THE EXCHANGE OF IDEAS

Peru 2015 | DIPLOMACY | GUEST SPEAKER

TBY talks to Michelle Bachelet, President of Chile, on regional relations and the Pacific Alliance.

Michelle Bachelet
BIOGRAPHY
Michelle Bachelet has been the President of Chile since March 11th, 2014. This is her second term as President, having served from 2006 to 2010. She was previously the first Under-Secretary-General and Executive Director of UN Women, and is a long-time defender of women’s rights. She also holds ministerial portfolios in the Chilean government as Minister of Defense and Minister of Health. Michelle Bachelet has been the President of Chile since March 11th, 2014. This is her second term as President, having served from 2006 to 2010. She was previously the first Under-Secretary-General and Executive Director of UN Women, and is a long-time defender of women’s rights. She also holds ministerial portfolios in the Chilean government as Minister of Defense and Minister of Health.

What is Chile's position on the convergence of Mercosur and the Pacific Alliance (PA) trading communities? What are the next practical steps for maximizing the process?

In the process of regional integration in Latin America, Chile has emphasized "convergence in diversity." Today's world is more complex, and cooperation and integration are unavoidable if progress is to result by successfully addressing the challenges of the global economy. Therefore, Chile will encourage the exchange of ideas between the PA and Mercosur. A specific step in this proposal of convergence was the realization of the “Dialogue on Regional Integration: Pacific Alliance and Mercosur” seminar, held in Santiago in November 2014. The next step was to prepare a plan of action for the PA and Mercosur around a common agenda.

What is Chile's comparative regional advantage in its relations with the PA?

The PA represents an opportunity to enhance the exchange and economic development of the countries located along the Pacific. In that space, our contribution is manifold. Chile has an extensive network of trade partners, having generated 24 agreements covering 63 markets. This network is enhanced by the PA and in turn serves to boost member countries. The globalization of the Chilean economy is undoubtedly attractive to our partners. For example, accumulation of origin in the Pacific Alliance will allow Chile to facilitate linkages and productive diversity, improving the position of our region in global value chains. In addition, Chile is an active participant in organizations such as the OECD, where it is recognized for working on good practices and international standards for public policies, and APEC, a regional technical cooperation platform with more than a three-decade relationship with Pacific Rim economies.

The Pacific Alliance has emerged as one of the region's most promising unions. How do you plan to expand Chile's contribution to the Alliance and its ability to work with neighboring Peru to grow the region's exports?

Chile will continue to work on strengthening the Pacific Alliance through the main features of this mechanism of regional integration, which are the high degree of flexibility and pragmatism. From convergences between the four countries, Chile will look to achieve achievements covering issues that go beyond the purely commercial sphere and nonetheless have clear commercial purposes. Likewise, we are working to strengthen technical cooperation with the 32 observer states by developing projects related to the pillars of the PA (free movement of persons, goods, services and investment, and cooperation); and looking to link these projects to the 18 existing technical groups, including the newly established Education and Mining Development. Regarding working with Peru, longtime we're advancing in the deepening of intraregional trade, first through bilateral trade agreement and then, in the initiatives of the Pacific Alliance and TPP. This will encourage the regional trade and generate greater opportunities for our investors.

TBY recently spoke with Gonzalo Alfonso Gutiérrez Reinel, Peru's minister of Foreign Affairs. He expressed a desire to forge closer ties with Asia. Trade with Asia is one of the Pacific Alliance's major goals; how is Chile working to liberalize trade and open new markets to Chilean and regional exports?

Chile works to strengthen trade and open new markets and regional exports through different areas: FTAs bilateral negotiation; participation in the multilateral system via the World Trade Organization; and our incorporation in plurilateral negotiations such as the Trans-Pacific Partnership Economic Strategic Agreement (TPP) and the Pacific Alliance. Additionally, Chile favors that within the disciplines negotiated in AP and TPP, ones that go beyond those traditionally addressed in trade agreements, such as competitiveness, regulatory coherence, development issues, trade facilitation, customs cooperation and export window, SME, among others, are included.

Chilean investors have made strong investments throughout the Peruvian economy in 2014, and continue to drive domestic growth. What is the future of Chilean foreign investment in Peru?

The growth projections of the Peruvian economy are auspicious, allowing anticipate new opportunities for our investments in that country. Since 2000, direct Chilean investments in Peru have shown a significant increase. Thus, in December 2014, according to figures in process, it totalizes more than $15,800 million. Regarding the investment areas, the opportunities that the Peruvian market offers the services sector, in areas such as construction, architecture, engineering, mining, software and information technology can be highlighted.