While advocates of protectionist trade policy continue to make headlines in the United States, China and Chile are lowering trade and investment barriers.  BusinessWeek reports that Chile and China have successfully ended a yearlong negotiation for a free trade accord.

The accord is expected to quickly increase bilateral trade between Chile and China, which reached US$6 billion in 2004 with a US$2 billion surplus for Chile, caused mainly by massive copper sales to China's booming economy.

Meanwhile, The United States is running massive trade deficits with China. Trying to win votes from labor unions, Senators Schumer and Graham have recently reintroduced legislation that would impose a massive 27 percent tariff on Chinese goods that come across the Pacific, if Beijing fails to revaluate the Chinese currency.  

This new agreement is also a sign of China's growing influence in Latin America. AP reports via BusinessWeek:

"It will be the first free trade accord signed by China with a Latin American nation," Foreign Minister Ignacio Walker told Radio Cooperativa of Santiago from Beijing. "It will bring more and better jobs for Chileans."

By freeing trade with an important Latin American nation, China seeks to increase its influence in the Western Hemisphere. That conjunction of trade and influence should be of note to Americans, too.

Brian Schwarz   10 31 05