PINOCHET RULING: Chile relies on British trade

IN FINANCIAL terms, Chile has far more to lose than Britain from any disruption to trade between the countries, according to latest export figures.

After the five law lords' decision, there was immediate speculation the 150-year-old trading relationship between the countries could be damaged. There was particular concern that defence contracts involving British warships could be jeopardised: General Pinochet had come to Britain with Chile's Minister of Procurement for the Armed Forces.

Figures released by the London-based British Chilean Chamber of Commerce, which represents more than 100 British companies trading with Chile, reveal that Chile earns almost twice as much than Britain from the trade between the two countries. In 1997 Britain spent pounds 393m on Chilean products compared to pounds 210m spent by Chile on British goods - a trade balance of pounds 183m in Chile's favour. "Britain is Chile's third most important market after the US and Japan, while Chile is number 61 on our list of markets," said Sandra Carey, the chamber's general manager. "And Britain is one of the biggest investors in Chile."

The only experience of Chilean produce for many Britons is the off-dry red wine. In turn Britain's main exports are specialised machine parts, propane gas and Scotch whisky. "Britain is well-viewed, as are our products," claims the most recent Department of Trade and Industry report. But British experts said yesterday there was a real fear commerce will be damaged.

"Up to 85 per cent of Chile's private sector is pro-Pinochet and in the short-term, British companies might start finding things difficult," said Michael Valdes Scott, chief executive of the Latin American Trade Advisory Council.

There could also be problems for British consortia bidding for concessions when Chile's ports and its 13 state- owned water companies are privatised next year. Telecommunications and service industries are other areas attractive to foreign investors.

British Aerospace is believed to be the only company with defence contracts with Chile - a pounds 20m deal for a multiple-launch rocket system and a pounds 12m contract for light arms. However the company, which invited Pinochet to visit, is also interested in supplying Chile's airforce with the Grippen lightweight fighter. The deal could be worth around pounds 200m.

The company's concerns will have been heightened by the situation over Britain's proposed sale of three former Navy frigates to Chile. Following Pinochet's arrest last month, two Chilean admirals cancelled their procurement visit to Britain and the multi-million pound deal is now uncertain. "We don't know what the situation is," said a Ministry of Defence spokesman yesterday.