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Economy of Chile

Foreign Trade

Chile's economy is highly dependent on international trade. In 1999, exports increased to $18.3 billion from $15.6 billion in 1999, and imports increased to $16.9 billion from $14 billion the previous year. Exports accounted for about 25% of GDP. Chile has traditionally been dependent upon copper exports; the state-owned firm CODELCO is the world's second-largest copper-producing company. Foreign private investment has developed many new mines, and the private sector now produces more copper than CODELCO. Copper output continued to increase in 2000. Non-traditional exports have grown faster than those of copper and other minerals. In 1975, non-mineral exports made up just over 30% of total exports, whereas now they account for about 60%. The most important non-mineral exports are forestry and wood products, fresh fruit and processed food, fishmeal and seafood, and other manufactured products.

Chile's export markets are fairly balanced among Europe, Asia, Latin America, and North America. The U.S., the largest-single market, takes in 17% of Chile's exports. Latin America has been the fastest-growing export market in recent years. The government actively seeks to promote Chile's exports globally. Since 1991, Chile has signed several bilateral free trade agreements, including Canada, Mexico, South Korea, USA,the People's Republic of China, the CACM nations (Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua), the EFTA and the European Union and has recently entered into the Trans-Pacific Strategic Economic Partnership which is a multilateral free trade agreement with New Zealand, Singapore and Brunei. This means that Chile has free-trade access to over half of the world's GDP. Chile intends to negotiate further agreements with countries such as India and Japan. Also, Chile is member (in different degrees) of many international economical instances, like APEC, WTO, Mercosur. Such diversity of relations prevents the Chilean economy from being exclusively dependent of any major partner and thus provides stability.

After growing for several years, imports were down in 1998 and 1999, reflecting reduced consumer demand and deferred investment. Imports have rebounded in 2000 and are up 19% over 1999; capital goods make up about 22% of total imports. The United States is Chile's largest-single supplier, supplying 18.5% of the country's imports in 2000, down from 21% in 1999. Chile unilaterally is lowering its across-the-board import tariff--for all countries with which it does not have a trade agreement--by a percentage point each year until it reaches 6% in 2003. Higher effective tariffs are charged only on imports of wheat, wheat flour, vegetable oils, and sugar as a result of a system of import price bands.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article Economy_of_Chile

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