Foreign policy and defense
Chile is a nation in South America. Its capital city is Santiago. Chile has historically had important relations with Europe, but since World War II, the relationship with the United States has been more important. Relations with neighboring countries have been periodically conflicting, although trade relations in recent years have contributed to closer cooperation.
The United States countered Salvador Allende in the 1970s by secretly providing financial support to his opponents, first in order to prevent him from being elected president, then to undermine his government (see also Modern History).
- Countryaah: Overview of business holidays and various national observances in Chile for years of 2020, 2021, 2022, 2023, 2024 and 2025.
Initially, the United States also supported the 1973 military coup and Pinochet’s anti-communist policies, but there is no evidence that the United States has actively participated in the coup. After Jimmy Carter became president in 1977, the White House condemned the oppression in Chile. The Pinochet regime was isolated after the revelation that its security service had been involved in the assassination of Allende’s former Foreign Minister Orlando Letelier in Washington DC in 1976. Democratization in Chile radically improved relations with the United States.
Trade issues are important for Chilean foreign policy. Chile has free trade agreements with a large number of countries (see Economic overview).
After democratization, Chile established good contacts across the Pacific, initially initially with Japan but during the 2000s also with China. In addition to Peru and Mexico, Chile is the only country in Latin America that is a member of the Pacific Cooperation Organization Apec.
Along with Colombia, Peru and Mexico, Chile also formed the Pacific Alliance (Alianza Pacífico) in 2011. It is primarily a trade block but also strives for increased integration on other levels as well. Unlike many other regional initiatives, the Pacific Alliance has in a short time taken concrete steps towards a common market for goods, services and people.
In the two Mercosur regional trade organizations and the Andean Community, Chile is an associated member. The country was also included when Unasur was formed in 2008, by all independent states in South America, but was also one of six countries that first suspended its participation ten years later.
In 2010, Chile became the first South American country to join the democratic industrialized countries’ cooperative organization OECD. During the years 2014–2015, Chile was one of the ten non-permanent countries in the UN Security Council.
During the 2000s, Chile has sought to play a more central role in the region. The country participated in the UN operation in Haiti until 2017, including with soldiers. The government has also declared its willingness to assist several Caribbean countries, including police training.
Disputes with neighbors
In the early 1980s, Chile and Argentina were about to start war on some islands in the border area in the south, but the pope managed to mediate the conflict. A few years into the 21st century, relations were disturbed by a conflict over energy, when Argentina was forced to cut gas supplies to Chile due to energy shortages. The Chilean government claimed this was contrary to a previous agreement (see Natural Resources, Energy and Environment).
With Bolivia, Chile does not have full diplomatic relations because of a dispute over the territory that Chile conquered from Bolivia in the so-called nitpicking war in the late 1800s (see Older history). Bolivia has continued to assert its right to a passage to the Pacific and turned in 2013 to the International Court of Justice (ICJ) to get it right. In 2018, the ICJ decided the issue in Chile’s favor.
Relations with Peru have also been strained due to the Chilean land gains in the War of the Nets, but in 1999 agreements were signed in which territorial disputes were settled. In 2005, however, Peru’s parliament decided that the sea border with Chile should be changed so that a disputed sea area rich in fish would belong to Peru, which led to disruptions in relations between the countries. At the beginning of 2008, the sea border issue led to new tensions since Peru decided to ask the ICJ to resolve the issue of the disputed sea area. Tense relations deteriorated even further after a spy deal was unveiled in November 2009. A Peruvian officer was then accused of having sold military secrets to Chile, something the Chilean government rejected.
In January 2014, the ICJ’s verdict came in the sea boundary dispute. Peru was entitled to a new sea area, while Chile was allowed to retain fish-rich waters near the coast. Both countries pledged to comply with the decision. Despite this, a new dispute arose the following year, when it turned out that the countries did not agree on where the new border begins: according to Chile, it is in the same place on the coast as before and according to Peru 270 meters inside the coast. Peru established a new administrative district on the site, with 15,000 residents, leading to protests from Chile.
Chile’s military spending has long been among the highest in Latin America. The army has been restructured since the late 1990s and divided into smaller and well-equipped units. Following the constitutional reform in the autumn of 2005, the president has the right to dismiss the army chief; this was not allowed in Pinochet’s constitution.
FACTS – DEFENSE
Army: 46 350 men (2017)
The air Force: 11 050 men (2017)
The fleet: 19 800 men (2017)
Military expenditure’s share of GDP: 1.9 percent (2017)
Military spending’s share of the state budget: 7.2 percent (2017)
Compensation to the victims of the dictatorship
The government decides to grant financial compensation to relatives of twelve victims of the dictatorship 1973–1990.
Ministers may go after traffic protests
Major protests erupt when the introduction of a new public transport system in Santiago causes chaos. Four ministers may go, including the Minister of Transport.
Former dictator Augusto Pinochet dies at a military hospital after a heart attack, 91 years old.
Free trade agreement with China
A free trade agreement enters into force between China and Chile and means that 97 percent of all goods within ten years should be completely duty free.
Bachelet wins the presidential election
Middle Left Alliance Concertación candidate Michelle Bachelet wins the second round of presidential elections and becomes Chile’s first female president. She wins with 53.5 percent of the vote over Sebastian Piñera who gets 46.5 percent. The Bachelet will take up March 11.