Chile's historic and commercial ties with Germany influenced its neutrality during World War II. Not until 1943 did the country sever its relations with the Axis powers, and not until 1945 did it declare war on Japan. This diplomatic reorientation was linked to the fact that Chile wanted to participate in the creation of the United Nations (UN). After the war, Chile aligned its foreign policy with that of the United States. In 1947 it signed the Inter-American Treaty of Mutual Assistance, and in 1952 it signed a Mutual Defense Assistance Pact. Chile received U.S. aid to purchase military matériel as well as military training. Chile broke diplomatic relations with the Soviet Union in 1947, and communists were forced to leave the government. In 1954, Chile also supported the American intervention in Guatemala, despite domestic opposition.
By the end of the 1950s, two facts determined Chilean diplomacy. First, the reunification of communists and socialists under the Frente de Acción Popular (FRAP, Popular Action Front) created concerns within Chilean political parties and abroad when Salvador Allende nearly won the 1958 elections. Second, the 1959 Cuban revolution raised fear that communism might spread throughout Latin America. However, President Jorge Alessandri (1958–1964) pursued a twofold policy toward Cuba. He abstained from the votes suspending it from the Organization of American States (OAS) in 1962 and imposing sanctions. During the 1962 Cuban Missile Crisis, however, Alessandri decided to support President John F. Kennedy's Cuban quarantine. Although Alessandri abstained again from votes sanctioning Cuba in 1964, Chile finally broke relations with the regime of Fidel Castro that year.
A special chapter in U.S.-Chilean relations began in 1963 when the Central Intelligence Agency (CIA) embarked on a covert operation in Chile to short-circuit Allende's triumph in the 1964 elections. The CIA sent more than $2 million to support the Christian Democratic candidate, Eduardo Frei. The money was primarily used for propaganda, including a leaflet that showed Soviet tanks in Czechoslovakia and warned what could happen to Chile if Allende won. The CIA covert operation continued until 1973, when President Allende was overthrown by a military coup. Despite the American involvement in Chile, President Frei (1964–1970) adopted a more independent foreign policy, especially toward Latin America. In 1965, Chile condemned the U.S. invasion of the Dominican Republic, criticized the United States for its unilateral actions, and refused to support the empowerment of the OAS to intervene in the internal affairs of a nation. As part of his economic program, Frei authorized the government purchase of 51 percent of Chile's copper mines. Although the American mining interests protested, the U.S. government declined to intervene.
The 1970 presidential elections revived CIA activity in Chile. The CIA spent millions of dollars to support an anti-Allende campaign. Allende won the election, but because he did not obtain the majority of votes, his confirmation remained in the hands of the Chilean congress. For two months, the United States embarked on an aggressive campaign to keep Allende from power. These efforts included bribes to congressmen, economic pressure, and the encouragement of a military coup. Nevertheless, Allende was elected by the Chilean congress.
Allende's foreign policy showed little change from that of Frei. Allende continued to support the principles of self-determination and nonintervention, and he established relations with Cuba, the People's Republic of China (PRC), and the Democratic People's Republic of Korea (DPRK, North Korea). He also advanced the nationalization of copper companies and the American-owned International Telephone and Telegraph Company (ITT) and embarked on agrarian reform. The United States responded by imposing an economic boycott, which included the suspension of aid from the Export-Import Bank, the International Monetary Fund, the World Bank, and the Inter-American Development Bank. On 11 September 1973, after three years of socialist government, Allende was overthrown by the Chilean military. That day, General Augusto Pinochet began one of the most repressive regimes in the history of the Americas.
The new military government quickly restored relations with the United States. Soon, U.S. economic aid began to flow to Chile. But these good relations came to an end when human rights abuses became publicly known. In 1976, the U.S. Congress approved an embargo on arms sales and limited economic aid to Chile. In domestic affairs, the so-called Chicago Boys—Chilean economists influenced by the free-market ideas of the University of Chicago School of Economics—instituted a new economic program that reduced inflation and opened the economy to foreign investment. Such policies resulted in an amazing economic boom.
In the 1980s, international pressure to democratize Chile led Pinochet to modify the constitution and call for democratic elections in 1989. They took place that December. Patricio Alwyin, the candidate of the Concertación de Partidos por la Democracia (Coalition of Parties for Democracy), won 54 percent of the vote. Alwyin was sworn in as president in March 1990, but Pinochet remained commander in chief of the army until 1998, when he became a senator.
Parkinson, F. Latin America, the Cold War & the World Powers, 1945–1973: A Study in Diplomatic History. Beverly Hills, CA: Sage, 1974.; Sigmund, Paul. The United States and Democracy in Chile. Baltimore: Johns Hopkins University Press, 1993.