Overview
Chile has long been heralded as Latin America’s success story. The country is characterised by strong macroeconomic stability, commitment to the rule of law, and robust democratic institutions. However, it also suffers from rampant inequality under its free-market economy. President Gabriel Boric, elected in 2021, promised to bury such neoliberal policies, but his government has faced several internal challenges in implementing its reform agenda.
Boric has nonetheless continued to project Chile at the regional and international level. In December, Chile and the European Union signed ambitious trade and political agreements, drawing to a close six years of negotiations, while earlier last year, the EU and Chile signed a memorandum of understanding on critical raw material supply chains.
Chile’s existing relations with the EU have strong potential to be strengthened. For example, Chile broke with Latin America’s strategic non-alignment, speaking out against Russian aggression in Ukraine. This is not to say, however, that Chile firmly aligns with the EU and United States. Its top trading partner is China and its ties with Beijing have only deepened in recent years, a trend US officials have voiced concerns over. Rather, Chile’s strategy has been to maintain equidistance, pragmatically engaging with both the US and China. Nonetheless Chilean interlocutors have expressed frustration at being squeezed between the US and China, citing when the US applied pressure on Santiago to cancel a contract to have passports produced by the Chinese company Aisino. Many also voiced a preference for working more closely with the EU as a “way out” or “third way”, highlighting Chile’s greater alignment with the EU in some areas and desire to offset China’s influence. However, some noted that “the EU just isn’t there”, or at least not in a meaningful way. In response, the EU needs to boost direct investments and achieve some quick victories to prove its commitment.
One such quick victory could be cooperating to maintain an open, free, secure, and accessible internet. Chile stands out for its strong advocacy of digital rights, which it has included in its draft constitutions, aligning significantly with the EU. It was also the first Latin American country to introduce data protection regulation, and has the highest internet and mobile connection penetration of the region. As such, the scope for cooperation at the multilateral level is significant.
To convince Chile of its commitment and value, the EU should properly leverage Global Gateway to support the country’s “last mile” connectivity efforts, making the internet accessible to geographically and socio-economically marginalised groups. The EU could also provide technical assistance to help Chile achieve data adequacy with the EU, opening the door to enhanced data flows. It can effectively leverage the recently signed critical raw materials agreement to support Chile in its efforts to capture more value from its trade and ascend global value chains. This would help Chile diversify away from China, which has deeply penetrated its digital architecture and supply chains.
Many of these critical raw materials are vital for the digital and green transitions. With regards to the latter, climate action is another fertile area. The EU and Chile have begun cooperation on green hydrogen, with the European Commission announcing a Team Europe Renewable Hydrogen Funding Platform to support Chile’s growing renewable hydrogen industry. The newly signed EU-Chile Advanced Framework Agreement has also established a framework for bilateral climate cooperation, with the first High Level Dialogue on Climate and Environment taking place in October 2023.
Chile is also a promising partner for the EU in the area of maritime security. Chile – with its long Pacific coastline – proactively monitors international fishing fleets against the backdrop of China’s extensive deep-sea fishing in the South Pacific. It is active in numerous multilateral maritime security initiatives, for instance, the Council of the International Maritime Organisation.
Finally, our research has also shown development to be a fertile area for enhancing cooperation. With a dual role as both beneficiary and provider of development assistance, Chile engages in strategic north-south, south-south, and south-global cooperation, giving it credibility as a global south actor that has progressed to high-income status. As a country that no longer receives official development assistance, it is active in so-called development in transition debates, and established a bilateral fund for development in transition with the EU to support the wider Latin American region. The EU should seek to build on such efforts, working with Chile to advance their shared solidarity-based vision of development. Yet as it works to scale up multilateral cooperation, the EU will once again need to show its credibility bilaterally, responding to Chile’s domestic needs and helping it achieve its own national development goals. As our interlocutors pointed out, even if the 2025 presidential election brings in a right-leaning president, public demands for greater equality cannot be ignored by a new government nor Chile’s new development model reneged upon. A successful transition from a neoliberal economy to a socialist democracy could position Chile as a new model for an internationalist welfare state in Latin America, free from the pernicious populism of many administrations in the region. But it will need Europeans’ support in navigating this transition.





