Facts at a glance
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Summary
The Governments of Australia and Chile have negotiated a comprehensive free trade agreement. This will be Australia’s fifth free trade pact and our first with a Latin American country.
The agreement will deliver new trade and investment opportunities to Australia and it will be an important milestone in our growing engagement with the wider Latin American market.
The FTA covers trade in goods, services and investment and is truly liberalising with commitments that go beyond both countries’ WTO commitments.
- This is consistent with Australia’s policy that FTAs should support our efforts to promote further multilateral and regional trade liberalisation – it is “WTO plus”.
- It introduces a high quality FTA into the APEC region - a model for other bilateral and regional trade and economic integration efforts among APEC members.
The FTA delivers the most comprehensive outcome on goods in any such agreement negotiated with another agricultural producing country since the Closer Economic Relations Agreement with New Zealand.
Tariffs on all existing merchandise trade – in both directions – will be eliminated by 2015. The vast majority of Australian goods exported into Chile – and Chilean goods exported to Australia - will enter duty free from entry into force of the FTA on 6 March 2009.
Chile is Australia’s 3rd largest trading partner in Latin America:
- It has a population of 16.6 million.
- It has a GDP of US$170 billion (2008).
- It is Latin America’s most stable and transparent commercial environment.
- It buys our coal, civil engineering equipment, specialised machinery and vehicles - Australian merchandise exports to Chile totalled A$341 million in 2008.
- It buys our services exports - valued at A$157 million in 2008.
- It is an investment base for over 70 Australian or Australian-affiliated companies - mainly mining technology and services, gas distribution and power generation.
Two-way trade between Australia and Chile is growing fast – up from A$857 million in 2007 to A$1.4 billion in 2008. Australia is the 4th-largest foreign investor in Chile, with around US$3 billion of direct investment.
The FTA will offer Australian exporters opportunities across the board which will be particularly valuable in services and investment areas, including:
- Mining and energy technology and services, engineering and consulting services, franchising and services, education and training, information technology, tourism and infrastructure.
- Other areas that will benefit include energy (coal, LNG, renewable energy), agriculture (dairy, meat, ovine and bovine genetics, production technologies) and food and beverages including wine.