Trade and Development: The rising importance of sustainable development in the trade agenda of Chile

Chile has actively integrated environmental and labor clauses into many of its free trade agreements, driven by foreign policy coherence, partner demands, and a desire to improve international competitiveness. However, these commitments are not reflected in its foreign direct investment (FDI) policies, and climate change is only beginning to be recognized as a significant trade factor. The report notes that deficiencies in national labor and environmental compliance persist, and suggests that Chile faces a risk of becoming a destination for carbon-intensive industries as developed nations reduce their own emissions.

• Chile has integrated sustainable development elements into a majority of its active trade agreements, though not into its FDI policy. Specifically, 12 of 19 active trade agreements include environmental commitments and 8 include labor clauses, while public policy for regulating FDI contains no clauses regarding sustainable development, labor, environmental issues, or climate change.
• The inclusion of environmental and labor aspects in trade negotiations is driven by four primary factors: the need for coherence with multilateral environmental agreements in foreign policy, demands from key trade partners, the desire to reinforce domestic legislation, and the need to enhance international competitiveness by incorporating the environmental dimension into economic internationalization.
• While environmental and labor concerns have been progressively added to the trade agenda over the last 15 years, climate change is only now starting to be viewed as an important factor by Chile's public and private sectors.
• Chile faces specific domestic challenges that hinder the full implementation of trade agreement dispositions, notably high levels of labor informality and low unionization in the labor sector, as well as various environmental deficiencies.
• There is a risk that developed countries may transfer carbon-intensive industries to countries like Chile to reduce their own gas emissions. Because restrictions on such FDI are unlikely, the report suggests designing economic incentives to direct investment toward prioritized sectors.

APA

Claro,, E. (2009). Trade and Development: The rising importance of sustainable development in the trade agenda of Chile. International Institute for Sustainable Development. https://www.iisd.org/publications/report/trade-and-development-rising-importance-sustainable-development-trade-agenda

Chicago

Claro,, Edmundo. Trade and Development: The rising importance of sustainable development in the trade agenda of Chile. International Institute for Sustainable Development, 2009. https://www.iisd.org/publications/report/trade-and-development-rising-importance-sustainable-development-trade-agenda.

Wikipedia

{{cite report |last1=Claro, |first1=Edmundo |title=Trade and Development: The rising importance of sustainable development in the trade agenda of Chile |publisher=International Institute for Sustainable Development |date=23 April 2009 |url=https://www.iisd.org/publications/report/trade-and-development-rising-importance-sustainable-development-trade-agenda |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{claro2009trade, author = {Claro,, Edmundo}, title = {{Trade and Development: The rising importance of sustainable development in the trade agenda of Chile}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = apr, url = {https://www.iisd.org/publications/report/trade-and-development-rising-importance-sustainable-development-trade-agenda}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }