Chile Seeks Freer Trade With Eastern Economies

by Mike Godfrey, Tax-News.com, Washington

20 August 2012

Chile and India will begin negotiations towards a comprehensive free trade pact by the end of the year, Chile's Foreign Minister Alfredo Moreno has announced, as part of larger plans to expand upon opportunities available to Chilean exporters in Asia.

Presently, concessionary trade arrangements between Chile and India are provided for in a partial trade agreement concluded in 2007, which reduces tariffs on a number of goods. Moreno said a new, more ambitious agreement would cover services as well as goods, and further cut tariff and non-tariff barriers to bilateral trade and investment. It is anticipated that Chile will also ease stringent visa requirements for Indian business persons, which are said to inhibit investment levels.

The two nations are also to sign a convention for the avoidance of double taxation. The agreement will lay a critical legal framework to boost economic activity levels by providing investors with legal certainty that income from cross-border activity will not be taxed twice. Under the current 2007 agreement, bilateral trade has increased markedly in recent years from USD1.9bn in 2009/10 to USD2.6bn in 2011/12.

Chile is said to also be close to finalizing a free trade agreement with Thailand, and has voiced interest in pursuing a similar pact to boost ties with Indonesia.

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