The Hindu : 'Take advantage of Chile's Free Trade Agreements'

Online edition of India's National Newspaper
Saturday, Sep 07, 2002

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Business

'Take advantage of Chile's Free Trade Agreements'

By Our Special Correspondent

CHENNAI SEPT. 6. Indian businesses should take advantage of the web of free trade agreements (FTAs) and special partnerships that Chile has concluded with both developed and developing countries, the Chilean Ambassador, Manuel Cardenas, said here.

Chile, which signed a Free Trade Agreement with the European Union in April this year, would become a "full partner of the EU", with the latter eliminating tariffs on Chilean industrial products in three years and Chile offering nil duty on EU industrial products in seven years. Chile already has stand-alone FTAs with Mexico and Canada, and is negotiating an FTA with the U.S. The South American country is also an associate member of the MERCOSUR grouping, Mr. Cardenas pointed out. Chile's free trade zone at Iquique could be used for duty-free imports and exports especially to neighbouring countries.

Addressing a meeting organised by the Confederation of Indian Industry-Southern Region (CII-SR), the Ambassador said Chile had the highest growth rate of six to seven per cent among South American economies in the 1990s, and though the growth rate had come down at present following the global economic crisis, it was still positive, and projected at 2.6 per cent for this year, in contrast to the deep trouble into which its neighbours, Argentina and Brazil, had landed themselves recently. Since 1988 the country did not face any balance of payments crisis.

The Ambassador said copper continued to be the largest exchange earner for Chile but its export basket had got vastly diversified over the decades, with the result that the share of the metal in the export revenues had been halved to 40 per cent. With a population of 15 million, the country, where democracy had got entrenched, had reduced "extreme poverty" to the level of four per cent and poverty in general remained at 17 per cent to 21 per cent, depending on how the poverty line was defined.

Replying to questions, Mr. Cardenas said though India had suggested a bilateral free trade agreement with Chile, talks were yet to begin and might take place soon. The FTAs of the EU, Canada and the U.S. (the last under discussion) all had clauses on environmental and labour standards only to the effect that Chile should enforce its existing laws on environment and labour and did not stipulate any other standards.

He said the Chilean government was negotiating with banks for debt relief to small and medium enterprises affected by the global economic slowdown.

Bilateral trade between India and Chile has increased from $36 million in 1993 to about $200 million last year. In the year 2000, Indian exports to Chile totalled $71 million and Indian imports $125 million. The main exports from India were cotton yarn, fabrics, drugs and pharmaceutical products, readymade cotton garments, cars, leather garments, handicraft, metal products, plastic products, carpets and other garments. Chile's exports to India included, besides copper concentrates and copper cathodes, fish meal, pulpwood, almonds, molybdenum concentrates, boric acid, confectionery, fertilizers, paper, copper waste, fibreboard, fresh fruits, paperboard, timber wines and wool.

Sunita Shahaney, Honorary Consul for Chile in Chennai, clarified that personal presence was not necessary for obtaining Chilean visa in Delhi. The Chairman of the CII-SR, N. Mahalingam, said Indian IT companies had their presence in the South American country, a significant participant in the global financial services industry.

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