By Antonio De la Jara

PUERTO VARAS, Chile (Reuters) - Member nations of Latin America's Pacific Alliance trade bloc must strengthen their relationships and keep clear of the isolationist path represented by Britain's exit from the European Union, Chile's foreign minister said on Wednesday.

"At a time that seems dominated by the discord and disintegration brought by 'Brexit' and by the lamentable attack in Turkey, what we are doing is constructing realistic, flexible and pragmatic integration," Foreign Minister Heraldo Munoz said as the Pacific Alliance kicked off its summit in the scenic town of Puerto Varas.

The Pacific Alliance is one of two large trade blocs in Latin America. Member nations Chile, Colombia, Mexico and Peru have moved to reduce trade tariffs between them since forming the bloc in 2011.

The group represents 38 percent of Latin America's gross domestic product, and starting in May, 90 percent of commerce between its member states has been free of tariffs. That has piqued the interest of nations far outside the bloc, with 49 different observer states eyeing possible trade agreements with the group.

The countries seen closest to becoming integrated into the bloc are Costa Rica and Panama.

Argentina, a member of Mercosur, Latin America's other trade bloc, is looking to bring itself closer to the Pacific Alliance.

But that nation's finance minister, Alfonso Prat-Gay, said his country's loyalties remained with Mercosur.

"We have a neighborhood that we belong to and that we want to keep belonging to, and that's the Mercosur. Thus, any move is with the Mercosur," he said.

The Pacific Alliance summit, backed by snow-capped volcanoes and azure waters in Chile's touristic Lake District, ends on Friday.

(Reporting by Antonio de la Jara; Writing by Gram Slattery; Editing by Anthony Esposito and Leslie Adler)