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Chile is moving forward and signing a new trade agreement with the UK




One of the main problems behind Brexit, both in Chile and among the rest of the European Union’s trading partners, is what will happen to trade with the United Kingdom, which is still governed by agreements with the bloc of nations. Old Continent.

In this context, Chile decided to move ahead and begin work on a new agreement to be concluded this Wednesday, with the idea of ​​protecting the export and import processes so that they suffer the least possible setbacks after the UK’s withdrawal from the EU.

In recent months, both sides have held seven trade dialogues, the purpose of which was to translate the Association Agreement between Chile and the EU into a bilateral agreement with the United Kingdom, guaranteeing conditions and preferential rules that currently govern bilateral trade.

From the Ministry of Foreign Affairs, it is indicated that after technical meetings and ongoing work on top-level relations, Chile and the United Kingdom agreed on the terms of a bilateral agreement, which, in general, provides for the transfer of the Association Agreement between Chile and the Union. The European Union is bilateral between Chile and the United Kingdom.
The new agreement repeats all the provisions of the Agreement with the European Union, but with the appropriate changes to make it operational at the bilateral level.

In this sense, the new agreement retains the same tariff preferences for Chilean goods. Similarly, the existence of preferential quotas for access to national products that are considered symbolic, such as beef, poultry, pork, sheep and goat meat, is maintained.

Thus, the signing of this new text will take place this Wednesday at 15:00 in the office building with the headings of the Minister of Foreign Affairs of Chile Roberto Ampuero and the Ambassador of the United Kingdom to our country, Jamie Bowden.

Faced with the implementation of this agreement, Ampuero said that “as the Ministry of Foreign Affairs, we had foreseen and reached a rather positive solution before the scenario could turn into a difficult situation. This underlines the central focus of our office: the work we are developing brings concrete benefits to Chileans. In this case, it means protecting bilateral trade, Chilean exporters and, above all, protecting jobs. ”

With this agreement, Chile is becoming one of the first countries in the world and the first in the region, which, after Brexit, agreed on the terms of a bilateral treaty with the UK.

Possible scenarios

From the Foreign Ministry explained that the date of entry into force of the agreement provide for different scenarios, depending on what happens with Brexit.

If the United Kingdom decides to leave the European Union on March 29 without consent and without a period of its implementation, the agreement will enter into force at the end of its parliamentary procedure, avoiding, as far as possible, a gap in the commercial exchange, "they support.

On the other hand, if the United Kingdom succeeds in approving an agreement on leaving the EU and a period for its implementation is established, the agreement will enter into force at the end of this period, which in principle will be January 1, 2021.

If, by the beginning of March, they note, there is still no clarity as to how the United Kingdom will withdraw from the European Union, Chile should enter the Agreement into Congress for processing. The idea is to avoid a gap in the preferential exchange between Chile and the United Kingdom.

improvements

The new commercial agreement, which will be signed on Thursday, also contains a number of tools for expanding and modernizing its coverage in the future.

First, an amendment to the evolutionary clause concerning agricultural goods was agreed, which states that for two years and then every two years, the parties will consider the situation with tariff liberalization for products of this type.

In the same part, the general evolutionary reservation was changed in parts to ensure that up to two years of entry into force, and every two years, how to improve their business relationships by improving the legal instrument and its conditions will be discussed.
In addition, the Ministry of Foreign Affairs reported that it included a political declaration highlighting the progress in establishing these new bilateral relations and that the intention of both parties is to advance in deepening these relations, even in the transition period for the UK to leave the EU.

According to Direcon, the commercial exchange in 2018 reached 1,360 million US dollars, which is 19% more than in the previous year. Exports from Chile to the UK grew by 17% ($ 685 million) in 2018, mainly due to fruits, bottled wine and food (without salmon). In particular, food is the main national export commodity to the United Kingdom, and mining does not direct supplies to this economy.

In Europe, the United Kingdom is currently the sixth destination country for national exports.

Meanwhile, imports in the same year increased by 21% (US $ 675 million) compared with 2017.


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