Background

• Chilean Delegation to California, 2009
• MOU signed by President Bachelet and Governor Schwarzenegger
• Chile-California Plan
• U.S.-Chile Free Trade Agreement

Chile President Cites Natural Affinities in Trade Relationship with California

California and Chile are natural partners, linked by a history dating back to the Gold Rush, plus climate and culture, the President of Chile, Michelle Bachelet Jeria, told a breakfast gathering at the California Chamber of Commerce on June 12, 2008.

President Bachelet’s talk at the 2008 California Chamber of Commerce event was part of a Northern California tour and attracted more than 160 guests, including representatives from the U.S. and California governments, local universities and businesses. President Bachelet highlighted the growth in trade between Chile and the United States, as well as Chile and California since the signing of the U.S.-Chile Free Trade Agreement (FTA) four years ago.

Describing “social cohesion” as a particular challenge in Latin America, President Bachelet cited the need to pursue economic growth and social justice at the same time. “It is impossible to have economic growth and a stable democracy with large segments of the population being excluded from progress,” President Bachelet said.

Chile has been investing record sums in education, including redesigning the research and development system, as well as investing in infrastructure with a particular focus on competitiveness, President Bachelet said.

Chilean Delegation to California in 2008

The President’s delegation included the Chilean ministers of foreign affairs, the economy and energy, and several members of the Chilean Parliament. Also accompanying President Bachelet to the CalChamber breakfast were Paul Simons, the U.S. ambassador to Chile; and the Chilean ambassador to the United States, Mariano Fernández.

After speaking at the CalChamber, President Bachelet and her delegation went to the State Capitol, where they were greeted by Governor Arnold Schwarzenegger and the President spoke to the California Assembly.

Next came a stop at the University of California, Davis, where the Governor and President Bachelet signed a memorandum of understanding to promote collaboration in “human capital development,” education, environmental protection, energy, agriculture, information and communication technology, trade and business.

Chile-California Plan

In June, 2008, President Bachelet signed an MOU with Governor Schwarzenegger of California, marking the start of a program called “Chile-California Plan: A Strategic Association for the 21st Century.” The association is based on the joint commitment of Chile and California to develop business opportunities, expand research and teaching in education, and develop projects in different areas that are strategic for both territories: human capital, education in environmental issues, energy, agriculture, information and communications technologies and trade. There are three top areas that have been determined to be key areas for initial promotion and coordination: human capital, research and development and trade and business.

It is anticipated that the Plan will generate opportunities for the development of innovative international exchange models and public-private networks in government, business and academic fields.

For further information, please contact: Trade Commissioner – PROCHILE.

• Bilateral Trade Chile – U.S.: A Win Win 2009
• Chile – California 2009

President Bachelet

President Bachelet became the first woman president of Chile on January 15, 2006. The President is trained as a doctor, has completed graduate studies in military sciences and speaks German, French, Portuguese, Spanish and English.

Before her election to Chile’s highest office, President Bachelet served as Chilean Minister of Health starting in 2000. In 2002 she was named Minister of Defense, the first woman in Chile and Latin America to hold such a position.

Trade with Chile: U.S.-Chile Free Trade Agreement

Since the U.S.-Chile Free Trade Agreement was implemented on January 1, 2004, bilateral trade between Chile and the United States has doubled and both trade and investment opportunities abound. Under the Free Trade Agreement, 85 percent of industrial products are traded without duties together with 75 percent of farm production. After just ten years, all trade in non-agricultural goods will take place without tariffs or quotas; for agriculture, the phase-out will take 12 years.

Two-way trade in goods between the United States and Chile rose to $20.3 billion in 2008. According to the US Department of Commerce, exports to Chile from the United States have risen by over 300 percent since implementation of the Agreement. Exports to Chile of petroleum, machinery, and fertilizer from the United States have experienced a marked increase since 2003. Chile is the United States’ 28th largest export partner. Top exports from Chile to the United States include copper cathodes, fresh grapes and salmon. Top exports from the United States to Chile include transmission receptors, computers and diesel trucks.

According to the American Chamber of Commerce in Chile, over 300 US companies have investments in Chile, with over 40 of them using Chile as a platform for services in the region. Chilean affiliates of US direct investors are estimated to employ over 58,5000 people and their value-added contributed 3.2 percent to Chile’s gross domestic product.

Chile is roughly equal in size to California and home to 16 million people and renowned copper mines. Chile holds $15.3 billion in reserves. In 2003, the Chilean economy began to recover after a 1999 slump, reaching a 3.3 percent growth in real GDP. GDP grew by 4.2 percent in 2006. Since 1990, there has been more than $50 billion in direct foreign investment in Chile. Chile has the most stable and fastest growing economy in the region which puts it in the best position to promote democracy and political freedom. Chile has now signed 56 Free Trade Agreements with various countries round the world.

See U.S.-Chile Trade Fact Sheet: Focus on California

Chile is California’s 22nd largest export partner. In 2008, California exported more than $1.7 billion to Chile, doubling the amount from 2007. This included petroleum and coal products, computer and electronic products, machinery, and transportation equipment. California imports the following from Chile: fresh fruits, forestry products, wines, and seafood.

History of the U.S.-Chile FTA Negotiations

The terms of the bilateral FTA were concluded in December 2002 after over a decade of waiting for an agreement between Chile and the United States which was promised at the Summit of the Americas. The U.S.-Chile FTA will be considered a template for a host of future free trade agreements, including a Free Trade Area of the Americas. The United States and Chile concluded the comprehensive (800 page) bilateral free trade agreement on December 11, 2002. The FTA builds on the progress made by the U.S.-Chile Joint Commission on Trade and Investment that was established during President Bill Clinton’s state visit to Chile in April 1998.

The U.S.-Chile FTA was signed in Miami on June 6, 2003 by then U.S. Trade Representative Robert Zoellick and Chilean Foreign Minister Soledad Alvear. It is the first free trade agreement between the United States and a South American country.

The U.S. House of Representatives and Senate passed the FTA in July 2003 by a vote of 270-156 and 66-31 respectively. The vote was held under the Trade Promotion Authority which allows for an up or down vote with an expedited time frame or ‘fast track.’ Chile also approved the agreement.

Americas Competitiveness Forum

The III Americas Competitiveness Forum will bring together public authorities, businesspeople, and high level experts from the 34 countries in the region in plenary sessions, roundtable discussions, simultaneous panel sessions and bilateral meetings to discuss how competitiveness can be improved in the current economic context.

The event will gather 2 presidents (President Michelle Bachelet of Chile and President Alvaro Colom of Guatemala), 18 ministers, entrepreneurs and world class experts. In addition, Alicia Barcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) will participate. From the United States of America, Gary Locke, US Commerce Secretary will be present.

From California State Government, the delegation included Secretary Dale Bonner of the California Business, Transportation and Housing Agency and Eloisa Klementich, assistant deputy secretary. Secretary Mike Chrisman of the California Resources Agency and Richard Martinez of the California Environmental Protection Agency were also in attendance.

Susanne Stirling, Vice President of International Affairs for the California Chamber of Commerce and Carlos Valderrama, Senior Vice President for Global Initiatives for the Los Angeles Area Chamber of Commerce will be representing the California Business Community.

Moderators and speakers from California include: Richard K. Lyons, Dean, Haas School of Business, UCB; John Kao, Chairman, Institute for Large Scale Innovation; and Nancy Ryan, Deputy Executive Director for Policy, California Public Utilities Commission.

A number of California companies operating in Chile (many of whom are California Chamber of Commerce members) will be in attendance and participating in the Forum events.

Chile has one of the fastest growing economies in Latin America with many opportunities for California companies. Moreover, as one of the most promising markets in the region for a variety of U.S. goods and services, according to the U.S. Department of Commerce, Chile holds an important commercial influence in South America. This is due to the energy and professionalism of its entrepreneurs, the transparency of its regulation, and the predictability of its decision makers.

Chile’s market-led reforms and an increasingly diversified economy offer a viable option for U.S. exporters operating in a wide range of industries. Additionally, The Economist Intelligence Unit ranked Chile as the safest country in Latin America (2008) and as having the best business environment in Latin America (2009).

2009 California-Chile Trade Mission Blog

Blog By (Mrs.) Susanne Stirling, Vice President, International Affairs

Day 1 – Sunday, September 27, 2009

The California delegation arrived in Santiago yesterday (via American Airlines, a long-standing CalChamber member) and were welcomed by the sights of a lovely modern city! What a great treat to spend some time in the Southern Hemisphere, where spring is on the horizon! (And yes, the water really does go the opposite way down the drain….) Even though we traveled for many hours, we were thankful that we only had to adjust our internal clocks by three hours. We checked into the hotel and began our whirlwind trip.

From California, the delegation included Secretary Dale Bonner of the California Business, Transportation and Housing Agency and Eloisa Klementich, assistant deputy secretary. Secretary Mike Chrisman of the California Resources Agency and Richard Martinez of the California Environmental Protection Agency were also in attendance.

Carlos Valderrama, senior vice president for global initiatives for the Los Angeles Area Chamber of Commerce, and I are representing the California business community.

One-third of Chile’s 16 million people live in Santiago. The central region of Chile, which includes Santiago, has a mild climate like California. The “central valley,” just like in California, is the breadbasket for Chile — with fruits and vegetables — and many wineries.

The similarites between Chile and California abound. The Chileans say their country really is like California only turned the other way around — with the desert to the north. The Chilean coastline is longer, but we both have mountains, a delta, skiing, rafting, and of course, the Pacific Ocean. And right through the middle of the country is the Pan-American Highway — like our I-5.

First, we were briefed by the Chilean Ministry of Foreign Affairs on Sunday afternoon. (A special thanks to Cristobal Barros for his graciousness.) This was very useful to us as we had much to learn about Chile and the many opportunities for California businesses.

Prior to the official beginning of the American Competitiveness Forum, the California delegation was driven from Santiago to Veramonte Vineyard in the Casablanca Valley, owned by a family who also owns Quintessa Vineyards in Napa, California. Casablanca Mayor Manuel Jesus Vera welcomed us.

Mayor Manuel Jesus Vera of Casablanca and
Susanne Stirling, CalChamber, at the Veramonte Vineyard

Napa and Casablanca are long-standing sister cities. The similarities of Chile and California become increasingly apparent…the Chilean wine industry is growing, but there is room in the world market for both California and Chilean wines.

The California delegation then proceeded to the U.S. Ambassador’s lovely residence. Ambassador Paul Simons and Mrs. Victoria Simons had graciously invited the entire U.S. delegation attending the Americas Competitiveness Forum to their home for a reception.

U.S. Ambassador Paul Simons

The Ambassador briefed the delegation on the U.S.-Chile bilateral relationship. There are already partnerships in so many areas ranging from observatories located high in the Andes to solar technology projects.

We were able to talk with embassy officials, as well as, many other states’ officials participating in the Forum. Mitch Larsen, the commercial counselor at the U.S. Embassy, did a great job in putting all of this together. (He started his career with the U.S. Department of Commerce in San Francisco years ago — small world!)

The reception was held in the manner of a traditional Chilean tea. What a treat! Not only were we able to get acquainted with fellow U.S. government and business representatives located in Santiago, but we experienced some of the Chilean culture first-hand.

After the Chilean tea, we headed back to our hotel for the official welcome reception for the 2009 Americas Competitiveness Forum. The room was filled to capacity with government and business representatives from all over North, Central and South America. We met some very interesting people and hopefully made some connections that will last a lifetime. I look forward to developing these relationships throughout Latin America.

Hugo Lavados, the Chilean minister of economy, welcomed us to the reception. The minister was among the delegation that traveled to California last year with President Bachelet.

Carlos Valderrama,LA Chamber, Susanne Stirling,
CalChamber and Chilean Minister of Finance, Hugo Lavados

Afterwards, Chilean Undersecretary of Foreign Affairs VonKlavern hosted the California delegation for dinner together with U.S. Ambassador to Chile Paul Simons and Chilean Ambassador to the United States Jose Goni,

Chilean Ambassador Jose Goni

who had traveled from Washington, D.C. to be present for the Forum. It was a gathering of approximately 50 business and government representatives and an outstanding venue to further cement California- Chile ties.

Also attending the dinner were Ambassador Gabriel Rodriquez; Ambassador Isauro Torres, director of North American affairs; and our long-time contact and friend, Cristobal Barros for the Ministry of Foreign Affairs. ProChile was represented by Viviana Arenda from Los Angeles and Chilean Consul General Alex Geiger-Soffia, based in San Francisco, who traveled for the event. Topics of conversation included business, agriculture and energy issues. It was a full and productive first day!

California-Chile Trade Mission Blog

Day 2 – Monday, September 28, 2009

Rise and shine and off to the first day of the Americas Competitiveness Forum! Today was a very busy and important day for the California delegation.

What a busy and informative morning we had. Chilean Finance Minister Hugo Lavados opened the morning by focusing on the interdependence of the Americas. By recognizing that Chile does not have the critical mass necessary, the Minister said that creating international colloboration is vital — and competitiveness and cooperation are key.

President Colom of Guatemala addressing the Forum

Guatemalan President Colom spoke on how Central and South America were getting closer and also recognized an increase in harmony among the Americas.

President Bachelet of Chile addressing the Forum

Chilean President Michele Bachelet (who has a 74 percent approval rating in her fourth and final year in office, with no consecutive re-election permitted) welcomed the Forum delegates in a spirit of cooperation among the Americas. The President’s focus was on “Competitiveness in Times of Crisis.”

U.S. Commerce Secretary Gary Locke spoke of President Obama’s pledge to renew our economic ties with South America. Further, the Secretary said that protectionism “simply does not work”.

Governor Schwarzenegger’s video address

During the Forum lunch, a video address by our own California Governor Arnold Schwarzenegger was played and well-received by the crowd.

U.S. Ambassador Paul Simons, Susanne Stirling, CalChamber,
AmChamChile President Garcia, Carlos Valderrama, LA Chamber,
and Chilean Ambassador Jose Goni at the MOU signing

After lunch, we met with Ricardo Garcia, president of the American Chamber of Commerce in Chile. The CalChamber, along with the Los Angeles Chamber, signed a Memorandum of Understanding (MOU) with the AmChamChile, to encourage and promote trade and Investment among our respective chambers.

MOU signing ceremony

This MOU is part of a larger Chile-California Plan supported by the Chilean Foreign Ministery. Both Chilean Ambassador to the United States Jose Goni and U.S. Ambassador to Chile Paul Simons witnessed the signing of the MOU.

Signing the MOU: the CalChamber, AmCham Chile, and the LA Chamber

U.S. Ambassador Simons, Susanne Stirling, CalChamber, AmCham President Garcia,
Carlos Valderrama, LA Chamber and Chilean Ambassador Goni after the MOU signing.

The MOU has been worked on diligently by Jaime Bazan, general manager of the AmCham, and John Welby, special projects. Mateo Budinich, former president of the American Chamber of Commerce in Chile, will head this project for the AmCham.

Members of the California delegation observing the ceremony.

The California-Chile trade relationship goes back to the U.S.-Chile FTA implementation. Former Consul General, Fernando Varela (now DCM of the Chilean Embassy in Washington D.C.) was very supportive. Consul General Alex Geiger-Soffia continues that support, together with Prochile Trade Commissioner Viviana Aranda http://www.chileinfo.com. Cristobal Barros of the Ministry of Foreign Affairs will continue to coordinate the Chile-California Plan from Santiago.

Following the MOU signing, the California delegation headed back to Ambassador Simons’ residence to host a California-specific reception. Attending were several Chilean government officials, including the Minister of Foreign Affairs and Chilean Ambassador Goni, as well as many California businesses which have operations in Chile. Representatives of CalChamber member companies in Chile, include American Airlines, Google, Chevron, Intel, Cisco, Clorox, Walt Disney, Mattel and Sempra. It was a great crowd and a wonderful opportunity for us to mingle with the local business community.

Again, it was a long and productive day! Tomorrow, many more things are on the horizon and then our scheduled departure. Where does the time go?

California-Chile Trade Mission Blog

Day 3 – Tuesday, September 29, 2009

Early Tuesday morning, another day awaited us at the Americas Competitiveness Forum. Although our bodies were telling us to sleep “just five more minutes,” we hurried and readied ourselves for a full and final day in Santiago.

Heading back to the Forum, we were greated with a full list of activities, sessions, and meetings. Ministers from many different countries addressed the group as well as the heads of several prominent South American businesses. All of this was very informative and I look forward to implementing some new ideas.

In the morning, the California delegation met with Ministry of Education officials regarding an exchange of students in the future. We also met with officials from BECAS Chile which is a new scholarship program established for Chilean students to go abroad. There is great interest among Chilean students to attend California universities and then return to Chile with their knowledge from abroad. Also present were representatives from the Consejo de Rectores de las Universidades Chilenas, which is the association of Chilean universities.

Before lunch, the California delegation had a private briefing with U.S. Commerce Secretary Locke. The Secretary spoke regarding export promotion and trade relations together with details of the ACF 2010 to be held in Atlanta.

Lunch was hosted by the American Chamber of Commerce in Chile. The California delegation was pleased to join the local business community for this event. Secretary Locke spoke of U.S. – Chilean relations but also of a broader U.S. policy toward South America. The event was a wonderful opportunity to discuss working together on export promotion and trade issues for the future.

Following lunch, the California delegation met with the Invest in Chile group. As trade and investment are two way streets, it was most interesting to learn of the Chilean strategies to attract investment from abroad.

As we finished our final day in Santiago, we were encouraged to just slow down and take in the beauty of the majestic city. Sometimes you never fully appreciate the natural scenery when you are focused on a goal. With the Andes as the backdrop and the first signs of spring returning, Santiago is truly a beautiful city. My only regret is that there is not enough time to sightsee. I will definitely be returning to Santiago, although perhaps next time, I will bring my family. In the interim, I am satisfied that the California-Chile trade and business relationship has been greatly furthered by the vast and productive meetings held over the past few days.

P.S. To learn more about Chilean literature — and if you like the genre Mystical Realism — choose one of Isabel Allende’s books. Also, try to look up Pablo Neruda, the Chilean poet who won the Nobel Prize for literature in 1971. Expand your horizons and happy reading.

Thanks for following my first trip blog!