This Tuesday, February 21, an excerpt from the CPTPP was published in the Official Gazette, which means its entry into force after a series of disagreements in the ruling party. It was rejected by Under Secretary Ahumada, although the Social Democrats (including Chancellor Urrejola and Minister Marcel) got their way to ratification.
Present. It was February 21st Published in the Official Gazette Excerpt from the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), commonly known as TPP11.
- The group accounts for 14.3% of Chile’s exports to the world, and the source of 10.9% of its imports. Both percentages are lower than they were 10 years ago, in part due to the growing importance of China in Chilean foreign trade.
- China does not belong to the CPTPP, although it has applied for membership. The United Kingdom, on the other hand, is in the final stages of becoming the twelfth country in the agreement.
- There are 11 TPP member countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Chile was the penultimate country to implement it, despite the fact that it was the main promoter during the government of Michelle Bachelet. Only Brunei is hanging.
- Among these economies, the majority rejected the proposal for side letters requested by Chile to exclude countries from the Investor-State Dispute Settlement Mechanism, which is included in Section B of Chapter 9 of the treaty. Among the partners who rejected the proposal, 95% of the CPTPP’s foreign direct investment is concentrated in Chile.
- “Last night, Monday the 20th, our country participated for the first time as a full member in the virtual CPTPP Senior Officials Meeting (SOM), coordinated by New Zealand as the host country,” the State Department stated.
Congress. The legislative process for TPP 11 was complex. In the Chamber of Deputies, it was approved by a narrow margin, since the majority of the opposition voted against it at that time, including the Broad Front and deputies such as Gabriel Borik.
- While passing through the Senate, there were commitments from the government of Sebastian Pinera to monitor the agreement and even the first strategy of side letters to persuade opponents. Senate voting paused in 2022 until the result of the constitutional referendum was known on September 4, in which Jose Miguel Ahumada, Undersecretary for International Economic Relations (Sobre), backed down.
- After the victory of the Rejection, the pressure of the Social Democracy, to which Chancellor Antonia Origola and Minister Mario Marcel belonged, made the difference. The majority of this coalition voted in favor (as well as the right wing and part of DC), and all of the Dignity Consent members voted against. President Borek tried to delay it, based on a new strategy of side letters Designed by Under Secretary Ahumada.
- Ahumada wanted other CPTPP countries to exclude Chile from the Investor-State Dispute Resolution chapter. The first messages were sent in August. Towards the end of the year the result was a failure: only three countries accepted: New Zealand, Malaysia and Mexico. Until a few weeks ago, those messages weren’t even official.
impact. For Under Secretary Ahumada, TPP11 – which he must now manage – represents only “marginal” business gain. To do this, it relies on a methodology proposed by former ECLAC collaborators. Many of his advisors come from this entity, such as the Head of Studies, Simon Accursi.
- In an interview with Ex-Ante, the Minister of Finance, Mario Marcel, emphasized that the great advantage of the TPP plan is its strategic nature rather than a few export lines with tariff cuts.
- It is this trade perspective that Subrei highlights in one of its summaries of the agreement: “Considering tariff concessions already contained in bilateral and multilateral agreements, CPTPP offers reductions on 100 tariff lines from Canada, 1052 from Japan, 663 from Malaysia and 1115 from Vietnam, in total 2930 tariff line represents a kind of preference.”
data. From the official statistics of the Central Bank, it is possible to identify the countries with the highest foreign direct investment (FDI) in Chile, according to stock Accrued until 2021.
- The largest investor in the world (and therefore, in the CPTPP) is Canada, as revealed last year by Ex-Ante after reviewing updated data from the central bank. Under the agreement, Canada accounted for 78% of the foreign direct investment.
- The treaty is ranked second by Australia (9% of the total), followed by Japan (8%). None of these countries has expressed an inclination to accept side letters.
- The next case is Mexico, whose foreign direct investment in Chile adds up to stock which accumulated $1,680 million USD. The government reported that Mexico had already accepted side messagethough Tuesday’s Diario Financiero notes that the process has been “trapped.”