trade and investment the experience of chile
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Trade and Investment The Experience of Chile. Rome, 2007. Switzerland. Uruguay. 2%. Spain. Others. 1%. 1%. Others. France. Venezuela. 11%. 8%. 2%. USA. 1%. Cayman. 25%. Netherlands. Islands. 2%. 3%. Argentina. Italy. 36%. Panama. 3%. 3%. Japan. 3%. USA. 4%. - PowerPoint PPT PresentationTRANSCRIPT
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Trade and Investment
The Experience of Chile
Rome, 2007
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Foreign Direct Investment in Chile (DL 600)Total 1974-2006: US$63,517 millions
Foreign Direct Investment from Chile to other countriesTotal 1990-2006: US$38,300 millions
Others8%
Peru14%
Colombia12%
USA4%
Panama3%
Cayman Islands
3%
Spain1%
Argentina36%
Brazil17%
Uruguay1%
Venezuela1%
Netherlands2%
France2%
Spain22%
USA25%
Switzerland2%
Italy3%
Japan3%
Australia5%
UK9% Canada
16%
Others11%
Source: Foreign Investment Committee (www.cinver.cl) and Direcon (www.direcon.cl)
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Foreign Trade Policy ElementsForeign Trade Policy Elements
Open economy
Dependent on international trade
Small country
Transparent
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Chile = Free TradeChile = Free Trade
Domestics policies
• Sound distribution of resources
• No subsidies• Simple tax
system• State
– Subsidiary role– Regulator, not
owner• Independent
Central Bank
Foreign trade policy• Looking outward
(exports)• Unilateral openness
(6%)• Welcome to Foreign
Investment:– Open pre & post– Strong protection
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Options Options
Multilateralism
Plurilateralism or
regionalism
Bilateralism
“All of them”
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MultilateralismMultilateralism
GATT (1948)/WTO
Active participants
Tokyo round
Uruguay round
Doha round (Round of the
development)
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RegionalismRegionalism
FTAA (“momentum”)
APEC
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Bilateralism- FTABilateralism- FTACanadaMexicoC. America (5)EU (27)KoreaUSA EFTA (4)VenezuelaColombia*EcuadorPeru* Mercosur (4)BoliviaPanama* * Not in force
• N. Zealand, Singapore,
Brunei
• India (partial trade
agreement)
• China
• Japan
18 Agreements
56 countries
88% of actual trade
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Chile and the WorldChile and the World
27
18
9 8
25
0,20
5
10
15
20
25
30
EU
L.America
USA
Mx,Cnd, Kor
Japan
Rusia
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Duties on International Commerce
Duties on International Commerce
Year Percentage of total tax revenue
1996 11.91997 10.91998 10.31999 9.22000 8.32001 7.02002 5.72003 3.92004 2.92005 2.6
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Projected Fiscal incomeProjected Fiscal income
1: With Free Trade Agreements and VAT 19%
2003 2004 20052006
Net
Revenue
Income8,140.6 8,458.0 9,022.7 9,499.3
Tax burden 16.5% 16.3% 16.5% 16.5%
Source: Budget and Tokman (2004)
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Projected Fiscal incomeProjected Fiscal income
2: Without Free Trade Agreements and VAT 18%
2003 2004 20052006
Net
Revenue
Income8,236.3 8,546.4 9,128.8 9,623.4
Tax burden 16.7% 16.5% 16.7% 16.7%
Source: Budget and Tokman (2004)
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Protection of Foreign Investment Agreements
Protection of Foreign Investment Agreements
5 Asia Pacific region
20 in Europe
14 in Americas
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Investment regimeInvestment regime
National treatment
DL 600
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South AfricaColombia (signed)
IrelandMalaysiaPortugalParaguayRussiaThailand
ArgentinaBrazilEcuadorMexicoPeru
Canada PolandCroatia SpainDenmark Sweden France S. KoreaNorway UKNew Zealand
Negotiation concluded
Before Congress
In Force
Chilean Double Taxation TreatiesChilean Double Taxation Treaties
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What are your objectives ?What are your objectives ?
Investment
In
out
Technology
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Chile's future....Chile's future....
RR