Updated July 16, 2019
Chile: An Overview
Chile, a nation of 19.1 million people, is located along the
Figure 1. Chile at a Glance
Pacific coast of South America. Chile traditionally has been
one of the United States’ strongest partners in Latin
America due to the countries’ common commitments to
democracy, human rights, and free trade. Chile also has
worked with the United States to promote peace and
stability in the Western Hemisphere, as the country’s
transition to a higher level of economic development has
enabled it to take on additional regional responsibilities.
Political and Economic Situation
Chile has a long democratic tradition, but it experienced 17
years of authoritarian rule after a 1973 military coup led by
General Augusto Pinochet deposed the democratically
elected Socialist government of President Salvador Allende
Source: CRS Graphics, Instituto Nacional de Estadísticas; Centro de
(1970-1973). More than 3,200 people were killed or
“disappeared
Estudios Públicos; and the International Monetary Fund.
,” and some 38,000 people were imprisoned
and/or tortured during the Pinochet dictatorship. Chile
ultimately restored democracy in 1990.
After four years in opposition, the former CPD incorporated
the Communist Party and social movement leaders into the
The center-left Coalition of Parties for Democracy (CPD),
coalition, rebranded itself as the New Majority, and
which initially formed to campaign for an end to the
regained power with a series of policy proposals intended to
dictatorship, governed Chile for 20 years after the
reduce inequality. From 2014 to 2018, President Michelle
transition. Although it repeatedly won the presidency and
Bachelet worked with her congressional allies to enact far-
majorities in Chile’s bicameral congress, the CPD’s ability
reaching fiscal, labor, education, and electoral reforms. She
to implement policy changes was constrained by provisions
struggled with low approval ratings, however, as the
of the Pinochet-era constitution and the specter of another
economy grew by an average of 1.8% per year. Analysts
democratic breakdown. Consequently, the coalition pursued
primarily attributed Chile’s economic slowdown to the
consensus-based reforms that largely maintained the
falling price of copper, which accounts for about half of the
market-oriented economic framework inherited from
country’s export revenues, but Bachelet’s policies
Pinochet while gradually strengthening Chile’s social safety
reportedly exacerbated the downturn by weakening
net. The CPD’s cautious approach enabled Chile to
business confidence.
consolidate democratic governance and produced
Chile’s political pendulum swung back to the rig
considerable improvements in living standards.
ht in
December 2017, as Chileans voted to return Piñera to the
Nevertheless, many Chileans have been dissatisfied with
presidency. He defeated Senator Alejandro Guillier of the
the limits of the post-Pinochet policy consensus. They
ruling New Majority coalition in a second-round runoff
argue that Chile’s economic growth has disproportionately
election by a margin of 54.6% to 45.4%. Piñera campaigned
benefited the country’s wealthiest families and that most
on the economic record of his first term, and he appears to
Chileans still lack economic security and access to quality
have won over swing voters with his argument that the
public services. Over the past decade, this dissatisfaction
country needs stronger economic growth to address the
has manifested itself through repeated electoral swings and
concerns of the middle class. Piñera also benefited from the
mass mobilizations.
fragmentation of the New Majority coalition; the centrist
Christian Democrats split from the coalition to run its own
In 2009, Chileans elected President Sebastián Piñera of
slate of candidates, and a new Broad Front coalition
center-right Coalition for Change as president, leading to
attracted many left-wing voters. Piñera’s center-right
the country’
coalition, rebranded Let’s Go Chile, picked up seats but
s first alternation of power since the return to
democracy. Piñera lacked majorities in both houses of
failed to win majorities in either house of congress.
congress, however, and generally adhered to the same
policy mix as the CPD while implementing some business-
Piñera was inaugurated to his second four-year term in
friendly economic reforms. The Chilean economy expanded
March 2018. He has pledged to boost economic growth by
by an average of 5.3% per year throughout his 2010-2014
modifying some Bachelet Administration reforms, creating
term, but Piñera enjoyed little popular support and faced
new incentives for entrepreneurship and innovation, and
repeated protests.
increasing investment in infrastructure. Piñera also has put
forward proposals to improve public security and tighten
the country’s immigration policies. He has struggled to
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Chile: An Overview
implement much of his agenda, however, due to insufficient
The United States and Chile also have differed on relations
support in the fragmented congress. Although the Chilean
with China—Chile’s top trade partner. Chile signed a
economy accelerated considerably in 2018, the Piñera
cooperation agreement on the Belt and Road Initiative in
Administration expects growth to slow from 4% to 3.2% in
November 2018 and upgraded its bilateral free trade
2019 due to falling copper prices and weakening global
agreement with China in March 2019. During an April 2019
economic conditions. Piñera’s approval rating has declined
speech in Santiago, Secretary of State Mike Pompeo
along with public perceptions of the economy. According to
warned Chile that “when China does business in places like
a mid-July 2019 poll by Chilean firm CADEM, 30% of
Latin America, it often injects corrosive capital into the
Chileans approve of Piñera’s performance in office and
economic bloodstream, giving life to corruption and
58% disapprove.
eroding good governance.” Although Chile has urged
greater transparency in the Belt and Road Initiative, it has
U.S.-Chile Relations
continued to pursue Chinese trade and investment.
Although the United States initially supported the Pinochet
dictatorship, it also helped foster the restoration of
International Affairs
democracy in Chile. Since the political transition, the
Chile has supported a variety of regional peace and security
countries have maintained close commercial ties and
efforts in recent years. The country was one of the top
collaborated on regional security concerns. President
contributors to the U.N. Stabilization Mission in Haiti, with
Piñera’s ability to work with the Trump Administration
more than 12,000 Chilean peacekeepers rotating through
could be constrained, however, as a Gallup poll found that
Haiti between 2004 and 2017. Chile also has facilitated the
75% of Chileans disapproved of the “job performance of
peace process in Colombia, worked with the Lima Group of
the leadership of the United States” in 2018.
countries to push for the restoration of democracy in
Venezuela, and supported security and development efforts
Trade and Investment Relations
in Central America. The United States and Chile maintain a
U.S.-Chile trade relations have grown considerably since
High-Level Bilateral Political Consultative Mechanism to
the U.S.-Chile Free Trade Agreement entered into force on
coordinate efforts on security cooperation, human rights,
January 1, 2004 (P.L. 108-77). As result of the agreement,
and other topics of mutual concern. They also work
100% of U.S. consumer and industrial goods now enter
together under the U.S.-Chile Trilateral Development
Chile duty free. Total bilateral trade in goods has increased
Cooperation Initiative to jointly implement foreign aid
317% since 2003, reaching $26.8 billion in 2018, according
projects in other Latin American nations.
to U.S. Department of Commerce data. U.S. exports have
increased faster than imports, and the United States has run
The United States provides some security assistance to
a trade surplus with Chile since 2008. In 2018, U.S. exports
Chile. In FY2018, the United States provided $357,000 in
amounted to $15.4 billion, with refined oil products,
International Military Education and Training (IMET) aid
machinery, motor vehicles, and civilian aircraft and parts
to Chile to strengthen the capabilities of the Chilean armed
accounting for a majority. U.S. imports from Chile
forces, improve interoperability with U.S. forces, and
amounted to $11.4 billion, with copper, fruit, salmon, and
enhance Chile’s peacekeeping activities. The Trump
wood accounting for a majority. Bilateral services trade
Administration requested $300,000 of IMET assistance for
amounted to $6.3 billion in 2017, with $4.6 billion in U.S.
Chile in FY2019 and $400,000 in FY2020. The United
exports and $1.8 billion in U.S. imports from Chile.
States also has provided some equipment to Chile under the
Excess Defense Articles program. In March 2019, for
Chile’s open economy, well-developed institutions, and
example, the Department of Defense notified Congress of
strong rule of law make it an attractive destination for
its intent to transfer two C-130H aircraft worth an estimated
investment. As of 2017, the accumulated stock of U.S.
$24 million to the Chilean Air Force to support disaster
foreign direct investment in Chile stood at $25.9 billion,
response, humanitarian assistance, and peacekeeping.
with significant investments in the mining, manufacturing,
and finance sectors. In comparison, the stock of Chilean
Although the U.S. and Chilean governments continue to
foreign direct investment in the United States totaled $2.1
collaborate on many foreign policy matters, they have
billion. A bilateral treaty (Treaty Doc. 112-8) designed to
diverged significantly on climate change. The Chilean
encourage investment in both countries by preventing
government expressed “profound disappointment” at the
double taxation was ratified by Chile but has been awaiting
Trump Administration’s decision to withdraw from the
the advice and consent of the U.S. Senate since 2012.
Paris Agreement. Chile has ratified the accord and has
pledged to reduce its carbon emissions per gross domestic
Despite growing commercial ties, U.S. and Chilean trade
product unit by 30% below 2007 levels by 2030. The Piñera
policies have diverged over the past three years. In January
Administration announced more ambitious targets in June
2017, the Trump Administration withdrew from the Trans-
2019, including a complete phaseout of coal by 2040 and
Pacific Partnership trade agreement, which had been signed
zero net carbon emissions by 2050. Chile is scheduled to
by the United States, Chile, and 10 other nations in the
host the 25th Session of the Conference of Parties to the
Asia-Pacific region in 2016. Chile worked with the other
U.N. Framework Convention on Climate Change (COP 25)
signatories to save the agreement, helping to forge a revised
in December 2019.
Comprehensive and Progressive Agreement for Trans-
Pacific Partnership in March 2018. The revised agreement
Peter J. Meyer, Specialist in Latin American Affairs
is currently pending ratification in the Chilean congress.
IF10880
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Chile: An Overview
Disclaimer
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