Thailand banks on Thai Chile FTA, to crack open Latin America market

Latin America and the Caribbean

Latin America and the Caribbean (Photo credit: Wikipedia)

TNA reports, The official signing ceremony of Free Trade Agreement (FTA) between Thailand and Chile will be held soon, which is one of the very important agreement signing ceremonies. Chile considers and foresees the potential of Thailand, which is the production base and trading hub of ASEAN, as well as Chile’s largest trading partner in the region, with trade value of around one billion U.S. dollars. Thailand considers Chile a major trading gateway for its trade expansion into Latin America and expects to increase its export volume of vehicles, canned fish, polymer, electric appliances, and construction materials, especially cements, thermoplastics, rubbers, rubber products, and jewelry products. Thailand also expects to expand its rice market to the country and benefit from Chile’s abundant raw materials such as copper, metal ores, and paper pulp.

 

Chile is a land of variety and outstanding geography, located in the southwest of South America, occupying a long, narrow strip of land between the Andes Mountains and the Pacific Ocean from the North to the South of the country; which benefits the Chilean agriculture industry; protecting it from plants diseases and pests spreading from its neighboring countries. The northern part is rich in minerals and marine resources. The capital city, which is located in the central of the country, is the center of agriculture and industries. The southern part is full of fishery and forestry resources, which has been well managed and subject to strict standard regulations on environmental conservation. The 17 million population, high-capacity business, and great support from the democratic government have propelled Chile to the top of the list of countries with the fastest growing economies. Chile is also one of the countries that have very strong economic and stable political systems in Latin America. Its export accounts for 40% of its GDP. Its major export product is copper, which generates one-third of the state’s revenues, thanks to its copper production under the management of CODELCO (Corporacion Nacional del Cobre de Chile), a state enterprise, and high copper price in the global market. Besides, its export of other products consisting of agricultural products, fruit, deli, fish, seafood and wines has been expanding. Chile has 22 Trade Agreements (FTA) with 60 countries, including EU, China, U.S.A, South Korea, Japan, Canada, Mexico and Mercosur etc., which are beneficial to Chile’s preferential trade status that allows access to 62% of world’s population; with up to 93% of its export value getting Tariff preferences.

 

Mr. Jaime Rivera, Trade Commissioner and Coordinator of ASEN Markets, Trade Commission of Chile in Bangkok, Embassy of Chile or ProChile said, “Chile realizes the importance of international trade and has entered into trade agreements with 60 different countries in order to support the agreement which allows its penetration to 4.3 billion people with purchasing power in the global market”. Chile is a gateway between Latin America and other parts of the world. Trading is a pilot engine of Chile’s growth, of which total value in 2012 exceeded 78 billion USD. Chile’s main export markets are China, U.S.A, Japan, and South Korea, the biggest market for Chile during the period between 2008 – 2012; which saw export volume increasing by 70% or 39.4 billion U.S. dollars in 2012. Chile is Thailand’s third trading partner in South America, after Brazil and Argentina in 2008 to 2012, respectively. An average trading value between Thailand and Chile is around 705 million U.S. dollars per year, or 0.17% of Thailand’s total trading value. Although the figure is low, it tends to rise steadily every year. According to the report of the Central Bank of Chile, foreign direct investment (FDI) in Chile topped 28 billion U.S. dollars in 2012, a 62.7% increase year-on-year of 17 billion U.S. dollars. Mr. Jaime Rivera also said, “This is a new page in the history of investment with foreign countries and a good clear sign of reliability in Chile’s political institution and economy; a good sign that is very important in order for to carry on continuously, facilitating new investors traveling to Chile in order to maintain the investment level in the country. Chile is ready to welcome Thai investors from all sectors. Investments in businesses and services such as orchid farms, hotel , shrimp and lobster farm, spa, Thai restaurant, Thai massage, wholesale and retail, engineering, architect, construction, traveling, and property, with local counterparts have good potential in Chile.The FTA agreements also attract Chilean businessmen to increase their investments in Thailand; for example, the Luksic Group, and Antofagasta, a big company in mining business, which has invested in many countries, as well as Soquimich, a fertilizer manufacturer from Chile that has already invested in Thailand”. With Chile’s commitment to establishing FTAs continuously with many countries all over the world, its products have penetrated up to two-thirds of global consumer markets. Chile is ranked as one of the fastest growing economies and influential countries. The success story stems from its citizens, and policies on social infrastructure, as well as social environment. (Source)

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