EEAS | 18 March 2024
EU-Chile: Council gives final endorsement to bilateral trade agreement
The Council today adopted the decision on the conclusion of the Interim Agreement on trade (iTA) between the European Union and Chile. This decision marks the end of the internal ratification process within the EU and paves the way for the entry into force of the deal.
This agreement focuses on trade and investment liberalisation, exclusively within the EU’s competence, while investment protection provisions are covered by the broader Advanced Framework Agreement (AFA), which is still in the ratification process within the member states. The iTA will expire when the AFA, after ratification by all member states, enters into force. The agreements aim to update the current EU-Chile association agreement and will strengthen EU-Chile political and economic relations and deepen cooperation and trade.
The EU is Chile’s third-largest trade partner. Around 99.9% of EU exports will be tariff free on the entry into force of the agreement, which is expected to increase EU exports to Chile by up to €4.5 billion.
Trade and investment liberalisation
The agreement will bring greater access to raw materials and clean fuel, such as lithium, copper and hydrogen, which are crucial for the transition to the green economy.
It will also make it easier for EU companies to provide their services in Chile, including delivery services, telecommunications, maritime transport and financial services.
It will provide the same treatment for both EU investors and Chilean investors in Chile and will give EU companies improved access to Chilean government procurement contracts for goods, services, works and works concessions, and vice versa.
The agreement includes a dedicated chapter on small and medium-sized enterprises to help ensure that smaller businesses fully benefit from the agreement, including by cutting red tape.
Next steps
The iTA only requires ratification by the EU and not by individual member states. Therefore, now that the Council has validated the iTA, it can enter into force as soon as the Chilean side completes its internal ratification process.
Once both sides have communicated the completion of their respective internal procedures, the agreement will enter into force on the first day of the third month following the date of notification.
The iTA will expire when the AFA, subject to ratification by all member states, enters into force.
Background
The current Association Agreement between the EU and Chile entered into force on 1 March 2005.
At a meeting held alongside the EU-CELAC summit that took place in Santiago on 26-27 January 2013, leaders from the EU and Chile agreed to explore options to update the agreement in order to further improve political and economic relations and to deepen cooperation and trade.
These efforts translated into two different agreements – iTA and AFA – which together constitute an updated version of the EU-Chile Association Agreement currently in place.
The EU and Chile reached the political conclusion of the negotiations on both agreements on 9 December 2022.
On 4 December 2023, the Council adopted two decisions to sign both agreements and on 13 December the signing ceremony between the EU and Chile took place in Brussels.