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2008 Charla Presentation

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  • Transcript

    • 1.
      • Business and Economic
      • Development in Chile
      • U.S. – Chile FTA
    • 2. AmCham Chile
      • Chilean-American Chamber of Commerce, member of the Association of American Chambers of Commerce in Latin America (AACCLA)/U.S. Chamber of Commerce
      • Mission: Promote free trade and investment between Chile and the U.S., being the effective voice of the members, and facilitating related services
      • Over 700 member companies: 46% Chilean companies, 30% U.S. companies, 24% mixed capital.
      • 18% of Chile’s GDP and 85% of U.S. investment in Chile.
      • Events, Research, Publications, Commercial Services
    • 3. Why Chile?
      • The Economy
      • Sustained economic growth
      • High domestic savings rate
      • Solid Banking System
      • Political Stability
      • Qualitative Features
      • Strong domestic financial and capital markets
      • Broad Access to international financing
      • Infrastructure, Human Capital
    • 4.  
    • 5. Chile: Economic Highlights
      • Early economic liberalization (1975) compared to the region (1980).
      • “ Chilean miracle”: Record real avg. annual growth of 8%, 1986-1997, after debt crisis in 1982. Steady GDP growth from US$ 74 billion in 2003 to US$ 120 billion in 2007
      • Doubled per-capita income / poverty cut in half during the 1990s.
      • Inflation under control: 2%-4% range from 1999 to 2007, rising in 2008
      • “ A+” Rating from Standard and Poor’s, December 2007
      • Developed nation by 2020
    • 6. GDP Growth Source: Central Bank of Chile
    • 7. Unemployment & Inflation Source: Central Bank of Chile
    • 8. Chile’s Efforts to Reduce Poverty Source: Ecuesta CASEN 2006, Mideplan
    • 9. Chile Trade Overview
      • Exports: Engine of Chilean economic growth
      • Exports represent approx. 50% of Chile´s GDP
      • Last 3 decades exceptional export growth
      • Increase in productivity & external competitiveness
      • Exporting products that 30 years ago didn´t exist:
        • Salmon, Fruit, Wine, Cellulose
      • 2007 Worldwide exports $66 Billion
      • 2007 Worldwide imports $43 Billion
    • 10. GDP based on PPP per Capita 2008
      • Source: Source: IMD, World Economic Outlook, October 2007
    • 11. Chile: Total Trade Source: Central Bank of Chile
    • 12. Chile Total Trade
      • Source: Central Bank
    • 13. Foreign Investment in Chile
      • $64.7 billion in FDI, 1974 – 2007
      • The US is the largest Investor with $16.3 billion, 25% of total FDI in Chile
      • Over 4000 companies from 64 countries have i nvestments in Chile ( 300+ U.S. companies in Chile)
      • Business Clusters in Chile: Shared services, corporate headquarters, IT development & support, call centers
      • 47+ Companies use Chile as a platform for services in the region
        • IBM, Unilever, Nestle, Zurich, GE, Falconbridge, Wachovia, Equifax, Packard Bell, Phelps Dodge, Kodak, ALICO.
    • 14. FDI in Chile by Country Source: Cinvers (Comité de Inversiones Extranjeras), Materialized Foreign Investment (D.L. 600) by Country 1974-2007
    • 15. Recent Trend of FDI in Chile Source: Cinvers
    • 16. U.S. FDI in Chile by Sector Source: Cinvers
    • 17. Materialized FDI in Chile Source: Cinvers
    • 18. Chile: Business Highlights
      • High standards of business ethics
      • Low cost of doing business
      • Business Environment Ranking: B 21 (E and 100 being most risky) (Economist Intelligence Unit)
      • Highly-skilled and reliable workforce
      • Advanced telecommunications and IT infrastructure
      • Santiago rated best combination of quality of life & business potential
      • Ranked best business center in the region
      • Economist Intelligence Unit Democracy Index rates Chile 30th out of 167 countries -- flawed democracy category
    • 19. Competitiveness Scoreboard Source: IMD, World Economic Outlook, October 2007
    • 20. Corruption Perception Index Source: www.transparency.org
    • 21. Chile: Services Market
      • Ranked highest in Latin America for connectivity and technology infrastructure
      • Ranked 33rd in Ease of Doing Business among 178 countries (down from 28 in 2007)
      • Ranked 30 th in E-Readiness (score of 6.47/10); U.S. is 2 nd (score of 8.85/10)
      • 7th for Offshoring Attractiveness(A.T. Kearney)
      • 2007/2008 Human Development Index: Ranked 40th (out of 177 countries) as a country with high human development
      • Technology & service springboard
      • Call centers, IT service centers, Biotechnology, Software Development center
    • 22. Doing Business in Chile Ranking Source: Doing Business in Chile 2008, International Finance Corporation
    • 23. Human Development Index 2007
      • Index is a compilation of:
      • Life expectancy at birth (78.3)
      • Adult literacy rate (% ages 15 and older) (95.7%)
      • Combined primary, secondary and tertiary gross enrollment ratio (82.9%)
      • GDP per capita (PPP US$12,027)
              • Source: Human Development Report 20072008
    • 24. Trade Agreements
      • Chile has 19 trade agreements with 57 countries, representing 80% of the world’s international trade; this is more than any other country
      • Free Trade Agreements: Canada, South Korea, CAFTA, China, Ecuador, EFTA (Iceland, Liechtenstein, Norway and Switzerland), USA, Mexico, Japan and Peru
      • Economic Cooperation Agreements: Bolivia, Colombia, Venezuela and MERCOSUR (Argentina, Brazil, Uruguay and Paraguay)
      • Association Agreements: European Union (27 countries), P-4 (Brunei, New Zealand, Singapore)
      • Partial Agreements: India and Cuba
      • WIP: Australia, Malaysia, Vietnam, Indonesia, South Africa and Turkey
    • 25. Chile´s Trading Partners
      • Source: Lexis Nexis
    • 26. Chile´s Trading Partners
      • Source: Lexis Nexis
    • 27. U.S.-Chile Relationship
      • The U.S. is Chile’s # 1 trading partner and foreign investor
      • Trade has reached a record high under the FTA
      • In 2007, total bilateral trade reached US$ 15.7 billion, with a positive trade balance
        • Exports to US of US$ 8.419 billion
        • Imports from the US of US$ 7.253 billion
      • More than 2,000 businesses exported to the U.S. 90% of them are micro, small and medium-sized businesses as opposed to large companies
      • In 2007, Chilean companies exported approximately 2,000 different products to the U.S.
    • 28. U.S. – Chile Trade Source: Central Bank
    • 29. U.S.-Chile Trade Development Source: Central Bank
    • 30. Chile Trade Development Source: Central Bank 132%
    • 31. The FTA
      • Tariff Reduction
        • Tariffs eliminated in a maximum period of 12 years (2015)
        • Chile - US: tariffs on 95% of products reduced to 0% immediately
        • US - Chile: Tariffs on 90% of products reduced to 0% immediately
      • Telecommunications, E-Commerce
      • Rules of origin and customs procedures defined
      • Effective dispute resolution
      • Transparency
      • Labor and Environmental Chapters
    • 32. FTA Benefits - U.S.
      • Regain competitive positioning
      • Leadership in free trade
      • Impetus towards other agreements (Peru)
      • Concrete support for countries who have succesfully applied free market economic reforms and have developed strong democratic political systems
      • Investment flows
        • Enhanced legal framework
        • Probable tax treaty
    • 33. FTA Benefits - Chile
      • New export possibilities
        • Market niches – Textiles, milk products, oils, nitrates, chemical products, pears, artichokes
        • Tariff escalation (discrimination on higher value-added goods) disappears
      • Decreased unemployment and inflation
    • 34. FTA Results
        • Expectations: Increase bilateral trade by 30% , major gains in terms of investment
        • Since 2003
        • 162% increase bilateral trade total
        • Both exports and imports show increases of over 140%
    • 35. Challenges
      • Facilitate the exportation of Services
      • More agreements to avoid double taxes
      • Better customs standards
      • Better English Skills
      • Innovation ( I & D)
      • Intellectual Property –FTA
      • Investment Rate
    • 36. Conclusion
      • Chile has a successful record of reform, growth and stability, standing out as an “island” in Latin America
      • This success is firmly rooted in trade liberalization
      • The U.S.-Chile FTA has been beneficial for the U.S. as well as Chile