Chile’s new government is shifting the focus of foreign policy. After three years in which the Andean country favored an alliance with peers facing the Pacific —Peru, Colombia and Mexico— it’s now looking towards the Atlantic seaboard nations of Argentina and Brazil.
Michelle Bachelet, the Chilean president who started her second term on March 11, plans to go to Argentina and Brazil on her first visit abroad in April, shifting international focus.
“In recent years, Chile has lost regional presence and an economic vision has excessively prevailed in the country’s relationships,” Bachelet said at the Economic Commission for Latin America and the Caribbean recently.
A member of the Socialist Party, Bachelet served her first term between 2006 and 2010. Sebastián Piñera, representing the center-right, followed her in the presidency. Under Chilean law, a president can’t run for immediate reelection.
Piñera launched the Pacific Alliance with Peru, Colombia and Mexico in 2011. The group set its eyes in Asia to increase trade tossing aside Brazil, which is now looking to gain back regional support.Both Brazil and Argentina differ from Chile through having a more protectionist economy.
Argentina set restrictions to imports and controls to currency exchange to stop people and companies from sending U.S. dollars abroad.
Brazil’s regulatory system, taxes and subsidies to local industries are a hurdle for foreign corporations looking to expand in Latin America’s biggest country by population.
Chile, with a population of 17 million, has more in common with Peru and Colombia than with Brazil. The three Andean countries speak Spanish and have opened their doors to business integration among themselves and with the world. With a population of 200 million, Brazil is a continent in itself and has its own agenda with the other BRIC countries: Russia, India and China.
While the new Chilean government has said it will keep its ties with the Pacific Alliance for business and trade purposes, the Bachelet administration will look to partner with Brazil to play a more political role in the region, divided between left- and right-wing governments.
In foreign policy like in other areas, Bachelet also wants to distance herself from her predecessor. In this new scenario Mexico stands to lose the most.
With 80% of its exports going to the U.S., its economic interests are far closer linked to its northern neighbor than with its Pacific Alliance partners.
“The Pacific Alliance is a way for Mexico to have political influence in South America,” says Hernán Felipe Errázuriz, a former Chilean foreign affairs minister.
The new Chilean government will have to balance its interest in playing a larger political role in the region with revitalizing Chile’s economy.
Last year, Chile’s gross domestic product growth slowed to 4.1% from a 5.6% increase in 2012.
Political benefits of aligning more closely with Argentina and Brazil are countered by their structuralism, and it’s the Pacific rather than the Atlantic countries that offer plainer sailing for economic prosperity.
forbes.com
Michelle Bachelet, the Chilean president who started her second term on March 11, plans to go to Argentina and Brazil on her first visit abroad in April, shifting international focus.
“In recent years, Chile has lost regional presence and an economic vision has excessively prevailed in the country’s relationships,” Bachelet said at the Economic Commission for Latin America and the Caribbean recently.
A member of the Socialist Party, Bachelet served her first term between 2006 and 2010. Sebastián Piñera, representing the center-right, followed her in the presidency. Under Chilean law, a president can’t run for immediate reelection.
Piñera launched the Pacific Alliance with Peru, Colombia and Mexico in 2011. The group set its eyes in Asia to increase trade tossing aside Brazil, which is now looking to gain back regional support.Both Brazil and Argentina differ from Chile through having a more protectionist economy.
Argentina set restrictions to imports and controls to currency exchange to stop people and companies from sending U.S. dollars abroad.
Brazil’s regulatory system, taxes and subsidies to local industries are a hurdle for foreign corporations looking to expand in Latin America’s biggest country by population.
Chile, with a population of 17 million, has more in common with Peru and Colombia than with Brazil. The three Andean countries speak Spanish and have opened their doors to business integration among themselves and with the world. With a population of 200 million, Brazil is a continent in itself and has its own agenda with the other BRIC countries: Russia, India and China.
While the new Chilean government has said it will keep its ties with the Pacific Alliance for business and trade purposes, the Bachelet administration will look to partner with Brazil to play a more political role in the region, divided between left- and right-wing governments.
In foreign policy like in other areas, Bachelet also wants to distance herself from her predecessor. In this new scenario Mexico stands to lose the most.
With 80% of its exports going to the U.S., its economic interests are far closer linked to its northern neighbor than with its Pacific Alliance partners.
“The Pacific Alliance is a way for Mexico to have political influence in South America,” says Hernán Felipe Errázuriz, a former Chilean foreign affairs minister.
The new Chilean government will have to balance its interest in playing a larger political role in the region with revitalizing Chile’s economy.
Last year, Chile’s gross domestic product growth slowed to 4.1% from a 5.6% increase in 2012.
Political benefits of aligning more closely with Argentina and Brazil are countered by their structuralism, and it’s the Pacific rather than the Atlantic countries that offer plainer sailing for economic prosperity.
forbes.com
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