MercoPress. South Atlantic News Agency

Chilean Congress approves free trade agreement with China

The Chilean Senate unanimously passed on Wednesday a free trade agreement with China, the first of its kind to be signed by a Latinamerican country. Last July 19 the Lower House supported the agreement with 94 votes and three abstentions.

According to the agreement zero tariffs applies to 92% of Chilean items exported to China and to 50% of Chinese goods imported by Chile.

With the agreement Chile hopes to become the access door for Chinese investment in the region in the fields of mining, energy, infrastructure and agriculture.

According to the Chilean Foreign Affairs Economic Relations Office the free trade agreement "should become the platform for making business and the natural link for trade between Asian and Southern Cone countries".

"This free trade agreement is of specific significance for Chile since it represents a decisive advance in strengthening the country's position in the Asia-Pacific region, a zone of great economic and trade dynamism and development, plus making us the privileged bridge between Asia and South America", said Chile's Foreign Affairs minister Alejandro Foxley.

Since China has a population of 1.3 billion "this free trade agreement makes as the country in the world most integrated in trade affairs", added Foxley.

Once the agreement becomes effective following its publication in the Official Gazette Chile will have access to almost 75% of the world's GDP.

Bilateral trade with China last year reached 6.988 billion US dollars, second only to United States. In the first half of this year, trade totalled 3.6 billion US dollars.

Chile's surplus with China last year was 1.9 billion US dollars.

Some Chilean products will enter China free of tariffs immediately and the rest gradually in a five years period including copper and other minerals; vegetables; fish oil; poultry; hogs; frozen shrimp; fresh peaches and nectarines, and cheese.

Some of the Chinese exports with zero tariffs are machinery, computers, printers, cellular phones, automobiles, DVD and other electronic equipment.

Chile already has trade agreements with the European Union, United States, Canada, Mexico, South Korea and most countries of the region plus a strategic economic agreement with New Zealand, Singapore and Brunei. Other accords in the pipeline include Japan; a partial tariff agreement with India; a free trade agreement with neighbouring Peru to be signed at the end of the month together with the formal re incorporation to the Community of Andean Nations as associate member.