WORLD  TRADE  
ORGANIZATION  WT/TPR/S/220/Rev.1 
5 November 2009 
 (09-5519) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
CHILE 
 
Revision 
 
 
 
 
This report, prepared for the fourth Tr ade Policy Review of Chile, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Chile on its trade policies and practices. 
 
Any technical questions arising from this  report may be addressed to Mrs Martha 
Lara de Sterlini (tel. 022 739 6033), Mr  Angelo Silvy (tel. 022 739 5249) and 
Mr Raymundo Valdés (tel. 022 739 5346). 
 
Document WT/TPR/G/220 contains the policy statement submitted by Chile. 
 
 
 
 
 Chile WT/TPR/S/220/Rev.1 
 Page iii 
 
 
  CONTENTS 
 
  Page 
SUMMARY OBSERVATIONS vii 
 (1) E CONOMIC ENVIRONMENT  vii 
 (2) T RADE AND INVESTMENT POLICY FRAMEWORK  vii 
 (3) M ARKET ACCESS FOR GOODS  viii 
 (4) O THER MEASURES AFFECTING TRADE  ix 
 (5) S ECTORAL POLICIES  x 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) M ACROECONOMIC TRENDS  2 
 (i) Economic structure and trends 2  (ii) Fiscal policy 5 
 (iii) Monetary and exchange policy 7 
 (iv) Balance of payments 9 
 (3) M
ERCHANDISE TRADE AND INVESTMENT FLOWS  10 
 (i) Composition of trade 10 
 (ii) Direction of trade 10 
 (iii) Trade in services 11 
 (iv) Foreign direct investment 11 
 (4) O UTLOOK  11 
II. TRADE AND INESTMENT POLICY REGIME 13 
 (1) O VERVIEW  13 
 (2) T RADE AND INVESTMENT POLICY FRAMEWORK  13 
 (i) General legal and institutional framework 13 
 (ii) Trade policy formulation and objectives 15 
 (3) F OREIGN INVESTMENT  16 
 (i) Legal framework 16 
 (ii) International investment agreements 19 
 (4) I NTERNATIONAL TRADE RELATIONS  19 
 (i) World Trade Organization 19 
 (ii) Regional Trade Agreements 21  (iii) Other agreements and arrangements 23 
III. TRADE POLICIES AND PRACTICES BY MEASURE 25 
 (1) O
VERVIEW  25 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  26 
 (i) Procedures, documentation and registration 26 
 (ii) Customs valuation 29 
 (iii) Rules of origin 29 
 (iv) Tariffs 31  (v) Other charges affecting imports 35 
 (vi) Import prohibitions, restrictions and licensing 37 WT/TPR/S/220/Rev.1 Trade Policy Review 
Page iv 
 
 
    Page 
 
 (vii) Anti-dumping, countervailing and safeguard measures 39 
 (viii) Technical regulations and standards 44  (ix) Sanitary and phytosanitary measures 48 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  53 
 (i) Procedures, documentation and registration 53  (ii) Export taxes and duties 54 
 (iii) Export prohibitions and rest rictions and licensing regimes 54 
 (iv) Tariff and tax concessions 55  (v) Export financing and guarantees 57 
 (vi) Export promotion 59 
 (4) O
THER MEASURES AFFECTING PRODUCTION AND TRADE  60 
 (i) Establishment and taxation of enterprises 60 
 (ii) Competition policy and price control 62 
 (iii) Incentives 66  (iv) State-owned enterprises and privatization 70 
 (v) Government procurement 71 
 (vi) Protection of intellectual property 75 
IV. TRADE POLICIES BY SECTOR 83 
 (1) O
VERVIEW  83 
 (2) A GRICULTURE AND FORESTRY  84 
 (i) General characteristics 84 
 (ii) Policy objectives and institutional framework 85  (iii) Agricultural support indicators 86 
 (iv) Policy instruments 88 
 (v) Forestry 92 
 (3) F
ISHING AND AQUACULTURE  93 
 (4) M INING   95 
 (i) General characteristics 95  (ii) Policy objectives and le gal and institutional framework 97 
 (5) M
ANUFACTURING  99 
 (6) E NERGY   101 
 (i) General characteristics 101 
 (ii) Hydrocarbons 102 
 (iii) Electricity 104 
 (7) S ERVICES  106 
 (i) General characteristics and multilateral commitments 106 
 (ii) Telecommunications 108 
 (iii) Financial services 111 
 (iv) Air transport and airports 118  (v) Maritime transport and ports 123 
 (vi) Professional services 126 
 REFERENCES 131 
 
APPENDIX TABLES 135 
 Chile WT/TPR/S/220/Rev.1 
 Page v 
 
 
  TABLES 
 
Page 
 I. ECONOMIC ENVIRONMENT 
 
I.1 Structure of the economy, 2003-2009 3 I.2 Evolution and structure of GDP by type of expenditure, 2003-2009 4 
I.3 Central Government finances, 2003-2009 5 
I.4 Key monetary indicators, 2003-2009 8 I.5 Balance of payments, 2003-2009 9 
II. TRADE AND INVESTMENT POLICY REGIME 
 II.1 WTO dispute settlement cases involving Chile, January 2003-June 2009 21 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 MFN tariff structure, January 2009 31 
III.2 Breakdown of the MFN tariff, January 2009 32 
III.3 Taxes levied on imports and domestic goods, January 2009 36 
III.4 Goods subject to import formalities 38 
III.5 Interest rates:  lines of financing for exports - CORFO 58 III.6 Overview of intellectual property rights in Chile, 2009 77 
IV. TRADE POLICIES BY SECTOR 
 IV.1 Estimated support for agriculture, 2004-2007 86 
IV.2 Manufacturing sector GDP, constant prices 2003-2008 100 
IV.3 Rights for foreign airlines in Chile 122  
 
APPENDIX TABLES 
 
 
I. ECONOMIC ENVIRONMENT  
AI.1 Merchandise exports (f.o.b.) by product, 2002-2008 137 
AI.2 Merchandise imports (c.i.f.) by product, 2002-2008 139 AI.3 Merchandise exports (f.o.b.) by trading partner, 2002-2008 140 
AI.4 Merchandise imports (c.i.f.) by trading partner, 2002-2008 141 
AI.5 Trade in services, 2003-2008 142 
AI.6 Foreign direct investment (under Decree Law No. 600) by sector, 2003-2008 143 
AI.7 Foreign direct investment (under Decree Law No. 600) by selected country  of origin, 2003-2008 144 
II. TRADE AND INVESTMENT POLICY REGIME 
 AII.1 Restrictions on foreign investment 145 
AII.2 Selected notifications to the WTO, June 2009 147 
AII.3 Overview of Chile's current regi onal trade agreemen ts, January 2009 150 
IV. TRADE POLICIES BY SECTOR 
 
AIV.1 Summary of Chile's comm itments under the GATS 156
 Chile WT/TPR/S/220/Rev.1 
 Page vii 
 
 
  SUMMARY OBSERVATIONS 
 
1. Chile's trade and investment regime 
continues to be characterized by openness, 
transparency, predictability and inter-sectoral 
neutrality.  Chile applies an almost uniform MFN tariff and grants national treatment to foreign investors in all but a few cases.  Since its last Review in 2003, Chile has adopted 
measures to modernize customs and facilitate 
trade, abolished some import taxes and export subsidies, and introduced significant reforms to its competition policy, government procurement and intellectual property systems.  Regional Trade Agreements (RTAs) have 
continued to play a central role in Chile's 
liberalization strategy.  At the same time, Chile remains strongly committed to the multilateral trading system, where it participates actively. 
2. Open trade and investment policies, 
together with sound macroeconomic management, underpin Chile's solid economic growth and its capacity to implement aggressive counter-cyclical measures to respond to the current global financial crisis.  
Nevertheless, benefits could arise from 
re-examining with a view to changing measures such as the imposition of non-ad valorem  tariffs on a couple of 
agricultural products, import prohibitions on 
certain used goods, and the application of 
reciprocity requirements in a handful of activities. 
(1) E
CONOMIC ENVIRONMENT  
3. The Chilean economy grew at an 
annual average rate of 4.8 per cent between 
2003 and 2008, reflecting strong domestic demand and, to a lesser degree, export growth.  However, amidst the global economic crisis, 
the economy has cooled off since mid-2008 and was experiencing a contraction in the first 
half of 2009.  Sustained economic growth has 
allowed Chile to attain one of the highest per capita income in Latin America, of some US$10,000 per person.  At the same time, Chile has implemented internal policies to ensure that the gains from trade are more 
broadly distributed;  this and sustained growth have reduced the proportion of the population living in poverty from 21 per cent in 2000 to 
14 per cent in 2008. 
4. Chile maintains a floating exchange 
rate system.  Monetary policy seeks to achieve an annual inflation target of 2 per cent to 4 per cent, and has generally kept inflation 
under control.  Fiscal policy aims at obtaining 
a structural surplus, which saw Chile enter the present global crisis with room for discretionary action.  As a result, Chile has been able to adopt an expansionary fiscal policy since 2008, using public assets 
accumulated when commodity prices were 
high.  Sound macroeconomic policies and open trade have allowed Chile to profit from economic specialization while lessening the vulnerabilities associated with it. 
5. Chile's external current account posted 
a positive balance for much of the period under  review, reflecting mainly a trade balance surplus.  Its exports consist mostly of primary products, which represented some 87 per cent of total merchandise exports in 
2008.  Chile's main trading partners are the EU 
and the United States.  Chile has continued to record a deficit in its services balance, particularly in financial services and insurance.  FDI inflows have traditionally 
played an important role in Chile's economy;  
they were equivalent to some 3 per cent of GDP in 2008.  The main recipient sectors were mining, electricity and communications. 
(2) T
RADE AND INVESTMENT POLICY 
FRAMEWORK  
6. Since its last Review, Chile has not 
introduced fundamental changes in its trade policy, which, the authorities state, continues to aim at furthering Chile's integration into the world economy within a framework of 
predictable rules and under policies that 
promote social equity. WT/TPR/S/220/Rev.1 Trade Policy Review 
Page viii 
 
 
  7. Chile participates actively in the WTO 
and the DDA.  It considers that the multilateral trading system should be further strengthened and that certain issues on the trade agenda, 
such as the elimination of agricultural 
subsidies, can only be resolved in the multilateral sphere.  During the period under review, Chile has made regular notifications to the WTO.  It has been involved in several 
dispute settlement procedures, in four cases as 
a defendant, three as a complainant and 11 as a third party.  Chile is not a party to any of the WTO plurilateral agreements. 
8. One of the most prominent features of 
Chile's trade policy regime is the central role it 
gives to RTAs.  As at mid-2009 Chile had in 
force 21 RTAs with 57 trading partners;  13 of these agreements, with 18 partners, were concluded during the review period.  As a result, just over 92 per cent of Chile's total 
merchandise trade is carried out with 
preferential partners.  As in the case of other WTO Members, the overall economic implications of Chile's RTAs are complex.  In the case of Chile, concerns about its wide and expanding network of RTAs are allayed by 
Chile's strong support to the multilateral 
trading system. 
9. Chile considers foreign investment as 
an essential engine of growth, and an integral part of its open economic policy.  It grants 
national treatment to foreign investors, with a 
few exceptions in areas such as fisheries, air and maritime transport, and audiovisual services.  Chile has in force a large number of bilateral agreements to promote and protect 
foreign investment, and to avoid double 
taxation. 
(3) M
ARKET ACCESS FOR GOODS  
10. Since its last Review, Chile has 
continued to adopt measures to facilitate trade and to modernize customs, including new 
valuation regulations.  As a result of previous 
unilateral tariff reduc tions, since 2003 Chile 
has applied a single MFN tariff rate of 6 per cent, with a few exceptions that reduce somewhat the otherwise noteworthy simplicity 
and neutrality of Chile's tariff structure.  The exceptions are:  a 12.5 per cent rate on poultry products, a price band system applied to a 
handful of agricultural products, and a tariff 
surcharge of 50 per cent collected on almost all used goods.  Under the RTA with the United States, the MFN tariff on poultry products was increased to 25 per cent but is 
being progressively reduced back to 6 per 
cent.   A zero rate on certain capital goods reduces nominal tariff protection, but increases effective protection on final goods. 
11. The MFN tariffs applied to wheat, 
wheat flour and sugar vary with international 
prices as a result of the price band system 
applied to these products;  reflecting the high prices prevailing in recent years, the use of this system appears to have resulted in tariffs no higher than the general 6 per cent rate.  Two 
Panels found the price band system 
WTO-inconsistent.  Draft legislation under consideration aims to bring the system into conformity with WTO rules by introducing a fixed compound tariff;  the proposed change would increase tariff protection over the level 
actually applied in recent years. 
12. All tariff lines are bound, most at 
25 per cent;  a number of agricultural products are bound at 31.5 per cent.  Chile renegotiated the bound rate for sugar, resulting in an 
increase of the bound rate to 98 per cent and 
the introduction of a tariff quota in 2002.  Although Chile's applied tariff rates have been stable in practice, reducing bound rates would enhance certainty to MFN traders. 
13. Chile imposes other charges on certain 
import operations, some on an ad valorem  
basis.  Imports are subject to the same internal taxes as domestic goods, most notably to a 19 per cent Value Added Tax (VAT).  Certain goods, such as alcoholic beverages, tobacco 
products, vehicles and jewellery, are subject to 
excise taxes.  Since 2003 Chile has abolished the airport tax and the customs dispatch tax. Chile WT/TPR/S/220/Rev.1 
 Page ix 
 
 
  14. Chile does not apply quantitative 
import restrictions or import licenses.  However, it prohibits, among others, the importation of most used motor vehicles, and 
used and retreaded tyres (except those wheel-
mounted).  Initially introduced to assist the domestic vehicle assembly industry, the import prohibition on used motor vehicles is ostensibly maintained for safety and 
environmental reasons.  The import prohibition 
on used and retreaded tyres seeks public health objectives.  It would be valuable to study whether less trade-restrictive measures could achieve the same objectives sought through outright import prohibitions on used motor 
vehicles and tyres.  Also on safety, health and 
environmental grounds, Chile applies administrative formalities to certain imports. 
15. As at January 2009, Chile maintained 
only one anti-dumping measure in force.  
During the period under review, Chile 
introduced two anti-dumping measures (on wheat flour) and three safeguard measures (on wheat flour and certain dairy products);  some of these measures have been challenged under multilateral rules.  On the other hand, by 
setting short application periods, Chile's 
legislation would seem to discourage the use of contingency measures for protectionist purposes.  Moreover, Chile supports stricter multilateral disciplines on the use of 
contingency measures, and has agreed to the 
reciprocal non-application of these measures under some RTAs. 
16. Since 2003, Chile has introduced no 
major changes to the legal or institutional 
framework governing the adoption and 
application of technical regulations or sanitary and phytosanitary measures (SPS).  Such framework aims to ensure non-discrimination and transparency, although there are no general guidelines for the elaboration and 
notification of SPS measures.  Chile has 
submitted numerous notifications on both types of measures during the period under review;  a reduced number of SPS notifications provided for shorter comment periods than 
those multilaterally recommended. (4) O
THER MEASURES AFFECTING 
TRADE  
17. Chile maintains a number of export 
promotion programmes that offer 
administrative facilities for the payment and 
reimbursement of import duties and VAT.  During the period under review, Chile phased out certain aspects of these programmes that it had previously notified as providing export 
subsidies.  Several public financing and 
guarantee schemes are also offered to exporters, mainly to small- and medium-sized enterprises.  Chile does not apply export taxes. 
18. Chile has in place numerous other 
incentive programmes, but most eschew 
targeting particular sectors in favour of 
horizontal measures targeting small- and medium-sized enterprises, technological innovation or regional development.  Incentives generally consist of fiscal benefits, 
investment and R&D financing, and support 
for the development of entrepreneurial skills. 
19. Chile has introduced important reforms 
to its competition policy framework, most notably by establishing a competition tribunal to increase the autonomy of the competition 
system.  Further reforms to strengthen the 
investigative powers of the competition authority, in particular against cartels, are expected to come into force in late 2009. 
20. Chile is not a signatory to the WTO 
Agreement on Government Procurement but it 
is an observer in the respective WTO committee.  Since 2003, Chile has implemented significant reforms to increase the transparency and efficiency of public 
procurement, particularly through the adoption 
of new legislation and the use of electronic tendering.  The reforms have led to greater participation in the public procurement market.  There is no discrimination based on the origin of products, services or providers.  
Public procurement by state enterprises and 
procurement of construction works are subject to separate regulations. WT/TPR/S/220/Rev.1 Trade Policy Review 
Page x 
 
 
  21. Reforms have also been made to 
Chile's intellectual property system with the aim of strengthening and adapting it to Chile's international commitments.  In some instances, 
the Chilean legislation goes further than the 
obligations of the TRIPs Agreement, for example, in certain aspects relating to the protection of copyrights and industrial property.  Chile has notified to the WTO the 
changes to its legislation. 
(5) S
ECTORAL POLICIES  
22. The agricultural sector has continued 
to play a major role in Chile's economic development, contributing both to the expansion and diversificati on of its exports.  In 
general, the sector enjoys a low level of 
support, which is mainly geared to small farmers and does not include production-based measures.  However, Chile has used contingency measures to protect domestic 
producers of wheat, wheat flower and certain 
dairy products, while the price band system it applies to wheat, wheat flour and sugar results in tariff protection that can vary inversely with the world price of these products.  This is at odds with Chile’s gene ral economic policies, 
and may hinder the reallocation of resources 
among activities that would support higher living standards in the long-run. 
23. Chile has managed to stabilize the 
production of its fishing sector.  Aquaculture 
has gained importance and now accounts for 
two-thirds of fish exports, but it is facing serious sanitary problems.  Foreigners must comply with residency and establishment requirements to invest in fishing or 
aquaculture activities, while companies must 
be Chilean majority-owned or be established in countries that grant r eciprocal treatment to 
Chileans. 
24. The mining sector consolidated its 
position as Chile's main export revenue 
generator and foreign investment recipient, 
benefiting from the high mineral prices that prevailed during much of the period since 2003.  The State continues to play a fundamental role as an operator in the sector, 
mostly in the production of copper.  During the review period, Chile introduced a new tax on mining activities.  A regulation remains in 
place requiring the main mining companies to 
deliver certain quantities of refined copper to domestic manufacturing enterprises;  in practice the quantities involved represent only a small fraction of Chile's copper production. 
25. The manufacturing sector has 
increased its productivity, and remains an important generator of value added and employment.  This reflects in part Chile's development strategy based on trade liberalization and inter-sectoral neutrality.  
The sector continues to be largely based on the 
processing of natural resources, thus reflecting Chile's comparative advantage. 
26. Chile is highly dependent on imports 
of energy to satisfy domestic consumption, 
and restrictions on the foreign supply of gas in 
recent years have become a constraint to Chile's economic performance.  Chile has intervened in the domestic energy market to stabilize the price of certain fuels, possibly at a considerable fiscal cost;  it is also adopting 
policies aimed at ensuring a sustainable energy 
supply in the long-run. 
27. Chile made specific commitments in 
five of the 12 sectors of the GATS.  It adopted the Fifth Protocol on Financial Services and 
the Fourth Protocol on Basic 
Telecommunications, accepting also the Reference Paper on regulatory principles in telecommunications;  however, Chile made no commitments on basic local 
telecommunications.  In general, the market 
access provisions in Chile's legislation are considerably more liberal than the commitments it undertook under the GATS. 
28. Since 2003, no major changes have 
been made to the legal framework governing 
the telecommunications sector.  Concessions 
to operate public telecommunication services are granted to companies established in Chile, independently of the origin of capital.  Chile WT/TPR/S/220/Rev.1 
 Page xi 
 
 
  However, concessions for radio broadcasting 
are not granted to companies with more than 10 per cent foreign capital unless their country of origin grants reciprocity to Chilean 
companies.  Generally, prices are market 
determined, except where a company has a dominant position in a sector subject to maximum price setting.  Interconnection fees are also fixed by law. 
29. Chile's financial sector shows 
significant diversification and internationalization.  Foreign banks and insurance companies may provide services in Chile through locally incorporated companies or branches with separate capital, which may 
engage in the same operations as domestic 
firms.  For reasons of national interest, approval is required to acquire more than 10 per cent of a bank's capital.  The establishment of branches by foreign insurance 
companies is possible since 2007;  cross-
border supply of interna tional maritime and air 
transport insurance, as well as insurance of goods in transit, is also allowed since that year, but only for foreign companies from countries with which Chile has a treaty in this 
respect. 
30. Chile practices an "open skies" air 
transport policy based on reciprocity.  It has concluded 43 bilateral ai r transport agreements 
with different degrees of openness.  In 
maritime transport, cabotage is reserved to ships registered in Chile, with exceptions.  To 
register a ship in Chile, at least 50 per cent of the capital must be owned by Chilean persons or companies.  Subject to reciprocity 
considerations, cargo sharing requirements and 
a special tax may be applied to certain international maritime transport operations.  There are no restrictions on foreign participation in concessions for the 
administration of ports and airports. 
31. A valid professional diploma is 
required to engage in a regulated profession in Chile, including law, engineering and accounting.  Foreign diplomas must be revalidated by the University of Chile or be 
otherwise recognized under one of Chile's 
international mutual recognition agreements.  Only Chilean citizens or foreigners who have completed their law studies in Chile may appear before Chilean courts.  However, 
foreign legal consultants may provide legal 
advice on international or foreign law.  Foreign engineers who have been hired to perform a particular job in Chile must receive temporal authorization from the national engineers professional association. Foreign 
accountants may establish a consultancy firm 
in Chile but must have at least one partner with a valid diploma to practice accountancy in Chile.