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New trade agreement between Chile and Argentina enters into force

Fresh Plaza | 9 May 2019

New trade agreement between Chile and Argentina enters into force

The Free Trade Agreement between Chile and Argentina entered into force on Wednesday, May 1. This agreement will complement the Economic Complementation Agreement between both countries (ECA 35), which has been in force for more than 20 years and already permitted the exchange of products free of customs duties.

The new agreement includes modern topics and rules, relevant to international trade in matters of Investment, Services, Public Procurement, Telecommunications, and Electronic Commerce. It also improves and complements the provisions on technical, sanitary and phytosanitary norms, as well as the existing customs procedures. It also incorporates new chapters regarding topics such as Environment, Labor, Gender, SMEs, Cooperation, and Competition Policy.

"Argentina is a great commercial partner for Chile, the sixth worldwide. The entry into force of this bilateral agreement will amplify the benefits of free trade in the region, with new proposals and modern legal frameworks, that will directly benefit national exporters, especially our SMEs," said the Director General of the Direcon, Rodrigo Yañez.

Benefits for SMEs

One of the chapters that will directly benefit SMEs is the chapter on public purchases, the first that Argentina subscribes in this area, which will allow Chilean companies to participate in tenders held in Argentina, a market that is three times larger than the Chilean market.

The e-commerce chapter will promote this type of commercial exchange through provisions that seek to facilitate trade electronically, and improve the conditions under which Chilean digital service and product providers operate in the Argentine market.

The chapter on SMEs contains commitments to promote business, creating a committee of SMEs, to assist and implement development programs for the benefit of this group of companies. It should be noted that 34% of Chilean companies that export to Argentina are SMEs. Moreover, the commitment to eliminate roaming in tele-communications will facilitate and substantially lower the costs of mobile calls. Finally, the agreement’s modern and balanced legal framework for the development and protection of investments will give greater agility and certainty to commercial operators and investors.

Bilateral Trading

In 2018, Chile’s trade with Argentina amounted to US $ 4.201 billion, i.e. 7.9% more than in 2017.

 source: Fresh Plaza