EU has provided an update on trade negotiations for a modernized FTA with Chile
Who? The European Commission
When? 9 June 2020
Why does it matter?
The EU and Chile concluded an Association Agreement in 2002, which includes a comprehensive Free Trade Agreement (FTA) that entered into force in February 2003 covering EU-Chile trade relations.
The EU is Chile's third-largest trade partner, comprising 12% of Chile's total trade in 2019.
The EU is Chile's third-largest import supplier and Chile's third-largest export market, after China and the US. In 2019 EU imports from Chile were mineral products (23%), vegetable products (21%) and base metals (17%). EU exports to Chile in 2019 were machinery (31%) transport equipment (26%), and chemical products (11%).
Free Trade Agreement offers important opportunities to increase trade volumes with the country or countries in question.
The EU has three types of FTA agreements with third countries:
Customs Unions, to eliminate customs duties in bilateral trade, and; establish a joint customs tariff for foreign importers.
Association Agreements, Stabilisation Agreements, (Deep and Comprehensive) Free Trade Agreements and Economic Partnership Agreements. They remove or reduce customs tariffs in bilateral trade.
Partnership and Cooperation Agreements, which provide a general framework for bilateral economic relations, and; leave customs tariffs as they are.
Often, preferential trade covers many areas, in particular, the opportunity to lower custom's duty. Qualifying products that meet the rules of origin and other rules, as detailed in the Agreement, can benefit from preferential duty rates.
What can I do?
Identify the products you currently trade with each jurisdiction and assess the possible duty savings opportunity.
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