Chile: An Overview




Updated July 26, 2023
Chile: An Overview
Chile, located along the Pacific coast of South America,
Nevertheless, Latinobarómetro polls since the mid-1990s
traditionally has been one of the United States’ closest
have shown a majority of Chileans to be dissatisfied with
partners in Latin America. In 2023, the two countries are
the results of the post-Pinochet policy consensus. Inequality
commemorating 200 years of official relations and the 20th
remains high in comparison to other Latin American
anniversary of their free trade agreement. Over the past
countries and Organization for Economic Cooperation and
year, the Biden Administration has sought to collaborate
Development members, and many Chileans still lack
with Chilean President Gabriel Boric on regional
economic security and access to quality public services.
democracy, human rights, migration, and security concerns.
Chileans have registered their discontent through repeated
However, internal challenges may limit Chile’s ability to
electoral swings and mass protests. In late 2019, for
take on new responsibilities or exert its influence abroad.
example, protests against a transit fare increase in Santiago,
accompanied by widespread vandalism, arson, and looting,
Figure 1. Chile at a Glance
spiraled into nationwide demonstrations against inequality
and the Piñera Administration’s heavy-handed response.
Constitutional Reform
In an effort to restore peace and respond to demands for a
new social contract, the Piñera Administration and
legislators from across the political spectrum agreed to hold
a plebiscite on whether to replace the Pinochet-era
constitution. The plebiscite passed with the support of 78%
of voters, and in May 2021, Chileans elected a
constitutional convention in which predominantly left-of-
center independents held a plurality of seats. After a year of

deliberations, the convention approved a sweeping 388-
Sources: CRS Graphics; Instituto Nacional de Estadísticas;
article draft constitution that would have enshrined
Latinobarómetro; International Monetary Fund; Trade Data Monitor;
numerous individual and social rights, significantly
and Ministerio de Desarrollo Social y Familia.
expanded the government’s role in social service provision,
and modified some government institutions. Voters rejected
Political and Economic Environment
the new constitution by a margin of 62% to 38% in a
Chile has a long democratic tradition but experienced 17
September 2022 referendum, after some prominent center-
years of authoritarian rule after a 1973 military coup led by
left leaders aligned with the Chilean right in characterizing
General Augusto Pinochet deposed the democratically
the proposed changes as too radical.
elected socialist government of President Salvador Allende
(1970-1973). More than 3,200 people were killed or
In January 2023, amid continued public support for some
“disappeared,” and some 38,000 people were imprisoned
constitutional reforms, Chile’s congress appointed a 24-
member committee of experts to produce a revised
and/or tortured during the Pinochet dictatorship. Chile
constitution. In May 2023, Chile held national elections for
restored democracy in 1990, following a 1988 plebiscite.
a constitutional council whose 50 members are to finalize
Center-left and center-right coalitions dominated Chilean
the new draft. Modified rules for electing delegates,
politics for three decades following the transition. Center-
together with shifts in public opinion, resulted in right-of-
left coalitions held the presidency and majorities in Chile’s
center parties gaining a majority of council seats. A
bicameral congress for most of that period, but Sebastián
referendum on the second draft constitution, which
Piñera led his center-right coalition to power for two
observers expect will be shorter and more limited in scope
nonconsecutive presidential terms (2010-2014, 2018-2022).
than the rejected version, is scheduled for December 2023.
Both coalitions largely maintained the market-oriented
economic framework inherited from Pinochet while
Boric Administration
implementing consensus-based reforms to gradually expand
Gabriel Boric was inaugurated to a four-year presidential
the social safety net. Living standards improved
term in March 2022, a decade after rising to prominence as
significantly following the restoration of democracy, with
a leader of Chile’s student movement. Leading the left-
real GDP growth averaging 4.5% per year between 1990
wing Apruebo Dignidad coalition, he defeated right-wing
and 2019, according to the International Monetary Fund
populist José Antonio Kast with 56% of the vote in a
(IMF), and the poverty rate falling from 68.5% to 8.6%
December 2021 runoff election. Boric pledged to address
between 1990 and 2017, according to the Chilean
environmental concerns and usher in a new era of economic
government, using its current methodology.
and social inclusion by strengthening the public education
and health care systems, replacing the privatized pension
https://crsreports.congress.gov

Chile: An Overview
system, improving working conditions, and expanding the
with significant investments in the finance, mining, and
rights of historically marginalized groups.
manufacturing sectors. In June 2023, the Senate advised
and consented to the ratification of a bilateral treaty (Treaty
Advancing that agenda has proved challenging. Many of
Boric’s
Doc. 112-8/Ex. Rept. 118-1) intended to encourage
proposed policies were closely tied to the rejected
investment in both countries by preventing double taxation.
constitution. Others have stalled in the Chilean congress,
Chile ratified the agreement in 2015 but must approve the
where Boric must negotiate with centrist and opposition
Senate’s reservations before the treaty enters into force.
legislators. Although the congress has enacted measures to
increase mining royalties, raise the minimum wage, and
The United States and Chile have differed on relations with
reduce the work week from 45 to 40 hours, it voted down a
China, which is Chile’s top trade partner and accounts for
revenue-raising tax reform intended to fund much of
32% of Chile’s total trade (nearly double the U.S. share).
Boric’s agenda in March 2023. The Boric Administration
Chile joined the Belt and Road Initiative in 2018, upgraded
also is contending with a resurgent right, which has
its free-trade agreement with China in 2019, and joined the
capitalized on the failure of the first constitutional reform
China-backed Asian Infrastructure Investment Bank in
process and widespread public concern over rising crime
2021. U.S. officials have expressed concerns about Chile’s
and immigration to boost its support.
deepening ties to China, particularly with respect to the
Boric’s
growing presence of Chinese firms in Chile’s strategic
political challenges are compounded by difficult
sectors, including its telecommunications infrastructure.
economic circumstances. Significant fiscal and monetary
stimulus propelled the Chilean economy to 11.7% growth
Foreign Affairs and Security Cooperation
in 2021, following a pandemic-driven 6.1% contraction in
President Boric’s approach to foreign affairs has
2020. Growth slowed to 2.4% in 2022, however, due to the
emphasized democracy, human rights, and peaceful dispute
withdrawal of stimulus measures, rising inflation, and
resolution. He has spoken out against authoritarian
domestic and geopolitical uncertainty. The IMF projects
governance and human rights abuses around the world,
these factors will tilt the economy into recession in 2023,
including in Nicaragua and Venezuela, as well as Russia’s
with a 1% contraction in GDP. These deteriorating
invasion of Ukraine. His government also has supported
conditions, combined with political setbacks, have shaken
U.S.-backed resolutions at the United Nations and
public confidence in Boric’s leadership. His approval rating
Organization of American States condemning such abuses,
stood at 32% in mid-July 2023, down from 50% at the start
while advocating for continued diplomatic engagement.
of his term, according to Chilean polling firm Cadem.
In June 2022, Chile signed the Los Angeles Declaration for
U.S.-Chile Relations
Migration and Protection, which recognizes migration
Although the United States initially supported the Pinochet
management as a shared responsibility and seeks to bolster
dictatorship, it also helped foster the restoration of
regional cooperation. Migration has become an increasingly
democracy in Chile. Since the political transition, the
contentious issue in Chile as the country’s foreign-born
United States and Chile have maintained close commercial
population has grown from 305,000 in 2010 to an estimated
and defense ties and worked together to promote democracy
1.5 million (7.5% of the population) in 2020. About a third
and human rights throughout the Western Hemisphere. In
of the migrants are from Venezuela. The United States
November 2022, U.S. and Chilean officials met for a High-
provided $10.9 million to humanitarian organizations in
Level Dialogue to design a roadmap for the bilateral
FY2022 and $5.0 million in the first half of FY2023 to
partnership. They discussed efforts to promote democracy
assist migrants, asylum-seekers, and refugees in Chile.
and human rights; advance sustainable and inclusive
U.S. military assistance to Chile aims to enhance Chile’s
growth; strengthen security cooperation; and deepen
contributions to international peacekeeping operations,
collaboration on environmental conservation and health,
strengthen the capabilities of the Chilean armed forces, and
science, technology, and innovation. S.Res. 140, introduced
improve interoperability with U.S. forces. In FY2022, the
in the Senate in March 2023, would commemorate the
United States provided $434,000 in International Military
bicentennial of U.S.-Chilean relations.
Education and Training (IMET) aid to Chile. The United
Trade and Investment Relations
States also completed the transfer of two C-130 Hercules
aircraft, valued at $24 million, to Chile under the Excess
U.S.-Chile trade relations have grown considerably since
Defense Articles program. The Biden Administration has
the U.S.-Chile Free Trade Agreement entered into force in
requested $650,000 of IMET aid for Chile in FY2024.
2004 (P.L. 108-77). Total bilateral trade in goods reached
$38.9 billion in 2022, a 20% increase compared with 2021
Chile has participated in the U.S. Visa Waiver Program
and a 72% increase compared with 2020, according to U.S.
since 2014, allowing Chilean citizens who meet certain
Department of Commerce data. U.S. goods exports to Chile
requirements to travel to the United States for up to 90 days
amounted to $22.3 billion in 2022, with mineral fuels,
without a visa. The Department of Homeland Security
machinery, and motor vehicles accounting for a majority;
Appropriations Act, 2024 (H.R. 4367), would prohibit
U.S. goods imports from Chile amounted to $15.6 billion,
funding from being used to admit Chileans under the
with copper, fish, and fruit accounting for a majority.
program until the Secretary of Homeland Security verifies
that the department has access to, and screens Chilean
Chile’s open economy, strong institutions, and commitment
nationals against, “appropriate” Chilean criminal databases.
to the rule of law have made the country an attractive
destination for investment. According to the U.S. Bureau of
Economic Analysis, the accumulated stock of U.S. foreign
Peter J. Meyer, Specialist in Latin American and Canadian
direct investment in Chile stood at $29.2 billion in 2022,
Affairs
https://crsreports.congress.gov

Chile: An Overview

IF10880
Ramon Miro, Analyst in Latin American Affairs


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https://crsreports.congress.gov | IF10880 · VERSION 13 · UPDATED