Chile is often described as a country that has made the most of the opportunities offered by globalization. This has led it to what the FT refers to as ˝the best performing economy in Latin America˝. This presentation describes Chile`s development strategy with special attention to the role played by foreign policy and what is sometimes termed as its ˝development diplomacy˝. That said, it also examines the degree to which Chile may find itself currently in a ˝middle-income trap˝, and the difficulties it encounters in generating a new national consensus to get out of it. After having signed FTAs with close to 60 countries, for Chile the new foreign policy challenges entail a more active participation in global governance issues, strengthening its global political alliances, leveraging to greater advantage its burgeoning trade and investment links with the Asia Pacific allowing for a greater participation in global production chains, and deepening South American regional integration.