What are the relevant historic issues in Chile's foreign policy?
Since the early 1830s, Chile has developed a reputation for its pragmatic foreign policy, traditionally letting national interests take precedent over ideology. Starting from at least as early as the Prieto administration there was an explicit understanding of the challenges of Chile's situation, isolated from its neighbors by deserts and mountains on the southern Pacific coast and far from European trade routes in the north Atlantic. Accordingly it focused its efforts on policies that would help it protect and defend itself.
Strategically this meant building a strong navy to defend its almost 3,000 miles of coast on the South Pacific as well competing with Argentina over the South Atlantic. It sought to expand its territory into the Patagonia and fought two wars with Peru and Bolivia, annexing large portions of both countries during the War of the Pacific (1879 – 1884). This war left Bolivia without maritime access. Interestingly, many of these conflicts are still unsatisfactorily resolved.
The series of border wars fought throughout the region's post independence period have led to a number of different pacts between different countries over the years. In different opportunities Chile has allied itself with Argentina against Peru and Bolivia; with Brazil against Argentina; and with Ecuador against Peru. As mentioned in the sections on Argentina and Brazil, Chile also formed part of the ABC Pact of 1915 which sought to stabilize the southern cone by establishing spheres of influence for each country.
Finally, Chile has a history of seeking a stable South America. Chile intervened in the conflict in the Rio de la Plata in 1830 and also served as a mediator during the Peru Bolivia conflict of 1831, notably rejecting the proposed mediation by British agents. However, the failure of both of these mediations caused Chile to rethink its policy to try and limit its intervention in the new states, limiting relations to security and commerce. President Prieto said to the Chilean Congress in 1833, "La unanimidad [entre los pueblos hispanoamericanos] es el medio más eficaz de asegurar su reconocimiento i su inviolabilidad."
Chile has supported those political principles that favor smaller states, including the principles of neutrality, non-intervention and sovereign equality among nations. It prefers multilateral institutions that, it believes, will increase its power in international forums. It has supported every Pan-American initiative since the Congress of Panama up to the O.A.S.; it is an associate member of Mercosur and CAN, a member of ALADI, and a signatory of the Union of South American Nations.  It has also been an active supporter of the United Nations and the World Trade Organization outside of the region and involves itself in U.N. peacekeeping missions.
Chile adopted a policy of neutrality early on to help it establish a broad base of support among the nations of the world. It was understandably cautious about taking sides in the nearly constant conflicts erupting in neighboring countries. After the expensive failure of the Expeditión Libertadora de Peru, Chile tried to remain neutral in affairs that did not directly involve their national security. In practice though, this policy was difficult to maintain, especially given ongoing conflicts with Peru and Bolivia that eventually ended in a Chilean-Argentinean alliance against those two countries. The policy of non-intervention was based on the same logic, but, enunciated as a political doctrine and supported in international forums, it helped set a general precedent against outside intervention in the sovereign affairs of another state.
The use of multilateral institutions, ruled by international law, was the favored vehicle of this foreign policy. Chile has been supportive of international organizations, in particular in Latin America where it views itself as sharing many of the same interest with other American states. It policy supports the principle of sovereign equality to increase the nations bargaining power in multilateral forums, arguing that its sovereign status as an independent republic should count more than its physical size or population.
In the selection of which multilateral bodies to ally with Chile has been open but has been clear about its willingness to grant favored status to other Latin American countries."  We believe this is because Chile views the region as its logical sphere of influence. Although not the largest nation in South America it manages one of the most sophisticated foreign policies in the region, its open stance toward Latin American countries and the world in general have helped to raise its profile everywhere.
Chile's economic history is somewhat similar to that of Argentina and Brazil. Its early distribution of land and power created agricultural elite that controlled national politics in early years of the Republic. After the annexation of what is now northern Chile, nitrate and later copper mining became the major national exports, providing much of the internal revenue for the state and consequently occupying a preeminent role in national policy. This led to what Vanden and Prevost refer to as a "night watchman" state, primarily concerned with protecting mining interests from internal and external threats. Up until 1920 this mining industry was principally controlled by British economic interests.
As mining gained importance as the major national industry, the country experienced a series of socio-economic changes. As more Chileans moved out of the agricultural sector, based in rural areas with low population densities, into mining, which tended to concentrate workers into more urban areas, the importance of labor unions grew in importance.
Following the German discovery of a synthetic nitrate at the turn of the 20th century, Chile lost the monopoly it had on the world market, causing a serious political and economic crisis that eventually led to a military coup in 1925 that overthrew the Parliamentary Republic and eventually led to the establishment of the presidential system still in place today. The Wall St. stock market crash followed on the heels of this depression, further complicating national efforts to reorganize the state.
Differing opinions among Chileans lead to a series of short-lived civilian and military governments that finally ended with the second presidency of Arturo Alessandri (1932-1938). Although Alessandri ushered in a new period of democratic governance, the tensions that had previously existed between the conservative ruling class and the growing middle and working classes were not resolved. Instead they fueled the growth of Communist and Socialist parties and the radicalization of national politics between those who supported private property and the status quo against labor groups who wanted to create a socialist state.
The socialists eventually gained enough support to win the 1970 presidential elections where Salvador Allende won with 36.2 percent of the vote. Although he did not possess a majority mandate, he began to enact socialist reforms including land seizures and redistributions, industry nationalizations and greater state control of the economy. These reforms divided Chilean society and eventually led to a military coup in 1973.
The military government installed in 1973 immediately set to work to repeal the socialist policies of Allende's administration. It instituted a policy of neoliberalism, opening up Chile's economy and privatizing many national industries and services (with the notable exception of the mining industry) as well as pursuing closer commercial relations abroad. This policy is still generally in force (although with major modifications learned along the way) and represents one of the distinguishing characteristics of Chile's foreign economic policy compared to that of its neighbors. While other Latin American nations experimented with economic nationalism before transitioning to neoliberalism in the late 1980s and 1990s only to move back to some grey area between the two, Chile is one of few countries who have not subsequently rejected the model.
By Nathan Gill – Southern Affairs
 President J.Prieto said to the Chilean Congress in 1832 “En el departamento de la Guerra y Marina, apénas tengo que añadir a lo que os espuso mi antecesor en 1.˚ de junio del año pasado. Llamo vuestra atención, como él lo hizo, a la seguridad de ámbas fronteras, a la necesidad de un método uniforme en la suministracion de vestuarios u en la remonta de la caballería, a la organización de la maestranza general de artilleria, a la lei de reemplazos, a la administración de justicia militar en última instancia, i al estado de las fuerzas navales.” Documentos Parlamentarios. Discursos de Apertura en las sesiones de Congreso, i Memorias Ministeriales correspondientes a la Administración Prieto (1831-1841). Tomo I. Imprenta del Ferrocarril. Santiago 1858: 4.  Recent flare ups include Bolivia's maritime access demand, Peru's lawsuit at The Hague over its southern maritime border with Chile, and the Argentinean tourist map incident of 2006.  Discurso del Ministro de Estado Diego Portales al Congreso 1836. Santiago 1858: 178-179.  According to Santiago Lorenzo, “Durante su primer Ministerio (1830-1831), Portales fue un abnegado defensor de la paz en una Hispanoamérica asolada por la anarquía. En 1830 asume la representación del gobierno chileno para mediar en los conflictos que dividen a las Provincias Unidas del Río de la Plata, que de unidas sólo tenían el nombre. Cuando toma esta iniciativa no lo hace por un altruismo pacifismo simplemente, sino por el convencimiento íntimo de que la paz interna de Hispanoamérica era el mejor garante de su independencia…” Lorenzo Schiaffino, Santiago. Portales y la Política Internacional in Portales: El Hombre y su Obra. La Consolidación del Gobierno Civil. Ed. Jurídica de Chile Ed. Andrés Bello, Santiago, 1989: 294.  Ministry of Foreign Relations. Website 17 Apr. 2008.  Foreign Ministry Website. 17 Apr. 2008.  Lorenzo 1989: 292.  Lorenzo 1989: 294 “Considerando la fallida experiencia en la mediación argentina u los obstáculos que os podían interponer en ésta, en rezón de que los presidentes de ambas naciones eran encarnizados enemigos, recomienda a Miguel Zañartu, encargado de la mediación, impida que Chile sea desairado y proceda en consecuencia, con la más estricta neutralidad.”  Pres. Prieto to Chilean Congress, 1832: 10.  Barros Van Buren 1990: 109.  This position is mentioned in both the Chilean foreign policy of 1832 as well as the current administration in 2008. Lorenzo 1989: 294. See Discurso del Presidiente Joaquín Prieto al Congreso. Santiago 1858: 2.  Vanden and Prevost 2002: 444.  Vanden and Prevost 2002: 444-447.  Ibid: 447.