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Events > UK-Chile Association Agreement
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UK-Chile Association Agreement

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Chile is an important and growing partner for the UK with the potential to increase and diversify our trade and investment relationship. Following the UK’s departure from the European Union (EU), the countries have agreed to enhance this relationship through the UK-Chile Association Agreement. The agreement took effect on 1st January 2021, when the existing EU agreement ceased to apply to the UK.

The treaty covers key points such as:

  • Certificates and Declarations of Origin

  • Preferential Tariff Rates on Goods

  • Sanitary and Phytosanitary Certification

  • Cumulation of Origin 

  • Goods in Transit in an EU Country

The UK and Chile have an annual Trade Dialogue that examines ways to boost bilateral trade. The work is led by Ministers and, at the 2021 Association Council, they agreed to a modernisation exercise to review elements of the UK-Chile Association Agreement. You may find treaty documents and more relevant information about Trade with Chile at the UK-Chile Association Agreement page at GOV.UK.

 

Facts and Figures on UK-Chile Trade

  • Chile is the UK’s third largest export market in Latin America. A pro-business sentiment, a vast network of Free Trade Agreements, and a strong drive for innovative solutions make the country a great first stop for British companies that are new to the region (Source: Comtrade, 2021).

  • Total trade in goods and services between the UK and Chile was worth £1.5 billion in 2021, an increase of 5.4% or £77 million with respect to 2020. Chile is the UK’s 66th largest export market, and with new investment there’s plenty of opportunity for this to grow (ONS, 2022). 

  •  Since liberalisation started in 2003, trade in products and services between the two countries has increased by an average of 9% annually (Source: Press release DIT, 2019).

  • The modernisation roadmap agreed at the recent Association Council will further enhance the thriving trading relationship between Chile and the United Kingdom. Both countries committed to continue to remove barriers to increase trade and further reduce red tape, in order to help business better utilise our existing trade agreement (Source: Press release DIT, 2021.

  • Commitments on preferential tariffs for both the UK and Chile have been transitioned without changes, remaining the same as in the EU Agreement (Source: Parliamentary Report, 2019).

  • Tariff-rate quotas (TRQs) negotiated under the UK-Chile FTA allow a certain volume of British cheese, fish, hake, and salmon to enter the Chilean market at preferential tariffs (Source: Parliamentary Report, 2019).

 

Key sectors

  • The Biopharmaceutical Competitiveness and Investment Attractiveness Index put Chile as the top ranking nation in Latin America, signaling promising opportunities for the Life Sciences industry (Source: Biopharmaceutical Competitiveness and Investment Attractiveness Index, 2019).

  • On Sustainable Infrastructure, Chile is embarking on major infrastructure programmes, allocating USD 3.4bn in public investment for infrastructure for the period 2020-2022, with a 30% focus on sustainable development. These projects are focused on improving transportation networks and healthcare infrastructure. Some of the key deliverables of the programmes include: improving roads, ports, and airports (over USD 4.7bn); improving integration of cities and urban transportation; developing public transportation systems & electromobility (over USD 7.1bn); and lastly, improving hospital capacity (over USD 1.6bn). (Source: Ministry of Public Works, 2020).

  • Chile is the #1 world destination for Renewable Energy Investment, mainly in solar and onshore wind. With more than USD 16bn of Clean Energy Investment in the last 8 years. Additionally, Chile has a strong policy framework and Net Zero commitments, aiming to generate 70% of the energy matrix from renewable sources by 2030 and to eliminate carbon generation by 2040 (Source: Ministry of Energy, 2021; Bloomberg´s Climatescope, 2020; InvestChile 2020).

  • On Green Hydrogen, Chile is targeted to become the world's most competitive producer of Green Hydrogen by 2030, having the lowest marginal cost of production of the world (USD 1.00/kg H2 by 2030). There are more than 60 private green hydrogen projects under development, valuated at more than USD 15bn, some starting production in August 2022, providing significant opportunities for UK companies (Source: McKinsey, 2021; Ministry of Energy, 2021).

  • In the Food & Drink sector, Chile is a leading producer and exporter of a wide range of high-value crops, which can be produced throughout the year due to favourable conditions every season. The industry is expected to grow by 35% by 2030. Chile is an attractive destination for UK companies which offer increased efficiency and technological solutions to make the most of this expected growth (Source: Britcham Online guide on doing business in Chile, 2022).

  • Export Health Certificates agreed with Chile offer great opportunities for UK Agriculture & Livestock exporters with a total import market worth approximately £1.4bn. There is huge potential for exporters of ovine genetic material as the UK is the only country in Europe which is authorised to export those goods to Chile. In March 2022, the Chile pork market was opened to UK industry for the first time. Other recently opened markets include cheese and pet foods (Source: CREST/DEFRA, 2022.  Full list of Export Health Certificates agreed with Chile, DEFRA 2022).

  •  
    In May 2022, the British Chilean Chamber of Commerce in partnership with the British Embassy in Chile launched the “Doing Business in Chile Guide”. This guide supports trade between UK and Chile by explaining the process that UK companies face when doing business in Chile – both when investing and when trading (Source: Britcham Online guide on doing business in Chile, 2022).

Businesses looking for support in trading overseas may wish to use the services and tools available at GOV.UK assisting importers and exporters:

Trade with the UK          Check How to Export Goods 

 

More information

The Department for International Trade (DIT) has overseas staff based in British Embassies and Consulates across Latin America and the Caribbean (LatAC). Our role is to increase the UK’s prosperity and to champion free trade globally.

If you would like more information on how this agreement may apply to your business and sector, contact us in case you are:

Interested in Chile          Interested in the UK

 

Published 21/09.

Last updated 22/08.