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EXPERIENCES OF LATIN EXPERIENCES OF LATIN AMERICAN COUNTRIES WITHIN AMERICAN COUNTRIES WITHIN

THE APEC REGION:THE APEC REGION:

THE CASE OF CHILETHE CASE OF CHILE

HERNAN GUTIERREZ B.HERNAN GUTIERREZ B.DirectorDirector

Economic and Trade DepartmentEconomic and Trade Department

Embassy of Chile – SeoulEmbassy of Chile – Seoul

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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

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Building Blocks of Chilean Foreign Trade Policy

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+ FTAWorld Wide WTO+ FTA

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A Three Tier Global Player A Three Tier Global Player

Multilateralism (WTO)

Regionalism

Geographic: APEC, FTAA, LAIA, Mercosur, Andean

Community

Issues: Cairns, G-20, FAN, FOF, etc.

Bilateralism

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Chilean Network of PTAsCanadaMexicoCentral America (5)EU (25)KoreaUSA EFTA (4)

VenezuelaColombiaEcuadorBoliviaMercosur (4)

• N. Z., Singapore & Brunei D.

• India

• China

• Peru

• Panama

• Ecuador

• Turkey

• Colombia

• Japan

• Bolivia

• Thailand

• Malaysia

NegotiatedNegotiated

NegotiatingNegotiating

StudiesStudies

FTAsFTAs

ECAsECAs

18 Trade Agreements

54 countries

More than 80% of trade

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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

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Institutional MattersInstitutional Matters- Transparency- Transparency- Objectives, excep. , final - Objectives, excep. , final

provisions, etc.provisions, etc.

DSMDSM

““Non trade issues”Non trade issues”- Intellectual Property Rights- Intellectual Property Rights- Labor- Labor- Environment- Environment

CoverageGoods

– Tariffs – NTM – Customs procedures

– Rules of origin Services InvestmentTemporary entryDisciplines

– Safeguards (Bi-Global)– AD/CVD – TBT/SPS– Competition

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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

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Impact of FTAs on the Chilean Economy

Investment and financial flows Attraction of FDI Deepening of financial markets

Macroeconomic Regime Stability, favorable for growth

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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

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Comparative Analysisof Market Access in 3 FTAs

E.U. Korea USA

Immediate 85.1% 40.6% 87.0%

1-5 years 11.1% 2.9% 8%

6-10 years 3.5% 56.5% 0.6%

+ 10 years - - 4.5%

Excep. 0.3% - -

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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

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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

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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

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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

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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

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Intellectual Property Rights

Brands

Geographic indications

Dominion names and brands

Author rights Balance between authors, artists and

producers

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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