Hailing the move as a historic step towards regional integration, the countries revealed the deal would eliminate up to 90 percent of merchandise tariffs between them with months, with the remaining ten percent disappearing by the end of the decade.
The countries also agreed to abolish the need for tourist and business visas, allowing their citizens, which have a combined population of 210 million people, to travel more easily between the four countries.
Formed just one ago, the Pacific Alliance has already drawn praise from a plethora of company executives and politicians, many of whom regard its creation as the most exciting business development in the region for years.
If combined, the four countries would have the ninth biggest economy in the world, with around 2.7 percent of global economic output. They account for a third of Latin American gross domestic product (GDP) and half of the region's trade with the rest of the world.
The Peruvian and Chilean economies were the fastest growing in South America last year, expanding by 6.3 percent and 5.6 percent respectively. The Colombian and Mexican economies grew more slowly but still outstripped the regional average.
