NEWS RELEASES
CANADIAN COMPANIES ANNOUNCE MAJOR INVESTMENTS AS CANADA, CHILE SIGN FREE TRADE AGREEMENT
December 17, 1996 No. 251
CANADIAN COMPANIES ANNOUNCE MAJOR INVESTMENTS AS
CANADA, CHILE SIGN FREE TRADE AGREEMENT
Canadian companies are demonstrating their confidence in Canada's newest trade
partner with announcements of major new investments and joint ventures in Chile,
said International Trade Minister Art Eggleton this week.
NorTel, Rio Algom, Newbridge Technologies and Teck Corporation recently announced
major ventures in Chile worth several hundred million dollars. In addition, a
survey of small and medium-sized companies that attended the December 4-6 Canada
Expo trade fair in Chile indicates that many firms foresee substantial business
opportunities in the short and long term.
"Canadian companies are consolidating their position in the Chilean market and
preparing for the added advantages that the free trade agreement will bring," said
Mr. Eggleton. "These major investments by some of Canada's principal companies
will boost exports and create jobs in Canada."
On December 5 in Santiago, Chile, Minister Eggleton signed the Canada-Chile Free
Trade Agreement at Canada Expo '96, a trade show designed to demonstrate the
versatility and expertise of Canadian companies. The event brought together
influential Chilean decision-makers and close to 180 Canadian companies
representing a variety of sectors. More than 4 000 people visited the fair.
"The Canada-Chile Free Trade Agreement is a major new economic link between North
and South America," added Mr. Eggleton. Many companies are finding that Chile is
an excellent gateway to the expanding markets of Latin America."
Among the deals announced recently by Canadian firms:
Rio Algom will invest about $270 million to boost production by 65 per cent at
its Cerro Colorado copper mine in northern Chile, ensuring about 20 years of
production.
VTR S.A. of Chile will invest in NorTel equipment, manufactured in Saint-Laurent,
Quebec, to build a nationwide cable telephone network. VTR's goal is to provide
telephone service to more than one million Chileans. The value of the project to
NorTel is approximately $245 million. Sixty per cent of NorTel's 22 000 jobs in
Canada depend on exports.
Teck Corporation and Teck Gold Ltd. have completed an agreement with the Emablos
Group to acquire a 60 per cent share in the planned Lobo-Marte gold mine in Chile
for about $70 million.
Newbridge Networks has reached an agreement in principle to acquire a majority
interest in Coasin Chile S.A., a leading South American telecommunications
company. Newbridge signed a letter of intent on the deal during Chilean President
Eduardo Frei's visit to Canada on November 19.
Chile has one of the most stable and fastest-growing economies in Latin America.
Over the last decade, annual economic growth has averaged almost 7 per cent.
Market-oriented policies have encouraged an entrepreneurial spirit and a strong
private sector. With low unemployment, falling inflation and rising wages, Chile
has established its credentials as a desirable trade and investment partner.
Total two-way Canada-Chile trade has doubled since 1991, with shipments totalling
$666 million in 1995, up 20 per cent from the 1994 total of $553 million.
Canadian exports to Chile increased 47 per cent from 1993 to 1994, and a further
23 per cent to $387 million in 1995. These figures are expected to increase
significantly in the future. Canadian investment in Chile now totals more than $7
billion.
The Canada-Chile Free Trade Agreement will result in immediate duty-free access
for most industrial goods, which account for 80 per cent of Canadian exports, and
the elimination of Chile's 11 per cent import duty on almost all remaining
industrial and resource-based goods over five years. Canadian exporters' overall
access to Chilean markets will now be better than that of their competitors in the
United States, the European Union, Argentina and Brazil.
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For further information, media representatives may contact:
Nicole Bourget
Director of Communications
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
This document is also available on the Department's Internet site:
http://www.dfait-maeci.gc.ca
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