Expenditures and Activities of
Cairns Group Countries
Chile’s export strategy is to promote itself as a reliable supplier of a range of high-quality, affordable goods and services. Other basic campaign points are: ease of trade, with few tariff walls or bureaucratic hindrances, low risk, due to political stability and a solid economy, a respect for quality and environmental protection standards, and a qualified workforce. During 1998 direct government support to export promotion was estimated at $10 million.
Established in 1974, ProChile is the first export promotion bureau created by a Latin American country. Three of its 10 sections are related to the agriculture, forestry, and fisheries sector. ProChile has 39 offices abroad inform exporters and producers of trade opportunity. Specialists in 13 domestic offices provide export assistance to more than 600 private companies.
ProChile’s various departments maintain trade data and market information, evaluate trade fairs, plan participation in international shows, organize trade missions, and identify potential markets for Chilean products. In 1999, ProChile, in cooperation with the Chilean fruit growers and exporters, introduced a promotional logo. It is part of a campaign to enhance the image of Chilean fruit’s quality and safety. The Government of Chile plans to convert ProChile into a public-private corporation, to enhance its efficiency.
Since 1995, ProChile has administered the Agricultural Export Promotion Fund, which finances marketing of agricultural exports, including processed products. The fund assists agricultural groups in developing new markets for traditional products, and promoting new products. The fund enhances existing export programs, finances market studies, and improves quality control programs. It also supports export promotion activities and covers operational expenses and salaries of Chile's agricultural attaches. The intention is to attract foreign investment, encourage joint ventures, and open new markets. No details of expenditures by activity are available.
ProChile’s budget for promoting agricultural exports has grown steadily. Producer and exporter associations, regional associations, or governments, may apply for promotional funds. Projects are intended to diversify exports and promote new products. A major emphasis is placed on projects originating in the regions outside of Metropolitan Santiago.
In 1998, the fund supported 75 programs with close to 300 activities involving 715 companies. Approximately 44 percent of the budget was devoted to fruit export development, 18 percent to wine, and 5 percent to processed foods.
Special emphasis is being given to projects that diversify exports and aid small- and medium-size companies. Products emphasized include pisco (Chilean brandy), seeds, flowers, legumes, meat, papaya, and honey.
Chile also encourages exports through a simplified duty drawback system that refunds duties paid on imports without an excessive documentation burden. Non-traditional products with total export value under $21 million are given a refund of between 3 and 10 percent of the Free-on-Board (FOB) value. The percent refunded declines as the total export value for a product approaches $21 million. It is eliminated once annual exports exceed $21 million. In 1995, rebates for agricultural products totaled approximately $30 million. Chile agreed to eliminate this program in 2003 as part of its Uruguay Round commitments.