Brazil, Chile Set to Sign Free Trade Deal by Year-end
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Brazil, Chile Set to Sign Free Trade Deal by Year-end

By IndraStra Global News Team

Brazil, Chile Set to Sign Free Trade Deal by Year-end

On October 23, 2018, Michel Arsalanian Neto, Director of the Regional Economic Integration Department of Brazil’s Foreign Ministry, said that a free-trade deal between Brazil and Chile, which could be signed next month.

"The idea is to have a single instrument with all non-tariff norms governing Brazil–Chile relations," Arslanian Neto said. "This deal comes as part of a very intense dynamic of commercial agreements in the region, which sped up recent times," said.

Also, he mentioned the innovative aspects to be taken up by Brazil for the first time in a bilateral trade pact which will include 17 non-tariff-related issues such as e-commerce commitments, good regulatory practices, transparency in anti-corruption efforts, gender and environment, in addition to labor-related topics. 

The lifting of taxes in bilateral trade had been agreed upon previously by Chile and MERCOSUR, the bloc comprising Argentina, Brazil, Paraguay, and Uruguay. Other agreements recently signed by the two countries, including the Government Procurement Protocol and the Investments in Financial Institutions Protocol, will also be added to the free trade agreement. Also, Brazil and Chile will not charge international roaming fees for mobile calls and data in each other’s countries, it said.

The deal may serve as a reference for future negotiations between Mercosur member countries and Canada and the Pacific Alliance.

“The new agreement will help fuel trade and investment between Brazil and Chile in both goods and services. It will also be a vector for building rapport between the Mercosur and the Pacific Alliance and to enhance regional integration,” the Brazilian Foreign Ministry said in a statement.

The talks were concluded on October 19 in Santiago. Before it becomes effective, the agreement must be ratified by the Parliament in both countries.

Current Trade Between the Two Countries

Chile is Brazil’s main commercial partner in South America. In 2017, bilateral trade exchange added up to US$ 8.5 billion, up 22 percent from the previous year.

Brazil is Chile’s biggest trade partner in Latin America and the country where most of Chile’s investment is headed—a total of US$ 31 billion.

With reporting by Empresa Brasil de Comunicação, and Reuters