WASHINGTON (Reuters) - The U.S.-China trade truce will allow Chile to spend more on social programs by supporting the price of its top export, copper, bolstering the Latin American country’s drive to address social unrest, its economy minister said on Wednesday.
Chile, facing a drop in investment and economic output after two months of street protests that have killed at least 26 people, needs added revenue to prevent increases in its debt, Economy Minister Lucas Palacios told Reuters in an interview in Washington after meetings with U.S. think tanks and investors.
The country’s main priority is quelling the protests peacefully, ensuring transparency and tackling the underlying concerns that fueled the demonstrations, Palacios said.
“The most important thing for us is to respect human rights,” Palacios said. “We have to make sure our country’s social tissue will not have wounds and scars for the future.”
Last week, the United Nations human rights office reported that Chilean police and soldiers used excessive or unnecessary force against demonstrators, committing serious human rights violations including unlawful killings, torture and sexual violence.
Palacios did not comment directly on the UN report, which the government has criticized, saying it relied on inaccurate or stale data. He did say Chile was concerned about what he called a raft of “fake news” about the protests.
Palacios said the truce that the world’s two largest economies announced in their trade war last week is “very important” for the Chilean economy, which is highly dependent on copper. Exports and prices have suffered as the U.S.-China trade war slowed global economic growth.
“The impact of the truce is on the long-term price trajectory of copper and that is why it is good for us,” he said, adding that for every cent increase in the price of copper the government can add $40 million in spending.
Copper prices CMCU3 edged lower on Wednesday a day after touching a more than seven-month high. Back in September the metal touched its lowest price since May 2017.
Although Chile recently revised its economic growth figures lower, Palacios said the U.S.-China truce would not affect growth positively as much as it would cap the country’s need to borrow.
“It has had an impact in increasing the debt,” he said about the trade war, noting that Chile still has a relatively low debt-to-GDP ratio.
The minister said there is no plan to revise Chile’s trade agreement with the United States, which under president Donald Trump has sought to redefine its trade relationships across the world.
“The United States is a very important partner and will continue to be a very important partner,” Palacios said.
Reporting by Rodrigo Campos and Andrea Shalal in Washington; additional reporting by Aislinn Laing in Santiago; Editing by David Gregorio