The EU and Chile commit to a forward-looking association
Association agreement
On 18 November 2002, Chile was the first country in South America to sign an Association Agreement with the EU.
It was a decisive moment that strengthened the ties between two historically and culturally like-minded partners. It enhanced political dialogue and boosted trade.
Since its entry into force, bilateral trade has diversified significantly and more than doubled in volume. In Latin America, the EU is Chile's third trading partner (13% of total), while Chile is the EU's second most-important trading partner.
One of the Agreement´s greatest impacts has been to propel the European Union into becoming the most important foreign investor in Chile, with 33% of its total. This represents a doubling of investment.
Next generation agreement
On 13 December 2023, Chile became the first country in the region to sign a new generation agreement with the EU, the Advanced Framework Agreement (AFA).
Building on the success of the existing partnership, the new Agreement upgrades the framework of our bilateral relationship. It deepens our political dialogue, cooperation, and economic relationship, while responding to new challenges and priorities such as climate action or digitalisation.
In particular, the Agreement sets new and higher standards, making it one of the most comprehensive and progressive bilateral agreements signed by the EU to date.
With articles dedicated to democratic principles, human rights, sustainable development and gender equality, amongst others, the agreement puts shared values at the core of EU-Chile relations.
It also promises to deepen and diversify EU-Chile trade and investment relations further, for instance, through the elimination of over 99% of export tariffs. It will reinforce investment protection provisions, ensuring that smaller businesses can benefit from the cutting of red tape, from equal treatment of Chilean and EU companies and better access to public procurement processes.
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Launch of the Team Europe Initiative for the Development of Renewable hydrogen in the presence of President Von der Leyen and President Boric, Santiago, June 14 2023
The AFA reflects our shared ambition to build greener economies, and will facilitate further cooperation in areas we were already intensely working on together.
Collaboration on the promotion of clean sources of energy is a clear example. In June 2023, two new projects for the development of renewable hydrogen in Chile were launched – the Team Europe Initiative for the Development of Renewable Hydrogen and the Global Gateway RH2 Financing Platform – with an initial combined budget of 225 million Euros.
Clean hydrogen
These projects will help to boost investment opportunities for Chilean and European companies in the field of clean hydrogen. They support technical, technological, financial and business cooperation and contribute to our joint objective to fully decarbonise our economies by 2050.
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Visit by the EU High Representative Josep Borrell to the Cerro Dominador solar plant financed by the EU, April 30 2022
Better access to and sustainable investment in critical raw materials such as lithium will also help to advance our shared ambitions of sustainable energy and digital transitions.
On 18 July 2023, the EU and Chile signed a Memorandum of Understanding (MoU) on establishing a partnership on sustainable raw materials’ value chains, which aims to develop a competitive industry for processing raw materials. This will create good quality employment opportunities with sustainable and inclusive economic growth, with mutual benefits.
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Visit by the Executive Vice-President of the European Commission, Margrethe Vestager,Vto the lithium salt flat managed by Albemarle company, 2022
Science and innovation
The new agreement brings a renewed focus on science, technology, research and innovation, areas with great potential for further cooperation. The new BELLA submarine fibre optic cable connecting Europe with Latin America has brought unprecedented opportunities for scientific and business exchanges.
The announcement this year that Chile will host the Copernicus Regional Center for Latin America and the Caribbean, taking advantage of the enhanced connectivity provided by the BELLA cable, will mean Chile will assume a leading role in monitoring the effects of climate change in the region.
Astronomical exploration
Work will also continue in the field of astronomical exploration through state of the art research facilities managed by the European Space Observatory.
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Visit by the EU High Representative Josep Borrell of the Paranal Observatory of the European Space Observatory, May 1 2022
The signing of this new Agreement is the culmination of a year of intense strengthening of bilateral relations between Chile and the EU. The process has been marked by numerous high-level visits to the country, including that of the President of the European Commission Ursula von der Leyen in June 2023.
The EU-Chile relationship owes much to history, but above all, it has a bright future. This landmark agreement provides the foundation for closer cooperation on key priorities and will foster the connection between people, businesses and civil society from the EU and Chile for decades to come.
If you want to know more about the EU-Chile Advanced Framework Agreement, follow the link to this video:
