Country profile: Chile

Chile has one of South America's most robust and open economies. The country is an associate member of the Common Market of the Southern Cone (MERCOSUR) and full member of the Asia-Pacific Economic Cooperation (APEC) organization. Chile is a member of a number of free trade agreements (FTAs) with various countries, such as Canada, Mexico, South Korea, the United States, and the European Union. The FTA with the United States entered into force in January 2004 and plans to lead to full trade liberalization within 12 years.

In 2005, Chile’s real gross domestic product (GDP) grew by 6.3 percent, continuing the strong growth experienced in 2004 (6.2 percent). Booming prices for Chile’s mineral exports, especially copper, are the principle drivers of the high growth rate. State-owned copper mining firm Corporacion Nacional del Cobre de Chile (Codelco) is the world's largest copper-producing company. While copper and other minerals remain the mainstays of Chile’s exports, trade of other non-traditional products, such as forestry products, fresh fruit and seafood, have grown considerably over the past two decades.

Chile has limited domestic energy resources. As a result, the country must import the bulk of its energy needs. Chile's growing reliance on energy imports, particularly on natural gas, has not been without consequences. In April 2004, Argentina began restricting natural gas exports to Chile, with cuts reaching nearly 50 percent of contracted volumes on some days. Chile, in turn, began to reconsider its energy policy, which, prior to the import restrictions, had assumed an increased use of natural gas and power imports from Argentina. Most importantly, Chile has begun to pursue other sources of natural gas, such as liquefied natural gas (LNG) or piped gas from other countries.