Chile and European Union address challenges and prospects facing future modernization of the Association Agreement.
In order to kick-start the process of modernization of the Chile-EU Association Agreement (signed in 2002), and to report on the new challenges for both negotiating parties, the head of the Delegation of the EU in Chile, Stella Zervoudaki, and the Director General of International Economic Relations (DiRECON), Paulina Nazal, led the first conversation between the two partners. The event brought together more than 150 attendees, including government officials, parliamentarians and civil society organizations.
Both sides are working on a document that addresses the issues that should contemplate an eventual updating and modernization of the Association Agreement.
"Chile is important for European Union and is a natural partner in Latin America. We have the same vision on open markets and free trade as powerful tools to promote sustainable development and investment, create jobs and foster innovation", said Ambassador Zervoudaki.
According to the Chilean authorities, in addition to updating existing disciplines, new areas should be incorporated "such as Energy and sustainable development, labor, environmental, Corporate Social Responsibility and Gender. Although more than 90% of bilateral trade is already liberalized, it is time to expand it, for example in dairy foods, cereals, rice and olive oil."
Chile and the EU have agreed to strengthen cooperation in tourism, promotion of SMEs and corporate social responsibility. They have an important Agreement on Scientific and Technological Cooperation and have concluded the first agreement on the mutual recognition of organic products. In addition, they have programs for young Chilean students, such as the Erasmus + program, which facilitates the creation of links between people through exchange, essential elements for a better understanding and a stronger world. But challenges remain, for example, in innovation.
Since the entry into force of the trade pillar of the Agreement in 2003, bilateral trade has doubled to € 15.9 billion in 2016. The EU is Chile's third largest trade partner with 15% of total trade. The EU is the largest foreign investor in Chile, with 33% of the stock. The flow of investment from the EU to Chile almost doubled in the first 10 years of the agreement. Chile receives 36% of the 58.8 billion dollars invested by the EU in renewable energy in Latin America.
The EU and Chile also agree on the relevance of SMEs for job creation and innovation. Trade reflects this: 40% of Chilean companies exporting to the EU are SMEs. A major challenge is to further increase exports and the number of European SMEs exporting and investing in Chile.