Tuesday, June 25th 2002 - 21:00 UTC

Breaking News from Latinamerica

Headlines:
Magallanes beef for Libya; Investors prefer China; Trade dispute with neighbors; Chilean astronaut

Magallanes beef for Libya

Chile completed a first shipment of 274 tons of beef to Libya, following a deal between Libyan businessmen and farmers from Magallanes Region in the extreme south of the country. The beef comes from Hereford herd in Magallanes and and "opens a new and interesting market in the Arab world for Chilean produce", remarked Lorenzo Caballero, head of the Chilean Agriculture and Livestock Service. Mr. Caballero said the shipment is another boost for Magallanes farmers who recently obtained an extension of the current quota of lamb and mutton export to Europe, from 3,000 to 5,000 tons, in the framework of the recent free trade agreement. Magallanes Region breeds 1,9 million head of sheep, out of a total Chilean flock of 3,6 million. The cattle herd in Magallanes is 140,000. Mr. Caballero added that in the coming next three years Chile is planning meat foreign sales of 40 million US dollars, ten of which to the European Union. Last May the Japanese government authorized beef and lamb imports from Chile.

Investors prefer China

Direct investment in Latinamerica experienced a considerable drop in 2001 according to the latest report from the United Nations Economic Commission for Latinamerica, CEPAL, that has its main office in Santiago. The report indicates that direct investment decreased from 105 billion US dollars in 1999 to 80 billion US dollars last year, and given the unstable political and financial situation in several countries of the region, a further decline is expected for 2002. Further more, "the adverse international economic climate, with a longer than expected recession in the United States, plus lower growth in Europe and Japan" will have an impact in Latinamerica and the Caribbean indicates Cepal. The report also points out that China has become the leading attraction for foreign direct investment with a figure ranging 40 billion US dollars during the last five years. Apparently the exhaustion of the privatization process that prevailed in the nineties, basically public utilities and basic services, has also influenced the retraction of direct investment in Latinamerica. In 2001, Mexico attracted 35% of the investment inflow compared to 18% during the 1995/2000 period. Brazil managed 32% in 2001 compared to an average 35% in the five year period. Chile dropped from 8 to 6%, and Argentina from 17 to 4%. Foreign direct investment in Argentina in the year 2000 was 11,6 billion US dollars, but in 2001, it collapsed to just 3,1 billion US dollars.

Trade dispute with neighbors

Chile formally requested last week the intervention of the World Trade Organization, WTO, regarding "discriminatory" taxing by Uruguay and Peru, against imported goods. "Under the WTO controversy solution mechanism, Chile has requested consultations with Uruguay involving the discriminatory application of the "Internal Specific Tax", IMESI, since imported goods must pay double the same tax, solely for being imported", according to the Chilean International Economic Relations Office. Chileans argue that the IMESI Uruguayan tax rate is similar for each category of goods, but it has an additional 30% tax base for goods from neighboring countries, (Brazil and Argentina), and an additional 100% tax base for non neighboring countries. Regarding Peru, Chile is requesting a committee of experts to check the sales tax, --with an 18% rate--, which is now applied to all imported goods, eliminating all previous exemptions. Besides the Peruvian "discriminatory" sales tax, identified as IGV, is only applicable to imported goods, and therefore discriminatory against similar foreign goods. Some of the goods directly punished by the Peruvian IGV are apples, grapes and peaches. Chilean-Uruguayan trade in 2001 reached 118 million US dollars, while with Peru, 763 million US dollars. In both cases Chile has a trade surplus.

Chilean astronaut

Chilean Air Force Commander Klaus von Storch will be flying to outer space next April in coordination with the Russian space program. The agreement will be officially signed next October when Chilean president Raúl Lagos makes a state visit to Russia. Commander von Storch will then become the second Latinamerican astronaut, behind Miguel Chang Díaz, a Costa Rican born physicist who has accomplished five missions in ten years with the US space agency, NASA. Chileans and Russians have been working closely since the successful launching of the FASAT Bravo satellite that in June 2002 completed three years in orbit. Part of the von Storch mission will be a close monitoring of the ozone layer in densely populated cities and how it affects contamination and the environment. "We are working closely with countries involved in the International Space Station, and expect Commander von Storch to become the first Chilean astronaut", indicated Nelson Hadad, Aviation Department Deputy Chief. Mr. Hadad added that "this by no means is space tourism, Chile can't afford it. It's the founding process of the Chilean Space Agency. We have ample experience in satellites, expertise, academic support and we want to contribute to the peaceful exploration of space".

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