1 EXPERIENCES OF LATIN AMERICAN COUNTRIES WITHIN THE APEC REGION: THE CASE OF CHILE HERNAN GUTIERREZ B. Director Economic and Trade Department Embassy of Chile – Seoul

2 Strategic Orientation  Economic growth and equal opportunities  Open & competitive economy, committed to free trade  Enforcement of international regulations  Trade policy consistent with sound macro-economic policies  Investment promotion and protection  Agreements to avoid double-taxation  Institutional innovation

3 Building Blocks of Chilean Foreign Trade Policy  Open economy Free flows of goods, S & I  Dependent on inter. trade More trade  Small country Rules & disciplines  Transparent/non corrupted Disciplines World Wide WTO+ FTA World Wide WTO+ FTA

4 A Three Tier Global Player  Multilateralism (WTO)  Regionalism  Geographic: APEC, FTAA, LAIA, Mercosur, Andean Community  Issues: Cairns, G-20, FAN, FOF, etc.  Bilateralism

5 Chilean Network of PTAs Canada Mexico Central America (5) EU (25) Korea USA EFTA (4) Venezuela Colombia Ecuador Bolivia Mercosur (4) N. Z., Singapore & Brunei D. India China Peru Panama Ecuador Turkey Colombia Japan Bolivia Thailand Malaysia NegotiatedNegotiatingStudies FTAs ECAs

18 Trade Agreements 54 countries More than 80% of trade

7 Objectives Commercial –Trade creation & reduction of trade diversion –Elimination of tariff peaks –Exports promotion –Enhancement of competition Economic –Rules & disciplines –Reduction of external economic vulnerability –Promotion of FDI Political –Dispute settlement –Differentiation in a context of international economic turbulence

8 üInstitutional Matters - Transparency - Objectives, excep., final provisions, etc. üDSM “Non trade issues” “Non trade issues” - Intellectual Property Rights - Labor - Environment Coverage Goods –Tariffs –NTM –Customs procedures –Rules of origin Services Investment Temporary entry Disciplines –Safeguards (Bi-Global) –AD/CVD –TBT/SPS –Competition

9 Impact of FTAs on the Chilean Economy Trade  Economic theory supports FTAs with big and stable economies  New Strategic Partnership of like-minded countries  Static & dynamic efficiency in resource allocation  C-A dynamic:  elimination of tariff escalations  diversification of exports  Competitiveness:  Lower cost of intermediate goods and of capital goods  economies of scale and of scope  quality and learning process  technological innovation, entrepreneurial spirit & strategic alliances

10 Impact of FTAs on the Chilean Economy Investment and financial flows  Attraction of FDI  Deepening of financial markets Macroeconomic Regime  Stability, favorable for growth

11 Market Access Comprehensive FTA, no exceptions Consolidation of GSPs Elimination of tariff escalation Stand-still and liberalizing reviews Commitment to the non application of subsidies in agricultural exports

12 Comparative Analysis of Market Access in 3 FTAs

13 Custom Procedures Transparency and efficiency: Commitment to publish laws and norms Guarantee justice in procedures Simplified procedures for the liberation of goods Facilitation of cargo transit for express delivery Use of risk analysis in procedures for surveillance and automation of customs procedures. Use of early resolutions at the origin, tariff classification and customs valuation

14 Services  Trans-border trade & Local presence  Regulatory transparency  Negative list approach  Promotion of MRs of professional services  Link with chapters on investments, telecommunications, temporary entry of business people and telecommunications

15 Investments Transparency Predictability Judiciary certainty NT & MFN Norms to protect the foreign investor  Minimum level of treatment, in accordance to international law  Right to free transfer related to investment  Compensation in case of direct or indirect expropriation  Specific dispute settlement system between the investor and the State that receives the investment

16 Public Procurement NT Non-discrimination and transparent procedures Tendering and results adequately publicized Standardized time frames for bids Standardized rules for bidding processes Right to request a judicial authority in case of any violation of the former principles

17 Labor Commitment with domestic legislation  Core labor standards, defined by IOL:  Free trade unions  Collective negotiations  Forced labor  Child labor  Acceptable working conditions: minimum wages, maximum hours of work, security and occupational health

18 Intellectual Property Rights Brands Geographic indications Dominion names and brands Author rights Balance between authors, artists and producers

19 Dispute Settlement Rules of procedures with defined stages and time frames Agreement between the parties is favored (stage of consultations as well as in the stage of implementation) Panel of independent specialist High standards of opening and transparency in dispute settlement panels  Public and open hearings  Public access to the legal presentation of parties  Rights of third party interested in presenting their viewpoints