Chile Free Trade Agreements

The trade data reflect Chile`s open and independent trade policy. Exports to the world increased by 89% in the eight years 1993-2001 (see Chart 1) and imports increased by 56%. Although Chile is not a full partner of the Andean Community or a full partner of Mercosur, its export growth has been the fastest intra-regional, evidence of Chile`s trade strategy, which combines unilateral reductions in customs and non-tariff barriers with aggressive efforts towards bilateral agreements. From 1993 to 2001, Chilean exports to Latin America increased by 126%, compared with 100% for the United States, 43% for Japan, 70% for Asia and 71% for the European Union. Chile`s trade with Canada indicates another interesting trend. Although the value of the export dollar is very low, it has increased by about 380%, an issue that has not escaped many U.S. business representatives of a U.S.-Chile free trade agreement, who argued that the Chile-Canada Free Trade Agreement has put a competitive disadvantage on the face of a similar or better-quality agreement with the United States. Chile is the first Latin American country to have sealed a free trade agreement with China (2005) and to work with Beijing since early 2007 to extend the agreement to services and investment. Other agreements in this regard were reached during President Bachelet`s visit to China in April 2008.

The service contract came into effect in August 2010. However, Chile`s open regionalization and export-oriented trade policy have been called into question because they have not sufficiently focused on the diversification of land from unrefined agricultural and mining products (copper, fish, grapes and wood). Manufactured goods account for less than 15% of total exports, indicating two potential problems. First, confidence in traditional raw materials can generate strong export returns, but profits are unpredictable due to volatile commodity prices (see fluctuations in Chile`s terms of trade in Table 1). (8) For eFTA-Chile trade statistics, see the EFTA Trade Statistics tool U.S. imports from Chile have increased steadily since 1992, due to continued U.S. interest in Chilean products and the expansion of the U.S. economy.

U.S. imports increased by 172% between 1992 and 2002, more than Latin America, excluding Mexico (107%) or the world (118%) that was the case. The United States maintained a trade surplus with Chile between 1989 and 2000; In 2001, the trade balance recorded a deficit of 6% of total trade between the two countries and 18% in 2002. In addition to the benefits expected by U.S. businesses, investors and consumers, a free trade agreement with Chile was also seen as an opportunity for the United States to support economic and trade reforms in Latin America, of which Chile had become a regional model. Trade has been a major part of Chile`s history of economic growth and development and has been directly linked to higher productivity, a higher standard of living, greater diffusion of technology and a complete modernization of the country.