Chile – China Free Trade Agreement promulgated by President Michelle Bachelet

On August 21, the Free Trade Agreement between Chile and China was promulgated by Chilean President Michelle Bachelet. The FTA was signed in November 2005 and will enter into force on October 1st, 2006.

This is the first agreement that China's agreed with a Latin American country. This FTA is also a landmark in Chilean trade policy, since the Asia-Pacific area is one of the most strategically relevant regions for Chilean exports, representing 36% of them last year. China is Chile’s second commercial partner with a $1,903 million favorable surplus for Chile which was partly due to record-high world copper prices.

Under this FTA, 92% of Chilean exports to China will receive tariff-free status, a share that will rise to 99% after ten years. Chile’s main exports to China are copper, molybdenum, and chemical products. The main Chilean imports from that country are computers, textiles, and electronic equipment.

From Chile's viewpoint, the FTA will also boost market access for its non-copper exports, such as its highly successful agro-export industry. This agreement will have an immediate and positive impact on Chilean consumers’ purchasing power and will also increase Chilean companies’ competitiveness in global markets and their access to a fast-growing and expanding economy such as China.

Chile and China will start consultations in the near future to negotiate disciplines in services and investments.