An official website of the United States government

WTO Trade Policy Review of Chile
October 7, 2009

Statement by David P. Shark, Charge d’Affaires, a.i.

Thank you, Chair.  The United States warmly welcomes the delegation of Chile, led by Ministry of External Relations Director of Multilateral Affairs Ana Novik and Ambassador Matus, to this, the fourth Trade Policy Review of Chile.  We would first like to recognize the excellent work of the Secretariat and the Government of Chile in compiling the reports before us.  They thoroughly detail Chile’s key trade policy objectives since its last review in 2003, and they give us a more complete picture of Chilean policies affecting trade.  We look forward to learning more about Chile’s trade policies in this Review.  Finally, we would like to thank Ambassador Eckart Guth, as discussant, for providing a helpful and insightful context for this review.

Chile has pursued sound economic policies for nearly three decades.  Chile’s Government has received high marks from economists and its citizens for its countercyclical spending in 2009 to offset the effects of the global economic crisis.  To its credit, Chile has refrained from introducing fundamental changes to its already-open trade policy and has managed to continue along the path of trade liberalization since 2003.  We would like to recognize Chile’s open and transparent trade and investment regime and commend the delegation for the work your government has done to create a predictable business environment within Chile’s borders.  Chile’s stable democratic institutions coupled with solid economic growth have provided an important example both regionally and globally of the benefits of open trade.

Successive Chilean administrations have remained steadfast in their commitment to deepen integration with the global economy through trade agreements.  For example, the economies of the United States and Chile have long enjoyed close trade ties, the cornerstone of which is our bilateral free trade agreement, which entered into force on January 1, 2004.  At the time of the 2003 TPR, the U.S. and Chilean economies were expected to integrate even more with the implementation of the bilateral FTA.  We anticipated increased U.S. direct investment, thereby further stimulating trade flows.

Today, six years into our FTA, we can say that the growth in trade is consistent with our expectations.  The latest available data show that from 2007 to 2008 U.S. direct investment in Chile grew by 9 percent.  Our two-way bilateral trade in goods has nearly tripled since the FTA took effect through 2008, though trade has fallen somewhat in 2009 due to the global recession.  There is no mistaking the synergy between trade, investment, and development; and we believe that the Chilean economy will continue to generate new opportunities for foreign investors and suppliers.

As it did in 2003, trade represents a significant and increasing portion of Chile’s GDP, accompanying Chile’s policy of open markets and increasing commercial ties through trade agreements.  With more than 60 trade agreements with countries around the globe, we understand that Chile plans to continue negotiations with additional countries while nurturing export diversification strategies.  Overall, the United States views Chile as a valuable partner in the western hemisphere and the ties between our two nations continue to grow.  Chile remains a strong supporter of the Free Trade Area of the Americas negotiations.  At the same time, Chile has continued to play a leadership role at the multilateral level, as most recently demonstrated by Ambassador Matus’s Chairmanship of the General Council and the Chilean government’s efforts to help bring the Doha Round to a successful conclusion.  Chile has recognized the importance of open trade as a key development tool and the government has acted in accordance with this conviction.

The United States welcomes Chile’s active participation in the WTO and the Doha Round.  Our governments concur that the multilateral trading system needs further strengthening and we agree that given global supply chains and the interconnected nature of the world’s economies the WTO has a unique role to play in addressing trade distortive practices and opening markets.  We also welcome Chile’s efforts as a “Friends of Fish” participant in pushing for a high ambition fisheries subsidies agreement.  We value our close work with Chile to secure an agreement that will truly address the problems of global overcapacity and overfishing.  Overall, our governments share a common Doha Round objective of achieving an ambitious agreement that would bring the benefits of trade liberalization to all.

There are, nonetheless, specific areas of Chile’s regime where action could lead to improved trade and investment opportunities and flows. We have referred to them in our questions, but would like to touch on certain of those areas today.

First, we acknowledge that Chile has made some positive efforts to improve its IPR regime, including the creation of a specialized unit within the Chilean police force to handle IPR crimes.  In addition, as the Secretariat notes, Chile recently opened a National Institute for Industrial Property to oversee administrative actions related to industrial property.  We also understand that Chile recently acceded to the Patent Cooperation Treaty.

Nevertheless, Chile’s IPR performance continues to fall well below our expectations.  For example, the United States remains concerned about inadequate enforcement against copyright piracy and trademark counterfeiting.  We understand that Chile’s Congress continues to consider legislation that addresses copyright and other IP issues.  We would particularly like to learn more about the status of Chile’s pending copyright legislation as well as the government’s work to strengthen enforcement mechanisms to fight trademark counterfeiting and copyright piracy.

The United States considers the Customs Valuation Agreement to be a key component of the transparency and predictability that suppliers need to conduct international trade.  Therefore, another area of concern that we would like to highlight in this TPR involves Chile’s inadequate appeals process.  The Secretariat reports that appeals against Chilean Customs’ decisions and actions may be lodged with the National Director of Customs.  But, Chile apparently does not provide for the right of a subsequent appeal to a judicial authority as the Customs Valuation Agreement prescribes.  We will study with interest Chile’s response to our written question on this issue, particularly the government’s plans to provide for this right of appeal.

The United States applauds Chile for significantly reforming its government procurement regime since 2003.  We observe that, although Chile is an observer in the Government Procurement Agreement committee, the Chilean authorities have no plans to negotiate accession to this Agreement.  The United States would like to encourage Chile carefully to consider joining the WTO Agreement on Government Procurement.

I will end my statement by reiterating our appreciation for Chile’s active participation and leadership in the Doha Development Agenda negotiations.  We look forward to continuing our work with Chile to achieve a balanced and ambitious result in the Doha negotiations with meaningful new market access for all.

The United States appreciates this opportunity to comment on Chile’s trade policy.  We welcome further cooperation on trade matters with our Chilean colleagues and we wish you a successful trade policy review.  Thank you.