Which statement best explains why a large quantity of agricultural products are imported into the United States from Chile?

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Economic Vigor Rooted in Export-Led Growth

which leaves less time for cooking.

The trend of more women joining the Chile's economic vigor is rooted in its export-led growth. Chile is undergoing || work force favors growing purchases one of the world's most profound economic transformations, bringing greater

of ready-to-eat foods. The signifiwealth to the average Chilean, and most likely to all income groups in the fu- cantly young population also bodes ture. The Chilean government privatized key industries, liberalized trade, diver

well for expected sales of processed

foods. sified exports and reduced debt.

The Next Free Trade Member Chile's economic indicators forecast a bright future for U.S. agricultural exports, as prosperity brings increased demand for foods beyond a staple diet. GDP per If pronouncements by the former Bush capita rose from $1,320 in 1985 to $2,809 in 1992. Private consumption ex- administration are acted upon by Prespanded, on average, 6.2 percent every year since 1986. The U.S. dollar weak

ident Clinton, the U.S. may enter into ened against their currency, making the United States more competitive in their

a free trade agreement with Chile, market.

after Mexico. A zero-tariff bilateral

treaty with Chile has potential to creThe agricultural sector is Chile's second largest foreign exchange earner after ate new opportunities for exports of a mining. Chilean farmers and agribusinesses work together to increase exports,

wide array of U.S. products. Reachparticularly in horticultural products. Their success can be measured by the sig-1| ing an agreement is within the framenificant growth of Chilean fruit and wine imports to the U.S. Fresh fruit and

work of the Enterprise for the Amerifruit juice imports rose from $190 million in 1986 to $349 million in 1992.

cas Initiative, which laid out policy re

forms needed for a U.S. commitment Wine imports from Chile gained tenfold during this period, capturing third place

to an agreement. among wine suppliers.

Last year, the U.S. International Trade Retail Opportunities The U.S. share of Chilean food pur

Commission examined U.S. market chases could be increased by strength

access in Chile and concluded it posChileans' purchases in supermarkets, ening the visibility of American prod

sesses a generally transparent and nondivided between domestic and foreign ucts and informing Chilean consumers

discriminatory trade and investment competitors, surged to over $2 billion. about their benefits. U.S. suppliers

regime. However, Chile still mainAlthough Chilean production of con- should be prepared to support their

tains barriers to U.S. goods in several sumer-ready foods is increasing, qualtrade with point-of-sale promotions ei

areas including certain agricultural ity advantages as well as a positive ther independently, jointly with their

sectors. Although Chile lowered most image of U.S. products will still gen- Chilean trade partner, or through the

agricultural import tariffs, basic comerally provide a sales advantage to appropriate U.S. market development

modities such as wheat and wheat U.S. products, assuming a reasonable cooperator.

flour, sugar and vegetable oils remain price differential. Foreign competition

subject to minimum price calls. is particularly strong from Ecuador, Chile's largest supermarket trade Argentina, and the EC, each of which show, Supermercado '93, would be an

Prospects for Expansion surpass the U.S. in exports of ready- excellent venue for U.S. to-eat foods. The U.S. and Brazil tied

Prospects are excellent for further exagribusinesses to link with wholesalers

pansion of U.S. agricultural exports to as fourth-ranked supplier in 1991. overseas. Supermercados will be held

Chile, and particularly high-value conThe advantage of most Latin Ameri- in Santiago from August 25-27. At can suppliers vis-a-vis the U.S. often least 5,000 distributors representing

sumer food products. As Chile con

tinues to explore where its agricultural comes through favorable import tariffs the food, food service and supermarket

comparative advantages lie, additional rather than lower transportation costs. sectors in Chile and other Latin Amer

changes could boost imports of vegeican countries are expected to attend. Most Chilean supermarkets are like

table oils, and over the medium term, For more information, contact the U.S. large stores in the United States. The

increase livestock inputs. Meanwhile, Agricultural Attache, Richard Helm, at dairy, meat, fresh produce and canned

consumer food sales will grow briskly (Tel.) 01156-2-671-0133 or (FAX) food sections are similar to those sec

as Chile's economy shows continuing 011-56-2-698-9626. tions in U.S. supermarkets; the frozen

prosperity. The attraction of new taste foods section is smaller but growing. Demographic Profile

sensations, high quality imported Small businesses and major chains

foods, and fast food establishments is rely upon larger importing firms to

The demographic and expenditure pat- expected to increase demand for U.S. purchase their consumer-ready items

terns of Chileans help shape their re- exports. from the U.S. Selection of products

sponse to market promotions. Eightyand manufacturers are generally the six percent of the people live in one of

For more information, contact responsibility of the U.S. distributors four major metropolitan areas, and 36 rather than the importer. Few middle

percent reside in the capital city; this Diane Dolinsky at (202) 720-6821 or men are involved in Chilean com

concentration assists market entry. Richard Helm in Santiago at

Nearly 21 percent of women are for- (011-56-2) 671-0133 merce.

mally employed outside the home,