José Miguel Ahumada: Los pasos del negociador de los tratados comerciales

Two activities carried out by the Undersecretary for International Economic Relations (Subrei), José Miguel Ahumada, have generated controversy and criticism. On May 9, a citizen consultation was announced to redefine and legitimize foreign trade policy, which caused discomfort in the Minister of Finance, Mario Marcel. The second was a meeting with the group Chile Mejor sin TLC, on June 22. Both episodes generated criticism from former authorities and private individuals.

During these five months of government, Ahumada has had eight lobby meetings. In addition to Chile Mejor sin TLC, it has received the Sociedad de Fomento Fabril (Sofofa), the Chilean North American Chamber of Commerce, Google Chile, the Official Spanish Chamber of Commerce of Chile and the Chilean Wine Association, among others. He also presented the trade policy guidelines to the National Chamber of Commerce (CNC). On its agenda, the Subrei has modernization with the European Union, and other processes with India, South Korea and the United Arab Emirates in the pipeline.

It is that more than his actions, what is present in the criticism he has received, according to different sources, is an academic career in which he showed a critical stance on free trade agreements.

“When presenting the project on the TPP-11, President Sebastián Piñera pointed out that it will allow the increase and diversification of national exports and the insertion of national companies in global value chains. However, neither of those two key goals will be met by the deal. In the current context, its effect will be, in the best of cases, neutral; at worst, regressive”, he pointed out in a column published by Ciper Chile in 2019.

More recently, in the middle of the presidential campaign, he told Radio Universidad de Chile that “if we see that the FTAs ​​restrict the space for the State to apply these productive and industrial policies that would guarantee long-term political stability, I would say that it is necessary , in the name of stability, reconsider some specific elements of these agreements and that they are not retroactive, which would avoid generating uncertainty”.

An expert in these matters affirms that one of the criticisms that Ahumada has made has to do with the fact that trade agreements have not allowed Chile to make industrial policies, or productive development, but adds that “this does not go through the FTAs.” “You can’t ask for pears from the elm tree,” analyzes the steps that Undersecretary Ahumada is taking, a former official of the Foreign Ministry, who is not surprised by the direction that foreign policy is taking.

Another who knows the internal work of this division says that he has taken false steps, but he still needs to catch the rhythm of what it is like to be in a government position. “He is trying to put a stamp on managing him. One idea was the public consultation, but it had a lot of criticism and had to be reconsidered”, he says. For this same setback he recommends improving its relationship with the private sector. “There are pieces that must be accommodated.”

One of his closest friends is the senator of the Democratic Revolution (DR) Juan Ignacio Latorre, who points out that “the attacks have been totally unfounded. The undersecretary has had excellent management, he has had an open-door policy to receive all those who wish to put forward their position on trade policy, he is opening new spaces so that citizens and the different relevant actors on the subject can be informed and submit their vision on the compass that our trade policy should follow. He is innovating in terms of trade policy and giving a new seal”.

Government sources acknowledge that Ahumada has clear convictions about trade policy, but that cannot influence state decisions. “As much as he has written books or has had a clear position on the Free Trade Agreements (FTA), that now has to be left behind, because he must comply with a government program, and for that he is mandated. He can’t get out of those parameters. It is a collective thing. He wrote what he wrote, but his role now is another”.

For the former Minister of Foreign Affairs of the second government of Michelle Bachelet, Heraldo Muñoz, “Chile’s trade policy is uncertain. There have been ambiguous signals, but I think that the idea that it is necessary to continue with trade policy will be consolidated”. Muñoz adds that, for this, for example, it is necessary to close the negotiation with the European Union as quickly as possible.

Rodrigo Yáñez, partner of Global Trade & Investment at Deloitte and former subordinate of the government of Sebastián Piñera, He comments that in “these first months of the Boric government, there has been a certain waiting period in commercial matters, mainly due to the plebiscite. It would have been optimal if rounds of negotiations -for example- with the United Arab Emirates, EFTA, South Korea and India had taken place before the plebiscite”.

The relationship and trust with the Minister of Foreign Affairs, Antonia Urrejola, have been built over the months, they affirm in the Executive. Neither of the two knew each other before coming to government. Every Monday there is a coordination meeting between the teams of the minister and the undersecretaries of Foreign Affairs and International Economic Relations. In that instance, the work week and the guidelines to follow are planned, so they see little room for Ahumada to follow his own path.

Ahumada is a supporter of Democratic Revolution and its contacts in the government include the Minister of Economy, Nicolás Grau; the Undersecretary of Economy, Javiera Petersen; the adviser of the Second Floor Carlos Figueroa and the minister of the General Secretariat of the Presidency, Giorgio Jackson, but his main supporter is President Gabriel Boric himself, who appointed him as part of the team that drew up the international policy program that highlighted the idea of ​​revising free trade agreements during the first presidential round. Then, after criticism of this approach, the programmatic team came out to clarify that in no case was it intended to carry out this process unilaterally, which was reflected in the program presented for the second presidential round.

Regarding his vision of the FTAs ​​before reaching the government, the Subrei responds that “the undersecretary has indicated that the trade agreements have allowed the expansion of the network of access to international markets for exports, but that, however, they must be adapted to new standards and criteria that are being raised today on a global scale”.

His ascendancy in the Broad Front also comes from his closeness to the South Korean economist Ha-Joon Chang, who is considered a benchmark for this political sector. Ahumada is a political scientist from the Diego Portales University, has a master’s degree in international economics from the Complutense University of Madrid, and a doctorate in development studies from the University of Cambridge.

The relationship between the undersecretary of International Economic Relations and the Treasury is defined by the government as distant. The communication channels are purely formal. The surprise that Minister Marcel had when he learned from the press about the idea of ​​putting trade policy into consultation – “we are going to be very interested in informing ourselves about it to know what is being proposed,” he said – was the same one that they had back in the Subrei, where they affirm that they have no obligation to communicate these matters to the Treasury, since they are issues that are dealt with at the cabinet level and not with a particular ministry. Before, when the Directorate of International Economic Relations existed, the interference of the Treasury was greater, they say. But not now. However, those who know the work of both departments maintain that a fluid dialogue is maintained between the technical teams, especially because there is an interministerial committee for trade negotiations that is made up of the Treasury and the Subrei. That group determines the negotiation strategy of the agreements, so everything that happens with the trade agreements is up to date with the Treasury.

From the Treasury they rule out that there is any uncertainty about the country’s trade policy and that, in the end, the treaty with the European Union will conclude in a good way and that the TPP11 will end up voting after the plebiscite on September 4. Inside the Executive they affirm that Ahumada’s development has not been entirely positive, in the sense that he has maintained a more academic than practical and pragmatic posture. “He has not yet entered the political arena,” mentions a Palace tenant, who adds that he “has not been able to communicate his proposals well.”

There are two key issues on the Subrei’s agenda. The first is the negotiation with the European Union. From the undersecretary they explain that, although a technical closure was announced, it is not an internationally recognized practice nor is it a legally binding act. In that sense, they say that “said technical closure is different from the conclusion of the negotiations, what the European Union calls in its system agreement in principle. In our case, Chile does not have an agreement in principle with the European Union. In other words, there has not been a political and official act of conclusion of the negotiation or texts published by the European Union and Chile that reflect that.

The Subrei maintains that they are being analyzed by the Chilean negotiating teams, and working with the European teams, “some specific aspects of the modernization proposal to ensure its compatibility with the government program. In particular, it seeks to safeguard the strategic autonomy of the State to carry out policies focused on stimulating the development of economic activities in strategic areas and the decentralization of our economy”.

Osvaldo Rosales, former Direcon in the government of Ricardo Lagos, who was the chief negotiator of the Free Trade Agreement with the United States and of the Commercial Pillar in the Association Agreement with the European Union, calls for calm: “The government is committed to the closing of the agreement with the European Union, the negotiations with India are advancing, I do not see the cause for any concern.”

The second relevant issue on Ahumada’s agenda is the public consultation that was originally to take place between August and October, and which later passed by the end of the year, now there is no fixed deadline. “There is a plan that has been modified while the proposal is strengthened, therefore, an exact date of completion has not been defined,” they say from the Subrei.

And about the TPP11, they rule out that it is a policy that depends on this distribution: “It is a decision that exceeds the powers of this undersecretary,” they respond. Senator Latorre agrees, who maintains that Ahumada’s management must be evaluated since he takes office as undersecretary. “He has been criticized for the TPP-11 citing his statements prior to taking office as undersecretary. But it turns out that the approval or not of said agreement is not in the hands of the Subrei, it is in the Senate. And I want to remember that it was Senator Yasna Provoste who indicated that she did not see enough political consensus on this.”

Currently, Chile has 31 trade agreements, and for this reason the former directors and foreign ministers have a positive view of the treaties and urge the government to speed up the pace in this matter. Carlos Furche, who was in charge of Direcon between 2004 and 2010 and was Minister of Agriculture in the second government of Michelle Bachelet, He says that although “the technical issues are debatable and debatable, there has been a lack of clearing up the ideological issues. It seems to me that the TPP11 is beneficial for Chile to compete in equal conditions”. Regarding the management of Ahumada, he adds that “it is still in development. In this evaluation, it will be very important how the modernization of the agreement with the EU and the TPP11 are resolved″.

But the Subrei’s agenda does not end with these issues: in the pipeline there are a series of ongoing trade agreements, including the Pacific Alliance Agreement and Associated States, the Comprehensive Economic Association Agreement between Chile and Indonesia and the Modernization of the Agreement on Chile-United Kingdom Bilateral Association.