EU-Chile Interim Trade Agreement enters into force

This article is published in association with United Nations.

The EU-Chile Interim Trade Agreement (ITA) has entered into force, following the completion of Chile’s ratification process. The ITA, which was signed in December 2023, is of key geopolitical importance. It will boost the competitiveness of businesses on both sides, while providing a shared platform for the development of our net-zero economies.

This work will be further underpinned by ongoing initiatives under the Global Gateway, such as the development of critical raw materials value chains for lithium and copper, and the Production of Green Hydrogen in Chile.

The agreement will enable the EU and Chile to cooperate as like-minded, lasting partners on global challenges,such as the de-risking of supply chains and the fight against climate change. In addition, it will boost the EU-Chile privileged partnership and put shared values at the core of bilateral relations, including major commitments and dedicated provisions on sustainable trade and gender equality.

More exports, easier investment and sustainable flow of critical raw materials

The ITA will deepen EU-Chile bilateral trade and investment relations and provide new opportunities for businesses by:

• Eliminating tariffs on 99,9% of EU exports and providing a level playing field for EU goods on the Chilean market;
• Ensuring more effective and sustainable flow of raw materials and derived products;
• Including an Energy and Raw Materials chapter that will foster investment and provide the EU with steady, reliable and sustainable access to critical raw materials such as lithium, copper as well as clean fuel like hydrogen, crucial for the transition to the green economy, while at the same time, giving Chile all the policy space it may need to pursue its industrial policy objectives;
• Making it easier for EU companies to provide their services in Chile, including in delivery, telecommunications, maritime transport and financial services;
• Ensuring EU investors in Chile are treated the same way as Chilean investors;
• Improving access for EU companies investing and bidding for government procurement contracts in Chile, Latin America’s fifth largest economy; and
• Ensuring that both EU and Chilean small businesses fully benefit from the opportunities offered by the Agreement.

A strong commitment to sustainability

The agreement will contribute to the EU and Chile’s shared ambition to make their bilateral trade and investment sustainable, through:

• An ambitious Trade and Sustainable Development (TSD) chapter confirming the Parties’ commitment to International Labour Organization (ILO) standards and to the Paris agreement on climate change;
• A dedicated Trade and Gender chapter, a first in an EU trade agreement, which includes commitments to eliminate all discrimination against women; and
• A chapter on Sustainable Food Systems, also a first in an EU trade agreement, with the objective of making food supply chains more sustainable and resilient.

Protecting intellectual property

The agreement also gives legal certainty to EU business by:

• Safeguarding intellectual property rights, including through strong provisions on copyright; and
• Protecting a total of 234 typical European and Chilean food and drinks products (geographical indications), with the possibility to add others in the future.

Background

The EU and Chile negotiated between 2017 and 2022 to modernise 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:

1. the Advanced Framework Agreement (AFA), that includes a) the Political and Cooperation pillar, and b) the Trade and Investment pillar (inclusive of investment protection provisions), subject to ratification by all Member States, and;
2. the Interim Trade Agreement (ITA) covering only those parts of the trade and investment pillar of the AFA that are of EU exclusive competence (i.e. not including the investment protection provisions), adopted through the EU-only ratification process.

Next steps

While the ITA is now in force, the AFA will enter into force when all EU Member States have completed their respective ratification processes. The ITA will then cease to exist and will be replaced by the AFA.

For More Information

Factsheet

The EU-Chile ITA explained

More on EU-Chile Trade relations