International trade and the Fundación Chilena del Pacífico

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By Alberto Salas Muñoz, President of Fundacion Chilena del Pacifico

(This is a machine translation)

I would like to highlight international trade in these lines, both for what it says about our country’s experience of growth and development over the past three decades, and for the way in which it is linked to the role that Fundación Chilena del Pacífico has developed with regard to the promotion and support of Chile’s insertion in the world through an open and active commercial policy with a long-term strategic vision.

It is essential to underline this aspect as we prepare to embark on what many describe as a new political cycle marked by a “social pact” markedly different from that which has prevailed since the return to democracy, with a new government starting of March 2022 and with a constituent process which will make a proposal for a new Constitution to the country.

Indeed, international trade has been and I believe should continue to be the cornerstone of our country’s development prospects. I think it is important to emphasize this, without any ambiguity whatsoever, in light of the discussions that we have witnessed for a good part of the year on the measures that our country must continue to take in this field and following some initial definitions, the responsibility of those who will soon take the reins of the executive, with regard to the management and stability of the current trade agreements that our country has successfully negotiated and sealed in the last three decades.

Indeed, the international trade promotion agreements available to all Chileans, of different nature and scope and whose most visible face are the free trade agreements (FTAs), constitute a real asset of our nation which we must be proud.

Within the Foundation that I have the honor of chairing, we have always understood the completely strategic meaning of this path (trade policy) consisting in integrating Chile into the forces of globalization that shape the contemporary world, with the vibrant Pacific Basin as a geographic frame of reference particular to our case.

“At the Foundation that I have the honor of chairing, we have always understood the absolutely strategic sense of this path (trade policy) consisting of incorporating Chile into the forces of globalization that are shaping the contemporary world, with the vibrant of the Pacific as a geographical framework. particular reference to our case”

The network of trade agreements with which Chile has given us access to around 65% of the world’s GDP and any non-ideologized analysis of its effects, over the last decades, cannot ignore its colossal role in the development of our capacity to export in multiple productive sectors, its correlate in the general modernization of our economy, in the creation of associated jobs and in the attraction of foreign direct investment; in the adequacy, in short, of a medium-sized economy such as that of Chile today (much smaller before) to reasonably succeed in the extremely competitive global scenario.

In short, Chile would currently be a much poorer country with even more dramatic social emergencies if it had not undertaken, in a visionary way in the Latin American concert, a determined commercial policy of insertion in multiple regions to through multilateral and bilateral agreements.

With the Foundation, we wanted to make a strong contribution this year to laying down a factual basis to feed the reflection that will take place in the future on the most appropriate trade policy for our country. In addition to addressing the issue in face-to-face and digital meetings, directly and indirectly, we have commissioned high-level research to bring to the table, more than opinions, numbers on the real effects of trade agreements in our country and the most likely scenarios in the event of a significant change or slowdown in trade policy.

The study (carried out by Guillermo Le Fort et al.) concludes that “Chile’s trade performance with each of its trading partners shows a positive average effect on the volume of trade, the diversification of Chilean exports and its penetration into new markets … Weighted by the importance of the countries and trading blocs with which Chile has an FTA, the average effect of FTAs ​​increases the volume of bilateral trade by 20% after the first five years after signing. Ten years after an FTA, the cumulative increase in export volume reaches 50%… Export diversification shows an overall increase, both in the number of products exported and in the growth of non-mining exports. Taking an average weighted by the importance of trading partners, the increase in the number of exported products amounts to 70%, while non-mining exports as a percentage of GDP increase by 40 percentage points five years after the signing of the ALE.

Regarding the effects of trade policy on foreign direct investment flows, the research concludes that they were close to those seen as an effect of increased trade, although it added political stability which has characterized Chile in recent decades as a key element in attracting investment.

Chile, as I have pointed out, seems to be preparing to enter a phase marked by transformations, and international trade policy, like any other, should always be subject to adjustments and improvements.

Undoubtedly, new trends such as digital trade, the growing integration of services, the inclusion of small and medium-sized enterprises in the export productive force, environmental emergencies and sustainability challenges, among so many others, impose new challenges that will, once again, compel our future political leaders to refine negotiating strategies and priorities.

At the Foundation, we see this as part of the normal and expected modernization processes of any agreement, but we do not lose sight of the fact that the basic pillars of Chile’s insertion in the world are one of the great stories of satisfaction for our country. over the past three decades.

Due to its public-private nature, its history, its present and above all its future, the Fundación Chilena del Pacífico is called to play an important role in the informed and respectful discussion of all that is at stake in the country. when it comes to designing the next steps for inclusion in the world. From now on, we are mobilizing our team and our dedication to add to this new stage.

“Because of its public-private character, its history, its present and, above all, its future, the Fundación Chilena del Pacífico is called to play an important role in the informed and respectful discussion of all that is at stake. in the country when it comes to designing the next stages of insertion in the world. From now on, we are mobilizing our team and our dedication to add to this new stage”

The content is the sole responsibility of the author and does not necessarily reflect the opinion of BNamericas. We invite those interested in participating as a guest columnist to submit an article for possible publication. To do so, contact the publisher at [email protected]

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