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Chile and United States: A “win-win” relation

Interview - January 29, 2015

In his interview with United World, the U.S. Ambassador to Chile, Michael Hammer, talks about the 10th anniversary of the Free Trade Agreement between the two countries, the most attractive sectors for U.S. investors in Chile, the areas where the two countries should cooperate more in the future and the significance of the upcoming 7th Summit of the Americas.


Prior to being appointed U.S. Ambassador to Chile in March 2014, in 2009 you traveled with President Obama to the Summit of the Americas, where the President launched a new era in U.S.-Latin America relations. How have the relations between the U.S. and Chile evolved over recent years?

As you pointed out, the President was launching a new era in U.S. diplomatic relations with the hemisphere based on mutual respect and on wanting to have a partnership with the countries in the region. I never thought, at that point, that some day I would be coming here as Ambassador, but I am thrilled to be in Chile. Presidents Obama and Bachelet had a very fulsome discussion at the White House last June about the full range of topics that we are working together on.

Issues like how to increase our energy cooperation. Chile is quite interested in a closer relationship with the United States on energy and we have developed a memorandum of understanding with our Department of Energy to increase cooperation on issues like energy efficiency, renewables and how to promote clean energy. We also talked about education and educational exchanges. As you may know President Obama, in 2011 here in Santiago, launched the 100,000 Strong in the Americas initiative to promote more Latin Americans coming to the United States to study and also more U.S. students traveling to the region for educational opportunities.  Our Presidents also talked about how they can work together to solve global issues, whether it is looking at Chile’s very important contributions to peace keeping and the excellent work they have done in Haiti, or as a non-permanent member of the UN Security Council.

2014 was the year of the 10th anniversary of the Free Trade Agreement. What are the main accomplishments this agreement has brought to both countries?

The ten year anniversary of the Free Trade Agreement marks a win-win for the United States and for Chile. Trade has increased on the margin of 340 percent; I think it has been a boost to both countries in terms of creating greater investment opportunities, greater job opportunities for citizens both in Chile and the United States and we are seeing the daily benefits of it as we work to promote and increase trade opportunities. Chile currently is the United States’ fourth largest export market in the Americas and it ranks 21st globally, so it is a key export market for the United States. Now we are looking how to get to the next level.

You are probably aware that we are negotiating on the Trans-Pacific Partnership (TPP) where Chile was one of the founding members and we, the United States, are working hard with our other 11 partners to realize a 21st century trade agreement with higher standards that will be a plus for all the economies involved. In fact, we are doing more and more with Chile in engaging the Asian Pacific region on a number of different initiatives. Trade is one component of it, but we are also looking at working on disaster relief and other issues of importance to both countries.

The United States is the leading investor in Chile. What are currently the most attractive sectors for U.S. investors in Chile?

I would say energy is one of the leading sectors. When I arrived in Chile, we did what we call a Direct Line call. Direct Line is a way for U.S. Ambassadors to connect with certain sectors and companies that might be interested in investment opportunities. And we did it precisely on energy and specifically, on renewable and clean energy. We had over sixty U.S. companies participate in that call, asking questions about the investment regime, what are the best ways to approach the Chilean market. We see tremendous opportunities. Since I have been here we have inaugurated two large solar projects, that President Bachelet attended, and I was present at one that, when it is completed, will be the largest photovoltaic plant in Latin America. So, there is tremendous solar potential, as well as wind and possibly geothermal. We are looking at other potential opportunities for U.S. investment, which isn’t just good for Chile in creating jobs, but also create jobs for the United States.

What are the most frequent questions among U.S. companies that show interest in investing in Chile?

They tend to try to figure out if there are any subsidies or any programs the government is promoting in terms of attracting investment. What we are able to tell them is that the investment climate in Chile is quite favorable, it has a long history of political and legal stability, there is strong rule of law and it is a place where historically you have seen companies come and feel comfortable, it ranks high on transparency, there are no issues with corruption. In fact, Chile was thirty-third in the World Economic Forum in competitiveness and forty-fourth on the Ease of Doing Business Report.

We recently had a delegation from Tampa Bay area, as well as a group from Texas, looking at opportunities here and they were extremely pleased. I should mention that Chile not only has a fantastic bilateral relationship with the United States as a whole, but it has a partnership with the Chile-California Council that dates back more than 30 years, that has been reinvigorated through President Bachelet’s efforts and they have launched a similar initiative with Massachusetts. They are looking at other State-to-Chile partnerships that bring our countries closer together and look at furthering cooperation, for example on issues like science and technology.

When we are talking about investments, we should also think of the astronomy investments the United States is making in Chile, which provides one of the best platforms in the world for looking at the stars. So Chile is number one in astronomy and we have a great partnership with Chile through our National Science Foundation, building new and incredibly powerful telescopes and other exiting projects.

The Visa Waiver Program is an important new development in U.S.-Chile relations. It allows Chilean citizens to travel to the United States for tourism or business purposes for up to 90 days without a visa. How has this agreement impacted the tourism and business activity between the two countries?

It has been phenomenal; I think that is the way to describe it. In the first six months of the Visa Waiver Program, approximately 56,000 Chileans travelled to the United States, trouble and visa free. I have to say our statistics show a 21 percent increase from what we saw during a similar period a year ago. In terms of an increase of U.S. citizens coming to Chile, because it has also benefitted Americans who now don’t have to pay a reciprocity fee, we have seen a 9 percent increase. So it has been one of those agreements that has reaped immediate benefits for both people, creating greater business opportunities for both countries and also to promote better understanding. The more people travel between our countries, the more they get to know our culture and our way of life. And that greater understanding promotes better relations.

In which areas do you think the two countries should cooperate more in the future?

That is an excellent but tough question, because we have such an expansive and deep relationship that it is a challenge to think: how can we do even better? How can we make sure that our businesses remain competitive? How can we make sure we are serving our people well? How can we make sure we are protecting our environment and working to develop the technologies and the right approaches to ensure our citizens are better off in the 21st century? How can we ensure security by working together with our militaries to advance peace keeping and humanitarian disaster relief?

So it is a challenge. Probably what we can see as potential for further cooperation is in the area of combating climate change and environmental issues. Chile has a responsible stewardship of its environment and we share that same passion and want to share experiences to see how we, together, can motivate others in the region and the world to be responsible as we look not only to advance economic opportunity but to do it in a way that is sustainable and that serves our people well.

Chile is undergoing major structural reforms, focusing on social development. What is the impact of the reforms on the business community and how are these changes seen from the White House?

I would say Chile has to decide what is the best model for development going forward. It has made tremendous strides and we are all challenged by issues of income inequality, how to improve education, and each country has to take a look at what models work best for them and what reforms are necessary. We have our own efforts underway, obviously, in the United States. I think what makes the U.S.-Chilean partnership so strong is, as Foreign Minister Muñoz likes to say, that we are link-minded. We approach problems in a pragmatic way, we have a passion for our democracy, we stand for human rights, we look to create economic opportunities for our citizens and in that way there is such commonality of purpose that we are able to work very well together.

In April 2015, the 7th Summit of the Americas will be held in Panama. What do you expect for this important meeting?

Having participated with President Obama in the Summit of the Americas in Trinidad and Tobago, I see these summits as a great opportunity for the leaderships of the hemisphere to get together and focus on the issues of concern for our citizens. How can we, as governments, deliver better and promote greater public-private partnerships so that we can combat issues like income inequality, so we can provide better education, so we can provide more jobs and prosperity. These are important issues of concern that when leaders can come together, they can work together to address for the benefit of the people of the Americas.

On a personal level, what do you like most about living in Chile?

The people are fantastic and I have to say the travel and the geographic diversity is simply amazing. From Arica to Punta Arenas, I have had a chance to visit the Atacama desert, which is breathtaking in terms of its beauty, the colors at sunset, it is really something to behold and that one would want to have the experience to see. And then to travel to places like Torres del Paine, with its natural, dramatic landscape, glaciers and snow covered mountains. It is really breathtaking. Santiago is a beautiful modern city and we have Valparaíso only an hour away, with its sort of bohemian style. So there is a lot of variety. And, I should mention, the wines are not bad. In fact, they are first class. So we are having a tremendous time and what makes the whole experience so worthwhile is that from a work perspective Chileans are easy to work with, they are professional, they are highly qualified and are always willing to work with the United States to solve problems.

Do you have a final message for our international audience?

I think the basic message is that diplomacy works and it works better when people get together and develop a better understanding of each other. We share, with Chileans, common values and a real and growing shared experience as we look to the future. And I would hope to see this relationship, even though it is at an incredibly high level, continue to grow. And that is the challenge for us here, and our mission, as we look at what more we could be doing. Each day is full of opportunities and we are doing great work. We have a large number of U.S. citizens in Chile, I think around 25,000 permanently live here and that number can rise up to 100,000 during peak tourist periods. It just shows again that we have a lot of work to do and we look forward to each and every day.