After a long process, Chile and the EU give political closure and sign the modernization of the Association Agreement

After several months of waiting and as announced by President Gabriel Boric last Tuesday, Chile and the European Union signed the modernization of the Association Agreement signed for the first time between both parties in 2002 and in force since 2003, thus closing political to the process.

The signing took place in Brussels, Belgium, in the presence of the Minister of Foreign Affairs, Antonia Urrejola, and the Undersecretary of International Economic Relations, José Miguel Ahumada; the Vice President of the European Commission and High Representative of the EU for Foreign Affairs and Security Policy, Josep Borrell and the Executive Vice President of the European Commission for the Euro and Social Dialogue and Trade Commissioner, Valdis Dombrovskis.

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Specifically, modernization will increase the percentage of products covered by some tariff reduction by the EU, from the current 94.7% to 99.6% of tariff lines. Likewise, 99.9% of what is imported from the block will be free of tariffs. This would increase EU exports to Chile by up to €4.5 billion, according to estimates by the European Commission.

Foreign Minister Urrejola commented that the modernization of the agreement “reflects a State policy”, since the process has included the last three government administrations in the country. Among the novelties of the now “Advanced Framework Agreement”, is the allocation of specific chapters to issues that were not considered before, such as gender equality, innovation, climate change and sustainable development.

Along these lines, Urrejola stated that some of the benefits “will begin to be seen regardless of the ratification of the agreement” and that these same “in relation to political dialogue have always been very important with the EU and the fact of having reached this agreement today, I think it will strengthen this political dialogue”.

Regarding the trade of goods, with the ratification of the modernization of the agreement, the documentation and data requirements for the import, export and transit of merchandise will be minimized. In addition, customs procedures and the use of information technologies and electronic payment are simplified.

European Union Executive Vice President and Trade Commissioner Valdis Dombrovskis said: “This agreement will create new opportunities to support economic growth on both sides, underpinned by much stronger environmental and climate protection, labor rights, gender equality and food systems. Our new trade rules will facilitate investment and offer greater opportunities for SMEs on both sides.”

For his part, the high representative and vice-president, Josep Borrell, declared that “the new agreement places common values ​​such as human rights, sustainability and the fight against climate change at the center of the association”.

“This historic agreement also lays the foundations for closer cooperation on justice, peace and security, and will foster connections between people, businesses and civil society in the EU and Chile for decades to come,” he added.

Now, the teams from both countries will start the legal review and subsequent translation of texts into all the official languages ​​of the EU. In this way, the modernized agreement would be signed during the second half of 2023. From the Foreign Ministry, this would ideally be at the Celac-EU Summit of Heads of State, in November of next year.

After this, the treaty must be approved by the European Parliament, the parliaments of the countries and the Chilean Congress. The Commission recalled that the agreement will be made up of two parallel legal instruments: the Advanced Framework agreement, which includes a political and cooperation pillar and the trade and investment pillar – subject to ratification by the States – and an interim free trade agreement, which will cover only the commercial and investment parts, which will expire when the modernized framework agreement enters into force.

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