The Interim Trade Agreement (ATI) between the European Union (EU) and Chile to boost the competitiveness of businesses on both sides came into effect this Saturday, also aiming to provide a shared platform for the development of their zero-emission economies.
The agreement, of “key geopolitical importance,” was signed in 2023 and has come into effect after the completion of the ratification process in the Latin American country, the European Commission (EC) said in a statement today.
This pact will allow the EU and Chile to cooperate as “like-minded and lasting partners in global challenges” such as reducing the risk of supply chains and combating climate change, it stated.
The European Commission also indicated that the agreement will strengthen the “privileged” partnership between the EU and Chile and place shared values “at the center of bilateral relations, including important commitments and specific provisions on sustainable trade and gender equality.”
“The effective alliances we continue to create around the world support both our economic growth and our economic security,” said Trade and Economic Security Commissioner Maroš Šefčovič.
“Chile is the EU’s third-largest trading partner in Latin America, and I am sure that economic operators on both sides will be able to benefit from this agreement from day one. It will help us diversify our supply chains while creating new opportunities for our businesses, including SMEs,” he added.
The ATI will deepen bilateral trade and investment relations between the EU and Chile, offer new opportunities to businesses, such as eliminating tariffs on 99.9% of EU exports, and provide a level playing field for EU products in the Chilean market, explained the European Commission.
It also seeks to ensure a more efficient and sustainable flow of raw materials and derived products, as well as promote investment and access to critical raw materials such as lithium and copper, and clean fuels such as hydrogen, crucial for the transition to the green economy.
Additionally, it will facilitate EU companies in providing their services in Chile, including delivery, telecommunications, maritime transport, and financial services, and ensure that EU investors in Chile receive the same treatment as Chilean investors.
The agreement will improve access for EU companies investing and bidding for public contracts in Chile, the fifth-largest economy in Latin America.
The EU and Chile negotiated between 2017 and 2022 to modernize the EU-Chile Association Agreement (in force since 2003), reached the political conclusion of the negotiations on December 9, 2022, and signed the modernized Agreement on December 13, 2023.
The modernized EU-Chile Agreement consists of two parallel legal instruments: the Advanced Framework Agreement (AFA) and the Interim Trade Agreement (ATI).
While the ATI is already in effect, the AFA will come into force when all EU Member States have completed their respective ratification processes and, in that case, the ATI will cease to exist and be replaced by the AFA.