Chile hopes to bridge Asia and S. America

Chile hopes to bridge Asia and S. America

By Paul Iredale

JAKARTA (Reuter): Chile served notice this past week it planned to be a power in the rich Asia-Pacific trading zone, rolling into town to join the group with a crisp roadshow and a large team of businessmen.

The high profile of the "new kid on the block" contrasted sharply with that of Mexico, until last week the only Latin member of the Asia-Pacific Economic Cooperation (APEC) forum, which has decided to create the world's biggest free trade zone by 2020.

While Chilean President Eduardo Frei held a lunch with Indonesian businessmen and led a delegation of 160 people, Mexican President Carlos Salinas made a shorter and altogether quieter visit.

"We want to actively participate in building a new era of transpacific cooperation, to be important actors in the changes taking place in the region and to help to create a true Pacific community," Frei told the Indonesian chamber of commerce and industry.

"This is our political will and we will act accordingly." Mexico clearly has a different political agenda at the moment from its "compadre" to the south.

The Mexican government is about to undergo its six-yearly shake-up as a new president takes office and jobs are changed through to the widest reaches of the administration.

Salinas himself, barred by the constitution from re-election, is looking for new work as the director of the World Trade Organization, which takes over from the General Agreement on Tariffs and Trade (GATT) next year.

While he did not raise his WTO candidacy at the APEC summit, his participation underlined what he sees as his global credentials for the job.

Chile's entry as the 18th member of APEC, a group responsible for half the world's trade, is its latest success in the march back onto the world's stage.

Shunned internationally for decades under military strongman Augusto Pinochet, Chile has since its return to democracy in March 1990 worked assiduously to produce a web of trade links through Latin America, Europe and the Pacific.

Frei, making his first Asian visit since becoming president in March, talked of "the viability of my country as a country that can become a bridge between Asia and South America, and as a trustworthy partner for the Asian community's interests in our hemisphere."

Chile's economic record is impressive. It boasts average annual growth of 6.3 percent over the past four years, is fifth among emerging economies in global competitiveness, and has the highest country-risk rating in Latin America.

This compares with economic growth of 2.8 percent in Mexico in 1992, and 0.4 percent last year.

But Mexico has one great advantage that still eludes Chile -- a trade deal with the United States.

Chile has been offered negotiations on entry to the North American Free Trade Agreement (NAFTA), which Mexico, the United States and Canada launched at the beginning of this year, but it is still waiting to begin talks.

For Chile, which already sends 32 percent of its exports to Asia, free access to the Asian market is arguably more significant than it might be for Mexico, which sends 86 percent of its exports and receives 72.9 percent of its imports from within NAFTA.

Other Latin nations are waiting in the wings for the hold-down on new membership of APEC to expire.

Colombia, Argentina and Ecuador have all expressed an interest in joining APEC.

And Peru, which like Chile conducts 31 percent of its trade with Asia, is already talking to the group about taking part in its working groups.