Letter from the President: AmCham
Last October, we held our Annual Strategic Planning Meeting, where we focused on seeking effective ways for accomplishing Amcham’s mission while strengthening bilateral trade between the United States of America and Chile, and facilitating related services.
The meeting decided – effective immediately – to work on the basis of five Primary Pillars (or axis), all of them of equal importance and hierarchy, and which will require a good deal of collaborative work between our Board and our ENTIRE Membership in order to succeed in this effort.
We believe that there are topics where, clearly, Amcham’s greatest contribution is to provide information and to pass along experience and know-how of US companies that have accumulated significant experience in similar fields, and in the way of confronting certain common problems.
This year we will also have an opportunity to discuss and inform about these problems at the highest level and to pick up the experience of the entire continent: I am referring to AmCham’s conference on the Business Future of the Americas (BFA); a meeting that AmCham – along with the Association of Latin American Chambers of Commerce (AACCLA) and El Mercurio – are organizing for this coming June 2007 in Santiago. The attendance of senior executives from the 23 regional AmCham entities, as well as speakers of the highest international level, will make this an occasion not only for Chile to exhibit its potential as a country ready to do business, but also for our Members to take full advantage of this international opportunity. This event will also be a great forum in which to discuss some of the most pressing issues facing Chile and Latin American countries, in terms of achieving the levels of competitiveness that are nowadays required in order to develop our region.
Boosting innovation and regional integration, the energy challenges, enterprising, and ultimately the steps that might facilitate a more fluid commercial development are some of the topics of the agenda of our conference. Therefore, I am now inviting you to register and to learn more about this important event, by visiting: www.amchamchile.cl/bfa
or by contacting our office directly at 290.9700.
Our Five “Working Pillars” are:
I. THE CHILE/US FREE TRADE AGREEMENT (FTA):
Three years on out since the date of effectiveness of the Chile/US Free Trade Agreement (FTA), bilateral trade has increased by 133%; which, unquestionably, is a very positive figure and certainly greater than expected. Moreover, no negative consequences have been observed as predicted by sectors originally opposed to it.
Nevertheless, AmCham believes that many aspects still need to be worked out in greater depth, among them the following:
1. There are areas that under utilize the FTA benefits. Such under utilization applies especially to:
Public procurement: The FTA with Chile entitles Chileans to participate in US public sector bidding contests. This covers all material supplies required by public agencies at both the national and state level and from pencils to furniture. We believe that there is a huge window of business opportunity here.
Exports of dairy products and others: the FTA sets export quotas which have not been fully used to this date.
Granting of US work visas: in addition to Singapore, these are the only FTA’s signed by the US that grant a number of temporary work visas into this country. Suffice to say that the annual FTA quota for Chile is 1,400 temporary work visas per year and that during the entire year 2006, there were only 158 working visas issued. Not to mention the very low figures of earlier years! Whether it is because of ignorance or lack of timely information, the fact remains that this is clearly a FTA benefit which both the United States and Chile are interested in promoting.
Small & Medium-Size Company (PYME) participation in exports to the US: a new impulse is definitely required here so that these companies may export their products to the US market. The FTA opens up a huge window of opportunity for such companies.
Nowadays, 2084 companies export to the US, of which near 50% are PYMEs. We will direct our efforts at providing assistance to these companies and, to that effect, we are already working toward the creation of a PYME CENTER.
2. It is necessary to improve operational and administrative aspects of the FTA, in order to facilitate and clarify questions regarding the documentation that is required, thereby saving time and resources: i.e. customs, forms, sanitary regulations with respect to bio-terrorism and others that require uniformity, easy understanding and access. We will undertake this task through a special FTA Follow-up Committee (which has been operational ever since the effectiveness of the Treaty) and which is comprised of several entrepreneurial entities linked to export activities, as well as by the most relevant public agencies on this topic. Based on the work carried out by this team, plus Member contributions, proposals are continuously launched which aim to facilitate bilateral trade.
II. CHILE – A BUSINESS PLATFORM COUNTRY:
The second topic – closely intertwined with the previous one – we have called this FTA II for several reasons. Although Chile managed to successfully position itself worldwide as a commodity and raw material exporting country, we are convinced that there is significant potential for this country to become, additionally, an exporter of services.
To that effect, it is necessary that the Government and the Private Sector work in tandem in order to submit proposals aimed at generating incentives so that multinational companies choose Chile as their regional business platform, and from here, provide their services to the rest of the continent and – why not! – to the rest of the world.
Chile has many advantages over its neighbor countries, but, it has certain disadvantages that take away incentives from companies. We must be very clear on this point: either we introduce the necessary changes now, or else, other countries will capture this huge worldwide flow of investment. Consider the cases of Ireland, India, New Zealand and Uruguay, among other examples.
The topics that need resolving are not complex, but they are quite detailed and long-term; for example: labor flexibility (we must organize our work to serve different time zones); simplification of the requirements imposed on foreigners to work in Chile; a huge effort must be made to secure qualified technicians and bilingual professionals; we must solve persistent double taxation problems, and others. At a seminar that was held last year to discuss some of these topics, we were able to learn from the valuable experience of Uruguay: I believe that good ideas can be extracted from such a similar example.
We believe that Chile has a huge potential and much to offer. Our legal system, for example, is now equipped with a totally revamped International Commercial Arbitration Center led by the Santiago Chamber of Commerce whose Council actively participates in AmCham. Nevertheless, if drastic measures are not adopted on a number of important issues in a timely manner, I am afraid that we will miss key international opportunities.
III. THE APPROPRIATE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS:
This is indeed a topic of the utmost importance to Chile and we think that it has not yet been tackled with sufficient depth. It is not a question of defending the equity position of any given industrial sector. In this respect, AmCham has a clear position on this subject, which can be briefly stated as follows:
1. Safeguarding intellectual property rights is to the direct benefit of Chilean entrepreneurs, innovators and business persons. If anyone should believe that their scientific, artistic, technological or any other kind of invention or development will not receive sufficient protection, not only will that person lack incentives to continue and struggle, but – which is what is happening nowadays – he/she will have the invention or idea patented in the US and not in Chile; with the main reasoning being: lack of confidence in the system.
Consequently, if we wish to become a country that generates innovation (which, in our opinion, is critical for furthering economic progress), we must urgently focus on protecting intellectual property rights at all levels.
2. A second reason why our country should enhance its intellectual property protection system is because Chile must abide by its commitments. Chile’s globalization successes are due, to a large extent, to its reputation as a serious and reliable country. Therefore, the US questioning of Chile on this issue – and given its delay in introducing appropriate legislation – may jeopardize our future trade and development. The inclusion of Chile on the US Priority Watch List should not be seen as minor circumstance. Nor was it a minor circumstance that the US Trade Representative (USTR), Susan Schwab, chose to personally announce that Chile had been added to their Priority Watch List. This is one more indication of the importance that the US gives to intellectual property rights.
Chile must abide by its international commitments promptly and without procrastination. The defense of intellectual property is an attitude that must be imbedded into our culture, starting with our education system, working to change the mentality that “it is not in our culture” or that “it is cheaper”. Let us remind ourselves that what appears as inexpensive may turn out to be very costly in the end.
3. If we wish to have more foreign investment in the country, the rule of law must always prevail. Thus, if our country does not provide adequate protection to intellectual property rights, we will significantly diminish our options of wooing foreign investors which, will result in a negative affect on the increase of local employment opportunities and the transference of knowledge.
IV. CORPORATE SOCIAL RESPONSIBILITY.
We are proud to be pioneers in recognizing and making public socially responsible corporate practices. We have said this over and over again: social responsibility is not only a matter of ethics; it is also a matter of business. We not only owe it ourselves and to the community in which we are inserted; but, in today’s world, those entrepreneurs who do not understand this reality are severely punished by consumers, regardless of how far away they may be. AmCham is also proud to include among its Members, companies that are doing far beyond their call of duty – in terms of what country regulations require them to do. In this sense, we are pleased to acknowledge year after year – with our Good Corporate Citizen Award – those programs and examples that are worth imitating.
We are currently working and will continue to work vigorously to bring successful US experiences into Chile, which we believe deserve to be emulated and implemented locally.
V: PROVIDING A BETTER SERVICE TO OUR MEMBERS
None of the above would be meaningful if it would not ultimately represent a better service to our Members. Our mission is to promote free trade and investment between the United States and Chile and to facilitate related services. This is why we restructured some of our work teams, in order to provide timely and effective services to each according to their respective needs, taking into consideration that the different natures and interests of our Members cannot be meet by applying one single scheme to all.
Some of the services that we expect to boost during the course of this year 2007 include: processing US visas as an exclusive service to our Members, their employees and families; market studies upon request; finding and screening of relevant information; searching for eventual partners, contacts and distributors here or in the United States in order to materialize business deals; creating a supply/demand work pool to facilitate finding professionals and technicians as needed; agreements and networking possibilities; and, marketing of Member products and brand names.
In the understanding that our Members wish to have access to privileged information on subject matters of their interest, we will continue to hold committee meetings and invite speakers of renowned authority on specific topics.
Likewise, we are generating new networking opportunities for persons seeking to complement their respective business operations.
This year we will emphasize our work on the Five Pillars mentioned above, so that all our Committees and their respective Members may contribute from their particular fields of work and/or expertise.
In order to pursue all of these tasks, AmCham has a Board of Directors and a Consultative Group of significant quality, which gives continuity to the work performed by its previous Boards.
We work to ensure that Committee Members are not only of great talent and capacity in all their respective fields of work, but also, that they represent different sectors of the economy. They will be the ones in charge of leading the work of Amcham’s different committees and thematic pillars in our work ahead.
We will continue to cooperate with the Embassy of the United States in Chile and with ProChile. In this manner, we help to develop joint working programs and afford our members the best information available.
Last but not least, AmCham is staffed with high-quality professionals who stand ready to be of help to you in your search for information and for establishing the kinds of contacts that your business requires.
In line with the foregoing, we will continue to work with other private and public sector entities in order to find the best solutions to the problems that might arise. Such public/private alliances have proven quite successful in the past and, consequently, we will continue to promote them in the future.
We have begun this New Year 2007 with renewed energies and motivation to assist our Members. Please do not hesitate to contact us to share your comments and/or observations.