CPTPP partner: Chile

CPTPP partner: Chile

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trading block that represents 495 million people with a combined gross domestic product of CAD $13.5 trillion – a full 13.5% of global GDP.  Through the CPTPP, Canada now has preferential access to some of the world’s most dynamic and fast-growing markets, which will strengthen Canadian businesses, grow the economy, and create more well-paying jobs for middle class Canadians.

The CPTPP entered into force for the first six countries to ratify the Agreement – Australia, Canada, Japan, Mexico, New Zealand, and Singapore – on December 30, 2018, for Vietnam on January 14, 2019, and for Peru on September 19, 2021. For the remaining signatories (Brunei, Chile, and Malaysia), the CPTPP will enter into force 60 days after that country ratifies the Agreement.

Why Chile matters

• Between 2015 and 2017, on average, Chile was Canada’s third-largest trading partner in South and Central America.
• Bilateral merchandise trade between Canada and Chile was $2.9 billion in 2017, an almost four-fold increase since the Canada-Chile Free Trade Agreement (FTA) entered into force in 1997.
• Chile is Canada’s top investment destination in South and Central America and 11th worldwide.
• Chile is a proponent of market liberalization and offers a stable environment for foreign investment.

Canada-Chile trade snapshot

Top Canadian Exports to Chile (2015-2017 average, $CAD)

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Key facts and figures

Canada-Chile trade

• Canadian merchandise exports: $793 million (2015-2017 average)
• Canadian merchandise imports: $1.9 billion (2015-2017 average)
• Canadian service exports (2016): $226 million
• Canadian service imports (2016): $101 million

Canada-Chile tourism

• In 2016, Canada welcomed approximately 27,200 visitors from Chile.
• Over 79,400 Canadian tourists visited Chile in 2015.

Canada’s top merchandise imports from Chile (2015-2017 average)

• Metals and minerals: $922 million
• Agricultural products (fruits): $605 million
• Fish and seafood products: $171 million
• Forest products and value-added wood products: $69 million
• Chemicals and plastics: $39 million

Canada’s top service imports from Chile (2016)

• Transportation and government services: $47 million
• Travel: $33 million
• Commercial services: $22 million

Canada’s top merchandise exports to Chile (2015-2017 average)

• Agricultural products (fats and oils, wheat): $229 million
• Industrial machinery: $130 million
• Metals and minerals: $90 million
• Medical goods and pharmaceutical: $61 million
• Miscellaneous industrial products: $49 million

Canada’s top service exports to Chile (2016)

• Commercial Services: $161 million
• Travel: $44 million
• Transportation and government services: $21 million

How the CPTPP helps Canada-Chile trade and investment

• The CPTPP will complement the Canada-Chile FTA, which provides preferential market access and clear trading rules for Canadian exporters.
• The CPTPP will also provide preferential market access that follows similar, modernized trade rules and will give exporters greater flexibility in using inputs from CPTPP members. This will allow Canadian exporters to choose between the trade agreements and claim preferences under the agreement that best suits their needs.
• On investment, the CPTPP will allow Canadian companies to invest with greater confidence in Chile, offering them protections from unfair and discriminatory treatment, as well as greater predictability and transparency.
• The service industry will also benefit from more predictable access and greater transparency in Chile.
• New commitments on the temporary entry of business people will make it easier for Canadian businesses to temporarily move high-skilled Canadian professionals and technicians to Chile.
• Suppliers of goods or services will also gain enhanced access to open, fair, and transparent processes when bidding on government procurement contracts at the sub-national level in Chile, a benefit that is not offered under the Canada-Chile FTA.
• The CPTPP also provides robust and enforceable provisions on labour and environment.

Sectoral opportunities in Chile

• Aerospace and defence:
  • Opportunities exist across Chile’s armed forces, including for significant naval upgrade programs.
  • Key opportunities in the aerospace sector include possible sales of C-series aircraft to Latin America.
• Renewable energy:
  • Chile has vast wind, hydropower, biomass, geothermal and marine resources and has the world’s best solar potential.
• Education:
  • Canada is an attractive destination for students and education partner.
  • 616 Chilean students have participated in the Emerging Leaders in the Americas Program and in the Canada-Chile Leadership Scholarship Program.
• Science, technology and innovation collaboration:
  • Canada has a memorandum of understanding with Chile on cooperation in science, technology and innovation.
  • Canada encourages collaboration with Chilean counterparts with a view to accelerate commercialization of innovation and to benefit our economies.
• Forestry:
  • Forestry is Chile’s second most important industrial sector after mining.
  • Chile’s forestry exports in 2018 are projected to reach US$5.5 billion, creating opportunities for Canadian exporters of forestry equipment and services.
• Infrastructure:
  • Chile is a proponent of public-private partnerships and Canada is already a significant player under this model.
• Mining:
  • Significant investment is expected in the mining sector over the next two to three years, along with a surge in demand for mining equipment and services.
• Agriculture and agri-food:
  • Canada currently exports a large amount of wheat, canola oil, pulses and frozen pork to Chile.
  • Exports of beef and processed food have also increased.
  • There are opportunities to export more Canadian agri-food products.