Bigger than Meets the Eye: Look South to Chile!July 29, 2014
Olivia Kantor recently completed an internship in the International Trade Administration’s Office of South America.
A long, narrow country in South America with a relatively small population of 18 million, Chile may not be the first country that comes to mind when considering export markets.
However, Chile’s dynamic economic growth, open markets, and world-class industries make it an attractive option for U.S. companies looking to sell their product abroad.
Chile is the United States’ fourth-largest trading partner in Latin America, and U.S. exports to Chile reached $17.6 billion in 2013. Trade with the country has increased nearly six-fold since the establishment of the U.S.-Chile Free Trade Agreement.
Several key industries in Chile have produced growing markets for U.S. goods and unique opportunities for business investment:
- Electrical Power Equipment: Chile has the highest energy costs in South America. Efficient, affordable energy sources are at a premium as the Chilean economy continues to expand. Between 2013 and 2020, growth rates of 6 to 7 percent are projected for electricity consumption in Chile, and an estimated $20 billion of foreign investment and electrical power equipment will be needed to complete a variety of energy generation and transmission projects. Additionally, Chile plans to invest in many forms of renewable energy, making it an ideal market for U.S. manufacturers in that industry.
- Construction: Driven by energy projects and investment in the Chilean mining industry, construction in Chile has grown at record rates. Construction within the mining industry alone is expected to total $50 billion during the next several years. With little construction equipment produced domestically, Chile relies on high-quality machinery from the United States. That puts U.S. businesses in an ideal position to take advantage of the wave of new construction projects, particularly in infrastructure and housing.
- Agricultural Machinery and Equipment: Chile’s export-driven agricultural industry is looking to boost productivity and efficiency, providing a unique opportunity to U.S. exporters of specialized and energy efficient agricultural machinery. Continued demand for sophisticated agricultural machinery is expected to grow 7 to 8 percent through 2015. Demand is especially high for harvesting machinery, irrigation infrastructure, and precision agriculture equipment.
Many other Chilean industries also offer significant opportunities for U.S. exporters. You can find a complete list of best prospect sectors for Chile in the Country Commercial Guide. The US- Chile Free Trade Agreement allows U.S. firms to export with fewer barriers than many other markets. In addition, Chile continues to strengthen its commitment to liberalizing trade as a founding member of both the Trans-Pacific Partnership and the Pacific Alliance.
If your company is interested in learning more about doing business in the Chilean market, the Look South initiative offers a number of services to help U.S. businesses capitalize on these exciting opportunities, from business matchmaking to trade counseling.
There are also a number of events for companies eager to start making connections in Chile and beyond.
Contact your nearest Export Assistance Center to learn more about how you can take advantage of opportunities in Chile and 11 U.S. free trade agreement partner countries in Latin America!