The European Council recently adopted the decision on the conclusion of the Interim Agreement on trade (iTA) between the European Union (EU) and Chile, marking the end of the internal ratification process within the EU and paving the way for the entry into force of the deal.

This agreement focuses on trade and investment liberalisation exclusively within the EU’s competence, while investment protection provisions are covered by the broader Advanced Framework Agreement (AFA), which is still in the ratification process within the member states.

The iTA will expire when the AFA, after ratification by all member states, enters into force. The agreements aim to update the current EU-Chile association agreement and will strengthen EU-Chile political and economic relations and deepen cooperation and trade, an official release said.

The EU is Chile’s third-largest trade partner. Around 99.9 per cent of EU exports will be free of tariffs on the entry into force of the agreement, which is expected to increase EU exports to Chile by up to €4.5 billion (~$4.87 billion).

The agreement will bring greater access to raw materials and clean fuel, such as lithium, copper and hydrogen, which are crucial for the transition to the green economy.

It will also make it easier for EU companies to provide their services in Chile, including delivery services, telecommunications, maritime transport and financial services.

It will provide the same treatment for both EU investors and Chilean investors in Chile and will give EU companies improved access to Chilean government procurement contracts for goods, services, works and works concessions, and vice versa.

The agreement includes a dedicated chapter on small and medium-sized enterprises to help ensure that smaller businesses fully benefit from the agreement, including by cutting red tape.

The iTA only requires ratification by the EU and not by individual member states. Therefore, it can enter into force as soon as the Chilean side completes its internal ratification process.

The iTA will expire when the AFA, subject to ratification by all member states, enters into force.

Fibre2Fashion News Desk (DS)

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