China and Chile's upgraded FTA (Free Trade Agreement) will help open more opportunities for foreign investors as well as improve bilateral relations between the two countries.
According to China Briefing, the upgrade took effect on March 1 and will see tariff exempted items and products increase to 98 percent. China's Ministry of Commerce said it will gradually eliminate tariffs on select wood products from Chile within the span of three years.
The Chinese market will open 20 sectors to investors from Chile including services in the entertainment and legal sects. The move is also part of the Asian country's pledge of opening new opportunities for foreign investments.
Chile, for its part in the agreement, will lift tariffs on Chinese imports including home appliances, clothing, sugar products, and textiles. The country will also open over 20 sectors to Chinese investors including industries related to construction, express delivery, and transportation.
Last year, bilateral trade between the two countries increased by 24 percent, accounting for a total of $42.8 billion. The amount is reportedly one-third of Chile's total foreign trade. China, on the other hand, saw significant exports to its counterpart in machinery and electronics, light industrial products, and textiles.
Before the first FTA was signed in 2005, bilateral trade between the parties was only at $7 billion. Over the years, the figures ballooned and are expected to increase further under the upgraded version of the agreement.
Experts attributed to trade increase to China's demand for copper as its construction sector continues to grow by the year. Chile has also been dependent on the Chinese auto industry since the country does not have a transport market as massive as that of China.
As for tourism, both parties have boosted traveling with Chile's implementation of visa-free travels for Chinese citizens while China's traveling community increased its use of Chilean travel companies for securing trips to Antarctica.
Referring to the enhanced FTA, the Chinese Ministry of Commerce said, "The protocol will further explore the potential of China-Chile bilateral economic and trade cooperation, and enhance the level of trade liberalization and facilitation between two countries," China Daily reported.
With the spring season just around the bend, it is expected that China will increase its demand for Chilean agricultural products including meat and fruits. Vice President of the China Center for International Economic Exchanges, Wei Jianguo said this is another opportunity to further up the countries' cooperation.
Signed originally in 2005, the China-Chile FTA is the first deal that China struck with a nation in the Latin American region. E-commerce and service trade ventures are expected to see a boost under the enhanced agreement.
