Yesterday, Chilean and US officials highlighted the positive effects that the Free Trade Agreement (FTA) between both countries will have on their bilateral economic and trade relationship, after twelve years of operation. They also stated that the recent closure of the Trans-Pacific Partnership negotiations (TPP), in which both countries and ten other economies in the Asia-Pacific region participate, would strengthen ties.
The officials spoke under the Chile-United States: Challenges and Opportunities, an open market Seminar, which was held yesterday at the Ritz-Carlton Hotel and was organized by the Directorate General of International Economic Relations (DIRECON) and the Chilean-US Chamber of Commerce, AmCham Chile.
In his presentation, the director of DIRECON, Andres Rebolledo, said that bilateral trade had grown at a 12% rate, that the United States was currently the largest foreign investor in Chile, and that Chilean companies were having a greater presence in the US with its investments in various sectors.
"The FTA has been very significant for our business relationship and we believe that the recent closure of the TPP negotiations and its future entry into force will be a new opportunity to strengthen, not only trade between both countries, but also with the 12-country block that represents 40% of the world's GDP," he said.
Meanwhile, Kathleen Barclay, president of AmCham Chile, said that the results achieved under the FTA had exceeded expectations and that today the United States was Chile's main trading partner in terms of the diversity of goods trade. She also stated that the TPP would be a milestone for international trade and "an important step in Chile's integration with the world because of the multiple business opportunities that being part of a trade bloc that accounts for 26% of world trade would generate."
In this sense, the US ambassador of Chile, Michael Hammer, said the TPP would set the tone for world trade in the XXI century, and that it would also be relevant for the development of small and medium enterprises, which are the backbone of our economies. In addition, he stated, the TPP would encourage the incorporation of the country into the global value chains.
Senator Ricardo Lagos Weber and other prominent economists, government officials, and business executives also attended the meeting.
The launching of a book, which was published by DIRECON with the support of Amcham, that contains a version of the bilateral FTA with all of the updates that have been implemented over the eleven years of the agreement in its various aspects also took place at the seminar.
Trade and investment
In 2014, the US accounted for 15.8% of Chile's foreign trade, with a total of $22.687 million dollars. During the 2003-2014 period, trade between Chile and the United States grew at an average rate of 12.3%, in line with Chile's 12.4% average annual foreign trade growth.
In the same period, Chilean exports to the US almost tripled, reaching $9.275 million dollars by 2014. Meanwhile, imports amounted to $13.412 million dollars last year.
The presence of Chilean products has grown in almost all traded items. For example, salmon exports went from $520 million dollars in 2003 to $1,276 million dollars in 2014. This positive performance can also be seen in other products, such as: metals, machinery, grapes and other fruits, bottled wine, and copper, among others.
By 2014, Chile had positioned different products with significant involvement in the US market: fresh grapes (61%), raisins (51%), fresh or refrigerated salmon fillets (76.7%), fresh apples (55 %), fresh peaches (99.2%), cherries (75.3%); fresh tangerines (25%), blueberries (44.6%), fresh kiwifruit (34%), avocados (4.2%) and wine (6%).
The United States is the leading foreign investor in Chile, having an accumulated investment of $29,000 million dollars to 2014 (26% of the total foreign investment in Chile as measured by the DL600). 46% of direct US investment in Chile took place in the period after the entry into force of the agreement. Between 1990 and 2014 Chilean investments in the United States reached $7,300 million.
