The border between Chile and Peru consists of two sections, one terrestrial and one maritime. The land border stands out as a very arid area, a meeting point between the Peruvian Coastal Desert and the Atacama Desert. The most important border city on the Peruvian side is Tacna, with a population of 340,000 (Year 2015, INEI) and on the Chilean side is Arica, with a population of 235,000 (projection year 2015, INE). The cities are less than 60 km away from each other, which makes them the closest cities that each have, when it is considered that, on the Peruvian side, Moquegua is located more than 160 km from Tacna and Iquique more than 300 km from Arica.
The proximity and fluid relationship between the two cities led to the formation of the Chile - Peru Border Committee in 1999, whose main objectives were: to actively participate in solving the operational problems of transit and trafficking of people, vehicles and goods; to promote the development of border areas, as well as regional cooperation and integration; and to consider and promote projects conducive to development and better understanding among border populations.
The Border Committee developed a new approach to strengthen the process of border cooperation and integration, resulting in the establishment of the Integration and Border Development Committee, the First Meeting of which was held in November 2012 in the city of Arica. To date, this Committee has become an active meeting point, organised in commissions (3), subcommittees (17) and thematic commissions (22), between actors on both sides of the border for the development of various areas of interest such as Social Development and Gender, Economic Development, Education and Sports, Culture, Health, Disaster Management and Prevention, Customs, Police and Judicial Co-operation and Coordination, Road Infrastructure, among others.
In recent years, the Peru-Chile bilateral relationship has acquired greater density and content, which has been mainly reflected in a sustained growth of trade. Since 2003, trade between Chile and Peru has grown at an annual rate of 14.8%. In 2012, trade between both countries was USD 3,885 million and investments accounted for USD 9,550 million. Peru ranks as the 8th largest trading partner of Chile and is responsible for 2.5% of Chile's total exports. Peru is responsible for 2.6% of Chile's total imports, placing Peru as the 10th largest supplier of its southern neighbours. Both countries have a bilateral trade agreement, in force since 2009, and are members of the Pacific Alliance (signed in 2011 by Chile, Colombia, Mexico and Peru), an integration process that encompasses goods, services, people and capital and offers opportunities beyond bilateral treaties. For example, members of the Pacific Alliance have agreed to integrate their stock exchanges in the future to form the second largest stock exchange in Latin America.
This economic dynamism at the national level is expected to also occur regionally. In the Tacna - Arica-Parinacota border area, important value chains such as tourism, commerce, agribusiness and services are developed. These cross-border value chains will be studied in the development of the INNOVACT project. For those that are prioritised, strategies, action plans and specific projects that can be implemented in the short term will be formulated.