The European Union and Chile are starting a first round of negotiations for a modernized Association Agreement. The objective is to update the 14-year old EU-Chile agreement governing the mutual ties between both sides while bringing the deal’s political and cooperation ambitions and trade provisions in line with the EU’s state-of-the-art agreements. A second round is set to take place early next year. According to Federica Mogherini, the EU’s chief of diplomacy, a modernized deal will open up new areas of cooperation and champion global peace and security, free and open economies and inclusive societies.
Commissioner for Trade, Cecilia Malmström, added that Chile is Europe’s key ally and both sides have boosted mutual trade in the past 15 years. “But in order to address today’s full range of political and global challenges, we need a new, modern agreement in place, since the one from 2003 leaves out many important trade, services and investment issues,” she commented. The new deal aims to be comprehensive and cover all issues including shared values such as sustainable development, support for small and medium-sized companies and efforts against corruption.
The EU is Chile’s second biggest partner accounting for almost 15% of the country’s total trade in 2016. Bilateral trade flows have been stable for the last three years. The EU is also Chile’s biggest foreign investor, accounting for almost a half of all foreign direct investment flows coming into the country. Since the current Association Agreement entered into force in 2003, EU exports to Chile have gone up by around 170% with imports rising by around a half.