The second most powerful man in the office of the President of the Unites States has attended the first official activity to mark the centenary of AmCham Chile, due in 2018. During his visit to the country, Vice President Mike Pence praised the positive business relationship between Chile and the US following the entrance into force of the Free Trade Agreement in 2004, which has boosted investment and generated new commercial opportunities.
The Chilean American Chamber of Commerce, AmCham Chile, has launched its centenary celebrations with a business dinner in which the main speaker was US Vice President Mike Pence. During the event, President Donald Trump’s second-in-command highlighted the positive business climate between Chile and the United States since the passage of their Free Trade Agreement (FTA) in 2003. This treaty is helping to drive increasingly frequent commerce and new business between the two markets.
Having begun his local tour by visiting President Michelle Bachelet, the business dinner was Vice President Pence’s final official engagement. During his keynote speech, he emphasized the following: “We are calling on all Latin American countries to do far more to boost investment opportunities through increased economic freedoms. Every nation in our hemisphere should continue to be bold in reducing excessive tax burdens and easing regulations, as well as in breaking down barriers to trade and investment. And every nation should continue to be daring in their efforts to confront the scourge of corruption (…) Make no mistake: more progress, more reforms and more transparency will create increased investment and greater opportunities”.
Vice President Pence, whose tour also included visits to Colombia and Argentina, praised the consolidation of free trade relations with both Chile and the wider region. During his speech, he stressed that trade with the region has grown to US$1.6 billion, doubling the amount generated with China. He also labelled the FTA with Chile an “exemplary agreement” that has led to the number of transactions between the two countries rising by 350% since entering into force, with a total of US$30 billion generated to date. He also commended the strong impact of the treaty on investment and its generation of new opportunities for large numbers of people.
In addition, the vice president reiterated the message of President Donald Trump’s administration to “do more business with Latin America”. Moreover, he paid tribute to the economic strategy applied by Chile over the last four decades, in conjunction with the pro-growth policies and reforms implemented by the governments of Brazil, Argentina, Colombia and the three nations that make up the Northern Triangle (Guatemala, Honduras and El Salvador).
A number of diverse personalities participated in the business dinner, which was sponsored by AES Gener, American Airlines, Citi, DIRECTV, Freeport-McMoRan and Walmart Chile. Among those in attendance was Thomas Kenna, President of the Association of American Chambers of Commerce in Latin America and the Caribbean (AACCLA), a body that brings together 24 entities, more than 20,000 companies, and which recently celebrated its 50th anniversary. The Vice President of International Affairs of the US Chamber of Commerce, Neil Herrington, was also present, as well as distinct representatives of AmChams from Argentina, Brazil, Panama and Peru.
In his speech to the gathering, Guillermo Carey, President of AmCham Chile, praised Chile’s relationship with its largest trading partner: “With Vice President Pence in attendance today, we are able to feel the commitment of the United States to Chile and future bilateral relations between the two countries, which are already built on extremely solid foundations (…) Over time, Chile has been able to strengthen its standing and institutions, providing a welcoming, non-discriminatory and stable environment to our foreign partners and in which political and economic stability have helped to consolidate a range of bilateral relations”.
In turn, former President and director of AmCham Chile and AACCLA, Kathleen Barclay, emphasized the role played by other integration mechanisms “based on free trade, the free market and free enterprise”, including the Pacific Alliance. That agreement was formed between Chile, Colombia, Mexico and Peru and has now become, due to its collective population of 220 million people, the eighth largest economy in the world in terms of GDP. With regard to the Pacific Alliance, Barclay stated, “we have laid the foundations for it to become a powerful platform from which to build Pacific Rim integration, as well as a means through which to realize the commitment to regional integration and projection to Asia-Pacific”.
Trade and business developments
In terms of the bilateral relationship and the impact of the FTA, Carey explained how trade between Chile and the United States has grown by an annual average of 11.8% since the agreement entered into force in 2004, “tripling overall trade, doubling Chilean exports and increasing US imports by a factor of four”. As a result, he stressed that both the number of Chilean exporters and the diversity of the products that they are shipping to America have grown considerably over this period.
Similarly, Vice President Pence highlighted the growing arrival of Chilean entrepreneurs in the US, “investing US$2.1 billion in industries such as mining, banking and across the entire economy”. He also underscored that US exports to Chile “have had the positive impact of creating around 93,000 jobs” in the United States.
Recognition of the growing amounts of Chilean capital invested in diverse sectors throughout the United States, including, for example, in winemaking and the boom of new industries such as the export of services, formed one of the notable themes of the business dinner. Accordingly, Carey singled out several Chilean companies for praise: “Arauco has a number of wood panel plants in the US and is preparing to invest US$400 million in the construction of a new facility for making particleboards in Grayling, Michigan. In addition, the work undertaken by Crystal Lagoons is noteworthy, having overseen multiple lagoon projects from its office in Miami. Also worthy of note is the 2015 purchase of City National Bank of Florida by Bci, which is the first and only Chilean bank, to date, to control a financial institution in the United States”.
Pending challenges in the bilateral relationship
In his speech, the US Vice President made reference to certain points raised during his meeting with President Bachelet concerning pending areas of the trade agreement between the two bilateral partners. “It important that Chile fulfils its commitment on intellectual property rights outlined in our free trade agreement because we must ensure a level playing field for American companies”, he noted. In particular, he reaffirmed the need for Chile “to make television piracy a criminal offense, including the design of related regulations”, and for these to function in such a way as to reflect gratitude to President Bachelet for her “openness to consider taking the necessary measures”. Regarding the latter point, the President of AmCham Chile added that “we at the Chamber are very optimistic about our ability to continue to incentivize the growth of investment between the two countries and, in this sense, both nations have the task of pushing ahead with the Avoidance of Double Taxation Treaty”.
In his concluding remarks, US Vice President Pence was keen to praise the efforts of AmCham Chile: “AmCham has done some extraordinary work in promoting trade relations between Chile and the United States, incentivizing investment and new opportunities”.