The new EU-Chile Interim Trade Agreement.

Modernising EU-Chili trade: The Interim Trade Agreement (ITA) and Future Framework (AFA)

The previous Association Agreement, in place since 2005, has been the foundation of the EU-Chile trade relationship. However, with the EU as Chile’s third-largest trade partner, modernising the agreement became essential to address evolving trade dynamics.

To achieve this, two parallel legal frameworks have been developed:

• The Interim Trade Agreement (ITA): A temporary arrangement focusing primarily on trade liberalisation.
• The Advanced Framework Agreement (AFA): A more comprehensive treaty that will address broader issues like sustainability and social justice. Because the AFA requires ratification by all EU member states, it will come into force later. Once the AFA is ratified, the ITA will expire.

Key features of the new EU-Chile Interim Trade Agreement (ITA)

The ITA spans 720 pages and introduces significant updates to facilitate trade, we have listed some of the most important ones below:

• Elimination of tariffs: The agreement removes tariffs up to 99.9% of goods.
• Simplified rules of origin: Exporters and importers can now use self-certification to establish preferential origin. Traditional EUR.1 movement certificates and invoice declarations will no longer be accepted. Self-certification options include:
  1. Single or multiple shipment statements on origin
  2. The importer’s knowledge.
• Transitional claims: Products in transit, temporary storage, warehousing, or free zones must use the new statements on origin from February 1.

Additionally, the previous Approved Exporter (AE) system will be replaced by the Registered Exporter (REX) system. This will be mandatory for consignments exceeding €6,000.

Economic growth and simplified trade rules ahead

A detailed guidance on the new trade agreement is still underway and will be published as soon as possible. ITA is expected to increase EU trade to the country up to 4.5 billion euro and simplifies the establishment of the preferential origin. Two (or more) birds with one stone!