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Chile copper delves deeper into Asia with India deal

Reuters India

Chile copper delves deeper into Asia with India deal

8 March 2006

SANTIAGO, Chile (Reuters) - Chile, the world’s top copper producer, signed a partial trade deal with India on Wednesday, obtaining easier access for the red metal to Asia, where more copper is used than anywhere else.

Asia is fueling intense copper demand, with China by far the biggest consumer in the region and India viewed as a potentially huge consumer as its demand surges.

In the Partial Access Agreement signed on Wednesday, Chile reduced import tariffs on 296 Indian products, while India cut tariffs on 266 Chilean exports, including copper, certain forestry products and salmon.

"On the global economic map, India is a strategic business bridge into the Far East and I think that for Chile this agreement means the challenge of boosting commerce to this market and seeking new opportunities with one of the great Asian economies," Carlos Furche, director general for Chile international trade relations, said in a news release.

Chile is aggressively pursuing new international trade avenues, particularly into Asia. Late last year it signed a free trade agreement with China, its top customer for copper.

And last month, Chile’s government miner Codelco, the world’s biggest copper producer, completed a 15-year supply deal with China’s giant state trading house, Minmetals.

The Asia Copper Club, an alliance of smelters from China, Japan, India and South Korea, said at a meeting in February that Asia needed to develop its natural resources more as demand for copper was expected to grow amid rising consumption in China and India.

India will host the next meeting of the Asia Copper Club, which was launched at a meeting in China in February 2005.

"We believe this accord with India establishes the basis to promote the expansion of trade and generates the conditions and mechanisms to deepen economic-trade ties in the future," Furche said.

Chile is also in trade talks with Japan, the only major world economy with which it does not have a free trade agreement.