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On September 24, President Sebastian Piñera visited California at the invitation of Governor Arnold Schwarzenegger. The President’s visit was the highlight of a weeklong business mission to California that included delegations led by the Ministers of Economy, Energy, Culture and Agriculture (see Boxes 1-4). The mission, structured within the framework of the Chile-California Strategic Partnership Agreement, was one of the largest Chilean business delegations to date and the first for President Piñera. 

AmCham played an important role in organizing the trip, as well as in arranging a breakfast meeting with over 250 business leaders in Los Angeles where President Piñera was the keynote speaker. AmCham President Ricardo García led the Chamber’s delegation that included directors Kathleen Barclay, Javier Irarrázaval and CEO Jaime Bazán.

President Piñera delivered a powerful message about his government’s commitment to eliminating poverty and lifting Chile into the ranks of the developed world, underpinned by strong values including respect for the environment and human rights. He aims to achieve these goals by accelerating economic growth to over 6% per year on a sustained basis – a target that requires a renewed commitment to innovation, efficiency and creativity with an emphasis on developing Chile’s human capital.

The California trip went to the heart of the Piñera government’s goals, focusing on some of Chile’s key challenges including education, the environment, renewable energy and agriculture. Agreements were signed in all these areas (see Box 5) on this visit, witnessed by Governor Schwarzenegger who received President Piñera at a luncheon at the home of UCLA Chancellor, Gene Block.

In his speech, Governor Schwarzenegger recognized the historical closeness of the Chile-California relationship from the times of the California gold rush, through the Kennedy years, the Alliance for Progress, student exchanges and the signing of the Chile-California Partnership Agreement in 2008. 

The Governor pointed to shared geographic, environmental and economic fundamentals, as well as to the success of the U.S.-Chile Free Trade Agreement. Under the FTA, California’s exports to Chile have grown over 400% since 2004. Clearly the Chile-California partnership has been, and will continue to be, a driver of growth in both economies.

Wherever they went in California, the Chilean delegation received an enthusiastic and warm reception. Chile has long been recognized for its economic success, but especially noteworthy on this visit was the respect it has earned by pulling together so effectively after one of the strongest earthquakes on record and coordinating the rescue of 33 trapped miners in the San José mine near Copiapo. Support for Chile is especially strong in California where earthquakes and the mining industry’s challenges are well understood. 

Chile is also admired as a beautiful and fertile land – much like California. This sentiment was nowhere more obvious than at the world premier of the Il Postino (The Postman) opera in Los Angeles, which was attended by members of the Chilean mission. The opera, which is based on a book by Chilean author Antonio Skarmeta, depicts Chile as a land where dreams can come true.

But dreams only come true with hard work and focus. To make Chile’s California dreams come true, the country’s entrepreneurs, business leaders, and artists will need to run faster and reach further. Chile has successfully globalized its exports, but its people also need to globalize themselves. 

President Piñera and his team have set an outstanding example on this trip. Now it’s up to all of us in the private sector to rise to the challenge and continue the momentum. It will take resources, effort and determination to make of the Chile-California partnership sustainable in the long term. We, at AmCham, are committed to doing our part towards realizing Chile’s California dreams, beginning with a trade mission to Chile in January for leading venture capitalists from the United States.

Economy: Daring to Dream Bigger

Innovation, productivity and creativity - these are the key areas Chile needs to improve in its quest to become a developed country. The Economy Minister, Juan Andrés Fontaine, led a delegation of 14 of the country’s most promising entrepreneurs to Silicon Valley in September to show that Chile is ready to meet these challenges.

The three-day mission began with a tour of Google’s headquarters including a private meeting with a senior executive focused on identifying and developing entrepreneurial talent. The Chilean delegation also exchanged ideas with experts in entrepreneurship at Berkeley and Stanford and presented their projects to leading venture capitalists in Silicon Valley - one of the toughest tests a young company can face.

The Minister signed agreements with Google Plex, Stanford Technology Ventures and launched the Start-Up Chile program that is bringing young entrepreneurs to Chile. AmCham, in partnership with Austral Capital and the U.S. Department of Commerce, also organized a meeting with a dozen of Silicon Valley’s leading venture capitalists to discuss how to promote a dynamic climate for Chilean entrepreneurs.

The message is clear: Chile’s human capital needs to globalize and become integrated with the best global talent and financing to create world-class companies that will accelerate the country’s development.

This mission was a step in this direction and the entrepreneurs who went have come back energized to meet this challenge (see Trade Testimonial “Talking on Borrowed Time” on page 6). AmCham, Austral Capital, and the U.S. Department of Commerce will bring a group of U.S. venture capitalists to Chile in early 2011 to build on the momentum generated by this trip. Meanwhile, Chile’s Economy Ministry, leading universities and entrepreneurs need to work hard to ensure Chile achieves its goal of entering the ranks of developed economies.

Energy: Solving Chile’s Power Puzzle 

For the Energy Minister, Ricardo Raineri, executives from Chile’s energy sector and AmCham’s President, Ricardo García, the California trip was a busy four days of meetings with local authorities and companies to learn from their experiences and gain insight into how Chile can meet its future energy challenges.

For Chile to reach its goal of becoming a developed country by 2018, it will need to exploit its renewable energy sources while improving environmental protection. To fuel its growth, however, Chile needs to double its installed capacity by 2020 with hardly any fossil fuels of its own, and with long distances to export markets which make the carbon footprint of Chilean products larger than the competition’s.

But there is a solution. Nuclear energy has been debated for years in Chile, but California showed the Chilean delegation that safe nuclear power is feasible in a land prone to earthquakes.

The Chilean delegation visited General Electric’s nuclear training facility in San José where GE demonstrated the high safety standards of nuclear reactors, zero carbon emissions, and capacity to generate large quantities of energy near urban areas. Given these benefits, reactors could be built near Chilean cities to complement hydroelectric power generation, but Chile needs skilled engineers and plant operators. It also needs to accelerate research and discussion about regulations and norms, as well as state participation in a possible nuclear power project.

California is also a world leader in renewable energy. Minister Raineri’s delegation visited a wind farm in Palm Springs managed by U.S. firm AES Corp. The farm covers hundreds of hectares and has installed capacity close to 500MW, making it one of the largest in the country. But the Chilean delegation concluded that wind power is not the answer to Chile’s energy needs. The Palm Springs turbines, for example, generate less than 40% of the time and must be backed up with supplies from the grid while covering a large territory that cannot be used for any other purpose.

But wind is not the only clean energy resource Chile has in abundance. It also has plenty of solar and geothermal potential. In this respect, the Minister signed an agreement to promote the development of Chile’s geothermal resources, including training and joint research projects. The Chilean delegation also met with authorities in California’s capital Sacramento to learn about clean energy regulations and air pollution norms.

The main conclusion of the visit is that Chile has much to learn in terms of nuclear power and renewable energy, and California’s energy authorities and the private sector are willing to work with us. It’s an opportunity we should not let pass.

Culture: Lights, Camera, Action!

Why film in Chile? This is the question Chile’s Culture Minister, Luciano Cruz Coke, tried to answer over three days of intense meetings with leading film and television producers in Los Angeles and Hollywood.

Leading a team from Chile’s entertainment industry including executives, producers, directors, writers and actors, the Minister sold Chile as a land of opportunity for producing films, television and commercials, promising that his country has what it takes to compete as a production location.

If the rest of us are able to deliver on this promise so that Hollywood producers speak highly of Chile, the amount of foreign investment that could flow as a result is staggering - US$100 million, US$500 million, US$1 billion?

It all depends on us.

Bridges between Chile and Hollywood will not be built by offering state subsidies to foreign firms. Instead, we should strengthen the public-private partnership that was forged on this mission by Minister Cruz Coke and his team. To attract Hollywood productions, we all need to work together in terms of infrastructure, services, legislation, languages, technical training, tax incentives and so on.

The variety and beauty of Chile’s natural landscape as well as its inverse seasons, economic and political stability, architecture and people are there for all to see, but it’s not enough. We need to develop a strategy that allows us, in 10 or 20 years, not just to compete with countries like Colombia, Mexico and Brazil in the region, but also with Australia, New Zealand and Canada. All these countries have been able to create value by offering film producers advantages when deciding where to invest their money.

Minister Cruz Coke did not just go sightseeing in California – he worked hard and laid the foundation for future success. Now everyone in the industry, including those who went with him and those who stayed behind, must work hard to reap the fruits of this visit.

Chile could, and should, be an important actor in the world entertainment industry. We could be the hot new location Hollywood chooses to set its next blockbuster. But that, of course, is up to us.

Agriculture: Planting Seeds for the Future

A team of executives and leaders from Chile’s agro-food sector accompanied the Minister of Agriculture, José Antonio Galilea, on the trade mission to California.

It’s no coincidence that Minister Galilea’s trip began in the Sacramento valley at the University of California Davis, where he attended a seminar titled "Sciences for Successful Agricultural Business.” UC Davis is one of the world’s leading universities in agricultural research, and many of the academics responsible for Chile’s agricultural revolution in the last 30 years have taught there. Today, Chile is used as a case study in many of the courses taught at UC Davis, and the exchange of knowledge continues to be important for both parties.

The United States is the most important market for Chile’s agriculture and forestry exports. According to the Ministry of Foreign Affairs, a third of Chile’s total agro-forestry exports, some US$3.5 billion, go to the United States, representing more than half of Chile’s total exports to that country but only 3% of total U.S. imports. This means there are opportunities to grow in this market, particularly in terms of value-added gourmet and organic products.

Within the U.S., California is a very important market for Chile, not just because it has a similar climate but, since its growing seasons are reversed, its production complements Chile’s.

During the visit, Minister Galilea signed an MOU with the secretary of the California Department of Food and Agriculture to deepen cooperation in the agricultural and agribusiness sectors.

Given the importance of California’s wine industry in particular for Chile, the delegation visited wineries in Napa Valley including the Quintessa winery owned by Chilean businessman Agustín Hunneus. Around 6% of total wine imports in the United States come from Chile and Chilean viticulturists have also helped Napa wineries fight plagues and diseases that affect grape production and quality.

Napa’s sister city in Chile, Casablanca, participated in the mission along with the National Agricultural Association (SNA), Wines of Chile, the Fruit Exporters Association (ASOEX), Chile’s Organic Producers Association, Chile Oliva, the National Seed Producers Association (ANPROS) and Chile’s Pork and Poultry Producers Association (APA/ASPROCER).

This strong participation made the mission a success. As Governor Schwarzenegger said, these trips are important not just for making contacts but also for strengthening ties to improve trade relations in the long term. The seeds of Chile’s success in this market have been planted.

Chile-California Agreements

Education: Chile’s Universidad Adolfo Ibáñez (UAI) and the UCLA Anderson School of Management launched an innovative dual degree executive MBA program called the Global Executive MBA for the Americas. The 15 month part-time program starts in April 2011 with course modules held in Miami, Los Angeles, São Paulo and Santiago. 

Environment: Chile’s Universidad Católica, the University of California Santa Barbara California and the Wildlife Conservation Society signed an MOU to promote marine conservation. The agreement is aimed at creating innovative public-private models to protect marine areas as well as offering training and educational exchanges for Chilean marine biologists.

Energy: Chile’s Energy Minister Ricardo Raineri signed an MOU with the California Energy Commission and the California Air Resources Board to develop renewable energy sources, improve energy efficiency and reduce carbon emissions.