<h6><strong>Julio García</strong></h6> <h4><strong>The Interim Trade Agreement (ITA) between the EU and Chile has entered into force following the completion of Chile's ratification process. The text, which modernises the trade agreement that has united both parties for 20 years, was signed in December 2023, in the final stretch of the last Spanish Presidency of the EU Council.</strong></h4> The signing of the Advanced Framework Agreement and the modernised Interim Trade Agreement took place in Brussels on 13 December 2023, once the ratification processes had been completed. The ceremony was attended by the Economic Vice-President of the European Commission, Valdis Dombrovskis; the Chilean Minister of Foreign Affairs, Alberto van Klaveren Stork; the then High Representative for Foreign Policy of the EU, Josep Borrell; and, representing the Spanish Presidency, the then First Vice-President of the Government, Nadia Calviño, and the Minister of Foreign Affairs, José Manuel Albares. With this agreement, 99.9% of EU exports to Chile will be exempt from tariffs, while Chilean products will have “faster” access to the EU single market. In addition, thanks to the elimination of tariffs, the EU expects an increase in exports to Chile of up to €4.5 billion. According to the Commission, this agreement (which officially entered into force last Friday) will boost the competitiveness of companies on both sides, while providing a shared platform for the development of our net-zero emissions economies. This work will also be supported by ongoing initiatives within the framework of the Global Gateway, such as the development of critical raw material value chains for lithium and copper, and the production of green hydrogen in Chile. The agreement will allow the EU and Chile to cooperate as like-minded and long-term partners on global challenges, such as reducing risks in supply chains and combating climate change. Furthermore, it will boost the privileged partnership between the EU and Chile and put shared values at the heart of bilateral relations, including important commitments and specific provisions on sustainable trade and gender equality. <h5><strong>More exports, easier investments and sustainable flow of critical raw materials</strong></h5> The ITA will deepen bilateral trade and investment relations between the EU and Chile and provide new opportunities for businesses by eliminating tariffs on 99.9% of EU exports and offering a level playing field for EU products in the Chilean market. It will also contribute to ensuring a more effective and sustainable flow of raw materials and derived products. The text includes a chapter on Energy and Raw Materials that encourages investment and provides the EU with constant, reliable and sustainable access to critical raw materials such as lithium, copper and clean fuels such as hydrogen, crucial for the transition to the green economy, while giving Chile all the policy space it may need to pursue its industrial policy objectives. It also contributes to making it easier for EU companies to provide their services in Chile, including in delivery, telecommunications, maritime transport and financial services; to ensuring that EU investors in Chile receive the same treatment as Chilean investors; to improving access for EU companies investing and bidding for public procurement contracts in Chile, the fifth largest economy in Latin America; and to ensuring that both EU and Chilean small businesses take full advantage of the opportunities offered by the Agreement. <h5><strong>A strong commitment to sustainability</strong></h5> The agreement will contribute to the shared ambition of the EU and Chile to make their bilateral trade and investments sustainable, through an ambitious chapter on Trade and Sustainable Development (TSD) that confirms the Parties' commitment to International Labour Organisation (ILO) standards and the Paris agreement on climate change. It also has a chapter dedicated to trade and gender, the first in an EU trade agreement, which includes commitments to eliminate all discrimination against women; and with a chapter on sustainable food systems, also the first in an EU trade agreement, with the aim of making food supply chains more sustainable and resilient. <h5><strong>Protection of intellectual property</strong></h5> The agreement also provides legal certainty for EU businesses by safeguarding intellectual property rights, including through strong copyright provisions; and by protecting a total of 234 typical European and Chilean food and drink products (geographical indications), with the possibility of adding more in the future. <h5><strong>Background</strong></h5> The EU and Chile negotiated between 2017 and 2022 the modernisation of the EU-Chile Association Agreement (in force since 2003). The parties reached the political conclusion of the negotiations on 9 December 2022 and signed the modernised Agreement on 13 December 2023. The modernised EU-Chile Agreement is composed of two parallel legal instruments: the Advanced Framework Agreement (AFA), which includes a) the Political and Cooperation pillar, and b) the Trade and Investment pillar (including investment protection provisions), subject to ratification by all Member States; and the Interim Trade Agreement (ITA) covering only those parts of the trade and investment pillar of the TFA that fall within the exclusive competence of the EU (i.e. not including investment protection provisions), adopted through the EU's exclusive ratification process.
