Chile Research Paper

Chile is an export driven economy, meaning that their exports compose a very significant portion of their economy and any potential internal growth. To really understand why today we see Chile as an export driven economy let’s start by taking a look at the history of how Chile was able to increase their GDP with trading. In the 17th century Chile had a husbandry and agriculture based economy with ore-rich districts like Potosi and other wealthy cities like Lima. Those Husbandry products which included suet, charqui and leather were the bulk of Chilean exports to the rest of the viceroyalty. With these trades made Chilean historian Benjamin Vicuna Mackenna labeled as the Century of suet of the 17th century. In the 18th century Chile direct trade with Spain over the straits of Magellan and Buenos …show more content…
During that time, “Chile was a devoted follower of the misguided import-substitution proposals of the Santiago-based United Nations Economic Commission for Latin America”. In the early 1970’s Chile experienced a chronic inflation under president Salvador Allende. He implemented a high protectionist barriers, which in returned decreased the foreign-exchange reserves which caused Chile’s GDP to decrease. By mid-1970’s, Chile trade policies turned around. Under the leadership of Finance Ministres Jorge Cauas and Sergio De Castro the government opened up foreign investment and eliminated protectionist trade barriers and adopted the uniform tariff policy; by 1979 Chile’s tariff was down to 10%. This forced Chilean businesses to compete with imports from other countries. In the 1990’s, Chile began signing Free Trade Agreements (FTA) with Canada, Mexico, and Central America. They also signed preferential trade agreements with Venezuela, Colombia, and Ecuador. In our opinion because of the high prices and led choice for the consumers. We advise the government to reduce or remove the restrictions on