Brussels, 9 December 2022
Today, the European Union and Chile have concluded negotiations on the EU-Chile Advanced Framework Agreement at a meeting between the Executive Vice-President and Commissioner for Trade Valdis Dombrovskis and the High Representative/Vice-President Josep Borrell, with the Chilean Minister of Foreign Affairs, Antonia Urrejola.
This landmark agreement is of key geopolitical importance: with the new Advanced Framework Agreement, the EU and Chile take their partnership to the next level to strengthen political dialogue, deepen cooperation and foster trade and investment opportunities. In particular, the agreement puts shared values such as human rights, sustainable trade and gender equality at the core of EU-Chile relations. It strengthens EU-Chile cooperation on shared global challenges, such as the fight against climate change and the environment.
Closer economic ties with Chile will allow the EU to diversify and strengthen its economic resilience, while increasing opportunities for EU exports and investments. Better access and sustainable investment in critical raw materials such as lithium will contribute to advancing our shared ambition for a green transition.
Boosting trade and investment
The agreement will deepen EU-Chile trade and investment relations and provide new opportunities for EU businesses in Latin America’s fifth largest economy:
- 99,9% of EU exports will be tariff free, which is expected to increase EU exports to Chile by up to 4,5 billion euros.
- Greater access to raw materials and clean fuel crucial for the transition to the green economy, such as lithium, copper, and hydrogen.
- Easier for EU companies to provide their services in Chile, including in delivery, telecommunications, maritime transport and financial services.
- Same treatment for EU investors in Chile as for Chilean investors, including in the energy and raw material sector, and vice versa.
- Improved access for EU companies to Chilean government procurement contracts for goods, services, works and works concessions, and vice versa.
- A dedicated chapter on small and medium enterprises to help ensure that smaller businesses fully benefit from the agreement, including by cutting red tape.
A strong commitment to human rights, sustainability and innovation
The agreement will contribute to the EU and Chile’s shared ambition of developing a fruitful partnership based on sustainability and shared values, through:
- New full-fledged articles on democratic principles, human rights and rule of law which enshrine core shared values at the heart of EU-Chile cooperation.
- Extending the political dialogue to include international peace, justice and security.
- A renewed focus on science, technology, research and innovation.
- An ambitious Trade and Sustainable Development chapter confirming the Parties’ commitment to International Labour Organization standards and to the Paris Agreement.
- A dedicated Trade and Gender chapter, with commitments to eliminate discrimination against women.
- A chapter on Sustainable Food Systems, with the objective of making food supply chains more sustainable and resilient.
Next Steps
The modernised EU-Chile Agreement will be composed of two parallel legal instruments:
- the Advanced Framework Agreement, that will include 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
- an Interim Free Trade Agreement (iFTA) covering only those parts of the trade and investment pillar of the Advanced Framework Agreement that are of EU exclusive competence (i.e., not including the investment protection provisions), to be adopted through the EU-only ratification process. The iFTA will expire when the Advanced Framework Agreement enters into force.
As a first step, both the EU and Chile will proceed with the legal verification of the agreement. Following that, the EU will propose the Advanced Framework Agreement and the iFTA for conclusion and ratification.
Background
The EU and Chile concluded an Association Agreement in 2002, which includes a comprehensive trade agreement that entered into force in February 2003 covering EU-Chile trade relations. EU-Chile trade in goods grew by 163% between 2002 and 2021. EU goods exports to Chile grew by 284% in the same period.
The EU and Chile agreed to modernise the Association Agreement and replace it with the new generation Advanced Framework Agreement that reinforces and deepens their bilateral relationship.
The Agreement is a concrete expression of the EU and Chile’s political will to work more closely together and a key building block of a renewed bi-regional partnership under the framework of the EU-Latin American and Caribbean Road 2023. It responds to new priorities and global challenges that have emerged since the signature of the current Association Agreement 20 years ago.
For More Information
- EU-Chile Joint Communique
- Factsheet – EU-Chile external relations (EN) (ES)
- Factsheet – EU-Chile Advanced Framework Agreement
- Factsheet – Sustainability in the Trade Part of the EU-Chile Advanced Framework Agreement
- Infographic – EU-Chile trade
- EU-Chile Agreement Trade part webpage
- EU-Chile Agreement Trade part explained
- Summary of the trade part of the Agreement
- EU-Chile trade relations
Quote(s)
We have today taken our already close partnership with Chile to the next level. This agreement will create new opportunities to support economic growth on both sides, underpinned by much stronger protection of the environment and climate, labour rights, gender equality and food systems. 99% of trade will be tariff-free. Our new trading rules will ease investments and also provide greater opportunities for SMEs on both sides. This modern, dynamic agreement reflects our shared ambition of building greener economies, including cooperation on raw materials and clean sources of energy.
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This year marks the 20th anniversary of the Association Agreement with Chile, and today we are opening a new chapter in our privileged partnership. At a time of unprecedented geopolitical challenges, with this new Advanced Framework Agreement we are modernising and updating our relationship to match our shared ambition and deepen our political dialogue, cooperation, and economic relationship. The new agreement places joint values such as human rights, sustainability and the fight against climate change at the heart of the partnership. This landmark agreement also provides the foundation for closer cooperation on justice, peace and security matters and will foster the connection between people, businesses and civil society from the EU and Chile for decades to come.
Source – EU Commission
Joint statement by the President of the European Commission, Ursula von der Leyen, and the President of Chile, Gabriel Boric
We welcome the successful conclusion of the negotiations of the EU-Chile Advanced Framework Agreement.
We are proud to build on the close political and economic relationship that the EU and Chile have established, at a time when we are facing important global challenges and moving towards new models of sustainable growth and development.
The benefits of our partnership have never been clearer. Having a modern and progressive platform to engage with the values we share and the challenges we face is fundamental.
The Advanced Framework Agreement marks the beginning of a new chapter in bilateral cooperation between the EU and Chile, with our common values at the center. We share a strong commitment to human rights, sustainable trade, gender equality and the fight against climate change. This agreement represents an opportunity to deepen our cooperation for the benefit of all Chilean and EU citizens, businesses and other stakeholders.
We commend our negotiators and their teams, led by EU Executive Vice-President and Trade Commissioner Valdis Dombrovskis and High Representative and Vice-President Josep Borrell, as well as Chile’s Foreign Minister Antonia Urrejola and Chile’s Under-Secretary for International Economic Affairs José Miguel Ahumada for their hard work.
We look forward to a continuing close cooperation and to a swift ratification of this new agreement.
Source: EU Commission
EU-Chile Joint Communiqué on the Advanced Framework Agreement
Today, Vice-President and Commissioner for Trade Valdis Dombrovskis, the High Representative/Vice-President Josep Borrell, Executive and Chilean Minister of Foreign Affairs Antonia Urrejola concluded an innovative Advanced Framework Agreement.
This modern Agreement will help deepen cooperation and will directly contribute to the Sustainable Development Goals and Agenda 2030. It will advance joint values and interests, including trade and sustainability, human rights and peace and security.
It will boost trade and investment in support of green and digital transition and provide new opportunities for businesses.
Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “We have today taken our already close partnership with Chile to the next level. This agreement will create new opportunities to support economic growth on both sides, underpinned by much stronger protection of the environment and climate, labour rights, gender equality and food systems. 99% of trade will be tariff-free. Our new trading rules will ease investments and also provide greater opportunities for SMEs on both sides. This modern, dynamic agreement reflects our shared ambition of building greener economies, including cooperation on raw materials and clean sources of energy.”
High Representative/Vice-President Josep Borrell said: “This year marks the 20th anniversary of the Association Agreement with Chile, and today we are opening a new chapter in our privileged partnership. At a time of unprecedented geopolitical challenges, with this new Advanced Framework Agreement we are modernizing and updating our relationship to match our shared ambition and deepen our political dialogue, cooperation, and economic relationship. The new agreement places joint values such as human rights, sustainability and the fight against climate change at the heart of the partnership. This landmark agreement also provides the foundation for closer cooperation on justice, peace and security matters and will foster the connection between people, businesses and civil society from the EU and Chile for decades to come.”
The Minister of Foreign Affairs of Chile, Antonia Urrejola, declared: ”With this Agreement, Chile and the EU have deepened our bilateral relationship in the benefit of our people by reinforcing the partnership in areas which reflect common values and principles such as the strengthening of democracy, human rights and fundamental freedoms, rule of law and good governance, sustainable development and, particularly, gender equality and the empowerment of women and girls. This agreement also recognizes the urgency of addressing areas such as Climate Change, energy transition, oceans, innovation, digitalization and cooperation to achieve balanced and sustainable regional and territorial development. On the trade and investment section, it incorporates important provisions, such as robust Trade and Sustainable Development, a Gender and Trade specific chapter, and a Small and Medium Enterprises chapter aimed at aiding SMEs in their internationalization. Finally, this instrument is aligned with the aim of the Chilean trade policy of ensuring the strategic and regulatory autonomy of the country, allowing for productive, environmental and other policies key for its development.”
The Advanced Framework Agreement is a concrete expression of the EU and Chile’s political will to work more closely together and a key building block of a renewed partnership.
EU-Chile: Foreign Affairs MEPs welcome new Advanced Framework Agreement, major achievement in EU’s Latin American policy
Joint statement on the conclusion of the negotiations on a new EU-Chile Advanced Framework Agreement, by MEPs Inmaculada Rodríguez-Piñero and Javi López.
On Friday 9 December, Inmaculada Rodríguez-Piñero (S&D, ES), Chair of the Delegation to the EU-Chile Joint Parliamentary Committee, and Javi López (S&D, ES), Chair of the Delegation to the Euro-Latin American Parliamentary Assembly, issued the following statement on behalf of the said delegations:
“We welcome the conclusion of the negotiations on a new EU-Chile Advanced Framework Agreement by the negotiating parties. This was a stated priority for both partners and takes place 20 years after the signing of the EU-Chile Association Agreement, which was the first agreement signed by the European Union with a Latin American country and has had very positive consequences on our peoples;
Chile is a key and reliable partner, and the bilateral relations are excellent, as they are based on shared values and principles. We are confident that the EU-Chile Advanced Framework Agreement, when ratified by both sides, will boost this relationship and will become a driver for sustainable economic growth, political stability, social progress and fighting inequalities;
We take the view that the successful conclusion of the negotiations reaffirms the commitment of both parties for multilateralism, respect for democratic and human rights principles as well as rules-based trade. We strongly believe that the EU-Chile Advance Framework Agreement will allow for the further deepening of our extensive cooperation in many areas including democracy, human rights, social cohesion, environmental issues, energy, science and technology, inclusive and sustainable development and new trade opportunities, and that it will contribute to further strengthening the ties between our societies;
We celebrate, in particular, that, for the first time, the text of the agreement includes a separate chapter on trade and gender equality, whose inclusion was explicitly demanded by the European Parliament and has been embraced by both the European Commission and Chile;
We consider that the conclusion of the negotiations on a new EU-Chile Advanced Framework Agreement represents a major achievement for the EU’s policy towards Latin America, as it accomplishes one of its key goals, namely, modernizing and completing the EU’s network of trade and association agreements and support regional integration of Latin America;
The European Parliament and, by extension, the European Union reiterate their willingness to continue working with the Chilean authorities and the Chilean people to strengthen the ties of cooperation and friendship, which are already excellent.”
Further information
EU-Chile: Trade MEPs welcome today’s agreement
After the conclusion of talks on an updated trade agreement between the EU and Chile, the Chair of the Trade Committee and the Standing Rapporteur for Chile made the following statement.
Bernd Lange (S&D, DE), Chair of the Committee on International Trade (INTA)
“It is good to see that there is a political conclusion on the trade part of the EU-Chile Advance Framework Agreement. I expect the final agreement to be submitted to the European Parliament as soon as possible, so that we can start our scrutiny of the agreement without delay and finalise the consent procedure before the end of the current legislature in mid-2024.
The new agreement contains many positive elements such as a historic stand-alone chapter on gender and trade, which was an explicit demand from the European Parliament. Apart from the values it enshrines and the possibilities it brings, it will contribute to a fairer and more equitable green transition for both partners. The agreement in principle is also a signal that the EU is willing to engage with likeminded partners in pursuit of sustainable and rules-based global trade.
Although I regret that it was not possible to include the EU’s new approach on trade and sustainable development (TSD) in the agreement, I welcome the strong commitment by Chile and the EU to review the agreement as soon as it enters into force in order to align it with the new TSD approach. This will ensure that the commitments on labour rights and environmental standards will be more effectively enforceable.”
Samira Rafaela (Renew Europe, NL), INTA Standing Rapporteur for Chile
“I welcome the conclusion of negotiations between the EU and Chile on the trade part of the EU-Chile Advance Framework Agreement. The conclusion demonstrates the EU can work together with likeminded partners to advance fair, green, and values-based trade. I congratulate the negotiators on the political conclusion.
The modernised trade part will advance many aspects of the EU’s values-based trade agenda in cooperation with Chile. Through the new agreement, both parties will be able to address issues such as climate change, labour rights, gender equality, as well as human and indigenous rights. This was a specific demand from the European Parliament, and I welcome this inclusion. Furthermore, a review clause for trade and sustainable development will create an opportunity for both parties to incorporate the most advanced standards into the agreement in the future.
I am particularly pleased that the Commission listened to the call of the European Parliament for the inclusion of a dedicated chapter on gender and trade, the first ever in an EU trade agreement. Gender equality is one of the core values of the EU, and should be advanced at all stages and through all policies. This chapter, with ambitious commitments, will set a new precedent for gender equality through EU trade relations.”
Background
The EU’s trade relations with Chile are currently governed by the 2002 Association Agreement. However, trade and investment relations have remained below their potential in recent years. Therefore, the EU and Chile started negotiations on the modernisation of the agreement in 2017 in order to bring the agreement in line with state-of-the-art trade and investment standards. Parliament outlined its preferences in a resolution in September 2017. The negotiations on the modernisation of the Association Agreement, now called Advance Framework Agreement, were officially concluded at technical level in October 2021. The agreement in principle was announced on 9 December 2022.
S&Ds welcome political agreement on the modernisation of political and trade partnership between the EU and Chile
The Socialists and Democrats welcome today’s announcement of the political agreement to update the trade part of the EU – Chile Association Agreement. It is a step forward in promoting global sustainable trade with our progressive partners in Latin America.
This is one of the most modern EU agreements, confirming the shared values and the common commitment of the EU and Chile in the fight against climate change. Both sides also re-affirmed their commitment to sustainable development. Apart from trade-related provisions on labour and environment, the agreement will also, for the first time in an EU trade agreement, include specific chapters on gender equality, and trade and sustainable food systems.
The S&D Group will now scrutinise the agreement in details.
Inma Rodríguez-Piñero, the S&D spokeperson on trade and the chair of the European Parliament Chile Joint Parliamentary Committee, said:
“Today we have very good news related to the Latin America! With a recently installed progressive government, Chile is one of our closest partners. The modernised EU-Chile agreement will allow us to strengthen our political and economical ties by fostering trade and investment opportunities. Better access and sustainable investment in critical raw materials such as lithium will directly contribute to advancing our shared green ambitions.
“The S&D Group has long been in favour of this modernisation. A key objective for us is of course promoting sustainable development by including trade-related provisions on labour and environment. We have long stated that the provisions should step up ambitions on climate change and be compatible with objectives of the EU Green Deal. The S&D Group also welcomes the joint commitment to review the TSD (Trade Sustainable Development) chapter.”
Margarida Marques, the S&D shadow rapporteur on this file, added:
“The modernisation of the agreement EU-Chile is of key geopolitical importance and it comes at the right time! We need to boost this EU’s long-standing partnership with Chile, strengthen both partners’ economic resilience and support countries in tackling increasing global challenges.
“It’s crucial for the EU to diversify imports and strengthen security in its supply chains for greater strategic autonomy, while confirming our shared values and the common commitment of the EU and Chile in promoting trade and sustainable development and in the fight against climate change.”