Trade

Chile deal marks UAE’s latest trade agreement

July 30, 2024, 12:10 PM

Workers at the Escondida mine. Copper is one of Chile's largest exports and it trades large amounts of industrial materials with the UAE

UAE and Chile sign Cepa
Non-oil trade could hit $750m
‘Significant potential’ in relationship

A trade deal signed between the UAE and Chile is expected to more than double non-oil bilateral trade and add $73 million to the UAE’s economy by 2031.

Non-oil trade between the two countries is forecast to grow from $305 million in 2023 to $750 million by 2030 as a result of the latest comprehensive economic partnership agreement (Cepa) signed this week.

“Chile offers a range of exciting opportunities for our private sector, particularly in key sectors such as manufacturing, mining, financial services, renewable energy, tourism and agriculture,” said Dr Thani bin Ahmed Al Zeyoudi, minister of state for foreign trade.

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Chile boasts the fourth-largest economy in South America with a GDP of more than $300 billion. It is the world’s second-largest lithium producer and a dominant producer of copper.

Main exports from the UAE to Chile include phones, portable devices, electronic products and industrial materials.

Imports from Chile are mainly made up of potassium nitrate, sodium, wood and various food products.

“We believe there is significant potential in our relationship with the UAE, and Chile offers many opportunities, particularly in areas like food and minerals, which are crucial to our economy,” said Alberto van Klaveren, Chilean minister of foreign affairs.

Chilean president Gabriel Boric is in the UAE this week on a state visit, the first of its kind since the establishment of diplomatic relations between the two countries in 1978.

The deal, the UAE’s second Cepa with a South American country following a one with Colombia in April, will eliminate or reduce customs duties covering 99.5 percent of the value of the UAE’s imports from Chile.

The Cepa will also open market access to services exports, remove unnecessary barriers to trade and encourage investment and joint ventures.

“Liberalisation is particularly significant in the services sector, which is key to attracting investments to both countries,” said Al Zeyoudi.

For the first time, a specialised section in the agreement has been devoted to empowering women in the economic and commercial sectors of both countries. A further chapter is also dedicated to safeguarding supply chains between the UAE and Chile.

Chile is a partner in the Mangrove Alliance for Climate, which looks to scale up and accelerate the conservation and restoration of mangrove ecosystems, and is led by the UAE and Indonesia.

The deal with Chile, which is expected to come into force in six months, is the 11th such agreement signed by the UAE since it launched its Cepa programme in September 2021.

The programme aims to increase the country’s non-oil foreign trade to AED4 trillion. The UAE’s non-oil trade in goods reached an all-time high of $710 billion last year, a 12.6 percent increase from 2022.