buSiness chile · 2015. 3. 5. · 6 buSiness chile live oil has come under greater scrutiny as global trends see more salads dressing mediterranean style. chilean olive oil is internationally

The voice of The chilean-american chamber of commerce n°293, march 2014

Trade facilitation: making Trade easier

EnvironmEntal ProtEctionbiodiversity offsets in chile

tradE tEstimonialGreen olives

sPEcial rEPortSport in chile: against all odds

buSiness chile

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March 2014 3

Contents

Green oliveschilean olive oil is known for its high quality but today local producers are making their processes greener to appeal to foreign consumers.

TRADE TESTIMONIAL

12making Trade easierchile has made life easier for exporters with a new single window customs system, but the results of a survey by the idB show there is room to improve.

COvER STORy

6

8ENvIRONMENTAL PROTECTION

biodiversity offsets in chile chile does not spend enough on protecting its biodiversity but a new mechanism to channel private sector funds towards conservation could help.

18Sport in chile: against all odds more private sponsorshiop of chile’s top athletes could help to promote sports and improve the country’s performance at international events.

SPECIAL REPORT

EDITORIAL BOARDCo-Chair, Michael Combes, Marco Chilena; Co-Chair, Karen Poniachik, British American Tobacco Chile; Vice-Chair, Manuel José Vial, Grupo Vial Abogados; Vice-Chair, Ruth Bradley, Freelance Journalist, General Editor, Julian Dowling, AmCham Chile; Assistant Editor, Mariana Ossa, AmCham Chile

MEMBERSKathleen Barclay, President AmCham Chile, Roberto Matus, General Manager AmCham Chile, Gonzalo Iglesias, IC Packaging; Ari Bermann, 3M Chile; Pelayo Bezanilla, Coca-Cola de Chile; John Byrne, Boyden Consultores Chile; Paulina Dellafiori, AmCham Chile; John P. Dill, Project Management; Francisco Garcés, Banco de Chile; Ricardo Inostroza, AES Gener; Olga Kliwadenko, K&D Comunicaciones; Gideon Long, BBC/The Economist; Vincent McCord, Asesorías e Inversiones CarCon; James Newbold, Tanager Investment; Roberto Ossandón, Ossandón Abogados

PRODucTIOnK & D Comunicaciones Ltda. Olga Kliwadenko, General Manager, 11 de Septiembre 1945 - Of. 516, Providencia. Phone: 376 9877, Cell: (09) 6601-5505; e-mail: [email protected] www.kyd.cl

Special RepoRt

Sport in chile: against all oddschile is spending more to promote access to sports for the general public, but more funding is needed for chilean athletes to train and compete at the top level.

© 2014 AMchAM chILEReproduction in whole or in part is strictly forbidden without permission from the publisher. Opinions expressed in bUSiness CHILE are those of the authors and do not necessarily reflect those of AmCham or bUSiness CHILE. We accept no responsibility for the accuracy of the articles and any unforeseen errors. bUSiness CHILE is published monthly, 10 months a year and mailed free of charge to AmCham members. Letters are welcome. They should be accompanied by the author's name and daytime telephone and sent to [email protected] For reasons of space limitation, AmCham reserves the right to edit letters published.Advertising inquiries should be addressed to AmCham's Sales Department: Paulina Dellafiori: E-mail: [email protected]; Phone:2909741. Fax 2120515 Av. Presidente Kennedy 5735, Torre Poniente, Of.201, Las Condes, Santiago de Chile; E-mail: [email protected]; www.amchamchile.cl; www.businesschile.cl

life in the Slow lane

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Trade Facilitation: Making Trade EasierChile has made progress in trade facilitation but local companies say more could be done to improve customs procedures and infrastructure.

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10th anniversary of the chile-uS fTa amcham together with the chilean government and the idB organized a seminar to celebrate the 10th anniversary of the chile-Us Free trade agreement.

heavy lifting on the hillWilliam lane, director of Government affairs for caterpillar, recalls the important role of the private sector in promoting the chile-Us Fta.

Trading up Former US Trade Representative Robert Zoellick says the Chile-US Free Trade Agreement could become the basis for hemispheric free trade.

AMChAM SPECIAL

INTERvIEw

INTERvIEw

34outlook 2014: Transition Yearchile faces a transition year, both politically and in the investment cycle, but is on solid ground to continue its strong GdP growth, writes Brian chase.

24To Patent or not to Patent?amcham recently signed an agreement with chile’s national industrial Property institute, inaPi, to inform and train members about patents.

SPOTLIghT

ECONOMIC SNAPShOT

The articles in this magazine are also available in Spanish at www.businesschile.cl

Doctor’s ordersSantiago eneldo survives a colonoscopy with his dignity (mostly) intact.

www.businesschile.cl4 buSiness chile

AmChAm GlobAl SponSorS

March 2014 5

the Free trade agreement (Fta) between the United states and chile came into force on January 1, 2004. a decade later it is regarded as one of the most successful free trade agreements that the United states has signed with any country in the americas.

the numbers speak for themselves: bilateral trade has increased over 300% since 2003 with the United states now chile’s second most important trading partner in terms of exports (12% of chile’s exports went to the Us in 2012) and its largest supplier of imports (23% in 2012).

Perhaps one of the most impressive statistics is that, today, just over 99% of chilean exports – some 7,650 products – enter the Us duty-free, which will rise to 100% next year. Key products shipped to the United states include non-traditional exports such as salmon, wine, fruit, and wood products.

lower tariffs are not the only benefit. as discussed in this month’s cover story, the agreement has facilitated trade through measures such as expedited customs procedures and the annual certificate of origin issued to chilean exporters. the success of chile’s olive oil producers, which today ship over half of their output to the United states, is highlighted in this issue’s trade testimonial.

the agreement has also facilitated investment. Us companies have invested over Us$25 billion in chile while chilean companies have invested Us$5 billion in the United states in sectors ranging from viticulture to banking. this proves that the flow of investment has not been just one way.

it was a landmark agreement in many ways and not just because it included labor and environmental provisions. it also laid the foundation for chile to be the first south american country to be invited to join the Us visa Waiver program last year and one of only a handful to sign a double taxation avoidance treaty.

However, the agreement was not reached overnight. it took nearly a decade for the two countries to reach a

deal. Part of the reason for the delay was the time it took the Us congress to renew fast-track authority for the President to submit the agreement for an up-or-down vote, meaning no amendments could hold up approval.

But there was another problem. there was widespread suspicion that trade agreements such as this one would cause investment to flee the Us and take jobs to countries with lower costs. the fact that this has not happened is a tribute to the vision of those in both countries who worked hard and long to get the agreement approved. on the contrary, investments by chilean companies in the United states have created jobs there and vice versa.

today, chile and the United states are involved in negotiations for a new trade agreement along with Japan, Peru, colombia, australia and new Zealand among others. the trans-Pacific Partnership (tPP) is an ambitious proposal aimed at opening borders in the asia-Pacific region – a region responsible for one third of global GdP and over 40% of world trade.

chile already has bilateral trade agreements with these countries but the tPP would include cumulative rules of origin and high standards in new areas. more potential benefits include efforts to remove non-tariff barriers to trade including sanitary regulations, reduced unfair competition from state-owned companies and the harmonization of regulations.

much depends on what happens in Washington in the next few months. according to robert Zoellick, the former United states trade representative interviewed in this issue, it remains to be seen if President obama will get fast track authority to submit the tPP agreement to congress.

But when Us representatives discuss the advantages of open borders the chile Fta surely deserves mention. amcham and the negotiating teams in both countries can be proud of this result as they celebrate the 10-year anniversary of an outstanding agreement.

Celebrating a Decade of Free Trade

Editorial

boArD oF DIrECTorS

President

Kathleen c. barclay asesorías Kcb ltda.

DirecTorS

ricardo García, camanchaca

michael Grasty, Grasty, Quintana, majlis & cia.

Pablo achurra, aramark Sudamérica

fernando fischmann, crystal lagoons

Sandra Guazzotti, oracle chile

Pamela camus, Ward van lines

Karen Poniachik, british american Tobacco

charles Kimber, arauco

Guillermo carey, estudio carey

Gabriela Peralta, american airlines

Sebastián arana, 3m

Javier irarrázaval, The Walt Disney company chile – Past President

Ellen Lenny-Pessagno, US Embassy in Chile (Ex-Officio)

AmCham Mision statement“Promote free trade and business between Chile and the United States"


live oil has come under greater scrutiny as global trends see more salads dressing mediterranean style. chilean olive oil is

internationally recognized for its high quality – 11 producers received outstanding scores in the 2014 edition of olive oil guide Flos Olei – but up-and-coming exporters have recently gone greener in an attempt to make their products stand out from the competition.

“this benefits productivity, but the other benefit we see is improving the image the industry projects to the world,” said Gabriela moglia, general manager of the industry association chileoliva, which represents 70% of chile’s olive oil producers.

chilean olives yield less than 2% of the olive oil produced

worldwide, with most ending up on supermarket shelves in the United states, spain and italy, but this share has been growing.

in 2011, chileoliva was selected by Us-based non-profit World Environmental center (WEc) to participate in a pilot project aimed at improving environmental performance and energy efficiency through cleaner production practices. the project was made possible through an agreement between the Us department of state and WEc, which aims to help small enterprises in countries that have signed free trade agreements with the United states.

moglia said the industry saw two advantages.

“the first and most concrete is lower production costs,” she said, adding that energy bills can devour

anywhere from 20% to 30% of a company’s budget. since many olive plantations are located in hilly areas, water for irrigation has to travel upward and a long way to reach plants, which takes energy. “any savings mean meaningful benefits for the companies,” she said.

as a result of the project, companies are also conserving water, a resource that chileans have learned not to take for granted. chile’s atacama region — the northern limit of national olive farming — has the driest desert on Earth, and well-documented contempt for those who needlessly guzzle away its precarious livelihood.

“in certain markets, consumers are going to require sustainable measures for the environment’s sake and out of concern for themselves, so it’s also a marketing advantage,” said moglia.

the WEc peeled through the profiles of dozens of small to medium-size companies before pitching its project to chileoliva. Eleven companies were selected, including the producers of brands such as olave, las doscientas, sol de aculeo, Petralia and casta. Ernesto samayoa, the WEc’s director of latin american operations, said the organization was attracted to the young industry’s potential for establishing good practices in its formative years.

Green OlivesThrough a partnership with the uS-based World environmental

center, chilean olive oil producers are making their production

practices greener in a bid to polish their international image.

oBy Kalynne Dakin

TrADE TESTImonIAl

Gabriela Moglia, ChileOliva

March 2014 7

“in the beginning we worked together in finding sustainable solutions where the company could be more efficient,” said samayoa.

this included reducing energy use in irrigation, minimizing wastewater and teaching employees best practices in the milling process, but the shift presented challenges to some of the companies. With too much on their plates, two dropped out of the effort, leaving nine on the vanguard of the WEc’s sustainability movement.

“the important thing is that you get good experience that can be replicated in the industry, and if possible in other industries,” said samayoa.

olive trees, planted by spanish colonists, first bloomed in the new World in the 16th century. the non-native seeds only took root in a few parts of the americas, favoring climates similar to their mediterranean motherlands.

sandwiched between the andes and the Pacific ocean, a number of olive varieties now thrive on chilean soil. What the country lacks in width it makes up for in over 4,000 kilometers of length, and the collision of mountain and maritime conditions produces microclimates that nurture the fruit throughout the temperate central regions.

most chilean olives were for household consumption until ital ian immigrant Giuseppe canepa, better known as the namesake of the canepa winery, introduced European technology to the nation’s modest production in 1952. other producers stepped up in the late 1990s after getting acquainted with investors and new marketing strategies.

“chilean olive oil is maximum quality, extra virgin, and the industry is focused on quality,” said moglia. most chilean olives become oil of the highest standard — in other words, extra virgin — meaning that producers abstain from chemical

Kalynne Dakin is a freelance journalist currently based in Washington, DC.

chilebUSiness

or high-heat processing.in 2011, the sector harvested

19,000 tons of olives destined for the press, up from just 598 tons a decade ago. Exports are growing too. according to chileoliva, in 2012 chile shipped 10,228 tons of olive oil, or about half of its total production, bringing in Us$36.2 million. today, the country’s 73 producers, most of which are small businesses, employ 2,500.

last year, more chilean producers agreed to go greener for the sake of sustainability. in June, the WEc brokered a clean Production agreement (cPa) between 20 producers and the national council for clean Production, a branch of the ministry of Economy, development and tourism, which promotes environmental development in the private sector.

chileoliva and the council will implement cost-cutting measures over the next two years that will extend the lifespan of the WEc project. these will focus on water conservation and energy efficiency, including practices to avoid or diminish co2 emissions, said Jorge alé, executive director of the council.

“it’s always more cost-effective

to avoid the contamination than to treat it,” he said.

companies that sign agreements have two years to implement clean production practices and, if they meet the requirements, they receive a certification that should give their products a competitive advantage, said alé.

chileans defy regional standards in many ways — they are increasingly wealthy, environmentally conscious and thirsty for olive oil — but even here the environmental cause has been slow to ferment.

“[in Europe and the Us] consumers are stricter and that’s why it’s important for industries to be positioned to provide better traceability,” said samayoa.

according to a recent survey by Uc davis’ olive center, consumers in the Us claim to know more about olive oil than they actually do and are often unable to distinguish between different grades. But with more americans buying olive oil for health reasons, chilean companies are looking to squeeze as much as possible out of their green image.

Cour

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of t

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orld

Envir

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ent C

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ith a geography that runs from antarctic wasteland to andean wetlands, chile offers an almost incomparable range of

natural habitats in a single country. But during years of rapid economic expansion, far too little attention has been paid to protecting the country’s precious biodiversity and ecosystems.

although around 14 million hectares of chilean territory are protected through state-run national reserves and parks, the amount spent on conservation is minimal. a 2010 study by the United nationals development Program (UndP) showed that chile spent just over Us$0.60 per hectare on its protected areas; in comparison, argentina spent over Us$8 a hectare, including contributions from international organizations.

Protected marine areas, which are the responsibility of the national Fisheries service (sernapesca), receive almost no funding. another study by universities in the Us, canada, the UK and Brazil placed chile ninth on a list of 40 countries that spend the least on protected areas, alongside much more troubled countries such as algeria, Eritrea, and iraq.

this lamentable situation is the result of widespread misunderstanding of what biodiversity means and its

importance, says Bárbara saavedra, director in chile of the Wildlife conservation society. “People think of the panda in asia rather than the air that we breathe,” she says.

recognizing the gap, the chilean government is preparing to create a new Biodiversity and Protected areas service, which will take over and expand the role currently played by the national forestry corporation, conaF, in operating the country’s protected areas.

But protecting biodiversity should go beyond national parks. the rapid expansion of cities, as well as mining, forestry, and other activities over recent decades, has wrought incalculable damage to chile’s biodiversity. the Environmental impact assessment system (sEia), created in 1997, was designed to ensure projects mitigated or repaired damage they caused to the environment. the system,

however, has not always worked as planned.

too often, biodiversity has suffered at the hands of this system, argues saavedra. Besieged by social demands from local communities, regional authorities have often granted developers permission to intervene in delicate ecosystems in return for an unrelated form of compensation. in one case, a mining company was allowed to carry out work in a rare andean wetland in exchange for funding a library at a local school.

Where developers have agreed to carry out environmental compensation, the results have been patchy at best.

often companies agree to relocate a population of a particular species that will be affected by their project. But little preparation and follow-up work is carried out so that a few years later it can be difficult to say whether or not the

chile spends far too little protecting its biodiversity. could a pioneering new mechanism to channel private sector funds towards conservation reverse that trend?

WBy Tom azzopardi

SEConDAry STory

Biodiversity Offsets in Chile

Boyden21,5x28 AmCham 01-14.indd 1 15-01-14 16:05

Boyden21,5x28 AmCham 01-14.indd 1 15-01-14 16:05


by developing and financing alternative equivalent ecosystems.

approaches differ; developers can implement the offset themselves or pay a third party to carry it out. But, crucially, the mechanism establishes that the offset land is protected or recovered to an agreed standard and ensures funding to keep the habitat to that standard in perpetuity, potentially outliving the project for which it was created and the company that funded it.

as biodiversity offsetting has become more common, so the mechanisms have become more sophisticated. in the United states, which has the world’s longest-running and best-established system of biodiversity offsets, this has given rise to ‘biobanks’. these institutions invest in the preservation of ecosystems and biodiversity; they then sell these biodiversity services to third parties that need to offset the impact of their own projects on the environment.

in the Us, where biodiversity conservation is largely focused on the preservation and recovery of wetland habitats, this has led to the creation of around 1,200 wetland banks across the country with investment totaling several billion dollars.

the rise of wetland banking not only helps preserve critical habitats in perpetuity with private money, but has created a new industry and a new destination for green investment by ethically-minded investors, says Wayne White, who participated in the development of the system during his career at the Us Fish and Wildlife service. today he is vice-president of the national mitigation Banking association.

By outsourcing biodiversity offsets to a specialist third party, the wetland bank ensures the funds are invested efficiently and are not reliant on the

developer’s goodwill.“[voluntary] offset systems are

basically unsuccessful… When money is tight one of the first things to go is the offset,” said White.

Biobanking also allows dozens of smaller projects to be combined into much large offset programs, which have a greater impact than a number of stand-alone programs.

recognizing its advantages over individual compensation projects, authorities in the United states encouraged developers to opt for this system by lower compensation requirements if they cooperated with wetland banks, says White.

Towards a global standard

today biodiversity offsetting is gaining traction around the world. more than 40 countries, including Brazil and colombia, have put in place legislation or mechanisms to enable biodiversity offsets to take place. the European Union is considering using it as part of its 2020 Biodiversity strategy.

“it is a mechanism which is gaining a lot of attention in many countries from policymakers and businesses,” Katia Karousakis of the Environmental directorate at the organization for Economic cooperation and development (oEcd) told a recent seminar at the public studies center cEP in santiago.

outside the Us, some of the most advanced biodiversity offset programs are found in the australian states of new south Wales, Queensland and victoria.

multilateral organizations, such as the international Finance corporation (iFc) and the inter-american development Bank (idB), are promoting biodiversity offsetting as a means of encouraging investment in conservation. meanwhile, multinational

affected species are thriving in their new habitat. such work can be costly but the environmental gain is often marginal, critics say.

“in the large majority of cases, it is very difficult to establish their effectiveness. nor are they measures which deal with all the impacts which biodiversity loss implies,” concedes ricardo irarrázabal, director of chile’s Environmental assessment service (sEa).

offsetting loss of biodiversity

in response to these failings, the chilean government is now looking to a new mechanism that aims to ensure that private spending on compensating for loss of ecosystems goes where it is most needed.

already widely used in a number of countries, biodiversity offsetting is an economic instrument that requires developers to compensate for intervening in ecosystems

bárbara Saavedra,Wildlife conservation society

“The role of biodiversity offsets should be limited, it should not be a developer’s first option for reducing their net environmental impact.”

SEConDAry STory

March 2014 11

the chilean government is now looking to implement biodiversity offsets. according to saavedra, there is huge potential for this mechanism in chile given the economy’s reliance on natural resources.

the salmon industry, which has a less than optimal environmental history, would benefit from investment in biodiversity by creating a healthier and more sustainable environment in which to farm fish.

meanwhile, the country’s wineries, many of which are leaders in environmental management, could become providers of biodiversity services that could generate a source of income to help them expand their sustainable production methods.

the new regulations for the Environmental impact assessment system, which come into force in 2014, represent a key step to broadening and improving biodiversity offsets in chile, says sEa director irarrázabal.

in line with international guidelines,

these regulations incorporate the concepts of adequate compensation, ensuring equivalence between the adverse outcome to be compensated and the offset, and mitigation hierarchy, to limit the size of the offset.

But these rules offer just the barebones for the development of a fully-fledged biodiversity offset scheme like the ones found in the United states or australia, says irarrázabal.

chile’s Environment ministry and the Environmental assessment service are now working on the development of a guide for implementing biodiversity offset projects.

“We hope that this will form a framework which allows us to continue advancing in the development of tools which reduce the rate at which we are losing biodiversity,” says irarrázabal.

companies, such as oil major royal dutch shell and mining firm BHP Billiton, are including it in their internal environmental policies.

Work is now underway to create a global standard for biodiversity offsets so that governments, businesses and nGos have a common understanding of what is meant by a potentially slippery term.

the Us-based Business and Biodiversity offset Program (BBoP), which was formed by an alliance of the nGos Wildlife conservation society and Forest trends, brings together around 80 organizations, both private and public. Having drawn up standards, it is now developing six pilot programs around the world showing how biodiversity offsets should be implemented.

a mechanism of last resort

support for biodiversity offsets is not universal. some environmentalists see the mechanism as allowing developers to intervene in precious ecosystems that would otherwise be off-limits. in the United Kingdom, where the government has proposed its own scheme of biodiversity offsets, legislators have criticized the plans as “too simplistic”, especially in terms of how environmental impacts are to be assessed.

“Environmentalist folk say that all this does is allow development. that’s not true,” says Wayne White.

saavedra is supportive of biodiversity offsetting but says its role should be limited. it should not be developers’ first option for reducing their net impact on the environment, she said. instead, it should only be used to compensate for those residual impacts that cannot be avoided, mitigated or repaired by other means; this concept is known as ‘mitigation hierarchy’.

Wayne White, Us national mitigation Banking association

“biobanking allows a number of smaller projects to be combined into large offset programs which have a greater impact.”

ricardo irarrázabal, chilean Environmental assessment service (sEa)

“The new regulations, which come into force in 2014, represent a key step to broadening and improving biodiversity offsets in chile.”

tom azzopardi is a freelance journalist based in Santiago

chilebUSiness


COVER STory

trade Facilitation:

chile has made important advances in trade facilitation including

the introduction of a single window system designed to halve the

time it takes for goods to clear customs, but companies say more

could be done to make trade easier.

n early december, while chileans were preparing for the second round of the presidential election on december 17, something

extraordinary happened nearly 10,000 miles away in Bali. at the ninth ministerial conference of the World trade organization (Wto), members finally agreed, after 12 years of negotiations, on a historic trade deal that could increase world GdP by around Us$1 trillion.

at the core of the deal, which is part of the broader doha

negotiations, is an agreement on trade facilitation. often described in layperson’s terms as “cutting red tape”, trade facilitation involves speeding up customs procedures and mechanisms for dispute resolution as well as infrastructure development.

the agreement still needs to be approved by Wto members, which is expected to happen sometime this year, and concrete measures will take effect in the second half of 2015, explained ana novik, director of Economic affairs at the ministry

of Foreign affair’s international trade office (dirEcon).

For a country like chile, which depends on trade for 70% of its GdP, this can’t happen soon enough. “the trade facilitation pillar of this agreement will reduce paperwork and bureaucracy for the exchange of goods all over the world, which will mainly benefit our export sector and, in particular, small and medium-size companies,” she said.

Exactly how much they will benefit depends on the sector and the market but the organization

iBy Julian Dowling

Making trade easier

COVER SToryfor Economic cooperation and development (oEcd) estimates that, through the implementation of the agreement, trade costs will be reduced by 10% on average for member countries.

chile has hailed the agreement as an important step but it has already made significant improvements in trade facilitation. many of its free trade agreements signed with 60 countries include chapters on simplifying customs procedures. it has also created specialized tax and customs courts, which have been gradually implemented since 2010. as a result, chile should not have any trouble abiding by the new Wto norms, says Álvaro Espinoza, head of the Wto department at direcon.

“Where does chile win? chile wins because the other members of the Wto will adopt the same agreement and therefore the benefit is from the export perspective,” he said.

the agreement calls for members

to form an inter-ministerial committee for trade facilitation at the national level, which should improve coordination between the ministries involved in customs procedures, said Espinoza.

it also encourages members to establish a single window system, but in this chile is ahead of the curve. in 2010 the government of President sebastián Piñera created a commission to develop a single window system to facilitate trade by grouping all export and import procedures into a single entity.

logistics companies have applauded the move. “customs processes tend to be expeditious and the people who work in customs are well prepared,” said sandra miró, country manager for dHl Express and president of amcham’s trade Facilitation committee.

Bu t compan ies l i ke dHl complain there are still barriers to trade. some of these have to do with regulations and permits, but

others are physical barriers due to infrastructure bottlenecks or labor disputes. a strike by dockworkers at several ports in chile in January, for example, caused millions of dollars in damages to fruit exporters whose produce rotted in containers while the strike, over payment for meal breaks, dragged on for several weeks.

But labor disputes are by no means the only problem facing exporters. “the main problem in chile is that trade is growing at a faster pace than its infrastructure capacity,” said miró.

Trade facilitation survey

chile is not alone in facing these challenges and all the members of the Pacific alliance, including Peru, colombia and mexico, have agreed to work towards harmonizing their customs procedures.

the inter-american development Bank (idB) carried out a survey last year to find out what companies


COVER STory

in these countries see as the most important obstacles to trade. in chile the survey was conducted with amcham and the national manufacturers’ association, sofofa.

“the idea is to find out what the problems are both from the importers’ and exporters’ side,” said carolyn robert, head of the integration and trade sector at the idB, during a recent visit to chile. “some problems are common to both.”

a group of 15 amcham members were invited to participate including importers and exporters in sectors such as retail, manufacturing, viticulture and forestry. Us companies with operations in chile also participated in the survey.

Preliminary results were expected out in late January and the idB planned to provide policymakers

with a set of recommendations by april. But some general conclusions can already be drawn, said robert. tariffs are no longer an obstacle for exporters in most markets thanks to chile’s free trade agreements, she said, but today there are other issues that are causing inefficiencies.

“companies can worry about how fast a truck is entering a port because they don’t have to worry about facing a tariff of 15% or 20% at the border,” she said.

in december amcham organized a Focus Group with some of the participants to discuss proposals that the idB could present to the authorities. according to charles Kimber, manager of corporate affairs at chilean forestry firm arauco, there was a consensus with chile relatively well evaluated

carolyn robert,inter-american development Bank (idB)

“countries in the region need to develop a next generation trade agenda with the objective of getting to another level of trade integration.”

Sandra miró, dHl Express

“The main problem in chile is that trade is growing at a faster pace than its infrastructure capacity.”

compared to other countries in the Pacific alliance.

But participants also expressed concerns about certification procedures and infrastructure bottlenecks among other issues. For example, Kimber said it takes too long to obtain a phytosanitary certificate in chile basically because the procedures are outdated. this document is required by importing countries to certify that plant products have been inspected according to appropriate procedures and are pest-free.

“there is a great opportunity for improvement, including greater automation, simplicity and systematization,” he said.

then there are certificates of origin required by foreign markets. chile has created an electronic certification system for exports to colombia, which will soon be extended to Ecuador, said novik at direcon. But for other countries, such as Peru, it takes longer, said Kimber. in the case of the United states, under chile’s Free trade agreement exporters can apply for a certificate that is valid for one year, which Kimber says is more efficient.

“We should study replicating what we have with mexico and the Us, or better still with colombia,” he said.

Opening the (single) window

the participants agreed that chile’s single window customs clearance system, known as the integrated Foreign trade system (sicEX), is a big step forward. Part of the Us$10 million price tag for the system, which entered a pilot stage last year, was financed by the idB.

“it’s a good initiative”, said miró. “it should be effective in reducing [customs clearance] times and bureaucracy.”

depending on the product, exporters currently need certificates


COVER STory

Joseph nehme, Finance ministry

“The single window system is not just about saving time, it also allows users to track their operations online.”

ana novik, direcon

“in the last few years chile has made important efforts internally to advance on measures aimed at trade facilitation.”

from up to 20 different agencies in chile including customs, the Public Health institute (isP), the agriculture and livestock service (saG) and fisheries regulator sernapesca.

in the past that was a time consuming process, averaging 21 days according to the World Economic Forum’s 2012 Global trade Enabling report, which meant high costs and lost export opportunities. But that is now down to 15 days and the government aims to reduce it further to 11 days, which is the average for oEcd countries, said Joseph nehme, executive director of sicEX at the ministry of Finance.

since december, exporters have been able to use the internet-based system after signing up for a 3-hour training course. so far over 100 companies and customs

agents have received training, said nehme, adding that importers will be able to start using the system later this year.

in addition to saving time, the process allows users to track their operations online, which is very important, he said. it also aims to standardize product names to avoid confusion when the same product is labeled differently in different agencies.

the backbone of the system is interoperability – in other words, an electronic connection – between the public services involved in the customs clearance process. But connecting agencies with different procedures and technologies has not been easy, admits nehme.

“Before sicEX some services issued a certificate first and then charged the user while others

charged the user first and then issued a certificate.”

the ministry has had to help some agencies update their technology to connect electronically, but, if all goes to plan, chile could eventually link up with similar single window systems in other countries, said nehme. members of the Pacific alliance are already in discussions, which would allow interoperability and facilitate trade.

“it’s a work in progress, the systems in these countries are not connected yet but we hope they will be soon,” said nehme.

infrastructure bottleneck

at the same time as chile has developed a single window system, it has invested to speed up customs procedures at the country’s ports, airports and border crossings. But companies say more needs to be done.

take the courier business, which dHl’s miró knows first hand. Before any package sent via FedEx, UPs or dHl can leave or enter chile it must be X-rayed. the problem is that these companies share a single X-ray machine at santiago’s international airport. screening takes up to 60 minutes but the time wasted is significant, said miró, especially in the courier industry where every minute counts.

“it’s really non-functional for the volumes that we’re handling right now,” she said.

dHl currently uses a third party warehouse for the overflow but that involves extra costs for customers as packages are treated by customs as air cargo rather than express packages. that should change when a new processing complex is completed later this year. “this is a big step all companies are looking forward to because it’s really necessary,” said miró.

airports are not the only bottleneck. chile is a long, thin country so internal transportation

March 2014 17

Julian Dowling is Editor of bUSiness CHILE

carlos aybar, shipco

“if chile aims to become a platform for logistics and trade for the Southern cone, it must advance in improving and facilitating processes throughout the global trade and supply chain.”

charles Kimber, arauco

“as a country that depends on exports, these must flow efficiently without red tape and with the lowest transit times possible to destination markets.”

can be a challenge, she said. not only must companies haul goods long distances, but wait times at ports and border crossings are growing as demand rises. it complicates matters that goods using more than one mode of transport to reach their destination require separate contracts for each mode, said carlos aybar, cEo of shipping logistics firm shipco.

the problem, he says, is that chilean authorities do not recognize intermodal freight transport, which allows companies to transport freight under a single contract using multiple modes including rail, ship and truck. this reduces handling fees, improves security, reduces damage and loss, and allows freight to be transported faster, he said.

articles 1041 and 1042 of chile’s trade code mention intermodal transport, but in practice aybar says it is not recognized by the different customs agencies, which means companies have to get permits and insurance for each step along the transport chain.

the solution, he says, is to create a registry of accredited multimodal transport operators, as singapore has done, whereby authorized operators can sign a single contract for the carriage of goods by at least two different modes of transport.

future recommendations

Under the Wto agreement members are encouraged to provide “adequate infrastructure” for expedited shipments, but developing countries are not obliged to invest in infrastructure. chile, however, is moving ahead on its own accord.

“an agreement is good but trade facilitation is something countries should want to do on their own,” pointed out former United states trade representative robert Zoellick during a visit to chile to celebrate the 10-year anniversary

of the signing of the chile-Us Free trade agreement.

this Fta, and others like it, have helped chile advance in trade facilitation over the last decade, but problems such as insufficient infrastructure are common among all countries of the Pacific alliance, pointed out robert at the idB.

sicEX is a good start, she says, but chile can do other things to facilitate trade. this could include certifying trustworthy traders thereby enabling them to skip customs inspections and enjoy expedited trade. in this regard robert suggests the EU’s authorized Economic operator program, which is comparable to the Us customs trade Partnership against terrorism (c-tPat) program, could be a model for Pacific alliance countries.

But it is not as simple as transplanting ideas from Europe or the United states, pointed out miró, noting that systems and procedures differ in each country.

chile has made much progress but there is work still to do, especially within the context of the Pacific alliance and the negot iat ions towards the transPacific Partnership. trade facilitation is not glamorous but it is important. the Bali agreement will give chile greater assurance that its exports will be treated fairly, but to increase competitiveness it cannot afford to wait for the Wto – it must continue to be proactive in coordination with its trading partners. chilebUSiness


hilean athletes have gained ground in sports from freestyle BmX to table tennis. Blind runner cristián valenzuela won chile’s first ever Paralympic gold in the 5,000-meters track event in the

london 2012 Paralympics, while tomás González put chilean gymnastics on the world map with

his fourth-place performance in mat and vault at the london olympics. this year, rider ignacio casale was the first chilean to win in the quad bike category of the dakar rally, which has had stages in chile since 2009.

Participation in mass sporting events is also booming. “ten years ago, it was tough to get 2,000

SpECial rEporT

more chilean athletes are succeeding at the international level but, apart from a number of soccer stars, they are few and far between. With limited public funding available for top performers more private sponsorship is needed, but companies should not expect a quick return on their investment.

By Steven bodzin

sport in Chile: Against All Odds

c

Kristel Köbrich


SpECial rEporTpeople signed up for a run,” says renato Palma, general manager of nike chile. today, the 12,000 spots in h is company’s annual events se l l out in two days.

But even as chileans get fitter and the results start to show in international contests, the country still lags. chile has won a total of 13 olympic medals in tennis, soccer, shooting, athletics, boxing and equestrian events. But with almost half of argentina’s population, it has barely a quarter of its neighbor’s medal count at the Pan american Games. moreover, in many sports where chile’s geography gives it a competitive advantage, such as skiing and snowboarding, the country has made little mark. and though more chileans qualified for the sochi Winter olympics than for the previous contest in vancouver, the national team was composed of fewer than 10 skiers.

the good news is that chile, blessed with mountains, coastline and a favorable climate, has plenty of potential. and, while everyone has a different suggestion for how to improve athletic performance, there is a consensus that private businesses will play a major role.

Show me the money

chile spends a relative pittance on its elite athletes. this year’s budget for the newly formed sports ministry (formerly the national sports institute, or ind) is around Us$160 million, including Us$25 million from national lottery operator Polla chilena, which is obliged by law to give 12% of its income to the ministry.

But most of that is earmarked for programs that promote physical activity and new sports centers for the public. in 2013 chile spent about Us$35 million on high performance athletes, not including sponsorship or donations, says Jorge silva, director of the Physical activity and sports division of the ministry. that’s about half of what new Zealand spends with a population one quarter of chile’s.

the private sector can help fill the gap between government funding and athletes’ needs, says silva. Public and private investment in high performance sport in chile is channeled through the association of olympic athletes (ado), created in 2006, which also receives donations from the public. “at most 5% of the support for sports development in the country comes from private donors,” he says. “i think that can rise a lot.”

But it’s not all about money. víctor Heresmann, organizer of the annual valparaíso cerro abajo

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March 2014 21

Jorge Silva, sports ministry

“at most 5% of the support for sports development in the country comes from private donors i think that can rise a lot.”

Ángelo vidal, chilean wheelchair fencer

“People should know who is representing chile abroad. They should know that there are sports that aren’t soccer or tennis.”

urban downhill bike race, says companies need to learn that support for sport can go beyond hanging a banner on a racetrack.

canon, he says, sets up a shop at the race, providing technical service and renting out lenses. the company gets to show off its wares, the athletes benefit from better photos, and consumers develop a re lat ionship with the brand.

asked how, for example, a mining company might do something similar, he didn’t hesitate: “a rally in a mine,” he said, drawing a picture of riders plunging into an open pit. “or an orienteering race in a dark mine, or have a team of miners to show off their physical stamina. or athletes versus miners in an exhibition race.”

broader access

such ideas apply to the top level of sport. But years before athletes get there, they are kids

to promote cycling and running on city streets. in santiago, the ciclorecreovía project closes more than 30km of streets on sunday mornings for people to pedal, run, skate or walk. sponsors put up stands along the route offering samples of yogurt or free water. the ministry’s Deporte En Tu Calle (sport in Your street) program runs a similar activity in five other communities, providing bike repairs, first aid and water along bike routes.

such efforts are succeeding, silva says. “We’ve increased the number of people taking part in our activities from 629,000 in 2009 to 1.45 million,” he says, referring especially to the tour ind series of running and cycling events.

that sort of growth could help sports where chile has a natural advantage, such as mountain biking, climbing or surfing. While such sports remain largely the province of the elite, companies are trying to increase access,

trying out different activities. “the most important thing is

for schools to teach kids more sports,” says Ángelo vidal, a wheelchair fencer who has won medals in the Pan american and south american games. that means physical education should begin at an early age with sports incorporated into the curriculum. “People should know who is representing chile abroad. they should know that there are sports that aren’t soccer or tennis.”

one obstacle is startup costs. For sports like fencing, few schools have the resources to buy equipment. Even track and field events require running tracks. the government is building 30 local sports centers that will provide venues for sports other than soccer — one such center includes the first heated public pool in the araucanía region.

But, with obesity rates in chile on the rise, other initiatives are aimed at the general public. one has been the nationwide push

víctor heresmann, valparaíso cerro abajo bike race

“There are other ways companies can support sports, for example they can provide innovative venues for bike races.”


says thomas Grob, cEo of the la Parva ski resort in santiago.

“today, skiing is much more accessible than it was 5 or 10 years ago,” says Grob. ski centers near santiago offer special discounts and other initiatives to get more people up in the mountains. still, he says, most skiers in chile come from the upper-middle class.

chicken and egg

one challenge is that people only grow enthusiastic about a sport when they have a role model. But that means someone needs to succeed. and that requires a mix of skill, luck, and the economic support that allows an athlete to train instead of attending university or starting a career.

athletes and sports managers praise the country’s system of amateur competitions and sports

Thomas Grob, ski la Parva

“There is no doubt that the number of skiers today in chile is much higher than before, but we need to do more.”

miguel Ángel mujica, chile’s olympic committee

“[companies] need to think in the medium to long term. long term is an olympic cycle, which is four years.”

SpECial rEporTfederations for their ability to select the best athletes. But once an athlete joins the ranks of the elite, a whole new set of challenges arises.

“support comes with success,” says vidal, the fencer. sports federations get cash from the olympic committee based on how well the sport has done in recent contests. vidal says he got l itt le support from the state until he could show that he had medals.

and private companies often decline to invest, or hope for overly speedy returns, says miguel Ángel mujica, vice president of chile’s olympic committee. “the investment can’t be short-term,” he says. “they need to think in the medium to long term. long term is an olympic cycle, four years.”

that can be difficult for companies, says silva at the sports ministry.

“companies want results,” he says. “so the best way to do that is improve the level of play.”

it is a chicken-and-egg problem that comes up again and again. neither the private nor public sector wants to invest in a sport without high-level athletes and public attention. But the athletes and attention are more likely to be found in sports with commercial and state support.

one exception is BmX freestyle rider coco Zurita, who won first place in the world championship in cologne last year. after winning a series of events here in chile, he left for the Us in 2003 and, within months, was sponsored by Gt Bicycles, which put him on a circuit of BmX shows. He recently returned to chile for a tour sponsored by yogurt brand Yogu Yogu.

His success has helped increase the popularity of the sport in chile, he says, which has driven the growth of facilities and brings

more kids into the sport. “i create awareness of what we can do, or can possibly become,” he says. “now we have five or six huge skate parks... the vans Us team came out [to chile] in october.”

today, he says, there are four or five chileans who have a chance at stardom. But if he were 19 again, Zurita says he would still go to the Us rather than try to make it in chile. in a bigger country, there will always be more sponsors and a larger audience, he says. since freestyle riding isn’t an olympic sport, there is no chance of getting state support in chile, giving riders even less reason to stay home.

companies can also break the chicken-and-egg cycle by changing their expectations. silva, at the ministry, says companies tend to evaluate the impact of their marketing expenses and want an immediate return.

“i’ve seen a few studies on

March 2014 23

return on investment, and they aren’t always so favorable for the sports activit ies. that’s why the companies sometimes don’t invest.”

nike is one company that has decided to take a long view, says Palma. nike sponsors the country’s most successful soccer players, alexis sánchez and arturo vidal. But it also aims to sponsor extreme sports, especial ly skateboarding, snowboarding and surfing.

With a longer view, he says, return on investment is difficult to measure. nike wants a mix of increased sales, a stronger emotional connection to the brand, and a social impact, he says. “When the investments are very short-term, it’s hard for them to bear fruit,” he says.

a chilean Jerry maguire?

the private sector can help professionalize sports in chile by offering more and better sports management services. an increasing number of athletes are recognizing the need for professional advice and support, and consultants are springing up to offer the service.

“my message is for the athletes,” Grob says. “they can’t

chilebUSiness

Steven Bodzin is a freelance journalist based in Santiago

wait for some angel or Good samaritan to show up and say ‘i’ll support you’. no, they need to turn their image into a product that appeals to companies.”

vidal, the fencer, says he has recently been working with advisers but there are not enough sports agents in chile. “it’s what we’re missing. someone who can say, we’re going to present you to this company.”

But to get an agent to represent them, athletes first need to develop their talents. the frustration is that in sports where chile should have a competitive advantage, it hasn’t distinguished itself on the world stage, says silva.

ski teams from the Us, norway,

austria and elsewhere train in the andes above santiago in the southern Hemisphere winter. But the presence of high-quality ski runs and a group of top competitors is not enough to create a top skier – athletes need to train on snow during the long northern winter as well.

and focusing on winter sports may not be the fastest route to the podium. about 300 of the 1,000 medals given out at the south american Games are for track and swimming events. a country seeking more gold needs to train for those events, says silva.

Even as the government seeks to increase funding for athletes, it also sees mega-events as a way to establish chile’s name in sport. most recently, the newly appointed minister of sport, Gabriel ruiz-tagle, traveled with the chilean portion of the dakar rally.

Up next, the olympic committee is focused on the south american Games, scheduled for march 7-18 in santiago. the games have given chile a reason to improve its swimming, track and cycling facilities and may focus the public’s attention on sports other than soccer — at least for 11 days.

Henrik von appen

GlimepiridaPioglitazona

30,000 -

25,000 -

20,000 -

15,000 -

10,000 -

5,000 -

0 -

Nº of beneficiaries

Source: Sports Ministry

Beneficiaries of High Performance Sports Programs in Chile

2010 2011 2012 2013

20,267

15,516

16,922

24,101


nnovation is crucial for chile’s economic growth and competitiveness, but it must be protected. if new ideas or inventions can be easily stolen

or counterfeited, inventors have little incentive to innovate. For chilean companies increasingly focused on adding value to their products for export, patents are an important way to protect their intellectual property and ensure they recoup their investment.

applying for patents can be a costly and time-consuming process, but today there are more tools available for companies to obtain information and advice. on January 15, amcham chile President Kathleen Barclay signed an agreement with maximiliano santa cruz, director of chile’s national industrial Property institute (inaPi), to share information, provide training and promote joint activities.

in his comments, santa cruz said the agreement was the “beginning of a great friendship” between the institute and amcham.

sandra Guazzotti, chair of amcham’s intellectual Property and innovation committee and country manager for oracle, put the agreement in context, pointing out the importance of innovation as a driver of growth and competitiveness. she said there is now a link on the website www.amchamchile.cl where members can obtain information from inaPi about new technologies and patenting procedures.

in addition, inaPi will support the training of amcham members regarding industrial property through workshops and other educational

activities. amcham will also help to organize training for inaPi staff in specific areas related to performance and increased efficiency.

“this agreement will help us to build a culture of intellectual property and innovation in chile with the aim of increasing the productivity and competitiveness of companies,” said Guazzotti.

the ceremony was followed by a workshop on patents and biotechnology. Guillermo carey, an amcham director and a partner at the firm carey, gave a presentation on strategies for patenting new technology. He said that in a highly competitive world, patents can act as an “equalizer” to “level the playing field” for companies. “if you want to compete with mike tyson, you need a strategy,” he said.

He pointed to the firm crystal lagoons as an example of a chilean company that has not only patented

SpoTlIGhT

iBy Julian Dowling

to Patent or not to Patent?

its technology, but also controls the use of this technology in projects around the world. rather than giving clients information about how to keep lagoons clean, the company controls the processes and chemical levels via the internet.

But patents are not always the most cost-effective solution. take ProEs, a chilean company that pioneered a new system for laying asphalt. since its process cannot be reverse-engineered, it is impossible for competitors to copy. this means that, like coca cola, the company is able to keep its formula a secret without a patent.

still, patents can be useful in protecting innovations that could be vulnerable to theft. metro santiago, for example, patented its pre-paid card multivia when it integrated with transantiago and has sought five more patents in the last six months. “innovation can come from unexpected places,” carey said.

there are two ways for companies

in January amcham signed an agreement with chile’s national industrial Property institute, inaPi. here buSiness chile looks at why this agreement is important.

maximiliano santa cruz, inaPi

C

M

Y

CM

MY

CY

CMY

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Portillo_AV_21,5x28_FINAL_TZD.pdf 1 14-02-2014 12:01:44

SpoTlIGhT

to apply for patents in foreign countries – one is through the Paris convention, which requires a separate application for each country, and another is through the World intellectual Property organization’s Patent cooperation treaty (Pct), which chile joined in 2009.

Henry crew, head of the Pct department at inaPi, said that the decision about which system to use comes down to costs. Both systems

have their advantages, the Paris system for example tends to be faster, but the Pct system allows companies to file a single application in multiple countries, thereby avoiding duplication of paperwork and costs.

Between 2009 and 2013, inaPi received 354 patent applications through the Pct system, including a record 74 in 2013, which puts chile third on the list of latin american countries after Brazil and mexico.

about half of all applications were in the mechanical sector and, importantly, 21% of applications came from universities and research centers, pointed out crew.

Ernesto manríquez, head of the Patent Examination department at inaPi, emphasized the importance of research prior to applying for a patent. companies should be able to describe their invention from a technical standpoint and comply with the requirements, he said. various public databases exist for companies to check if patents already exist in other countries, he added. these include Espacenet, Patentscope and the United states Patent and trademark office (UsPto.gov).

Finally, following a Q&a session, Guazzotti invited members to participate in the committee’s working groups focused on areas such as entertainment, software, biotechnology and energy.

sandra Guazzotti, amchamHenry crew, Guillermo carey and Ernesto manríquez at amcham

For more information about AmCham’s Intellectual Property and Innovation Committee contact: [email protected]

Publirreportaje_Apoya_Amcham_21,5x28.pdf 1 21-02-14 10:45

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in december, amcham members elected five board members for the period 2014-2016. the new directors are: charles Kimber, corporate affairs manager of arauco; Guillermo carey, partner at the law firm carey; and Gabriela Peralta, General manager of american airlines.

Karen Poniachik, director of British american tobacco, and Pamela camus, director of Ward van lines, were reelected. there were 18 candidates and 292 companies

voted, representing around half of amcham’s members. amcham’s board, chaired by President Kathleen Barclay, is comprised of 12 directors who serve for three-year terms.

in addition sebastián arana, General manager of 3m chile, replaces Javier irarrázaval, General manager of the Walt disney company for the andean region, who resigned in december. irarrázaval remains on the board as Past President of the chamber.

on January 14, the chile-Us Energy Business council hosted an open discussion with the chairs and coordinators of its seven working groups. the aim of the meeting was to discuss their proposals to address the challenges in each area. around 40 members attended the talk.

rafael lorenzini, Executive secretary of the council, moderated the discussion. the speakers were: carlos Finat, non-conventional renewable Energy Group; Germán silva,

AmCham Directors Elected

AmCham Talk on Chile’s Energy Challenges

AmChAm nEwS

Board members at amcham’s annual planning meeting in January

Álvaro clarke, credit rating agency icr; Kathleen Barclay, amcham; stephen davis, Harvard University; Pamela camus, Ward van lines, and roberto matus, amcham

Corporate Governance Lunch with Dr. Steven Davisin november, amcham co-sponsored a luncheon with KPmG and the

University of chile for the chilean branch of Women corporate directors (Wcd). stephen davis, a Harvard professor and expert on corporate governance, was a guest at the event, which was hosted by amcham President Kathleen Barclay.

dr. davis and the attendees had the opportunity to have an off-the-record conversation regarding global trends in corporate governance. dr. davis emphasized the importance of promoting diversity of thinking in boards given the ever more complex and global issues they face. He also took the opportunity to discuss increasing levels of shareholder activism around the world and the need for boards of directors to be responsive and attentive to this topic. luncheon participants discussed their own experiences in these areas, as well as others, exchanging views directly with dr. davis.

Wcd is an organization committed to the highest standards of corporate governance and to the development of skills for women in this field.

Energy, society and Environment Group; víctor Ballivián, Energy Efficiency Group; sebastián Flores, Biofuels Group, carlos cortés, shale Gas Group; Javier tapia, regulatory Framework Group, and rené muga, infrastructure and technology Group.

the Biofuels and shale Gas Groups were created last november, bringing the total number of groups in the council to seven. in april the council plans to publish a report on the seven main challenges facing chile’s energy industry.

carlos Finat, non-conventional renewable Energy Group

March 2014 29

AMChAM COMMittees

AmCham Pasta Party

University of Chile wins 2014 Jessup Competition

Dale Carnegie Breakfast

the final of the national qualifying round for the 2014 Philip c. Jessup international law moot court competition was held on January 23 at amcham’s offices. the team from the University of chile beat adolfo ibáñez University.

the English-language debate was

in november amcham helped organize a breakfast at the W Hotel hosted by dale carnegie training. Peter Handal, President and cEo of the company, gave a presentation on how to build a “culture of engagement in a changing world”. around 80 executives attended the breakfast.

Handal’s presentation was based on a Us study by dale carnegie, which showed that seven of ten employees are not fully engaged in the workplace. dale carnegie proposes a model of engagement and actions to make employees more enthusiastic and self-confident.

Kathleen Barclay welcomes members at the Pasta Party

(1st row, standing): Felipe silvestre,Elina mereminskaya, marcosríos, catalina Fernández,claudio troncoso, and FelipeHoetz. (2nd row): ralph lorén,agustín searle, isabel cholaky andEliana Barrera

mario ríos, country manager of dale carnegie chile; Peter Handal, cEo & chairman of dale carnegie training; and laurent devlieger, cEo of dale carnegie chile

nEw mEmbErS

bc & mc business centerinternational legal consultingmanuel vergara,General manager

Gestión y Desarrollo Patioreal EstateÁlvaro Jalaff,Executive vice President

mares australesmining & related BusinessPatricia low,General manager

e-cl Power Generation and distributionlodewijk verdeyen, General manager

Palma & cía. abogados tax and Financial advisory services daniel lyon,Partner

on January 8, amcham’strade Facilitation committeeheld its first meeting of the yearwith guest speaker Josephnehme, Executive secretary ofchile’s single window customsclearance system, sicEX. the committee’s president, sandra miró, chaired the meeting.

over water use between the fictitious countries of amalea, represented by the University of chile, and tirania, represented by adolfo ibáñez. the jury was comprised of 36 lawyers from law firms, universities and private companies. the competition was sponsored by the law firms carey, Grasty Quintana majlis & cía, and Bofill

mir & Álvarez Jana. the University of chile will

participate in the White & case international round of the Jessup competition in Washington, dc, in april.

"the key to success in a changing world is to have engaged employees who are heard by senior management… that is what creates successful companies," said Handal.

on december 12, amcham hosted an italian-themed dinner party for members at the residence of amcham President Kathleen Barclay. the event, sponsored by carozzi, was to thank members for their participation in amcham activities during the year. around 40 members attended, including amcham General manager roberto matus and directors Pamela camus and sandra Guazzotti.


the first run for Entrepreneurship and innovation was held on november 23 in santiago. around 1,800 runners participated in the event co-organized by mundorunning, mutual de seguridad cchc, newsHolding and momento Zero.

the initiative was created by mundorunning founder, Juan Pablo muñoz, an entrepreneur who was injured after being hit by a car along with a group of other runners

AmChAm mEmbErS nEwS

on november 29, BancoEstado announced the winners of its 9th annual Entrepreneurship awards in a ceremony at the centro cultural Gabriela mistral. those in attendance included Finance minister Felipe larraín, Economy minister Félix de vicente, and BancoEstado President segismundo schulin-Zeuthen, among other guests.

the winners of the four categories were: ana correa and luis navarro in the rural category; Yesenia castillo and carlos vargas in the Youth category; loreto orellana and luis Zapata in the Urban category; and sandra ramírez and iván salas for innovation.

this initiative seeks to support the development and growth of small businesses. "We are the bank with the most small business customers in the country. today we have more than 458,000 clients, which gives us a 62% market share and means we continue to be the national leader in microfinance,” said schulin-Zeuthen.

BancoEstado 2013 Entrepreneurship Awards

Run for Entrepreneurship and Innovation

UPS Employees Volunteer for Special Needs Kids Crystal Lagoons’ Fischmann Named Businessperson of the Year

BancoEstado award winners (from left to right): carlos vargas, Yesenia castillo, luis Zapata, segismundo schulin-Zeuthen, loreto orellana, sandra ramírez, ana correa, iván salas, luis navarro, and soledad ovando, manager of BancoEstado microempresas

some of the 1,800 runners who took part in the run

during the santiago–valparaíso run for the 2012 telethon. three runners died in that accident and seven were injured.

"support for entrepreneurship, innovation, and for small and medium-sized enterprises in chile is a central focus of our work related to workplace safety,” said maría isabel Pardo, corporate affairs manager at mutual de seguridad cchc.

in october, UPs chile employees took part in a special initiative during World volunteer month, which included improving the playground of a special needs school in santiago.

the special needs school andalue in maipú has capacity for 240 students aged 4 to 25 years with different learning disabilities. community members also work and socialize with the students.

the employees were grateful to have the chance to “volunteer for a cause that improves the quality of life for many children and young people as part of our mission to bring UPs closer to the community,” said víctor Henríquez, manager of UPs chile.

in december, newspaper Diario Financiero named Fernando Fischmann, founder and president of crystal lagoons, as the winner of its 17th annual Businessperson of the Year award. diario Financiero’s director roberto sapag and President Baltazar sánchez presented the award.

the other 12 categories included Best international Expansion (won by crystal lagoons,) and Best start-Up (comparaonline.com).

Fischmann has previously won avonni’s Best innovator award and Ernst & Young’s Best Entrepreneur award, becoming the first chilean businessperson to receive all three awards.sandra villalobos, rosa Urbina and

víctor Henríquez

Fernando Fischmann, crystal lagoons, with roberto sapag and Baltazar sánchez, diario Financiero

March 2014 31

last november movistar announced the launch of its fourth generation (4G) cellular network across the country. the network allows clients to access a range of services online and download data at speeds reaching up to 10 times faster than with the 3G network.

this year the company aims to double the area of coverage of the network, which uses the 2,600 mHz band. the network is especially aimed at meeting the cellular needs of young people in chile.

"You can enjoy the new 4G technology in all regions of chile, and that's what sets us apart from the competition. We are committed to offering the best connectivity in the country,” said movistar chile cEo roberto muñoz.

Jacqueline Fuentes is sales manager at consulting firm Incosec. She has a Master's degree in Business Management from Adolfo Ibáñez University and more than 10 years experience developing market strategies in Link humano, Golden Line and Grupo Norte Chile, among other companies.

Gonzalo Gebara has been appointed COO of Walmart Chile. he holds a degree in Business Management from the Pontifical Catholic University of Argentina and has been with Walmart Chile for 13 years.

Loreto Barril is head of the retirement area at consulting firm Mercer Chile. She has a degree in business management and experience in pension-related issues. She will be responsible for expanding the firm’s retirement business.

Culinary Institute Roundtablethe culinary institute held a

roundtable on december 5 in santiago to discuss the future of higher education in chile’s services industry. Guests included sernatur national director Javier vergara, wine entrepreneur thierry villard, events producer, sandra neumann, and culinary corporate chef Juan Pablo mellado.

the objective was to inform applicants about the current state of different service industries in chile and future graduate employability. the guests agreed that chile has great potential in the services area, but it needs trained manpower to meet the needs of this fast-growing market.

Gonzalo Gallardo, culinary; Javier vergara, national director of sernatur, and sandra Jorquera, culinary

in december, Kimberly-clark chile launched my sustainable life (Mi Vida Sostenible), an interactive platform that allows employees to compensate their carbon footprint online. the platform is part of the company’s ‘small steps make a difference’ program.

in addition to raising awareness about the environment, my sustainable life includes a variety of options so that employees can make better decisions in terms of living better and volunteering. the platform was designed with the collaboration of the Kimberly-clark Foundation.

Movistar Launches 4G Network

claudio muñoz, President of movistar chile; Pedro Pablo Errázuriz, minister of transport and telecommunications; Jorge atton, Undersecretary for telecommunications, and roberto muñoz, cEo of movistar chile

Jacqueline Fuentes, inosec

Gonzalo Gebara, Walmart Chile

Loreto Barril, Mercer Chile

ExECUtIvE aPPoinTmenTS

Kimberly-Clark LaunchesCarbon Offsets Platform


AmChAm pEoplE

on January 23, the final of the national qualifying round for the Philip c. Jessup international law moot court competition was held at amcham. this year’s winner, which will represent chile in Washington, dc, in april, was the University of chile.

Jessup 2014 Final

eduardo aninat and Kathleen barclay, amcham alfredo comandari, fundación lópez Pérez; José miguel Simian, universidad de los andes, and marco Simpson , fundación lópez Pérez vincent mccord, asesorías e inversiones carcon; ignacio Santa maría and manuel herrera, Portfolio capital Pedro reus, Sofofa, and andrés montero, interTrust head hunting María Mondeja and Manuel Vergara, BC & MC (Business Center & Management Consulting) Enrique Olivares, Bank of Tokyo-mitsubishi; Pilar Pérez, american airlines, and Takehiko Kimura, bank of Tokyo-mitsubishi

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ralph lorén and catalina fernández, university of chile; Kathleen barclay, amcham, and agustín Searle, university of chile Álvaro Gutiérrez and constanza fernández, university of chile supporters, and roberto matus, amcham michael Grasty, amcham; claudio Troncoso, university of chile; lucy Young and Thomas Gottschlich, Grasty, Quintana, majlis & cía.

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on december 19, amcham held its last breakfast of 2013 at the marriott Hotel with chilean economist and former Finance minister, Eduardo aninat. His presentation was titled “lessons From the European crisis for the new chile: What We should avoid”.

Breakfast with Eduardo Aninat

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carolina montes, e-cl; carolina Jiménez and claudia herrera, alo ventas, and claudia Torres, bodegas San francisco ralph haller, unipack; radomir Petricio, francisco Petricio, and Patricio amuchastegui, colliers international mario vives and Graciela Torres, engintel roberto matus, amcham; alberto Quiroga, Palcom, and Juan José lópez, boyden ellen leny-Pessagno, uS embassy; Kathleen barclay, amcham, and Pamela camus, Ward van lines michael combes, marco chilena, and Jorge laporta, Ward van lines

on december 12, amcham members were invited to an end-of-year Pasta Party at the residence of amcham President Kathleen Barclay.

Members Pasta Party

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Economic Snapshot

in the last few months, we have seen a pronounced slowdown in chile's economic activity, prompting the central Bank to start a monetary easing cycle as we head into 2014. although more stimuli is likely this year and the risk of major external shocks appears to be limited, chile will struggle to reach its potential GdP growth as it faces a soft patch in the investment cycle during a political transition year.

chile’s 2013 real GdP growth was unimpressive, likely only reaching 4.2-4.3% year-over-year, compared to nearly 6% per annum in the previous three years. the slowdown was caused by weak internal demand, most notably on the investment side, which likely grew at just 4% y/y, compared to 12.1% a year earlier. this was mainly explained by a downturn in the capital expenditure (or capex) cycle of companies, which became particularly apparent in the second half of the year. However, with many companies having completed major investments, this is part of a natural cycle. in addition, capex in the mining sector has led to a modest rebound in export activity, which has offset some of the declines in investment, while helping the current account deficit.

meanwhile, the investment slowdown, coupled with a weaker currency and efforts by authorities to curb credit growth started taking its toll on consumption late in the year, particularly private consumption. all of these factors, as well as limited external shocks, also contributed to low inflation, which was running below 3% for much of the year, ultimately converging to the midpoint of the 2-4% central Bank target range. this has given the central Bank some room for monetary easing, which started in the fourth quarter with two 25 basis-point cuts in its monetary policy rate to 4.5%.

so far, this year has seen a continuation of these trends, with consensus economic forecasts calling for inflation running just below 3% and the central Bank cutting its rate another 25 basis points to 4.25% in February. Furthermore, with room for further cuts, and ample reserves to counter down cycles, it appears that in the absence of major external shocks chile should be able to attain real GdP growth of 4% y/y, which would still be enough to better global and latin american growth, but falls below chile's potential.

a key factor for growth on the domestic side of the equation will be the policies of the incoming administration. transition years are often tight on public spending and announced intentions to reduce the fiscal deficit suggest this will be the case. in addition, with many reforms in the Bachelet plan, we could see delays in investments as market participants take a "wait and see" approach.

meanwhile, on the external front, chile's largest trade partner, china, has set growth goals that suggest the country is intent on orchestrating a "soft landing" with GdP growth likely to be in the range of 7.0-7.5%. in addition, the state Grid corporation of china, the world's largest single consumer of copper, announced a 13% increase in demand for 2014, following a 10% rise in 2013, which should help copper prices.

as for the developed world, Us economic data continues to improve as the country potentially embarks on a new investment cycle. at the same time, Europe should continue to muddle through, while Japan basks in the stimuli of abenomics (after Prime minister shinzō abe). Greater developed world growth also bodes well for copper, which is a more widely used metal than say iron ore, which tends to be more china-centric.

although chile faces a transition year, both politically and in the investment cycle, we still see the country on solid ground for 2014, helped by a still solid policy framework and a generally rising tide across the world.

By brian P. chase

outlook 2014: transition Year

brian P. chaseis Portfolio Manager, head of Andean Equities, at Itau Asset Management.

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en years is not long in international relations but in the economic relationship between chile and the United states it is

a lifetime. chile’s trade strategy of opening key markets kicked off with the signing of a free trade agreement (Fta) with canada in 1996. But its Fta with the United states, signed in 2003 and in force since January 2004, is arguably the most important trade agreement chile has ever signed. since then chile’s exports have grown 10.3% annually, exceeding the country’s annual growth rate, and trade with the United states has quadrupled.

so when amcham members gathered at the intercontinental Hotel on January 30 for a seminar marking the 10th anniversary of the chile-Us Fta they had plenty to celebrate. amcham, the chilean government and the inter-american development Bank (idB) organized the seminar, which was sponsored by metlife and Principal Financial. robert Zoellick, the former United states trade representative who signed the agreement in 2003, gave the keynote address.

in her welcome remarks, amcham President Kathleen

Barclay highlighted key statistics that demonstrate the success of the chile-Us Fta. Bilateral trade, she noted, has risen 300% to Us$27.8 billion in the last ten years. But she also pointed out that the benefits go far beyond the purely economic.

"the [Fta] has been a great success and has brought benefits for both countries that go beyond trade,” she said, adding that these include greater social and cultural integration between the two countries.

But reaching an agreement was hard work. Before the chile Fta, the United states only had three such agreements with israel, Jordan and naFta (with mexico and canada). as free trade was a relatively new concept in the United states, the negotiating process was long and complex, she said, but it resulted in a happy ending for both parties.

“a successful conclusion, although difficult, was possible in large part because of the two countries’ shared values, including democratic principles, respect for human rights, and a belief in free markets,” she said.

Álvaro Jana, director of the international trade department

at the ministry of Foreign affairs (direcon), said the agreement marks a “before and after” in chile’s trade policy. He pointed out that today chile depends on trade for 70% of its GdP and that it has 22 free trade agreements with 60 countries, many of them signed in the last decade.

“in terms of exports, having clear rules of the game certainly can make the difference,” he said. Exports of certain products such as chilean oranges and ferromolybdenum, which were not exported to the Us at all before the agreement, today enter the Us with zero tariffs and account for 44% and 85%, respectively, of total Us imports of these products.

the Fta has also facilitated Us investment in chile and vice versa, he added. in the future, Jana said that the double taxation avoidance treaty and a new systems approach to fruit exports will further facilitate trade. “if the Fta didn’t exist these things would not be possible or would be much less ambitious,” he said.

But the chile-Us Fta was not just about commerce and investment, said robert Zoellick in his keynote address. “our agreement is a practical expression of a vital,

t

10th Anniversary of the Chile-Us FtAamcham co-hosted a seminar in Santiago to celebrate the 10th anniversary of the chile-uS free Trade agreement.

AmChAm SpECIAl

Álvaro Jana, DireconBy Julian Dowling

March 2014 37

even historic, idea,” he said.although Zoellick was unable

to achieve his goal of a Free trade agreement of the americas while he was in the Ustr, he pointed out that the chile Fta led to other agreements with countries like colombia, Peru and Panama. the “stream of history” continues, he said, with both chile and the United states involved in negotiations towards the transPacific Partnership.

chile is also a member of the Pacific alliance, which the Us has joined as an observer nation. “the Pacific alliance is stronger because of its links with the United states and canada and it uses that foundation to look beyond,” he said.

Zoellick, who was President of the World Bank during the 2008 financial crisis, said that five years later the world is “moving towards more normal conditions but we’re still not sure what that normal will look like”.

as countries continue their recovery from the crisis there is a need for structural reforms, especially in developing economies, in order to boost productivity, he said. making the leap from middle-income to high-income status will be a challenge for countries like chile and mexico, he suggested, but greater international trade and investment

can support structural reforms.although poverty rates have

plummeted in latin america, there remains much to do in areas such as infrastructure, pensions, health and education, he said. He also pointed out that energy prices have been a brake on chile’s growth. “i hope chile can keep its focus on the fundamentals of good growth policies while adding to inclusiveness and sustainability,” he said.

Following Zoellick’s speech, a discussion was held with senator ricardo lagos Weber and former minister of Foreign affairs Juan Gabriel valdés who participated in the Fta negotiations under the government of former President ricardo lagos. mauricio Hoffman, a journalist at radio oasis, moderated the discussion.

Finally, there was a panel with participants from the private sector including William lane, director of international Government affairs at caterpillar (see Interview on Page 38); Juan miguel ovalle, president of the Poultry Producers’ association (aPa) and ronald Bown, president of the Fruit Exporters’ association (asoEX).

lane pointed out that the United states has benefitted not just from increased exports to chile, but also from imports. He said the promise of fresh chilean grapes in the winter at a lower price, as well as

good wine, helped convince Us congressmen to vote for the Fta.

“trade is important to create jobs and exports, but the import side is also important because it increases your quality of life,” he said.

overall, the seminar was a great success. By bringing together speakers from the chilean and Us governments who were involved in the negotiating process, as well as representatives of the private sector, the participants left with a well-rounded vision.

the speakers agreed that the agreement has been an astounding success, which is borne out by the numbers, but as Zoellick pointed out, the historical and political significance goes far beyond an agreement to phase out tariffs. “the chile-Us Fta is one of the shining stars that light our path,” he concluded.

Kathleen Barclay, AmChamRobert Zoellick

Senator Ricardo Lagos Weber

chilebUSiness


William c. lane, caterpillar

Heavy lifting on the Hillhat the chile-Us Free trade agreement (Fta), passed just over a decade ago, has been a major success for both countries is by now common knowledge. But less well known is how close it was to never happening.

american businesses, in coordination with amcham chile, played a key role in working with lobbyists and meeting with politicians to get the crucial votes that were needed to give former President George W. Bush fast track authority to bring the agreement before congress.

one of these businesses was caterpillar. the manufacturer of construction and mining equipment, which in chile is distributed through Finning, has long been a free trade promoter in Washington, dc. William c. lane, senior director of Global Government and corporate affairs, has spent nearly 39 years with the firm and started promoting a trade agreement with chile in 1995.

He came to chile recently to attend an amcham seminar celebrating the 10-year anniversary of the Fta. during his visit he spoke to bUsiness cHilE about how amcham and Us businesses came together to convince lawmakers that chile was a worthy free trade partner.

how did caterpillar become involved in promoting the fTa?

We played an important role in naFta, and then we were one of the corporate leaders of the Gatt Uruguay round. so we established that we were effective in public policy advocacy, particularly as it relates to trade. on top of that we were always looking for issues that we had a unique story to tell. When you look at the Ftas we’ve championed – chile, australia, Peru, colombia and Panama – they’re either big markets or there is a big project as in the case of Panama. Even though the population base of chile isn’t high, it’s been a historically important market both for mining and infrastructure.

What role did amcham play in the negotiations leading to the fTa?

in some ways i learned from amcham. it brings

a certain set of strengths, primarily credibility and the ability to interact with their counterparts in the Us. amcham put assets in place that set the stage for eventual passage. it started out with meeting members of congress but they also met with thinktanks. they put all of the intellectual foundation in place. they engaged the press and met with all the trade groups. it was a very sophisticated effort. they played the public policy apparatus like a stradivarius. it was that good and i’ve not seen anything as good since. other efforts relied more on paid lobbyists, but chile didn’t.

Was the agreement a case of the right people at the right time or was there something more to it?

there was a higher degree of professionalism in amcham and the Embassy, really across the board. i think i’m a good judge of people and i was seeing things in this effort that i wasn’t seeing in others. in some public policy efforts the feeling is that if you throw enough money at it, or if you hire enough lobbyists, you can get it done. But this was a whole different approach. this was mr. smith goes to Washington. the idea was that if we tell a compelling story, and if we can do it in a sincere way, we could convince people to make the right decision. But that effort stalled when the Us did not move forward on fast track authority [also called trade Promotion authority, or tPa] in 1997 and almost all the focus in Washington moved to china.

how did chile recapture the momentum in the early 2000s?

[George W.] Bush was elected and he was clearly a free trader. He worked hard for trade Promotion authority getting very contentious votes, ultimately 21 democrats voted for it in 2002. this was right after 9/11 and some bartering took place. the steel industry had just come off hard times and they were seeking protection so the administration was more amenable to it than some people would have thought [Bush placed a temporary tariff on imported steel in 2002]. as a result we were able to get some republicans who wouldn’t normally support free

By Julian Dowling

t

InTErvIEw

March 2014 39

trade to support it. these votes were by one or two votes; it was very, very close.

You said earlier that the chile fTa was better than nafTa, what did you mean?

naFta had a lot of liberalization take place over a long period of 10-15 years. at least for manufactured goods, the chile Fta immediately eliminated tariffs in the Us and chile, on top of that it was broader in the sense that it included remanufactured goods [goods produced using parts from old equipment] and included new areas. i think the agricultural community was exceedingly pleased with it. it embraced free trade rather than try to phase it in.

how was the fTa good for caterpillar?in some ways this was the best benefit of the Fta – it

was a validator that chile is a good place to invest. all of a sudden, out of 210 countries in the world, chile is one of five that has a free trade agreement and with it comes all sorts of disciplines in terms of investor protections and trade liberalization. that becomes a magnet for growth. chile also started investing in infrastructure, which clearly benefits us, and by not charging high tariffs on mining equipment it means the sector is more efficient, and we also benefitted from higher copper prices. so all three things came together.

What did you personally learn from the negotiating experience?

Expanding my field of view, it made me realize there’s a lot more to lobbying than just relationships. You have a lot of tools you can use that include working with cEo community, the lobby community, engaging the press and developing grassroots apparatus. You don’t want to rely on consultants, you want to rely on yourself and that’s what amcham did. chilebUSiness


hen robert B. Zoellick, United states trade representative under former President George W. Bush, signed the chile-Us Free trade agreement (Fta) in miami on June 6, 2003, it was the conclusion of nearly a decade

of negotiations. now, more than a decade on and after serving as president of the World Bank between 2007 and 2012, ambassador Zoellick has transitioned to the private sector as chairman of Goldman sachs’ board of international advisers. But he remains as committed as ever to free trade, which he says has played an important role in the economic growth and development of latin america.

after delivering the keynote address at an amcham seminar in January to mark the 10-year anniversary of the Fta, he spoke to bUsiness cHilE about the origins of the agreement and how it has become a model for the region.

Tell me about the historical context of the fTa...it was a very important step for the United states and for

canada after naFta to extend the notion of regional free trade to south america. chile has been a leader in openness, trade and economic reforms, so it was a natural partner. at the time we were also trying to create the Free trade area of the americas, which was not to be at that time. But the United states proceeded to take the chile Fta model and extend it to Peru, colombia, Panama, the five countries of central america and the dominican republic. so the United states now has free trade agreements with over 50% of the non-Us GdP in the hemisphere.

the reformist impulse of the Pacific alliance countries – chile, colombia, Peru and mexico – could also be important in the future in setting a pattern and a model that will be appealing to others in latin america. But it’s very important for latin american countries to benchmark globally. in that sense, the transPacific Partnership negotiations could be very important.

Was it a coincidence that Chile was the first South american country to sign an agreement?

no, it wasn’t. at the time we finished naFta, i talked with then-Finance minister alejandro Foxley about trying to extend the agreement in 1992 but [the republican Party] lost office. We didn’t have another chance until 2001 but the reason we did so is because chile was oriented towards free trade and markets, and frankly it was good to encourage a successful transition to democracy. so to me it was a combination of economics and foreign policy.

You’ve said the fTa could be useful as chile looks to implement reforms in areas such as pensions, education and energy. What did you mean?

the principles that underlie the Fta are principles of openness, policies oriented towards growth, policies that bring investment, and policies that learn from comparative experience. countries that have reached middle-income status such as chile often struggle to reach high-income status. But all countries in the world are struggling with this challenge of how to have inclusive growth.

trade doesn’t solve all problems – it just creates the foundation for growth. Growth gives you the resources to help solve problems. But open societies tend to learn from other societies and they are forced to deal with these changes. it’s the nature of a democracy that these are subjects of vibrant debate.

how is the fTa seen in Washington?For the people who know the details it has been a big

success. there has been a 300% increase in trade, but actually the Us has seen a 500% increase in exports and we went from a deficit to a surplus with chile. Because these agreements cover things like services and intellectual property, more advanced economies like the United states have more in those sectors so the more you have fair rules the better off you are.

how important was the private sector in getting the agreement approved?

Extremely important and it’s more than lobbying. Governments are trying to create an enabling framework for businesses and entrepreneurs, and so the negotiating officials should not be sitting in a room trying to come up with textbook solutions. they need to understand how to support the private sector to build better economic growth and a better society. When i was in the Ustr we worked closely with industry and labor groups to try to understand their interests. successful trade negotiations are a constant dialogue with the business and economic community.

That paid off because today nearly 100% of exports are duty free…

Yes, we eliminated a large number of [tariffs] from the start. this was a complement to chile. chile by the nature of reform was willing to push the envelope to liberalize.

By Julian Dowling

W

InTErvIEw

robert b. Zoellick, former united States Trade representative

Trading Up

March 2014 41

Chile and the US are involved in the TransPacific Partnership negotiations. Will this agreement build on the fTa?

it’s too early to tell but if the tPP is to advance it should build on the experience of other free trade agreements. the Us has Ftas with six of the countries in the tPP so that leaves new Zealand, Brunei, malaysia, vietnam and Japan. the big question is whether Japan will open up through the tPP process. if you can’t get global free trade then a bigger region is better.

are bigger free trade agreements preferable to bilateral agreements?

the tradeoff is that the more countries you include, the weaker the quality of the agreement. chile has agreements with some 60 economies so the danger is what one critic has called the ‘spaghetti Bowl’ with different rules and processes. ideally you want as many countries to be as open as possible with the same rules but sometimes that is not realistic, which is why when we launched [the chile Fta] i was moving on three related fronts: bilateral, regional and global. You want a strategy that says: “i will open if you open, but if you don’t i’m not going to stop”. that’s how you create competition.

That approach sounds a bit scattershot…not quite. that may fit chile since it’s a smaller economy and it may

try to have agreements with everybody but in the United states the politics are a little harder.

Does President obama have the political support to get the TPP agreement through congress?

the republican Party tends to support free trade but President obama’s having trouble with his own party. Bill clinton, to his credit, spent a lot of political capital to get naFta passed in 1993. But politicians have to be careful about their base. the big issue now is whether President obama will really push for trade Promotion authority.

looking back, is there anything you would have done differently in negotiating the fTa?

there were some dimensions on the borders of trade such as capital flows that were part of the Us negotiating package. i’m not sure how important they were to include but chile wanted to demonstrate it could have the highest quality standards so it was willing to include them. You always learn with agreements about different aspects to improve over time.

But by and large the Fta was important economically for chile, it was important for the United states in its relationship with chile but also to build momentum for freer trade. and the real question is can we continue to build on that momentum. i would like to see a day when the chile Fta will eventually become the basis for free trade throughout the hemisphere. chilebUSiness


Doctor’s OrdersBy Santiago eneldo

hate my doctor – with a vengeance! Perhaps not a comment you would normally expect from such a serious publication, but it is true.

it is 4.07am and i am sitting, rather uncomfortably, in front of my laptop as i follow

“doctor’s orders” and get ready for a colonoscopy later today. You probably do not want to hear about this, but then i get to write this column not you!

i have spent most of the night drinking vast quantities of laxative juice. no sooner does it get imbibed than i have to make for the bathroom. EiGHt liters (that’s over 16 pints!) so far and i haven’t finished yet... i feel bloated, as well as extremely tired, so i will be short-tempered all day.

Without going into detail, all this intake and unpleasantness is the preview to concluding my Health checkup. i have done the blood work, i have had a chest x-ray and an abdominal scan, and i am about to finish on a “high” with the colonoscopy. i have read that i need to be accompanied by an adult (i am an adult!) because i will be drowsy after the “inspection”.

i hate my doctor because he recommended this examination. i would love to turn the tables and have him spend all night drinking laxative and then wait eight more hours for a “deep” penetration. and, worse, i had nothing solid to eat all day yesterday (just one glass of orange juice, four cherries and half a bowl of weak soup) and it will be dinner time today before i can have a proper meal – perhaps a big steak and a baked potato with all the trimmings and a BEEr!!

i hate my doctor because he is making me pay for this torture.

But then, i suppose, i should see the other side of the coin. if i check out as “healthy” then i will be fit to go for another 12 to 18 months. i am fortunate to be able to have a 1.5 million mile checkup and take quick, aggressive, but hopefully timely, action if anything unpleasant is uncovered.

so i will be going to see my doctor next week to “review the findings” and make any adjustments to

my lifestyle he might suggest, such as reducing white wine intake by one third of a glass a month…

i am not on a diet but i am concerned about “eating well”, or perhaps i should say “eating correctly”. the big problem is that almost everything i like is on the no list and almost everything on the to Eat list is pretty uninspiring – boiled fish with hummus, nuts and a few leaves of organic spinach is not my idea of a meal.

i like “real” butter, whole milk, eggs, a steak every now and then, and cream on my strawberries. the other day i had milk on my cornflakes that appeared to be mostly water. Yuck! so, is anything both good for me and really delicious?

But for now i have to wait, tired and annoyed, for eight hours to see the colonologist (!) before i can fill a very noisy stomach. i really hate my doctor.

i remain resolute and philosophical in the face of great adversity,

Santiago eneldo(dietary recommendations to [email protected])

Postscript: i survived!! not at all pleasant but i insisted on watching everything on the monitor. now i have to wait for the biopsy results. my doctor has discussed some of the other test results with me: high cholesterol, fatty tissue on the liver, a growth on the gall bladder, weakened aorta (that’s the main road north and south!), damaged vertebrae, etc. He says i am like a used car: many minor (and some not so minor!) scrapes but nothing that a good paint job will not cover up... i still hate my doctor!!

life in the Slow lane

i

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