Australia and Chile share a strong bilateral relationship which was formally established on the 27th December 1945 at the San Francisco Conference. Both economies are major mining and agricultural producers, with a strong focus in the Asia-Pacific region.
The two countries are members of the Cairns Group (to ensure that agricultural trade reform issues are a priority in the WTO Doha Round) and APEC (where they cooperate to promote trade and investment liberalisation in the Asia-Pacific region). The two countries have many other shared interests including: environment, regional security, Antarctica issues, etc.
There have been several important developments in the bilateral relationship during the last decade including: stronger air links between the two countries that followed from the introduction of the direct Qantas/LanChile code share flights, increasing the numbers of visitors to the respective countries and neighbour countries; the introduction of an international scholarship program (Sistema Bicentenario Becas Chile) where Australia and New Zealand were selected by Chile as a pilot for the first tranche of the program; and of course the Australia-Chile Free Trade Agreement (FTA). Download the full FTA document in English or Spanish here.
The Australia-Chile FTA was signed by the Governments of Australia and Chile at Parliament House in Canberra on the 30th July 2008 and entered into force on the 6th March 2009. It was Australia’s first FTA with a Latin American country. The agreement, based on the World Trade Organisation rules and the multilateral trading system, has eliminated export duties of around 97% of goods exported in both directions.
Key FTA Benefits
- Reductions in taxes related to cross-border payments, such as dividends, interest and royalties
- Guarantee of both sides’ high standards of intellectual property protection for patents, trademarks, geographical indications and copyright
- Special rules to preserve the application of existing tax arrangements between companies under the provisions of Chilean Legislation (this is particularly important for Australian companies with investments in Chile)
- Secures both sides’ liberal services regime.
- Locks in both sides’ liberal investment regime.
- Covers trade in goods and services as well as investment and a range of trade related issues such as intellectual property and government procurement.
Further Benefits
- Tariffs on all existing merchandise trade will be eliminated by 2015.
- The transparency in the tax system will increase as taxpayers have access to bank information.
- Higher level of certainty for business and higher visibility.
- Further liberalisation of services and investment.
Australia and Chile’s Market Features
- Stable markets, both politically and economically.
- Both economies are open for international trade and investments.
- Both countries possess extensive FTA networks.
- Australia is the third largest trading partner in Latin America and fifth largest foreign investor.
- Chile is one of the region’s main foreign investors.
- Australia’s largest merchandise exports to Chile are: coal, iron ore, gold and petroleum products (90% of Australian investment is concentrated in the mining industry), whereas Chile’s exports to Australia are mainly copper and related products.