Foreign Trade: Learning from Chile

Not fearing free trade, lowering tariffs and facilitating business development are some of the ingredients the Chilean export model that Central America could follow.

Thursday, September 8, 2016

In an interview with Elfinancierocr.com, ProChile's director, Roberto Paiva, explained that one of the main reasons behind the success of his country's foreign trade model is the high degree of trade liberalization. Not only for having reduced tariffs, but also for   "... 'having negotiated trade agreementsWe have agreements with Europe and much of Asia. We don't yet have Africa. This opening not only lowers tariffs but brings us closer to the market and the business'. "

Flexibility and innovation are other keys when diversify the export supply.  Chile is not a producer of tea, but it does export it, "... 'because the TLC permits it. You have to look at trade liberalization without fear. China managed to make cheaper bikes arrive in Chile which helped workers, for example.' "

Regarding the advantages of being part of the Pacific Alliance, Paiva explained that one of them is that "... 'it is not only that tariffs are removed but raw materials from partners are considered from each country'." For example, "... I can take Peruvian cotton, process it in Chile and sell it as Chilean. It is a trade integration mechanism that only offers advantages, even more so for small countries. In order to grow you have to be integrated into markets, cheaper raw materials can be obtained. "



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The entry into force of the FTA now depends on the approval of Congress and subsequent ratification by the Executive.

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The government has announced the signing of the process of incorporation, while business associations oppose the increased tariff liberalization which will come from membership of the group.

As part of the agreement of incorporation into the block of Pacific Alliance tariffs must be eliminated on 92% of the products and the remaining 8% will be gradually removed.

Central America and the Trans-Pacific Agreement

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Analysis of the impact of the Trans-Pacific Partnership on the region.

The competition which sectors such as textiles could face is one of the elements raising questions among employers in the region, compared to the real benefits that could be accrued if Central America participates in the Strategic Economic Trans Pacific Partnership (TPP).

Nicaragua: FTAs Provide for More Trade

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Exports have performed very well in recent years, partly thanks to 11 trade agreements, but they are far from reaching their full potential and production of many goods lacks added value.

Nicaragua should not only increase the volume of its exports, but it should also diversify its range.

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