In spite of Chile’s distance from the NAFTA nations, it is positioned to become the next member of that formidable trade block. Shortly after Chile started high-level preliminary negotiations with the US, the neighbouring MERCOSUR trade block announced that it would put membership negotiations with Chile on hold for at least a year.

Recent agricultural trade disputes between Brazil and Argentina underscore the fact that NAFTA offers a more stable market base than MERCOSUR. Fruit industry leaders believe that the citrus sector would benefit most from NAFTA membership. Chilean citrus production is rising at a time when global competition among citrus producers is already very intense.

Grapes, which are Chile’s leading fruit export, stand to benefit least from NAFTA membership. At present, duties charged on Chilean grapes entering the US are minimal. One advantage which could be derived for grape producers is access to a mechanism for resolving difficult trade disputes which have plagued grape exporters in the recent past.

By Steve Lewis, correspondent