May 23, 2013
Interview with Chilean Foreign Minister Alfredo MorenoWednesday, October 24, 2012
‘Argentina’s barriers are not affecting Chilean exports’
SANTIAGO — The annual bilateral meeting between Argentina and Chile (on this side of the Andes this year) at ministerial, gubernatorial and mayoral level is just around the corner. Looking ahead to the agenda for November 7-8, Chilean Foreign Minister Alfredo Moreno received the Herald on the 15th floor of the ministerial building.
Moreno, a well-known businessman and a key organizer of the successful Sebastián Piñera presidential campaign, has the ministerial track record with the highest ranking in Chilean surveys. At a time when his country is bracing itself for this Sunday’s municipal elections, whose results will set the trends for the 2013 presidential elections, the minister (“the good Moreno,” they call him in Chile to distinguish him from feisty Domestic Trade Secretary Guillermo on this side of the Andes) claims to have no political ambitions after the end of Piñera’s term.
Moreno is a zealot of the region’s latest “club” — the “zero-tariff” Pacific Alliance (Mexico, Colombia, Peru and Chile). In other words, the total opposite of the “other” Moreno with his welter of tariffs and non-tariff barriers — a trade policy which the Chilean foreign minister describes as “meaning more work and more worry without actually affecting Chile’s exports to Argentina.”
Which are the main issues in the relationship with Argentina?
The biggest challenge is connectivity. We have the second-longest frontier in the world but mountainous, to which should be added our economic horizon of a globalized Pacific. Better access and mountain passes to Chilean ports from Argentina would benefit both countries. There are any number of projects — while we have reinaugurated the rail connection between Salta and the north of Chile, we have also upgraded some of the existing mountain passes such as Pehuenche and Cardenal Samoré.
Among the pending projects are tunnels like Aguas Negras in San Juan and Aconcagua in Mendoza — pet and maybe sole projects for Ambassador Adolfo Zaldívar’s mission in Argentina (so much so that at the September 18 national day reception, guests were greeted with the sight of scale models of both projects). How far advanced are they?
In the case of Aguas Negras the tunnel has already been agreed by both countries and it’s now up to Argentina to move ahead — Chile will be contributing the proceeds from the highway tolls. On the other hand, the Aconcagua project in Mendoza is still under study and until these are complete, we cannot advance to the next phase.
And what progress are you expecting for the Aconcagua project in the remainder of Piñera’s term?
It’s at the evaluation stage in both Argentina and Chile. Corporación América, which heads up this project, has already replied to the technical and economic questions and this is what is being evaluated. Within a complex geography, it would be the second-longest tunnel in the world. For this project we have to estimate the demand and the huge scale of investment — the tunnel needs to link up highways, infrastructure and ports to earn support. For now Aguas Negras is moving ahead — Aconcagua is at the evaluation stage.
At present Mercosur’s boundaries contrast sharply with the almost zero tariffs of the Pacific Alliance (Chile, Peru, Colombia and Mexico). Does this mark a dividing-line with what you are trying to bring together politically, for example, Unasur?
Maintaining political unity and integration, we have different options as far as economic liberation goes. Chile occupies 8th place worldwide among countries with the lowest tariffs (they do not reach one percent on average and our wish is to bring them down to zero) — we have free trade agreements with 60 countries. We believe in economic integration with the world — we do not believe that tariff barriers can be beneficial.
Within the Pacific Alliance we are seeking to free both merchandise and services as well as capital flow. Our economy is competitive. Last year Chile was third only to Brazil and Mexico as a recipient of Foreign Direct Investment on this continent (thus we received a quarter of the FDI into Brazil when its economy is 10 times our size).
How has Chile reacted to the trade barriers imposed by Argentina?
We are working on each one on a case-by-case basis. It means more work and more worry without actually affecting Chile’s exports to Argentina.
And how about Lan Chile being blocked in Aeroparque downtown airport?
For now it is just a news item in the press. I have no official information on that front.
Did you take it as another blow when Argentina unilaterally abrogated the treaty against double taxation?
Argentina decided to end such treaties with every country, including Chile. We still have a year until the current one lapses and in that period we hope to agree on a new treaty with Argentina. Our transport industry, services and mining all need this.
Which worries you more, the relationship with Bolivia or with Peru?
The relationship with Peru is going fine — in trade, investment and at the intergovernmental level we are side by side within the Pacific Alliance. Both our interests and aims converge. At the same time we have a frontier dispute up before the World Court in The Hague. There will be oral hearings in December and a decision next June. It is extremely important for both countries but it does not get in the way of the relationship.
The ties with Bolivia are very much up to Bolivia, a country with which we have had no diplomatic relations since 1978, when they were broken off by La Paz. In March, 2011, for whatever reason, President Evo Morales embarked on a new track. Even if he did not go to The Hague (Editor: he has announced that several times), he created a Maritime Revindication Department and placed all previous treaties in doubt. We have replied that the door is always open for dialogue on the basis of respect for existing treaties.