AmCham’s president since January, Ricardo García has taken over his new post at an unusually challenging time. The Chamber’s role is not, he says, to offer companies precise recipes for weathering the crisis, but this is a time at which it can provide “additional, complementary value” for its members.
“The main role the Chamber can play in a context like the present is to collaborate in keeping alive Chile’s ties with the United States, our main trading partner,” says García. U.S. demand may be weakening but Chile has a key advantage, he notes – “our market share in the U.S. is so small… that the fact of whether the U.S. is in recession or not doesn’t reduce the opportunities for our exports.”
As regional president for Latin America & the Caribbean at American Life Insurance Co., ALICO, a Delaware-based life insurer, and president of Seguros Interamericana, ALICO’s Chilean subsidiary, García is more optimistic than many. “I believe the speed at which international financial and credit markets will start to get back to normal will surprise us during the second half of 2009,” he says.
The effects of the crisis on the real economy will, of course, take longer to work through. “But the U.S. economy is extraordinarily resilient,” points out García, adding that he expects to see a U.S. recovery starting before the end of the year.
But while the crisis lasts, there are risks as well as opportunities for Chilean exporters and importers…
Certainly, and one of the main risks comes from countries seeking to protect their domestic industries, thereby limiting trade and its benefits. That has historically been the case in crises – in the Great Depression, for example – and we’ve seen something of that now in the U.S. Congress in the “Buy American” proposals. That’s a very fragile and short-term approach, which history has shown to have very negative effects. In that sense, AmCham has an important role this year in defending open markets and free trade.
What impact do you think the new U.S. administration will have on free trade?
All the signs are that it will be much more moderate than many thought initially. I have no fear for existing free trade agreements (FTAs), including the Chilean one. Quite the contrary, I think the new administration may be much bolder in this field.
In the case of Colombia, for example?
Yes, the Colombia-U.S. FTA is an important candidate, which would bring many benefits not only for Colombia but also for the U.S. by tightening its links with Latin America’s third largest country.
And, in general, how do you see U.S. relations with Latin America developing under the Obama administration?
I think the new administration understands that it has an extraordinary opportunity to establish better-quality political relations with some regions of the world. President Obama has given very powerful signs in that direction.
For years, Latin America has had a lower priority for the U.S. than we would have liked. Expectations were high when President Bush was elected – he speaks Spanish and he launched the proposed Free Trade Area of the Americas (FTAA) – but, finally, he got diverted to other issues.
And what about trade and investment between Chile and the U.S.?
We’ve just had some very good news in that area. Since the Chile-U.S. FTA came into force, U.S. investment in Chile has been disappointing but Chile has just received one of the largest investments ever by a U.S. company – Wal-Mart. Particularly in the present economic context, that’s a great vote of confidence in Chile. And, because it’s in a sector that has such direct contact with so many consumers, it could be a great source of prestige for the U.S. business model in Chile.
And vice-versa, what role can AmCham play in projecting Chile’s image in the U.S.?
We’ve been talking to Juan Gabriel Valdés, director of Chile’s Country Image Office, and he has described this initiative to us. It’s very interesting and, of course, very long-term but, clearly, if Chile wants to test a refreshed image and implement a new branding strategy, its testing ground should be the United States, its largest trading partner. We’re exploring ways in which AmCham can help there.
In September, Chile will host the next meeting of Americas Competitiveness Forum – the first time this meeting has been held outside the U.S. That will be an opportunity to showcase Chile, and AmCham is looking to see how it can best collaborate.
What other priorities do you have for AmCham in 2009?
Well, they’re not mine but the priorities set by the Chamber’s Board. We want to put more emphasis on AmCham as an organization that provides opportunities for networking, not only among its members themselves but also, eventually, with companies in the U.S. One project in this area involves AmCham’s website. It has undeveloped potential as a portal for U.S. companies to discover and contact Chilean companies and vice-versa. It’s a long-term project but I’d like to get it started.
You’ve been elected as AmCham president through to January 2011; beyond the current crisis, what other priorities does the Chamber have?
A key focus – through the Chamber’s committees and other activities – will be to promote the long-term sustainability of companies and, particularly, Chamber members. That includes both environmental and social responsibility, and social responsibility doesn’t mean just producing good-quality products and services efficiently and having good labor practices. It also means understanding that a company is part of a broader community and that its long-term sustainability depends on its relations with all its stakeholders. By the same token, we need to ensure that tougher environmentalism does not limit Chile’s legitimate right to exploit its natural resources in an effective and sustainable manner. A good example is hydroelectricity where Chile has enormous unexploited capacity.