Chilean ambassador Fernando Schmidt is hoping that diversification of products traded between Chile and T&T will help correct the current trade balance between the two countries, which is now in T&T's favour.
"We need to diversify the exports of Chile to T&T, which is composed mainly of pulp for making paper. Chile also exports food to T&T, like food for babies and wine. Chilean exports are increasing over the last few years, but it is still concentrated in a few things in the basket of products," he told the Business Guardian on Monday.
Schmidt, who speaks perfect English and Portuguese, has been in T&T for just over two months and said he hopes to be in T&T for "the longest possible time."
He served in Hungary from 2009 to 2010 and last year as ambassador to Brazil for nine months and is a past deputy Foreign Affairs Minister of Chile.
With this vast experience in international relations, Schmidt is ready to help develop trade, economic relations as well as other areas between the two countries.
There has been an Embassy of Chile in T&T for eight years.
Chile today is viewed as one of Latin America's richest countries and is a member of the Organisation for Economic Co-operation Development (OECD). Some view Chile as a first-world country.
He said Chile has not been unaffected by the current global economy and projected economic growth for 2014 is two per cent, which is half what had been projected one year ago.
"This can be attributed to the drop of copper prices on the world market and a reduction in investments. We believe with massive investments in public works, like ports and other infrastructure, the economy will have a bright future. The government is allocating about US$550 million into the economy to help it grow," he said.
The interview was held at the Embassy of Chile, Alexandra Street, St Clair.
Partial scope agreement
Schmidt said it is important that both countries study a partial scope agreement.
"It is important that both countries facilitate trade development through a partial scope agreement that would cover liquefied natural gas (LNG), which is the most important export product to Chile. There is currently a six per cent tariff on LNG for its entrance into Chile. This makes it more expensive to the final consumer in Chile. A partial scope agreement would foster more trade," he said.
He said the balance of trade is "totally in favour of T&T."
In 2013, T&T exported more that US$1 billion in products to Chile and Chile exported US$19 million to T&T.
T&T's exports to Chile are mainly in the area of energy, with LNG being the biggest export, followed by anhydrous ammonia and methanol.
For the first quarter of 2014, the balance of trade continued to be in T&T's favour.
T&T exported US$583 million to Chile, while Chile exported US$10.8 million to T&T.
"There is a big imbalance in favour of T&T," he said.
He said there are many areas that both countries should seek to explore to help diversify the areas of export.
"Tobago is one area that is relatively unknown to Chilean tourists. It is also important to explore the area of mining companies. There are some elements that apply to the oil and gas industry that are easily adaptable to the mining sector. Chile has a range of exports that can easily be exported to T&T. There are also agricultural items that Chile can export to T&T. There is also potential in the construction sector. There are big Chilean companies that are expanding throughout Latin America and the Caribbean," he said.
Schmidt said Chile is one of Latin America's big investors and this money can easily be transferred to T&T as his country's investment in T&T is "minimal."
According to statistics provided by the Chilean Embassy, Chile has US$24 billion invested in Brazil, one of the world's largest economies, US$16 billion invested in Argentina, US$16 billion invested in Peru and US$15 billion invested in Colombia.
"The Chilean economy is one of Latin America's largest investors, so why not do the same in T&T?" he asked.
He said Chile views T&T as an investor friendly country with a lot to offer.
"T&T is an attractive place to invest and it is not only in oil and gas. We should look at this market more carefully. Productivity is high in the energy sector, but it is lower in some sectors in T&T and this must be corrected."
Air service agreement
Schmidt said an air service agreement would help facilitate more trade and more tourists from Chile's large middle class.
"The possibilities of an agreement like this is unlimited. Not having an agreement like this limits tourism. Today, there are two main routes from T&T to Chile, that is through Miami and through Panama with Copa Airlines. It would arrange for the fundamentals of airliners to operate in both ways. Why can't the airport of Trinidad be the gateway for tourism from South America to the rest of the Caribbean region?"
He said Chilean tourists' visits to the Spanish speaking part of the Caribbean has increased in the last decade.
"About 200,000 Chileans vacation in the Caribbean region, most of it in the Spanish speaking parts like Cuba, Dominican Republic, Mexico and Costa Rica. The question is: how to attract these tourists to English-speaking Caribbean islands like Trinidad, and especially Tobago, which has fabulous riches," he said.
"Many of the countries of the English-speaking islands are not well known either. Breaking this lack of knowledge is a political need as well as good business," Schmidt said.
He said right now, Copa is the main airline that takes passengers to Panama before they go on to Chile, but with an air service agreement, there is the possibility for more airlines to enter, which will drive prices down and create competitiveness.
"I cannot deny the excellent job that Copa Airlines is doing, but it is important to diversify. It is over US$1,000 to travel from T&T to Chile. This is very expensive," he said.
Language barrier
He admitted that nationals of T&T do not know much about Chile and vice versa and said this could hamper business and cultural ties.
"The problem is that Chileans do not know much about T&T either. We have to break that barrier of lack of knowledge," he said.
He said Chile is doing its part to break the "linguistic barrier" and T&T has sent Spanish teachers to be trained in Chile.
"Last month, three teachers spent one month in Chile and returned to Trinidad," he said.
Agriculture
He said Chile can also offer expertise in agriculture.
"This has been area that we have worked with other countries in the Caribbean. What areas we can contribute to T&T in will be based on T&T's needs in the area of agriculture," he said.
Some major agriculture products that come from Chile are grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic, asparagus, beans, beef, poultry, wool, fish and timber.
He said Chile has a professional programme where it invites professionals from different fields to Chile to learn from their Chilean counterparts.
"These are fellowships annually in different fields. We are also working with diplomats from different countries to study at the diplomatic academy for about three months," he said.
Chile has one of the lowest crime rates in Latin America and the Caribbean. Although he was hesitant to give advice, the Chilean ambassador said there are similar experiences both countries can learn.
According to the United Nations Development Programme's (UNDP) Citizen Security Report in 2013, Chile has the lowest homicide rate in the region–two murders per 100,000 people.
"We have programmes that have been successfully implemented in Chile. Every government in Chile is analysed and penalised because of how high or low the rate of crime is in Chile. We have increased the number of police officers. We have a crime watch similar to T&T," he said.
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Chile's economy
The economy of Chile is ranked as being high income by the World Bank and is considered as one of Latin America's most stable and prosperous countries, leading Latin American nations in competitiveness, income per capita, globalisation, economic freedom, and low perception of corruption.
In May 2010, Chile became the first South American country to join the OECD. In 2006, Chile became the country with the highest nominal gross domestic product (GDP) per capita in Latin America. The Ease of Doing business Index, created by the World Bank, listed Chile as number 34 in its 2014 ranking.
During 2012, the largest sectors by GDP were mining (mainly copper), business services, personal services, manufacturing and wholesale and retail trade. Mining also represented 59.5 per cent of exports in the period, while the manufacturing sector accounted for 34 per cent of exports, concentrated mainly in food products, chemicals and pulp, paper and others.