China, Chile sign free trade agreement

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China, Chile sign free trade agreement

BUSAN - Chinese President Hu Jintao met with his Chilean counterpart Ricardo Lagos on November 18 to attend the signing ceremony of a free trade agreement between the two countries. The meeting took place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting, which kicked off the same day in South Korea's southeastern port city of Busan. Both China and Chile are members of the APEC forum.

Hu said the establishment of a free trade zone between China and Chile, the first between China and a Latin American country, would not only help deepen bilateral political, economic and trade


ties, but also set a good example for South-South cooperation. The two leaders agreed to direct the relevant government departments to implement the agreement as early as possible, so as to benefit the peoples of both countries, said sources from the Chinese delegation.

The free trade agreement was signed by Chinese Commerce Minister Bo Xilai and Chilean Foreign Minister Ignacio Walker. Under the agreement, the two countries will fully launch on July 1, 2006, a tariff reduction process for cargo goods trade.

Under the agreement, many of the existing customs duties between both countries would be immediately abolished, to the benefit of 92% of current Chilean exports to China. For China, 50% of the goods it exports to Chile would have their tariffs immediately reduced.

Chile will enjoy immediate duty free access to China for its exports of copper, other minerals, some agriculture products and some wood products. Other goods such as frozen and fresh salmon, grapes, and apples, will have their tariffs phased out over a 10-year period. Among the Chinese exports expected to benefit from the FTA are machinery, computers, cars, cell phones, DVDs and printers.

The FTA also includes provisions on cooperation on a vast array of areas such as investment and economic promotion; intellectual property rights; cultural products; technology and scientific research; and industrial and mining matters.

The free trade negotiations were launched by the Chinese and Chilean presidents on November 18, 2004, when Hu paid a state visit to the Latin American country. It is the second free trade agreement that China has signed, after one with the Association of Southeast Asian Nations (ASEAN).

During the meeting with Lagos, Hu said that in recent years Sino-Chilean ties had undergone a new phase of accelerated development, with frequent exchanges of high-level visits and enhanced mutual political trust. Chile's recognition of China's full market economy status has promoted a rapid increase in bilateral trade and expanding investment, Hu added. Chile was the first Latin American country to recognize China's full market economy status.

"The two countries are maintaining sound coordination and cooperation in regional and international affairs," said the Chinese president, who arrived here on November 17. China and Chile, both important countries in their respective regions, enjoy great potential and broad prospects in the enhancement of bilateral ties, Hu said.

This year marks the 35th anniversary of the establishment of full diplomatic ties between the two countries. Both sides should grasp the opportunity and enhance their cooperation in political, economic and trade and cultural fields, so as to push forward an all-around cooperative partnership, he added. For his part, Lagos said the Chinese president's visit to Chile last year has consolidated the traditional bilateral friendship, expanded areas of cooperation, and enhanced bilateral ties.

Agreeing that the two countries shared identical views on many major international and regional issues, the two heads of state also pledged to strengthen cooperation in multilateral organizations.

Chile signed a free-trade agreement with the US in July 2003, whose results are generally perceived to have exceeded expectations. Chilean exports to the US grew 32% in 2004, while US exports to Chile rose 35% in that year.