Chile International Trade Agreements

The World Trade Organization (WTO) is the world`s largest trade organization. Chile has been a member of the WTO since its inception in January 1995. The organization governs the main rules of trade between countries. These WTO-ratified agreements have been taken up in Chilean law. Chile is one of the 70 largest trading nations in the world. On 21 November 2016, Chile signed the Trade Facilitation Agreement (TFA), which came into force on 22 February 2017 and proves to all global players that it is open and requires international trade. The TFA is an agreement that aims to reduce and simplify trade by revising red tape. In addition to economists` questions on the impact of bilateral agreements on trade, several interest groups strongly opposed each other. Perhaps the import industries are the first to bear the main burden of the adjustment costs of a trade agreement. Despite the gains in well-being for society as a whole (for example. B more efficient allocation of resources, cheaper imports, greater choice of goods), industries that face increased competition may be under severe pressure to adapt their activities to more efficient and less expensive producers. Competition is generally accepted as a principle of market power and, at the national level, these adjustment costs can be low and lead to increased productivity.

However, if the rules change because of trade agreements, the workers and industries concerned vehemently oppose each other and their concerns are an integral part of the debate on trade liberalization. Bilateral negotiations have been a difficult task for both countries and, although a comprehensive agreement has been reached, some issues, as expressed in the Debate in the House of Representatives and the Senate, have been controversial. Given that several free trade agreements are now being considered, there has been concern about the potential that Chilean provisions could become a „model“ for free trade agreements. In particular, immigration, investment (capital controls) and labor rules have appeared on hot topics, and many members of Congress have actually sent the message that language in the U.S.-Chile free trade agreement would not be acceptable in future trade agreements. A summary of these problems appears at the back of the report. As EsTV came into force, this is the final version of the report. As can be seen in Chart 2, Chile has diversified export markets, which not only increases trade opportunities, but also reduces its dependence on a small number of markets, thereby reducing the risk of foreign shocks (for example. B Argentina). The largest export market is the European Union, which accounted for 23% of exports in 2002, followed by the United States (20%) Latin America (19%).