EU-CHILE TRADE AGREEMENT TO ELIMINATE 99.9% OF TARIFFS SIGNED
By Ane Barcos and EditoRed
The European Union and Chile have signed this Wednesday, December 13, 2023, the Advanced Framework Agreement and the modernized Interim Trade Agreement in order to promote mutual benefits, foster economic growth and create new opportunities for SMEs. The agreement is also expected to contribute to the ongoing green transition on both sides.
Strengthening political and economic relations between the EU and Chile, as well as deepening cooperation and trade, are key objectives of the new agreement. It will effectively contribute to addressing emerging global challenges, such as the consequences of the Russian invasion in Ukraine, addressing issues such as global inflation, supply chain disruptions and the energy crisis.
The President of the European Commission, Ursula Von der Leyen, has welcomed the news, noting that when she met with President Boric in Santiago last June, the parties agreed to move forward to be able to close these agreements before the end of the year. And so it has been, “they are already a done deal”, he pointed out.
With this agreement, 99.9% of the Union’s exports to Chile will be exempt from tariffs, while Chilean products will have “more agile” access to the EU’s single market. Furthermore, thanks to the elimination of tariffs, the EU expects an increase in exports to Chile of up to 4.5 billion euros.
Chile expects to deepen the commercial exchange “adding value by incorporating new materials”, according to a communiqué from the Chilean Foreign Ministry. It highlights that the European Union represents an enlarged market of 448 million people, the third largest global economy.
Chile’s El Mercurio newspaper notes that since the entry into force of the first agreement in 2003, Chile-EU trade has doubled. “After registering US$19,299 million in 2022, with an average annual growth of 4.5%, the EU has become Chile’s fourth largest trading partner after China, the United States and Mercosur.”
In addition, the EU is the first foreign investor in Chile, especially in the area of services, and is the third regional destination for Chilean investments.
The Chilean newspaper indicates that “during 2022, a total of 2,079 companies exported to the EU, of which 36.3% correspond to SMEs; in the same year, this group of SMEs exported a total of 254.3 million dollars, 16.4% more than during 2021”.
The German highlighted that this alliance will strengthen the EU’s connections with Chile, “the fifth largest economy in Latin America”. As she explained, they will work together on sustainable supply chains of critical raw materials, which is “a great opportunity for our cleantech industry and an important contribution to our open strategic autonomy”.
The President of the Commission stressed that Chile is a partner with which the European Union shares “common fundamental values and ambitions such as the defense of respect for human rights, gender equality and environmental protection. In this sense, he reiterated the commitment of both parties to decarbonization. Proof of this is the fact that these guiding principles have been placed at the center of the new agreements which, as he assured, “will govern our trade and investment relations”, which could serve as a model for future EU trade agreements, he pointed out. Thus, Von der Leyen expressed her joy for “opening this new chapter with such a privileged and trustworthy partner”.
For his part, Executive Vice President Dombrovskis noted that the signing “formalizes a commitment that takes this close bond to a whole new level” and added that “in many respects, it marks an even stronger partnership between old friends.”
He reiterated the importance of this alliance “at a time of considerable geopolitical tension.” In this regard, he noted that Russia’s war in Ukraine “has refocused attention on the need to forge closer alliances with trusted allies.”
This news was originally published in Aquí Europa.
