Formation of common market would strengthen Pacific Alliance economies – Roca Junyent

Peru and Colombia require improvements to infrastructure, and this is generating opportunities for Spanish companies as well as their legal advisers

The economies of the Pacific Alliance could be strengthened by improving legislative integration and forming a common market, argues Roca Junyent partner Santiago Pagès.
Pacific Alliance countries offer a wealth of investment opportunities, says Pagès, especially Peru and Colombia, where key infrastructure such as roads and railways is being developed. “Mexico and Chile enjoy more stable, consolidated economies, and their infrastructure is more sophisticated,” he adds. “Peru and Colombia have a lot of infrastructure requirements, and this is an opportunity for Spanish companies and law firms.”
One of the main challenges when investing in Pacific Alliance countries is adapting to the local culture and finding a suitable partner on the ground, according to Pagès. “We find that clients think that Latin America is like Spain, but it isn´t – you need to adapt to the local culture and customs, including the language – we express ourselves in a different way,” he says. “You need to be patient, spend time in the country, see the market and understand it.”
Pagès says researching local partners, being cautious and “having a solid partnership agreement, including exit clauses, is key”. He adds that political instability and a potential shift to a more protectionist stance are added risks. “Investors shouldn´t fear measures such as expropriations in Pacific Alliance member states, but if there is a shift towards protectionist policies, governments could make it harder for foreign companies to win public contracts,” says Pagès. In spite of these risks, investors have a lot of interest in the Pacific Alliance, a region that has enormous potential. “Panama and Costa Rica are in the process of entering the alliance, and this will improve stability on an economic level,” says Pagès. “The Pacific Alliance is an excellent initiative, which could be improved further by strengthening links between countries and working towards greater legislative integration and eventually, a common market.”