NMIRI

Free trade Agreement Between U.S. and Chile

By
M. Gene Aldridge
New Mexico Independence Research Institute, Inc.
The 108th U.S. Congress and President Bush will soon have the opportunity to cement a free trade agreement between Chile and the United States. President Bush notified Congress in January that he would be signing the agreement and is allowing the U.S. Congress time for the mandatory 90 day review.

Chile's recent position with respect the United Nations stand on Iraq has come into play in recent weeks. There are those in Latin America who are watching carefully whether the U.S. Congress and/or the President will change their minds with respect to votes taken by Chile on the Iraq issue in the United Nations. These fears, we believe, are unfounded.

While the U.S. Congress may debate the votes taken by Chile, and President Bush would have liked for Chile to join the U.S. coalition, it would be foolhardy for the United States to ruin a golden opportunity to advance our neighbor's economic freedom over one vote in the United Nations. We believe, at the Institute, that Congress and President Bush will advance this important agreement early this year regardless of the vote on Iraq taken by Chile at the U.N. Chile has already come on board with President Bush on fighting terrorism, so this issue is not left without support from Chile.

While it is disheartening that our allies seem to leave us in time of need while we are fighting a war on terrorism and a disarmament program with Iraq that is led by the U.N., our goals for the future economic structure of Latin American cannot go unattended. Our own Institute studies on economic development of nations has produced key variables for potential success. Those variables within cultures are: sound educational systems in support of democratic ideals for debate, clever attraction of international investments to the country for economic development, freedom for businesses to operate, and sound free market policies that will drive both monetary and fiscal policies. Chile has created just such an environment in Latin America. It deserves U.S. support and attention regardless of Chile's ill conceived vote at the U.N.

Chile is a Latin American neighbor that represents some of the best hope for economic freedom and free markets in the region. Chile is headed for what looks to be at least a 3.0 growth in GDP for their economy in 2003. Chile has created a commitment to economic development via international investments from 4300 companies in 65 countries over the past few decades. Chile is the leader in Latin American economic policies and results, both in fiscal and monetary policies. Inflation seems to be under control with sound financial management of the nation's resources. This kind of financial policy commitment cannot go unrewarded in Latin America at this crucial time.

President Bush is one of the few presidents in recent years that can make a difference in Latin America. It is too bad that the terrorists have created a new agenda for the U.S. for the moment because most of us who follow Latin America had high hopes for major policy changes from the United States on matters of free trade in the region. President Bush will support the Chilean Free Trade Agreement in the coming months by signing the agreement. This is as it should be.

The U.S. will benefit with new jobs, creation of approximately $4.2 billion in new business (University of Michigan Study) with Chile, tariff reductions for our trade with Chile and a whole host of other benefits to our nation's position in Latin America. The U.S. must symbolically reward those nations that create the kind of economic structures that will bring stability to Latin America. Market share in international trade, new business for the future, creation of e-business opportunities, and the enhanced labor force all combine to make this agreement a hope for opportunity and business growth. Canada, Mexico and other nations already have free trade with Chile. Europeans are moving on the Chilean markets as we speak. It is imperative that the U.S. move to complete this arrangement. Chile stands as a beacon of hope for all of Latin America as it relates to free trade and sound economic policy.

About the author: Professor M. Gene Aldridge is a specialist on U.S. Mexican and Latin American issues. He has worked in over 100 nations of the world over the past 25 years. His publications include issues about U.S. Security, Economics, Intercultural Communication, Economic Development, International Marketing and Management, and Mass Communication. He may be contacted at galdridge@zianet.com

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