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Chile-Mexico: Nothing like free trade

Inter Press Service | 20 March 2007

CHILE-MEXICO: Nothing Like Free Trade

Diego Cevallos

MEXICO CITY, Mar 20 (IPS) — Chilean President Michelle Bachelet’s Tuesday-Wednesday visit to Mexico will help strengthen the fastest-growing commercial relationship in Latin America — which expanded by nearly 2,000 percent between 1990 and 2006 — while giving concrete form to a strategic alliance that could also benefit neighbouring countries.

The socialist Bachelet was received in Mexico with unusual deference. She and her host, conservative President Felipe Calderón, exchanged praise for one another, and promised that during their terms, relations between Mexico and Chile, which were broken off during the dictatorship of General Augusto Pinochet (1973-1990), would be stronger than ever.

Chile and Mexico are the most open economies in the region. They are the only countries of Latin America to have signed free trade agreements with the European Union and the United States. And along with Peru, they are the only Latin American members of the Asia-Pacific Economic Cooperation (APEC) forum.

In addition, they have signed dozens of other free trade deals, including the one freeing up trade between Mexico and Chile themselves.

"We have a shared vision of the challenges and tasks we are facing," said Bachelet, while Calderón stated that the two countries would push for "a new, outstanding Latin American presence on the international scene." He added that building the future of the region was not about "left or right" but about sharing "a strong sense of social responsibility."

Calderón said the visit by his Chilean counterpart and the agreements signed by the two countries show that Latin America is high up on his government’s agenda.

Mexico and Chile have put into effect a "strategic association accord" aimed at bolstering trade, political, diplomatic and cultural relations between the two countries as well as ties with civil society. The agreement also creates a fund that will provide two million dollars a year for development projects in Chile, Mexico and third countries.

"Trade relations between Chile and Mexico have experienced the highest level of growth seen in Latin America, and have a bright future thanks to the signing of the strategic association accord," said Aureliano Martínez, president of the Chile-Mexico Chamber of Commerce.

From 1999, when the Mexico-Chile free trade agreement went into effect, to 2006, bilateral trade climbed from 1.4 to nearly 3.3 billion dollars — a more than 130 percent increase.

And between 1990, when the two governments restored diplomatic relations, and 2006, the increase was nearly 2,000 percent.

But despite this exponential growth, trade with Chile represents less than one percent of Mexico’s imports and exports, while trade with Mexico is equivalent to 3.2 percent of Chile’s total trade.

Mexican internationalist academic Rolando Chacón told IPS that the closeness between the two countries is encouraged by the fact that they are "highly complementary in terms of foreign trade," and do not compete in similar niches. Mexico sells Chile mainly electronic products, and buys minerals, fruit and seafood.

He also pointed out that the two countries, "in spite of their ideologically opposed governments, are the most committed to free trade" in Latin America.

Bachelet was decorated with Mexico’s highest award in a solemn ceremony in parliament, received the keys to the capital city, and met with leaders of the governing National Action Party (PAN) and the opposition.

"Your very presence at the head of the Chilean government is, to us, a palpable symbol that the prophecy made by (former President) Salvador Allende in his last message to the Chilean people from the Moneda Palace (government house) has come to pass," Calderón told his visitor.

The president was recalling a famous statement by Allende, the socialist leader who was overthrown by the 1973 military coup headed by Pinochet, who said just before he died in the coup that "much sooner than later, the great avenues will again be open where free men shall pass to build a better society."

President Calderón and local political leaders emphasised that in the 1970s, Mexico opened its doors to about 10,000 exiles fleeing Pinochet’s military dictatorship and cut off diplomatic relations with his regime.

"Friends are friends through good and bad times alike. Thank you again, in the name of the people of Chile, for what you did (in taking in the exiles)," said Bachelet, whose father, a general, was tortured to death in prison during the Pinochet dictatorship.

Her cousin, Hugo Miranda Bachelet, was one of the exiles. The head of "Chile House", a meeting point for his compatriots in Mexico, he applauded the president’s visit, and described her as a "really positive, loving, tender, brave and outspoken person."

In an interview with the newspaper El Universal, Miranda expressed his thanks for Mexico’s hospitality, describing the country as a "magic world" that he has made his own.

In the last 17 years, every Chilean president has visited Mexico, and every Mexican president has visited Chile. In fact, the first state visit to Calderón’s predecessor, Vicente Fox (2000-2006), was by former president Ricardo Lagos.

The warm and close relations between the two countries, as their presidents described them, suffered a hiccough in 2005, when they both competed for the post of secretary general of the Organisation of American States. Mexico nominated its foreign minister Luis Ernesto Derbez, and Chile put forward former interior minister José Miguel Insulza.

Five rounds of voting all resulted in a tie, demonstrating deep divisions in the region but particularly between Chile and Mexico, governed at that time by Fox. Finally Derbez stepped aside and Insulza was elected secretary general.

 source: IPS