Chile-UAE Economic Partnership Agreement Takes Effect, Opening New trade Corridors
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A landmark trade agreement between Chile and the United Arab Emirates (UAE) officially went into effect this Monday, promising to significantly boost commercial ties and investment opportunities between the two nations. The Complete Economic Partnership Agreement (CEPA), first signed in July 2024, marks Chile’s inaugural free trade agreement with a Middle Eastern country.
The agreement’s implementation was highlighted by the undersecretariat of International Economic Relations (Subrei), which emphasized the UAE’s growing importance as Chile’s second-largest trading partner in the Middle East. Bilateral trade between the two countries reached $232 million in 2024,a figure expected to rise substantially in the coming years.
Expanding Market Access for Chilean Exports
The CEPA immediately establishes improved access conditions for approximately 97% of Chilean products exported to the UAE. This percentage is slated to increase to 98% within three years, providing Chilean businesses with a competitive edge in the lucrative Middle Eastern market.
Conversely,the agreement offers significant benefits to the UAE,granting access to 99% of products imported into Chile.A phased tariff reduction schedule will further expand this access to 99.5% over the next three stages.
A Multifaceted Agreement Beyond Tariffs
This association agreement is not solely focused on tariff reductions.It also addresses critical areas such as women empowerment, global value chains, support for small and medium-sized businesses, rules of origin, public procurement, and investment promotion. This holistic approach aims to foster a more inclusive and sustainable trade relationship.
“The entry into force of the agreement seeks to diversify our international ties and open new growth opportunities for chile,” stated a senior official. The official further emphasized that the CEPA “expands export possibilities, strengthens the attraction of investment and contributes to a more diverse and sustainable economic insertion, for the benefit of Chileans.”
Presidential Visit Paved the Way for agreement
The CEPA was signed on july 29, 2024, during a historic visit by Chilean President Gabriel Boric to the UAE – the first by a Chilean head of state. The two-day trip, accompanied by a large delegation from the political, private, and business sectors, focused on attracting investment from the UAE, a region known for its substantial sovereign wealth funds.
. A graphic illustrating the flow of key exports between Chile and the UAE would be beneficial here.
The agreement builds upon existing collaborations, including a Double Taxation Agreement already in force, and anticipates a forthcoming agreement dedicated to investment promotion. This layered approach underscores Chile’s commitment to strengthening its economic partnership with the UAE and solidifying its position in the Middle Eastern market.
The CEPA represents a notable step towards diversifying Chile’s international economic relationships and unlocking new avenues for growth and prosperity.
Why: The CEPA was established to diversify Chile’s international economic relationships and unlock new avenues for growth and prosperity, notably with a key Middle Eastern market.
Who: The agreement involves Chile and the United Arab Emirates (UAE), with key players including the Undersecretariat of International Economic Relations (Subrei) and Chilean President Gabriel Boric.
What: The CEPA is a comprehensive free trade agreement that reduces tariffs and expands market access for products from both countries, covering areas beyond tariffs like women empowerment
