Study on China-Sri Lanka Free Trade Agreement

3.3 China-Chile Free Trade Agreement
Chile is one of the first South American countries to establish trade and diplomatic relations with
China. Since setting up diplomatic relations in 1970, bilateral economic relations between Chile and
China have also grown considerably. 94 China-Chile Free Trade Agreement in goods was signed on
18 th November 2005, which came into effect on 1 st October 2006. 95 It is the first such agreement
that China signed with any Latin American country. 96 The agreement is expected to be fully
implemented by 2015 by which time 97 per cent of the tariff lines will be reduced/eliminated. 97
The FTA has expanded beyond trade in goods to include trade in service. In April 2008, China and
Chile signed the Trade in Services Agreement, which came into force in August 2010. 98 While the
agreement has used a positive list approach for negotiations, the two countries have opened their
service sectors in all four modes 99 to each other’s markets on the basis of their commitments to the
WTO. The two countries are also expected to further strengthen exchange and cooperation in such
areas as SMEs, culture, education, science and technology, and environmental protection. 100
Chile has reaped economic benefits of the FTA soon after its implementation with the expansion of
bilateral trade. Chile’s exports to China which represented x per cent of Chile’s total exports at the
time of signing of the agreement in 2005 increased to 15.5 per cent of Chile's total exports by 2007,
overtaking the US accounted, which was Chile’s largest export market. In 2012, Chile’s exports to
China reached US$18 bn compared to its exports to the US, which was US$9.4 bn. 101 China has been
particularly interested in Chile’s copper industry, which is considered the world's largest copper
mine. As a result, 80 per cent of the country's exported copper in 2012 was channelled to China,
totalling US$14 bn. 102
The Agreement is composed of 14 chapters: Chapter 1: Initial Provisions, Chapter 2: General
Definitions, Chapter 3: National Treatment and Market Access for Goods, Chapter 4: Rules of Origin,
Chapter 5: Procedures Related to Rules of Origin, Chapter 6: Trade Remedies, Chapter 7: Sanitary
and Phytosanitary Measures, Chapter 8: Technical Barriers to Trade, Chapter 9: Transparency,
Chapter 10: Dispute Settlement, Chapter 11: Administration, Chapter 12: Exceptions, Chapter 13:
Cooperation and Chapter 14: Final Provisions. The Agreement has eight annexes which contain the
following: elimination of import customs duties; list of geographical indications; product specific
rules; certificate of origin; competent governmental authorities of Chile; model of certification and
94 Barton, J. R. (2009), “The Impact of China’s Global Expansions on Chile” in The Impact of China’s Global
Economic Expansion on Latin America, Working Paper No. 6, available at:
[http://www.uea.ac.uk/polopoly_fs/1.116928!ChinaChile%20General%20wp6.pdf]
95 Ibid.
96 Taifend, C. (2009), Regional Trade Agreements vs. Multilateral Trading System: A <strong>Study</strong> of Chinese Interests
and Policy Options, NUPI Working Paper 762, available at:[
http://www.nupi.no/content/download/10219/102610/version/5/file/WP-762-Taifeng.pdf]
97 Ibid
98 WTO Secretariat, Factual Presentation of Free Trade Agreement Between Chile and China (Goods and
Services), 2008, available at: [http://rtais.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtaid=8]
99 Cross-border supply (Mode 1), Consumption abroad (Mode 2), Commercial presence (Mode 3) and Presence
of natural persons (Mode 4).
100 Taifeng, C. (2009), “Regional Trade Agreements vs. Multilateral Trading System: A <strong>Study</strong> of Chinese Interests
and Policy Options”, NUPI Working Paper 762, available at:[
http://www.nupi.no/content/download/10219/102610/version/5/file/WP-762-Taifeng.pdf]
101 Ibid.
102 Ibid.
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