Chilean Foreign Policy: 2008

What is Chile’s current foreign policy?

Chile’s current foreign policy strongly resembles the foreign policy of the Portales period, emphasizing political neutrality, non-intervention, sovereign equality, regional stability, and commercial expansion.

The types of problems it faces are also similar to that era, but not specific to it, insofar as it has yet to resolve territorial disputes with Argentina, Bolivia, and Peru.[1] However, its relative economic success and interest based diplomacy, as opposed to a variable ideology-driven policy like those of other nations around the region, have given Chile a position of power within the region disproportionate to its size and small population.

Like Brazil, Chile’s foreign policy can be divided between regional and extra-regional efforts, [2] but it can also be further subdivided between its commercial and political agenda, with its extra-regional efforts focused primarily on commerce while the principle aim of its regional efforts’ is the “promotion of integration and the consolidation of an environment conducive to peace, dialogue, solidarity and mutual confidence within the region.”[3] Accordingly we will first discuss Chile’s foreign trade policies applicable to both regional and extra-regional relations before we move on to a discussion of its regional policies that focus more specifically on Latin America.

Foreign Trade Policy

Open regionalism is Chile’s official foreign trade policy. [4] This policy seeks a deeper penetration of world markets in Latin America, North America, Europe and the Asia Pacific in order to increase foreign investment and open new markets.

According to the Foreign Ministry, this position allows Chile to “strengthen its ties with its neighbors, but at the same time, keep its independence in the economic arena.”[5] To these ends Chile has signed more bilateral trade agreements than any other country in the world and is a strong proponent of the Doha Round of the WTO as well as the Free Trade Agreement of the Americas.

Chile began to actively push its trade agenda around the world in the early 1990s. Beginning in the Americas where it first signed a FTA with Canada in 1996, Mexico in 1998, Central America in 1999. It then negotiated and signed a FTA with the EU in 2002 and finished its negotiations with the USA in 2003, the treaty went into effect in Jan. 2004.

Most recently Chile has turned its attention to strengthening its commercial position in the Asia Pacific where it hopes to position itself as the bridge for Asian expansion into Latin America.[6] It became a member of APEC in 1996 and has since signed an FTA with six of its 21 members and was the host of its annual summit in 2004. [7] In Asia it signed a FTA with South Korea in 2002, China in 2005 (their first with a Latin American country),[8] a preferential trade agreement with India in 2006 and a FTA with Japan in 2007. Chile is also negotiating various types of trade agreements with other Asian Pacific countries including Australia, Brunei, Malaysia, New Zealand, Singapore, and Thailand.[9]

The final aspect of Chile’s trade policy is its relationship with Latin America. While most of Chile’s exports go to countries outside of the region, Argentina and Brazil are Chile’s number two and number three suppliers, respectively, making a closer integration with these two countries and other Mercosur countries a high priority.[10]

Also, because Chile has no natural sources of energy, it is dependent on Argentina to supply it with the majority of its energy in the form of natural gas piped over the Andes. As mentioned earlier, disruptions in gas supplies from Argentina have caused problems for Chileans and highlighted the need to diversify national energy supplies.

Improved relations with CAN member countries and infrastructure connectivity with its northern oil and gas rich neighbors in Bolivia, Peru, Ecuador, and even as far away as Venezuela and Brazil could provide a solution to this problem in the long term; however, the ongoing conflicts with Peru and Bolivia over maritime borders limits these options in the short term.

From the standpoint of these interests, it would seem that a union focused on improving regional relations and infrastructure connectivity would benefit Chilean interests by bringing it “closer” to the rest of its neighbors. However, it is important to highlight the close relationships Chile maintains with Mexico and Central America when considering the logic of creating a South American Union as opposed to a Latin one.

Foreign Political Policy

In addition to the commercial aspects of Chile’s extra-regional foreign policy we have already discussed, Chile is also involved in the major multilateral political forums of the UN and the WTO as well as the regional groups of the OAS and APEC. It prefers the consensus building offered through these types of multilateral institutions because they allow it to better maintain its policies of neutrality and non-intervention.

As discussed, these are important historic policies that Chile has tried to follow to help it avoid unnecessary conflicts; however, within Latin America, Chile is sometimes willing to intervene, (as it did in the Peru-Ecuador conflict of 1998) to maintain regional stability. This is essentially non-intervention from a regional perspective that helps to increase Chile’s influence within the region over non Latin American countries.

The policy of non-intervention was also practiced by Diego Portales in 1831 when he rejected the presence of British agents in the Peru-Bolivia conflict in which Chile was mediating.[11] This behavior is consistent with its policy of ‘regional solutions for regional problems,’ which seeks the promotion of peace, human rights, democracy, political cooperation, physical integration and development to help maintain a “more peaceful, stable Latin America.”[12]

All of these activities indicate a sophisticated, long-term foreign policy with clear objectives that have been supported through successive presidential administrations. This makes Chile different from the rest of South America in so far as it has stuck with several basic political and economic policies for a long period of time.

By Nathan Gill – Southern Affairs

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Chilean Foreign Policy: Actors and Institutions
Chilean Foreign Policy: Traditions

[1] It is worth noting in the Peru – Chile and Bolivia – Chile disputes the Chilean government maintains that, from a legal standpoint, its borders with the two countries are recognized under international law. In practice, these are two of Chile’s most problematic issues within South America. [2] Chile’s use of the term ‘regional’ often refers to Latin America as opposed to Brazil’s preferred use of the term to refer specifically to South America. This contrast will be discussed further on. [3] Foreign Ministry Website. 17 Apr. 2008 [4] Foreign Ministry Website. 17 Apr. 2008 [5] Foreign Ministry Website. 17 Apr. 2008 [6] Koh, Tommy. Chile in the World: A View from Singapore. Diario Financiero Online. Accessed 20 Apr. 2008. [7] Foreign Ministry Website. 17 Apr. 2008 [8] Associated Press. China, Chile Sign Free Trade Agreement. 18 Nov. 2005. Accessed 19 Apr. 2008 [9] La Tercera Online. Chile y el mundo. In Chile y sus presidentes: Nº14 Consolidación democrática (1994-2006). 21 Apr. 2008 [10] Chile’s top export markets in 2006 were the USA (15.4%), Japan (10.4), China (8.5%), and the Netherlands (6.6%). The Economist Factsheet. Chile. Country ViewsWire 27 Sept. 2007 [11] Min. Estado Diego Portales al Congreso, 1836. Santiago, 1858: 178-179 [12] Foreign Ministry Website. 17 Apr. 2008

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