SANTIAGO, Chile -- Standing atop the stone staircase on Cerro Santa Lucia, the hill on which this city was founded in 1541, looking east past the verdant vineyards that dot the suburbs, you can see the dramatic, snow-capped Andes.

The pure snowmelt that flows from those peaks has always been Chile's agricultural pride. Its farmers boast that they need only dig a trench -- not even put in pumps -- to nourish their lush orchards, fertile vegetable fields and vast vineyards.

So it's ironic that only now, since winemakers have learned the discipline to let their vines drink less greedily of that eternal flood, are they beginning to make the best wines their country can.

Chile stands ready today, after several stumbling starts, to make a major splash in the world of top-value wines. At friendly, mostly $5-to-$12-a-bottle prices. Even a dollop of $25 wines to compete with the world's finest.

It's not surprising that Chile's most popular export wines happily mirror America's favorite wines to drink -- chardonnay, sauvignon blanc, merlot, cabernet sauvignon. It's because Chile's favorite foods are also America's:

* Its round, sweet sauvignon blanc with seafood from the icy Antarctic waters brought to Chile's Pacific shore by the Humboldt Current. Delicate, flaky congrio eel, sopa de mariscos (seafood soup), parrillada de mariscos (seafood grill).

* Its lush chardonnay with another Chilean specialty, pollo a la brasa, spit-roasted chicken with baked onions and rice.

* Its heady merlot and rich cabernet sauvignon with Chilean beef, which, tended by huasos, the Chilean version of Argentina's gaucho, is approaching that country's in quality. A favorite is the parrillada, in which nearly every part of the cow or pig, from prime filet to sausage to, if you insist, the intestines, is seared on big outdoor charcoal grills.

Chile, when you think of it, is a natural place to make good-value wine. Sunnier than France. Cooler than California. Land and labor cheaper than either. Its vine-rich Central Valley, isolated by the Pacific to the west, the Andes to the east, the Atacama desert to the north, the Antarctic to the south, is like an island -- free of the diseases, from mildew to the plant louse phylloxera that plague the world's other vineyards.

Its wine heritage is French. Its vines were first imported by wealthy landowner Don Silvester Ochagavia from Bordeaux at the end of the last century, just before phylloxera devastated France's wine industry. Because of that, Chile is dotted with fields of 100-year-old cabernet sauvignon vines -- older than most in France. And old vines, any French vigneron will tell you, make the best wine.

Until recently, what held back Chilean wine was its outmoded methods of winemaking -- hot, roiling fermentation, long aging in ancient casks of the Chilean redwood called rauli -- which turned out tired, tannic wines the world no longer wants.

Now that's changing. Finally, after the 1988 end of the stultifying, 15-year dictatorship of Gen. Augusto Pinochet, two important things are happening.

Chile is now seen as hospitable by French, Spanish and American wine executives with money and modern know-how. And the country's old wine dynasties, recognizing the competition, are finally pumping in the money to copy those modern methods with $600 French oak barrels, temperature-controlled stainless steel fermenting tanks and such.

A final detour: Chilean wines, cheap and good, took America by storm in the 1980s. But by the start of the '90s many Chilean vineyard owners, drunk with success, fell into the trap of letting in too much of that magical Andes water, increasing production to as much as 10 tons per acre. It overtaxed the vines, made wines that were washed out and insipid. But a quick plummet in popularity showed the owners the folly of greed. Today Chile's winemakers -- the successful ones, anyway -- are learning the discipline of quality over quantity.