China, Chile seek to upgrade FTA
China and Chile signed 12 cooperative documents on Tuesday to enhance cooperation in areas including astronomy, finance, education, agriculture and trade during President Xi Jinping’s state visit.
According to the agreements and memoranda of understanding, which were signed with Xi and his Chilean counterpart Michelle Bachelet in witness, the two countries agreed to initiate negotiations on deepening a free trade agreement (FTA) signed in 2005.
The two countries also agreed to jointly establish and operate an astronomical base in Chile.
A Chinese culture center will be set up in Santiago, according to another one of the agreements.
Xi said after the signing ceremony that he had invited President Bachelet to pay a state visit to China next year, as the two countries are moving forward to boost mutual political trust and enhance high-level exchanges.
“Chile is close to China in the countries’ alphabetic rank, and we are true neighbors,” he said.
China has never changed its confidence in the potential for Latin America’s development, Xi said, adding that China firmly supports Latin American countries’ efforts to safeguard regional peace and unity.
Bachelet said that the agreements will bring more practical cooperation to the two countries.
Thanks to the FTA, as much as 97 percent of Chile’s exports to China are free of tariff duties now, she said.
In June 2016, the China Construction Bank, one of China’s largest banking institutions, opened a Santiago branch, which made it the first clearing bank for transactions in Chinese currency in South America.
The Chinese bank will facilitate Chinese finance toward Chilean projects, Bachelet said.
Chile was the first Latin American country to have signed a bilateral FTA with China. In 2014, the bilateral trade volume reached $34.15 billion, almost five-fold the amount after the signing of the agreement.
The 25th-largest trading partner with Chile before the FTA was reached, China is now Chile’s biggest trade partner, buyer and importer.
In 2015, although the overall trade value declined to $31.9 billion because of the global financial crisis, Chile’s exports to China still accounted for more than one-fourth of its total.
Liu Rutao, the economic and commercial counselor of the Chinese Embassy in Chile, highlighted the economic and trade cooperation between the two countries.
A new level of free trade will introduce e-commerce, trade in services, digital customs and more scientific inspection and quarantine into the traditional commodity trade, Liu said.
During the meeting with Bachelet in July 2014, Xi stressed the importance of finance, as he called on both countries to form a new cooperation patterns driven by financial cooperation and supported by trade and investment cooperation.