Brussels, 26/04/2002 (Agence Europe) - Chilean and European negotiators concluded, on Friday morning, negotiations for an association and free trade agreement, providing for liberalisation over a 7-year period for industry and 10 years for agriculture. "The agreement is the most ambitious that the EU has ever concluded from the trade point of view. It covers the creation of a free trade area, political dialogue and broad cooperation", declared Pascal Lamy, Trade Commissioner. "After 24 hours of talks, we reached an ambitious agreement that covers goods, services, investment, public procurement, intellectual property and dispute settlement", stressed the Chilean Foreign Minister, Soledad Alvear. The political agreement should be submitted to the Member States then officially confirmed during the EU/Latin America/Caribbean Summit on 17 and 18 May in Madrid. It will then be initialled and submitted for ratification to European and national parliaments. After a final round of negotiations lasting two weeks and a 24-hour marathon, discussion partners agreed that:
In the industrial sector, the EU should immediately abolish customs duties on around 90% of imports from Chile (mainly for textile products) and abolish duties on the remaining 10% after three years. Chile will open its borders after transitional periods of 3, 5 and 7 years (for chemicals, paints and plastics respectively). The asymmetrical nature of liberalisation takes into account the levels of development of the two parties, stressed Commissioner Lamy.
In the agricultural sector, 97-98% of trade will be liberalised over a ten-year period for both parties. Some products that are sensitive for the EU, such as orange juice, pork, sheepmeat and garlic will be liberalised in the context of quotas. Chile, for its part, imposed a quota on olive oil, for example. The EU agreed to make certain concessions requested by Chile in the agri-industrial sector, mainly for biscuits and confectionery, lifting the specific duties within the tariff quota.
In the fisheries sector, negotiators did not conclude an agreement on access to resources, but on mutual access to markets for fish exports, stressed Commissioner Lamy. Chile, however, should amend its legislation on investments, in order to allow European fishing companies to have access to Chilean waters under Chilean flags, and under joint ventures. Liberalisation will be over a ten-year period for 93% of existing trade. The EU excluded two sensitive products from liberalisation: fresh hake and tuna loins. After difficult negotiation, both parties reached an agreement on the rules of origin in the fisheries sector. "This is a very satisfactory agreement for both parties and especially for Chile, as it exports $250 million worth of fishing products to Europe as opposed to $7 million worth of EU exports to Chile", said the Commissioner's spokesperson, Anthony Gooch. Both parties are to publish a statement specifying that the agreement does not change their positions on the definitions of territorial waters at international meetings, a sensitive matter for Chile.
In the wines and spirits sector, the agreement on recognition of designations is "a good agreement that will give Chilean producers good opportunities of access to European markets", Soledad Alvear assured. Chile agreed to withdraw some of its trade marks and to recognise the geographic indications over a 5-year period for its exports and 12 years on its national market. Traditional European expressions such as "Château", "clos" or "classico" should be protected on the Chilean market, said one European negotiator.
In the services sector, "the EU has negotiated a complete agreement for the first time", a negotiator stressed, recalling that, in the case of Mexico, negotiators only agreed to a "stand still" and decided to come back to the issue later. In the financial services sector, the agreement "gives extensive coverage" and "we went a long way on both sides", said one European negotiator. Europeans will have access to pension funds, except public pension funds, guaranteeing retirement pensions for salaried workers: "this is question of great political importance for Chile", said the same source, stressing that "the message is very clear as the agreement states: we respect the functioning of the Chilean social system and we are not launching into an ultra-liberal operation on Chilean pension funds, as others might like us to do". In the telecommunications sector, the EU was able to consolidate its access but not for local networks. "Chilean generosity was on a par with European generosity", remarked one European discussion partner, stressing that some Member States did not agree to make concessions on the free provision of services for natural persons, as Chile requested.
Negotiators also reached agreement on phytosanitary rules and on rules of origin after difficult discussion, especially for sectors such as bicycles, electrical household appliances and nuts.