Nov 14 Peru's government said on Saturday it
would quit an APEC summit in Singapore after recalling its
envoy to Chile over charges a Peruvian military officer had
spied for Chile's government. [nN14489069]
The charges that an air force official was in the pay of
the Chilean government will further fuel tensions as an
international court considers a Peruvian demand to claim more
of territory disputed between them.
But the incident is just the latest chapter in a long
dispute analysts agree is unlikely to spill over further or
disrupt trade and investment between the South American
neighbors, which are both key copper and metals exporters.
Here are some of the key facts about ties between the two,
their history and trade relationship:
* Diplomatic ties between Peru and Chile have been
periodically rattled since Chile defeated Peru in the 1879-1883
War of the Pacific and won a slice of mineral-rich land from
its northern neighbor.
The border spat remains a source of tension. Peru filed
suit against Chile last year at the International Court of
Justice in The Hague, disputing their maritime border and
demanding more of the rich Pacific Ocean fishing waters between
* But even in times of tension both countries are committed
to free trade. Earlier this year a trade pact between the two
countries went into effect, opening up their economies to each
other as they sought to weather the global crisis.
Both countries rely heavily on revenues from mineral
exports that have plunged during the world turmoil.
* In 2008, trade between the two countries reached $3.37
billion, a 24-percent increase over the year earlier, according
to Chile. Chilean exports to Peru focused on the service
sector, oil and fuel. Chile imports copper derivatives, fish
oils and petroleum products.
* Private sector ties are also strong. Chilean retailers
Falabella (FAL.SN), Ripley RIP.SN and Cencosud CEN.SN,
which controls major Peruvian supermarket Wong, have seen their
neighbor as a key piece of expansion plans in the region and
have invested heavily in Peru.
According to official figures, Chile's direct investment in
Peru was around $5.5 billion from 1990 to 2008, making Peru the
third-largest destination for Chilean investments.
* However, Chile has this year revived Peruvian fears with
plans to buy new hardware to upgrade its armed forces. The
Chilean government is studying the possible purchase of U.S.
stinger missiles worth about $455 million, medium-range
missiles worth $145 million and Sentinel radar systems worth
Chile says any such deal would simply align it with the
United States without affecting the "basic military balance in
Chile's armed forces have benefited from years of windfall
copper earnings, thanks to a law which guarantees them 10
percent of state copper giant Codelco's sales.
(Reporting by Patrick Markey and Antonio de la Jara in
Singapore; Editing by John Chalmers)