EU-Chile Bilateral Agreement Ratified

The Council of the European Union officially gave its approval on 18 March 2024 to the Interim Agreement on Trade (iTA) between the European Union and the Republic of Chile, thereby completing the EU’s internal ratification process and paving the way for the agreement’s entry into force.

The existing Association Agreement between the EU and Chile was established in 2005, but it has been revised in order to further strengthen political and economic relations between the two regions. Following intensive negotiations, a political agreement was reached between the parties in December 2022, followed by the official signature in Brussels in December 2023.

The main objective of this interim agreement is to liberalise trade and investment, with particular attention to investment protection through an Advanced Framework Agreement (AFA), which is currently undergoing ratification.

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

In addition, the interim agreement is expected to facilitate access to raw materials and clean fuels, such as lithium, copper and hydrogen, which are essential for the transition towards 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 key aspect of the agreement is its commitment to ensuring equal treatment for investors from both parties and improving access to public procurement procedures, while also including provisions designed to support small and medium-sized enterprises by reducing bureaucratic burdens.

The next steps include Chile’s internal ratification, after which the agreement may enter into force. This will take place on the first day of the third month following notification by both parties that their internal procedures have been completed. The interim agreement is expected to be replaced by the AFA once it has been ratified by all EU Member States.