Foreign policy is an essential component of any national development strategy. If that changes, foreign political and trade relations will have to change. Thirty years of neoliberal strategy have led to a trade opening without intermediary on the world economy, while our diplomacy has enthusiastically approached the developed countries, distancing itself from Latin America and the countries of the South. Left-wing presidential candidate Gabriel Boric says this needs to change.
The liberal logic which reigns within our economy has been fully deployed in the field of external relations. A radical opening up to the world was imposed, without protection of the internal market and without regulation in favor of sectors of productive transformation. As a result, trade policy has exacerbated export extractivism, closing off opportunities for productive diversification. Politics has been subordinated to big capital, and not only within our country, but also in our relations with the outside world. The economic policy of “every man for himself”, which destroyed Chilean industry and closed the doors to small entrepreneurs, was supplemented by a blind opening of foreign trade.
The integration of our country into the world economy has not promoted development. Growth, which businessmen, politicians and establishment economists have deified, has created precarious jobs, extreme inequality, environmental degradation and the depletion of our natural resources. Foreign policy has been functional to this perverse growth. And this kind of growth has held back development.
After a few short years in the early 1990s, when Chile strengthened its economic and political ties with Latin America, the governments of the Concertation became dizzy. They have chosen to privilege relations with developed and Asia-Pacific countries. Not to discuss substantive political issues on the international agenda, but to establish economic and trade commitments in free trade agreements (FTAs). Foreign policy was subordinate to FTAs. Thus, thanks to FTAs, developed countries and transnational corporations have secured their interests through the indiscriminate liberalization of goods and services, as well as the extensive protection of their investments and intellectual property, in exchange for access by our exports to large markets. This logic has also imposed itself in our negotiations with the intermediary countries of the Asia-Pacific region, and has become unchallenged common sense in international organizations.
It is true that it is in the interest of small countries to open up economically to the world. The narrow internal space makes it difficult for the economy to reproduce more widely. But in the case of Chile, economic expansion through FTAs with developed countries has not turned out to be a good deal (I mean for the country, for the Chilean people). Of course, the primary responsibility does not lie with trade policy, but with economic policy. Indeed, our economic policy does not encourage productive transformation nor does it contribute to the diversification of exports and, at the same time, unregulated trade opening through FTAs has favored the attraction of foreign investment, but it does so. has done in the primary and service sectors. Thus, FTAs have served to stimulate extractivism, increasing exports, but not exports of natural resources.
In short, our country has consolidated a productive matrix exporting natural resources, which has been favored by trade policy. Thus, foreign policy, especially since the 2000s, has fostered rapprochement with developed countries, moving us away from our neighbors. This policy, as well as the commitments contained in the FTAs, hinder any joint effort with the countries of the South to act jointly with the world powers on the key issues of the international agenda: uncontrolled financial flows, intellectual property, conflicts between companies and States. , the environment, among others.
Therefore, if the Boric government promotes a change in the productive structure of our economy, it will also have to change foreign policy and, in particular, foreign trade policy. It will have to introduce substantive changes. Whether unilateral or negotiated (FTA), it will be necessary to regulate the circulation of goods, services and capital, to the benefit of the productive and social priorities proposed by the new development strategy. This has been well underlined by Petersen and Ahumada, in response to Ignacio Walker, who fiercely defends the type of globalization promoted by Chilean governments (see La Tercera of September 2, 2021).
If effective productive diversification is to take place, unilateral foreign trade policies and trade agreements cannot be neutral in terms of tariffs, financial capital, foreign investment and intellectual property. Discrimination should be made in favor of industrial sectors or production processes which add value and knowledge to the new productive matrix. Gabriel Boric’s program offers a review of existing trade agreements to assess their relevance for productive diversification. It is not an easy task, but neither is it impossible. This will require renegotiations that will require goodwill and mutual respect between our country and its counterparts. This was underlined by the presidential candidate during his meeting with the ambassadors of the European Union (September 7).
On the other hand, faced with the reality of globalization and the uncertainties arising from the new protectionism, our country will have to rediscover multilateralism, which is the best defense of small countries against powerful countries. But this policy will be effective if we are able to act as a whole, in solidarity with the countries of Latin America and possibly other regions of the South. In short, a new government of transformations has the heavy task of strengthening the negotiating force of “developing countries” to support the international agenda on the issues that concern us: protection of ecosystems, feminism, demilitarization, peace, solidarity with the processes. migration, among others.
At the same time, multilateralism in the economic field should aim to promote a fairer international trading and financial system, including: the regulation and control of financial transactions and tax havens; flexible and less expensive forms of access to advanced technologies; reduction of intellectual and industrial property protection times, among other things.
Our project as a country, and the possibility of having a greater presence in the international context, is linked to Latin America and the developing world. Chile must pursue a foreign policy of rapprochement and economic and diplomatic cooperation with that part of the world with which it shares interests and problems, even in the midst of the difficulties presented by regional institutions. And he should do it regardless of political changes in Latin American governments. It is true that the question is complex. Relations with the countries of the region, and in particular with our neighbors, are not easy.
Determined efforts should be made to deal with particular concern with political and economic relations with neighboring countries. The security and stability of Chile, and therefore our own democracy, are linked to the need to eliminate all sources of tension with our neighbors. This is of paramount importance. Diplomatic, political and economic conflicts with neighboring countries exalt chauvinism and stimulate arguments in favor of armaments in certain sectors of our society at high financial costs. Renewed bilateral efforts are therefore necessary to foster mutual trust and, above all, to advance simultaneous demilitarization initiatives.
Border agreements between Chile and Argentina in the mid-1990s were recently clouded by the dispute over the maritime shelf on the continental ice. At the same time, the disputes with Peru and Bolivia, resolved at the Court in The Hague, do not alleviate the historic resentments of Bolivians and Peruvians and Chileans. This must be overcome. We must embark on a determined path to end the tensions in order to ensure diplomatic rapprochement and peace between our countries.
Finally, there is the complex issue of regional integration, where serious difficulties have arisen in recent years. This places limits on Chile’s deepening of relations with countries in the region and at other times leads to uncomfortable disputes. Therefore, it may be necessary to prioritize sub-national integration initiatives, between the regions of Chile with Argentina, Bolivia and Peru. This could be more effective and, in line with the interest of decentralization, would allow interesting citizen and territorial links between neighboring countries. At the same time, this would promote the development of mutual trust between our countries, based on regional governments and social organizations.
This does not mean giving up multinational integration schemes. First, we must revalue the LAIA, which allowed tariff liberalization between all the countries of the region, especially in the 1990s; but unfortunately in recent years it has received little political support. Second, Chile has the opportunity to play an interesting role in the convergence of plurilateral integration initiatives between the Atlantic (Mercosur) and Pacific (Andean Development Community and Pacific Alliance) programs. Finally, the new government should support CELAC as a body for political integration of the countries of Latin America and the Caribbean. And, as Mexican President López Obrador recently proposed, CELAC should hopefully become a replacement project for the OAS.
Foreign policy and commercial policy are essential instruments for promoting a new development project in our country. Both must intelligently accompany productive changes, as well as economic and social policies, in order to break with neoliberalism.