MEPs approved the EU-Chile Advanced Framework Agreement and its complementing deal on trade and investment liberalisation.
The agreements lay down the framework for deeper and broader political and economic cooperation between the like-minded partners on global issues, such as foreign and security matters, sustainable development, environmental protection, climate change, sustainable energy, rule of law and human rights. For the first time in an EU deal, there is a dedicated trade and gender chapter, with both sides committing to eliminate discrimination against women. Under the trade pillar, around 99.9% of EU exports will be tariff-free except for sugar, which is expected to increase EU exports by up to EUR 4.5 billion. The most sensitive agricultural goods are exempted from full liberalisation. These include meat, certain fruits and vegetables and olive oil.
The deal is expected to secure better access to raw materials and clean fuel such as lithium, copper and hydrogen. The agreement also includes binding commitments on social, labour and environmental obligations based on International Labour Organisation standards and the Paris Agreement.
Key aspects of the agreements:
Political cooperation: The agreement provides for stronger political cooperation on foreign and security matters, deepens cooperation on sustainable development, environmental protection, climate change, sustainable energy, rule of law, human rights, women’s rights, responsible business conduct, and labour rights. It opens the door for joint efforts in public health, state modernisation, migration, non-proliferation, money laundering, financing of terrorism and cybercrime.
First-ever gender chapter: The deal includes the EU’s first stand-alone chapter on trade and gender, with both sides committing to eliminating discrimination against women, and a joint commitment not to weaken existing protection levels.
Removal of duties: The agreement will liberalise 96% of the agricultural tariff lines not yet liberalised on Chile’s side and 66% on the EU side. The most sensitive agricultural goods are exempted from full liberalisation including meat, certain fruits and vegetables as well as olive oil. The deal is expected to increase EU exports to Chile by up to €4.5 billion, according to the Commission. In 2022, total EU-Chile trade in goods was €18.5 billion.
Clean energy and raw materials: The deal facilitates non-discriminatory access for EU companies to the Chilean energy markets, including hydrogen. It will allow equal investment opportunities for EU companies and fair access to electricity grids. The deal will also ensure non-discriminatory access to raw materials such as lithium and copper. It will prohibit export and import monopolies and dual pricing, while allow Chile some flexibility to set a lower domestic price. Chile is the EU’s main lithium supplier, providing around 80% of all EU imports, according to Commission data.
Geographical indications: The agreement will protect 216 EU geographical indications (GIs) in Chile, such as Parmigiano Reggiano, Bayerisches Bier, meaning that products will only be allowed to be sold under these names in Chile if they originate from the corresponding region.
Investment Protection: Introducing provisions to protect investments, based on the EU’s Investment Court System (ICS) model. The agreement will replace 15 existing bilateral investment protection treaties between Chile and EU member states.
Sustainability: A comprehensive chapter on Trade and Sustainable Development (TSD) includes binding commitments on social, labour and environmental obligations based on International Labour Organization standards and the Paris Agreement. The parties commit in a joint statement to review the TSD provisions upon the agreements’ entry into force, in order to bring them in line with the most recent standards.
