1	World Trade Organization Third Trade Policy Review Chile Geneva, 2-4 December 2003
2	Presentation by the Government of Chile Ambassador Osvaldo Rosales General Director for International Economic Relations Ministry of Foreign Affairs
3	Overview Macroeconomic environment Trade Policy Conclusions
4	Macroeconomic Environment (1997-2003) Difficult External Environment Low growth in our main trading partners Falling prices of our main exports High price of oil Significant decrease in capital flows towards emerging economies Several external shocks Financial crises Terrorist attacks of 9/11 Corporate scandals Bursting of the “IT Bubble”
5	Chile’s main macroeconomic indicators
6	Macroeconomic Environment (1997-2003) Macroeconomic Policy Pillars Inflation targets 2 to 4% range, centered on 3% Exchange rate flexibility Floating exchange regime since Sept.’99 Gradual liberalization of capital account “Structural surplus” fiscal rule 1% of GDP Allows for counter-cyclical fiscal policy
7	Macroeconomic projections
8	Trade Policy (1997-2003) Main goals of Chilean trade policy Improve access for Chilean goods and services to our main markets Foster domestic and foreign investment Increase the competitiveness of the Chilean economy Increase macroeconomic stability Contribute to poverty eradication
9	Trade Policy (1997-2003) Chile has continued and deepened its “multidimensional” trade policy Unilateral tariff reduction New FTAs with major partners Active participation in WTO
10	Trade Policy (1997-2003) Main features Increasing importance due to difficult external environment Broad support among the Chilean population Low flat tariff Transparency and predictability Sectorial neutrality Minimize risk of trade diversion due to FTAs
11	Trade Policy: Developments at the national level Unilateral tariff reduction Introduction of a safeguards regime Stricter provisions than the WTO Agreement Subsidies programs have been modified/phased out to achieve conformity with WTO’s SCM Agreement Omnibus Law on WTO Compliance Adjustments related to TRIMS, TRIPS, Customs Valuation, TBT Effective as of 4 November 2003
12	Trade Policy: Developments at the bilateral level Need for bilateral negotiations with key partners because: Unilateral liberalization doesn’t provide market access for Chilean exporters Multilateral negotiations, which are otherwise the best alternative, are slow and may converge to the lowest common denominator To avoid being discriminated in markets of countries that have engaged in FTAs To attract foreign investment
13	Trade Policy: Developments at the bilateral level (2) Over 90% of trade with Latin America has been liberalized México, Colombia, Ecuador, Venezuela, MERCOSUR, Perú, Costa Rica, El Salvador Since 1997, Chile has concluded FTAs with several OECD members Canada, México (FTA), EU, US, EFTA, Korea Prospective agreements: Bolivia, New Zealand and Singapore
14	Trade Policy: Developments at the bilateral level (3) In the near future, over 75% of Chile’s foreign trade will be duty free Potential market of over 1 billion consumers Benefits: Reinforcement of comparative advantage Increase in exports Diversification of exports towards products with more value added and services More and better jobs Increased macro & regulatory predictability Increased inflows of Foreign Direct Investment Higher (and more stable) economic growth Poverty reduction
15	Trade Policy: Developments at the bilateral level (4) Chile’s FTAs are comprehensive in scope and WTO-consistent (WTO-plus in most cases) Full (or at least substantial) coverage in both goods and services Full disciplines: trade remedies, investment, intellectual property, competition, government procurement, dispute settlement, trade facilitation
16	Trade Policy: Developments at the plurilateral level Strong commitment to a comprehensive FTAA Chile will chair APEC 2004 We have applied to become members of the OECD
17	Chile and the WTO (1) Strong and consistent commitment to the WTO From the GATT to Cancun Active support for launch of the DDA Active participation in negotiations of the Doha Development Agenda Cairns Group, G-20, FANs, Friends of Fish, Energy, Air Transport, GATS Mode 4, etc. Several proposals: Agriculture, Non Agricultural Market Access, Rules, Dispute Settlement
18	Chile and the WTO (2) WTO is the most important forum where Agricultural trade distortions and the abuse of Antidumping measures can be tackled DDA offers Chile additional market access opportunities, especially in the big and dynamic markets of Asia
19	Chile and the WTO (3) For Chile, the WTO is not just about negotiations Rules-based multilateral trade system Transparency Dispute Settlement Understanding The DSU must be protected. This requires compliance by all members in all cases
20	Conclusion Chile’s participation in the WTO is an essential component of our trade strategy We have high expectations put on a successful Doha Round Agriculture is the cornerstone of the DDA because of its development implications Progress in Agriculture will facilitate movement in the other areas It’s time to come back to the negotiating table and resume our job