Chile's Aylwin Pushes Free Trade President Uses First State Visit to US to Seek Pact and Encourage Foreign Investment

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CHILEAN President Patricio Aylwin Azocar is in the United States this week to press the Bush administration on dismantling trade barriers and to discuss new business possibilities with US investors and industrialists.

He will be the first Chilean chief executive in 30 years to make a state visit to the US, although he and President Bush have met previously in less formal circumstances. The US kept his predecessor, Gen. Augusto Pinochet Ugarte, at arm's length during the 17-year military dictatorship that ended in 1990.

President Aylwin's coalition government is still struggling to assert full civilian authority in the country amid a series of restraints left in place by General Pinochet, who remains commander-in-chief of the Army.

Aylwin tells those business leaders who may be nostalgic for military rule that continued economic gains can be achieved only under democratic leaders.

"In the long run, democracy is better for business," says a Chilean Foreign Ministry official. "You see President Aylwin traveling to Europe, the {United} States, opening up opportunities, and you can't help but remember that Pinochet was a pariah who couldn't go anywhere."

Aylwin will urge Mr. Bush to move quickly on talks aimed at a US-Chile free trade agreement similar to that being negotiated between the US and Mexico.

Chile is a natural candidate for expansion of the free trade concept to South America. Its economy was radically revamped under the military regime, which reduced tariffs, privatized state industries, and welcomed foreign investment. Chilean exports now account for about 29 percent of the country's economy.

But observers note that presidential elections looming in the US may make a US-Chile pact difficult to achieve this year, considering the opposition from some of the sectors that would be directly effected.

One Chilean official gives the deal "no better than a 50-50 chance."

In Chile, there is little opposition to further trade liberalization since the industries likely to be damaged by competition have either risen to the challenge or disappeared long ago.

California's agricultural exports are similar to Chile's, and investors are taking a look at combining operations to provide year-round supplies, especially to Asian clients. …


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