 
								PROFILE
								OFFICIAL NAME:
								Republic of Chile 
								Geography
								Area: 756,945 sq. km. (302,778 sq. mi.); nearly 
								twice the size of California.
								Cities: Capital--Santiago (metropolitan 
								area est. 6 million). Other cities--Concepcion-Talcahuano 
								(840,000), Vina del Mar-Valparaiso (800,000), 
								Antofagasta (245,000), Temuco (230,000). 
								Terrain: Desert in north; fertile central 
								valley; volcanoes and lakes toward the south, 
								giving way to rugged and complex coastline; 
								Andes Mountains on the eastern border. 
								Climate: Arid in north, Mediterranean in the 
								central portion, cool and damp in south. 
								People
								Nationality: Noun and adjective--Chilean(s).
								
								Population (2003): 15.1 million. 
								Annual population growth rate: 1.2%.
								Ethnic groups: Spanish-Native-American (mestizo), 
								European, Native-American. 
								Religions: Roman Catholic 69.9%; Protestant 15%.
								Language: Spanish. 
								Education: Years compulsory--12. 
								Attendance--3 million. Adult literacy 
								rate--95.8%.
								Health: Infant mortality rate--8.9/1,000.
								Life expectancy--79 yrs. 
								Work force (6.0 million); employed 5.5 million:
								Community, social and individual services--26%;
								industry--14.4%; commerce--17.6%;
								agriculture, forestry, and fishing--13.9%;
								construction--7.1%; financial 
								services--7.5%; transportation and 
								communication--8.0%; electricity, gas 
								and water--0.5%; mining--1.2%.
								Government 
								Type: Republic. 
								Independence: September 18, 1810. 
								Constitution: Promulgated September 11, 1980; 
								effective March 11, 1981; amended in 1989, 1993, 
								1997, and 2005. 
								Branches: Executive--president. 
								Legislative--bicameral legislature. 
								Judicial--Constitutional Tribunal, Supreme 
								Court, court of appeals, military courts.
								Administrative subdivisions: 12 numbered 
								regions, plus Santiago metropolitan region, 
								administered by appointed "intendentes," regions 
								are divided into provinces, administered by 
								appointed governors; provinces are divided into 
								municipalities administered by elected mayors.
								
								Political parties: Major parties are grouped 
								into two large coalitions: 1) the center-left "Concertacion", 
								which includes the Christian Democrat Party, the 
								Socialist Party, the Party for Democracy, and 
								the Radical Social Democratic Party; and 2) the 
								center-right "Alliance for Chile", which 
								includes the National Renewal Party and the 
								Independent Democratic Union. The Communist 
								Party joined the Humanistic Party and a number 
								of smaller parties to form the "Together We Can" 
								coalition in 2004, but none of these leftist 
								parties have recently elected congressional 
								representatives. 
								Suffrage: Universal at 18, including foreigners 
								legally resident for more than 5 years. 
								Economy (2005) 
								GDP: $112.0 billion. 
								Annual real growth rate: 6.3%.
								Per capita GDP: $6,000. 
								Forestry, agriculture, and fisheries (6% of 
								GDP): Products--wheat, potatoes, corn, 
								sugar beets, onions, beans, fruits, livestock, 
								fish. 
								Commerce (8% of GDP): Sales, restaurants, 
								hotels. 
								Manufacturing (17% of GDP): Types--mineral 
								refining, metal manufacturing, food processing, 
								fish processing, paper and wood products, 
								finished textiles. 
								Electricity, gas, and water: 3% of GDP.
								Transportation and communication: 7% of GDP.
								Construction: 8% of GDP.
								Financial services (12% of GDP): Insurance, 
								leasing, consulting. 
								Mining (13% of GDP): Copper, iron ore, nitrates, 
								precious metals, and molybdenum.
								Trade: Exports--$39.5 billion: copper, 
								fishmeal, fruits, wood products, paper products, 
								fish, wine. Major markets--U.S. 17.3%, EU 
								23.9%, Japan 11.7%, China 10%, Korea 5.5%, 
								Mexico 4%, Brazil 4.2%. Imports--$31.7 
								billion: consumer goods, chemicals, motor 
								vehicles, fuels, electrical machinery, heavy 
								industrial machinery, food. Major suppliers--EU 
								16.3%, Argentina 16%, U.S. 14.6%, Brazil 10.9%, 
								China 7.6%, Korea 3.8%, Japan 3.1 %. 
								GEOGRAPHY
								The northern Chilean desert contains great 
								mineral wealth, principally copper. The 
								relatively small central area dominates the 
								country in terms of population and agricultural 
								resources. This area also is the cultural and 
								political center from which Chile expanded until 
								the late 19th century, when it incorporated its 
								northern and southern regions. Southern Chile is 
								rich in forests and grazing lands and features a 
								string of volcanoes and lakes. The southern 
								coast is a labyrinth of fjords, inlets, canals, 
								twisting peninsulas, and islands. The Andes 
								Mountains are located on the eastern border. 
								PEOPLE 
								About 85% of Chile's population lives in urban 
								areas, with 40% living in greater Santiago. Most 
								have Spanish ancestry. A small, yet influential 
								number of Irish and English immigrants came to 
								Chile during the colonial period. German 
								immigration began in 1848 and lasted for 90 
								years; the southern provinces of Valdivia, 
								Llanquihue, and Osorno show a strong German 
								influence. Other significant immigrant groups 
								are Italian, Croatian, Basque, and Palestinian. 
								About 800,000 Native Americans, mostly of the 
								Mapuche tribe, reside in the south-central area. 
								The Aymara and Diaguita groups can be found 
								mainly in Chile’s northern desert valleys.
								HISTORY
								About 10,000 years ago, migrating Indians 
								settled in fertile valleys and along the coast 
								of what is now Chile. The Incas briefly extended 
								their empire into what is now northern Chile, 
								but the area's barrenness prevented extensive 
								settlement. The first Europeans to arrive in 
								Chile were Diego de Almagro and his band of 
								Spanish conquistadors, who came from Peru 
								seeking gold in 1535. The Spanish encountered 
								hundreds of thousands of Indians from various 
								cultures in the area that modern Chile now 
								occupies. These cultures supported themselves 
								principally through slash-and-burn agriculture 
								and hunting. The conquest of Chile began in 
								earnest in 1540 and was carried out by Pedro de 
								Valdivia, one of Francisco Pizarro's 
								lieutenants, who founded the city of Santiago on 
								February 12, 1541. Although the Spanish did not 
								find the extensive gold and silver they sought, 
								they recognized the agricultural potential of 
								Chile's central valley, and Chile became part of 
								the Viceroyalty of Peru. 
								The drive for independence from Spain was 
								precipitated by usurpation of the Spanish throne 
								by Napoleon's brother Joseph in 1808. A national 
								junta in the name of Ferdinand--heir to the 
								deposed king--was formed on September 18, 1810. 
								The junta proclaimed Chile an autonomous 
								republic within the Spanish monarchy. A movement 
								for total independence soon won a wide 
								following. Spanish attempts to reimpose 
								arbitrary rule during what was called the "Reconquista" 
								led to a prolonged struggle. 
								Intermittent warfare continued until 1817, 
								when an army led by Bernardo O'Higgins, Chile's 
								most renowned patriot, and José San Martín, hero 
								of Argentine independence, crossed the Andes 
								into Chile and defeated the royalists. On 
								February 12, 1818, Chile was proclaimed an 
								independent republic under O'Higgins' 
								leadership. The political revolt brought little 
								social change, however, and 19th century Chilean 
								society preserved the essence of the stratified 
								colonial social structure, which was greatly 
								influenced by family politics and the Roman 
								Catholic Church. A strong presidency eventually 
								emerged, but wealthy landowners remained 
								extremely powerful. Toward the end of the 19th 
								century, the government in Santiago consolidated 
								its position in the south by ruthlessly 
								suppressing the Mapuche Indians. In 1881, it 
								signed a treaty with Argentina confirming 
								Chilean sovereignty over the Strait of Magellan. 
								As a result of the War of the Pacific with Peru 
								and Bolivia (1879-83), Chile expanded its 
								territory northward by almost one-third and 
								acquired valuable nitrate deposits, the 
								exploitation of which led to an era of national 
								affluence. Chile established a parliamentary 
								democracy in the late 19th century, but 
								degenerated into a system protecting the 
								interests of the ruling oligarchy. By the 1920s, 
								the emerging middle and working classes were 
								powerful enough to elect a reformist president, 
								whose program was frustrated by a conservative 
								congress. In the 1920s, Marxist groups with 
								strong popular support arose. 
								Continuing political and economic instability 
								resulted with the rule of the quasidictatorial 
								Gen. Carlos Ibanez (1924-32). When 
								constitutional rule was restored in 1932, a 
								strong middle-class party, the Radicals, 
								emerged. It became the key force in coalition 
								governments for the next 20 years. During the 
								period of Radical Party dominance (1932-52), the 
								state increased its role in the economy. 
								The 1964 presidential election of Christian 
								Democrat Eduardo Frei-Montalva by an absolute 
								majority initiated a period of major reform. 
								Under the slogan "Revolution in Liberty," the 
								Frei administration embarked on far-reaching 
								social and economic programs, particularly in 
								education, housing, and agrarian reform, 
								including rural unionization of agricultural 
								workers. By 1967, however, Frei encountered 
								increasing opposition from leftists, who charged 
								that his reforms were inadequate, and from 
								conservatives, who found them excessive. At the 
								end of his term, Frei had accomplished many 
								noteworthy objectives, but he had not fully 
								achieved his party's ambitious goals. In 1970, 
								Senator Salvador Allende, a Marxist and member 
								of Chile's Socialist Party, who headed the 
								"Popular Unity" (UP) coalition of socialists, 
								communists, radicals, and dissident Christian 
								Democrats, won a plurality of votes in a 
								three-way contest and was named President by the 
								Chilean Congress. His program included the 
								nationalization of private industries and banks, 
								massive land expropriation, and 
								collectivization. Allende's program also 
								included the nationalization of U.S. interests 
								in Chile's major copper mines. 
								Elected with only 36% of the vote and by a 
								plurality of only 36,000 votes, Allende never 
								enjoyed majority support in the Chilean Congress 
								or broad popular support. Domestic production 
								declined; severe shortages of consumer goods, 
								food, and manufactured products were widespread; 
								and inflation reached 1,000% per annum. Mass 
								demonstrations, recurring strikes, violence by 
								both government supporters and opponents, and 
								widespread rural unrest ensued in response to 
								the general deterioration of the economy. By 
								1973, Chilean society had split into two hostile 
								camps. 
								A military coup overthrew Allende on 
								September 11, 1973. As the armed forces 
								bombarded the presidential palace, Allende 
								reportedly committed suicide. A military 
								government, led by General Augusto Pinochet, 
								took over control of the country. The first 
								years of the regime in particular were marked by 
								serious human rights violations. A new 
								Constitution was approved by a plebiscite on 
								September 11, 1980, and General Pinochet became 
								President of the Republic for an 8-year term. In 
								its later years, the regime gradually permitted 
								greater freedom of assembly, speech, and 
								association, to include trade union activity. In 
								contrast to its authoritarian political rule, 
								the military government pursued decidedly 
								laissez-faire economic policies. During its 16 
								years in power, Chile moved away from economic 
								statism toward a largely free market economy 
								that fostered an increase in domestic and 
								foreign private investment. In a plebiscite on 
								October 5, 1988, General Pinochet was denied a 
								second 8-year term as president. Chileans voted 
								for elections to choose a new president and the 
								majority of members of a two-chamber congress. 
								On December 14, 1989, Christian Democrat 
								Patricio Aylwin, the candidate of a coalition of 
								17 political parties called the Concertacion, 
								was elected president. Aylwin served from 1990 
								to 1994 and was succeeded by another Christian 
								Democrat, Eduardo Frei Ruiz-Tagle (son of the 
								previous President), leading the same coalition, 
								for a 6-year term. Ricardo Lagos Escobar of the 
								Socialist Party and the Party for Democracy led 
								the Concertacion to a narrower victory in 2000 
								presidential elections. His term ended on March 
								11, 2006, when President-elect Verónica Michelle 
								Bachelet Jeria took office. 
								GOVERNMENT AND POLITICAL CONDITIONS
								Chile's Constitution was approved in a September 
								1980 national plebiscite. It entered into force 
								in March 1981. After Pinochet's defeat in the 
								1988 plebiscite, the Constitution was amended to 
								ease provisions for future amendments to the 
								Constitution. In September 2005, President 
								Ricardo Lagos signed into law several 
								constitutional amendments passed by Congress. 
								These include eliminating the positions of 
								appointed senators and senators for life, 
								granting the President authority to remove the 
								commanders-in-chief of the armed forces, and 
								reducing the presidential term from six to four 
								years. 
								Presidential and congressional elections were 
								held December 2005 and January 2006. The new 
								President and members of Congress took office on 
								March 11, 2006. 
								Chileans voted in the first round of 
								presidential elections on December 11, 2005. 
								None of the four presidential candidates won 
								more than 50% of the vote. As a result, the top 
								two vote-getters--center-left Concertacion 
								coalition’s Michelle Bachelet and center-right 
								Alianza coalition’s Sebastian Pinera--competed 
								in a run-off election on January 15, 2006, which 
								Michelle Bachelet won. This was Chile’s fourth 
								presidential election since the end of the 
								Pinochet era. All four have been judged free and 
								fair. The President is constitutionally barred 
								from serving consecutive terms. 
								Chile has a bicameral Congress, which meets 
								in the port city of Valparaiso, about 140 
								kilometers (84 mi.) west of the capital, 
								Santiago. Deputies are elected every 4 years, 
								and Senators serve 8-year terms. Chile's 
								congressional elections are governed by a unique 
								binomial system that rewards coalition slates. 
								Each coalition can run two candidates for the 
								two Senate and two Deputy seats apportioned to 
								each electoral district. Historically, the two 
								largest coalitions (Concertacion and Alianza) 
								split most of the seats in a district. Only if 
								the leading coalition ticket out-polls the 
								second-place coalition by a margin of more than 
								2-to-1 does the winning coalition gain both 
								seats.
								In the December 11, 2005 congressional 
								elections, the Concertacion coalition won a 
								majority in both the Senate and the Chamber of 
								Deputies. In the 38-member Senate, the 
								Concertacion coalition holds 20 seats and the 
								Alianza opposition holds 17. There is one 
								independent. In the 120-member Chamber of 
								Deputies, the Concertacion coalitions holds 65 
								seats and the Aliana holds 54. There is one 
								independent. 
								Chile's judiciary is independent and includes 
								a court of appeal, a system of military courts, 
								a constitutional tribunal, and the Supreme 
								Court. In June 2005, Chile completed a 
								nation-wide overhaul of its criminal justice 
								system. The reform has replaced inquisitorial 
								proceedings with an adversarial system more 
								similar to that of the United States.
								Principal Government Officials 
								President--Verónica Michelle BACHELET Jeria
								Minister of Interior--Andres ZALDIVAR Larraín
								Minister of Foreign Affairs--Alejandro FOXLEY 
								Rioseco
								Ambassador to the United States--Andrés BIANCHI 
								Larre
								Ambassador to the Organization of American 
								States (OAS)--Esteban TOMIC Errazuriz
								Ambassador to the United Nations--Heraldo MUNOZ 
								Valenzuela 
								Chile maintains an
								embassy 
								in the United States at 1732 Massachusetts 
								Avenue, NW, Washington, DC 20036; tel: 
								202-785-1746, fax: 202-659-9624, email:
								
								embassy@embassyofchile.org. 
								DEFENSE 
								Chile's Armed Forces are subject to civilian 
								control exercised by the President through the 
								Minister of Defense. The President has the 
								authority to remove the commanders-in-chief of 
								the armed forces. 
								Army 
								The commander in chief of the Chilean Army is 
								General Oscar Izurieta Ferrer. The Chilean Army 
								is 45,000 strong and is organized with an Army 
								headquarters in Santiago, seven divisions 
								throughout its territory, an Air Brigade in 
								Rancagua, and a Special Forces Command in Colina. 
								The Chilean Army is one of the most professional 
								and technologically advanced armies in Latin 
								America. 
								Navy
								Vice Admiral Rodolfo Codina directs the 
								25,000-person Navy, including 5,000 Marines. Of 
								the fleet of 29 surface vessels, only six are 
								operational major combatants (destroyers and 
								frigates). Those ships are based in Valparaiso. 
								The Navy operates its own aircraft for transport 
								and patrol; there are no Navy fighter or bomber 
								aircraft. The Navy also operates three 
								submarines based in Talcahuano. 
								Air Force (FACH)
								Gen. Osvaldo Sarabia heads a force of 12,500. 
								Air assets are distributed among five air 
								brigades headquartered in Iquique, Antofagasta, 
								Santiago, Puerto Montt, and Punta Arenas. The 
								Air Force also operates an airbase on King 
								George Island, Antarctica. The FACH will begin 
								taking delivery of 10 U.S. f-16 aircraft in 
								2006. 
								Carabineros
								After the military coup in September 1973, the 
								Chilean national police (Carabineros) were 
								incorporated into the Defense Ministry. With the 
								return of democratic government, the police were 
								placed under the operational control of the 
								Interior Ministry but remained under the nominal 
								control of the Defense Ministry. Gen. Jose 
								Bernales is the head of the national police 
								force of 30,000 men and women who are 
								responsible for law enforcement, traffic 
								management, narcotics suppression, border 
								control, and counter-terrorism throughout Chile.
								
								ECONOMY 
								After a decade of impressive growth rates, Chile 
								experienced a moderate downturn in 1999, brought 
								on by the global economic slowdown. The economy 
								remained sluggish until 2003, when it began to 
								show clear signs of recovery, achieving 3.3% 
								real GDP growth. The Chilean economy finished 
								2004 with growth of 6.1%. Chile was on track to 
								achieve real GDP growth of around 6% in 2005, 
								mainly due to record-level copper prices. 
								Chile has pursued generally sound economic 
								policies for nearly three decades. The 1973-90 
								military government sold many state-owned 
								companies, and the three democratic governments 
								since 1990 have continued privatization, though 
								at a slower pace. The government's role in the 
								economy is mostly limited to regulation, 
								although the state continues to operate copper 
								giant CODELCO and a few other enterprises. Chile 
								is strongly committed to free trade and has 
								welcomed large amounts of foreign investment. 
								Chile has signed free trade agreements (FTAs) 
								with several important economies, including an 
								FTA with the United States, which was signed in 
								2003 and implemented in January 2004. Over the 
								last several years, Chile has signed FTAs with 
								the European Union, South Korea, New Zealand, 
								Singapore, Brunei, and China. It reached a 
								partial trade agreement with India in 2005 and 
								began negotiations for full-fledged FTAs with 
								India and Japan in 2006. High domestic savings 
								and investment rates also helped propel Chile's 
								economy to average growth rates of 8% during the 
								1990s. The privatized national pension system (AFP) 
								has encouraged domestic investment and 
								contributed to an estimated total domestic 
								savings rate of approximately 21% of GDP. 
								However, the AFP is not without its critics, who 
								cite low coverage rates (only 55% of the working 
								population is covered) with whole groups such as 
								the self-employed outside the system. There has 
								also been criticism of the inefficiency and high 
								costs due to a lack of competition among pension 
								funds. Critics cite loopholes in the use of 
								pension savings through lump sum withdraws for 
								the purchase of a second home or payment of 
								university fees as fundamental weaknesses of the 
								AFP.
								Unemployment has hovered in the 8%-10% range 
								in recent years, well above the 5%-6% average 
								for the 1990s. Unemployment remained at 8.8% at 
								the end of 2004 in spite of strong economic 
								growth. Most international observers blame the 
								high unemployment rate on Chile’s complicated 
								and restrictive labor laws. Wages have risen 
								faster than inflation as a result of higher 
								productivity, boosting national living 
								standards. The percentage of Chileans with 
								incomes below the poverty line--defined as twice 
								the cost of satisfying a person's minimal 
								nutritional needs--fell from 46% in 1987 to 
								around 18% by 2004.
								Chile's independent Central Bank pursues a 
								policy of maintaining inflation between 2% and 
								4%. Inflation has not exceeded 5% since 1998. 
								Chile registered an inflation rate of 2.4% in 
								2004. In 2005, inflation reached an estimated 
								3.7%. Stronger than expected domestic demand 
								coupled with higher worldwide energy prices led 
								to most of the inflationary rise in 2005. The 
								Chilean peso’s rapid appreciation against the 
								U.S. dollar in 2004 and 2005 helped keep down 
								inflation while at the same time the 
								strengthening peso played a role in the stronger 
								than expected domestic consumption. Most wage 
								settlements and spending decisions are indexed, 
								reducing inflation's volatility. Under the 
								compulsory private pension system, most formal 
								sector employees pay 10% of their salaries into 
								privately managed funds. 
								Total foreign direct investment rose to $7.1 
								billion in 2004, up from $2.5 billion in 2003. 
								Both foreign and domestic investment in Chile 
								had declined during the country’s period of 
								slower economic growth from 1999-2003, but both 
								now appear to be recovering strongly. The 
								Chilean Government committed in early 2002 to 
								undertake a series of microeconomic reforms 
								designed to create new incentives for private 
								investment. The government also has encouraged 
								the use of Chile as an "investment platform" for 
								multinational corporations planning to operate 
								in the region. Chile's welcoming attitude toward 
								foreign direct investment is codified in the 
								country's Foreign Investment Law, which gives 
								foreign investors the same treatment as 
								Chileans. Registration is simple and 
								transparent, and foreign investors are 
								guaranteed access to the official foreign 
								exchange market to repatriate their profits and 
								capital. The U.S.-Chile Free Trade Agreement 
								offers a number of other investor protections.
								
								Foreign Trade 
								Chile's economy is highly dependent on 
								international trade. In 2005, exports accounted 
								for about 39% of GDP. That figure was somewhat 
								distorted by world-record copper prices. Chile’s 
								overall trade profile has traditionally been 
								dependent upon copper exports, and the rise in 
								copper prices has reinforced it further. The 
								state-owned firm CODELCO is the world's largest 
								copper-producing company with recorded copper 
								reserves of 200 years. Chile has made an effort 
								to expand nontraditional exports. In 1975, 
								non-mineral exports made up just over 30% of 
								total exports, whereas now they account for 
								about 60%. The most important non-mineral 
								exports are forestry and wood products, fresh 
								fruit and processed food, fishmeal and seafood, 
								and wine. The trade balance for 2005 showed a 
								surplus of $8 billion. Total exports in 2005 
								were $38 billion, up nearly 20% from 2004. 
								Chile's export markets are fairly balanced among 
								Europe (25.1%), Asia (33.1%), Latin America 
								(15.7%), and North America (19%). The U.S., the 
								largest national market, takes in 17.3% of 
								Chile's exports. Since the implementation of the 
								U.S.-Chile FTA in January 2004, bilateral trade 
								has increased 85%. 
								Asia has been the fastest-growing export 
								market in recent years. For example, Chile’s 
								number two, three, and four trading partners are 
								China, Japan, and South Korea, respectively. 
								Chile’s recent FTAs with Asian trading partners 
								and plans to sign more in 2006 underscore the 
								growing importance of Asia to Chile’s trade 
								portfolio. 
								Chilean imports increased 32% in 2005, to $30 
								billion (est.), reflecting a positive change in 
								consumer demand and overall economic recovery. 
								Capital goods made up about 66% of total 
								imports. The United States provided 13.7% (est.) 
								of Chilean imports in 2005. Chile unilaterally 
								lowered its across-the-board import tariff--for 
								all countries with which it does not have a 
								trade agreement--to 6% in 2003. 
								Higher effective tariffs are charged only on 
								imports of wheat, wheat flour, and sugar as a 
								result of a system of import price bands. The 
								price bands were ruled inconsistent with Chile's 
								World Trade Organization (WTO) obligations in 
								2002, and the government has introduced 
								legislation to modify them. Also, Chile will 
								have to phase out the price bands within 12 
								years under the terms of the U.S.-Chile FTA. 
								Successive Chilean governments have actively 
								pursued trade-liberalizing agreements. During 
								the 1990s, Chile signed FTAs with Canada, 
								Mexico, and Central America. Chile also 
								concluded preferential trade agreements with 
								Venezuela, Colombia, and Ecuador. An association 
								agreement with Mercosur--Argentina, Brazil, 
								Paraguay, and Uruguay--went into effect in 
								October 1996. Continuing its export-oriented 
								development strategy, Chile completed landmark 
								free trade agreements in 2002 with the European 
								Union and South Korea. Chile, as a member of the 
								Asia-Pacific Economic Cooperation (APEC) 
								organization, is seeking to boost commercial 
								ties to Asian markets. To that end, it has 
								signed FTAs in recent years with New Zealand, 
								Singapore, Brunei, and most recently China. In 
								2006, Chile has begun FTA negotiations with 
								Japan and India. 
								After two years of negotiations, the United 
								States and Chile signed an agreement in June 
								2003. The agreement will lead to completely 
								duty-free bilateral trade within 12 years. The 
								U.S.-Chile FTA entered into force January 1, 
								2004 following approval by the U.S. and Chilean 
								congresses. The bilateral FTA has inaugurated 
								greatly expanded U.S.-Chilean trade ties. Chile 
								is a strong proponent of pressing ahead on 
								negotiations for a Free Trade Area of the 
								Americas (FTAA) and active in the WTO’s Doha 
								round of negotiations, principally through its 
								membership in the G-20 and Cairns Group.
								Finance 
								Chile's financial sector has grown faster than 
								other areas of the economy over the last few 
								years; a banking reform law approved in 1997 
								broadened the scope of permissible foreign 
								activity for Chilean banks. The Chilean 
								Government implemented a further liberalization 
								of capital markets in 2001. Chileans have 
								enjoyed the recent introduction of new financial 
								tools such as home equity loans, currency 
								futures and options, factoring, leasing, and 
								debit cards. The introduction of these new 
								products has also been accompanied by an 
								increased use of traditional instruments such as 
								loans and credit cards. Chile's private pension 
								system, with assets worth roughly $54 billion at 
								the end of 2004, has been an important source of 
								investment capital for the capital market. Chile 
								maintains one of the best credit ratings (S&P 
								A+) in Latin America. There are three main ways 
								for Chilean firms to raise funds abroad: bank 
								loans, issuance of bonds, and the selling of 
								stocks on U.S. markets through American 
								Depository Receipts (ADRs). Nearly all of the 
								funds raised through these means go to finance 
								domestic Chilean investment. The government 
								continues to pay down its foreign debt. Combined 
								public and private foreign debt was roughly 50% 
								of GDP at the end of 2004--low by Latin American 
								standards. 
								FOREIGN RELATIONS 
								Since its return to democracy in 1990, Chile has 
								been an active participant in the international 
								political arena. Chile completed a 2-year 
								non-permanent position on the UN Security 
								Council in January 2005. Chile is an active 
								member of the UN family of agencies and 
								participates in UN peacekeeping activities. 
								Chile hosted the Defense Ministerial of the 
								Americas in 2002 and the APEC summit and related 
								meetings in 2004. Chile hosted the Community of 
								Democracies ministerial in April 2005. An 
								associate member of Mercosur and a full member 
								of APEC, Chile has been an important actor on 
								international economic issues and hemispheric 
								free trade. 
								The Chilean Government has diplomatic 
								relations with most countries. It settled its 
								territorial disputes with Argentina during the 
								1990s. Chile and Bolivia severed diplomatic ties 
								in 1978 over Bolivia's desire to reacquire 
								territory it lost to Chile in 1879-83 War of the 
								Pacific. The two countries maintain consular 
								relations. 
								U.S.-CHILEAN RELATIONS
								Relations between the United States and Chile 
								are better now than at any other time in 
								history. The U.S. Government applauded the 
								rebirth of democratic practices in Chile in the 
								late 1980s and early 1990s and sees the 
								maintenance of a vibrant democracy and a healthy 
								and sustainable economy as among the most 
								important U.S. interests in Chile. Besides the 
								landmark 2003 U.S.-Chile FTA, the two 
								governments consult frequently on issues of 
								mutual concern, including in the areas of 
								multilateral diplomacy, security, culture, and 
								science.
								U.S. Embassy Functions
								In addition to working closely with Chilean 
								Government officials to strengthen our bilateral 
								relationship, the U.S. Embassy in Santiago 
								provides a wide range of services to U.S. 
								citizens and businesses in Chile. (Please see 
								the embassy's
								home 
								page for details of these services.) The 
								Embassy also is the locus for a number of 
								American community activities in the Santiago 
								area. Public Affairs works closely with 
								universities and non-governmental organizations 
								(NGOs) on a variety of programs of bilateral 
								interest. Of special note are extensive U.S. 
								Speaker, International Visitor, and Fulbright 
								programs. Themes of particular interest include 
								trade, international security, judicial reform, 
								law enforcement, labor, and environmental 
								issues.
								Attachés at the Embassy from the Foreign 
								Commercial Service, Foreign Agricultural 
								Service, and the Animal and Plant Health 
								Inspection Service (APHIS) work closely with the 
								hundreds of U.S. companies that export to or 
								maintain offices in Chile. These officers 
								provide information on Chilean trade and 
								industry regulations and administer several 
								programs intended to support U.S. companies' 
								sales in Chile. 
								The Consular section of the Embassy provides 
								vital services to the more than 12,000 U.S. 
								citizens residing in Chile. Among other 
								services, the Consular section assists Americans 
								who wish to participate in U.S. elections while 
								abroad and provides U.S. tax information. 
								Besides the U.S. citizens resident in Chile, 
								about 120,000 U.S. citizens visit Chile 
								annually. The Consular section offers passport 
								and emergency services to U.S. tourists as 
								needed during their stay in Chile. It also 
								issues about 40,000 visitor visas annually to 
								Chilean citizens who plan to travel to the 
								United States. 
								The Public Affairs Office works daily with 
								Chilean media, which has a keen interest in 
								bilateral and regional relations. It also 
								assists visiting foreign media, including U.S. 
								journalists, and is regularly involved in press 
								events for high-level visitors. 
								Principal U.S. Embassy Officials
								Ambassador--Craig 
								A. Kelly
								Deputy Chief of Mission--Emi Lynn Yamauchi
								Public Affairs Counselor--Judy Baroody
								Management Counselor--Floyd S. Cable 
								Commercial Counselor--Americo A. Tadeu 
								Economic and Political Counselor--Andrew 
								Chritton 
								Consul General--Sean Murphy
								Defense Attaché--Col. Jorge Matos, USA
								Military Group Commander--Jeffrey B. Smith, USAF
								Agricultural Counselor--Christine Sloop
								APHIS Attaché--Karen S. Sliter
								(Acting) Legal Attaché--Paul Cha
								DEA--James C. Kuykendall 
								The 
								U.S. Embassy and Consulate in Santiago are 
								located at 2800 Andres Bello Avenue, Las Condes, 
								(tel. 562-232-2600; fax: 562-330-3710). The 
								mailing address is Casilla 27-D, Santiago, 
								Chile.