EU, Chile Negotiators Begin Laying Groundwork to Update Trade Deal

25 January 2018

Officials from the European Union and Chile concluded a weeklong round of negotiations in Santiago, Chile, last Friday, aiming to set the stage for updating their trade accord, which dates back over 15 years. Officials say that the 15-19 January meetings allowed for the first in-depth discussion between the two negotiating teams since talks were launched in 2017.

The two sides formally kicked off this effort in November, confirming that the changes are necessary to bring their trade and investment relationship up to speed with the current climate. They have also noted the benefits that the existing agreement has already brought to their bilateral ties. The EU-Chile trade deal is part of an Association Agreement that has been in place since 2002.

“In the economic pillar [of the Association Agreement], this accord opened the doors for us to one of the world’s major economies, and today the bloc is our third largest trading partner and primary source of investment,” said Paulina Nazal, director-general of DIRECON, Chile’s General Directorate of International Economic Relations within the country’s ministry of foreign affairs.

The EU-Chile negotiations come during a particularly intense period for both sides, with the EU looking to ink new or updated trade deals with countries and country blocs such as Australia, Mexico, New Zealand, and the four-country Mercosur coalition. Meanwhile, Chile is a member of the Pacific Alliance coalition, which is working to ink trade accords with countries outside their grouping as “associate members,” among other initiatives. (See Bridges Weekly, 18 January 2018 and 2 November 2017)

The start of talks also comes as Chile prepares for Sebastián Piñera to take office as president, following a landslide win during elections held in December. The center-right politician and business executive will be succeeding Michelle Bachelet, the centre-left official and former head of UN Women who is wrapping up her second, non-consecutive term as president.

Piñera will assume the presidency in March for a four-year term, and had previously served in the role from 2010-2014, after Bachelet’s first term.

Building on “shared interests”

Among the topics for discussion last week were gender, services, technical barriers to trade, dispute settlement, energy, customs and trade facilitation, and intellectual property rights, according to a summary issued by DIRECON after the event. 

“It was a very substantive, profound negotiating round, where both sides put forward texts and expectations. This will allow us to move forward with concrete proposals to reach a satisfactory result in the medium-term,” said Chile’s chief negotiator Pablo Urria in a statement on 19 January.

Trade officials from both sides have welcomed the potential for incorporating various topics related to sustainability and inclusiveness that were not captured in the original accord and are common priorities.

“Chile and the European Union have shared interests in many areas – such as human rights, sustainable development, and gender equality – and this agreement will reflect these shared values and will allow us to face new challenges in the future,” said EU Trade Commissioner Cecilia Malmström in a blog post published by Chilean newspaper El Mercurio before this latest negotiating round.

“Following Chile’s example in its trade agreement with Canada, this will be the first time that the European Union includes in an agreement specific provisions aimed at promoting the key role of women in trade,” the EU trade chief continued.

Chile and Canada announced last year that they had concluded talks for incorporating a gender chapter in their existing trade deal. The EU, Canada, and Chile have been publicly advocating for greater consideration of gender issues in relation to trade, being among the many WTO members to endorse a declaration to this effect at the WTO’s Eleventh Ministerial Conference in Buenos Aires, Argentina, last year. (See Bridges Weekly, 22 June 2017, and Bridges Daily Update, 13 December 2017)

EU negotiating directives

Meanwhile, the European Council released the negotiating directives that it has endorsed for the EU-Chile trade talks, outlining what it would like the European Commission to advocate for in these discussions. The 36-page document covers a host of topics, including investment, gender, small and medium-sized enterprises (SMEs), government procurement, and agriculture, among others.

For example, the EU is looking to include its investment court system (ICS), which it has advocated for in its more recent trade and investment agreements, and would like to see “a commitment from the parties to cooperate on future steps on the path towards the creation of a multilateral investment court.”

The negotiating directives also call for a chapter on small and medium-sized enterprises (SMEs), focusing largely on access to information, as well as the above-mentioned chapter on trade and gender. On trade and sustainable development, the bloc is looking at labour and environmental rules, along with provisions that support the UN’s Agenda 2030 for Sustainable Development.

The EU would also like to see improved “mutual access” in the field of government procurement, covering tenders at all levels of government, and bringing the existing government procurement rules in line with the revised WTO Government Procurement Agreement (GPA).

The EU is also looking to have the possibility of covering more geographical indications in the intellectual property chapter than what is included in the current agreement, along with increased market access in goods and services and “new or enhanced regulatory disciplines” relative to the WTO’s General Agreement on Trade in Services (GATS). On goods, the EU is also calling for “full tariff liberalisation,” with “special treatment” in sensitive areas, as well as updating and clarifying the current accord’s provisions on rules of origin.

ICTSD reporting.

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