The Council of the European Union (EU) decided today (04.11.2023) to finalize the signing of the Advanced Framework Agreement (AFA) and the Interim Trade Agreement (ITA), which constitute an updated version of the Association Agreement with Chile currently in force.
These final terms of the new agreement will strengthen political and economic relations between the EU and Chile and deepen cooperation and trade. At the same time, they will help to jointly address new global challenges.
The Vice-President and Minister of Economy, Trade and Enterprise, Nadia Calviño, has pointed out that the EU-Chile trade agreement will contribute to improving the strategic autonomy of the EU, reinforcing the security of supply and the export opportunities of our companies.
Thus, the Advanced Framework Agreement (AFA) consists of political, economic and social components. cooperation and trade and investment, while the Interim Trade Agreement (ITA) deals with the liberalization of trade and investment.
Trade and the benefits of the agreement
The EU is Chile's third largest trading partner. Around 99,9% of EU exports will be tariff-free when the agreement comes into force, which is expected to increase EU exports to Chile by up to €4.500 billion.
The agreement will provide greater access to Clean raw materials and fuels such as lithium, copper and hydrogen, which are crucial to the transition to the green economy.
It will also make it easier for EU companies to provide their services. services in Chile, including delivery, telecommunications, maritime transport and financial services.
It will provide the same treatment to the investors of the EU in Chile than to Chilean investors and will give EU companies better access to Chilean public contracts for goods, services, works and works concessions, and vice versa.
The agreement includes a chapter dedicated to the small and medium-sized enterprisess to help ensure that smaller businesses benefit fully from the agreement, including by cutting red tape.
The signing ceremony for the agreements (AFA | ITA) is expected to take place in mid-December. Legislative approval of the text in the EU and Chile will then be required for these new provisions to become effective.
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