Latin America’s View of Asia Based on the Example of the Pacific Alliance

Since the 1990s, dynamic interregional cooperation has developed between Asia and Latin America that is closely linked to globalisation and to the associated geopolitical change.¹ One key indicator of this development is the rapid increase in interregional trade. Between 1990 and 2011, trade between Asia and Latin America increased tenfold to around 473 billion US dollars.² China occupies a particularly prominent position within this dynamic: As early as in the 2000s, the country became the most important trading partner for several Latin American economies, in many cases overtaking the US as the main export market. In 1990, the People’s Republic (PR) of China accounted for 5.2 per cent of total trade between Asia and Latin America. This share rose to an average of 11.9 per cent between 1990 and 2003 and then to an average of 40.3 per cent – or around 221 billion US dollars – between 2004 and 2011. During this period, the PR China replaced Japan as Latin America’s most important Asian trading partner.³

Since 2011, trade in goods between Latin America and Asia has expanded significantly once again and deepened structurally. After the slowdown caused by the fall in commodity prices in the 2010s and the pandemic-related slump in 2020, the long-term trend was confirmed. To date, Asia has become an increasingly important sales, procurement, and investment region for Latin America.⁴

However, cooperation between the countries of Asia and Latin America – particularly in economic terms – can thus far be regarded as a partnership of equals only to a limited extent. While equal cooperation certainly exists in multilateral contexts and selected policy areas, many bilateral relationships exhibit structural asymmetries. This is particularly true of relations with China, where an unequal economic division of labour often predominates, with Latin America primarily acting as a supplier of raw materials and China as a centre of capital, technology, and demand.⁵

Importance of the Pacific region and new trade routes

The development of relations between Asia and Latin America in the 20th and 21st centuries is closely linked to structural changes in the global economy. While interaction between the two regions remained highly limited during the Cold War and primarily took place through bilateral or ideologically shaped contacts, relations intensified significantly after the end of the bipolar world order.

With the economic and political liberalisation of many Latin American states in the 1980s and 1990s and the rise of South and East Asian economies, a new basis for interregional cooperation emerged.⁶ An important institutional framework for this was provided by the Asia-Pacific Economic Cooperation (APEC), which was founded in 1989 and promoted dialogue and economic integration in the Pacific region. With the accession of Mexico (1993), Chile (1994), and Peru (1998), Latin American economies were systematically integrated into this trans-Pacific cooperation architecture for the first time, thereby deepening Latin America’s economic links with Asia and making it more possible to conceive of the Asia-Pacific region as a shared economic space.⁷

Another key turning point was China’s accession to the World Trade Organization (WTO) in 2001.⁸ This step accelerated China’s integration into the global economy and led to a massive expansion of its trade relations with Latin America. As a result, China became the most important trading partner to several Latin American countries within just a few years, particularly in the raw materials sector.

This transformation is reflected in the rapid increase in trade between the two regions, which rose from a few billion US dollars in the 1990s to several hundred billion US dollars in the first quarter of the 21st century. The dynamic can thus be attributed not to economic growth alone, but also to strategic foreign trade decisions through which the Pacific region has emerged as a central geostrategic corridor between Asia and Latin America. It is an evolution that is driven to a significant extent by the expansion of maritime infrastructure and logistics networks. The modernisation of sea routes, ports, and transport corridors helps reduce transaction costs and increase the efficiency of global supply chains.

One example of this is the construction of the deep-water port of Chancay in Peru, which is regarded worldwide as one of the most important infrastructure projects of recent years. Officially opened on 1 June 2025 around 80 kilometres north of Lima, “China’s megaproject”⁹ marks a strategic access point to the Pacific that shortens the shipping route from China to South America by one to one-and-a-half weeks at sea. The Chinese state-owned company COSCO Shipping Ports has invested around three billion US dollars in the construction and operation of the port and holds a majority stake in the operating company. This allows China – with its fleet of deep-water megafreighters – to call directly at Peru as a gateway to South America without time-consuming and costly transhipments – for example, in Singapore or Busan – while controlling the entire logistics chain from departure to unloading. Chancay is thus becoming a logistics hub that is reshaping the trade architecture between South America, Asia, and the entire Pacific region.¹⁰

These developments are part of a broader shift in global trade routes. While the Atlantic region long represented the centre of international economic relations, the focus is increasingly shifting towards the Pacific region, thereby creating ties that extend far beyond those between China and the South American continent. This shift also opens up new export markets for the ASEAN member states, while the reverse applies to the Pacific littoral states of Chile, Peru, Colombia, and Mexico, which have joined together in the Pacific Alliance (PA). Alongside the PA, BRICS – with major powers Brazil, India, and China – and China’s Belt and Road Initiative (BRI) also play a central role in expanding interregional trade relations between Latin America and Asia.¹¹

China’s strategic objectives in South America: Belt and Road Initiative and BRICS

This shift is not only economic, but also geopolitical in nature as it is accompanied by a redistribution of influence and power. Against this background, China’s engagement in Latin America should be understood not solely as a consequence of growing trade volumes, but also as part of a long-term geostrategic positioning. Central to this is securing access to raw materials, agricultural goods, and energy; opening up new markets for Chinese companies; and shaping the infrastructure through which future trade flows, data flows, and political dependencies will be channelled. South America is particularly relevant in this regard because the region has key deposits of copper, lithium, iron ore, oil, and agricultural raw materials.¹²

In this context, the BRI serves China as a political and institutional framework for embedding bilateral projects within a broader narrative of connectivity, development, and South–South cooperation.¹³ Unlike Eurasia, South America is less about a continuous land corridor and more about a network of ports, rail, road, and energy infrastructure; digital connectivity; and financing instruments. Strategically, the BRI in South America aims to align supply chains more closely with Chinese demand, Chinese logistics, and Chinese corporate networks. Infrastructure projects such as the deep-water port of Chancay illustrate this logic: Those who are involved in controlling ports, transport axes, energy transmission, or digital networks are able to influence not only costs and efficiency, but also partner countries’ political room for manoeuvre.

Through loans, direct investment, free trade agreements (FTAs), technology cooperation, and forums such as the China-CELAC¹⁴ Forum (Community of Latin American and Caribbean States), Beijing is seeking to consolidate its role as a reliable partner for development and modernisation. For many South American governments, this creates room for manoeuvre vis-à-vis traditional partners such as the US and the EU. At the same time, new vulnerabilities are emerging: Raw material exports often remain concentrated, value creation takes place locally only to a limited extent, and the involvement of Chinese companies in critical infrastructure can create dependencies that extend beyond the economic sphere.

BRICS complements this strategy at the multilateral level. In Brazil, South America has a founding member of the group that serves China as a key political partner in the “Global South”. The expansion of BRICS opens up additional opportunities for China to involve South American states in forums that explicitly emphasise both the reform of global governance structures and – in the longer term – reduced dependence on the US dollar.

As such, China’s engagement in South America is part of a broader reordering of economic and political relations in which the region no longer appears merely as a supplier of raw materials or a sales market, but increasingly also as a strategic hub between the Atlantic, the Pacific, and Asia. For precisely those countries whose foreign trade has traditionally been more strongly oriented towards the Pacific, the question therefore arises as to how they can not only passively respond to this growing Asian dynamism, but also actively shape it. Against this background, the PA is gaining particular importance: It is a regional attempt to institutionally bundle economic opening, integration, and connections to the Asia-Pacific region.

The Pacific Alliance as an instrument of regional integration and a bridge to Asia

Founded in 2012, the PA is one of the most interesting trade integration projects in Latin America in the 21st century. It reflects a strategic reorientation of the foreign economic policies of its member states, Chile, Colombia, Mexico, and Peru, which – with the exception of Colombia – became increasingly aware of their Pacific orientation through their APEC membership from the 1990s onwards.¹⁵ The Alliance’s strategic orientation beyond South and Central America was emphasised by then–Chilean President Sebastián Piñera – host of the signing ceremony in the northern Chilean city of Antofagasta – when he highlighted the fact that the PA was pursuing a “deep integration” that would “go far beyond free trade and extend into the Asia-Pacific region”.¹⁶

Unlike other integration projects in Latin America, the PA is characterised by an explicitly market-oriented and open approach without the objective of creating supranational institutions. While alliances such as MERCOSUR and the Andean Community (CAN) place greater emphasis on protectionist elements and internal market integration, the PA seeks to integrate its member states into global value chains and to facilitate access to international markets, particularly in the Asia-Pacific region.¹⁷

The PA was founded against the backdrop of growing economic ties with Asia. Even before its formal institutionalisation, the participating states concluded a series of bilateral trade agreements with Asian partners, including China, Japan, and South Korea.¹⁸ With a population of more than 220 million people and accounting for more than one-third of Latin America’s gross domestic product, the PA is a significant economic area within the region. Dispensing with supranational decision-making mechanisms, its institutional structure was deliberately designed to be flexible. This flexibility allows for rapid adaptation to global economic developments, though at times, it can complicate coherent political coordination.

One key feature of the Alliance is its openness to external partners. The possibility of participating as an observer state has led numerous Asian countries – including China, Japan, South Korea, and Singapore – to become closely involved in the Alliance’s activities. At their twelfth summit, in June 2017, the Alliance’s four member states took a further step by deciding to begin association negotiations with Canada, Australia, New Zealand, and Singapore. In so doing, the PA was responding directly to the suspension of negotiations on the Trans-Pacific Partnership (TPP) by US President Donald Trump by seeking to conclude “ambitious economic and trade agreements”¹⁹ as a bloc and to maintain the objectives that had once been associated with the TPP. The presidents of the four member states reiterated this global, free trade-oriented approach in their “Pacific Alliance Strategic Vision for 2030”.²⁰

One key component of this strategy is the export-driven orientation of the member states. As early as in 2011, the Alliance countries exported goods worth around 71 billion US dollars to Asia, with annual growth of approximately ten per cent. This exchange was deliberately expanded further in the years leading up to 2019. Overall, trade volume between the PA and Asia increased by an estimated 40 to 60 per cent during this period, with trade with China in particular growing at an above-average rate. Asia’s share of the Alliance’s total exports rose moderately to around 15 to 18 per cent, while its share of imports remained significantly higher, at around 30 to 35 per cent. The ASEAN–Pacific Alliance Work Plan 2021–2025²¹ ushered in a new phase of cooperation with ASEAN. With the adoption of the ASEAN–Pacific Alliance Framework for Cooperation at the third ministerial meeting on 24 September 2016, the PA member countries and the ASEAN states had agreed to deepen economic and trade relations between the two blocs and to explore an expansion of cooperation. The work plan further elaborated cooperation in the areas of trade and investment, education, science, technology and innovation, the digital economy, gender issues, and sustainable development.

Cooperation with Asian partner states

Cooperation with Asian states is a central element of the PA. Trade relations have been intensified and investment flows increased through bilateral and multilateral agreements. China plays an outstanding role in this regard. As the largest trading partner of many Latin American states, the country is heavily involved in infrastructure projects and investments. At the same time, Japan and South Korea have also expanded their engagement in the region, particularly in technology-intensive sectors such as the automotive industry and electronics production.²²

Institutional relations between the PA and ASEAN have to date developed only selectively overall, essentially being limited to bilateral FTAs and memoranda of understanding (MoUs) between individual PA member states and selected ASEAN countries and exhibiting varying degrees of intensity.²³ Against this backdrop, Singapore’s recent association with the PA could mark the starting point for a qualitatively new form of interregional cooperation across the Pacific. This step was facilitated by the withdrawal of the US administration from the TPP negotiations in January 2017, just days after Donald Trump was inaugurated as the 45th President of the United States. The decision marked a major turning point in US trade policy and encouraged the remaining TPP partners to seek alternative forms of cooperation in the Asia-Pacific region, thereby increasing the importance of new interregional rapprochement. Chile and Singapore were the driving forces behind a trans-Pacific FTA without the US, with the economic success of both countries resting in no small part on the negotiation of extensive FTAs. The two countries were crucial in the drafting and development of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – signed in Santiago de Chile in 2018 – in which they acted as conceptual pioneers and laid the foundations for additional deepened trans-Pacific cooperation.²⁴

The Pacific Alliance as a deepening of regional cooperation between Asia and Latin America?

The FTA with the first associated member of the PA – Singapore – entered into force on 3 May 2025. The signing of this agreement was a “landmark moment”²⁵ for both Singapore and the PA in the Alliance’s orientation towards Asia, with the aim of creating new incentives for attracting investment, facilitating public procurement procedures, and improving market access for service providers across a wide range of sectors.

Both the admission of Singapore as an associated member of the PA and the resulting Pacific Alliance–Singapore Free Trade Agreement (PASFTA) are symbolically significant and constitute a test case for the growing role of minilateral agreements within the Asia-Pacific order. The agreement signals that the Pacific region does not merely consist of Asian and American subregions operating alongside one another, but that transregional integration is both possible and politically desirable. Singapore gives the PA global credibility and connectivity to Asia, while the Alliance allows Singapore to expand its role as a hub of trans-Pacific trade beyond existing ASEAN, CPTPP, and APEC structures.

Through its association with the PA, Singapore helps embed the APEC model of open, market-oriented, and globally integrated trade into a more operational form of regional cooperation. While APEC provides the strategic and normative framework, the PA together with Singapore now – for the first time – offers a trans-Pacific integration dynamic that goes beyond dialogue. This step is significant in terms of integration policy because it creates an institutional link between Southeast Asia and Latin America that had previously not existed in this form, with Singapore functioning as an anchor and intermediary between the two levels: It remains embedded in APEC while additionally using the PA as a platform to concretely advance trans-Pacific issues such as the digital economy, trade facilitation, services, and SME integration. This demonstrates that economic integration in the Pacific region can advance not only through mega-forums, but also through smaller, compatible integration cores. In this respect, Singapore’s association with the PA serves as a functional complement to APEC, which continues to provide the overarching and inclusive framework for dialogue and agenda-setting. The PA – together with Singapore – is becoming a practical building block of integration within this framework.

At a time of fragmented trade orders, this step demonstrates how multilateral openness (APEC) and selective deepening (PA) can interact productively within the Pacific region. Particularly in areas highlighted by APEC in its 2020 roadmap (“Putrajaya Vision 2040”²⁶) as drivers of economic development – that is, digitalisation, more resilient supply chains, and connectivity – the PASFTA promises deeper cooperation across the Pacific region.

Singapore’s association sends two signals to the EU: (1) Latin American–Asian rule-setting is gaining independent weight, and (2) “bridge actors” are becoming more important. For the EU, Singapore’s association agreement with the PA signals that Latin America is building integration axes independently.²⁷ The successful integration of Singapore into the PA structures through a network of interregional FTAs between Asia-Pacific and South America also makes the Alliance more attractive as a partner for the EU, not least in the context of defending multilateral approaches. The PASFTA coincides with the EU–Singapore Digital Trade Agreement, which entered into force on 1 February 2026 and likewise emphasises ambitious goals and a values-based approach.²⁸ Because the EU has already developed a cooperation framework with the PA since 2019, including on digital strategies, mobility, and climate, this framework may now be strategically strengthened through Singapore’s role as a practice-oriented rule-maker in the digital sphere. In its 2019 Latin America and Caribbean strategy “Vision 2030 – A Partnership for the Future”, the CDU/CSU parliamentary group in the Bundestag strongly advocated associated EU membership in the PA,²⁹ which it identified as a potential “hub of trade between the Atlantic and Pacific”.³⁰ With Singapore as a shared partner and “bridge actor”, the next step towards closer cooperation between the EU and the PA could be accelerated.

For ASEAN, Singapore’s association with the PA has both an integrative and a competitive signalling effect. It is integrative insofar as ASEAN and the PA already possess established contact formats and a cooperation framework. Joint ministerial meetings have repeatedly taken place since 2014, ultimately leading to a concrete work plan extending to 2025. In addition, three further ASEAN member states – Indonesia, Thailand, and the Philippines – hold observer status in the PA. In this context, Singapore’s association can serve as a model for further operationalising existing ASEAN–PA cooperation, for example, through joint projects in trade, connectivity, innovation, or tourism.

At the same time, the PASFTA sends a competitive signal to ASEAN because Singapore demonstrates that ambitious trade and digitalisation standards can increasingly be advanced through flexible, issue-specific, and partner-oriented agreements – even when large regional organisations progress more slowly. The PASFTA could therefore provide additional incentives for other ASEAN members to harmonise existing ASEAN regulatory frameworks more rapidly or to increasingly seek suitable cooperation partners outside established ASEAN formats.

Outlook

The growing integration of Asia and Latin America has far-reaching implications for the global order. Indeed, this integration has contributed to the emergence of a multipolar world in which traditional centres of power are losing importance while new actors are gaining influence. One central aspect of this development is the growing importance of South-South cooperation, which enables states of the so-called Global South to diversify their economic and political relations and to operate more independently from traditional Western-dominated institutions. At the same time, however, there is a risk of new forms of dependency and inequality. The existing asymmetric trade structures between Asia and Latin America – particularly vis-à-vis China – mean that economic benefits are distributed unevenly and that existing structural problems persist.

Moreover, infrastructure projects and new trade routes are reshaping global value chains and intensifying competition between states and regions. The increasing economic and political interconnectedness are therefore opening up new opportunities for growth and development while simultaneously creating considerable challenges. In particular, both China’s dominance and the enduring asymmetric trade structures demonstrate that integration does not automatically lead to balanced development; rather, there is a danger that existing dependencies will be reproduced and new ones created. For Latin America, this situation has given rise to the central challenge of finding a balance between integration and autonomy. Indeed, sustainable development requires the diversification of economic structures, the expansion of institutional capacities, and the strategic shaping of international cooperation.

– translated from German –

Andreas Klein is Director of the Konrad-Adenauer-Stiftung’s Regional Programme Political Dialogue Asia, based in Singapore. He previously headed the Foundation’s Office in Santiago de Chile from 2016 to 2022.

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3. Ibid., p. 6. ↩︎
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30. Ibid. ↩︎