MercoPress. South Atlantic News Agency

Chile and China sign historical agreement

China and Chile on Friday signed a free trade agreement, the first between China and a Latin American country.

Chilean Foreign Minister Ignacio Walker and Chinese counterpart Li Zhaoxing signed the pact during a ceremony on the sidelines of the Asia-Pacific Economic Cooperation forum in Busan, South Korea. Chinese President Hu Jintao and Chilean President Ricardo Lagos witnessed the signing, shook hands and raised a toast.

"For Chile, this is extremely important. China has become the second partner of Chile in terms of our international trade," Lagos said.

"I am very happy that because of this agreement it has been possible to open up a new market, a large market for Chile, and at the same time to demonstrate that Chile, with a very open economy, is becoming the platform, some sort of a springboard, for investments for many, many foreign firms and from Chile to the rest of Latin America," he said.

"In order to have this springboard working, we have a very good infrastructure, telecommunications system and what's more important, extremely educated human resources," said Lagos, who added that Chile also planned to begin free trade talks with Japan.

In a statement on its Web site, China's commerce ministry said the agreement would lead to the reduction of tariffs, and enhance cooperation in areas such as small- and medium-sized enterprises, education, science and technology, environmental protection, labor and social security, investment promotion, mining and industry.

The ministry described the agreement as "a new historical milestone" that would promote close cooperation between China and other Latin American countries.

The agreement has 14 chapters and 121 articles on topics such as market access, rules of origin, technical barriers to trade, animal and plant quarantine, trade remedy, dispute settlement mechanisms, and related legal and technical problems.

Earlier Friday, Lagos defended bilateral free-trade agreements in a speech to a business executives' meeting at the APEC forum, which aims to achieve free trade among its 21 member economies by 2020.

Lagos said the ultimate goal remains a strong multilateral trading system based on the World Trade Organization, which is due to hold a meeting next month in Hong Kong that will try to break a deadlock in global trade talks.

"The fact that we have so many trade agreements doesn't mean that Chile, as any other country, is not so much involved in what is going to happen next month in Hong Kong," Lagos said.

Hopes of advancing the WTO's trade liberalization goals at the Hong Kong meeting have soured because of disputes over agriculture and other issues, which recent talks in Europe have failed to resolve.

"It is essential that the leaders be able to put all of our political will and to instruct the negotiators that it is necessary to succeed," said Lagos. "If we succeed, then at the world level I'm sure we'll be much closer to reaching an agreement next month in Hong Kong."