Summary This document examines the impact of modernization of the health system on foreign trade in health services during the period 1983-1999 and looks at future prospects in this area. It establishes linkages between specific aspects of reform and modernization of the sector and imports and exports of specific services produced or required by the health system and the public. Firstly, a description is given of the modernization and reform process which has the potential to promote foreign trade in the area of health and a number of theories are outlined in this respect. Secondly, the effective influence of modernization and health reform linkages on the export and import of health services is examined. Thirdly, the author looks at policy instruments designed to mobilize or create the national capacity for substitution or for slowing the rate of growth of imports of services generated by modernization and reform. The document concludes that modernization and health reform in Chile have contributed to internationalization of health, that the development of trade in health-related services and goods is an important and growing part of this internationalization and, lastly, that in order to promote and regulate this trade, policies should not be limited to the national sphere but should encompass the country's trade and integration agreements.