Chile is a Strong Trade Player in the World - Free Trade Agreements

By Beatriz B. Ramirez, Free Trade Specialist
Illinois SBDC International Trade Center

10 years after the U.S.-Chile Free Trade Agreement was signed, we recognize that it has contributed positively to the U.S. economy. Both countries have strong commitments to increase economic growth and job creation.

Chile has a Free Trade Agreement (FTA) with Canada, Mexico, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, European Union, United States, South Korea, Iceland, Liechtenstein, Norway, Switzerland, China, Brunei, New Zealand, Singapore, Panama, Colombia, Peru, Japan, Australia, Turkey, Malaysia, and Vietnam. This establishes Chile as world player with some influence with the United States, China and the European Union.

The Office of the United States Trade Representative indicated that on January 1, 2004, “tariffs on 90% of U.S. exports to Chile and 95% of Chilean exports to the U.S. were eliminated,” making both countries and their products more competitive. In the first quarter in 2004, it was reported that the U.S. increased exports of manufactured goods to Chile by 19.5%.

USA Trade Online (https://usatrade.census.gov/data/Perspective52/View/dispview.aspx), a government database that assists our small businesses with statistical information, indicates that U.S. exports to Chile from 2010 to 2012 have increased significantly. Exports from the U.S. to Chile in 2010 were $10 billion; in 2011 were $15 billion, and were $18 billion in 2012. In total, that the U.S. has increased exports to Chile since 2003 by 600 percent, while exports to the rest of the world were increased 113% (http://www.whitehouse.gov/the-press-office/2013/06/04/fact-sheet-us-chile-economic-relations). This makes Chile an important trade partner for the U.S.

Chile has signed Free Trade Agreements with other countries as well. Chile signed a FTA with Canada in 1997, New Zealand in 2005, China and Brunei in 2006, Australia in 2009, and Vietnam in 2014. They continue to aggressively pursue trade relationships with other nations.

Chile is also an important partner in the Trans-Pacific Partnership (TPP) and, as a result, is currently enjoying the benefits of enhanced trade relationships with the signatories of this trade argument. Unfortunately, the United States has yet to receive approval from Congress to join this trade group, which may explain why U.S exports to Chile are down in 2014, as Chile shifts its attention to its TTP partners.

Chile has difficulties like every country. However, it is stable and prosperous, and almost free of corruption. Chile leads Latin American nations in competitiveness, income per capita, globalization, and economic freedom.  It is a partner who should be appreciated as the U.S. pursues other strategies that will benefit both countries. In this manner, the U.S. can increase exports of American products and create jobs.

You can contact Beatriz B. Ramirez at 309-677-3075 or send an e-mail to bramirez@bradley.edu for more information.