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LinkedIn and Twitter have listed shares on the Mexican stock exchange in recent months. (Photo: IMER)
Wednesday, June 18, 2014
Trade Talk

Pacific Alliance: What Next?

Foreign companies list on Mexico’s Bolsa, World Cup boosts ad spending, best retail markets and more.


The Pacific Alliance – the star of Latin American economic groups – is now planning to invite Argentina and Brazil to join the group, Peruvian newspaper El Comercio reports. Currently, the alliance includes Chile, Colombia, Mexico and Peru. 

The invitation will be formally made after the Pacific Alliance summit of presidents in Punta Mita, Mexico this week.

The move would contradict an earlier statement from Colombian finance minister Mauricio Cardenas, who told CNN en Español  in February that the key requirement is to have business-friendly policies and macroeconomic stability.

Argentina and Brazil both are seen as more investor-hostile and protectionist than the Pacific Alliance. Meanwhile, their dominance of the Mercosur trade pact has brought that group to a virtual standstill and paralysis. The latest summit of Mercosur presidents has been repeatedly delayed during the past five months due to unrest in Venezuela, where it was scheduled to be held in January.

Many see the Pacific Alliance as a contrast to Mercosur, Brazil and Argentina. On February 10, the presidents of the Pacific Alliance members signed an agreement to eliminate 92 percent of the tariffs between them. Meanwhile, Argentina and Brazil continue to implement protectionist measures against each other and the outside world.

An in-depth analysis from Latinvex of data from the International Monetary Fund shows that the Pacific Alliance outperforms Brazil – Latin America’s largest economy -- in estimated growth of GDP, inflation, exports and imports this year as well as combined GDP, FDI, trade and population size.

However, Mexican foreign minister José Antonio Meade told a conference in London last week that the nature of the Pacific Alliance is pragmatic and not political and if Brazil respects that it can join.

“We want Brazil to see that it is not a channel for political dialogue, but to provide specific solutions for integration,” he said after a prepared speech at Chatham House on June 13.

He also emphasized that “there cannot be any significant integration in Latin America without Mexico and Brazil,” according to Spanish news agency EFE.

Meanwhile, Costa Rica – which had formally applied to join the Pacific Alliance in February – is now re-evaluating its position, the country’s new president Luis Guillermo Solis told EFE this week.

Guatemala, Panama and Mercosur’s more business-friendly members Paraguay and Uruguay have all expressed an interest in joining the alliance.


Latin American companies have long favored listing on the nNw York Stock Exchange to attract major capital. However, recently US and European companies have also gone the other way – listing on Mexico’s stock exchange Bolsa Mexicana de Valores (BMV).

The most recent example is LinkedIn, which started listing on April 23. Twitter launched its stock on February 26, while sport giant Nike listed on March 11.

Time Inc – which started listing on NYSE last week – has applied to list through Deutsche Bank, CNNExpansion reported earlier this month.

Meanwhile, Manchester United plans to become the first soccer club to list on the Bolsa this month, El Financiero  reports.


The FIFA World Cup in Brazil will boost global advertising spending by an estimated $1.5 billion this year, UK-based ZenithOptimedia estimates.

“The event will deliver large television audiences and high interest in news media and sport websites, at a time of year when – in the northern hemisphere at least – people normally spend less time consuming media,” the agency says.

It expects TV to benefit the most, but World Cup advertisers will spend more of their budgets on Internet advertising, with advertisers more active on social media than during any previous sporting event.

“We forecast the World Cup to have the biggest impact in Latin America, where the matches will be ideally timed for Latin American viewers,” ZenithOptimedia says.

It predicts that the World Cup will add as much as $500 million to the Latin American ad market this year.

And despite the lower levels of interest in football in North America, ZenithOptimedia expects the Cup to add an extra $300 million each to that region.

Partly as a result of the World Cup, Latin America will lead the world in advertising spending this year, ZenithOptimedia estimates. The agency predicts ad spending will grow by 12.5 percent in Latin America. That compares with 4.7 percent in North America and 5.4 percent worldwide.

“Latin America is a region with rapidly growing economic output, and its ad market is growing at a similar rate,” ZenithOptimedia says. “We forecast an annual growth rate of 12 percent a year between 2013 and 2016, boosted by the World Cup in 2014 and the Olympics in 2016, both of which will be hosted in Brazil.”

Meanwhile, a report from Deloite quoted by Colombian newspaper La Republica estimates that ad spend tied directly to the World Cup could reach as much as $2.9 billion,


Rio de Janeiro and Sao Paulo are considered among the worst cities to work in, according to a global PwC survey of 15,000 professionals from 30 cities worldwide.

The survey was released in the firm’s new Cities of opportunity report.

Of 30 cities, Rio ranks as the fourth-worst. Only Nairobi, Jakarta and Mumbai receive lower scores.

Meanwhile, Sao Paulo ranks as the fifth-worst, while Buenos Aires ranks among the seven worst cities and Mexico City among the nine worst cities.  London, New York and Singapore rank as the best cities.

The survey looks at ten key factors for working in a city: intellectual capital and innovation; technology readiness; city gateway (international openness); transportation and infrastructure; health, safety and security; sustainability and the natural environment; demographics and livability; economic clout; ease of doing business and cost.

In several of these categories Rio ranked worse than its overall ranking. In both technology readiness and city gateway, Rio ranked as the second-worst worldwide. Only Nairobi ranked worse.  In cost, Rio also ranked as the second-worst behind Milan.

Meanwhile, Buenos Aires ranked better than the other three cities in Latin America in terms of   transportation and infrastructure and health, safety and security. In transport and infrastructure it ranks as the third-best in the world.

In terms of demographics and livability, Buenos Aires and Rio ranked best in Latin America.

However, in terms of ease of doing business Buenos Aires ranks worst among the 30 cities worldwide. Rio ranks as the fifth-worst, while Mexico City ranks in the middle – in 15th place.


Chile has replaced Brazil as the best retail market worldwide, according to the latest A.T. Kearney Global Retail Development Index.

Brazil fell from first to fifth place on the index, which analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities. The index looks at 30 emerging markets.

China came in second while India ended up in 20th place.

“The South America and Latin America markets keep their dominating position in the GRDI, with three of the top five countries in the Index, as an expanding middle class offers lucrative opportunities,” A.T. Kearney says. “This diverse retail ecosystem includes Brazil’s (#5) huge market, Chile’s (#1) sophisticated mid-sized market, and small gems such as Uruguay (#3), where high consumption levels are attractive to luxury brands. While some countries in the region face economic and political challenges, continued economic and political stability in leading countries has led to increased consumer and investor confidence, and created a favorable environment for retail.”

International retailers are entering and gaining ground in a highly competitive environment with local and regional leaders, the firm points out. “This battle is most intense outside of the region’s capital cities, where new markets are emerging as consumers opt for modern retail formats,” A.T. Kearney says.

Retail Stars

Most attractive emerging retail markets

LatAm Rk


Gl. Rk


























Costa Rica







Source: 2014 A.T. Kearney Global Retail Development Index


Millions of wireless phone subscribers in the Dominican Republic were threatened with suspension after they failed to meet a June 12 deadline to verify ownership. The problem? The wireless operators and the national telecommunications agency Indotel had hardly notified the clients beforehand. Indotel claims it gave the operators six months, but clients only received messages a few days before the deadline.

Compounding the problem for clients of Orange (a unit of Luxembourg-based Altice):  The web site where clients could validate ownership crashed on June 11 and June 12.

After the June 12 deadline came and went, both Orange and Claro (a unit of America Movil) risked losing significant business unless the government extended the deadline. Claro reportedly had as many as three million clients that had not yet verified ownership, according to local newspaper Diario Libre.

As of December, the Dominican Republic had 7.5 million prepaid wireless subscribers.  Indotel is requiring verification of these as a result of a new 911 system that is being implemented.

In the end, the government extended the deadline 90 days – until September 10. 

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