Updated January 2, 2020
Chile: An Overview
Chile, a nation of 19.1 million people, is located along the
CPD and the Communist Party—large majorities in
Pacific coast of South America. Chile traditionally has been
congress. From 2014 to 2018, Bachelet and her
one of the United States’ strongest partners in Latin
congressional allies enacted far-reaching fiscal, labor,
America due to the countries’ common commitments to
education, and electoral reforms intended to reduce
democracy, human rights, and free trade. Chile also has
inequality. They struggled with low approval ratings and
worked with the United States to promote peace and
repeated protests due to dissatisfaction with the policy
stability in the Western Hemisphere, as Chile’s transition to
changes, slow economic growth, and corruption scandals.
a higher level of economic development has enabled it to
take on additional regional responsibilities.
Figure 1. Chile at a Glance
Political and Economic Situation
Chile has a long democratic tradition but 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
(1970-1973). More than 3,200 people were killed or
“disappeared,” and some 38,000 people were imprisoned
and/or tortured during the Pinochet dictatorship. Chile
ultimately restored democracy in 1990.
The center-left Coalition of Parties for Democracy (CPD)
governed Chile for 20 years after the transition. The
coalition’s ability to implement policy changes was
constrained, however, by provisions of the Pinochet-era
constitution and the specter of another democratic
Source: CRS Graphics; Instituto Nacional de Estadísticas; Centro de
breakdown. As a result, the CPD largely maintained the
Estudios Públicos; and the International Monetary Fund.
market-oriented economic framework inherited from
Pinochet while implementing consensus-based reforms that
Chile’s political pendulum swung back to the right in 2017,
gradually increased the state’s role in regulating economic
as Chileans voted to return Sebastián Piñera to the
activity and providing social services. Although President
presidency. Piñera campaigned on the economic record of
Sebstián Piñera (2010-2014) broke the CPD’s hold on
his first term, when the economy expanded by 5.3% per
power, his center-right administration generally adhered to
year, and argued that Chile needed stronger economic
the same policy mix. Analysts have credited this policy
growth to address the middle class’s concerns. Piñera also
stability for significant improvements in living standards.
benefited from the fragmentation of the New Majority; the
centrist Christian Democrats split from the coalition to run
Nevertheless, many Chileans have been dissatisfied with
its own slate of candidates, and a new Broad Front coalition
the limits of the post-Pinochet policy consensus. They
attracted many left-wing voters. Piñera’s center-right “Let’s
argue that Chile’s economic growth has disproportionately
Go Chile” coalition picked up seats in both houses of
benefited a small sector of society and that most Chileans
Congress but failed to win majorities.
still lack economic security and access to quality public
services. Moreover, many Chileans think the country’s
Piñera began his second four-year term in March 2018,
elites have unjustly used their wealth and connections to
pledging to enact business-friendly reforms. He struggled to
advance their own interests while limiting the opportunities
obtain congressional support for much of his agenda,
available to the rest of the population. A series of
however, and effectively abandoned it in mid-October
corruption and collusion scandals has reinforced those
2019, when protests against an increase in transit fares
perceptions by revealing how businesses tied to some of
turned violent. As some groups engaged in vandalism,
Chile’s wealthiest families have engaged in influence
arson, and looting, Piñera asserted the country was “at
peddling, price fixing, and other market-distorting and
war”; he declared a state of emergency and deployed the
illegal activities—often with few consequences.
military to enforce a curfew. Those measures appear to
have triggered a backlash, with millions of Chileans taking
Over the past decade, Chileans have registered their
to the streets to express their discontent with societal
discontent with the status quo through repeated electoral
inequality and the high cost of living. Piñera ultimately
swings and mass mobilizations. In 2013, they elected
lifted the curfew on October 28, 2019, but clashes between
former President Michelle Bachelet (2006-2010) and gave
protesters and Chilean security forces have continued.
her “New Majority” coalition—consisting of the former
According to Chile’s National Human Rights Institute,
security forces are responsible for at least 5 of the 29 deaths
https://crsreports.congress.gov
Chile: An Overview
that have occurred during the unrest and more than 1,300
Pacific Partnership trade agreement, which had been signed
other human rights violations, including the use of
by the United States, Chile, and 10 other nations in the
excessive force, torture, and sexual violence.
Asia-Pacific region in 2016. Chile worked with the other
signatories to save the agreement, helping to forge a revised
Piñera has adopted a more conciliatory approach since late
Comprehensive and Progressive Agreement for Trans-
October 2019. He has sought to address protestors’
Pacific Partnership in March 2018.
demands with proposals intended to increase pensions and
the minimum wage, reduce health care and transit costs,
The United States and Chile have also differed on relations
and enhance penalties for corruption and collusion. He also
with China—Chile’s top trade partner. Chile signed a
negotiated an agreement with the congress to hold a
cooperation agreement on the Belt and Road Initiative in
plebiscite in April 2020 that will allow Chileans to decide
November 2018 and upgraded its bilateral free trade
whether the country should draft a new constitution to
agreement with China in March 2019. During an April 2019
replace the Pinochet-era charter. Protests, vandalism, and
speech in Santiago, Secretary of State Michael Pompeo
looting have continued, however, contributing to an
warned Chile that “when China does business in places like
estimated 2.5% economic contraction in the fourth quarter
Latin America, it often injects corrosive capital into the
of 2019. Piñera’s approval rating had fallen to 11% as of
economic bloodstream, giving life to corruption and
late December 2019, according to the polling firm Cadem.
eroding good governance.” Although Chile has urged
Most Chileans also disapprove of the political opposition,
greater transparency in the Belt and Road Initiative, it has
however, illustrating the weak links between Chileans and
continued to pursue Chinese trade and investment.
their elected leaders.
International Affairs
U.S.-Chile Relations
Chile has supported a variety of regional peace and security
Although the United States initially supported the Pinochet
efforts in recent years. The country was one of the top
dictatorship, it also helped foster the restoration of
contributors to the U.N. Stabilization Mission in Haiti and
democracy in Chile. Since the political transition, the
helped to facilitate the peace process in Colombia. Chile
countries have maintained close commercial ties and
has also supported efforts to restore democracy in
collaborated on regional security concerns. President
Venezuela and foster development in Central America. The
Piñera’s ability to work with the Trump Administration
United States and Chile maintain a High-Level Bilateral
could be constrained, however, as a Gallup poll found that
Political Consultative Mechanism to coordinate on security
75% of Chileans disapproved of the “job performance of
cooperation, human rights, and other topics of mutual
the leadership of the United States” in 2018.
concern. They also work together under the U.S.-Chile
Trilateral Development Cooperation Initiative to jointly
Trade and Investment Relations
implement foreign aid projects in other nations.
U.S.-Chile trade relations have grown considerably since
the U.S.-Chile Free Trade Agreement entered into force on
The United States provides some security assistance to
January 1, 2004 (P.L. 108-77). As result of the agreement,
Chile. In FY2019, the United States provided an estimated
100% of U.S. consumer and industrial goods now enter
$487,000 in International Military Education and Training
Chile duty free. Total bilateral trade in goods has increased
(IMET) aid to Chile to strengthen the capabilities of the
317% since 2003, reaching $26.8 billion in 2018, according
Chilean armed forces and to improve their interoperability
to U.S. Department of Commerce data. U.S. exports have
with U.S. forces. The United States also has provided some
increased faster than imports, and the United States has run
equipment to Chile under the Excess Defense Articles
a trade surplus with Chile since 2008. In 2018, U.S. exports
program. In March 2019, for example, the Department of
amounted to $15.4 billion, with refined oil products,
Defense notified Congress of its intent to transfer two C-
machinery, motor vehicles, and civilian aircraft and parts
130H aircraft worth an estimated $24 million to the Chilean
accounting for a majority. U.S. imports from Chile
Air Force to support disaster response, humanitarian
amounted to $11.4 billion, with copper, fruit, salmon, and
assistance, and peacekeeping.
wood accounting for a majority.
Although the U.S. and Chilean governments continue to
Chile’s open economy, well-developed institutions, and
collaborate on many foreign policy matters, they have
strong rule of law make it an attractive destination for
diverged significantly on climate change. The Chilean
investment. As of 2018, the accumulated stock of U.S.
government expressed “profound disappointment” at the
foreign direct investment in Chile stood at $26.1 billion,
Trump Administration’s decision to withdraw from the
with significant investments in the mining, manufacturing,
Paris Agreement. Chile has ratified the accord and pledged
and finance sectors. In comparison, the stock of Chilean
to reduce its carbon emissions per million dollars of gross
foreign direct investment in the United States totaled $3.1
domestic product to 30% below 2007 levels by 2030. The
billion. A bilateral treaty (Treaty Doc. 112-8) designed to
Piñera Administration announced more ambitious targets in
encourage investment in both countries by preventing
June 2019, including a complete phaseout of coal by 2040
double taxation was ratified by Chile but has been awaiting
and zero net carbon emissions by 2050.
the advice and consent of the U.S. Senate since 2012.
Peter J. Meyer, Specialist in Latin American Affairs
Despite growing commercial ties, U.S. and Chilean trade
IF10880
policies have diverged over the past three years. In January
2017, the Trump Administration withdrew from the Trans-
https://crsreports.congress.gov
Chile: An Overview
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10880 · VERSION 6 · UPDATED