China to ex­pand FTA with Chile

The Pak Banker - - BUSINESS -

China and Chile are in talks to ex­pand the 10-year-old free trade agree­ment be­tween the two sides, to boost trade in agri­cul­tural prod­ucts and de­velop lo­gis­tics and fi­nan­cial ser­vices, Chilean of­fi­cials said on Thurs­day.

Car­los Furche, Chilean Min­is­ter of Agri­cul­ture, said gov­ern­ments from both sides are keen to ac­cel­er­ate talks in ar­eas in­clud­ing air trans­porta­tion, e-com­merce, ser­vices, cus­toms pro­ce­dures and rules of ori­gin, as well as add grapes, pork and wool in the trade list of agri­cul­tural prod­ucts.

Both coun­tries sealed a FTA deal in Novem­ber 2005 that has since made China the South Amer­i­can coun­try's largest trade part­ner. Bi­lat­eral trade amounted to $34.1 bil­lion in 2014, five times greater than be­fore the pact was signed in 2005, data from the Min­istry of Com­merce show. China ex­ports mainly con­struc­tion ma­chin­ery, man­u­fac­tur­ing equip­ment, steel, elec­tron­ics, tex­tiles, gar­ments and house­hold ap­pli­ances to Chile. In ad­di­tion to cop­per, wine, blue­ber­ries and cher­ries, Chile's ex­ports to China also in­clude tim­ber, in­or­ganic chem­i­cals and an­i­mal feed.

Though the price drops in global com­modi­ties mar­kets have af­fected the value of Chile's cop­per ex­ports to China, Furche said ris­ing in­comes and ac­cel­er­at­ing ur­ban­iza­tion are driv­ing de­mand for more di­ver­si­fied di­ets and spurred more con­sump­tion of fruit and meat.

"We can see the up­side in the daily calo­rie in­take of con­sumers in China, es­pe­cially fruits and high-pro­tein foods, in­clud­ing trout, pork and dairy prod­ucts," said An­gel Sar­tori, di­rec­tor of the Agri­cul­tural and Live­stock Ser­vice, the Chilean State body re­spon­si­ble for sup­port­ing the coun­try's agri­cul­ture, forestry and live­stock in­dus­tries.

China is Chile's largest ex­port desti­na­tion for cher­ries and blue­ber­ries in Asia, and con­sumed 80 per­cent of Chile's to­tal cherry out­put in 2015. Ea­ger to com­pete with es­tab­lished ri­vals such as New Zealand in the field of dairy prod­ucts ex­port, Chile also shipped 6,000 dairy cows to Chi­nese mar­kets through mar­itime trans­porta­tion last year.

"Both gov­ern­ments have agreed on the need to in­tro­duce fac­tors that will al­low us to mod­ern­ize and ex­pand trade," said Jorge Heine, Chilean Am­bas­sador to China. China and Chile signed a sup­ple­men­tary agree­ment on in­vest­ment un­der the FTA in Septem­ber 2012, which mapped the scope of the China-Chile free trade area.

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