Updated June 3, 2020
Chile: An Overview
Chile, a country of 19.1 million people, is located along the
proposals in October 2019 as he sought to respond to mass
Pacific coast of South America. Chile traditionally has been
protests. Piñera is likely to spend the remainder of his term
one of the United States’ closest partners in Latin America
trying to contain social unrest while contending with the
due to the countries’ common commitments to democracy,
health and economic challenges posed by the Coronavirus
human rights, and free trade. Chile’s transition to a higher
Disease 2019 (COVID-19) pandemic.
level of economic development has enabled the country to
play a more active role in foreign affairs, including U.S.-
Social Unrest
backed efforts to promote peace and stability in the Western
In the 30 years since Chile’s democratic transition,
Hemisphere.
successive administrations have largely adhered to the same
mix of market-oriented economic policies and targeted
Figure 1. Chile at a Glance
social welfare programs. Although living standards have
improved significantly, many Chileans are dissatisfied with
the limits of the post-Pinochet policy consensus. They
argue that Chile’s economic growth has disproportionately
benefited a small sector of society and that most Chileans
still lack economic security and access to quality public
services. Chileans have registered their discontent with the
status quo through repeated electoral swings and mass
mobilizations over the past decade.
Frustrations boiled over in October 2019, when protests
against an increase in transit fares suddenly turned violent.
As some groups engaged in vandalism, arson, and looting,
Piñera declared a state of emergency and deployed the
military to enforce a curfew. Those measures appear to have
Sources: CRS Graphics; Instituto Nacional de Estadísticas; Centro
triggered a backlash, with millions of Chileans taking to the
de Estudios Públicos; and the International Monetary Fund.
streets to denounce societal inequality and the high cost of
Political and Economic Situation
living. Piñera lifted the state of emergency after 10 days,
but protests, and sometimes -violent clashes with Chilean
Chile has a long democratic tradition but experienced 17
security forces, continued into 2020; Chile’s National
years of authoritarian rule after a 1973 military coup led by
Human Rights Institute has filed more than 1,400 criminal
General Augusto Pinochet deposed the democratically
complaints against members of the police and military for
elected Socialist government of President Salvador Allende
alleged human rights abuses. Piñera has sought to address
(1970-1973). More than 3,200 people were killed or
protestors’ demands with proposals to increase pensions
“disappeared,” and some 38,000 people were imprisoned
and the minimum wage, reduce health care costs, and
and/or tortured during the Pinochet dictatorship. Chile
enhance penalties for corruption. He also agreed to hold a
ultimately restored a democratic system of government in
plebiscite on whether the country should draft a new
1990. A center-left coalition of parties dominated Chilean
constitution to replace the Pinochet-era charter.
politics for two decades after the transition.
COVID-19
President Sebastián Piñera of the center-right Let’s Go
The arrival of the COVID-19 pandemic in Chile suspended
Chile coalition was inaugurated to a second nonconsecutive
most protest activity and shifted the focus of government
term in March 2018. His 2017 campaign centered on the
efforts. The Piñera Administration began implementing
economic record of his first term (2010-2014), when the
containment measures in March 2020, closing borders and
Chilean economy expanded by 5.3% per year. His argument
restricting freedom of movement. Although Piñera had
that Chile needed stronger economic growth to address the
announced plans to begin lifting restrictions in May, a spike
concerns of the middle class appeared to resonate with
in infections and hospitalizations forced him to backtrack
many voters after four years of economic stagnation under
and impose a complete quarantine on the Santiago
President Michelle Bachelet (2006-2010, 2014-2018) and
metropolitan region—home to more than 40% of Chileans.
her center-left New Majority coalition.
As of June 2, 2020, Chile had confirmed more than 108,000
cases of COVID-19 and had registered nearly 1,200 deaths.
Piñera began his second four-year term pledging to enact
business-friendly tax and labor reforms . Similar to his first
The Piñera Administration has taken aggressive action to
term, however, Piñera struggled to win legislative approval
mitigate the economic impact of the pandemic. It has
for his agenda because his coalition lacks majorities in both
increased funding for unemployment benefits, offered
houses of congress. He effectively abandoned his campaign
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Chile: An Overview
financial support to businesses, and provided emergency
2017, the Trump Administration withdrew from the Trans-
income and food support to the most vulnerable
Pacific Partnership trade agreement, which had been signed
households. Altogether, the government’s economic
by the United States, Chile, and 10 other nations in the
response measures have amounted to nearly $17 billion,
Asia-Pacific region in 2016. Chile worked with the other
which is equivalent to 7% of Chile’s projected GDP for
signatories to save the agreement, helping to forge a revised
2020. The International Monetary Fund forecasts that
Comprehensive and Progressive Agreement for Trans-
Chile’s economy will contract by 4.5% in 2020 before
Pacific Partnership in March 2018. The revised agreement
bouncing back with 5.3% growth in 2021.
is currently pending ratification in the Chilean congress.
Piñera’s approval rating, which averaged 12% between
The United States and Chile also have differed on relations
mid-October 2019 and mid-March 2020, had increased to
with China—Chile’s top trade partner. Chile signed a
29% as of the end of May 2020, according to the polling
cooperation agreement on the Belt and Road Initiative in
firm Cadem. He is likely to face renewed political pressure,
November 2018 and upgraded its bilateral free-trade
however, once he lifts the country’s containment measures.
agreement with China in March 2019. During an April 2019
The pandemic has highlighted and exacerbated inequities in
speech in Santiago, Secretary of State Michael Pompeo
Chile and already has generated some social unrest.
warned Chile that “when China does business in places like
Chileans also may take to the streets to press their demands
Latin America, it often injects corrosive capital into the
as the plebiscite on a new constitution, which was
economic bloodstream, giving life to corruption and
postponed from April 2020 until October 2020, approaches.
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. The countries have maintained close
Chile has supported a variety of regional peace and security
commercial and security ties since Chile’s democratic
efforts in recent years. The country was one of the top
transition. During a September 2018 meeting, President
contributors to the U.N. Stabilization Mission in Haiti and
Trump and President Piñera pledged to strengthen the
helped to facilitate the peace process in Colombia. Chile
bilateral economic relationship and cooperate on regional
also has supported efforts to restore democracy in
challenges as part of a “more enduring strategic
Venezuela and foster development in Central America. The
partnership.” Piñera’s ability to work with the Trump
United States and Chile maintain a High-Level Bilateral
Administration could be constrained, however, as a 2018
Political Consultative Mechanism to coordinate on security
Gallup poll found that 75% of Chileans disapproved of the
cooperation, human rights, and other topics of mutual
“job performance of the leadership of the United States.”
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 $487,000 in
100% of U.S. consumer and industrial goods enter Chile
International Military Education and Training (IMET) aid
duty free. Total bilateral trade in goods has increased 308%
to Chile to strengthen the capabilities of the Chilean armed
since 2003, reaching $26.2 billion in 2019, according to
forces and to improve their interoperability with U.S.
U.S. Department of Commerce data. U.S. exports have
forces. The United States also has provided equipment to
increased faster than imports, and the United States has run
Chile under the Excess Defense Articles program. In March
a trade surplus with Chile since 2008. In 2019, U.S. exports
2019, for example, the Department of Defense notified
amounted to $15.8 billion, with mineral fuel, machinery,
Congress of its intent to transfer two C-130H aircraft worth
and civilian aircraft and parts accounting for a majority.
an estimated $24 million to the Chilean Air Force to
U.S. imports from Chile amounted to $10.4 billion, with
support disaster response, humanitarian assistance, and
copper, salmon, and fruit accounting for a majority.
peacekeeping. The Trump Administration requested
$400,000 of IMET aid for Chile in FY2020 and FY2021.
Chile’s open economy, well-developed institutions, and
strong rule of law make it an attractive destination for
Although the U.S. and Chilean governments continue to
investment. As of 2018, the accumulated stock of U.S.
collaborate on many foreign policy matters, they have
foreign direct investment in Chile stood at $26.1 billion,
diverged significantly on climate change. The Chilean
with significant investments in the mining, manufacturing,
government expressed “profound disappointment” at the
and finance sectors. In comparison, the stock of Chilean
Trump Administration’s decision to withdraw from the
foreign direct investment in the United States totaled $3.1
Paris Agreement. Chile ratified the accord in 2017 and
billion. A bilateral treaty (Treaty Doc. 112-8) designed to
increased its commitments in April 2020. Based on its
encourage investment in both countries by preventing
updated emissions reduction and forestry pledges, Chile
double taxation was ratified by Chile but has been awaiting
estimates that its net greenhouse gas emissions would
the advice and consent of the U.S. Senate since 2012.
decline by about 30%, compared to 2016 levels, by 2030.
Despite growing commercial ties, U.S. and Chilean trade
Peter J. Meyer, Specialist in Latin American Affairs
policies have diverged over the past three years. In January
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Chile: An Overview
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