Australia-Chile FTA To Come Into Effect In March

by Mary Swire, Tax-News.com, Hong Kong

11 February 2009

It has been announced that the Australia-Chile Free Trade Agreement (FTA) will officially come into force on March 6, 2009.

The news was announced by Australia's Minister for Trade, Simon Crean, on February 11, who explained that the implementation of the FTA will be particularly beneficial to Australian exporters.

Speaking of the new relationship the FTA will create between Australia and Chile, Crean explained:

"I am proud of this agreement. This is the first Free Trade Agreement to be concluded by the Rudd government and, with this announcement, will be the first to enter into force. It is an agreement of the highest quality."

"It is the most comprehensive outcome on goods in any FTA that Australia has negotiated with another agricultural producing country since the Closer Economic Relations agreement with New Zealand signed by the Labor government in 1983."

"At a time of significant downturn in the global economic outlook facing this country, this FTA demonstrates our commitment to expanding trade opportunities, and to our broader efforts to drive economic growth through international trade."

The agreement will immediately eliminate Chile's tariffs on almost 92% of tariff lines covering 97% of goods currently traded between the two countries. This includes Australian coal, meat, wine, key dairy exports and all other industrial goods of interest to Australia. Tariffs on all existing merchandise trade will be eliminated by 2015.

"As Australia is one of the largest sources of foreign direct investment in Chile, it is notable that the agreement includes access to and strong protections for Australian investment in Chile, including a right for investors to protect their investments directly through investor-state dispute settlement," Crean went on to remark.

Additionally, the agreement includes commitments by Chile to maintain an open and non-discriminatory market for Australian services, including in important sectors for Australia such as education, professional services, mining, engineering, management consulting and financial services.

Chile is Australia's third largest trading partner in Latin America and there are approximately 120 Australian companies actively trading with Chile.

"The Rudd government will continue to fight for trade reform in Australia's overseas markets, to create new opportunities for Australian exporters and more jobs for Australians," Crean concluded.

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