NEWS RELEASES
TRADE AGREEMENT WITH CHILE SHOWS POSITIVE RESULTS
May 11, 2001 (10:00 a.m. EDT) No. 58
TRADE AGREEMENT WITH CHILE SHOWS POSITIVE RESULTS
International Trade Minister Pierre Pettigrew attended a meeting of the Canada-Chile
Free Trade Agreement (CCFTA) Commission yesterday in Santiago where he praised
the agreement for helping to create prosperity for the two countries.
"The Canada-Chile Free Trade Agreement offers convincing evidence that free trade
agreements do in fact provide economic benefits for both partners," said
Minister Pettigrew. "The success of this free trade agreement is a strong demonstration
for other countries in the hemisphere pursuing the path of modernization and
development. The evidence is clear -- both Canada and Chile are increasing their
market shares and competing in new areas of non-traditional exports."
Canada and Chile agreed on appropriate compensation for a safeguard measure that
has been imposed on Canadian wheat. The compensation will take the form of
accelerated tariff elimination on imports of Canadian French fried potatoes, dried beans
and peas, and pet food. Tariffs on these products were to be eliminated over the next
two years, but following yesterday's agreement, will be eliminated almost immediately.
"I am very pleased we have come to an agreement with the Chileans," added Minister
Pettigrew. "I hope to continue to strengthen our successful trading partnership in the
future."
The CCFTA entered into force on July 7, 1997. Canada is the only industrialized country
with which Chile currently has such a treaty. Since 1997, economic relations between
the two countries have grown immensely. Bilateral trade in merchandise has increased
33 percent to $1.25 billion. Investment has also increased, with Canada becoming the
second largest investor in Chile. Canada is the only country to have its exports levels to
Chile recover lost ground following the 1997 economic downturn in much of Latin
America.
The annual commission meeting is held to review the state of the agreement and
discuss further ways to improve bilateral economic relations. In addition to attending the
commission meeting, Minister Pettigrew participated in a round table on the
achievements and challenges after four years of free trade, hosted by his Chilean
counterpart, Minister of Foreign Relations Soledad Alvear.
Minister Pettigrew joined Adrienne Clarkson, Governor General of Canada, during her
visit to the region to promote culture.
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A backgrounder is attached.
For further information, media representatives may contact:
Sébastien Théberge
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
Backgrounder
CANADA-CHILE FREE TRADE AGREEMENT: A SUCCESS STORY
IN THE AMERICAS
Success in Canada
• Canadian exports to Chile have increased 27% since 1999, rising to $700 million in
2000.
• Canada has increased its market share of the Chilean market, rising each year since
1996, while the market share of competitors has steadily fallen.
• Many non-traditional exports are some of Canada's fastest growing sectors:
• Telecommunication equipment increased 221% to $80.3 million (duty-free since
1997).
• Denim fabric has increased 232% to $2.25 million (duty-free since 1997).
• Canada's major exports to Chile include electrical machinery, machinery, cereals,
paper and paperboard, mineral fuels, plastics, and automobile parts and accessories.
• Chile is one of the most diversified markets for Canadian exports, meaning that more
products from more sectors are exported to Chile than to other markets.
• While the largest share continues to be devoted to mining, Canadian investments
have diversified into other sectors including financial services, energy, forestry,
telecommunications, manufacturing and infrastructure.
• Canadian investments in Chile have risen 57% since the Canada-Chile Free Trade
Agreement (CCFTA) entered into force.
Success in Chile
• Chile's growth during the nineties averaged 6.6%, the highest in the hemisphere.
• The incidence of poverty has declined dramatically, from about 45% in the late
eighties to close to 17% today.
• The Chilean government is moving ahead with a progressive legislative agenda,
improving the lot of workers.
• Chile is a leader in pension reform, judicial reform and the shift into e-government.
• Chilean exports to Canada in 2000 rose 31.7% over 1999 to a record $555 million,
and have risen 59% since entry into force of the CCFTA.
• Chile has also been increasing its market share of Canadian imports, up 33% since
1998.
• The Canadian market is the second fastest growing market for Chilean exports.
• Major exports to Canada include copper ores, fruit and nuts, wine, wood, fish and
seafood, and iodine.
The Canada-Chile Free Trade Agreement
• Chile was the first bilateral free trade partner of Canada outside of NAFTA.
• Canada was the first G-7 country to sign a free trade agreement with Chile. The
United States is currently negotiating its own free trade agreement with Chile.
• Canada believes that trade agreements complement labour and the environment.
The Canada-Chile side agreements on labour and environmental co-operation have led
the two countries to share experiences and develop best practices.
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