Project Web -- Background

Although the two countries have different interests, Chile and Korea started an FTA negotiation in 1997 mainly because the two countries’ markets have complementary rather than competing characteristics. Chile basically intensively exports natural resources, for instance, copper, fruits, fish, etc. On the other hand, Korea exports high-value-added products, for example, vehicles, laundry machines, color televisions, etc.

Chile and Korea are also seeking to increase and consolidate the access of their exports in different markets. For Chile, an objective vis-à-vis Asia is to project strategically the national economy towards the MERCOSUR and Latin America, acting as a bridge for Asia, while for Korea, Chile is an entry to other Latin American countries. In this sense, experience in FTA negotiation across the Pacific is essential for both countries to keep on negotiating with other countries. For example, Chile defended in APEC goals established in Bogor, Indonesia which can be achieved through FTAs. Apart from the FTA with Korea, Chile is researching alternative FTAs with Japan as well as negotiations between New Zealand and Singapore.

Both countries also realistically recognize the fact that, besides bilateral or regional agreements, there are no other ways for effective trade negotiations, especially after the temporal failure of the multilateral negotiations under the WTO in Seattle. Although Korea has long stuck to multilateral negotiations and avoided bilateral ones, worrying about the possibility of falling victim to powerful trade-preferring countries, now she decides to turn to regionalism; it seems Korea cannot endure any more the disadvantages from those countries exchanging preferential tariffs only with each other.

[1] Largely cited from Mario Matus, “Corea un pais que se abre al mundo,” General Department of International Economic Relations, September 2000.

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