Implications of Regional Integration for Economic Policies in Mercosur and the Pacific Alliance

Abstract

The article is focused on the ways to involve regional integration into decision making and implementation of economic policies, considering the experiences of Mercosur and the Pacific Alliance. They have lots of similarities with the Customs Union of Belarus, Kazakhstan and Russia. Member states of these trade blocs rely increasingly on common business infrastructure and intra-regional trade in their economic development. The leaders of Mercosur, Brazil and Argentina take intra-regional trade as a leverage for domestic companies’ competitiveness, while the leaders of the Pacific Alliance, Chile and Mexico – for export markets diversification. The smaller economies, like Paraguay and Uruguay, rely on regional integration in their economic policy plans, and Peru and Colombia use its structures to foster domestic markets. The Local Currency Payment System (SML) of Mercosur has proved to be important for companies during the financial reform in Brazil and Argentina’s economic instability. The author believes that its practice to execute international clearing through existing national real time gross interbank settlement systems may be applicable in constructing common settlement system of the EEC. Since the Latin American Integrated Market (MILA) was created the Pacific Alliance has attained the goal of enriching intra-regional investment. The author stresses its structural elements that could also be implemented in the Integrated Foreign Exchange Market of the EEC.