MercoPress. South Atlantic News Agency

Chile pioneers free trade agreement with China

Chilean President Michelle Bachelet signed Monday a free-trade agreement with China to reduce tariffs on 92% of exports over ten years, to the Asian country.

Trade between China and Chile, the world's biggest copper producer, increased to 6.99 billion in 2005, making China Santiago's second-biggest trading partner behind United States revealed the Chilean government. In 2005 Chile posted a 1.8 billion surplus.

The first products to be exempted from duties are Chilean copper and other minerals, vegetables, fish oil, fish, chicken, shrimp, peaches and nectarines, as well as Chinese machinery, televisions, printers, computers and automobiles.

Excluded from the pact are Chilean wheat, wheat flour, rice, iodine, urea and some woods. With immediate effect Chile cuts tariffs for 50% of Chinese imports; five years for 21% and 26% in ten years with tires, textiles and refrigerators excluded.

'This treaty will make it easier for Chilean products to access the Chinese market, strengthening the international position of our country,' Bachelet said. 'We are going to create more jobs. We are going to help our small and medium businesses.'

Chile has been especially active in recent years in signing free trade accords. It has closed deals with the United States, South Korea, Mexico, Canada, the European Union, New Zealand and Singapore, and has advanced talks on deals with Peru, India and Japan.

President Bachelet described the agreement as a landmark trade opportunity for Chile which will generate new "strategic and privileged links" with the fourth world economy.

"This accord is particularly important for Chile since it helps consolidate our position in the Asia-Pacific region", said Foreign Affairs minister Alejandro Foxley.

This is the first free trade agreement of China with a Latinamerican country.