Commercial exchange between Chile and China continues to grow, thanks to the FTA

The Asian giant has become the main trading partner of the South American nation so far in 2010.

mine

After four years of the Free Trade Agreement (FTA), commercial trade between Chile and China has increased more than operations with countries without such agreements, said the General Directorate of International Economic Relations (Direcon).

After the agreement, the exports from Chile to China increased on an annual rate which averaged 32.6%, while the exports from the Asian country increased 13.7%, in contrast to the countries without agreements, which diminished to 6.1% and 19.1% respectively.

According to the report “Assessment of the four years of operation of the free trade agreement between Chile and China”, elaborated by the agency which depends of the Ministry of Foreign Relations, currently 95% of the Chilean goods enter China tariff-free.

Among the Chilean products which China declared as tariff-free immediately and for five years – and which have benefited from the FTA – include copper and other minerals, vegetables, fish oils, poultry, fresh cherries, fresh peaches and fresh nectarines, wooden panels, smoked salmon, cheese, canned peaches, chocolate and tomato paste.

Sustained growth

Regarding exports, the report noted that in 2007 the shipments directed to China grew 98.3%, widely exceeding the growth registered in 2006, which reached 14.8%. In 2008 however, shipments to this country fell 2.5% and in 2009 on the other hand, exports to China grew 20.6%, which helped compensate the decline in exports of Chile to the world.

During the first semester of 2010, the exports to the Asian giant incremented in 65%, while the exports of Chile to the world grew 43%, all compared to the previous year.

In turn, imports from China -which recorded an average annual growth of 37.5% in the three years prior to the FTA- were strengthened in 40% in 2007 and 39.2% in 2008, making China the second largest supplier to Chile.

According to figures from the National Customs Service of Chile, between January and August 2010 the trade between the two countries registered US$ 15,272 million, with a positive variation of 55.5% compared to the same period of the previous season, which represented an incidence of 9.9% of total operations, the highest for a country in particular.

A consolidated relationship

In 1970, Chile became the first country in South America to establish diplomatic relations and adopt the principle of “Only one China”, a decisive choice in the establishment and consolidation of a constructive bilateral relationship.

Over the years, other milestones were set, which include being the first Latin American country to support China’s accession to the World Trade Organization (WTO), the first to recognize China as a market economy and the first country in the world to conclude bilateral negotiations of a FTA with the Popular Republic.

In November 2009, and after three months of its publication in Spanish and English, former President Michelle Bachelet was in charge of launching in Shanghai the Chinese version of the official site thisisChile.cl.

Thus, more than half a million articles with general information about the country and the keys to investment, tourism, education and living in Chile were made available to 1,300 million people in China.

This post is also available in Spanish