id	author	title	date	pages	extension	mime	words	sentence	flesch	summary	cache	txt
ftr-316	Hurtado, Hugo	The U.S. and Chile Tax Treaty and Its Impact on Foreign Direct Investment	2022	59	.pdf	application/pdf	26531	1210	60	CONCLUSION ................................................................................... 98 2012] U.S. and Chile Tax Treaty 43 I. INTRODUCTION Foreign direct investment (“FDI”) from both the United States in Chile and from Chile in the United States has consistently grown in both amount and diversity during the last decade.1 In fact, the United States is the most important source of FDI in Chile, and the United States is the second greatest recipient of Chilean FDI after Brazil.2 FDI is usually encouraged because it is considered to have a positive effect on the gross domestic product (“GDP”) of the recipient country3 based on the general argument that greater investment generates a higher GDP.4 A country’s GDP has three main components: consumption, investment, and government spending.5 The result of the interaction between the three components and its direct effect on the GDP is not altogether clear; however, at least some macroeconomists believe that a greater investment rate generates a higher GDP.6 Borensztein, De Gregorio, and Lee proposed that FDI has a positive effect on the GDP of the recipient country if that country has qualified human capital.7 The basic premise behind this positive effect is that if one of the components of GDP (investment materialized by foreign investors) increases, GDP will rise as a natural effect of this growth. 2012] U.S. and Chile Tax Treaty 45 2001 U.N. Model and the 2008 OECD Model Tax Convention)13 and is the second treaty that the United States has ever signed with a South American country.14 This Article will explore the main consequences on FDI of the Treaty between the United States and Chile and will be divided into four sections.	cache/ftr-316.pdf	txt/ftr-316.txt