The European Union and Chile have announced today the culmination of their negotiations to update the association agreement in force since 2002, a demonstration of the renewed commitment of the community bloc with Latin America and the strategic interest of diversifying their economic relations and access to Crucial raw materials for the success of the energy transition. "At a time of unprecedented geostrategic challenges, we are modernizing our relationship to live up to our ambitions and to deepen our political dialogue, cooperation and economic relationship", stressed the EU's High Representative for Foreign Policy, Josep Borrell, it's a statement.
With the new version of the agreement, 99.9% of European exports to Chile will be free of tariffs, compared to the current 90%, which is expected to translate into an increase in sales worth 4.5 billion euros. There is also a strong strategic component in the signing of this agreement, as well as in the open negotiations with countries like Australia, which became a priority for Ursula von der Leyen's executive as a result of the war in Ukraine, which is also considering closing the modernization of the agreement with Mexico and, since Lula da Silva's victory in Brazil, ending negotiations with Mercosur.
The agreement on access to critical minerals was reached very quickly, community sources explain. "It is a win-win. It allows us to have access to raw materials such as lithium, of which Chile is one of the largest exporters in the world, in a non-discriminatory manner and, at the same time, for Chile, it allows them to promote the transformation and increase the production of these products. Thus, with the modernization of the association agreement, European investments in Chile _will receive the same treatment as Chilean ones -and vice versa- in the field of energy and raw materials, a provision that may be "a model" for agreements with other countries. "It will help us diversify our resources and move away from dependence on China, particularly in terms of lithium and copper," say sources from the European Commission.
The Chilean government, for its part, was especially interested in raising the quota of meat it can export to the EU as well as expanding the agri-food categories covered by the agreement. Thus, the EU has granted Chile an additional 18,000 tons of duty-free chicken meat, 9,000 tons of pork, 4,000 sheep and 2,000 beef. In addition, for the first time, the Latin American country will be able to export olive oil to the EU, 11,000 tons per year, just a small drop compared to the two million that the community bloc produces each year. The agreement places limits on the use of European geographical indications and will prohibit the use in Chile of denominations such as Parmesan, Gruyère, feta, camembert or brie, according to what the Chilean government has reported.
Telecommunications, shipping and financial services companies located in the European Union, for their part, will have more facilities to offer their services in Chile. In addition, the new advanced framework agreement will improve the access of European companies to the public tenders of the Government of Chile and vice versa. The agreement aims to intensify political cooperation between the EU and Chile and includes for the first time several chapters on human rights, rule of law, sustainability, science, technology, innovation and food security. For the first time, it includes a section on gender equality, an element highly highlighted by the Chilean Government, which is committed to a "feminist foreign policy".
The original agreement between the European Union and Chile was signed in 2002 with the government of President Ricardo Lagos and entered into force a year later. Between 2002 and 2021, trade in goods between the two parties increased by 163%, with the largest increase recorded by the European side, 284% more, according to figures from the European Commission. Negotiations for its update began in 2017 and were practically ready from a technical point of view at the end of last year.
However, upon coming to power, the team of President Gabriel Boric demanded to review some aspects of the text negotiated by the Government of Sebastián Piñeira. The contacts came to fruition a few weeks ago and last night Chilean Foreign Minister Antonia Urrejola arrived in Brussels to announce today, along with community officials, the political conclusion of the agreement. Now begins the ratification process that will last for several months and will involve both the European Parliament, for the commercial part, and the national parliaments, through which the rest of the agreement passes.
