Facilitating Trade and Structural Adjustment Chile

This paper is the first of four country case studies which is a part of a broader researchprogramme addressing trade and structural adjustment issues in non-member economies which wasconducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005)which identified policies for successful trade-related structural adjustment. This paper studies the tradeliberalisation experience of Chile from 1973 onward.The report consists of 5 main parts Part 1 provides the introduction, part 2 looks at the tradeliberalisation in Chile which was implemented in three phases, (1) initial trade reforms (1973-84), (2) tradereform after a temporary policy reversal(1985-89) and (3) after 1990. Part 3 looks at the evolution andstructure of exports and imports, and Part 4 looks at sectoral developments in the copper industry, agrofoodindustry, wood and wooden products industry and the textiles and clothing industry. Part 5 concludeswith lessons learnt. The experience of Chile shows that trade reform has been essential for realigning theincentive structures in Chile. A stable macroeconomic environment, trade reform starting with theelimination of quantitative restrictions, introduction of flat tariffs, coherent exchange rate policy, soundinstitutional framework, rule of law, mild promotion of exports, use of foreign capital, and relativelyflexible labour market policies have been important factors in Chili's successful trade liberalisationexperience.

OECD Trade Policy Papers

Facilitating Trade and Structural Adjustment Chile

Experiences in Non-Member Economies