The Chile-Brazil Free Trade Agreement: What You Need to Know
The Chile-Brazil Free Trade Agreement (FTA) was signed on November 21, 2018, and came into force on June 3, 2020. This agreement allows for the reduction or elimination of tariffs on goods traded between the two countries, thus promoting increased economic and trade relations.
As two of the largest economies in Latin America, Chile and Brazil have long-standing trade relations. The FTA aims to deepen these ties and provide a framework for mutual economic benefits. Under the agreement, Chile and Brazil have agreed to gradually eliminate tariffs on 98% of their respective exports within the next ten years.
In addition to promoting trade, the FTA also addresses issues such as intellectual property rights, e-commerce, and labor and environmental standards. Both countries have committed to upholding international labor and environmental standards, and ensuring that their domestic laws are in line with these standards.
The FTA is expected to have a positive impact on both countries’ economies. According to Chile’s Ministry of Foreign Affairs, the agreement is projected to increase Chilean exports to Brazil by 25% and Brazilian exports to Chile by 20% by 2030. This is expected to benefit various industries such as agriculture, mining, and manufacturing, among others.
The FTA also represents a significant step towards regional integration in Latin America. Although there are already several trade agreements between countries in the region, the Chile-Brazil FTA is the first between two of the largest economies in South America. It is hoped that this agreement will lead to further trade and economic integration within the region.
It is worth noting that the FTA has not been without controversy. Some stakeholders have expressed concern about the potential impact on certain domestic industries, particularly in Brazil. Critics argue that the agreement may lead to an influx of cheaper Chilean goods, which could threaten the competitiveness of Brazilian industries. However, proponents of the agreement argue that the benefits of increased trade outweigh these concerns.
In summary, the Chile-Brazil Free Trade Agreement represents a significant step towards increased economic and trade relations between these two countries. As the agreement takes effect over the coming years, it will be interesting to see how it impacts various industries and whether it leads to further regional integration in Latin America.