UE-Chile Bilateral Agreement
Categorie News
02/04/2024

EU-Chile Bilateral Agreement Ratified

The Council of the European Union officially gave the green light on 18 March 2024 to the Interim Agreement on Trade (iTA) between the European Union and the Republic of Chile, thus completing the internal ratification process and paving the way for the agreement to enter into force.

The existing Association Agreement between the EU and Chile was established in 2005, but was revised to further improve political and economic relations between the two regions. After intensive negotiations, a political agreement was reached between the two parties in December 2022, followed by the official signing in December 2023 in Brussels.

The main objective of this interim agreement is to liberalise trade and investment, with a focus on investment protection through an Advanced Framework Agreement (AFA), which is currently in the ratification process.

The European Union is currently Chile’s third largest trading partner and with the entry into force of the agreement, approximately 99.9% of EU exports will be duty free, leading to a significant increase in European exports to Chile of up to EUR 4.5 billion.

In addition, the interim agreement promises to facilitate access to raw materials and clean fuels, such as lithium, copper and hydrogen, which are essential for the transition to a green economy. It will also facilitate the provision of services by European companies in Chile, including delivery, telecommunications, maritime transport and financial services.

A crucial aspect of the agreement is its commitment to ensure equal treatment for investors on both sides and improve access to public tenders, as well as including provisions to favour small and medium-sized enterprises by reducing bureaucratic burdens.

The next steps include Chile’s internal ratification, after which the agreement can enter into force. This will take place on the first day of the third month following the announcement of the completion of internal procedures by both parties. It is expected that this interim agreement will be replaced by the AFA once ratified by all EU member states.

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