Georgia State University
International Business Term Paper
International Term Paper: Chile
* Name of country: Chile
* Neighboring countries: Argentina, Bolivia and Peru
* Territorial size of the country: 291,930 sq. miles (756,096 km²)
* Size of the population: 17.46 million (2012)
* Type of political system: Unitary state, Presidential system, Democratic republic, Constitutional republic
* Who is the Prime Minister, President? Sebastián Piñera
* What political party is in power? Democratic
* Derivation of the form of law: based on the civil law model followed by Europe and Latin America
* How would you classify its ...view middle of the document...
U.S companies should export in Chile because of the country stable economy, Free Trade Agreement and its mining and agricultural sectors. Among many countries in Latin American, Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy. Chile became the country with the highest nominal Gross domestic product (GDP) per capita in Latin America. The GDP for Chile as of 2012 is 268.3 billion USD (http://www.tradingeconomics.com/chile/gdp). Recently, the largest sectors by GDP were mining, business services, personal services, manufacturing and wholesale and retail trade. Chile is also known all over the world as one of the best countries to do business with in Latin America not only because of its imports, but what the country exports plays a big factor among other surrounding home countries in South America.
The Chilean Pesos makes it flexible for U.S company owners to conduct business within the country because of the easy conversion unit. As of 2014, one U.S dollar is equivalent to 554.77 Chilean Pesos (http://themoneyconverter.com/USD/CLP.aspx). The United States continue to invest in Chile because of the country’s growth and development. Among Chile’s advancing country is its infamous bank, Banco de Chile. Banco de Chile is the strongest bank in Latin America. It is easy to transfer money from the county’s bank to any other bank within the U.S, which is one of the reasons why most U.S companies enjoy doing business with Chilean Manufacturers.
On January 1, 2004, The Free Trade Agreement (FTA) was established. The agreement also proven that Chile and the U.S. will establish duty-free trade in all products within a maximum of 12 years. The United States-Chile FTA eliminates tariffs and opens markets, reduces barriers for trade in services, provides protection for intellectual property, ensures regulatory transparency, guarantees nondiscrimination in the trade of digital products, commits the Parties to maintain competition laws that prohibit anticompetitive business conduct, and requires effective labor and environmental enforcement (http://www.ustr.gov/trade-agreements/free-trade-agreements/chile-fta). The FTA also provides favorable access for U.S. service suppliers and guarantees of protection to U.S. investors and U.S. copyrights, trademarks and patents registered in Chile. In addition, Chile has opened up significant government procurements to U.S. bidders (http://export.gov/%5C/FTA/chile/index.asp).
Chile is also known for its mining and agricultural sectors. The mining sector in Chile is one of the pillars of Chilean economy, Agriculture is the second pillar, and copper exports alone stands for more than one third of government income. Mining products of Chile includes not only copper, but also gold, silver, molybdenum, iron and coal. “Chile is the number one source of copper in the world, responsible for producing 35% of world supply. For...