Japan should gear up for pushing a bilateral free-trade agreement with Chile to expand business in South America, a Chilean business leader urged.

Roberto de Andraca, chairman of the board at CAP S.A., a Santiago-based mining and steelmaking firm, said the urgency to promote free-trade between the two countries is increasing since Chile concluded an FTA with the European Union in April.

“This puts in danger not our products . . . but imports from Japan,” de Andraca said in a recent interview with The Japan Times. He visited Tokyo last week to cochair the 21st Japan-Chile Business Cooperation Committee conference.

Chile’s exports to Japan consist mainly of raw materials, including copper, fish products, wood and wood chips. It imports equipment, automobiles and computers from Japan, the sixth-largest direct investor in the South American nation.

De Andraca said that due to lowered trade barriers under the accord with the EU, Chile will import more cars and other products from Europe.

Chile has signed FTAs with 17 countries.

Japan, on the other hand, just signed its first FTA, with Singapore, in January. The agreement could take effect this summer.

The Chilean government and the government-affiliated Japan External Trade Organization started joint studies on a bilateral FTA in May 2000 and released a report last June that called for an early conclusion of a comprehensive free-trade pact.

De Andraca said an FTA should benefit both economies. Chilean businesses could expand business opportunities with the Japanese side and obtain technologies, while Japanese firms could build a secure business base in South America by strengthening ties with Chile, which has an open market and maintains a relatively stable economic environment in the continent, he explained.

De Andraca noted the “sensitivity” of the agricultural sector, but added that the two countries can find solutions, because Chile is not a major producer of rice and harvests different types of farm products.

At the end of last week’s two-day conference, 94 Japanese and 87 Chilean business leaders issued a joint statement calling on both governments to start official negotiations for forming an FTA as soon as possible.

“Chile has been committed to Japan since 25 or 30 years ago. Japan has taught us a lot of things,” said de Andraca, who has been doing business with Japanese companies since the mid-1960s. “We look forward to having a more intimate relationship, which is a free-trade agreement.”

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