Investment

According to various economists, the elected president Ricardo Lagos is not expected to implement any fundamental changes to economic policy. He will try to stimulate GDP growth while containing the fiscal deficit will be among his priorities this year. The economy contracted by an estimated 1% in 1999, but will rebound with a strong 5% growth rate in 2000.

Chilean policy toward foreign investment is liberal and open in order to stimulate development. Chile's best investment incentive is its proven track record: economic growth, high corporate profits, advantageous tax system and transparency. In 1998, the US represented over 22% of all foreign investment, reaching US$ 1.339 billion. This is not surprising, given the fact that the US represents over a third of all foreign investment in Chile between 1974 and 1998, making it the largest and most consistent investor.

On the other hand, in 1999, the U.S. was the largest receiving country of Chilean capital, accounting for US$3.12 billion. Chilean investment reached US$5.785 billion last year.

Trade
Chile posted a trade surplus of US$1.640 million. The U.S. again, was Chile's strongest trading partner. The U.S. represented 16% of all exports from Chile and received 24% of the Chilean imports. In 1997, Chilean imports from the US represented 20% of all imports while they represented 24% in 1998. Also, Chilean exports to the US were 14% of all exports in 1997 and 16% in 1998. Overall exports rose 7.9% to US$15.91 billion in 1999, exports to NAFTA members (United States, Canada and Mexico) represented 41% of the total exports ; Asia represented 29%; and Europe 27,6%.

In the agricultural sector, members of the North American Free Trade Agreement (the U.S., Canada and Mexico) were the top markets for Chilean exports accounting for US$1.68 billion of the total.

Salmon exports increased 14.5% in 1999 in comparison to 1998. 32 percent of the total salmon exports went to the U.S. market. Smoked Salmon had a good reception too in the United States, where 36.4% went to this market.

Chilean wine exports will rise during 1999, the U.S. bought 17.5% of the exported wine and England was the number one market, receiving 25% of the Chilean wine.

Despite the predominance of primary commodities, Chile's government has succeeded in diversifying the economy. At present, almost four thousand products from more than five thousand eight hundred (5,800)businesses are being shipped to one hundred eighty markets. Additionally, Chile is slowly changing the composition of it's leading production and exporting goods from raw material such as copper, fish, meat and wood to services and technologically advanced products such as ones from the manufacturing industry.

The above graph shows the trend of the trade between Chile and the U.S. While trade between both countries diminished last year, Chile s trade with the U.S. did not diminish as much as its total trade did. There is a very strong economic relationship between these two countries.

Despite the predominance of primary commodities, Chile'sgovernment has succeeded in diversifying the economy. At present, almostfour thousand products from more than five thousand eight hundred (5,800)businesses are being shipped to one hundred eighty markets. Additionally,Chile is slowly changing the composition of it's leading production andexporting goods from raw material such as copper, fish, meat and wood toservices and technologically advanced products such as ones from the manufacturingindustry.

The above graph shows the trend of the trade between Chileand the U.S.. While trade between both countries diminished last year, Chile’strade with the U.S. did not diminish as much as its total trade did. Thereis a very strong economic relationship between these two countries.

Chilean exports to the U.S. (US$2,812 millions) in 1999 increased 12% in comparison to the same period of 1998. Imports to Chilefrom the U.S. (US$2,987 millions) decreased 22% in comparison to the sameperiod of 1998. In 1999, U.S. surplus was US$175 million, in 1998,was of 1.326.

As one can see from the above graph, Chilean exports to the United States for the first half of 2000 have continued to increase as they have since 1995, while imports are beginning to recover. The United States continued to be Chile's premier trading partner, as 17% of all Chilean exports went to the US and 20% of Chile's imports are from the United States.

Chilean exports to the United States ($238 million) in July of 2000 declined 1.2% from last July. Imports from the US in July of 2000 ($270 million) increased 11.5% when compared to the same month in 1999.

Total Chilean exports to the United States ($1.805 billion) between January and July of 2000 were 7% greater than they were during the same period last year. Imports from the United States to Chile between January and July of 2000 ($1.885 billion) also grew 9.4% from the amount imported during this period in 1999.

The principle products exported to the United States between January and July of 2000 were fresh grapes ($264 million), copper cathodes ($183.3 million), and fresh salmon ($150.3 million). The principle products imported from the United States to Chile were transmission receptors ($126 million), computers ($53 million), and diesel trucks ($52 million).

Source: Research Department, AmCham

Investment

According to various economists, the elected president Ricardo Lagos is not expected to implement any fundamental changes to economic policy. He will try to stimulate GDP growth while containing the fiscal deficit will be among his priorities this year. The economy contracted by an estimated 1% in 1999, but will rebound with a strong 5% growth rate in 2000.

Chilean policy toward foreign investment is liberal and open in order to stimulate development. Chile's best investment incentive is its proven track record: economic growth, high corporate profits, advantageous tax system and transparency. In 1998, the US represented over 22% of all foreign investment, reaching US$ 1.339 billion. This is not surprising, given the fact that the US represents over a third of all foreign investment in Chile between 1974 and 1998, making it the largest and most consistent investor.

On the other hand, in 1999, the U.S. was the largest receiving country of Chilean capital, accounting for US$3.12 billion. Chilean investment reached US$5.785 billion last year.

Trade
Chile posted a trade surplus of US$1.640 million. The U.S. again, was Chile's strongest trading partner. The U.S. represented 16% of all exports from Chile and received 24% of the Chilean imports. In 1997, Chilean imports from the US represented 20% of all imports while they represented 24% in 1998. Also, Chilean exports to the US were 14% of all exports in 1997 and 16% in 1998. Overall exports rose 7.9% to US$15.91 billion in 1999, exports to NAFTA members (United States, Canada and Mexico) represented 41% of the total exports ; Asia represented 29%; and Europe 27,6%.

In the agricultural sector, members of the North American Free Trade Agreement (the U.S., Canada and Mexico) were the top markets for Chilean exports accounting for US$1.68 billion of the total.

Salmon exports increased 14.5% in 1999 in comparison to 1998. 32 percent of the total salmon exports went to the U.S. market. Smoked Salmon had a good reception too in the United States, where 36.4% went to this market.

Chilean wine exports will rise during 1999, the U.S. bought 17.5% of the exported wine and England was the number one market, receiving 25% of the Chilean wine.

Despite the predominance of primary commodities, Chile's government has succeeded in diversifying the economy. At present, almost four thousand products from more than five thousand eight hundred (5,800)businesses are being shipped to one hundred eighty markets. Additionally, Chile is slowly changing the composition of it's leading production and exporting goods from raw material such as copper, fish, meat and wood to services and technologically advanced products such as ones from the manufacturing industry.

The above graph shows the trend of the trade between Chile and the U.S. While trade between both countries diminished last year, Chile s trade with the U.S. did not diminish as much as its total trade did. There is a very strong economic relationship between these two countries.

Despite the predominance of primary commodities, Chile'sgovernment has succeeded in diversifying the economy. At present, almostfour thousand products from more than five thousand eight hundred (5,800)businesses are being shipped to one hundred eighty markets. Additionally,Chile is slowly changing the composition of it's leading production andexporting goods from raw material such as copper, fish, meat and wood toservices and technologically advanced products such as ones from the manufacturingindustry.

The above graph shows the trend of the trade between Chileand the U.S.. While trade between both countries diminished last year, Chile’strade with the U.S. did not diminish as much as its total trade did. Thereis a very strong economic relationship between these two countries.

Chilean exports to the U.S. (US$2,812 millions) in 1999 increased 12% in comparison to the same period of 1998. Imports to Chilefrom the U.S. (US$2,987 millions) decreased 22% in comparison to the sameperiod of 1998. In 1999, U.S. surplus was US$175 million, in 1998,was of 1.326.

As one can see from the above graph, Chilean exports to the United States for the first half of 2000 have continued to increase as they have since 1995, while imports are beginning to recover. The United States continued to be Chile's premier trading partner, as 17% of all Chilean exports went to the US and 20% of Chile's imports are from the United States.

Chilean exports to the United States ($238 million) in July of 2000 declined 1.2% from last July. Imports from the US in July of 2000 ($270 million) increased 11.5% when compared to the same month in 1999.

Total Chilean exports to the United States ($1.805 billion) between January and July of 2000 were 7% greater than they were during the same period last year. Imports from the United States to Chile between January and July of 2000 ($1.885 billion) also grew 9.4% from the amount imported during this period in 1999.

The principle products exported to the United States between January and July of 2000 were fresh grapes ($264 million), copper cathodes ($183.3 million), and fresh salmon ($150.3 million). The principle products imported from the United States to Chile were transmission receptors ($126 million), computers ($53 million), and diesel trucks ($52 million).

Source: Research Department, AmCham