Jan-Feb 2010 ITU
- Table of Contents
- Full Issue in PDF
- U.S. Export Position Improves as National Export Initiative Marks One Year
- Answering the Call to Double U.S. Exports
- In Chile, a Sense of National Unity and Opportunities for U.S. Businesses
- New Web Portal Helps Companies Protect Intellectual Property Rights
- Short Takes
- Trade Calendar
- Featured Trade Event: Trade Mission to Qatar and United Arab Emirates
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In Chile, a Sense of National Unity … and Opportunities for U.S. Businesses
Mitch Larsen, senior U.S. and Foreign Commercial Service commercial officer in Santiago, with his daughter, Emily, at the Rebuild Chile Expo 2010. Chile, says Larsen, "is one of the most open economies in the world." (U.S. Department of Commerce photo)
Despite suffering a serious earthquake in 2010, the Chilean economy has rallied and offers opportunities to U.S. exporters in many sectors. In addition to being one of the most stable and transparent democracies in Latin America, Chile is an ideal market for U.S. companies looking to grow overseas.
Over the years, Latin America has proven to be an increasingly important and reliable market for U.S. exporters. Evidence of the region’s commitment to expanding commercial ties was seen late last year at the Americas Competitiveness Forum in Atlanta, Georgia (see sidebar), where representatives from more than 34 countries throughout the Western Hemisphere gathered to discuss concrete ways of ensuring economic growth and improving the efficacy of trade.
Chile, an important market in the region, has had a free trade agreement (FTA) with the United States since 2004. In 2010, the United States exported $10.9 billion in goods to Chile and had a positive trade balance of $3.9 billion.
Mitch Larsen, senior U.S. and Foreign Commercial Service commercial officer in Santiago, recently spoke with Doug Barry of the Trade Information Center in Washington, D.C., about opportunities for U.S. firms in Chile. Here are some excerpts from their conversation.
Barry: We’ve been hearing a lot about Chile in the news lately: the earthquake in February 2010 and the mine rescue last fall. From where you sit in Santiago, what’s happening there that U.S. businesspeople need to pay attention to?
Larsen: There is a sense of national unity here, which came across in the news reports of the mine rescue. And while the earthquake was a very big blow, Chileans came together in the aftermath. Chile also qualified for the 2010 World Cup—something a small country of 17 million people doesn’t qualify for every four years. Soccer is a big thing in Latin America! And finally, 2010 was Chile’s bicentennial year.
At Atlanta, Talk of Hemispheric Cooperation and Growth
In November 14–16, 2010, representatives from more than 34 countries throughout the Western Hemisphere met in Atlanta, Georgia, to participate in the fourth Americas Competitiveness Forum. The event was hosted by the Department of Commerce and the city of Atlanta with support from CIFAL Atlanta, a UN-affiliated organization. It consisted of a series of workshops, presentations, and meetings that highlighted successful strategies to increase economic prosperity throughout the region. The focus was on four areas: innovation and green technologies; education and workforce development; entrepreneurship and small business development; and trade facilitation, border clearance, and supply chain logistics.
Secretary of Commerce Gary Locke told attendees how cooperation in these areas can bring economic benefits: "The more we can share ideas, along with goods and services, the better off all of us will be. Regional issues are not open to one-size-fits-all solutions. But there are common challenges that can be addressed to improve competitiveness."
For more information about the fourth Americas Competitiveness Forum, including links to reports on previous forums, visit www.competitivenessforum.org.
Barry: And how is Chile’s economy performing?
Larsen: Chile, like many other countries, is recovering from the global financial situation. But commodity prices are close to all-time highs. This includes copper, which accounts for more than 50 percent of Chile’s export revenues. The Chilean economy has improved quite dramatically recently. In the third quarter of 2010, gross domestic product growth was about 6.5 percent. So Chile, along with other countries in Latin America, is starting to hit a good growth track.
Barry: Why should a U.S. company consider doing business in Chile?
Larsen: For U.S. companies, there are great opportunities there. Chile is a safe, tranquil, and stable place to do business. There are favorable exchanges rates and, under the U.S.–Chile FTA, the private sectors of both our countries have a history of working very closely together.
Barry: Are there any particularly active sectors that U.S. exporters should look at?
Larsen: Chile has a small manufacturing base, and it exports a lot of commodities, notably copper and other raw materials. It also exports a lot of wine, agricultural products, and processed food. But it needs the machinery and equipment to mine, harvest, and ship these things. Chilean industry has to purchase this equipment and technology from somewhere. We’d like it to do so from U.S. producers.
Barry: Can U.S. companies already doing business in Chile use it as a springboard into neighboring markets? If so, how does a company go about doing so?
Larsen: Once a company is doing business in Chile, it can readily access other markets in Latin America, particularly in the so-called southern cone region—Argentina, Brazil, and Uruguay. And an added advantage of using Chile as a base for doing business is that it, in turn, has FTAs with neighboring countries. You can export into or out of Chile very easily.
Barry: Just how difficult is it to export to Chile?
Larsen: Chile has by far the most open, transparent, and working customs regime that I have ever seen in my overseas career. Things come in and go out very efficiently, with low to no tariffs. And because it has such a small domestic market, Chile lives and dies by free trade. It is one of the most open economies in the world.
At the fourth Americas Competitiveness Forum held in Atlanta, Georgia, November 14–16, 2010, Francisco Sánchez, undersecretary of commerce for international trade (left), and Roberto Kreimerman, Uruguay's minister of industry, energy, and mines (right), signed a memorandum of intent to build international trade capacity and advance mutual interests in education and workforce development. (U.S. Department of Commerce photo)
Barry: What about U.S. small and medium-sized enterprises (SMEs)? Are they doing business in Chile? And has your office been able to give them a hand?
Larsen: Yes, they are definitely here. SMEs are our bread and butter. We work with larger companies as well—especially when it comes to advocacy regarding government tenders. But for the most part, we are doing a lot of trade promotion work targeted at SMEs, such as our Gold Key program, various trade events, and our International Buyer program.
Barry: What are the next steps that a small U.S. company should take to inform itself about the opportunities in Chile?
Larsen: First, we produced a report titled, “Country Commercial Guide.” It includes sections that describe 10 to 15 so-called best prospect sectors. It also includes sections on the free trade agreement, intellectual property rights protection, and much more. Second, we have a great team of commercial specialists and assistants who are responsible for specific industry sectors. They can provide companies with a lot more detail on a particular product or industry. So I would encourage companies thinking of exporting to Chile to contact us. They should also go to our Web site, www.buyusa.gov/Chile/en/, and take a look at the list of upcoming activities offered there. If a company contacts us and tells us what product they have or what service they offer, we can then get a conversation going and figure out if there is a market for it in Chile.
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