Relations remained tense due to alliances during and after the 1995 Cenepa War between Peru and Ecuador, but they have improved gradually, with the neighboring countries entering into new trade agreements in the 21st century.

After finding no gold and little more than farming societies and the fierce attacks of the Mapuche, Diego de Almagro returned to Peru with a broken army seeking to gain some sort of power and prestige.

The lack of the treasures and natural resources that the Spanish valued (such as gold and silver) for their economy and the constant raids from the local Mapuche made Chile a highly undesirable place.

As a result, during the colonial era Chile was a poor and problematic province of the Viceroyalty of Peru, and it took a while before settlers would begin to find the other natural resources of the lands.

[2] In order to prevent other European nations from making colonies in these sparsely-populated areas, the trade of Chile became restricted to directly providing supplies, such as tallow, leather, and wine, to Peru.

The arrival of Simón Bolívar and the subsequent victories at the battles of Junin and Ayacucho finally served as the end of Spanish rule in South America.

The formation of large, united South American nations was a popular idea that Simón Bolívar and a series of other prominent leaders of that time sought to form.

Famous Chilean leaders such as Bernardo O'Higgins and Ramon Freire openly favored the ideas of the newly self-appointed "Grand Marshal" Santa Cruz, but at the same time they opposed the regime that at that moment governed Chile.

The second campaign to attack Santa Cruz was better organized with excellent commanders such as the Chilean Manuel Bulnes Prieto and the Peruvian Ramon Castilla.

This time they fought and eventually won an important victory in the Battle of Portada de Guias, and thus the liberation force was able to enter the city of Lima.

The first major intercontinental event involving these nations erupted as a result of guano, a resource that was heavily demanded in the international market and that western South America (mainly in the territories of Peru, Bolivia, and Chile) had plenty of to sell.

Also, the prosperity of the Peruvian government's guano (fertilizer) monopoly and the thriving nitrate industry in Peru's Tarapacá province were related to mining activities on the Bolivian coast.

[4] The government of La Paz next called for Peruvian aid in accordance to the defensive alliance both nations had made in 1873, but Peru tried to negotiate a peaceful solution between Bolivia and Chile in order to avoid war.

Finally, in 1929, through the mediation of the United States, an accord was reached by which Chile kept Arica; Peru reacquired Tacna and received $6 million indemnity and other concessions.

In 1884 a truce between Bolivia and Chile gave the latter control of the entire Bolivian coast (Antofagasta province), with its nitrate, copper, and other mineral industries; a treaty in 1904 made this arrangement permanent.

However, he was successfully dissuaded from starting the invasion on that date by his advisor, General Francisco Morales Bermúdez, whose original family was from the former Peruvian (currently Chilean) region of Tarapacá.

[9] This claim was promptly denied by Chile the following day on February 5, 1995, but admitted that they had sold weaponry to Ecuador on September 12, 1994, as part of a regular commercial exchange that had no aim against any particular nation.

On March 21, 2005, General Bayas was asked by the Ecuadorian newspaper El Comercio if Chile had sold armaments to Ecuador during the Cenepa War, to which he replied: "Yes, it was a contract with the militaries during the conflict.

[9] In response to the declarations made by General Bayas, on March 22, 2005, the government of Chile denied the claims and stated that the only registered sale of weapons to Ecuador was in 1994.

Peru added that Chile, as a guarantor of the Rio Protocol, should have maintained absolute neutrality and that this alleged weapons commerce during the Cenepa War goes against resolutions made by the United Nations and the Organization of American States.

[10] On November 28, in response to this incident, a Chilean government spokesman stated that a scheduled visit to Chile by the Peruvian defense minister, Antero Flores Aráoz, might be inopportune given the circumstances.

The following day, Flores Aráoz announced his decision to postpone his trip after conferring with the Foreign Affairs Minister, José Antonio García Belaúnde.

[11] Donayre defended the video, declaring that Peruvian citizens have a right to say whatever they want at private gatherings and that even though he is scheduled to retire on December 5 he will not be forced to resign early under external pressure.

As a consequence of these exchanges, tensions between Peru and Chile rose again; president Bachelet met with top aides on December 1 to discuss the matter and possible courses of action.

According to the Peruvian Foreign Ministry, the Chilean legislatures had endorsed a plan regarding the Arica and Parinacota region which did not comply with the current established territorial demarcation.

[citation needed] For its part, the Chilean government has asserted that the region in dispute is not a coastal site named Concordia, but instead refers to boundary stone No.

While agreeing with the court's ruling, the Chilean government reiterated its stance that the maritime borders between the two nations were not in question and have been formally recognized by the international community.

On January 16, 2008, Peru formally presented the case to the International Court of Justice, in which the Peruvian government sued the state of Chile regarding the Chilean-Peruvian maritime dispute of 2006–2007.

The 1929 Peace and Friendship treaty, which formalized relations between the three states following the War of the Pacific, requires Peru's "prior agreement" to pursue further negotiations for Chile to cede former Peruvian territory to a third party and settle the conflict.

[19] Afterwards, Peru's Chancellor José Antonio García Belaúnde expressed the Peruvian government's decision to neither attend the event or make any further comments on this internal affair of Chile.