TPP and the Pacific Alliance:
Opportunities for the Economic Relationship
between Chile and Japan in the future
Mr. Pablo Urria
Director for Bilateral Economic Affairs
DIRECON
CHILE & JAPAN: ECONOMIC & SOCIAL INDICATORS (2013)
CHILE
JAPAN
GDP
US$ 277 billion
GDP
US$ 4,899 billion
GDP per capita (PPP)
US$ 22,534
GDP per capita (PPP)
US$ 36,654
GDP growth rate
4.2%
GDP growth rate
1.5%
Unemployment rate
5.9%
Unemployment rate
4%
Exports
US$ 77.4 billion
Exports
US$ 715.1 billion
Imports
US$ 79.6 billion
Imports
US$ 833.2 billion
India´s relevance
CHILE
JAPAN
Population
17.6 million
Population
127.3 million
Literacy rate
98.6%
Literacy rate
99%
Life expectancy
79 years
Life expectancy
84 years
Source: DIRECON, based on data of November 2014; International Monetary Fund, World Economic Outlook, October 2014; Central Bank of Chile;
TradeMap; National Statistics Institute; UNESCO; CIA, The World Factbook, 2014.
MILESTONES IN CHILE – JAPAN TRADE RELATIONS
» Official bilateral relations between Chile and Japan can be traced back over a century, beginning with
the signing of the Treaty of Amity, Commerce and Navigation in 1897.
» One of the major milestones in the economic field is the Strategic Economic Partnership Agreement
(EPA) which entered into force on September 3rd 2007.
» The EPA between Chile and Japan is based on long and fruitful relationship between the two
countries, which celebrated 110 years of establishment of trade and diplomatic relations in 2007.
» The EPA is a comprehensive agreement that addresses not only tariff matters but also deals with
trade in services and disciplines governing trade in both goods and services. In addition to that, also
takes care of issues related to investments and government procurement, among others.
» The Agreement allows greater opportunities for Japanese investment in the country, interested in
optimizing its industrial and financial presence in key global markets. It also improves the
competitiveness of our economy (better access to capital and technology).
» Japan is Chile´s third largest trading partner being only surpassed by Chile´s exchange with China
and the United States.
CURRENT TARIFF REDUCTION CONDITIONS UNDER THE AGREEMENT
Chile
Category
Immediate
Quotas
10 years
Between 12 and 15
years
Renegotiation
Exceptions
Total
Japan
Nº items
%
Category
6,809
29
307
88.4%
0.4%
4%
104
162
294
7,705
1.3%
2.1%
3.8%
100%
Source: Market Access Department, DIRECON.
Inmediata
Quotas
10 years
Between 12 and 15
years
Renegotiation
Exceptions
Total
Nº items
%
7,502
38
291
82.8%
0.4%
3.2%
60
254
910
9,055
0.7%
2.8%
10%
100%
CHILE – JAPAN TRADE RELATION
» Between 2006 and 2013, exports growth averaged 5% per year and imports grew 8% yearly.
» Exports of industrial goods have increased US$ 90 million since 2006.
» In 2013 food exports to Japan reached US$ 1.3 billion (17% of total exports). Salmon was the main
product with US$ 438 million in exports.
» Chile main imports from Japan are consumer goods. In 2013 they reached US$ 953 million.
Bilateral Trade Chile – Japan
Exports and Imports 2006 – 2013
(billion US$)
(billion US$)
10
9
7.6
8
EPA
7
8
6.5
6
7
5
6
5
4
4
3
3
2.5
2
2
1.5
1
1
0
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Exports (FOB)
Imports (CIF)
Industrial exports
Exports (FOB)
Imports (CIF)
2006
2013
Source: Studies Department, DIRECON, based on data of the Central Bank of Chile
5
CHILE-JAPAN TRADE FEATURES:
MAIN EXPORTS AND IMPORTS SECTORS
» Chile main exports to Japan are mining products.
Exports (FOB)
Mining
» Chile main imports from Japan are consumer goods.
» Industrial
goods
(salmon,
trout
and
1%
forestry
68%
31%
products) are the 2nd main exports to Japan.
Industry
Agriculture,
forestry and
fishing
MAIN PRODUCTS 2013
Exports (million US$)
Imports (CIF)
Imports (million US$)
1
Copper
4,797 Cars
1,038
2
Salmon
335
Tires
195
3
Trouts
273
Chassis for trucks
106
4
Wood in chips or particles
264
Aircraft fuel
74
5
Molybdenum
256
Sulfuric acid
68
Source: Studies Department, DIRECON, based on data of the Central Bank of Chile
Consumer
31%
31%
Intermediate
38%
Capital
JAPANESE INVESTMENTS IN CHILE
Foreign Direct Investment in Chile (1974 - 2013)
» Japan is the 4th investor (FDI D.L.
Others
19%
600) after United States, Canada and
United States
24%
Australia
4%
Spain.
» Japanese
FDI
stock
(D.L.
600)
represents 10% of total investment
United Kingdom
7%
Canada
19%
Japan
10%
Spain
17%
materialized in Chile until 2013.
» Japanese FDI flows (D.L. 600) in
2013 reached US$ 2,525 millions.
» Mining has received 93% of total FDI
Foreign Direct Investment in Chile (D.L. 600) 1974 - 2013
Million US$
%
Mining
9,052
93%
Wood & paper products
134
1.4%
Financial services
126
1.3%
Food, beverages & tobacco
99
1%
Others
290
3%
Total
9,702
100%
stock from Japan between 1974 and
2013.
Source: Studies Department, DIRECON, based on data of the CIE (2013 and June 2014)
7
TRANS-PACIFIC PARTNERSHIP:
FRAMEWORK
»
Chile takes part in TPP negotiation because of his membership in Trans-Pacific
Strategic Partnership Agreement P4 (2005) with Brunei, New Zealand and Singapore.
P4 is an agreement with a view to integrate new members.
»
In 2009 United States announces its wish to join the P4. Subsequently Australia,
Canada, Malaysia, Mexico, Peru and Vietnam also indicate their interest.
»
Because of its disciplines depth and the potential joiningof new countries, TPP is the
most important trade liberalization process in negotiation today.
»
TPP will be part of the APEC free trade zone, the most dynamic region in the world
and focus of the Chilean trade policy in the last years.
Source: DIRECON
TRANS-PACIFIC PARTNERSHIP:
MACROECONOMIC INDICATORS
TRADE
Population
(million people)
GDP
(billion US$)
GDP per capita
(PPP)
US$
World
(billion US$)
TPP
(%)
Australia
23
1,505
45,138
485
29%
Brunei
0.4
16
73,823
15
64%
Canada
35
1,827
43,253
918
72%
Chile
18
277
22,534
156
31%
Japan
127
4,898
36,654
1,548
28%
30
313
23,160
435
39%
118
1,261
17,390
761
72%
4
182
33,626
78
41%
31
202
11,557
85
35%
5
298
78,761
784
30%
316
16,768
53,001
3,906
40%
90
171
5,295
228
33%
Malaysia
Mexico
New Zealand
Peru
Singapore
United States
Vietnam
Source: Studies Department, DIRECON, based on data of IMF (WEO, October 2014) and TradeMap.
TRANS-PACIFIC PARTNERSHIP:
PARTNERS' TRADE AGREEMENTS
CHILE
CHILE
CANADA
FTA
(1996)
NEW
ZEALAND
SINGAPORE
BRUNEI
USA
AUSTRALIA
VIETNAM
PERU
MEXICO
MALAYSIA
FTA P4 (2006)
FTA P4
(2006)
FTA P4
(2006)
FTA (2004)
FTA (2008)
FTA
(2014)
FTA (2009)
FTA
FTA
(In force
25/2/12)
FTA
FTA
CANADA
FTA
(1996)
Under
negotiation
NEW ZEALAND
FTA P4
(2006)
FTA P4 ASEAN
(2009)
SINGAPORE
FTA P4
(2006)
BRUNEI
FTA P4
(2006)
Under
negotiation
FTA (2008)
Negotiation
in ASEAN
FTA - SAFTA
(2004)
ASEAN
FTA P4 ASEAN
ASEAN
ASEAN
FTA (2003)
FTA (2005)
FTA P4 ASEAN
(2009)
FTA P4 (2006)
FTA P4
(2006)
FTA P4 ASEAN
USA
FTA (2004)
AUSTRALIA
FTA (2008)
FTA (2008)
FTA - SAFTA
(2004)
ASEAN
FTA
(2014)
Negotiation
in ASEAN
ASEAN
ASEAN
VIETNAM
PERU
MEXICO
MALAYSIA
TOTAL
FTA
FTA
FTA (2003)
FTA (2009)
PTPA (2007)
FTA
FTA
Under
negotiation
FTA
10
5
ASEAN
ASEAN
6
10
6
Under
negotiation
6
ASEAN
ASEAN
PTPA
(2007)
FTA
TOR (agreed)
Negotiation
in ASEAN
FTA
FTA (2010)
FTA (2009)
Negotiation
in ASEAN
FTA (2005)
FTA (2009)
FTA
(In force
25/2/12)
FTA (2010)
ASEAN
FTA
FTA
TOR (agreed)
ASEAN
7
6
5
5
6
» Only Chile and Singapore have agreements with every member. However, the agreements differ in
disciplines and coverage.
Source: DIRECON
JAPAN IN CHILE-TPP TRADE
»
Chilean exports to TPP countries
(billion US$)
Exports to Japan represent
35
32% of Chilean exports to TPP.
30
25
»
Chilean exports to TPP reached
US$ 23 billion in 2013.
20
TPP
15
Japan
10
5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Chilean imports from TPP countries
(billion US$)
»
Imports from Japan represent
35
10% of Chilean exports to TPP.
30
25
»
Chilean imports from TPP
reached US$ 26 billion in 2013.
20
TPP
15
Japan
10
5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Studies Department, DIRECON, based on data of the Central Bank of Chile
PACIFIC ALLIANCE - JAPAN
The Pacific Alliance is a regional integration initiative created on April 28, 2011 by Chile, Colombia,
Mexico and Peru.
The main objective of the Pacific Alliance is to form an area of deeper integration to boost further
growth, development and competitiveness of the participating economies through the progressive
search of the free movement of goods, services, capital, people and cooperation.
Currently 32 countries have been accepted as observer states in the Alliance: Germany, Australia,
Belgium, Canada, China, South Korea, Costa Rica, Ecuador, El Salvador, Spain, USA, Finland,
France, Guatemala, Holland, Honduras , Israel, India, Italy, Japan, Morocco, New Zealand, Panama,
Paraguay, Portugal, United Kingdom, Dominican Republic, Singapore, Switzerland, Trinidad and
Tobago, Turkey, and Uruguay. Recently Austria and Haiti have formally applied for the observer
status.
Japan is an Observer State in the Pacific Alliance since February 2013. The group of external
observers held their first meeting with nine observer states (Australia, Canada, China, South
Korea, Spain, USA, France, Japan, New Zealand) in April 2014 to identify possible areas of joint
work focused on the pillars of the Alliance. In particular, with Japan the areas of SMEs,
infrastructure and public-private cooperation were defined.
Source: DIRECON
CHALLENGES AHEAD
Resto
22%
2%
3%
22%
17%
Minería
31%
26%
PROMOTION
OF
INVESTMENT
EDUCATION,
SCIENCE AND
TECHNOLOGY
Source: DIRECON
78%
18%
PRODUCT
DIVERSIFICATION
CULTURAL
EXCHANGE
ありがとう ございます
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