Santiago 2015 Blog: Heraldo Muñoz and Carlos Gutierrez on Chilean Confidence and Opportunity

By
Holly K. Sonneland

The Chilean foreign affairs minister and former U.S. secretary of commerce spoke about opportunities in trade, energy, and regional cooperation.

Speakers:

  • Susan Segal, President and CEO, Americas Society/Council of the Americas
  • Heraldo Muñoz, Minister of Foreign Affairs of Chile 
  • Carlos Gutierrez, Former U.S. Secretary of Commerce

Confidence—both of foreign investors and of Chileans in their own economy—was the theme of the day at AS/COA’s annual conference in Santiago. AS/COA’s President and CEO Susan Segal opened the event by citing various global factors that contribute to market insecurity, while strategic initiatives like a pending Trans-Pacific Partnership (TPP) deal and the recently passed Trade Promotion Authority by the U.S. Congress strengthen the integration of global markets. Few countries understand the importance of open markets as Chile does, Segal said, noting that with 24 free-trade agreements with 63 countries, Chilean exports grew an average of 6.4 percent annually from 2009 to 2014. “Chile understood well before its counterparts—and maybe even well before much of the global community—the importance of being connected, of investment,” she said.

Minister Heraldo Muñoz followed and spoke about how Chile’s open-market policies have secured jobs, increased public-private cooperation, and boosted intraregional trade. Importantly, he said, helping small- and medium-sized enterprises to connect to international markets has led to sustained economic growth and development. And finding new opportunities or improving existing trade agreements is a major goal of the government at the moment.

Chile recently began the process of renegotiating its agreement with the European Union, Muñoz said, since the original one was now over a decade old, and there was a greater priority in science, technology, and higher education now. He acknowledged that recent talks between TPP members in Hawaii were not successful because, as he said, Chile is seeking a balanced agreement, in particular, guarantees for intellectual property protections for pharmaceuticals. He further said that Chile is committed to the Pacific Alliance, of which it is a founding member, and the financial integration of Latin American countries.

Beyond Chile’s current free-trade agreements—which, he noted, allow 90 percent of Chilean exports to pay no tariffs—the country is looking to expand in new directions, namely, east and north. “We want to advance the dialogue on Mercosur because Chile has interests in the Atlantic, too,” he said, highlighting a handful of attractive market sectors in Brazil and Argentina.

He closed in acknowledging that the structural reforms required in the near future would take time and effort, but that the cost of not addressing them was too great if the country wants to move ahead and see greater social inclusion. “Turning around a boat takes a lot of effort,” he said. “But we’re investing all our efforts to go in the direction of the future. . . . We have to have confidence in ourselves.”

Next, former U.S. Commerce Secretary Carlos Gutierrez spoke on the global and hemispheric factors affecting developing markets, and the current opportunities in energy. In the Western Hemisphere, “We have the opportunity of a lifetime,” he said, referring to new energy sources like shale. Even with the development of renewable energies, traditional fossil fuels will be as critical as ever for global growth, he said, and new discoveries in oil, natural gas, and shale could prove lucrative. “The Americas—and this isn’t an exaggeration—can be the Middle East of the 21st century,” he said.

If we’ve learned anything from Chile, Gutierrez said, it’s that with growth you can do a lot of things, but without growth, everything is difficult. Chile has the most free-trade agreements of any single country in the world, and almost 34 percent of its GDP comes from exports—a portion smaller only than that of Germany (45 percent) and nearly three times the United States’ (13 percent). “There is no one who has more credibility than a Chilean to convince the rest of the Americas to take advantage of this moment and the opportunity to do something bigger than we ever could have imagined: convert the region into the most dynamic in the world.”

Chile's Minister of Foreign Relations Heraldo Muñoz and AS/COA's Susan Segal opened the conference: