	Domestic Situation

Located along the Pacific coast of South America, Chile is a politically stable, upper-middle-income nation of 18 million people. President Bachelet has quickly moved forward with her policy agenda since assuming office for a four-year term in March 2014. President Bachelet signed into law several initial education reforms in May 2015. Over the course of the next year, the Bachelet Administration intends to educate citizens about the issues involved, hold a national dialogue to hear what Chileans would like to include in the constitution, and send a measure to the Chilean Congress that would authorize the next Congress—scheduled to take office in 2018—to select a mechanism for considering a new constitution. In addition to these large-scale reforms of Chile's tax, education, and political systems, Bachelet and her New Majority coalition are pushing ahead with a number of other notable policy initiatives. While students, unions, and other groups have continued to hold demonstrations and have called on Bachelet and the Chilean Congress to enact more far-reaching policy changes more quickly, some economic and political analysts maintain that Chilean policymakers should slow down in order to reassure the business community and establish broader consensus on significant policy changes. President Bachelet's approval rating has declined significantly since she took office, with divisions regarding her reform agenda, recent corruption scandals, and the weakening economy (see " Economic Challenges " below) taking a toll on her popularity. Chile's economic growth slowed to 1.9% in 2014. Economic analysts attribute the deceleration to a sharp decline in private investment stemming from the drop in copper prices and other external factors, as well as a fall in business confidence that appears to be related to the Bachelet Administration's reforms. The Chilean government has sought to stimulate economic growth over the past year. Buoyed by these measures, Chile's annual economic growth is forecast to accelerate slightly to 2.3% in 2015. Commercial Ties

U.S.-Chilean trade relations have grown considerably since the U.S.-Chile Free Trade Agreement entered into force on January 1, 2004. Total bilateral trade has quadrupled since the agreement was signed, growing from $7.9 billion in 2003 to $31 billion in 2014 (see Figure 2 ). Trans-Pacific Partnership

Chile and the United States have both participated in negotiations concerning the Trans-Pacific Partnership (TPP), a proposed 12-member Asia-Pacific regional trade agreement that includes Australia, Brunei, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The 114 th Congress may consider the TPP under the rules and procedures set forth in the Bipartisan Comprehensive Trade Priorities Act ( P.L. 114-26 ), commonly known as trade promotion authority (TPA), which the House and Senate approved, and President Obama signed into law, in June 2015. In February 2010, the United States and Chile signed an income tax treaty designed to encourage investment in both countries by providing certainty on the tax treatment of investors and reducing tax-related barriers to investment. President Obama submitted the agreement to the U.S. Senate for its advice and consent in May 2012 ( Treaty Doc. 112-8 ). The Senate Foreign Relations Committee held a hearing to consider the treaty, along with seven other pending agreements, on October 29, 2015, and reported the treaty favorably on November 10, 2015. In order to foster closer security ties, the United States provides some foreign aid to Chile. In June 2013, the United States and Chile signed an extradition treaty. President Obama submitted the agreement, known as the "Extradition Treaty Between the Government of the United States of America and the Republic of Chile," to the U.S. Senate for its advice and consent in September 2014 ( Treaty Doc. The countries currently cooperate on a range of issues, including trade, security, energy, and scientific research.
Chile, located along the Pacific coast of South America, is a politically stable, upper-middle-income nation of 18 million people. In 2013, Michelle Bachelet and her center-left "New Majority" coalition won the presidency and sizeable majorities in both houses of the Chilean Congress after campaigning on a platform of ambitious reforms designed to reduce inequality and improve social mobility. Since her inauguration to a four-year term in March 2014, President Bachelet has signed into law significant changes to the tax, education, and electoral systems. She has also proposed a number of other economic and social policy reforms, as well as a process for adopting a new constitution. Although a significant majority of the public initially supported the reforms, Chileans have grown more divided over time, with some groups pushing for more far-reaching policy changes and others calling for Bachelet to scale back her agenda. Disapproval of the reforms, a corruption scandal that implicated her son, and Chile's slowing economy have taken a toll on President Bachelet's approval rating, which has declined to 29%.
Chile's economic growth has slowed considerably in recent years, falling to 1.9% in 2014. Analysts have largely attributed the slowdown to the end of the global commodity boom and the coinciding drop in copper prices, which have a significant impact on the Chilean economy. There are also indications that the Bachelet Administration's policy reforms may have reduced business confidence and dampened growth. In order to stimulate the economy, the Chilean government has implemented expansive fiscal and monetary policies over the past year. Growth is forecast to accelerate slightly to 2.3% in 2015 and gradually increase in the following years.
President Obama and President Bachelet have sought to build upon the long-standing partnership between the United States and Chile. Commercial ties are particularly strong. Total trade in goods and services reached $31 billion in 2014, more than quadrupling since the implementation of a free trade agreement in 2004. Trade and investment flows could increase if the Trans-Pacific Partnership (TPP) trade agreement, which includes the United States, Chile, and 10 other nations in the Asia-Pacific region, is approved. The United States and Chile also work together to address regional and global security challenges, such as instability in Haiti. The United States provided Chile with an estimated $1 million in foreign aid in FY2015 to strengthen the capabilities of Chilean security forces and foster closer security ties. The countries' mature partnership includes additional collaboration on issues such as energy development and scientific research.
The 114th Congress is currently considering several measures related to U.S.-Chilean relations. Congress may consider implementing legislation for the TPP agreement under the rules and procedures set forth in the Bipartisan Comprehensive Trade Priorities Act (P.L. 114-26, "trade promotion authority"), which both houses passed and the President signed into law in June 2015. The Senate also may consider a bilateral income tax treaty with Chile (Treaty Doc. 112-8), which was signed in 2010, submitted to the U.S. Senate for its advice and consent in 2012, and reported favorably by the Senate Foreign Relations Committee on November 10, 2015. An extradition treaty with Chile (Treaty Doc. 113-6), which was signed in 2013 and submitted to the Senate in September 2014, also awaits the Senate's advice and consent.