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Policy Networks and Business Participation in Free Trade Negotiations in Chile*

Published online by Cambridge University Press:  29 April 2008

BENEDICTE BULL
BENEDICTE BULL
Affiliation:
Benedicte Bull is a Senior Research Fellow at the Centre for Development and the Environment (SUM), University of Oslo, benedicte.bull@sum.uio.no
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Abstract

Within Latin America, Chile is distinguished by its stable trade policies and rapid negotiation of trade agreements with countries and regions all over the world. Explanations for these phenomena often point to the stable pro-free trade coalition established in the aftermath of the shock-therapy pursued in the 1970s, and Chile's professional government bureaucracy. Although both of these elements are important, this article shows how the rapid integration of Chile into the world economy has also depended on the existence of business associations with expertise on trade issues. Through the process of integration, a close policy network has evolved between key public officials and business representatives. This is premised on the mutual recognition of expertise in the public and private sectors, and is held together by close personal networks of loyalty and trust across the public-private divide. However, while the development of such a policy network has been highly favourable to the process of negotiating trade agreements, it has also contributed to the de-facto exclusion of societal actors that have less to contribute to trade negotiations than business sectors.

Resumen:

Chile se distingue en América Latina por sus políticas comerciales estables y por su rápida negociación de acuerdos comerciales con países y regiones de todo el mundo. Tales fenómenos con frecuencia se explican por la estable coalición a favor del libre comercio establecida poco después de la terapia de shock aplicada en los años 70, y también por la profesional burocracia gubernamental chilena. Aunque ambos elementos son importantes, este artículo muestra cómo la integración acelerada de Chile dentro de la economía mundial también ha dependido de la existencia de asociaciones empresariales con experiencia en asuntos comerciales. A través del proceso de integración, ha evolucionado una cerrada red de funcionarios públicos clave y representantes comerciales. Esta se basa en el reconocimiento mutuo de la experiencia existente tanto en el sector público como en el privado, lo cual se mantiene por medio de relaciones personales cercanas de lealtad y confianza entre los distintos sectores. Sin embargo, mientras que el desarrollo de tal red ha sido altamente favorable para el proceso de negociación de acuerdos comerciales, también ha contribuido para que se dé una exclusión de facto de actores sociales que tienen menor capacidad de contribuir a las negociaciones comerciales que los sectores empresariales.

Palabras clave: Chile, redes de políticas públicas, acuerdos de libre comercio, sector empresarial, participación

Resumo:

Dentro da America Latina, o Chile se destaca por suas políticas de comércio estáveis e sua rápida negociação de acordos comerciais com países e regiões do mundo todo. Explicações para esses fenômenos frequentemente apontam para a estável coalizão em prol do livre comércio, estabelecida como consequência da terapia de choque adotada na década de 1970, e à burocracia governamental profissional do Chile. Embora ambos esses elementos sejam importantes, este artigo expõe como a rápida integração do Chile na economia mundial também dependeu da existência de associações empresariais proficientes em questões relativas ao comércio. Por um processo de integração, uma rede próxima de funcionários públicos-chave e representantes empresariais evoluiu para criar diretrizes oficiais. Isso é baseado no reconhecimento mútuo da habilidade e destreza nos setores público e privado, e é mantido por redes íntimas de lealdade e confiança em ambos lados da divisa público-privada. No entanto, enquanto o desenvolvimento de uma rede para elaboração de políticas oficiais tem sido altamente favorável ao processo de negociação de acordos de comércio, ao mesmo tempo contribuiu à exclusão de fato de atores sociais que têm menos a contrubuir a negociações comerciais do que setores empresariais.

Palavras-chave: Chile, redes de criação de diretrizes, acordos de livre comércio, participação do setor empresarial.

Keywords

Chiletrade agreementstrade negotiationsbusiness organizationspolicy networksstate-society relations
Type
Research Article
Information
Journal of Latin American Studies , Volume 40 , Issue 2 , May 2008 , pp. 195 - 224
Copyright
Copyright © Cambridge University Press 2008

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References

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2 Eduardo Silva, The State and Capital in Chile (Boulder, Colorado, 1996); Patricio Silva, ‘Los tecnócratas y la política en Chile: pasado y presente, Revista de Ciencia Política, vol. 26, no. 2 (2006), pp. 175–90; Patricio Silva, ‘Going Asia: Economic Internationalization and Technocratic Empowerment in Chilean Foreign Policy,’ Paper presented to the XX LASA Congress, Guadalajara, México, April 17–19.

3 Trade negotiations are often analysed as a ‘two level game’ in which chief negotiators bargain simultaneously with interest groups at home and with the international partner. The original formulation of this is that of Robert, D. Putnam, ‘Diplomacy and Domestic Politics: The Logic of Two Level Games’, International Organization, vol. 42, no. 3 (1988), pp. 427–60.Google Scholar For analyses of trade negotiations in Latin America based on this framework see, Intal-ITD-STA, The Trade Policy-Making Process Level One of the Two Level Game: Country Studies in the Western Hemisphere (Buenos Aires, 2002); José Ignacio Porras, ‘La estrategia chilena de acuerdos comerciales: un análisis político’, CEPAL Serie Comercio Internacional 36 (Santiago de Chile, 2003).

4 For examples of the coalition approach, see e.g., Thacker, Big Business, the State and Free Trade: Constructing Coalitions in Mexico (Cambridge, UK, 2000), and Jeffrey A. Frieden, Debt Development and Democracy, 1965–1985 (Princeton, 1991).

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12 This was the view in for example Guillermo O'Donnell, Modernization and Bureaucratic-Authoritarianism (Berkeley, 1973).

13 This process is most well described in the cases of Chile and Mexico. See, for example, Alex, E. Fernández, Jilberto, ‘Neoliberal Restructuring: The Origin and Formation of Economic Groups in Chile’, Journal of Developing Societies, vol. 20, no. 3–4 (2004), pp. 189–206Google Scholar and Judith Teichman, Privatization and Political Change in Mexico (Pittsburgh, 1996). Similar processes have occurred also in the smaller Latin American countries. See Benedicte Bull, Aid, Power and Privatization: The Politics of Telecommunication Reform in Central America (Cheltenham and Northampton, 2005).

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24 Ben Ross Schneider, Business Politics and the State in Twentieth-Century Latin America (Cambridge, UK, 2004), ch. 7.

25 Andrés Langebaek, ‘The Role of the Colombian Private Sector in Making External Trade Policy’, in Intal-ITD-STA, The Trade Policy-Making Process Level One of the Two Level Game: Country Studies in the Western Hemisphere (Buenos Aires, 2002).

26 Thacker, Big Business, the State and Free Trade.

27 Mancur Olson's classical theory focuses on the provision of selective benefits: Mancur Olson, The Logic of Collective Action (Harvard, 1965).

28 Schneider, Business Politics and the State.

29 The average tariff increased from 10.1% in 1980–82 to 22.7% in 1982–85, but was then reduced to 17.6% in 1985–89. Ricardo Ffrench-Davis, Entre el neoliberalismo y el crecimiento con equidad: Tres décadas de política económica en Chile (Santiago de Chile, 2005).

30 Interview Augusto Aninat, former director of ProChile, 9 May 2006.

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32 A free trade agreement is characterised by a ‘negative list approach’: the goal is full free trade and the parties negotiate about exceptions. This differs from more limited Economic Complementation Agreement (ECA) in which tariff reduction is negotiated for specific products based on a ‘positive list approach’. An Association Agreement (AA) is more encompassing and includes also political collaboration.

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34 Mesquita Moreira M. and Blyde J., Chile's Integration Strategy: Is There Room for Improvement? IADB-INTAL-ITD Working Paper No. 21 (Buenos Aires, 2006).

35 Schneider, Business Politics and Policy Making.

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46 Silva, ‘Organized Business, Neoliberal Economic Restructuring’.

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49 http://www.sofofa.cl/sofofa/index.aspx?channel=3541, downloaded 19.9.2007; Schneider, Business Politics and the State, p. 269.

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51 Peter Evans, Embedded Autonomy: States and Industrial Transformations (Princeton, 1995).

52 Alejandro Foxley, La economía política de la transición: el camino del diálogo (Santiago de Chile, 1994); Patricio Silva, State Capacity, Technocratic Insulation, and Government-Business Relations in South Korea and Chile (Santiago de Chile, 2000).

53 Arriagada, Los empresarios y la política.

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57 For a good account of the process of emergence of new export oriented businesses in Chile, see Cecilia Montero, La revolución empresarial chilena (Santiago de Chile, 1997).

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59 Porras, ‘La estrategia chilena.’

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61 Porras, ‘La estrategia chilena.’

62 Ibid

63 Guillermo Campero, Los gremios empresariales en el periodo 1970–1983: Comportamiento sociopolítico y orientaciones ideológicas (Santiago de Chile, 1984).

64 Rivarola, Mirrors of Change.

65 Porras, ‘La estrategia chilena’.

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67 Interview, Mario García, President, Instituto de Textil, 3 April 2006.

68 Silva, ‘Política comercial y la relación público-privada.’

69 Interview, Kathleen Barclay, President AmCham, 20 March 2006.

70 Interview, Manfred Wilhelmy, President, Fundación Chilena del Pacífico, 31 May 2006.

71 Osvaldo Rosales, ‘Chile-U.S Free Trade Agreement: lessons and best practices’, Paper presented to the American Chamber of Commerce in Washington D.C., 28 April 2003.

72 These dominate sectors such as forestry, mining, and services in Chile. See Hugo Fazio, La transnacionalización de la economía chilena: mapa de la extrema riqueza al año 2000 (Santiago de Chile, 2000); Hugo Fazio, Mapeo empresarial de Chile Enero 2004 (Santiago de Chile, 2004).

73 José Ignacio Porras, ‘La estrategia chilena.’

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75 José Ignacio Porras, ‘La estrategia chilena.’

76 Marcos Robledo, ‘Sector privado, política exterior y estrategia de inserción económica internacional’, in Paz Millet, Gabriel Gaspar y Francisco Rojas A. (eds.), Chile-Mercosur: Una Alianza Estratégica (Santiago de Chile, 1997).

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82 Diario Financiero 4 Feb, 2001.

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