WT/TPR/M/315

8 September 2015

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Trade Policy Review Body

23 and 25 June 2015

TRADE POLICY REVIEW

CHILE

MINUTES OF THE MEETING

Chairperson: H.E. M. Atanas Atanassov Paparizov (Bulgaria)

CONTENTS

1 INTRODUCTORY REMARKS BY THE CHAIRPERSON ...... 2 2 OPENING STATEMENT BY THE REPRESENTATIVE OF CHILE...... 4 3 STATEMENT BY THE DISCUSSANT ...... 7 4 STATEMENTS BY MEMBERS ...... 11 5 REPLIES BY THE REPRESENTATIVE OF CHILE AND ADDITIONAL COMMENTS ...... 43 6 CONCLUDING REMARKS BY THE CHAIRPERSON ...... 50

Note: Advance written questions and additional questions by WTO Members, and the replies provided by Chile are reproduced in document WT/TPR/M/315/Add.1 and will be available online at http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.

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1 INTRODUCTORY REMARKS BY THE CHAIRPERSON

1.1. The fifth Trade Policy Review of Chile was held on 23 and 25 June 2015. The Chairperson H.E. Mr Atanas Atanassov Paparizov (Bulgaria) welcomed the delegation of Chile headed by Mr Andrés Rebolledo, Director General of International Economic Relations at the Ministry of Foreign Affairs; the rest of the delegation, including H.E. Ambassador Héctor Casanueva, Permanent Representative of Chile to the WTO; other colleagues from the Mission in Geneva; and the discussant, H.E. Ambassador Irene Young (Hong Kong, China).

1.2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of the procedures for the meeting. The report by Chile was contained in document WT/TPR/G/315 and that of the WTO Secretariat in WT/TPR/S/315.

1.3. Chile adopted the alternative time-frame for its TPR. The following delegations submitted questions one week before the meeting and had been transmitted to the delegation of Chile: Malaysia; Australia; Switzerland; Brazil; Singapore; Hong Kong, China; Peru; China; the Plurinational State of Bolivia; the United States; Canada; Chinese Taipei; Mexico; and the Republic of Korea. The following delegations submitted written questions after the deadline and had also been transmitted to the delegation of Chile: New Zealand; the European Union; Japan; Norway; Guatemala; Turkey; the Dominican Republic; Trinidad and Tobago; Ecuador and Thailand.

1.4. At the time of the previous review in 2009, Members had commended Chile's open, transparent and predictable trade regime. It had been noted that Chile had attained one of the highest income and social development indicators in Latin America, and Chile had been referred to as a model for others to follow. Despite this very positive assessment, a few areas for improvement had been identified. For instance, a number of Members had questioned Chile's price band system, and had sought clarification on the steps being taken to bring it into compliance with WTO obligations. Some concerns had been expressed regarding customs appeal procedures and Chile had been also asked to reconsider its import regime for used goods.

1.5. Now turning to the current fifth review, the Chairperson was pleased to note that the Chilean economy had weathered successfully the global crisis, supported by high commodity prices and the implementation of prudent macroeconomic policies. Although structural reforms had been implemented in several areas, Chile's economy continued to be heavily dependent on copper and agricultural exports. As a consequence of this dependency, but also of high energy costs and low productivity growth, GDP growth had decelerated since 2012 as copper prices had fallen and investment in mining had decreased. GDP growth for 2014 was estimated at 1.9% reflecting declining investment and an appreciating currency; however, more recent estimates indicated higher growth for 2015 albeit still below Chile's potential. The authorities had reacted to lower growth by easing the monetary stance so as to lower interest rates, which had resulted in a depreciation of the peso. Chile had also reformed its tax system to improve tax collection. The reform was expected to increase revenue by 3% of GDP by 2018 allowing Chile to return to a situation of fiscal surplus and to finance the reform of the educational system and other social policies.

1.6. Chile's trade and investment regime continued to be, on the whole, open, transparent and predictable. As a result of its accession to the OECD, Chile had undergone regulatory and institutional reform in several areas. In addition, an Energy Agenda had been established to serve as a roadmap for formulating and implementing a long-term energy policy, and a Productivity, Innovation and Growth Agenda had been launched. These and other reforms had been conducted in consultation with the private sector, which supported the Government's main policy thrust. Chile considered foreign investment as an essential engine of growth, and an integral part of its open economic policy. Investment flows had been substantial during most of the period under review (2009-2014), particularly in the area of mining. Chile was in the process of reviewing its foreign investment regime, and several Members had raised questions on the impact that the new regime would have on existing and future investment flows.

1.7. Chile considered bilateral agreements as a key instrument to improve market access for its products. Reflecting this, Regional Trade Agreements (RTAs) had continued to play a central role in Chile's trade strategy. Since 2009, Chile had concluded several RTAs; in 2013, these had covered

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- 3 - some 98% of Chile's trade. At the same time, Chile remained strongly committed to the multilateral trading system, in which it participated actively.

1.8. Chile was in the process of implementing measures to facilitate customs procedures. A Single Window for export procedures was in place and full implementation of the Single Window for imports was envisaged for January 2017 at the latest. Chile had also pursued unilateral trade liberalization during the period reviewed, including the elimination in 2012 of its highest tariff rate of 12.5% which had applied to some animal products. Currently, Chile's MFN tariff consisted of two rates: 0% and 6%, with exceptions for some agricultural products which were subject to the price band system. The price band system remained unchanged since 2009 and applied to: wheat, wheat flour and sugar. In the course of this review, Chile had noted that during 2009-2014 the applied tariff rate for these products had been 0%.

1.9. Chile managed several incentive programmes to promote exports, including drawback, export credits and guarantees. Other incentive schemes were implemented to promote regional development, SMEs and technological innovation. The effect of these programmes had never been evaluated and there were no estimates of revenue foregone due to their application. Some Members had raised questions with respect to these regimes and their WTO status.

1.10. Chile had continued to strengthen its legal and institutional frameworks in the areas of TBT and SPS, government procurement, competition policy and intellectual property rights. With respect to SPS, Chile had passed legislation to strengthen SPS requirements for aquaculture and fisheries products after facing a sanitary crisis in 2009. Draft legislation on competition to make mandatory the notification of mergers and acquisitions above a certain threshold, to increase penalties for breaches of the competition law, and to enhance the investigative and enforcement powers of the Competition Authority had been submitted to Congress. In government procurement, open tendering was mostly used, and no preference margins were granted to domestic suppliers.

1.11. These were only a few of the topics that have been touched upon in the over 320 questions raised by Members. Other issues highlighted by Members included: export promotion, financing and support; incentives; State-owned enterprises; fisheries legislation; competition in the telecommunications market; and national treatment issues in maritime transport, among others.

1.12. The Chairperson was sure that these topics and themes, and many more, would be touched upon in greater detail at the deliberations on the first and second day of the meeting.

1.13. The Chairperson closed his introductory remarks by wishing Chile a very successful fifth Trade Policy Review. He looked forward to its active engagement in this TPR.

1.14. He also noted that a podcast would be made of the meeting which could be accessed on the Members' website.

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2 OPENING STATEMENT BY THE REPRESENTATIVE OF CHILE (MR ANDRÉS REBOLLEDO)

2.1. I should first like to express my gratitude for the introduction made by the Chairperson of the Trade Policy Review Mechanism, Ambassador Paparizov, and to all delegations that have helped to make this review a success. I am also grateful for the work done by the Secretariat to deliver a full report, which has been of great utility in this exercise. Our gratitude and appreciation go also to the Permanent Representative of Hong Kong, China, Ambassador Irene Young, for serving as discussant in this review. For Chile, this is a very important opportunity in its trade policy as regards its growing international role in recent years. We are here with a sizeable delegation from Santiago, which includes representatives from different ministries associated with trade policy management and with implementing the strategy of integrating our country into the world economy, as well as representatives of our Mission to the WTO: Ambassador Casanueva and his professional team, who have also been engaged in preparing and formulating this report, which is of the highest relevance and importance for our country.

2.2. The system of reviewing trade policies of WTO Members illustrates the robustness and importance of the organization's regular terms of reference. In this case, by submitting their trade policy to review, Members are reinforcing one of the WTO's fundamental pillars, that of transparency. The timing of the reviews makes it possible to trace the history of a Member's integration into the international community and its trade policy management and to examine the state of that policy from the inside. The reviews constitute an invaluable instrument for public consultation. This new exercise enables us to understand and respond to the observations conveyed to us with such interest by other WTO Members through their questions. I should also like to express my gratitude for the commitment and willingness on the part of different countries to take an interest in our development and to enrich our document with their questions. I also take the opportunity to thank you for your presence here this morning.

2.3. At the national level, the WTO review process also provides important feedback to government departments and encourages teamwork that enhances the coherence of domestic measures, which are taken on the basis of the multilateral trade disciplines.

2.4. Chile is a small country (we represent 0.3% of the world's territory, 0.4% of its population and 0.5% of world trade), we are a middle-income developing country with a per capita of US$22,000, and are strongly and resolutely committed to opening up our economy to foreign trade and investment flows. Our economic openness index is currently around 70% of our GDP, we rank seventh in the world in terms of economic freedom, our average tariff level is close to 1% and we have the highest proportion of per capita exports in our region. In 2014 we were the Latin American country with the strongest growth in its foreign investment flow (14%), and the cumulative stock of Chilean capital invested abroad, and particularly in South America, stands at US$95 billion, or roughly one-third of GDP.

2.5. We believe that there are several avenues of trade liberalization, no single one being sufficient by itself, but that they are complementary. As regards unilateral opening, Chile has maintained its most-favoured-nation tariff at 6%. Pursuant to the ministerial declarations and in order to implement the principle of special and differential treatment, we decided unilaterally to eliminate import tariffs on goods from least developed countries, thereby complying with the duty-free quota-free principle, which has been fully in effect since 2014.

2.6. Chile has been very active in the negotiations on bilateral, regional and multilateral agreements. Accordingly, we have signed 24 trade agreements with 63 economies. We are also members of APEC and the OECD, we form part of the Pacific Alliance (a subregional project in South America), we are an associate member of MERCOSUR, and we have close institutional ties with Central America and the Caribbean. We have played a dynamic part in furthering the quest for greater economic integration in our region, to which end we developed the proposal of "convergence in diversity" among the different subregional integration models currently existing in Latin America. Chile's decision to press ahead with market opening was based on the three options that we consider to be complementary: the unilateral, the bilateral and the multilateral. The path of bilateral liberalization in particular is complementary to and not exclusive of multilateral liberalization. Besides, since its inception the GATT has always allowed its Members the possibility to negotiate free trade agreements for goods, and this was maintained by the WTO, which further incorporated the liberalization of services.

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2.7. In the economy of tomorrow, there are fundamental areas that pose various challenges. Intellectual property is one of them. Our country has introduced substantive legislative and institutional improvements, thereby remaining at the vanguard of regional and global standards. Specifically, the country's economic growth has gone hand-in-hand with a greater level of patenting, which has been growing steadily since 2009. Similarly, Chile's universities are among the leading national applicants for patents in Chile, which is in line with the endeavour to encourage local innovation. At every stage our country endeavours to strike a balance between the interests of creators and of society as a whole, in a manner that encourages innovation and ensures due access to knowledge and medicines for the entire population. Chile's intellectual property system has thus made it possible to create an enabling environment in which to establish and develop innovative industries, and this has been reflected, for example, in a good score in the 2014 global innovation index, placing Chile second in the region.

2.8. As regards the ministerial commitments of the 2013 Bali Conference, we value above all the 2014 signing of the Protocol to the Trade Facilitation Agreement, which has already been submitted to our National Congress for analysis and discussion with a view to its early adoption and ratification. We expect to have completed the formalities for our trade facilitation protocol by the beginning of next year. The Trade Facilitation Agreement is an important step forward and we hope that its international application will soon materialize as it will help eliminate barriers at borders and reduce transaction times and costs. This Agreement is particularly relevant in today's international trade context in which lines of production are distributed across different countries and global and regional value chains are taking shape, meaning that ever more goods are crossing our borders and that the services associated with this trade must be made more efficient.

2.9. Another initiative that we would like to underline in the implementation of multilateral commitments is Chile's ratification in 2013 of the Protocol amending the TRIPS Agreement (known as the Paragraph 6 System). Chile deems it important to recognize the public health needs of developing countries and to emphasize that intellectual property rights should be implemented in a manner that does not preclude measures to protect the health of the population. This is why Chile hopes that this amendment will soon take effect and we support the call by the WTO Director-General to Members to confirm their approval.

2.10. The WTO is a crucially important forum for Chile's interests. We are an active Member, a facilitator of agreements and of progress in trade liberalization. We trust in the multilateral trading system and are dependent on it. WTO disciplines are of key importance both for the adoption of domestic policies and as a frame of reference for negotiating regional trade agreements, as most of the provisions adopted in these agreements come precisely from the WTO.

2.11. Bali and the Trade Facilitation Agreement represented a major step forward in the negotiation process. But this is not enough, as we need to continue to break new ground in trade liberalization.

2.12. Chile is playing an active part in negotiations in this house in various fields and is hoping for substantial progress towards a successful Post-Bali Agenda. We believe that it is most important to move forward on multilateral disciplines and to strengthen the system as there are topics that can only be determined in this forum. I refer here specifically to the lowering of agricultural subsidies, the abolishment of agricultural export subsidies, and to reducing the misuse of anti-dumping measures.

2.13. It is therefore crucially important to have the work programme in due time and form so that we can arrive at the Nairobi Ministerial Conference in a position to make substantive progress and properly conclude the Doha Round. This will allow us to embark on a new stage of trade multilateralism by taking on board the new issues affecting international trade.

2.14. This is Chile's fifth review in this forum. The first took place in the GATT and the following four in the WTO. Many things have happened at the multilateral level since that first review. But I would venture to say that even more has happened since the preceding one in 2009, as new topics have come prominently to the fore on the international agenda and pose a systemic challenge to humanity and an inescapable task for multilateral bodies and for trade, and we must rise to these challenges.

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2.15. The WTO is now 20 years old; today trade is organized differently from the time when this institution was established and is affected by different things. Today it is regulations beyond borders that are impacting foreign trade. Production, marketing and distribution of goods are organized differently from in the past and services now have a much larger place.

2.16. Our country wishes to tackle fundamental issues such as climate change, food security and safety, the biodiversity, the technological revolution, the digital environment, e-trade, the potentially new industrial revolution that would be represented, for example by 3D and 4D printing, the redrawing of the map of world production with macro-regions and the emergence of regional value chains.

2.17. Many of these topics are now being addressed in plurilateral and mega-regional agreements. Our policy has been open and pragmatic. We therefore participate in some of these processes. The challenge is to develop modern and balanced rules that take account of the economic and institutional realities of the participating countries. For a small and open country, it is of central importance to have rules, but we recognize that plurilateral agreements are still a second-best alternative, as the multilateral trading system will always be the ideal setting for our country. We should extend these new standards to multilateralism, even if on a more limited and gradual basis.

2.18. But we cannot meet these challenges alone. We are doing our part through public policies on the environment, innovation and technological development, and by means of sweeping and forward-looking reforms to education, employment and taxation. These challenges must nevertheless be approached also in a multilateral setting in order to move forward in delivering these goods globally. Moreover, our country is facing its own challenges. It is essential for Chile to diversify its presence on international markets and to develop a more inclusive external sector with greater involvement of new and small exporters. It is therefore critically important to boost our productivity. Chile has therefore responsibly accepted the need to carry out fiscal as well as educational reform, whereby education becomes a social right.

2.19. We therefore believe that the time is right to align our multilateral trading system with the decisions that will be taken at Addis Ababa on financing for development, at the United Nations regarding the Post-2015 Sustainable Development Agenda, at COP21 in Paris on the environment, in our own Nairobi Ministerial Meeting, and at UNCTAD XIV in 2016 in Lima. Only with a systemic, long-term vision, forward-looking scenarios and clear political determination will we be able to begin new global governance for development.

2.20. The WTO has a key role to play with respect to the issues on this new agenda, and we stand ready to support all endeavours in that direction.

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3 STATEMENT BY THE DISCUSSANT

Introductory remarks

3.1. Thank you, Chairman, and a very warm welcome to you, Director General Rebolledo. I wish you and your delegation a successful Trade Policy Review and a pleasant stay in Geneva.

Economic environment – stability built upon versatility

3.2. TPR for Chile takes place once every six years. This is longer than the term of Government and the planning horizon in many countries, so one may expect to see noticeable changes if we compare what we saw in the previous review and what we see now. In the case of Chile, it is both yes and no.

3.3. In terms of the broader economic environment, there had indeed been clear ups and downs. Between the global financial crisis of 2009 and 2012, when emerging economies were the main drivers of growth, Chile had benefited from the strong demand for raw materials – in particular its copper exports, and had enjoyed a period of high terms of trade and very favourable financing conditions. Since 2013, however, there had been capital outflows from the emerging economies. Chile then felt sharply the impact of the slowdown in China and in Latin America, as its terms of trade fell by 4.8% in 2012 and continued to fall, albeit at a more moderate rate, in the two years that followed. The much reduced copper prices have also curbed investment in the mining sector. By 2014, GDP growth had dropped to 1.9%, considerably lower than the average of 5.7% between 2010 and 2012.

3.4. Amidst oscillating external conditions, Chile is nonetheless able to make adjustments and maintain a structural balance. The 2015 government budget continues to reflect an expansionary fiscal policy. It increases expenditure by 9.8%, with a strong emphasis in public investment to stimulate growth and employment. For the years ahead, the Government projects a recovery in economic activity and an inflation rate within its target range. Being versatile and responsive to changes allows Chile to withstand the pressure of economic cycles, such that over a period of time, we see a high degree of stability in the economic environment, which is crucial to trade.

Trade policy – the domestic regime

3.5. In many respects Chile's trade policy itself is also stable and predictable. The tariff structure, for instance, has for a long time remained practically homogenous at an MFN rate of 6%, especially following the tariff cuts for the dozen poultry lines from 12.5% to 6% in 2012. The legal framework for food safety, animal and plant health has not undergone major changes either. In fact, the drafting and application of technical regulations, standards and conformity assessment procedures have all along been transparent and open, and the measures themselves follow mainly international standards.

3.6. Where changes are made, they are often changes for the better, in the sense that rules become more pro-trade, more transparent and in line with international best practices. Examples of these during the review period include: incorporating international standards and new types of protection for intellectual property; empowering the competition authorities and ensuring their independence; giving due procedural guarantees for appeals against customs clearance decisions; introducing new provisions to ensure the sustainability of hydrobiological resources and adapting the sanitary requirements for importation to the risk analysis of the OIE (World Organization for Animal Health); strengthening cabotage policy in air transport to allow foreign companies free access without reciprocity; establishing a Financial Stability Council, incorporating the latest guidelines from the Basel Committee on Banking Supervision; and strengthening the regulations for supervision of the insurance market. On the trade facilitation side, customs procedures have already been standardised for some customs destinations. We can expect a single window for definitive imports in two years' time.

3.7. Of the various changes, an important one is the new legal framework for foreign investment, announced by the Chilean Government at the beginning of this year. I understand that there will be a new institutional setup to promote FDI and channel it in particular to the strategic sectors, and investors will have greater certainty regarding the rules on foreign exchange and remittance

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- 8 - of funds. I believe Members would like to know how the new framework is being implemented, and what initial feedback the Government has received.

3.8. I also note that legislative changes have gone in different directions for different contingency measures. While Members would welcome those limiting the use of anti-dumping and countervailing measures, they may not readily understand the rationale for extending the application and renewal periods for safeguards measures. It would be useful to hear from the delegation their Government's considerations in this regard.

3.9. Over the years, Chile's efforts in liberalizing trade and reducing restrictive practices have resulted in its being above standard in many respects. Compared to its obligations in the corresponding WTO Agreements, Chile's anti-dumping regime is much more restrained and its intellectual property legislation more advanced. In terms of import control, Chile applies no quantitative restrictions. Nor does it have import licensing. The general non-discriminatory and non-protectionist nature of its policies, be it in the area of competition, government procurement, or in important sectors such as mining and agriculture, adds to Chile's appeal as an ideal place for doing business. Foreign investors would appreciate in particular the national treatment that is granted in most economic sectors1 which allows them to own 100% of a firm's equity.

3.10. But then, one can always do better. Streamlining, for instance, may be a better option where the procedures seem to be unnecessarily complex or costly. In this regard, the variable preferential rules of origins in the various regional and bilateral trade agreements would seem a ready candidate for review. Then, there is also the price band system which seeks to moderate the tariffs for wheat, wheat flour and sugar. A review that took place last year concluded that the floor and ceiling rates should be permanent. As the price band system had been a subject of dispute (in 2001-02) and found to be inconsistent with Art.4.2 of the Agreement on Agriculture, perhaps Chile could share with us its considerations for still maintaining it. I also note the mandatory use of customs agents, who must be Chilean citizens and accredited by the authorities, for both imports and exports exceeding a certain value (US$1,000 for imports and US$2,000 for exports). Now that the single electronic portal to integrate all external trade processes, known as SICEX, is already in operation, would it be more trade facilitative if traders are given a choice to seek clearance on their own rather than use customs agents?

3.11. Last year, the OECD commented on Chile's competition regime, saying that the current control on mergers, I quote, "lacks transparency, legal certainty and predictability".2 This year, OECD further suggested that Chile grant more statutory powers to its competition authorities to undertake market studies.3 I wonder if the new draft Competition Law in Chile will address these issues?

3.12. One thing I find commendable about Chile's Government report is the honesty with which Chile assesses its own performance. Where there are causes for full concern, be it a drop in international ranking regarding the ease of doing business or the perennial problem of gender inequality, the Government report does not gloss over them, but rather acknowledges and addresses them. This readiness to reflect upon policy gaps is reassuring. It gives trading partners the confidence that they are working with a country that is serious about improving itself.

3.13. Some of the difficulties that Chile faces are structural or systemic. For instance, the almost stagnation in productivity does not help Chile maximise its economic benefits. This is aggravated by the high electricity costs which put tremendous pressures on both industrial and household consumption. Also, relying on copper mining for half of its exports means that the country is particularly vulnerable to fluctuations in the demand and prices for that one single commodity, the market for which also happens to be highly concentrated, with 40% going to China alone, and another 30% to other countries also in Asia. The risks associated with such an export profile

1 Except in certain sectors as prescribed by law, such as costal shipping, air transport and the communications media. In the fisheries sector, restrictions are subject to the principle of international reciprocity. As a general rule, foreign nationals may not acquire state land located within 10km from the border and 5km from the coast. 2 Assessment of Merger Control in Chile, Report by the OECD Secretariat, July 2014. 3 Competition and Market Studies in Latin America: the case of Chile, Colombia, Costa Rica, Mexico, Panama and Peru, Report by the OECD Secretariat, March 2015.

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- 9 - cannot be ignored. And despite the surplus in merchandise trade, services and investments have a traditional negative balance which should have room for improvement.

3.14. As we have seen during the review period, sound monetary and fiscal policies can help Chile mitigate market setbacks and achieve structural balance in the medium term, but resilience and sustainable growth need a more solid foundation. It is encouraging to see the Chilean Government proactively rolling out a Productivity, Innovation and Growth Agenda, and at the same time pursuing a new Energy Agenda to diversify the energy matrix and lower electricity costs. But does the Government have in mind specific sectors that it would groom for diversifying its exports and enriching its income sources? Does it have planning targets to reverse the negative trade balance in services and investments? I hope Chile can share with us its long-term strategies.

Trade policy – the international dimension

3.15. Turning to Chile's international trade, I can see that it is characterized by a strong desire to reach out and connect. Chile sees great value in the harmonization of trade rules and economic cooperation among trading partners, first and foremost on the multilateral level. Chile was a founding Member of the WTO, and has been making significant contributions ever since. It had played a key role in helping to finalize the Trade Facilitation Agreement, and continues to engage constructively in the ongoing Doha Round negotiations. It also supports in action the principle of special and differential treatment by being the first Latin American Member to adopt the duty-free and quota-free initiative for least developed countries, and by ratifying the Protocol amending the TRIPS Agreement.

3.16. On WTO regular work, since the last review in 2009, Chile has filed hundreds of notifications pursuant to the various WTO Agreements, bearing testimony to its transparency and respect for the system. In contrast, its anti-dumping, countervailing and safeguard actions are, on the whole, few and far between, with no such measures in force or investigation underway as of the end of last year and the beginning of this year. Chile is an active participant in dispute settlement cases, but mainly as third party. It has not been a complainant since the previous review.

3.17. Outside the WTO, Chile is also an active member of other trade-related international organizations such as APEC, OECD and WIPO. It is among those countries with the largest number of regional and bilateral trade agreements, having signed 24 of them with 63 partners, and with 35 reciprocal IPPAs (Investment Promotion and Protection Agreements) in force. Ongoing plurilateral negotiations include the TPP (Trans-Pacific Strategic Economic Partnership Agreement) and TiSA (Trade in Services Agreement). In the APEC context, the Leader's Summit last November also agreed to launch a strategic study into a possible Free Trade Area of the Asia-Pacific. Notably, however, Chile has not participated in the plurilateral agreements or negotiations within the WTO regarding Information Technology, Environmental Goods and Government Procurement. In the case of Government Procurement in particular, conditions actually seem quite favourable for Chile to join: this is because Chile has been Observer to the Committee since 1997; its own government procurement system is transparent, non-discriminatory and efficient; recent revision to the GPA should also have addressed the two specific points raised by Chile in its last TPR regarding the need for better market access and more modern procedures. It would be useful to know why Chile, which seems to welcome plurilateral agreements in general, has not been more forthcoming in joining the WTO ones.

3.18. Meanwhile, regional integration in Latin America features prominently on Chile's agenda. With its closest partners in the Pacific Alliance, Chile's "Convergence amid Diversity" philosophy finds expression not only in preferential tariffs and trading terms, but also in customs clearance procedures, to the extent that online processing of documents (such as phytosanitary certifications) initiated in one country can continue electronically through to the destination point in another country, making the entire foreign trade operation traceable and transparent.

3.19. Regional cooperation exists in different forms in different parts of the world, but not very often do we see integration taken to such an ambitious level as in the Pacific Alliance. What are the conditions that made this form of partnership desirable and feasible? Can the model be adopted elsewhere? How far can it go in terms of scope and depth? What are the costs and risks? What are the implications for trade flows outside the Alliance and for the multilateral trading system? It would be interesting if Chile could share with us its insight.

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Trade policy – at crossroads?

3.20. The year 2015 is a special year for Chile - not only because it is hosting Copa America and is well on its way to the quarter-finals, but also because it reminds me of some truly historical events that had given the country fresh impetus in the past.

3.21. One of these events was Milton Friedman's visit to Chile which took place exactly 40 years ago. Back then in 1975, Chile was in the throes of hyperinflation; the Government was going bankrupt, and the economy on the brink of a total collapse. The earnest advice that Friedman tendered to the Chilean President was very well received. It immediately translated into an Economic Recovery Plan which led to Chile opening up its markets, privatizing its state-owned enterprises and later experiencing the largest economic boom in its history. It is really nothing short of a miracle that Chile was able to almost triple4 its income per capita and reduce poverty rate to almost one-fifth5 of what it was over the last 25 years.

3.22. For Chile, however, economic success is not everything. It is interesting to note that the many domestic initiatives that we see in the Government report for this Review are actually more to address the problem of social inequalities. Clearly, the current Government has an ambitious agenda to reform its tax, labour, education and welfare systems in favour of more inclusive growth. However, as it does so, some critics are sounding alarm. Questions arise as to whether Chile is abandoning free market for government intervention, and whether public welfare is taking precedence over business interests.

3.23. In my view, social and economic objectives are not mutually exclusive. Very often they can complement and reinforce each other. The Chilean President just formed a new cabinet and appointed a new Finance Minister last month. How does the new team see the original economic model that sparked off Chile's transformation 40 years ago? Have circumstances and priorities changed over time to require adjustments to that model? Can the Government assure the international trading community that its reforms, in particular those relating to tax and labour policies, are business friendly? This TPR is a timely occasion for Chile to share its vision with us.

Final remarks

3.24. The year 2015 also marks the 70th anniversary of Chile's first Nobel Prize in Literature, awarded to the distinguished poet Gabriela Mistral, who was also the first person in Latin America to receive this Prize. I was reading one of her poems the other day. It is called The Lark. There, the poet says she wants to be like the lark that frees itself from earthly ruts and flies straight toward the sun.

3.25. Let this also be my wish for Chile, that in its pursuit of social and economic development goals, it will be like a bird that soars high and keeps scaling new heights. With your strong fundamentals, coherent policies and a political will to improve, may the sky be your limit.

4 Over the past 25 years, per capita income in Chile has risen by 289% (from US$5,800 to US$23,000, expressed in purchasing power parity). Source: United Nations Economic Commission for Latin America and the Caribbean. 5 From 38.6 to 7.8. Source: United Nations Economic Commission for Latin America and the Caribbean.

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4 STATEMENTS BY MEMBERS

MALAYSIA

4.1. We commend Chile for having recovered from the global economic crises, recording an average GDP growth of 3.6% during the review period. Malaysia welcomes the various reforms including the regulatory framework for investment and the adoption of a more far-reaching competition law which would certainly enhance Chile's trade performance.

4.2. Chile has traditionally been a close economic partner of Malaysia and more so now with the implementation of Malaysia-Chile Free Trade Agreement (MCFTA) in 2012. The MCFTA marks the first of Malaysia's bilateral FTA with a South American country. Together with Malaysia, Chile is also negotiating the Trans-Pacific Partnership (TPP), which when concluded, is expected to further intensify our bilateral and regional partnership.

4.3. Although Malaysia's trade with Chile contracted by almost 36% last year, it is encouraging to note that the flow is steadily trending upwards this year. Our bilateral trade has increased in the first quarter this year to US$97 million.

4.4. In 2014, major Malaysia's exports to Chile include electrical and electronics, wood and rubber products, machinery appliances and parts, and palm oil. Malaysia's imports from Chile were among others manufactures of metal, seafood and chemicals and chemical products. In term of investment, as of December 2012, Malaysia's investments in Chile is still small and mainly destined for wholesale/retail trade and financial insurance/takaful sectors. We look forward to further enhance bilateral trade and investment between the two countries.

4.5. Chile is an active advocate of trade liberalization and continues to put the WTO at the centre of its trade policy agenda, while at the same time actively pursuing regional and bilateral free trade agreements. Malaysia is encouraged by Chile's effort in undertaking the necessary steps to expedite the ratification of the Trade Facilitation Agreement. With the looming deadline of the Post-Bali work programme, we believe Chile with other Members would put in our best efforts to successfully deliver the Post-Bali work programme and there on to conclude the Doha negotiations.

4.6. Finally, we would like to take this opportunity to thank the Chilean delegation for responding to our questions and these are being examined at the Capital. In addition, we will also be submitting additional questions and we look forward to receiving feedback.

AUSTRALIA

4.7. Australia is pleased to participate in this fifth Trade Policy Review of Chile. Our two countries share an extensive bilateral relationship underpinned by the Australia-Chile Free Trade Agreement (ACIFTA), and double taxation and social security agreements. We are also active Members in a range of international bodies including the WTO, APEC and the OECD.

4.8. ACIFTA is a high-quality and comprehensive FTA, which serves as a model for other bilateral trade agreements. Since entry into force of the ACIFTA in 2009, there has been significant growth in bilateral trade between our two countries, which has increased on average by more than 10% per annum. Bilateral merchandise trade has grown by 46% and around 120 Australian companies now operate in Chile, many of which have established regional headquarters in Chile and have launched subsidiaries across Latin America.

4.9. On entry into force, the ACIFTA eliminated tariffs on 97% of existing merchandise trade. As of 1 January 2015, all tariffs have been reduced to zero, except on sugar. We would welcome the dismantling of Chile's price band system to also reduce tariffs on sugar to zero.

4.10. Australia and Chile are committed to trade liberalization and are strong supporters of the multilateral trading system. Chile's ongoing commitment to open trade settings has delivered substantial economic and development benefits to Chile, and sets an example for other WTO Members aiming to bolster growth through trade. Chile has made its commitment concrete through, for example, its contributions in the Cairns Group to progress multilateral agricultural trade reform. Chile's constructive participation in the Trade in Services Agreement negotiations is

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- 12 - also appreciated by Australia. And we look forward with confidence to constructive engagement with Chile in the lead-up to MC10.

4.11. Our shared commitment to regional trade liberalization is underscored by our close collaboration in the Trans-Pacific Partnership negotiations. An ambitious, comprehensive TPP Agreement that builds on our respective WTO commitments will be a substantial step towards realizing the vision of an inclusive Free Trade Area on f the Asia-Pacific.

4.12. Chile is Australia's third largest trading partner in Latin America. Australia's observer status of the Pacific Alliance is indicative of our commitment to deeper economic engagement with Chile and Latin America more generally. Australia strongly supported Chile's accession to the Organisation for Economic Cooperation and Development (OECD) in 2010 in recognition of Chile's commitment to reform towards a more open economy. We value the constructive dialogue we maintain with Chile, bot as part of our Joint Trade Committee meetings related to the ACIFTA, and at the WTO, as strong proponents of the multilateral trading system.

SWITZERLAND

4.13. We congratulate Chile on its overall successful and forward-looking response to the global economic crisis six years ago, with solid growth rates, significantly reduced unemployment and inflation kept within the Central Bank's target range during the reporting period.

4.14. Switzerland welcomes the Chilean Government's efforts on a comprehensive tax reform, with additional revenues directed towards important needs in public health and education.

4.15. Chile has a strong tradition of facilitating trade. In this context, we note the Chilean Government's commitment to completing the domestic approval procedures of the Trade Facilitation Agreement as soon as possible and to establishing a single window by 2017.

4.16. We note with interest that Chile initiated a programme in 2011 to promote the registration of geographical indications and appellations of origin. Switzerland welcomes such initiatives aimed at promoting products with distinctive local characteristics.

4.17. Chile has a remarkable financial sector including banking, insurance, securities and pension funds. We commend the steps already taken in regard of the Basel II and III capital adequacy rules and encourage Chile to implement these fully in its legislation.

4.18. Since Chile's last Trade Policy Review, regional integration in Latin America has made a significant new step forward with the creation of the Pacific Alliance. We welcome the objectives of this initiative and will continue to follow it with interest as an observer country.

4.19. We would also like to highlight that during the period under review, Chile became a member of the OECD. This major achievement became possible through, notably, a number of regulatory and institutional reforms.

4.20. Before concluding, allow me to make a few remarks on Switzerland's bilateral economic relations with Chile. Chile is our sixth trading partner in Latin America. Last year, bilateral trade amounted to US$350 million, and Swiss FDI stocks in Chile reached US$3.4 billion, supplying jobs for more than 20'000 Chileans.

4.21. Our bilateral agreements, in particular the Free Trade Agreement concluded as part of EFTA, a Double Taxation Agreement and an Investment Protection and Promotion Agreement – together with the multilateral trade rules – provide for a sound framework for companies doing business between our two countries.

4.22. Switzerland very much appreciates Chile's strong and continued commitment to the WTO and its constructive engagement for the multilateral trading system, as just expressed again by Director-General Rebolledo in his introductory statement.

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BRAZIL

4.23. It is a matter of great satisfaction for Brazil to participate in the fifth TPR of Chile. Our countries share a common cultural heritage and a strong commitment to democracy, human rights protection and sustainable development. Our political relations are intrinsically marked by bonds of friendship. In the multilateral trading system, both our countries have deployed persistent efforts for the successful conclusion of the Doha Development Agenda and are committed to the improvement and reinforcement of the WTO.

4.24. Between 2009 and 2014, the period covered by this review, Chile's economy grew at an annual average of 3.6%, thus demonstrating its capacity to recover, quickly and sustainably, from the effects of the international financial crisis. Chile's resilience is a result of sound fundamentals and a solid financial system, as well as prudent management of economic policy. Countercyclical measures, implemented to preserve financial stability and stimulate the local economy, were based on consistent fiscal surplus and avoidance of excessive indebtedness. Furthermore, Chile was successful in taking advantage of the favourable high prices for mining commodities prevailing for most of the last decade to help promote prosperity for its population.

4.25. In the bilateral arena, trade and financial flows to and from Brazil have suffered somewhat due to medium term effects of the international crisis. Nevertheless, bilateral trade did recover and resumed growth in the last three years. Around 70 Brazilian companies operate in Chile, in important sectors such as mining and pharmaceuticals. Brazil is the main destination of Chilean investments worldwide. It is estimated that this partnership has already created more than 100.00 jobs in Brazil.

4.26. Chile, an Associate Member in Mercosul, enjoys zero-duty access to the Brazilian market for most tariff lines, and vice-versa. Brazilian goods correspond to 8.7% of Chilean imports, whereas our market absorbs 5.4% of its total exports. Brazil is Chile's fifth largest supplier, after China, the US, Japan and Korea, and ranks as its third biggest importer, following the US and China. We mainly export fuels, cars and meat products, and import minerals and fish.

4.27. Chile for decades has adopted an open trade and investment policies, including a low flat import tariff and the participation in a number of bilateral, regional and plurilateral initiatives. Trade flows with Mercosul reflect Chile's commitment to regional integration, a strategy that has undoubtedly contributed to the positive economic results maintained through the last years.

4.28. Allow me to point out that, as a close trading partner of Chile in the agribusiness arena, Brazil is deeply concerned by the new labelling requirements for food products known as the "SuperEight Initiative". While sharing Chile's firm commitment to public health matters, we have stressed, time and again, that the new requirements appear much more trade restrictive than necessary to fulfil the legitimate objective of helping people to make good nutritional choices when buying food.

4.29. We acknowledge last week's decision by the Ministry of Health to withdraw the text of the Supreme Decree No. 977/96 from the General Comptroller. It shows that Chile's national authorities were sensitive to public worries at home and abroad. We hope that the review process of the proposed regulation will be conducted with a view to minimizing undue restrictions while working for better nutritional standards.

4.30. Brazil is grateful for the written responses to the questions our delegations presented. They will be forwarded to Brasilia for consideration and follow-up as appropriate. We just received a few additional questions that will be promptly forwarded to the Chilean delegation. I count on your understanding on the matter.

4.31. Before concluding, I would like to congratulate Chile for the outstanding organization of the ongoing 2015 "Copa America". I wish you continued good fortune during the tournament and I hope our teams can meet each other in the finals. Were that to be the case, I count on your understanding that we would then become less forthcoming with our good wishes.

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4.32. Finally, let me reiterate that Brazil stands ready to further enhance its partnership with Chile, which is a very high priority for Brazil foreign policy, and wishes it a successful Trade Policy Review exercise.

SINGAPORE

4.33. Although Singapore and Chile lie on opposite sides of the Pacific Ocean, separated by 16,500 kilometres, we share many commonalities. Singapore and Chile are like-minded economies in our openness to international trade in goods, services and investment. Both Singapore and Chile are ranked amongst the most open and business-friendly countries in our respective regions. We also believe strongly in the importance of Open Skies as evident in the 7th freedom passenger and cabotage rights enjoyed by both countries under the Multilateral Agreement on the Liberalization of Air Transportation (MALIAT). This openness has facilitated not only the strengthening of business and trade links between our countries and regions, but also people-to-people ties. In 2014, bilateral trade amounted to S$191 million. We are confident that this figure will continue to increase and see further potential for collaboration between Singapore and Chilean enterprises, particularly in the fields of Information-Communications Technology, Infrastructure development and Mining.

4.34. Chile's emphasis on trade liberalization is commendable, with 24 preferential agreements signed with 63 partners that account for 85% of global GDP. Since the last review, we note that Chile has undertaken initiatives to streamline procedures and domestic rules pertaining to entrepreneurship and trade, including the establishment of the Integrated Foreign Trade System; cost-free web portal for starting a business in one day; and improvements in Chile's law on Bankruptcy. We also note that Chile has launched an initiative, Start-Up Chile, which has helped many innovative Chilean enterprises to grow and improve productivity.

4.35. Singapore and Chile have always worked closely to promote trade liberalization. The Trans-Pacific Strategic Economic Partnership Agreement (P4), which both Chile and Singapore are part of, sowed the seeds for the emergence of the Trans-Pacific Partnership (TPP). We have also cooperated closely at Asia-Pacific Economic Cooperation (APEC) meetings and, since February 2014, Pacific Alliance events.

4.36. At the WTO, we find in Chile a constructive and like-minded partner. Chile has been a key player in pushing areas such as trade facilitation, as demonstrated by the prompt submission of its Category A notification for the Trade Facilitation Agreement (TFA). We look forward to Chile's ratification and deposit of its instrument of acceptance for the TFA in the near future.

4.37. Our delegation shares an excellent working relationship with Ambassador Hector Casanueva and his team. This connection between Singapore and Chile is perhaps unsurprising, not because of our football ties, but given how one of Chile's best loved poets Pablo Neruda had served as Chile's Consul in Singapore in 1931. While we do not have "Twenty Love Poems" nor "a Song of Despair" today, we look forward to continuing our close cooperation as we work towards a fruitful MC10 in Nairobi, and the strengthening of the multilateral trading system.

HONG KONG, CHINA

4.38. Chile and Hong Kong, China (HKC), both being free trade advocates, maintain good economic and trade relations. Chile is our treasured trading partner in Latin America and the only economy in the region with which we have signed a free trade agreement (FTA) so far. The FTA between Chile and HKC, which came into force last October, is comprehensive and of high quality, encompassing trade in goods and services, investment, and other related areas. It is also fully consistent with provisions of the World Trade Organization. With the FTA in force, we believe that HKC's bilateral trade with Chile, which has been growing at an average of almost 6% per annum since 2009 and exceeded US$1 billion last year, will be taken to new heights.

4.39. Chile views foreign trade as a decisive tool for achieving economic and social developments and is making tremendous efforts to advance towards these goals. Its per capita income increased by almost 290% over the last 25 years; and its national poverty rate reduced from almost 40% in 1990 to 7.8% in 2013. Although income inequality is still high, its income distribution gaps have gradually declined since 2000. Chile stands out among economies in the region for its

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- 15 - competitiveness and its trade agreement with 63 economies. Its success demonstrated the importance and benefits of open trade and free markets. We are pleased to note Chile's firm commitment to an open trade policy and believe that its efforts in this regard will continue to contribute positively to its economic and social development.

4.40. We commend Chile for making continued efforts in implementing trade facilitation measures during the review period. Steps have also been taken to ensure the impartiality of decisions regarding complaints brought before the National Customs Service. We hope such good efforts would continue. However, we note that importers are still required to use the services of a customs agent for inward clearance of imports with f.o.b. value exceeding US$1,000 and the agent must be Chilean citizen and accredited by the National Director of Customs. We hope Chile could review the need for such requirement.

4.41. On the multilateral front, we applaud Chile for its active and constructive contribution to the trade facilitation negotiations. We are encouraged to note that Chile has notified its Category A commitments and is in the process of ratifying the Trade Facilitation Agreement. We hope Chile's impending acceptance of the Agreement will contribute to its early implementation.

4.42. We note that Chile continued to apply a 19% value added tax (VAT) on domestic sale and imports of goods and services. The VAT on imported goods is calculated on the basis of customs value plus import duty. We hope that Chile could review its high VAT rate and the method for calculating the VAT to facilitate imports.

4.43. In addition, we note that there is a gap between the average applied MFN tariff rate (6%) and the bound tariff rates (which range from 25% to 98%). The price band system is also a source of uncertainty and lessens the transparency of Chile's tariff policy. We encourage Chile to consider reducing its bound tariff rates and reviewing its price band system with a view to providing more certainty to its tariff regime.

4.44. HKC and Chile are both active members of the "Friends of Anti-Dumping Negotiations" ("FANs") Group. We share the belief that the existing Anti-Dumping (AD) Agreement should be improved to counter AD measures being used to restrict trade. We appreciate that under Chile's regime, AD and countervailing measures may only last for one year and may not be renewed. We are also pleased to note that Chile has amended its legislation to limit the use of AD and countervailing measures by shortening the maximum period for an investigation.

4.45. We note, however, that Chile has extended the possible application and renewal periods for safeguard measures from one year to two years. Although the new time-limit does not exceed that of the Agreement on Safeguards, we hope that Chile could review and take steps to lessen the trade restrictive effects of such measures.

4.46. On the services side, we would encourage Chile to open up its markets to foreign investment, and will continue to work closely with Chile to further liberalise services trade.

4.47. Finally, I would like to commend the contributions made by Ambassador Casanueva to the work of the WTO, especially in his role as the Chair of the Council for Trade in Goods. We also thank the delegation for using the more interactive alternative timelines, and for the replies it provided to our questions.

PERU

4.48. I am pleased to say that in recent years, bilateral relations between Peru and Chile have expanded in density and content, and this has been reflected in the sustained growth of trade and investment between both countries. Under the free trade agreement signed in 2006, which broadened Economic Complementarity Agreement No. 38, in force since 1998, Chile is currently the seventh leading destination for Peruvian exports worldwide and the leading destination in Latin America.

4.49. Although we are recording levels below those of 2011 and 2012, bilateral trade has increased by just over 60% since 2009, standing at almost US$3 billion in 2014. In that framework, 43% of Peru's exports to Chile were non-traditional goods, mostly in the chemical,

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- 16 - agricultural and livestock, metal-working and textile sectors. In 2014, 43% of Peru's total imports from Chile comprised capital and consumer goods, which is evidence of substantial trade in goods with some degree of added value.

4.50. Investments between both countries have also become a significant factor in the economic development of both countries. Chile is the leading Latin American country of origin of foreign direct investment in Peru and the cumulative stock for the past 15 years is close to US$13 billion, while Peruvian investments in Chile are estimated at US$7 billion.

4.51. In the light of Chile's sustained economic growth, its entry into the Organization for Economic Cooperation and Development, and of other factors that place it firmly on the path of development, Peru deems it important for both countries to continue working together to expand our economic relations. In that connection, both our countries coincide in pursuing the aims of processes such as the Asia-Pacific Economic Cooperation (APEC) forum, the negotiations on the Trans-Pacific Partnership Agreement (TPP), among others. At the WTO we also share the same interests in the negotiations in which we are jointly involved as members of the Cairns Group, the G-20, and the Friends of Fish Group, among others.

4.52. Similarly, Peru and Chile, together with Mexico and Colombia are founding members of the Pacific Alliance, an initiative that represents a hub for integrating the Latin American region's most dynamic economies so as to project our international presence towards the markets of the Asia-Pacific region, at the same time speeding up the integration process to allow for the free movement of people, goods, services and capital.

4.53. The density of our bilateral relations has given rise to new areas of cooperation between Peru and Chile, leading in turn to the creation and strengthening of mechanisms that enhance the institutional dimension of bilateral relations in various fields such as science and technology, culture, mining and the fight against drugs, among others. Both countries are committed to and keenly promote border integration, with over 4 billion crossings of our common border recorded in 2014. Both Governments have therefore been working arduously to implement a system of integrated control and border cooperation that facilitates the transit of persons, vehicles and goods at the border.

4.54. I would also like to underscore, as an important element of our bilateral relations, the presence of a large resident Peruvian community of over 150,000 in Chile. They have been contributing through their efforts and dedication to the betterment of Chile and of their own families in Peru, and to greater knowledge of our respective cultures and to increased trade in goods and services. I take this opportunity to acknowledge and thank the Government of Chile for its efforts to facilitate the proper integration of the resident Peruvian community into Chilean society.

4.55. Turning to the Secretariat's report on the trade policy review of Chile, I should like to commend the Chilean Government on its efforts to rapidly overcome the effects of the world economic crisis. In that regard, I wish to draw attention to Chile's prudent economic policy management, which enabled the country to generate a fiscal surplus and keep borrowing low, intensify its open trade strategy based on trade agreements, implement trade facilitation measures, and regulatory changes designed to limit the use of anti-dumping and countervailing measures and promote investment in various sectors of the economy. I would specifically like to underscore that country's efforts to improve the educational system.

4.56. Nevertheless, as stated in the Secretariat's report, despite a good economic performance, Chile is facing challenges in boosting productivity, and although there are indications of a recent pickup, the report points out that corporate investment in research and development is low and that there is a shortage of qualified personnel. Peru also faces similar challenges, despite the success of the economic and trade development policy my country has implemented over the past two decades.

4.57. Peru regards Chile's trade policy review as a working framework that provides a major opportunity to obtain valuable information of benefit to all and we therefore wish Chile a successful outcome to this exercise.

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4.58. Peru has submitted some questions on various aspects of the functioning of Chile's trade in general. I take this opportunity to express my gratitude for the replies we have received from the delegation of Chile. They will be forwarded to our competent authorities for evaluation and follow-up.

CHINA

4.59. We are pleased to note that the Chile's economy has quickly recovered from the global economic crisis, with GDP growing at an average annual rate of 3.6% in real terms between 2009 and 2014. Such good economic performance is attributive to such factors as the effective fiscal and monetary policy and its prudent management of economic policy.

4.60. Significant steps have been taken to improve productivity, educational system and environment for investment which serve to sustain the long-term growth. Nonetheless, Chile's economy is still dependent on commodity export and vulnerable to external factors, we believe the right way to diversify their economy and ensure sustainable growth is to build up an investment- friendly business environment.

4.61. Chile's trade performs well. The past six years has seen a faster increase in Chile's merchandise imports by 69% and exports by 38.2%, with continued increase in receiving large foreign direct investment flows. We commend the efforts made by Chile in further enhancing its already open and liberalized trade and investment regime during the period under review, especially their restraint in taking trade remedy measures during the global financial crisis and afterwards.

4.62. Chile is continuing its open trade strategy both on multilateral and regional level. In WTO, as we are sitting next to each other in the meeting rooms, we see all the time Chile is actively participating in works of this Organization. Outside the WTO, Chile is one of the countries with the most trading partners and the most regional and bilateral free trade agreements.

4.63. China is the largest trading partner of Chile with total trade volume exceeding US$34 billion dollar. According to WTO's Report, in 2014, China provided Chile's main export market absorbing 24.6% of its exports, became Chile's main supplier, with 20.9% of the total.

4.64. Such a good and close cooperation is the natural harvest and testimony of the long-standing Sino-Chilean bilateral economic and trade ties. I would recall that Chile is the first Latin American country to establish diplomatic relation with China and one of first countries that signed FTA with us.

4.65. As we are celebrating the 45th anniversary of establishment of diplomatic relationship between China and Chile, our Premier Li Keqiang paid an official visit to Chile last month, during which, two countries agreed to enhance cooperation in wide-range areas such as finance, agriculture, renewable energy, infrastructure and upgrading the bilateral FTA. This historical visit has opened up a brand-new chapter for our comprehensive cooperation in future.

4.66. Having said that, it is worth mentioning that there are some concerns on certain issues in Chile's trade and investment policies. We would encourage Chile to further ease their FDI policy and increase the transparency of the foreign investment regime. We thank the Chilean delegation for their responses to our questions, which we will study carefully.

PLURINATIONAL STATE OF BOLIVIA

4.67. I thank the Government of Chile for the replies to our questions seeking clarification of the reasons for the problems facing Bolivia's overland "traffic in transit". I wish to point out that Article V of the GATT 1947 established freedom of transit, and that Bolivia is being severely affected by certain trade measures taken by the Chilean Government. Those measures are affecting our export earnings, pushing up our production costs owing to restrictions on free transit and are undermining Bolivia's capacity for development.

4.68. We therefore wish to take this opportunity to ask questions and seek clarifications in addition to the questions initially submitted by Bolivia, and I shall now read out the relevant text.

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1. Several of Chile's replies to Bolivia refer to international conventions to which Chile and Bolivia are parties, but only to those that are of particular interest to Chile, without considering those in which it undertakes specific commitments on freedom of transit, such as the United Nations Convention on the Law of the Sea, which establishes a special regime for landlocked countries. These rights accorded to countries like Bolivia were operationalized under the 2014 Vienna Programme of Action for Landlocked Developing Countries and ratified by the first follow-up conference held in Zambia a few weeks ago, and are in line with Article V of the GATT. Chile and Bolivia have both signed these instruments. We would be grateful to know how the Government of Chile intends to fulfil its commitments under the Law of the Sea Convention and the Vienna Programme to implement free transit, particularly in the light of unilateral measures taken by public employees suspending activity at its borders, or of similar measures taken by private operators at its ports.

2. In the reply to Bolivia's question No. 2, the delegation of Chile refers to "safeguard requirements" pursuant to international rules, but at no time does it make clear which international rules. Those "safeguard requirements" have become limitations and restrictions on Bolivia's "traffic in transit" across Chilean territory via the most convenient routes. It is therefore important to know how Chile will ensure compliance with Article V of the GATT 1947 on the implementation of those measures.

3. Chile's reply No. 7 to Bolivia states that "pursuant to the 1904 Treaty of Peace and Friendship and subsequent agreements such as the 1912 Convention on Commercial Traffic between Chile and Bolivia and the 1937 Convention on Transit, Chile accorded Bolivia, in perpetuity, the most extensive and unrestricted right of transit across its territory to its Pacific ports." In the light of the foregoing, we must make the following clear: not only does Article VI of the 1904 Treaty of Peace and Friendship provide for the most extensive and unrestricted right of transit for Bolivia across Chilean territory, but it also expressly prescribes that the appropriate regulations for ensuring this right will arise from special instruments agreed on by both Governments. Therefore, the Chilean Government cannot unilaterally introduce regulations that in any way limit or curtail the extensive and unrestricted right of commercial transit. Article 15 of the ATIT is also construed in this way, as it expressly states that the Agreement on International Land Transport (ATIT) in no case means restricting the transport and free transit facilities that have been accorded to signatory countries.

4. Chile's reply No. 7 to Bolivia states that "Chile's port enterprises, as predecessors to the autonomous port enterprises of Arica and Antofagasta, passed resolutions granting commercial privileges to Bolivia's cargo in transit." In the light of the foregoing, it must be made clear that the extensive and unrestricted right of commercial transit is above all a right accorded under the 1904 Treaty of Peace and Friendship, a right granted by Chile to Bolivia and hence not a commercial privilege accorded under resolutions passed by port enterprises, as Chile erroneously states in this reply.

5. Chile's reply No. 7 to Bolivia states that Chile established "the most extensive and unrestricted right of commercial transit across its territory to its Pacific ports", and paragraph 2 of Article V of the GATT 1947 stipulates that there shall be freedom of transit through the territory of each contracting party, via the most convenient routes.

6. Considering that the (public and private) agents responsible for complying with free transit commitments have suspended the service on more than one occasion in Bolivian-Chilean border areas and that services are currently suspended at the port of Iquique, making it impossible to use the most convenient routes for Bolivia's commercial transport purposes, how will the Chilean Government guarantee compliance with the commitment to allow free transit via the most convenient routes as established under its multilateral commitments? Given the situation Bolivia has had to face in its trade in attempting to exercise the faculty granted under Article V of the GATT 1947 regarding free transit and the most convenient routes in crossing Chilean territory, our understanding is that these are neither short-term nor random situations, and we would therefore like to know how the Government of Chile guarantees fulfilment of the multilateral commitments under Article V of

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the GATT 1947 with respect to Bolivian cargo or that of any other country crossing its territory.

7. In the second part of reply No. 7, Chile states that "free transit is a legal framework that applies both to the State and to private operators or state-owned companies and that it is respected without exceptions." It further states that contracts with privatized enterprises are binding on the concessionaire to maintain the conditions of free transit for Bolivian cargo. As explained above, and as is public knowledge, private companies that operate Chile's ports continually limit the right of free transit that Bolivia ought to enjoy, and we therefore need to know how the Government of Chile intends to ensure that private companies comply with the Chilean State's international commitments. In the event of non-compliance by private enterprises, will they compensate other States for the damage caused them as a result of that non-compliance?

8. In replies Nos. 8 and 9 to Bolivia's questions, Chile states: " … are honoured by the Chilean State through its entities that are involved in free transit. Hence, the port enterprises, both state-owned and private, as well as all operators and the system of state-owned enterprises (SEP), are required to observe the regulations laid down in the Treaty and the aforementioned subsequent agreements. It is incumbent on the State's port enterprises, which own the ports being operated under concessions, to ensure that free transit occurs." When reference is made to free transit for Bolivia taking place through the operators involved in free transit, it is understood that they are both public and private enterprises, but over recent years, and even more so in recent weeks, these operators have unilaterally suspended their activities, thereby impacting free transit for Bolivia. This means that the guarantee of free transit referred to by Chile is not being upheld, as hundreds of Bolivian cargo vehicles have not been able to enter Chilean territory let alone its ports, and we would therefore like to know how free transit is being guaranteed if the operators entrusted with compliance of international commitments are unilaterally suspending the commitment to provide unrestricted transit services for Bolivia.

9. Chile's reply No. 4 to Bolivia includes the following: " … in this regard, pursuant to Article 4 of the Agreement on International Land Transport (ATIT), a multilateral treaty in force for Argentina, Bolivia, Brazil, Chile, Paraguay, Peru and Uruguay, transporters from member countries must respect the laws and regulations applicable to any vehicle in the country being transited". As Chile mentions, free transit commitments were made and facilities provided to Bolivia under the 1904 Treaty, one of these facilities being the obligation to agree, in special instruments, on all measures affecting the right of free transit accorded to Bolivia. Article 4 of the ATIT is therefore not applicable to Bolivia, given the requirement of prior agreement through special instruments on the rules applicable to Bolivian cargo in transit.

UNITED STATES

4.69. At its last review in 2009, we noted the Chilean Government's efforts to offset the effects of the global economic crisis. To its credit, Chile refrained from introducing fundamental changes to its already-open trade policy and managed to continue along the path of trade liberalization.

4.70. Successive Chilean administrations have remained steadfast in their commitment to deepen integration with the global economy through trade agreements. The United States and Chile are long-term partners, with our bilateral trade agreement as the foundation of our partnership. The agreement has been in force since 1 January 2004, and now, with the twelfth annual tariff reductions taking effect on 1 January 2015, 100% of U.S. exports can enter Chile duty-free. Our two-way bilateral trade in goods has quadrupled since the FTA took effect. We should note that the U.S. exports of goods and services to Chile supported an estimated 106,000 jobs in 2013, according to the U.S. Department of Commerce.

4.71. Complementing the improved trade flows, foreign direct investment in each other's market has also grown. U.S. foreign direct investment in Chile was US$41.1 billion in 2013, up 8.7% from 2012. Chilean FDI in the United States was US$487 million in 2013, up 20.8% from 2012.

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4.72. We would like to recognize Chile's open and transparent trade and investment regime and commend them for the work they have done to create a predictable environment within their borders. We also value the cooperative working relationships we and many of our regulators have with Chilean counterparts and recent resolution of and progress on issues with respect to pork, beef grading and alcohol labelling. However, as is true for all of us, we feel there are some specific areas where Chile could take action to improve its trade and investment regime. We have referenced many of these in our questions, but would like to briefly touch on some of those areas.

4.73. While the United States appreciates our extensive engagement with Chile on its draft nutrition labelling regulation and strongly supports Chile's public health objectives, we remain concerned about elements of the draft regulation that could confuse consumers as well as negatively impact U.S. exports.

4.74. The United States urges Chile to take steps to address long-standing intellectual property issues. For example, we urge Chile to implement protections against the unlawful circumvention of technological protection measures and protections for encrypted program-carrying satellite signals, as well as improve protection for plant varieties. We also urge Chile to implement an effective system for addressing patent issues expeditiously in connection with applications to market pharmaceutical products and to provide adequate protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products. We welcome further engagement with Chile on these and other important IPR issues.

4.75. Chile continues to make significant contributions to the Asia-Pacific Economic Cooperation (APEC) forum, working to promote trade and investment liberalization in the Asia-Pacific region. Showing leadership in the region, at the Summit of the Americas, Chile joined others in publically affirming that it intends to notify the WTO of its acceptance of the TFA in advance of the 10th WTO Ministerial Conference in Nairobi, Kenya in December 2015.

4.76. We are now working with Chile in the most ambitious effort yet to promote regional trade and investment liberalization, the Trans-Pacific Partnership (TPP). In TPP, we are seeking to liberalize trade and investment on a comprehensive basis, and are tackling a broad range of issues with relevance to the way trade happens in the 21st century. These are ambitious objectives, but the 12 TPP partners are committed to them, in part because we know an ambitious agreement is one that will generate the greatest benefits to its members, and for our citizens. We are committed to a TPP that is fully consistent with our WTO obligations and contributes to a stronger multilateral system. We would also like to note the important early and ongoing role of Chile in the TiSA negotiations.

4.77. United States appreciates this opportunity to comment on Chile's trade policy. We would like once again to express our appreciation to the Director General and his team for all of the information they are providing, and we look forward to receiving the answers to our questions. In addition, we welcome further cooperation on trade matters with our Chilean colleagues - here at the WTO and in the broader context of our positive and growing bilateral relationship.

CANADA

4.78. My remarks will focus on three themes: (1) Chile's strong commitment to upholding the principles of open markets; (2) opportunities to support investment in the natural resources sector; and (3) progress made in the bilateral and multilateral trade framework.

4.79. Firstly, faced with the recent steep decline in world prices for commodities, the Government of Chile has supported continued economic growth through solid fiscal policies and a strong institutional framework, an outward-looking trade regime and a robust financial system. Chile enjoys South America's highest sovereign bond rating due to its market-oriented economy characterized by a high level of foreign trade and sound fiscal policies. These economic policies have supported job growth and poverty reduction. While the current global economic context continues to hold challenges, Chile's sound macroeconomic management, aided by the lower cost of oil, is contributing to Chile's prospects for renewed growth.

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4.80. Secondly, in a context of slowing investment worldwide in the mining sector, to which Chile is particularly vulnerable, there are opportunities for Chilean authorities to support continued investment in major projects through better coordination of the project approval process. Investors have noted that the process of obtaining permits often involves duplication and lengthy delays. The authorities are aware of these issues, which affect both domestic and foreign investors, and have initiated a review of the environmental review process. This presents a good opportunity and good timing for taking steps to ensure a system that is both strengthens environmental protection while providing greater transparency and predictability.

4.81. Thirdly, Canada notes with satisfaction that since the last review in 2009, Chile, now the first South American OECD member, continues to be a leader in advancing its economic interests through the pursuit of bilateral and regional trade agreements. This includes Chile's active and constructive contributions within the Trans Pacific Partnership negotiations and its leadership in the development and achievements of the Pacific Alliance. Since its creation and with strong Chilean leadership, the Pacific Alliance has advanced quickly in its liberalization and harmonization agenda, notably by establishing its institutional foundations in the Pacific Alliance Framework signed in Chile, setting the stage for the Pacific Alliance's comprehensive and ambitious trade agreement contained in the Additional Protocol. Canada is pleased to be an active observer in the Pacific Alliance.

4.82. In the context of the ongoing Trans-Pacific Partnership negotiations, Canada and Chile are like-minded partners and are working to conclude an ambitious agreement which will establish new rules for trade and investment in the Asia-Pacific region.

4.83. Canada also recognizes and appreciates Chile's concrete efforts to advance in its commitment to a strong rules-based multilateral trading system that supports maximum transparency. Chile is an active and constructive participant in the Council for Trade in Services and its subsidiary bodies and in the Trade in Services Agreement negotiations.

4.84. Since the entry into force of the Canada-Chile Free Trade Agreement (CCFTA) eighteen years ago, our two countries have worked toward the expansion and modernization of the agreement to ensure continued competitiveness in each other's markets. In 2013, an agreement to amend the CCFTA came into force to include a financial services chapter and update the chapters on government procurement, dispute settlement and custom procedures. On the margins of the APEC Ministerial Meeting in November 2014, we announced conclusion of a new Technical Barriers to Trade chapter, and at the Summit of the Americas in April 2015, we announced conclusion of the Sanitary and Phytosanitary Measures chapter and technical amendments to the Government Procurement chapter. There is also concrete progress towards expeditious implementation of amendments to our Rules of Origin (ROO) chapter and its associated Annexes. In a further development in Chile and Canada's economic cooperation, I note the recent partnership between the Toronto and Santiago Stock Exchanges that gave rise to the creation of the Santiago Stock Exchange Venture. This initiative permits companies to have joint listings on both exchanges and will further stimulate two-way investment between our economies.

4.85. In closing, Canada would like to welcome the positive advances Chile has made since the last Trade Policy Review and encourages Chile to continue its efforts in favour of trade liberalization and the maintenance of solid frameworks for investment and economic growth.

4.86. Canada is proud to be associated as a true partner with Chile's progress both economically and in its trade policy. We are confident that our exchanges will be positive and fruitful. We will therefore examine with interest the answers provided by the Government of Chile to the questions that we have raised for this work session.

SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU

4.87. Chile’s economy is recognized as being a liberal and open, characterized by its particularly high level of foreign trade. The adoption of an outward oriented growth strategy since the mid-1970s is probably the main factor in guaranteeing Chile's continuing economic success. Overall, the macroeconomic indicators show a moderately good performance since the previous Review, with the Chilean Government managing to minimize the impact of the global economic crisis by its prompt reaction and the effective coordination of the fiscal and monetary authorities.

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4.88. There are still some formidable challenges ahead, however, in the areas of income distribution, human capital, the diversification of exports, and the current lack of innovation. But, we are pleased to note that the Chilean Government has introduced a number of necessary reforms and measures aimed at achieving more sustainable and inclusive development.

4.89. Both the Secretariat and the Government reports highlight the fact that Chile is a strong advocate of FTAs. Indeed, Chile is among the countries with the highest number of agreements and trading partners. This profusion of FTAs may well have had the effect of reducing some potential barriers to Chile's exports. At the same time, however, it may be adding inconvenience and complexity to its trading regime as well.

4.90. Having said this, Chile has always been actively engaged and played a significant role in the multilateral trading system. We also look forward to Chile’s early ratification of the Trade Facilitation Agreement (TFA).

4.91. In our written questions submitted in advance we are seeking further clarification of certain aspects of Chile’s policy direction and approach. Our thanks to Chile for its responses, which we shall examine carefully.

4.92. I will just mention a few issues in which we have a particular interest or concern.

4.93. First, regarding its investment regime. Generally speaking, Chile grants national treatment to foreign investors and allows them to own up to 100% of a firm’s equity in most sectors. However, some Chilean authorities impose stricter requirements for foreign investment projects in some specific sectors. Here, we would be pleased to hear from Chile about possible improvements in this regard and how better quality incentives might be offered while Chile is drafting its new legal framework for foreign investment.

4.94. Secondly, with regard to financial services. As noted in the Secretariat's report, the legislation allows both Chilean nationals and residents of Chile to make deposits in, and to obtain loans from banks located abroad. Nonetheless, the cross-border supply of banking services is not permitted. With the widening use of e-commerce and the increasing diversity of financial services, we would encourage Chile to further liberalize cross-border operations for banking services.

4.95. And thirdly, concerning the Agreement on Government Procurement (GPA). We applaud Chile for its transparent and efficient government procurement system. Given the expanded market access coverage in the Revised GPA and the growing membership to the Agreement, we would encourage Chile to make a further commitment to its becoming a Party to the GPA. This would generate new opportunities for the Chilean business community.

4.96. Finally, on the bilateral front, Chile is our second largest trading partner in South America. Total two-way trade was more than US$2 billion in 2014, an increase of 25% in 2009. Our bilateral relationship is mutually beneficial and far more complementary than competitive. We have close cooperation within APEC and as well as in the TiSA, therefore, all-in-all, we have every reason to believe that the ties between us will become even stronger in the future.

MEXICO

4.97. Chile is an important and strategic trading partner to Mexico in Latin America. Our long standing trade relations were further strengthened with the entry into force of our free trade agreement in 1999. They have undoubtedly been intensified with the launch of the Pacific Alliance, an extensive regional integration initiative through which it is hoped to progress gradually towards the free movement of goods, services, capital and people, and in which Colombia and Peru are also participants.

4.98. The importance of trade relations between Mexico and Chile can be seen from the fact that our country is Chile's third largest supplier and its fourth goods export market in Latin America.

4.99. Chile is a very active Member of this Organization with an excellent representation headed by Ambassador Hector Casanueva. We have worked together on various fronts to further

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- 23 - strengthen the multilateral trading system and specifically in pursuit of a successful conclusion to the Doha Round.

4.100. We are also joint participants in negotiations on other regional agreements such as the Trans Pacific Partnership Agreement (TPP) and the Trade in Services Agreement (TISA), and are very active members of APEC and the OECD.

4.101. The Chilean economy was quickly able to overcome the effects of the financial crisis, achieving average annual growth of 3.6% between 2009 and 2014. One factor contributing to this recovery was undoubtedly the proper management of its counter cyclical monetary and fiscal policies, important elements of which were its Social and Economic Stabilisation Fund and the robustness of its financial system.

4.102. Chile's efforts to reduce poverty and promote human development continue to be noteworthy. According to the UNDP, Chile is still the country with the highest Human Development Index in Latin America. Nevertheless, as is the case in many countries in Latin America, unequal income distribution still poses a major challenge.

4.103. In its report of April 2015, the World Bank stated that Chile is still facing major challenges in promoting inclusive growth. It pointed to the need for structural changes to stimulate productivity and improve access to and the quality of social services as well as reduce the energy shortfall and dependence on copper exports. Copper accounts for one half of Chile's exports, which leaves the Chilean economy highly vulnerable to international copper price fluctuations.

4.104. We therefore commend the Chilean Government on its launch of an ambitious programme of reforms, including fiscal reform meant to create a progressive tax structure and increase government revenue for funding social projects; educational reform, which will promote equitable access to educational services; energy reform to promote the use of clean technologies, and lastly, reform designed to boost economic productivity, which has been rising only modestly in recent years. We wish Chile every success in these endeavours.

4.105. Of particular note in the realm of trade is the implementation of trade facilitation measures including the standardization of customs procedures at some destinations and the creation of Tax and Customs Courts; measures designed to enhance the independence of its specialized bodies, although in this case further action is required to strengthen the process of notification of mergers and acquisitions; and regulatory reforms designed to reinforce the framework governing intellectual property.

4.106. As pertains to tariff policy, Chile has a low average applied MFN tariff (6% in 2014) and a flat tariff structure. Despite this, it still applies a price band system to wheat, wheat flour and sugar, which detracts from the certainty and transparency of its tariff policy.

4.107. The services sector is the biggest contributor to GDP with close to 65% in 2014. Chile has a solid financial sector with a high degree of financial intermediation and international integration, and a supervisory framework guided by the recommendations of international bodies. The IMF has nonetheless recommended strengthened vigilance in areas such as mortgage lending and the high degree of dependence on institutional deposits.

4.108. Of particular note in the telecommunications sector is the introduction of number portability and the elimination of long distance zones. Nevertheless, the sector remains highly concentrated despite the presence of several service providers.

4.109. Lastly, we thank the Government of Chile for its replies to my delegation's questions, which we will analyse in detail. We wish Chile every success in this review.

REPUBLIC OF KOREA

4.110. The bilateral economic relations between Chile and Korea have developed and matured over the years in line with Korea and Chile's respective commitment to both economic reform and the liberalization of their economies. Importantly, we believe that the Korea-Chile FTA has continued to play an important role in boosting bilateral trade. Today, bilateral trade volume

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- 24 - between the two countries has expanded more than 250% compared to ten years ago when the FTA entered into force. In 2014, the trade volume reached US$7 billion up from US$2.6 billion in 2004. Indeed, it is our hope that our close economic partnership with Chile will continue to grow and develop in the future.

4.111. Since the early 1980s, Chile has been at the forefront of introducing bold new economic reform measures providing text-book examples of success for others to emulate. The two circulated reports show that this track record of success has continued during the review period, and we would like to congratulate Chile for its overall economic performance. Although Chile did not escape the effects of the global economic crisis and its GDP shrank in 2009, Chile achieved a solid record of an annual average growth rate of 3.6% between 2009 and 2014.

4.112. Reflecting its economic growth, per capita GDP rose to roughly US$14,500 in 2014, well above US$10,180 in 2009. The unemployment rate fell from 9.6% in 2009 to 6.4% in 2014 and nominal wages rose by 33.8% during the same period. Chile also continued to receive large FDI inflows, reaching US$100.8 billion, nearly six times the amount of that during the previous review period.

4.113. It is clear that Chile has done many things right, and its success showcases what developing countries can achieve under stable leadership, with a clear blue-print for economic development which incorporates effective structural reform measures, and a clear strategy for liberalizing its trading and investment regimes.

4.114. Despite this success, Korea would like to provide a few brief comments on Chile's trade policies and practices where we find there is room for improvement.

4.115. First, we note that the level of restriction and the complexity of rules of origin vary according to the bilateral agreements Chile has signed and proof of origin is always required. There are some exceptions which allow the possibility of certifying origin by means of a commercial document such as an invoice. As pointed out in the Secretariat report, these differences may make it difficult to apply the agreements and can serve as a barrier to trade. We would like to encourage the Chilean Government to simplify or harmonize the procedures for certifying the origin of goods in such a way that will promote trade.

4.116. We also note that Chile is not a signatory to the GPA as it is, for the moment, an observer in the WTO committee on Government Procurement. Given Chile's commitment to reform its procurement regime making it more transparent and efficient, we would like to see Chile take a step further and join the GPA.

4.117. Finally, we are confident that Chile, as a key player in the WTO, will continue to play an important role in helping not only strengthen the WTO multilateral trading system as a whole, but also advance the DDA negotiations.

NEW ZEALAND

4.118. New Zealand and Chile share similar experiences of the benefits of economic and trade liberalization. Chile's continued commitment to adopting and maintaining open trade and investment policies in the period under review is to be commended. We have noted that during the period under review Chile has experienced a deepening economic slowdown largely due to deteriorating external conditions, in particular falling commodity prices for copper. The report notes that this has had flow-on effects domestically, such as a stagnation of production. Today's discussion has been useful to better understand how Chile intends to support the diversification of its exports away from copper and other commodities.

4.119. We cooperate closely with Chile in the WTO. In the agricultural area we share a common desire for the elimination of export subsidies, a substantial reduction in trade-distorting domestic support measures and the dismantling of tariffs and other barriers to market access. New Zealand and Chile work closely as part of the Friends of Fish group, with the common goal of an ambitious outcome in the fisheries subsidies negotiations, through removal of subsidies that contribute to over-fishing and over-capacity. We are both committed to a successful and ambitious conclusion to

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- 25 - the Doha Round as an important means of stimulating trade flows and demonstrating international commitment to open markets.

4.120. New Zealand and Chile have worked together in the context of the Trans-Pacific Strategic Economic Partnership Agreement (P4) since 2006, and in other fora such as APEC. In the period under review, Chile has participated in negotiations towards the Trans-Pacific Partnership Agreement, with New Zealand and ten other WTO members. All TPP participants share a commitment to concluding a high quality, comprehensive, 21st century TPP that delivers on the instructions from Leaders' in 2013.

4.121. Chile has also further consolidated striking progress made towards regional economic integration through the Pacific Alliance, alongside Colombia, Mexico and Peru. New Zealand is impressed by the unprecedented degree of integration Chile and other Pacific Alliance members have achieved in such a short space of time. As an active and committed Observer of the Pacific Alliance since its inception, New Zealand is enthusiastic about the possibilities for a closer partnership with Pacific Alliance and the opportunities afforded by this initiative.

4.122. New Zealand also welcomes Chile's active engagement in the OECD and the Chilean Government's efforts to promote key reforms for inclusive growth. And we look forward to Chile chairing the 2016 OECD Ministerial Meeting.

4.123. New Zealand thanks Chile for its written responses to its questions, and we are considering carefully the information that has been provided regarding aspects of Chile's government procurement and fishing policy settings.

4.124. New Zealand appreciates Chile's continued commitment to the multilateral trading system and we welcome the positive steps that Chile has taken in the six years since the last TPR. We look forward to the further discussion this week, including on the issues raised in our questions.

EUROPEAN UNION

4.125. Let me start by congratulating Chile for having maintained a strong GDP growth during the review period despite the 2008 financial crisis. GDP grew at an average annual rate of 3.6% between 2009 and 2014. As highlighted in both reports, over the past 30 years, Chile's trade policy has been geared towards trade liberalization, facilitating and broadening entry and access for goods and services to all markets, as well as stimulating domestic and foreign investment. Over the review period, Chile continued and intensified its trade openness strategy by pursuing its participation within the multilateral trading system and by concluding bilateral trade agreements. The EU welcomes Chile's long-standing trade openness and trusts Chile will continue exerting its positive influence in this Organisation. In particular, the EU welcomes the positive role played by Chile in the process of adopting the Trade Facilitation Agreement, appreciates the positive role of Ambassador Casanueva and his team and looks forward to an equally intensive and positive engagement on the rest of the DDA.

4.126. The EU also notes with satisfaction the evolution of Chile in view of ensuring a broad and open consultation of stakeholders before any major legislative initiatives. This was the case for instance for the recently adopted tax reform. Such a consultation process ensures that all the aspects of the legislation are taken into account and facilitates dealing with any possible conflict before the adoption of legislation.

4.127. A word on our bilateral relationship with Chile. The EU-Chile Free Trade Agreement, which entered into force in 2003, has spurred a major and sustained increase in the bilateral trade flows throughout the past decade. The EU is Chile's second trade partner, accounting for 15% of Chile's total bilateral exchanges. In 2014, total trade in goods between the EU and Chile has reached €16.1 billion. The EU is the main source of foreign direct investment in Chile and Chile is EU's fourth FDI recipient in Latin America. In 2013, EU's foreign direct investment flows to Chile have reached € 4.7 billion while Chile's direct investment flows to the EU amounted to € 887 million.

4.128. Even though Chile's record is quite impressive, there are some areas where the EU considers there would be room for further improvements. This leads me to some issues raised by the EU in the questions submitted ahead of this TPR.

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4.129. First of all, in order for Chile to really draw benefits from its trade openness, the EU would like to stress the importance to ensure that the international commitments in the trade and investment field are effectively implemented by all relevant public bodies. In this context, the EU sees possibilities to promote a more favourable trading environment in Chile with respect to conformity assessment procedures; customs control procedures and technical regulations – to name a few.

4.130. Second, the EU would like to draw Chile's attention to the length and complexity of its government procurement procedures. Opening up further the access to markets by simplifying the administrative burden would definitely be a big step ahead to remove unnecessary obstacles.

4.131. Also, we would encourage Chile to consider joining the Environmental Goods Agreement process.

4.132. With respect to IPR, the EU would appreciate if Chile could ensure that its legislation on copyright provides effective protection against digital piracy, in particular against illegal posting and against use of copyright-protected material online. Moreover, rules on liability of internet service providers should be applied more strictly. The EU considers that effective measures are essential to control that content provided online is legally licensed from the right-holders/the collective management bodies.

4.133. Finally, the EU would like to emphasize how important it is to ensure adequate data protection for both pharmaceuticals and agro-chemicals and encourages Chile to adapt its rules and/or administrative practices accordingly.

4.134. Mr. Chairman, I thank you and the delegation of Chile for your kind attention. The EU looks forward to Chile's responses to the questions that have been put forward today and that have been submitted previously in writing. The EU wishes Chile a productive Trade Policy Review.

JAPAN

4.135. Chile has so far successfully maintained steady long term growth. Depending on the statistics used, the country's per capita GDP increased six or eightfold over the past two decades.

4.136. Poverty reduction has also been impressive, as shown by World Bank statistics. The percentage of the Chilean population living in poverty fell from 4.9% in 1990 to 0.8% in 2011.

4.137. Chile joined the OECD in 2010 as the first South American member, and has undertaken a range of domestic reforms.

4.138. Japan highly appreciates the efforts of the Government and people of Chile and recognizes that country's major social and economic accomplishments.

4.139. The Secretariat's report nonetheless mentions that productivity growth has been modest, with very little being invested in research and development. There is also another somewhat disquieting element, that of income inequality. This can be seen from a Gini coefficient of 0.508 in 2011.

4.140. It is my understanding that Chile is deploying a range of actions to meet these challenges, including changes to the regulatory framework for investment and reforms to the educational system. We encourage the Chilean Government in these efforts.

4.141. I should now like to turn to trade policies.

4.142. Chile's trade policies have been strategically focused on globalizing its economy and promoting its trade. Conditions conducive to free trade and the dismantling of trade barriers are vitally important. The basing of Chile's trade policies on these considerations has doubtless been one of the most important factors in the present prosperity of the economy.

4.143. One of the features of the Chilean economy is the importance of the mining industry, and of copper in particular. Japan is the third largest importer of Chilean products and mineral imports

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- 27 - make up 55% of the overall value of our imports from Chile. Japan appreciates and relies on the stable supply of minerals and other products of such importance to our economy.

4.144. At the same time, however, bearing in mind the considerable mineral price fluctuations, Chile has understood that excessive dependence on some specific products represents a risk to the economy and is therefore continuing its efforts to diversify its industries and trade. One successful example has been that of salmon. Japan helped develop this industry by providing technical assistance for fish farming in Chile, and will continue to support these efforts.

4.145. Chile has played an active and constructive role at the WTO both in the activities of the ordinary bodies and in the Doha Round negotiations. Chile has contributed much to this house, in particular, distinguished ambassadors who have played and continue to play important roles here in Geneva.

4.146. In that regard, we have just heard an affirmation of strong commitment to the multilateral trading system by Mr Rebolledo, Director General of International Economic Relations. Despite the somewhat depressing atmosphere in this house, his words are encouraging. Japan stands ready to work with Chile and with other Members to buttress the multilateral system.

4.147. As pertains to the Trade Facilitation Agreement, Chile contributed to the negotiation process as an active proponent and one of the Friends of the Chair. Japan appreciates these contributions and hopes that Chile will be able to finalize its internal procedures for accepting the Protocol in a timely manner.

4.148. There is another topic that should not be forgotten. In 2013, Chile introduced its duty free quota free scheme for least developed countries. This is an admirable example that other developing countries would do well to emulate, especially emerging economies. We hope that more Members will follow that lead.

4.149. In regional trade liberalization, Chile is a true pioneer, with the greatest number of trade agreements and partners, including Japan.

4.150. Chile has been vigorously promoting economic integration in the Pacific region from the start, and sees itself as a Pacific nation. Chile has been an active APEC member since 1994 and has been promoting the TPP negotiations as an original P4 member. Japan wishes to continue cooperating with Chile to conclude this historic agreement, thereby promoting the liberalization of world trade.

4.151. Before concluding, I should like to touch on a specific matter regarding intellectual property. We commend Chile's efforts to ratify the 1991 UPOV Convention, as proper protection of new plant species is of the highest importance. We hope that Chile will continue its efforts to ratify the treaty as soon as possible.

NORWAY

4.152. Chile has experienced high and stable growth rates over the last years and has doubled its GDP per capita between 1990 and 2014. While Chile has experienced diminishing growth rates since 2013, fiscal recovery is projected for this year, and Chile will hopefully see continued growth in the years to come.

4.153. Chile has taken great strides in terms of poverty reduction but is still facing challenges with social and economic inequality. The Trade policy review report by Chile recognizes this issue. We welcome the extensive reform agenda, which the current Government has undertaken, and hope that it will have a positive effect on inequality. The reform agenda includes tax reform, labour reform and educational reform. The Government is making important efforts in order to achieve a more inclusive society, socially and economically, so that more Chileans can contribute to value creation.

4.154. We would also like to commend Chile for the ability to attract foreign investments, due to stable financial framework conditions.

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4.155. One of the challenges Chile faces is the lack of growth in productivity. The country would therefore benefit from further investment in human capital and increased female labour participation. We agree with the statement in the TPR report by Chile that "the integration of Chilean women into the workplace is a matter of particular concern". The educational reform will be an important step in order to improve the quality of and access to education, which in turn can contribute to productivity growth.

4.156. Chile would also benefit from intensifying their efforts to diversify its production in order to avoid being overly dependent on the mining industry.

4.157. Chile has a very open economy and is fully committed to the multilateral trade system. In addition, Chile has negotiated a number of bilateral and plurilateral free trade agreements. According to the Trade policy review report by Chile, the country has entered into 24 agreements with 63 partners.

4.158. Chilean companies are increasingly active regionally and the country's membership in the Pacific Alliance has brought the country closer to the growing economies of its own region.

4.159. Norway follows with interest Chile's increased focus on its own region in terms of trade through the Pacific Alliance and cooperation with other trade forums in Latin America such as Mercosur in order to strengthen the region's competitive position and establish regional value chains. Hopefully this will contribute to further diversify the national production matrix.

4.160. The trade relationship between Norway and Chile is good. Last year marked the 10-year anniversary for the free trade agreement between EFTA and Chile. An increasing number of Norwegian companies and investors are present in Chile within various sectors such as seafood, shipping, energy, banking, technology and engineering services.

4.161. Norway enjoys close cooperation with Chile in a number of areas in the WTO, both in the DDA-negotiations and in the regular activities of the Organization. In particular, Chile is an active and constructive partner in both the "Friends of Anti-dumping Negotiations" and the "Friends of Fish" groups. Chile is also a Friend of the System and as such, contributes in a constructive manner to the work in the WTO and to enhancing the multilateral trading system. In this context, we commend Chile for their early notification of category A commitments under the Trade Facilitation Agreement. We also commend Chile for having introduced a DFQF scheme for the least developed countries.

4.162. Chile is also actively involved in the TiSA negotiations and an observer to the agreement on Government Procurement. Like others, we would encourage Chile to engage in a process of accession to this agreement.

4.163. In closing, we would like to thank Chile for the replies to our advance written questions, which we will study with interest. We would also like to extend our gratitude to our colleagues at the Chilean Permanent Mission in Geneva for excellent cooperation and congratulate them on this Trade Policy Review.

GUATEMALA

4.164. Relations between Chile and Guatemala are based on close ties of friendship and cooperation. Proof of this was the recent visit by President Michelle Bachelet during which she met with President Pérez Molina in order to strengthen cooperation and political dialogue and address other topics on the bilateral agenda relating to trade, the economy and security. One outcome of that visit was the signing by the authorities of both countries of a Memorandum of Understanding on Tourism Cooperation between the Guatemalan Tourism Institute (INGUAT) and Chile's National Tourism Service – an initiative aimed at establishing better mechanisms for developing the sector in both countries. Our authorities also discussed ways of generating and pursuing better cooperation alternatives in the fields of mining, energy and forestry, in addition to the training and scholarship schemes in the framework of the Diplomatic Academy and the Foreign Ministries, as well as scholarships and bilateral cooperation under the Chile Guatemala Cooperation Plan.

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4.165. Trade relations between Guatemala and Chile are based on the Free Trade Agreement (FTA) between Chile and Central America and the Bilateral Protocol between Chile and Guatemala to that FTA, an instrument that took effect in March 2010. In December 2014, the third meeting of the Commission on Free Trade was held between Chile and Guatemala. Our authorities took the opportunity to underline the importance of seizing the opportunities generated by the agreement and seeking ways of diversifying exportable supply and promoting investments.

4.166. Our balance of payments surpassed US$238 million in 2013, recording an annual increase of over 12% on the preceding year. Guatemala's main exports to Chile are sugar, natural rubber, paints and varnishes. Its main imports from Chile are wood products, cereal based preparations and paper and paperboard products.

4.167. As regards the present trade policy review, we underscore the capacity of the Chilean economy to weather the global crisis that arose at the end of the past decade, thanks to prudent economic policy management that translated into a fiscal surplus and a low level of borrowing. It is our understanding that the policy of structural balance with certain flexibilities and the public savings mechanism are two very important pillars that are helping to stabilize expenditure over the long term. Similarly, Chile has consistently followed a policy of trade opening by negotiating and implementing a large number of trade agreements with trading partners around the world. We see one future challenge facing the Chilean economy as that of continuing the process of diversifying exports away from the traditional mining and agricultural products.

4.168. We recognize Chile's efforts during the period of this review. We are grateful for the kind replies to the questions asked and we wish the Chilean delegation here today a successful conclusion of this exercise.

DOMINICAN REPUBLIC

4.169. In this fifth Trade Policy Review, we would like to congratulate the Government of the Chile since, as indicated in the Secretariat's report, while the Chilean economy did not escape the effects of the global economic crisis, it was quickly able to recover, thanks to higher mineral prices, to its sound financial system, and to its prudent management of economic policy which resulted in a fiscal surplus and a low level of borrowing. The average annual GDP growth rate was 3.6% in real terms between 2009 and 2014. Also worth mentioning in a very positive light are the trade liberalization policies accompanied by changes to the regulatory framework for investment and the adoption of a more far reaching competition law, as well as the educational reforms, all designed to help boost productivity.

4.170. Hence the enactment in 2014 of the Tax Reform Law, designed to enhance tax efficiency and equity and increase tax revenue by 3 percentage points of GDP. This should help to finance the educational reform and other social protection policies, and to restore the central government's structural balance.

4.171. We see that the mining sector accounts for more than 11% of Chile's GDP and is the country's principal export sector and the main destination for foreign investment inflows. The period 2009 2014 saw a faster increase in merchandise imports (69%) than exports (38.2%). Mining products accounted for a 56.8% share of total exports during the period 2009 2014, which indicates that Chilean exports continue to depend heavily on mining, in particular copper, which in 2014 accounted for 50.1% of its exports. This would make it advisable for Chile to attempt to diversify its exportable supply.

4.172. We commend Chile on its continued receipt of large foreign direct investment (FDI) inflows during the review period, amounting to US$100,856 million between 2009 and 2013, or nearly six times the amounts received in 2003 2008. We are also gratified to see that over the review period, Chile continued and intensified its open trade strategy based on the conclusion of trade agreements. Chile is now one of the countries with the most agreements and trading partners.

4.173. We also welcome Chile's continued implementation of trade facilitation measures during the review period. For example, it standardized customs procedures for some customs destinations and expects to have a single window for definitive imports up and running in 2017.

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4.174. We commend Chile on its introduction of a number of legal amendments during the review period to further limit the use of anti-dumping and countervailing measures by shortening the maximum period for an investigation. This is in addition to another important aspect of Chile's anti-dumping and countervailing measures regime, namely, that measures may only last for one year and may not be renewed.

4.175. We note with interest that Chile has two duty drawback systems for exporters: one general and one simplified. Under the simplified system, used above all by small exporters, non-traditional exports are eligible for a reimbursement of 3% of the f.o.b. value of the goods exported. Chile also has a temporary admission for inward processing regime (DATPA), which allows companies producing goods for export to import raw materials, semi processed goods and components and spare parts from abroad without paying import duties or VAT. The Chilean Economic Development Agency (CORFO) operates a bank loan guarantee scheme for exporters (COBEX) against the risk of non-payment. We would be grateful for details on these programmes, for example as to whether they have been notified to the WTO under the Agreement on Subsidies, and their WTO compatibility.

4.176. The Dominican Republic submitted some questions to Chile regarding investment agreements, rules of origin and sanitary and phytosanitary measures among other things, and we thank them for the replies, which we will study carefully. To conclude, it only remains for us to urge Chile to continue on the path of progress.

TRINIDAD AND TOBAGO

4.177. In its report, the Government of Chile highlighted its recognition of international trade as a key enabler to inclusive growth and sustainable development.

4.178. It is perhaps in this spirit that during the period under review, Chile continued to steer its trade policy towards greater openness by strengthening its wide-ranging network of trade agreements. In its report, the WTO Secretariat noted "Chile is one of the countries with the most agreements and trading partners". While according to the IMF, Chile "has a highly open economy with the highest trade openness indicators in the Latin America Region".

4.179. Having noted this, Trinidad and Tobago is heartened by the fact that Chile's drive to negotiate preferential agreements to boost its external trade and foreign investment flows has not undermined the importance it attaches to participation in the WTO as part of its trade policy strategy. With this in mind, my delegation takes this opportunity to acknowledge Chile's active and constructive engagement in the work of the various WTO negotiating bodies within the context of the Doha Development Agenda (DDA) negotiations.

4.180. Chile's approach with respect to transparency and avoiding trade protectionism is for the most part, positive, though my delegation noted concerns with respect to some of its labelling requirements and SPS measures. In addition, my delegation posed questions relating to its customs procedures, customs valuation and the legal framework associated with its foreign investment regime.

4.181. My delegation was pleased to note Chile's range of reforms in relation to its intellectual property regime, as well as measures to promote and facilitate trade and business development. These efforts will no doubt play a critical role in attracting and retaining investment and achieving its economic goals.

4.182. We have taken note of Chile's acknowledgement of its low rate of productivity and other challenges. As our discussant noted in her remarks this morning, the acknowledgement of its weaknesses and its efforts to address them, indeed send a positive signal to investors and the business community. Chile must be commended for its bold and ambitious policy reforms in favour of fostering strong and sustained growth and reducing inequality, while preserving its record of prudent macro-economic policy. Key reforms include: energy, education, labour and tax reforms.

4.183. My delegation also took positive note of initiatives introduced by the Government of Chile in January this year (2015) to promote entrepreneurship and innovation, as part of its efforts to transform Chile into a regional innovation hub.

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4.184. I now turn to our bilateral relations. In September 2014, Trinidad and Tobago and Chile celebrated fifty (50) years of diplomatic relations. Since the establishment of relations in 1964, Trinidad and Tobago and Chile have enjoyed a cordial and fruitful bilateral relationship. Over the years, this relationship has been enhanced by a series of State and official visits. Chile has also been actively deepening its ties with the countries of CARICOM over the last few years.

4.185. In terms of our trade relations, during the period under review, Trinidad and Tobago maintained a favourable balance of trade with Chile, our main export being liquefied natural gas. The value of Trinidad and Tobago's exports to Chile can be attributed to the implementation of the Memorandum of Understanding concerning cooperation in the Development of Energy Sector Interests, which was signed in 2010. Trinidad and Tobago would like to deepen the bilateral economic exchanges between our two countries. In light of this, our two Governments are exploring the possibility of a Partial Scope Trade Agreement.

4.186. In the spirit of fostering greater South-South cooperation, Trinidad and Tobago has responded favourably to proposals from the Government of Chile to develop an intra-regional plan for cooperation. To this end, in January 2014, Trinidad and Tobago received a delegation from the Chilean International Cooperation Agency (AGCI), to explore the possibility of the Agency's assistance in the establishment of a single technical cooperation agency in Trinidad and Tobago. In May this year (2015), representatives of the Ministry of Planning and Sustainable Development of Trinidad and Tobago participated in an internship programme organized by the AGCI. With respect to trade and investment related South-South cooperation initiatives, preliminary discussions have identified energy, the creative economy and agriculture, including fishing, as sectors of interest for collaboration.

4.187. In conclusion, my delegation once again wishes to acknowledge the Chilean delegation's positive engagement in the work of the WTO under the able stewardship of Ambassador Casanueva.

ECUADOR

4.188. Ecuador is participating in this trade policy review with great interest as the Chilean economy is recognized as one of the most solid and dynamic on the American continent, and despite various periods of crisis throughout its history, it has recorded significant and sustained economic growth in recent years.

4.189. Ecuador welcomes the measures taken by Chile to deal with the international economic crisis. We are sure that these measures, for example that of structural balance with certain flexibilities, and expansionary measures in times of lesser economic growth, will attain the goal of ensuring medium term fiscal stability.

4.190. Similarly, we welcome the trade opening policies, the reforms to the regulatory framework for investment and the adoption of the competition law, which have helped enhance its economic development and trade.

4.191. Turning to taxation, we note the changes being phased in by the Chilean Government since 2014 through the tax reform law, and which will lead to a lowering of various tax rates and increases in others, with a view to establishing tax equity and increasing tax revenue.

4.192. The Secretariat's report refers to Chile's public savings mechanism, the Economic and Social Stabilization Fund, which fulfils an important role in funding fiscal deficits, paying down the public debt and stabilizing expenditure.

4.193. From a trade standpoint, Chile is known as an exporting country, mainly of mining and agricultural products. According to the information provided, copper accounts for some 50.1% of total exports, with the Chilean State being the main protagonist through the state owned companies the National Copper Corporation (CODELCO) and the National Mining Enterprise (ENAMI).

4.194. Worthy of note are the trade facilitation measures being applied through the standardization of customs procedures and the implementation of a single window for imports.

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4.195. The report by the Secretariat also refers to modest productivity growth owing to low corporate investment in research and development, and the lack of qualified human resources. We hope that investment policies and changes to the regulatory framework for investment, to cite one example, will be instrumental in boosting productivity.

4.196. Furthermore, throughout their commercial history, Ecuador and Chile have developed a highly efficient economic relationship, which has been reinforced with the signing of Association Agreement No. 65 in the LAIA framework.

4.197. In that context, Ecuador trusts that it will soon receive replies to questions regarding the phytosanitary situation and additional information requested on specific products.

4.198. To conclude, we would like to thank the delegation of Chile in advance for its responses to the questions we have submitted through the Secretariat on various aspects of Chile's trade policy. These responses will provide significant input for strengthening our bilateral trade.

THAILAND

4.199. It is a great pleasure for Thailand to participate in the fifth Trade Policy Review of Chile because our two countries have had a long-standing relation. Chile is ranked as our 42nd export destination and 50th import source. In 2014, our bilateral trade value stood at US$961.1 million, compared to the statistics of a year before, shows an increase of 8.46%.

4.200. As Thailand considers itself as a hub of Southeast Asia, Chile is without doubt our most important gateway to Latin America. The most recent evidence is the visit of our Deputy Commerce Minister to Chile from 8-9 June 2015, or just two weeks ago. It should also be noted that an FTA between our two countries was signed in 2013. In this regard, we fervently hope that, the Agreement would enter into force, after the approval of the Chilean Parliament, prior to the APEC Meeting in November this year.

4.201. As for the multilateral trading system, Thailand is grateful for Chile's contributions to the system, not only in terms of the substantial efforts that Chile has put into the negotiation in various forums, but also its continued endeavour to liberalize and facilitate trade. This is indeed valuable to all WTO Members. Thailand has no doubt that Chile will play a key role in providing the positivity and flexibility needed to move the WTO negotiations forward. In this connection, we do look forward to intensive and constructive negotiating work in the WTO to achieve a meaningful work program by July and the successful tenth Ministerial Conference this year.

4.202. In this review, Thailand would like to submit some questions to Chile, covering the policies and measures of our interests regarding among other things, Chile's investment policies, the price band system, and the amendment of Chilean Industrial Property law. We will be grateful for the responses to be provided by Chile, and Thailand will certainly study them in detail with great interest.

4.203. In conclusion, Thailand would like to express its appreciation to the Chilean delegation for today's presentation and responses. We are thankful for the close cooperation with Chile at every level. We therefore wish Chile every success in this fifth trade policy review.

COSTA RICA

4.204. Costa Rica is pleased to participate in this trade policy review. Chile is an important trading partner to our country in South America, occupying second place among countries of origin of our imports and fourth place as a destination for our exports to the Latin American region. We share many positions with Chile in the WTO, for not only is it an active member of the Cairns Group, but has also demonstrated its commitment to the multilateral trading system and to the successful and ambitious conclusion of the Doha Round. We also share a common vision on trade facilitation, disciplines regarding the use of anti-dumping measures and the fundamental role of trade in services in the world economy, to mention but a few topics.

4.205. Trade between both countries is highly complementary and a free trade agreement has been in place since 2002 between Costa Rica and Chile with a view to further strengthening our

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- 33 - trade relations. Over the past decade, this agreement has made for average annual growth of 10% in bilateral trade, which will stand at US$316 million in 2014. For their part, the committees set up under the Agreement meet periodically to take stock of its implementation and to pinpoint areas on which to work together, such as the conduct of cooperation projects and electronic certification of origin, to cite a few examples.

4.206. Both the Secretariat and Government reports mention the stability of the Chilean economy and its recovery from the world financial crisis. Although there are aspects of its trade policy that cause uncertainty, one example being the price band mechanism, Costa Rica views Chile as a partner with a transparent and open trading system, and welcomes the measures adopted by its Government in that connection, for example, the introduction of a single window for imports.

4.207. Although Costa Rica did not submit questions on this occasion, we maintain a constant interest in the trade policies of a partner as close and important as Chile, and in particular, in the evolution of its policies on the diversification of production and on innovation and competitiveness. We are therefore grateful for the replies given by Chile in the framework of this review. Lastly, on behalf of Costa Rica, I should like to wish Chile a successful trade policy review.

INDIA

4.208. Notwithstanding effects of the global economic crisis, the Chilean economy has posted steady growth since 2010 with an average annual growth rate of over 3.5 %, which is commendable. While the growth rate has slowed down in the last two years due to external conditions and weaker investments, we note that the future outlook for growth is positive and that the authorities expect the economy to grow by about 3% in 2015. In 2010, Chile became a full member of the OECD, and it continues to pursue generally open trade strategies through concluding a number of trade agreements. Together with prudent macro-economic management, it has strived to achieve steady growth, reducing inequalities and fostering social inclusion.

4.209. As regards trade policy measures, while Chile has adopted measures to modernize customs and facilitate trade and maintains a single MFN rate of 6% on about 99% of the tariff lines, its continued use of price band system based on international reference prices for imports of certain items remains a source of uncertainty for exporters. It would be useful to know whether the Chilean Government is planning to evaluate the system afresh, including consideration of its dismantling. As brought out in the Secretariat report, we also note a range of programmes maintained by the Government to support and promote exports, assistance program for remote areas, incentives, tax concessions and support programs for specific sectors such as mining and renewable energy, and only some of these appear to have been notified to the WTO.

4.210. Although the Chilean economy has recovered well from the global financial crisis, Chile's growth over the last decade, as noted by the OECD and the IMF, has mainly been driven by factor accumulation, rather than by a substantial increase in productivity. Investments in research and development remain low, and innovation and technological progress has been affected owing to shortage of qualified personnel. We wish Chile every success in addressing these challenges and its efforts in getting back to high growth trajectory.

4.211. On the bilateral level, India and Chile enjoy a close partnership, which is expanding in diverse areas. We have strived to promote bilateral trade and investment relations with a view to benefitting from the comparative strengths of our economies. Bilateral trade has grown substantially in the last five years and stood at over US$3.2 billion during 2013-14. Chile is India's third largest trading partner in the Latin American region. We have concluded negotiations on enhanced partial scope agreement (PTA) with Chile. We are committed to expanding our trade and investment ties with Chile and to take our bilateral cooperation to a higher plane.

4.212. While our two-way trade is expanding, we believe we could do much more to facilitate trade. Our exporters, particularly of agriculture, pharmaceuticals, herbal and ayurvedic products, do face market entry challenges due to conformity assessment procedures, customs and related regulatory requirements. We would urge the Chilean Government to look at the regulatory requirements and take requisite steps to make these less burdensome.

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4.213. Finally, we appreciate the role played by Chile in the WTO and the on-going DDA negotiations. We would urge Chile to play a more constructive role in arriving at a balanced outcome notably in agriculture towards levelling the playing field in a sector fraught with glaring inequities. Both India and Chile are founder Members of the WTO, and have a shared interest in an effective and equitable multilateral trading system. In this common endeavour, we look forward to working closely with the Ambassador of Chile and his team in Geneva.

COLOMBIA

4.214. Chile's previous trade policy review in 2009 ended on a very high note. At the time, Members warmly commended the country on its trade policy, which they considered a model for developing countries, and highlighted the way in which Chile was able to use trade as a critical tool for improving its social development indicators and raising the standard of living of its population.

4.215. As that review took place at a particularly difficult juncture for the world economy, Members also underscored the soundness of its macroeconomic policies, which enabled the country to weather external problems.

4.216. At this review, we are again able to confirm the soundness of those policies. As stated in the Secretariat's report, average GDP growth was 3.6% between 2009 and 2014 (and above 5% between 2010 and 2012). For the same period, per capita GDP increased from US$10,180 to US$14,500. Meanwhile, inflation and unemployment were held in check. It is especially noteworthy that according to the World Bank, the poverty rate declined from 22.2% in 2011 to 14.4% by 2013.

4.217. The year 2014 brought new economic challenges, with growth contracting to 1.9%. We are gratified to see from the Government's report that a new trend is projected for 2015. The Chilean authorities estimate GDP growth at between 2.5% and 3.5% for this year, driven by a recovery in domestic demand.

4.218. This is the outcome of a combination of factors. One was the depreciation of the Chilean peso, which helped boost the external sector's international competitiveness. Another was the Central Bank's capacity to implement an expansionary monetary policy to support the recovery of domestic demand, to which must be added a fiscal policy with an appreciable public investment component designed to help stimulate the economy and generate employment.

4.219. We observe with great interest that the 2015 budget contains a substantial education and health expenditure component, both areas being among the present Administration's top priorities.

4.220. We underline the fact that foreign trade currently accounts for over 65% of Chile's GDP. At the same time, Chile has found ways of diversifying its import and export markets, and this contrasts favourably with other comparable developing countries whose trade is concentrated in just a few markets. This is clearly an outcome of its broad network of trade agreements which is still being developed, with important negotiations in progress.

4.221. Managing such a broad network of trade agreements poses its own problems, and the "policy of regional convergence" is intended to help resolve them. Under this policy, we highlight the work being done within the Pacific Alliance, in which Chile together with Peru, Mexico and Colombia are progressing towards the free movement of goods, services, capital and persons, and the worldwide projection of these economies, in particular toward Asia and the Pacific region.

4.222. Other very significant outcomes include the creation within the Alliance of a mechanism for the cumulation of origin, which will help develop new production chains, and also simplifies the administration of six different trade agreements.

4.223. We would be remiss not to mention that as of last year Chile became the first Latin American country to offer benefits to LDCs under the duty free–quota free scheme, which is proof of its support for implementation of the principle of special and differential treatment through concrete actions.

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4.224. With respect to technical regulations, the Secretariat's report states that the formulation and application of regulations, standards and conformity assessment procedures are based on the principles of non-discrimination and transparency. In this regard, we take the opportunity to recall Colombia's concerns over the law on nutritional content and food labelling and the decree establishing the sanitary regulations governing foodstuffs. Colombia believes that they contain potentially trade distorting provisions, as we believe that they go beyond the regulatory requirements set by international bodies (Codex Alimentarius).

4.225. In trade facilitation, the report mentions the significant progress made during the period under review. We highlight the standardization of some customs procedures, the progress made in setting up a single window, and the changes introduced in regard to customs complaints with the establishment of independent Tax and Customs Courts.

4.226. We further recall the outstanding role played by Chile in the negotiations on the Trade Facilitation Agreement as well as the timely submission of its notification on Category A commitments, which included almost all Section 1 provisions.

4.227. During a visit to Chile in February of this year, the WTO Director General said the following: "Chile represents a powerful and decisive voice in the world debate on trade. It is a country that has understood that its role in the world depends on fluid and untrammelled foreign trade". Having benefited from Chile's experience in this regard, Colombia can attest to its commitment to this Organization and to free trade (from a privileged position, as both delegations are normally seated side by side).

4.228. We therefore wish Chile every success in this trade policy review and hope that it will take away new recommendations that are useful in the future in its process of internationalization and integration into the world community.

MONTENEGRO

4.229. Although Montenegro has only recently opened full diplomatic relations with Chile on the level of ambassadors, our two countries share many common values: decisive openness of the economy, strong incentives for domestic and foreign direct investments and commitment to the international trading rules, while maintaining pragmatic economic policies. In addition, our policy makers and academic community have observed Chile closely even before Montenegro's independence since Chile has always had reputation as being a model for economic reforms. It has proved so again during the global financial crisis where Chile has maintained structural balance and recovered quickly due to its flexibility and prudent macroeconomic policy. While Montenegro notes that Chilean economic growth has slowed since 2012, Montenegro believes that Chile's continued commitments to international trade and investment will ensure that economic growth gains the required strength again.

4.230. In agreement with the Secretariat, Montenegro notes the large increases in foreign direct investment that the Government of Chile has achieved since its last trade policy review. Even though almost 45% of Chile's FDI is attributable to the mining sector, Montenegro is pleased to observe that the FDI has also been realized in sectors ranging from financial services, electricity, gas and water to the manufacturing industry. It is to Government of Chile's credit that it has secured such high increases in FDI. In joining some other speakers today, we would appreciate if delegation of Chile could elaborate on the elements of the new legal framework for the FDI started in 2015.

4.231. Further in agreement with the Secretariat, Montenegro also notes that the Government of Chile has intensified its open trade strategy by continuing to conclude trade agreements with a variety of states - Canada, China (services and investment), Hong Kong China, Malaysia, Thailand, Turkey and Viet Nam; and that Chile continues Trans-Pacific Partnership (TPP) negotiations, also actively participating in the Pacific Alliance negotiations. Like Chile, Montenegro believes that the liberalization of trade in this regard is essential for long-term economic strength and development.

4.232. As a maritime country, Montenegro will continue to analyse the success of significant increases in maritime transportation from Chile (33% over the period), in particular Chile's legislation, as well as the structure and management of port enterprises and public agencies in

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- 36 - achieving their objectives. In addition, Montenegro will follow with interest the impact of the recently introduced Tax reform and its gradual implementation on the bases of the newly designed regimes.

4.233. Montenegro welcomes the Government of Chile's continuous contributions to the multilateral trading system, including its commitments to the World Trade Organization, Doha Development Agenda and its engagement on the issues important for the success of the forthcoming 10th Ministerial Conference in Nairobi. It is within this context that Montenegro is looking forward to continuing cooperation with the Delegation of Chile in Geneva lead by distinguished Ambassador Hector Casanueva.

PARAGUAY

4.234. We are gratified by Chile's participation in this exercise at a time when its economy is performing well and overcoming the obstacles posed by the past world financial crisis.

4.235. As we are all aware, Chile's economy is one of the world's most open, and has a genuinely export oriented production platform. This, together with the solidity of its financial system and its prudent economic policy management generated GDP growth at an average annual rate of 3.6% in real terms.

4.236. As regards foreign direct investment, Chile continued to receive substantial investment flows during the period under review. Between 2009 and 2013, inflows to Chile amounted to over US$100,000 million, or almost 6 times the amounts received between 2003 and 2008. As always, the dynamic mining sector played a key role in this performance, accounting for the bulk of exports and attracting the most foreign investment.

4.237. We would also like to underscore the fact that Chile continued to implement trade facilitation measures during the period under review, as borne out by its standardization of customs procedures for some customs destinations and almost full implementation of the measures in the Trade Facilitation Agreement. It is worth highlighting yet again the active role played by the Chilean delegation in the negotiations on this Agreement.

4.238. One recent but no less important detail was Chile's notification concerning the elimination of import tariffs on goods from least developed countries. Chile thus became the first Latin American country to adopt the duty free and quota free initiative for LDCs.

4.239. I also wish to highlight the excellent bilateral relations existing between my country and Chile, not only at the economic level but also at the political, social and cultural levels.

4.240. Economic and commercial relations between both countries are governed by the MERCOSUR Chile Economic Complementarity Agreement in force since 1996. In force for 18 years, this Agreement means that the entire tariff universe covered is now free of customs duty.

4.241. Trade between Chile and Paraguay was worth almost US$850 million in 2014. Chile's main exports to Paraguay include chemicals, metal products and wine, while Chile's main imports from Paraguay are boneless beef, soya bean pellets and maize, and miscellaneous foodstuffs. A prominent place is undoubtedly occupied by exports of Paraguayan meat to Chile, the second leading destination for this recognized national product.

4.242. Chilean investments have also been playing a major role in Paraguay, especially in manufacturing and services.

4.243. In conclusion, it is worth stating that Paraguay and Chile share the same vision for the future of the multilateral trading system, we support the early implementation of the Trade Facilitation Agreement and the formulation of a future development centred work programme.

4.244. Once again I congratulate those leading this review and the delegates from the Permanent Mission of Chile in Geneva on their invariably active involvement in the different areas of this Organization's work.

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ARGENTINA

4.245. We are pleased to note that the Chilean economy rapidly overcame the GDP contraction that occurred in 2009 as a result of the world economic crisis.

4.246. As other delegations have mentioned, we see that Chile resumed growth as of 2010, and that GDP grew at an annual average rate of 3.6% in real terms between 2009 and 2014.

4.247. We also commend Chile on its progress in reducing poverty.

4.248. During the period under review, Chile received substantial foreign direct investment (FDI) inflows. Between 2009 and 2013, FDI inflows amounted to US$100,856 million, nearly six times the amounts received in the 2003 2008 period.

4.249. Similarly, we note from the Secretariat's report that Chile was also a dynamic investor abroad during the period under review, with outgoing FDI on the order of US$70,199 million between 2009 and 2013.

4.250. Chile is among the leading investors in Argentina, occupying fourth place with a stock of US$6,103 million in 2013.

4.251. Trading relations between Argentina and Chile fall under Economic Complementarity Agreement No. 35 (ECA 35) between MERCOSUR and Chile. It is worth highlighting that since 1 January 2014, the entire tariff universe has been duty free under ECA 35, which means that there is free trade among the Parties.

4.252. Historically, bilateral trade has been dynamic and extensive. We nonetheless regret that 2014 saw a decline in both exports and imports on the prior year (27% and 15%, respectively). Similarly, in the January February 2015 period, both exports and imports declined by comparison with the same period in the previous year (29% and 26% respectively).

4.253. In agricultural trade, we note from the Secretariat's report that "Chile continues to apply a price band system based on international reference prices for imports of wheat, wheat flour and sugar". According to the aforementioned report, "although the application of the price band system has not led to greater protection during this period, its existence is a source of uncertainty among potential exporters and it lessens the transparency of Chile's tariff policy."

4.254. In the realm of multilateral negotiations, Chile has been and continues to be an important partner that has contributed to efforts to reform international agricultural trade through its participation in the Cairns Group and the Geneva G20.

4.255. Likewise, in the negotiations on fishing subsidies, Chile is a member of the Friends of Fish Group, which also includes our country.

4.256. We hope to continue working with Chile in all these groups, in particular to fulfil the mandates of the Doha Round regarding agricultural and fishing subsidies, considering that the WTO is the only place where the problem of subsidies can be tackled.

4.257. Furthermore, we appreciate Chile's commitment to completing the Doha Round trade negotiations taking place under WTO auspices, a process in which all of us here today are involved, sharing as we do the desire for an early and successful outcome.

4.258. In conclusion, while reiterating our appreciation of this new opportunity to share viewpoints and comments on Chile's trade policy, we once again draw attention to the importance of all aspects of this exercise in transparency, and we wish the Chilean authorities every success in this fifth review of their trade policy.

NIGERIA

4.259. We are pleased to note that Chile has continued to pursue sound economic policies since its last review. Chile's stable democratic institutions as well as its solid economic growth have

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- 38 - provided an important example both regionally and globally of the benefits of open trade. It is also impressive that the economy of Chile has quickly recovered from the effects of the global economic crisis, thanks to higher mineral prices, sound financial system, and prudent management of economic policy which resulted in a fiscal surplus and a low level of borrowing. These significant steps taken to improve productivity, including trade liberalization policies accompanied by changes to the regulatory framework for investment and the adoption of a more far-reaching competition law. All of this has been coupled with efforts to improve the educational system.

4.260. The enactment of the Tax Reform Law has helped to enhance tax efficiency and equity, and increase tax revenue by 3 percentage points of GDP. These efforts have assisted Chile to finance the educational reform and other social protection policies, and to restore the central government structural balance. The tax reform is being introduced progressively over a period of four years, and involves reducing certain tax rates and increasing others with a view to achieving greater tax equity.

4.261. It is commendable that successive Chilean administrations have consistently demonstrated their commitment to deepen integration with the global economy through trade agreements. Therefore, we are not surprised that Regional Trade Agreements (RTAs) have continued to play a central role in Chile's liberalization strategy. Indeed, Chile is one of the countries with the most agreements and trading partners. Since the last review in 2009, Chile has concluded free trade agreements with Canada; China (services and investment); Hong Kong, China; Malaysia; Thailand; Turkey; and Viet Nam. It is continuing to negotiate the Trans-Pacific Partnership (TPP) to integrate the Asian and Pacific regions. It participated actively in the Pacific Alliance negotiations, and has continued to liberalize trade in the framework of APEC. In fact, Chile is one of the active WTO Members that continues to be committed to the Doha Development Agenda (DDA) Negotiating Group on Rules for RTAs and has been consistent in the discussion on the clarification of RTAs rules. It would be interesting to hear how Chile achieves the right balance between its bilateral trade agenda and its commitment to the multilateral trading system.

4.262. The continued large inflow of FDI during the review period amounting to US$100,856 million between 2009 and 2013 and an outward FDI flow of US$70,199 million within the same period is a good assessment of the country's economic performance. The Secretariat report, however, reveals that Africa's share as a whole stood at US$265 thousands which is a reflection that, the relationship with Africa still remain under-explored both from the analytical point of view and from a practical perspectives. However, in the light of Chile's impressive economic performance, it would be interesting to further extend Nigeria's hands of friendship and a call for partnership with the aim of identifying the driving forces behind the strength of the Chilean economy and perhaps reproduce same strategies within our national policy context. We also note that Chile has limited domestic energy resources. We would like to know how Chile is coping with this serous challenges and what can be done to explore the trade opportunities that exist in Africa.

4.263. Before concluding, my delegation would like to recall that during a visit to Nigeria by H.E. Fernando Schmidt Aritzia, Chile's Deputy-Foreign Minister in 2012, where he met with the officials of the Ministry of Trade and Investment, the two countries agreed to establish Nigeria-Chile Business Council that will comprise mainly the organized Private Sector Operators in order to boost trade relations between the two countries. We believe that together, we can collectively collaborate very closely with the private sector operator to boost exports particularly in manufactured products.

4.264. In conclusion, we wish to acknowledge Chile's continuous support to the multilateral trading system. Nigeria also welcomes Chile's active participation of the Geneva Mission, in the WTO and the Doha Round. We are also encouraged by the efforts of Chile towards achieving a credible and meaningful post-Bali programme before the target date. We look forward to our continued collaboration in order to achieve a balanced and development-oriented outcome in the DDA negotiations.

PANAMA

4.265. Panama and Chile have built up excellent bilateral relations since 1904. Technical cooperation, policy coordination, cultural rapprochement and trade have been continuously

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- 39 - strengthened, especially since the entry into force of our free trade agreement on 7 March 2008, concluded so as to encourage specialization and competitiveness in both economies. Panamanian exports increased by 25.5% in 2014 and Chilean exports by 60%, while Chilean foreign direct investment in Panama rose by 28% in 2013.

4.266. Chile's economic performance during the world economic crisis was based mainly on the adoption of government policies designed to boost its productivity and competitiveness. This has helped strengthen its financial, investment and mining sectors.

4.267. Panama welcomes the Chilean Government's efforts to improve its educational system, which has made it one of the leading destinations in Latin America for the pursuit of higher studies.

4.268. We underscore the legal amendments introduced to further limit the use of anti-dumping and countervailing measures, in addition to measures taken to facilitate trade, which have helped speed up customs processes, which in turn helps boost its trade and underpin its strategy of open trade.

4.269. Chile has been a very active Member throughout the period of this review. It signed seven free trade agreements, joined the OECD, played an active part in the Pacific Alliance and continued its leadership role in APEC.

4.270. Chile has effected important reforms to its intellectual property regime by undertaking commitments that afford adequate protection to creators and innovators, and this has placed it in a position of leadership in the region.

4.271. Chile's public policies have created a transparent, predictable and stable trading environment and encouraged investment and market access.

4.272. In conclusion, we would like to underscore Chile's commitment to the multilateral trading system and its role in the negotiations in progress with a view to concluding the Doha Round, as well as its active role in plurilateral initiatives. We commend the delegation of Chile on its efforts and wish them every success in their trade policy review.

EL SALVADOR

4.273. We see from the Secretariat and Chilean Government reports that Chile's economy has performed well. They highlight Chile's made good use of favourable external conditions to recover from the global economic crisis and its balanced legal and policy framework and the Government's timely reaction to the slowdown in its economy.

4.274. We have also observed the efforts by the Government of Chile to continue and intensify its open trade strategy based on the conclusion of trade agreements, which has made it one of the countries with the largest number of trade agreements and trading partners. We see that Chile continues to receive substantial foreign direct investment (FDI) inflows, 45% of which is absorbed by the mining sector, which in addition to being Chile's principal export sector, is also its biggest contributor to GDP, with over 11%.

4.275. Chile has continued to implement trade facilitation measures such as the standardization of customs procedures for some customs destinations and has taken significant action to ensure the impartiality of decisions regarding customs complaints by creating the new and independent Tax and Customs Courts (TTAs). We welcome the forthcoming establishment of the import window.

4.276. Also worthy of note is Chile's very pro trade legislation on anti-dumping and countervailing measures, which was amended to even further limit the use of such measures, whose maximum duration is one year. Other positive and noteworthy aspects are the transparency and openness of the legal framework applicable to technical regulations, standards and conformity assessment procedures, as well as the transparency and efficiency of its government procurement regime for goods and services, the promotion of competitiveness and innovation in the agricultural sector.

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4.277. Chile has done sterling work on intellectual property and is now a reference at the Latin American level and even more so since its Industrial Property Office (INAPI) was designated an Administration for International Searching and Preliminary Examining (ISA). This has opened up a new opportunity in the region for Spanish speaking users of patents as it is the world's third ISA after Spain and Brazil, and the second in Latin America, handling international searches and preliminary examinations in our Spanish language.

4.278. Naturally, Chile still faces major challenges and these will require special attention and greater efforts than those being deployed at present. These include the slowdown in its economy, largely compounded last year by its dependence on mining, which contracted slightly from 59.8% of total exports in 2009 to 56.4% in 2014. There is also a balance of services deficit that has not been corrected for several years, as mentioned in the Secretariat's report.

4.279. In bilateral relations, which fall under our free trade agreement in place since 2002, Chile is an important trading partner to El Salvador and ranks 21st amongst our export destinations and was the leading destination for our exports to South America in 2014. As regards imports, Chile ranks 23rd among suppliers of goods and fourth among South American countries.

4.280. Trade between both countries is fairly complementary: according to figures from the Central Reserve Bank of El Salvador, our exports to Chile for the period 2012 2014 were concentrated on sugar, paper products and plastic furniture, while imports were mainly of apple products, fruit jellies, fresh grapes and wine.

4.281. In the fourth quarter of 2014, Chilean foreign direct investment in El Salvador stood at US$1.9 million, and was concentrated in infrastructure and agro industry.

4.282. But the historic bilateral relations between El Salvador and Chile, and we say historic, as they date back to 1860 according to consular records, are not limited to trade alone. On 4 June 2013, both countries signed the Integrated Partnership Agreement, on which basis the Chile El Salvador Partnership Council was set up to address the main topics on the bilateral agenda in the political, economic and commercial, cooperative, cultural, legal and social fields. This agreement is the corollary to a number of instruments signed by both countries, including the Friendship, Trade and Navigation Treaty (1876), the Cultural Convention between El Salvador and Chile (1981), the Basic Convention on Technical and Scientific Cooperation between El Salvador and Chile (1991), the Agreement on the Promotion and Reciprocal Protection of Investments between El Salvador and Chile (1996), the Cooperation Agreement between the Ministries of Labour and Social Welfare of Chile and El Salvador (2004,) the Memorandum of Understanding on Tourism Cooperation (2007), the Cooperation Agreement between Supreme Courts of Justice (2010), as well as the Free Trade Agreement between Chile and Central America and its Bilateral Protocol (2000) to mention but a few.

4.283. At the multilateral level, Chile is a founding member of the WTO and remains committed to the multilateral trading system. Chile has played an active part in numerous initiatives in recent years. We commend Ambassador Casanueva on the constructive role he has been playing in this Organization, together with the entire team from his Permanent Mission.

URUGUAY

4.284. Uruguay is honoured to welcome the delegation of Chile in this forum of such importance to the multilateral trading system and which makes for greater transparency in the trade policies of Members.

4.285. Our countries have maintained and continue to maintain close ties of friendship and cooperation both at the political, economic and commercial, cultural and cooperative levels and we share values and interests both regionally and multilaterally. To further strengthen these ties, our Foreign Minister paid an official visit to Chile last April, where he met with his counterpart and with the President of the Republic.

4.286. As pertains to regional integration, we share interests in UNASUR and CELAC, LAIA and MERCOSUR and in respect of convergence between the Pacific Alliance and MERCOSUR. We also share interests and values in multilateral bodies, for example, our joint work in the United Nations

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Stabilization Mission in Haiti, and Chile's support for Uruguay's candidacy for a seat as a Non-Permanent Member of the Security Council for the period 2016 2017.

4.287. In the LAIA framework, Economic Complementarity Agreement No. 35 was the first to be negotiated by MERCOSUR. In effect since 1 October 1996, ECA 35 between MERCOSUR and Chile established a free trade area over a ten year period, covering almost the entire tariff universe. Today, the entire tariff elimination timetable has already been implemented.

4.288. We have revitalized our bilateral relations through a new programme running until 2017; we note the effective implementation of projects addressing social development, the environment, energy and the development of production; our countries are also jointly engaged in promoting triangular cooperation with third countries in the region.

4.289. In bilateral trade, our exports grew steadily between 2009 and 2012 but have contracted since then. Chile ranked 13th among our export destinations, mainly for beef or chilled meat.

4.290. We also export substantial amounts of non-traditional products such as pharmaceuticals, wood and plastic and wood and plastic products, machinery and essential oils.

4.291. Imports grew steadily over the period of this review, and comprised mainly food preparations, knitwear, fertilizers, machinery, paper and paperboard.

4.292. In January 2009, both countries also signed a government procurement agreement which favours trade and investment.

4.293. There are opportunities for increasing trade with Chile. For our country, the greatest opportunities lie in products from the manufacturing industry such as chemical substances and products, rubber and plastic products, food products and beverages, textile products and products of leather, base metals, machinery and equipment, among others.

4.294. In the realm of investment, Uruguay has received substantial foreign direct investment inflows from Chile over the past decade, ranking sixth among FDI receiving countries in 2013. Almost 80% of overall investment went to the industrial sector and the rest to the services sector.

4.295. Lastly, we would like to reaffirm our two countries' interest in joining forces in the quest for a successful conclusion to the Doha Development Round, where progress in the agriculture negotiations is of pivotal importance for integrating the least developed countries into the multilateral trading system, eliminating trade distorting factors and strengthening the WTO.

HONDURAS

4.296. From the report before us we note with great interest Chile's open trade policies accompanied by changes to the regulatory framework for investment and the adoption of a broader competition law, as some of the significant steps taken to enhance productivity.

4.297. At the same time, we commend efforts to improve the educational system, as well as the public savings mechanism, the Economic and Social Stabilization Fund (FEES).

4.298. We note that the share of agricultural products in total exports grew from 25.9% in 2009 to 28.8% in 2014 and that during the period of this review, agricultural policy focused on promoting competitiveness and innovation, including small scale agriculture.

4.299. Furthermore, we have observed the important steps taken by this Member to ensure the impartiality of decisions regarding complaints brought before the National Customs Service with the creation of the Tax and Customs Courts (TTAs). We note that the legal framework for the drafting and application of technical regulations, standards and conformity assessment procedures is transparent and open, is guided by principles of non-discrimination, and also draws on international standards.

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4.300. Chile introduced measures to reinforce the activity, powers and independence of its competition authorities, and we are gratified to see that a new draft competition law has been drawn up and underpins the powers of the authorities and regulates the review of mergers.

4.301. Our bilateral trade is governed by the free trade agreement consisting of 21 chapters and their respective annexes and tariff elimination schedules, as well as the bilateral protocol. Both instruments became effective on 19 July 2008.

4.302. Bilateral trade increased considerably over 2013, when we imported approximately US$68 million in medicinal products for human use, apples, malt extracts, fats and oils, among other items, and we exported over US$2 million in natural polymers, rosin, recovered paper and paperboard, and cables and plaited bands of aluminium.

4.303. The second meeting of the Joint Technical Cooperation Commission held on 26 May 2015 approved the 2015 2018 bilateral cooperation programme, which took stock of the cooperation carried out in recent years, prominent among which were projects in mining development, forestry, the environment and education. Priority areas under the 2015 2018 cooperation programme included security and justice, development and social inclusion, economic cooperation for development, the environment, energy, mining and forestry.

4.304. We take this opportunity to express our profound gratitude to our Chilean brothers and sisters for the support and assistance provided to enable Honduran professionals to become even more specialized in particular areas and participate in regional initiatives.

4.305. Lastly, I would like to reiterate our thanks for this renewed opportunity to exchange views and examine Chile's trade policies and practices and to wish the authorities every success in this trade policy review.

PAKISTAN

4.306. Chile is definitely among those developing countries that have used trade liberalization as a vehicle for economic development, employment generation and improvement in the standard of living of its people. It has one of the lowest MFN applied tariff among developing countries and the largest number of FTAs. It has managed to reduce poverty during the review period, the population living below the poverty line fell to 14.4% as compared to 20.6% in the year 2000. However, income inequality still remains a challenge.

4.307. The declining growth rate since 2013 combined with deteriorating fiscal deficit has led to tax reforms geared towards funding of education reform and other social protection policies. Objectives of these tax reforms are to enhance tax equity, improve income distribution; introduce new and more efficient incentive mechanisms for saving and investment; and reduce tax evasion and avoidance. Members would definitely observe the impact of these tax reforms in the next Trade Policy Review of Chile and wish them well for initiating such bold reforms.

4.308. To meet the challenge of low domestic demand and low investment, Chile under the new political leadership has introduced several initiatives. The National Export Development Council, as a public-private partnership is aiming at increasing Chilean exports, particularly from small and medium-sized enterprises (SMEs). We would like to hear more about the productivity and innovation stimulating programs through the SME business development centres. New measures have also been taken to attract investment not only in goods and mining but other services sectors such as aviation and professional services.

4.309. Chile's inclusion in the OECD during the review period is a remarkable achievement as it included institutional strengthening and stronger legal frameworks to meet the criteria, Chile's investment in education and tax reforms would pave the way for increase in export of highly skilled services, diversification of exports and higher growth rate that remained very low in 2013.

4.310. Chile's participation in Doha Round negotiations, Bali Ministerial and adoption of Trade Facilitation Agreement has been exemplary. Despite a large number of FTAs, we see that Chile is heavily engaged in the multilateral negotiation process with a constructive approach.

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5 REPLIES BY THE REPRESENTATIVE OF CHILE AND ADDITIONAL COMMENTS

5.1. I should first like to thank you for your presence here this morning and for all the statements delivered on Tuesday. This exercise has given us the opportunity to outline the progress made and the trade policy challenges we face. Your comments will help us to assess and improve the formulation and implementation of that policy. I wish to reiterate that for Chile, this exercise in transparency is of the highest importance for sharing with you the economic policy aims that we have been pursuing, and for obtaining feedback from delegations, who have very constructively offered us their comments and stated their concerns.

5.2. I should also like to express my very special gratitude for the work done by the Chair of this review in the person of Ambassador Paparizov, and for the full, thought-provoking and balanced statement by the discussant, the Permanent Representative of Hong Kong, Mrs Irene Young.

5.3. I referred in my statement to the aspects of our trade policy highlighted by many delegations. I also mentioned the challenges facing our country and the ways in which we are responding to them and, lastly, to some of the specific topics on which some delegations asked questions and offered comments.

5.4. On behalf of Chile, I thank you for your recognition of the design and implementation of the economic, trade and social policies vigorously pursued by the Government of President Bachelet to tackle all forms of inequality and make the country developmentally more inclusive and economically more competitive. This is a priority challenge on our Government's agenda.

5.5. The foregoing has meant introducing reforms to meet the challenge of raising productivity and supporting innovation in order to induce more diversified growth that broadens our exportable supply to include the production of goods and services with greater added value in addition to the exploitation of natural resources. The aim is to strengthen our country's human capital through better access to and higher quality education, which naturally includes ongoing training for our workforce. For Chile, these reforms are not optional but indispensable to achieving inclusive and sustainable growth.

5.6. As pointed out in your statements, Chile is a small country far removed from the world's main economic hubs and has based its development strategy on a free and open economy that is highly integrated into and dependent on international markets. We have maintained this strategy despite the recent economic crisis of 2008-2009, which we all had to face.

5.7. Regional integration has been a key component of our country's foreign policy, one central tool being the trade agreements that many of you have mentioned. With respect to the Pacific Alliance, we have made several advances in liberalizing trade in goods, services and capital. But this project still poses challenges. We must increase intraregional trade which, in the case of the Pacific Alliance, is still below 5%. This is a challenge for the Pacific Alliance as well as for Latin America. Intra-Latin American trade is still hovering at around 12-15%, which is far from the rates being recorded by integration schemes with a longer and more profound history. We must tackle subjects such as regulatory improvements, transport, support for small and medium-sized enterprises and interconnection, and we must also keep striving for greater rapprochement between the different sub-regional economic schemes.

5.8. We have taken initiatives to strengthen the various integration schemes coexisting in Latin America, as spaces for coordination and convergence so that collectively, the region can take up its place and compete in a globalized world. Chile has intensified its relations within the different integration mechanisms in the region such as LAIA, CELAC and UNASUR6 and has also strived for expanded trading relations between the Pacific Alliance and MERCOSUR by advocating the concept and project we mentioned on Tuesday, that of convergence in diversity between the various sub-regional schemes in Latin America.

5.9. As regards plurilateral agreements, Chile has been participating actively in and promoting the negotiations on the Trade in Services Agreement (TISA), which is an ambitious and realistic

6 The Latin American Integration Association (LAIA), the Community of Latin American and Caribbean States (CELAC) and the Union of South American Nations (UNASUR).

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- 44 - agreement aimed at updating the existing system of WTO rules and building on the commitments undertaken by each participant 20 years ago. We are convinced of the need to continue to buttress the multilateral trading system and, as the aforementioned services negotiations show that it is possible to reach agreements, this is one possible avenue for moving the Doha process forward.

5.10. In that regard, we note comments by some Members urging us to join in other agreements of that kind, such as those on information technologies, government procurement and environmental goods, and we are assessing these with interest.

5.11. I wish to convey special thanks to the Central American countries for their statements affirming the efforts of our countries to come up with processes of mutual learning through cooperation programmes, which of course will be maintained over time as part of a broad and positive agenda that we share with that region.

5.12. Furthermore, I would like to point out that Chile is now forging closer economic ties and stepping up cooperation with Africa, with which region we are working out an agenda for cooperation and for developing trade and investment opportunities. One milestone in this policy was the recent visit by President Bachelet in 2014 and the numerous government delegations and entrepreneurs who have participated and will take part in seminars and negotiating rounds in various African countries.

5.13. I also wish to address the main challenge mentioned by several delegations, that of diversifying our export matrix and boosting our country's productivity. The Government of President Bachelet has made this a priority commitment in its policies to boost productivity and economic growth and lessen our economy's dependence on the vagaries of copper prices. The copper-mining sector accounts for 50% of our exports and enables the greatest number of people to participate in the development process and reap its benefits.

5.14. One of the measures taken by the Government in its first 100 days in office was to launch an ambitious agenda of productivity, innovation and growth designed to transform the country's export matrix so as to boost productivity and induce major change in innovation processes. One of the aims of this agenda is to move forward in transforming and diversifying production, producing new goods and services, developing new industries and generating new innovation hubs, which of course also entails giving new momentum to our exports.

5.15. Furthermore, as I mentioned earlier, another fundamental pillar is educational reform, which is a priority area for President Bachelet's Government, whose aim is to bring about a fairer system while improving the training of human capital as a factor that will enhance productivity, competitiveness and ultimately innovation.

5.16. I should also like to address some specific matters mentioned in some of Tuesday's statements.

5.17. I begin with the statement by the delegation of Bolivia. There is no justification for describing the recent strike by customs officers and workers at the port of Iquique as "unilateral suspension measures" by Chile affecting services provided for Bolivian cargo in transit. Those developments are not the result of a decision by the Government of Chile or the port authorities, but of decisions taken by the said workers, and cannot be prevented by any coercive action on the part of Chilean Government authorities. The internal institutions have done their work, and the strikes have been settled. Their effects, felt by Chilean as well as foreign users, did not produce any blockage whatsoever of Bolivia's external trade, as Chile made every effort to facilitate the flow of cargo. Bolivia has several alternatives for reaching the Pacific via Chilean ports, all of which are operational, and the port of Iquique represents 7% of its cargo movements.

5.18. Article V of the GATT 1994, which deals with "traffic in transit" via the most convenient routes, is understood as the possibility of accessing, without discrimination, the available routes authorized for international transit by the country being transited, and Chile respected this during these events.

5.19. As transit country for Bolivia and Paraguay, Chile respects the priorities and objectives of the Vienna Programme of Action for Landlocked Developing Countries. In terms of infrastructure

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- 45 - development, Chile has connecting routes that are paved and others undergoing repairs, via which Bolivia can access its ports. There are also two international rail connections. Transit policies are such that Bolivia's commercial traffic crosses Chilean territory free of charges, with its own customs presence and authority over its cargo in transit, and enjoys facilities and privileges, some of which are considered under the 1904 treaty system and others accorded by Chile outside of that framework, and which far exceed the stipulations of the Vienna Programme.

5.20. Article 15 of the Agreement on International Land Transport (ATIT) states that the Agreement "in no case means restricting the transport facilities and freedom of transit accorded by the signatory countries to one another." Bolivia interprets this rule as exempting it from fulfilling the requirements of that Treaty in transiting Chile, because the 1904 Peace And Friendship Treaty provides, in its favour, for the most extensive and unrestricted commercial transit through Chilean territory. Nothing in the ATIT contradicts the free transit system applicable between Bolivia and Chile. Instead the ATIT takes it into account and reinforces the principles of non-discrimination and reciprocity. Chile accords Bolivia ample freedom of transit, but the rights arising therefrom are neither absolute nor unlimited, nor can they be exercised while disregarding fundamental principles and obligations enshrined in international law concerning the protection of the life of persons, the environment, and the prevention of wrongful international acts, and which must be respected in all fields, including transport. We undertake, Mr Chair, to provide further specific replies and additional information in writing, in response to the questions asked by the delegation of Bolivia on Tuesday.

5.21. As regards the new foreign investment regime just announced in our country, Chile had been applying a policy based on foreign investor initiative, which led to agreements between foreign investors and the Government of Chile guaranteeing them certain rights, all of this under "Decree Law 600".

5.22. Today, Chile's economic and political context is different from that in which the old investment regime was created. Following the restoration of democracy to our country in the early 1990s, Chile signed several investment promotion and protection agreements as well as various free trade agreements containing chapters on investment as part of our network of free trade agreements.

5.23. Chile has therefore reformed its foreign direct investment regime to take account of the relevant international recommendations and standards. Central to the reform was providing foreign investors with stable conditions in a legal framework that does not discriminate against domestic investors.

5.24. The new law establishes the regime applicable to foreign direct investment, offers guaranteed access to the formal foreign exchange market, the right to remit capital and profits, a waiver of the tax on sales and goods and capital import services, and protection against arbitrary discrimination. This law furthermore regulates the effects of contracts entered into during the period of validity of Decree Law 600 so as to ensure full observance of the rights and duties acquired by foreign investors under that legal regime. Similarly, it establishes an exceptional right allowing foreign investors to seek authorization for foreign investments with tax invariability for a maximum of four years.

5.25. Lastly, the new foreign direct investment framework focuses on actively promoting investments as has been done by many other transition and developing economies that have been engaged in trade opening and integration programmes in their capital markets.

5.26. We were asked about trade protection measures and it was pointed out to us that Chile maintains legislation that allows for a short period of application of anti-dumping and countervailing measures, but that in the case of safeguards, Chile nonetheless amended its legislation during this period so as to extend their application time-frame. In that connection Chile has always maintained an implementation policy based on its trade protection measures, at the same time ensuring that the policy is always in line with its WTO commitments. Chile does not actively use these measures. In fact, since the preceding review in 2009, we have opened only four investigations and applied definitive measures on just one occasion for a period of five months only.

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5.27. Turning to comments on rules of origin, one challenge for many countries given the ever greater proliferation of bilateral and plurilateral trade negotiations, is the so-called "spaghetti bowl", not only when it comes to tariffs but also trade disciplines and more particularly the diversity of rules of origin that effectively complicate the system. Chile applies preferential rules of origin in the framework of free trade and other preferential agreements signed regionally and bilaterally. These rules of origin therefore vary from one agreement to another and include general and specific regulations.

5.28. Chile is consequently not unfamiliar with this problem and in its negotiations over recent years has pursued the goal of simplifying and ideally standardizing rules of origin. To advance in that direction and press ahead with market opening, we are currently working to harmonize and simplify the rules of origin in several of our agreements currently in force or being negotiated. Such is the case of the negotiations on the Pacific Alliance and the Trans-Pacific Partnership (TPP), where negotiations have been based on a single set of rules of origin and common customs procedures.

5.29. Regarding the concerns raised by some Members over the regulations implementing Law 20.606 on nutritional labelling, the Government has made an in-depth analysis of all the comments submitted and they have been taken into account in finalizing regulations that do not restrict trade more than is necessary while pursuing our legitimate policy goal of combating obesity. The draft regulations were recently returned to the Office of the Comptroller-General of the Republic so as to wind up the internal process, which will culminate in early publication in Chile's official gazette. Only yesterday, the Office of the Comptroller-General confirmed the constitutionality of this decree and it will take effect in the coming days. We are open to continued dialogue on questions and doubts that delegations may raise with us on this matter.

5.30. Regarding the questions on Chile's price band system, it should be recalled that it was introduced to cushion the impact on domestic industry of external fluctuations in the prices of some agricultural products and allows for the application of specific duties or tariff reductions when imports of wheat, wheat flour or sugar are below a floor price or above a ceiling price, respectively. The price band system is transparent and provides certainty, as the law lays out the entire methodology for its application.

5.31. The President of the Republic reviewed the price band system in December 2014. Many elements were incorporated in the process, such as obligations existing under trade agreements signed by Chile, international price movements for the products affected, and domestic market prices.

5.32. The law does not prescribe a new time-frame for its review in the future. The price band system may, however, be reviewed and evaluated at any time if deemed necessary by the competent authority. On balance, considering the current floor and ceiling prices as well as the international prices of the products affected by the price band system, no additional duties have been levied in recent years, but instead there have been tariff reductions. Over the past seven years, imports of wheat, wheat flour and sugar into Chile have been zero tariff imports. There is consequently no reason to change the system in the future.

5.33. I wish to express my gratitude for statements on the granting by Chile of "duty free-quota free" treatment to least developed countries pursuant to the Hong Kong Ministerial Declaration, which was reiterated in Bali. Today we wish to report that in the same spirit we are working on implementing the Bali Ministerial Decision in order to operationalize the waiver concerning preferential treatment to services and service suppliers of least-developed countries.

5.34. Mr Chair, as I said in my first statement, the current multilateral trading system is at a crucial juncture, and has received fresh momentum with the Trade Facilitation Agreement. For our part, we will do the utmost to arrive at Nairobi having ratified this Agreement. We must endeavour to strike the balances needed in order to have a substantive work plan and thus hold a successful ministerial conference. I take this opportunity to wish the Government of Kenya every success in organizing the first ministerial conference on the African continent. Many thanks for your time, Mr Chair, to the Representative of Hong Kong, China, and to all delegations, for having given us

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- 47 - this opportunity and this forum and for having listened to us, collaborated in and contributed to this review of the Government of Chile.

DISCUSSANT

5.35. First of all, I would like to congratulate Chile on a very fruitful discussion on Tuesday, and on all the commendations that it has received – which are of course well-deserved. I also appreciate the statement just given by Director General Rebolledo, which is a very comprehensive and substantive response to Members' comments, and provides useful information on important changes such as its new investment regime.

5.36. My own observation is that, while Members have participated enthusiastically in this Review and more than 300 questions have been raised, they seek more to clarify than to criticize. Understandably, Members tend to focus on their own areas of interests – in particular, the bilateral trade relationships with Chile which they all cherish. I do not see any particular issue that draws negative comments from a large number of delegations, but I do hear a strong chorus of applause for Chile's open market, its outstanding economic performance, the improvements it has made to trade policies and the constructive role it plays in the WTO.

5.37. Members should be pleased to note Chile's plans to diversify its exports through innovation and affordable, quality education. Other developments that many Members welcome are Chile's ongoing domestic reforms to enhance competitiveness and productivity, as well as its efforts to address social inequalities. We have not seen the full effects of these reforms yet, but I trust that in implementing them, the Chilean authorities will benefit from Members' comments, and will be mindful of the implications for trade.

Looking ahead

5.38. Many of us (including myself) will probably not be in Geneva by the time Chile has its next TPR. But based on what we know today, we may try to visualise the progress that Chile can make six years from now. If everything works out as planned, Chile will be able to:

(1) Keep inflation at 3%;

(2) Increase government expenditure without upsetting structural balance, and indeed regain surplus after 2018;

(3) Sign even more trade agreements, including the TPP, the Strategic Association Agreement with Indonesia and TiSA;

(4) Move towards a possible Free Trade Area of the Asia-Pacific with other APEC economies;

(5) See the Additional Protocol to the Pacific Alliance Framework Agreement coming into force, and build even stronger bridges between Mercosur and the Pacific Alliance;

(6) Have a single window for definitive imports – and maybe more;

(7) Benefit from improved competition, IP and foreign investment regimes;

(8) Showcase to the world the initial success of its education, labour, and tax reforms;

(9) See greater gender equality in the country, and a development which is environmental friendly, sustainable and socially responsible; and

(10) Above all, make great strides in its Energy Agenda and Productivity, Innovation and Growth Agenda.

5.39. Along the way, there may also be new policies and initiatives coming up, which I hope will strengthen Chile's open trade regime and further contribute to trade liberalization.

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5.40. At the WTO, it will be the year of MC13 when Chile has its next TPR. By then, I hope the coming into force of the Trade Facilitation Agreement and the Protocol amending the TRIPS Agreement should have long been accomplished. And – who knows – maybe we will also be referring to the successful conclusion of the Doha Round as part of our proud history.

Concluding remarks

5.41. I know this may sound very optimistic, but it is not impossible. It all depends on what we are prepared to do to make things happen. As Discussant for this TPR, I know I have asked many questions already and I hope Chile doesn't think too many. But allow me to just ask two more today: when we read Chile's next set of TPR Reports in six years' time, how do you think the work of the WTO will be described? How would we want it to be described? I do not expect a response from anyone, and certainly not any reply in writing. These are questions to reflect upon.

5.42. Chairman, colleagues, Chile's trade policies do not operate in a separate universe. As Chile's trading partners and fellow Members of the WTO, we are all part of that universe: we play a part in shaping it, and are in turn affected by it. So, as we encourage Chile to make further progress, let's also encourage ourselves to try harder, because we do share common interests in this multilateral trading system, just as we share with Chile the responsibility of making it a success.

EUROPEAN UNION

5.43. Let me first express our appreciation to the delegation of Chile for the replies provided and for the very comprehensive information both on Tuesday and today.

5.44. The EU is pleased to note that Chile has taken significant steps to improve productivity, introduce further trade liberalization policies accompanied by changes to the regulatory framework for investment, tax reform and a more far reaching competition law.

5.45. The EU has a few follow-up questions in areas of investment and IPR that we have submitted to the Secretariat this morning just before the meeting and we look forward to the replies in due course.

5.46. Finally, we would like to thank the delegation of Chile for the very constructive participation in this important exercise of transparency as stressed by the delegation of Chile also earlier.

UNITED STATES

5.47. Thank you to the entire delegation of Chile for his participation and active engagement, in particular for all the answers to our many questions in this process and we will continue to study those carefully.

5.48. Finally, I would just like to commend Chile for its dedication to this process as well as its dedication to enjoying the football.

PLURINATIONAL STATE OF BOLIVIA

5.49. Let me begin by saying that we have noted and are grateful for the replies and comments received from the delegation of Chile regarding Bolivia's comments and questions at the preceding session.

5.50. Naturally, Bolivia has a different understanding of the problems of free transit that are severely affecting my country.

5.51. I close by stating that we will be sending today's comments to our capital city and we look forward to the written replies to the additional questions submitted by Bolivia at the preceding session, and these will be analysed appropriately.

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JAPAN

5.52. Many thanks Mr Chairman for your warm words. I merely wish to congratulate the Chilean delegation on its successes both in this trade policy review and in other fields, including football.

5.53. I take this opportunity to reaffirm our unwavering determination to continue to cooperate with Chile here in the WTO, and in other forums including the TPP.

MR ANDRES REBOLLEDO

5.54. I merely wish to express my gratitude for the latest comments and to add something that was addressed by our discussant, who has requested written replies on the matter and which has to do with our future. Indeed, Chile would like to be able, at the next TPR, to state that the Doha Round has ended, that a Nairobi agreement was reached, including substantive progress in the basic areas that have been the subject of protracted negotiations, with pragmatism, flexibility and in a manner that sends a signal to countries and to the system. We will always be available for this purpose. We would also like to be able to say that the WTO has launched a new process of reflection on other international trade issues that constitute new trade policy frontiers. If we are able to make these two statements at the time of our next TPR, I believe that the multilateral trading system and our country will be the better for it.

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6 CONCLUDING REMARKS BY THE CHAIRPERSON

6.1. The fifth Trade Policy Review of Chile has allowed us to have a better understanding of Chile's trade, and investment policies since its last Review in 2009, and the challenges that it faces. Our discussion has benefitted from the constructive participation of the Chilean delegation, headed by Mr Andrés Rebolledo, Director General of International Economic Relations at the Ministry of Foreign Affairs, and by the valuable comments from the discussant, the Permanent Representative of Hong Kong, China to the WTO, Ms Irene Young. Members appreciated Chile's response to the more than 320 advance written questions, and we look forward to answers to any outstanding questions no later than one month after this meeting.

6.2. As in the previous Trade Policy Review of Chile, in this fifth Review Members commended Chile for its overall open, transparent and predictable trade and investment regimes, with few obstacles for its trading partners. Members noted that Chile's economy was able to quickly recover from the effects of the global economic crisis due to: the high price of minerals, its main export product; its sound financial system; and the prudent management of economic policies which resulted in a fiscal surplus and low levels of indebtedness. During 2009-2014 GDP grew at an average annual rate of 3.6% in real terms, with trade remaining a significant factor contributing to growth. Chile's main exports continued to be minerals and agricultural products.

6.3. Members noted that Chile had taken great strides in terms of poverty reduction but income inequality remains a problem. To address this issue, the current government has undertaken an extensive reform agenda encompassing taxation, the labour market and education, with a view to create a more inclusive society. The adoption of these measures was welcomed by Members. They noted in particular that the steps taken to improve the quality and access to education should contribute to boost productivity growth, which is another challenge Chile is facing.

6.4. Chile remained an important recipient of foreign direct investment during the period under review. The mining sector had continued to be the main recipient, with some 45% of the total, followed by the financial services sector. Chile is in the process of drafting a new foreign investment legal framework and Members sought more information on this initiative. Members wondered if under the new regime the remaining restrictions to FDI would be liberalized and procedures would be streamlined.

6.5. Chile's trade openness and its commitment to the multilateral system through its constructive contribution to the work in the WTO were mentioned by most Members. The institutional and legal reforms that Chile had to undertake as a result of its accession to the OECD had reinforced its commitment to a more open regime. Members noted with satisfaction that all major reforms were taken through a process of consultation with stakeholders. Chile stated that it maintained a strong commitment to the multilateral trading system, in particular to the Doha Development Agenda and the post-Bali process. Members also welcomed Chile's implementation of its Duty Free Quota Free (DFQF) Scheme for LDCs.

6.6. Members noted that during the period under review Chile had continued to liberalize trade unilaterally and through the negotiation of trade agreements. Chile was one of the WTO Members with the largest number of trade agreements: as at March 2015 it had signed 24 agreements with 63 trading partners. Members highlighted the importance given to these agreements in Chile's trade policy agenda but raised concerns in regards to the complexity of their rules of origin. In response, the Chilean authorities indicated that bilateral and plurilateral initiatives provided a useful additional way of achieving substantial outcomes expeditiously and that Chile had undertaken efforts to simplify its rules of origin regime.

6.7. Chile was commended for its implementation of trade facilitation measures during the review period; for example, the standardization of customs procedures for some customs destinations, the implementation of a single window for exports, and the establishment of Tax and Customs Courts. Members urged Chile to ratify the TFA, which is at present being discussed in Congress and raised other issues, inter alia, the requirement to use customs agents for inward clearance and the fact that they need to be Chilean citizens. Issues regarding the transit of goods were also brought up.

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6.8. Members welcomed Chile's unilateral tariff reduction, which had resulted in an almost flat tariff structure, consisting of two rates 0% and 6%. They noted, however, that the price band system, which some Members considered not transparent and a source of uncertainty, had been kept in place following its recent evaluation. Members enquired if Chile had any plans to dismantle it.

6.9. While there were many positive economic developments during the review period, it was important to note a number of areas where Members thought improvement was possible. Chile remained vulnerable with respect to its exports as it relied on a few markets, and on a narrow product base. Chilean exports continue to depend heavily on mining, in particular copper, which in 2014 accounted for 50.1% of its exports, and on agricultural products, which represented 29% of total exports in 2014. Despite efforts to diversify trade, both imports and exports had become further concentrated with respect to trading partners. In this context, Members enquired about the measures that Chile was planning to take to diversify its economy. Specific questions were raised regarding export support measures (i.e. the general and simplified drawback systems) and other programmes implemented by the Chilean Economic Development Agency (CORFO).

6.10. In general, Members praised Chile for its overall open and transparent regime; however, they felt that in a few specific areas Chile could improve its trade regime. In this regard, Members questioned various aspects of Chile's new food labelling requirements which seemed more trade restrictive than needed to fulfil legitimate public health objectives. With respect to intellectual property, some questions and concerns were raised regarding: copyright and the protection of encrypted programmes; the control of material provided via the Internet; the protection of pharmaceuticals and agro-chemicals; and the improved protection of plants and the ratification of the International Union for the Protection of New Varieties of Plants (UPOV) Convention. The programme implemented in 2011 to promote the registration of geographical indications was noted.

6.11. Members welcomed Chile's scant use of contingency measures, and the fact that under Chilean law antidumping and countervailing measures could only be applied for one year and could not be renewed. It was also noted that Chile had amended its legislation to limit the use of antidumping and countervailing measures, but had extended the possible application and renewal periods for safeguard measures from one to two years. Members hoped that Chile would review this measure.

6.12. In the view of Members, Chile's government procurement regime was transparent but some simplification of administrative procedures would be welcomed. The important participation of small and medium-sized enterprises (SMEs) in government procurement as a means to promote employment and social inclusion was highlighted. Members strongly encouraged Chile to become a party to the GPA, in particular in the light of the recent changes to the agreement, which had addressed several of Chile's concerns with respect to it. On competition policy Members welcomed the introduction of measures to reinforce the scope and powers of its competition authorities and the drafting of a new Competition Law which addressed several of the issues of concern by Members, including the lack of a merger notification obligation.

6.13. On sectoral issues, Members commended the performance of Chile's financial sector including banking, insurance, securities and pension funds, and appreciated the steps already taken by Chile to implement the Basel II and III capital adequacy rules. Members sought more information regarding specific support programmes, to assist sectors such as mining and renewable energy, and noted that some of them had not been notified to the WTO. Chile's performance as one of the major world exporters of fish and fish products was highlighted. In this context, Members welcomed its participation in the "Friends of Fish Group", which aims at the removal of fish subsidies that contribute to over-fishing and over-capacity.

6.14. Members congratulated Chile for its constructive engagement in the multilateral system and for its decision to continue using foreign trade as a tool for achieving economic and social development, while continuing with a process of liberalization and structural reform. The fifth Review of Chile's trade policies was successfully concluded to the benefit of all the Membership. I have no doubt that Chile will take into account the lively and fruitful discussion and dialogue during the review to further develop its trade and economic policies to the benefit of all its citizens. The large number of advance written questions submitted before the meeting and the 35 delegations that took the floor during our two days of discussions highlight the importance

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Members attached to Chile's trade and related policies and its role in the multilateral trading system.

6.15. In closing, I would like to thank Director General Mr. Andrés Rebolledo and the rest of the Chilean delegation, the discussant, the Members and the Secretariat for their contribution to the fifth Trade Policy Review of Chile.

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