TPP Founder Chile: Partner, Investor, Client, Supplier, and FriendDecember 1, 2015
Join me in Chile for Trade Winds 2016!
This is a guest blog by Michael A. Hammer, U.S. Ambassador to Chile.
Eleven years after the United States and Chile signed our bilateral Free Trade Agreement (FTA), all trade is now tariff-free, topping $26.2 billion in 2014. That’s growth of 300 percent since the FTA entered into force in 2004, and the United States enjoys a sizable trade surplus with Chile. This isn’t just goods going back and forth. The United States is the leading foreign investor in Chile, accounting for 24.2 percent of foreign direct investment (FDI) that spans all industrial sectors. Google’s only data center in South America is located in Chile, and companies like Pfizer and 3M have launched innovation centers in Chile. U.S. companies play an important role in the Chilean private pension sector, and energy companies – including a multitude of solar energy companies – have invested in this small, but dynamic country of 17 million.
With the highest GDP per capita in Latin America and home to the region’s largest retailers and airline, Chilean firms are also investing in the United States. Chile is now the 12th fastest-growing source of FDI in the United States. Large Chilean firms have made major investments in the United States, such as LAN Cargo’s 2014 investment in a $15 million fleet maintenance facility in Miami creating 300 new U.S. jobs, and Arauco’s recent announcement of a $325 million greenfield investment in Michigan that will create 250 new jobs. Smaller Chilean firms are also actively seeking to invest in U.S. companies, such as De Vicente Plasticos, which owns and operates plants in Tennessee and in Texas. I was proud to accompany the first-ever Chilean delegation to the 2015 SelectUSA Summit, and I am thrilled to announce I’ll be with another delegation of Chilean investors at the June 2016 Select USA Summit in Washington.
Given these overwhelmingly positive and liberalized trade conditions, the question often arises both at home and in Chile, what does the Trans-Pacific Partnership (TPP) offer in such an advanced trade and investment relationship?
To address this question, first I would point out that Chile and the United States, along with the other TPP partners, are leading the world by arriving at a high-standard, comprehensive, and ambitious agreement that sets new rules for trade for the 21st century. I’d like to also note that Chile is not just a member of the TPP – it was a founder in the P-4 process (with Brunei, Singapore, and New Zealand) that evolved into the TPP. Chile is a worldwide leader in tariff reduction, having already negotiated FTAs with 62 countries, including all TPP countries. Thus, TPP represents the next generation of agreements, moving beyond mere tariff reduction and addressing more complex issues to facilitate trade, such as investments, standards, harmonization, environmental and labor considerations, services, and IPR, among others. Small businesses are among the biggest TPP winners in both Chile and the United States, enabling unprecedented access to global supply chains from TPP member markets. TPP is also opening several market opportunities for Chilean agribusiness exports, which in turn we anticipate will stimulate demand for U.S. exports of agricultural equipment and services.
I am pleased to announce that Santiago will be the host of the next Trade Winds event from September 7-9, 2016. Trade Winds is a business summit that will feature consultations, sessions, and matchmaking for U.S. businesses. The effort is being led by our U.S. Commercial Service team at the Embassy in Santiago, and will feature participation from Senior Commercial Officers from all Western Hemisphere and TPP countries, as well as high-level Chilean and regional businesses in best prospects sectors. I’d like to cordially welcome U.S. businesses – large and small alike – to sign up for Trade Winds and explore the dynamic Chilean, regional, and TPP markets. My team and I at the Embassy look forward to receiving you in this action-packed market.