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Chile plans more free-trade accords in Asia under Bachelet

January 18, 2006

Chile Plans More Free-Trade Accords in Asia Under Bachelet

Linus Chua

Jan. 19 (Bloomberg) — Chile, which counts Asia as its biggest export market, is seeking more free-trade agreements in the region as President-elect Michelle Bachelet pushes for closer trade ties, Foreign Affairs Minister Ignacio Walker said.

The Chilean government this year will study the feasibility of free-trade accords with Malaysia and Thailand, and expects to start talks with Japan in March, Walker said in an interview yesterday. Chile’s also forging closer ties with Singapore, New Zealand and Brunei, and has existing trade agreements with China, India and South Korea, he said.

``We’re very comfortable with this new neighborhood we’ve discovered,’’ Walker said in Singapore. ``We have a small market and there’s much to gain from opening to the world economy.’’

Bachelet, who will become Chile’s first woman leader after winning the Jan. 15 runoff election, takes over an economy that is expanding for a seventh year, benefiting from a surge in prices of copper, the nation’s biggest export. She has vowed to keep her nation’s economy ``vibrant’’ and expand trade ties.

``I receive a country that’s energized, prosperous, optimistic,’’ Bachelet said in a victory speech in Santiago on Jan. 15. ``After decades of economic ups and downs, we built a vibrant economy that many want to imitate. We will continue on that road.’’

Asia, home to the fast-growing economies of China and India, buys 36 percent of the goods that Chile ships overseas, Walker said. The Americas account for 35 percent of the nation’s exports and Europe 26 percent.

Walker didn’t say how much the new accords may boost trade. Chile’s trade with South Korea surged 72 percent in the year after the signing of a free-trade agreement in 2002, he said.

Market for Asia

``Chile is one of the wealthier economies in Latin America and they would represent a market for the products coming out of Asia,’’ said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. ``This region is increasingly the manufacturing center of the world and certainly that would be part of any agreement.’’

Chile’s economy will grow at least 6 percent this year, faster than the government forecast in its 2006 budget, as consumption and investment increase, outgoing President Ricardo Lagos said this week. The country, which is the world’s biggest copper producer, will continue to benefit from exports of the metal this year, said Lagos, whose term ends in March.

``Even with the face of change of the administration, I would expect the foreign policy to continue,’’ said Walker. ``The new president is part of the coalition that has ruled the country for 15 years so I would expect basic continuity in foreign policy, especially with the emphasis on Asia.’’

To contact the reporter on this story:
in Singapore at [email protected]

Last Updated: 20:37 EST

 source: Bloomberg