CHILE Its Land, People and Business Opportunities

CHILEIts Land, People and Business Opportunities

BECAUSE IT’S A GENIUINE AND TRUSTWORTHY COUNTRY

BECAUSE IT’S AN OPEN COUNTRY CONNECTED WITH THE WORLD

FOR THE TREASURES THAT ARE PRESENT IN ITS DIVERSITY OF LANDSCAPES AND NATURAL RESOURCES

WHY CHILE?

• Vast mineral wealth• World capital of astronomy• The development of unconventional renewable energies

NORTHERN REGION

EXPLORING CHILE AND ITS RICH DIVERSITY

CENTRAL REGION• The largest number of inhabitants• Concentration of the business sector• The country is among the eight largest wine

producer in the world

SOUTHERN REGION• Large natural reserve of biodiversity and resources• Salmon, mussels, dairy products, livestock and

agricultural products• Sustainable cultivation of forests for wood industry

Agreements in force

Agreements signed

EFTA South KoreaUnited StatesEuropean Union

JapanIndia P-4 China

Australia PeruCuba Panama

VietnamMalaysiaTurkey Ecuador

Central AmericaMexicoCanadaMercosur

Venezuela Bolivia Colombia Thailand

63% Of the global population

93,8% Of our export markets

85% Of global

GDP

A COUNTRY OPEN TO THE WORLD: 24 trade agreements with 62 countries

Source: DIRECON

ECONOMY AND FOREIGN TRADE

Fuente: Inteligencia Comercial ProChile, con cifras del Banco Central de Chile.

Exports 2013:• USD $ 40.158 million in copper• USD $ 36.526 million in goods excluding copper

EXPORT OF GOODS

2009 2010 2011 2012 2013 -

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

29,695

41,361 44,670 41,987 40,158

25,768

29,748

36,768 35,978

36,526

Cobre Bienes sin CobreUSD $ MM

Copper52%

Non-Copper Goods48%

In 2013, the total of Chilean exports reached USD $ 76.684 million

In 2013, the exports of non-copper goods reached USD $ 36.526 millon, recording a growth of 2% in comparison with 2012.

Exports of Goods*

Source: DIRECON and Central Bank of Chile

2009 2010 2011 2012 2013 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Vinos MineralesProductos del Mar Industria ForestalProductos Agropecuarios Manufacturas

USD $ MM

Wine5%

Minerals12%

Sea Products 14%

Forestry Industry16%

Agro products26%

Manufacturing27%

* Doesn’t include neither copper nor services

EXPORTS OF GOODS*


2007 2008 2009 2010 2011 2012 2013 - 5

10 15 20 25 30 35 40 45 50

3 6

13 12

24

36

47

US$ MM

2007 2008 2009 2010 2011 2012 2013 -

50 100 150 200 250 300 350 400 450 500

194 237

197

362 404 404

465

US$ MM

2007 2008 2009 2010 2011 2012 2013 -

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2,253 2,417

2,112 2,069

2,930 2,893

3,543

US$ MM

Olive oil Berries Salmon and Trout

* Does not include neither copper nor services.

Exports of Goods*According to the Geographical Zone


Geographical ZoneUS$ MM US$ MM US$ MM US$ MM US$ MM

2009 2010 2011 2012 2013

Asia, Oceania and Middle East 6,609 7,822 9,998 9,794 10,042

South and Central America and the Caribbean 7,158 8,343 10,228 10,037 9,955

North America 6,334 6,893 8,459 8,316 8,556

Europe 5,053 6,119 7,303 7,061 7,305

África 201 172 255 330 299

Total 25,768 29,748 36,768 35,978 36,526

África Europa América del Norte América del Sur, Centroamérica y

Caribe

Asia, Oceanía y Medio Oriente

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 2012 2013US$ MM

* Does not include neither copper nor services

EXPORT OF GOODS*10 MAIN DESTINATIONS


Estados Unidos

China Japón Brasil Perú Bolivia Holanda México Corea Del Sur

Suiza -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2009 2010 2011 2012 2013US$ MM

* Doesn´t include neither copper nor services.

EXPORT OF SERVICESMacrosectors


Service US$ MM 2008

US$ MM 2009

US$ MM 2010

US$ MM 2011

US$ MM 2012

US$ MM 2013

Transport 6,456 4,720 6,394 7,450 6,478 6,357

Travel 1,657 1,604 1,645 1,889 2,150 2,219

Others** 2,625 2,169 3,109 3,766 3,827 4,211

Total 10,738 8,493 11,149 13,105 12,456 12,787

** Other services include: company administration services, research and development, IT and engineering design and architecture.

60%

15%

24%

2008

Transportes Viajes Otros*

50%

17%

33%

2013

US$ 10,738 MM US$ 12,787 MM

Successful story of Foreign Direct Investment

An average of 7.4% of GDP in the last decade

Fuente: Inteligencia Comercial ProChile, con cifras del Banco Central de Chile.

20032004

20052006

20072008

20092010

20112012

2013

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

5.7%

7.3%

5.7%

4.8%

7.3%

8.5%

7.4% 7.2%

9.3%

10.7%

7.3%

FDI a

s %

of G

DP

A PLACE TO LOOK FORWARD TO

Chile has been recognized as

The most stable and secure country of South America

A good business partner

A country open to the world that promotes free trade

Fastest economic growth

By OCED, World Bank and The Economist Intelligence Unit, and Earnst & Young

LAND OF OPPORTUNITIES

1CHILENUMBERONE INLATIN AMERICA

GLOBAL IT REPORT2014WORLD: 35 OF 144FORO ECONÓMICO MUNDIAL

INDEX OF EASE OF DOING BUSINESS 2014 WORLD: 34 OF 189 WORLD BANK

BEST COUNTRIES TO DO BUSINESS2013WORLD:22 OF145FORBES MAGAZINE

GLOBAL FOOD SECURITY INDEX2013WORLD: 28 OF 107ECONOMIST INTELLIGENCE UNIT

GLOBAL COMPETETIVITY REPORT 2014WORLD: 31 OF 60INTERNATIONAL INSTITUTE FOR MANAGMENT DEVELOPMENT

INDEX OF ECONOMIC FREEDOM 2013WORLD: 11 OF 152FRASER INSTITUTE, CANADA

LOGISTICS PERFORMANCE INDEX 2014WORLD: 42 OF 160WORLD BANK

EASE OF BUSINESS INDEX 2014 WORLD: 8 OF 138WORLD ECONOMIC FORUM


2014 Index of Economic Freedom

Fuente: The Heritage Foundation (http://www.heritage.org/index/)

Economías (7th amongst 178 economies )

Chile is one of the 10 countries with a high

percentage of economic freedom.

65

70

75

80

85

90

95

90.189.4

82 81.6 81.280.2

78.7

76.5 76.2 76.1

Cana

da

Chile

Irela

nd

Hon

g Ko

ng

Sing

apor

e

Aust

ralia

Switz

erla

nd

New

Zea

land

Mau

ritius

Den

mar

k


Corruption Perception Index 2013 (22nd amongst 176 economies).

Fuente: Transparency International, 2013 (www.transparency.org)

Amogst the least corrupt countries in the world having high

levels of transparency.

Venezuela

Bolivia

Argentina

Peru

Brazil

Spain

Chile

Hong Kong

United Kingdom

Australia

Netherlands

Switzerland

Singapore

Finland

Denmark

0 20 40 60 80 100 120 140 160

160

106

106

83

72

40

22

15

14

9

8

7

5

3

1


http://www.transparency.org/

The dynamic food industry has placed Chile as one of the leading suppliers of fresh produce off-season for the northern hemisphere. Furthermore, it is the largest exporter of frozen Pacific salmon, frozen trout, fresh blueberries, apples and dried plums.

AGRI FOOD SECTOR

The growth of primary production sectors, along with the implementation of a satellite industry support, have enabled significant advances in the development of competitive advantages in areas such as innovation, production, and global compliance certifications.

INDUSTRIAL SECTOR

CHILE, UN PAÍS PARA HACER NEGOCIOSPRODUCTOS Y SERVICIOS PARA EL MUNDOProducts and services for the world


Trade in services accounts for over 30% of exports "No Copper" of the country. Its average annual growth rate of 11% respond to the modernization of the State; reforms in the systems of education, transport and health; infrastructure development, and advances in telecommunications.

SERVICE SECTOR

CHILE, UN PAÍS PARA HACER NEGOCIOSPRODUCTOS Y SERVICIOS PARA EL MUNDO

Mining is part of our identity as a nation, being the protagonist of the growth path that had the Chilean economy in recent decades. Mining exports relative to total shipments Chile remains the most important, with a share of around 60%.

MINING SECTOR

Products and services for the worldLAND OF OPPORTUNITIES

Fuente: Inteligencia Comercial ProChile, con cifras del Banco Central de Chile (Balanza de pagos).

TRADE WITH ASEAN COUNTRIESExports and Imports main trade partners (US$M)

Phillipines

Indonesia

Malaysi

a

Singa

pore

Thail

and

Vietnam

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2010201120122013

Exports

Phillipines

Indonesia

Malaysi

a

Singa

pore

Thail

and

Vietnam

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2010201120122013

Imports


TRADE WITH ASEAN COUNTRIES

2010 2011 2012 20130

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1,282,374 1,430,2951,281,102 1,281,409

1,040,529

1,262,1511,365,743 1,480,325

Exports (FOB) Imports (FOB)

Main ASEAN Trade Partners, 2013 (US$M)

Balance of Trade (US$M)

189,908

402,796

471,647

190,165

929,385

556,466

Phillipines Indonesia Malaysia

Singapore Thailand Vietnam


TRADE WITH THAILANDExports to Thailand per Sector

2010 2011 2012 20130

50,000

100,000

150,000

200,000

250,000

41,75159,838 48,402 51,615

54,735

100,51590,132

70,546

Good* Exports per Sector, US$ M

Forest Industry Manufacturing Minerals

Agriculture and Livestock Products Sea Products Wines

51,615

22,843

1,10214,433

70,546

6,479

Forest IndustryManufacturingMineralsAgriculture and Livestock ProductsSea ProductsWines

Good* Exports per Sector 2013, US$M

* Does not include neither copper nor services


TRADE WITH THAILANDSea Products

2010 2011 2012 20130

20,000

40,000

60,000

80,000

100,000

120,000

AbaloneOther FishAlgaeOther SeafoodChilean SeabassCrabMusslesOther sea productsFish OilSquidSalmon and trout


TRADE WITH THAILANDAgriculture and Livestock Products

2010 2011 2012 20130

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Fresh BerriesFresh ApplesFrozen fruits and vegetablesDehidrated fruits and veg-etablesSowing seed: vegetablesFlour Starch and Cereal derivatesConcentrated JuiceOther AgricultureFresh CherrysFresh Grapes


TRADE WITH THAILANDWines

2010 2011 2012 20130

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Other packaged wineBulk red wineBulk white winePackaged white winePackaged red wine

CHILE TRADE POLICY

Chile is relatively small with open economy to free trade through the implementation of a trade policy based on the negotiations of trade agreements. For the past 35 to 40 years, this strategy has allowed Chile to position its products in important and highly competitive markets around the world.

Thee fundamental pillars:

Unilateral reduction of tariffs

Bilateral negotiations of Trade Agreements

Multilateral integration through WTO, OCDE and APEC

BENEFITS OF NEGOTIATION WITH THAILAND

» Thailand strategic geographical position in South East Asia

» Attractive market of more than 69 million people with a GDP per capita of US$ 10.100

» Negotiation with Thailand is part of Chile´s strategic integration process with all ASEAN countries

» Thailand is Chile ´s first trading partner within the ASEAN countries

» Once in force, the FTA with Thailand will be Chile´s 5th trade agreement with an ASEAN country

FTA CONTENT

Disciplines Negotiated:

i. Trade in Goodsii. Rules of Originiii. Custom Procedures and Cooperationiv. Sanitary and Phytosanitary Measures (SPS)v. Technical Barriers to Trade (TBT)vi. Trade Remediesvii. Trade in Servicesviii. Financial Services ix. Dispute Settlementx. Transparency

Modern and Comprehensive

Institutional Framework

CHILEAN EXPORTS TO THAILANDMAIN PRODUCTS

29

Source: Studies Department (DIRECON), over data of TRADEMAP.

MAIN CHILEAN EXPORTS TO THAILAND

(Thousand US$)

HS CODE DESCRIPTION 2012

740311 Copper cathodes 125.548

030314 Frozen Trout 57.156

470311 Chemical wood pulp 42.954

310420 Potassium chloride 11.156

030312 Frozen Pacific salmon 7.184

150420 Fish fats & oil 7.184

030313 Frozen Atlantic salmon 6.188

080610 Fresh Grapes 6.164

SHARE IN THAILAND IMPORTS

2012

6%

73%

57%

4%

13%

45%

13%

6%

TARIFF

MFN FTA

1% Year 0

5% Year 0

0% Year 0

5% Year 3

5% Year 8

10% Year 0 - Year 3

5% Year 0

30% 0% in 2016

THAILAND EXPORTS TO CHILEMAIN PRODUCTS

MAIN EXPORTS TO CHILE FROM THAILAND

(Thousand US$)

HS CODE DESCRIPTION 2012

870421 Diesel powered trucks 462.593

252329 Portland cement 36.544

160414 Fish prepared or preserved 20.334

870332 Automobiles with diesel engine 14.761

842810 Automatic washing machines 11.321

392321 Sacks and bags 6.829

841810 Combined refrigerator-freezers 6.909

SHARE IN CHILEAN IMPORTS

2012

41,7%

31,2%

64,3%

3,8%

14,7%

10,2%

6,4%

TARIFF

MFN FTA

6% Year 0

6% Year 3

6% Year 0

6% Year 0

6% Year 0

6% Year 0

6% Year 3 - Year 5


THAILAND EXPORTKEY PRODUCTS (thousand US$)

Source: Studies Department (DIRECON), over data of TRADEMAP.31

Code Product label 2012

847170 Computer data storage units 13.177.109

271019 Petroleum oils and preparations 8.780.752

870421 Diesel powered trucks 7.677.966

400122 Natural rubber (TSNR) 4.204.533

100630 Rice, semi-milled or wholly milled 4.053.027

847330 Parts of data machines 3.358.194

870431 Gas powered trucks 2.749.144

160414 Tunas 2.673.478

870899 Motor vehicle parts 2.639.617

Exports to Chile

Chile imports from the world

18 133.394

71 7.486.274

140.674 1.108.295

4.581 45.128

64 60.817

- 92.495

- 232.28

10.112 57.91

381 451.226

Tariff

MFN FTA

6% Year 0

6% Year 0

6% Year 0

6% Year 0

6% Year 5

6% Year 0

6% Year 0

6% Year 0

6% Year 0

CHILE EXPORTS TO THAILAND:POTENTIAL NEW EXPORTS (thousand US$)

Code Description

'210690 Food preparations

'870840 Tansmissions for motor vehicles

'200870 Peaches preserved

'240220 Cigarettes containing tobacco

'080520 Mandarins

'040221 Milk and cream powder

'380892 Fungicides

'190110 Prep of cereals,flour,starch

Chilean Exports to the world

Thailand Imports from the world

302.639 479.631

200.08 2.835.464

86.988 45.738

85.797 125.144

74.385 122.26

58.312 123.913

49.571 55.263

46.507 114.598

TARIFF

NMF (%) FTA

5% Year 0

30% Year 0 - Year 3

30% Year 0 - Year 5

60% Year 8

40% 0% in Year 2016

18% Year 5

20% Year 0

5% - 30% Year 0

Source: Asia and Oceania Department (DIRECON), over data of TRADEMAP and WTO.

THAILAND EXPORTS TO CHILE:POTENTIAL NEW EXPORTS (thousand US$)

Code Description

'870323 Automobiles piston engine displace 1.5 to 3.0 cc

'230910 Dog or cat food

'330510 Hair shampoos

'220300 Beer

'330610 Dentifrices

'851712 Telephones for cellular networks

'732393 Kitchen or other household parts

'330720 Deodorants

Thailand Exports to the world

Chile Imports to the world

1.582.827 1.903.409

827.918 93.43

574.166 69.49

212.652 99.927

201.358 46.543

99.323 1.485.899

98.076 42.613

86.614 71.992

TARIFF

NMF (%) FTA

6% Year 0

6% Year 0

6% Year 0

6% Year 0

6% Year 0

6% Year 0

6% Year 0

6% Year 0

Source: Asia and Oceania Department (DIRECON), over data of TRADEMAP and WTO.


SUPPLY CHAIN

FIRST STEPThe material, supply or consumable good is imported to the country with preferential treatment.

Production or

assembly in Chile

FTAFinal goodSupplies

Tariff Preference

Rules of

Origin

FTAs

Tariff

SECOND STEPThe production process is carried out in Chile or Thailand in order to comply with the rules of origin of different trade agreements.

THRID STEPThe final good is exported (with Chilean of Thai origin) to other markets.

EXAMPLE

US$ 11 million in 2012

MFN Tariff 6%

EXAMPLE

Chile – Thailand Free Trade Agreement

Potential Market of 566 million

consumers

0% Tariff 0% Tariff

37

Total

GDP(current prices) 5.634

GDP per capita (PPP) 12.285

Population 566.161

PERSPECTIVES

The FTA between both economies is a clear reflection of the necessity of both economies to take their trade relationship to a new level, boost trade exchange and strengthen an already close relationship.

Through this Agreement, both Chile and Thailand seek to open new trade opportunities for goods, services and investment for exporters from both sides.

Once the Agreement enters into force it will allow:

Materialize economic alliances and reciprocal investment

Simplify sanitary and technical regulations for exports from both sides

Standardize, transparent and understand each other's customs procedures

A quick and efficient resolution of contingencies that may arise through contact points of technical committees

CONTACTO

Información General www.thisischile.cl

Información Comercialwww.prochile.gob.cl/importadores

Inversioneswww.inversionextranjera.cl

Turismowww.chile.travel

Directorio Exportadorwww.prochile.gob.cl/importers/exporter-directory

Documents

CHILE Its Land, People and Business Opportunities