Yesterday, the EU, the EU Member States and Chile signed the Advanced Framework Agreement in Brussels. It replaces the Association Agreement which was adopted in 2002. The Advanced Framework Agreement puts the political and economic relations between the EU and Chile on a new footing.

Federal Minister Habeck said: "In these geopolitically difficult times, it is particularly important that we strengthen our relations with those partner countries with whom we share values. Chile is a reliable partner in South America and a forward-looking market for renewable energy and the production of green hydrogen. The Advanced Framework Agreement will help companies from Germany to diversify their supply chains and grasp new business opportunities."

The Advanced Framework Agreement consists of

  1. a political part, which aims to intensify cooperation on numerous issues and in which the shared values, including human rights and the rule of law, in the cooperation between the EU and Chile are anchored,
  2. a part on investment protection to secure a stable regulatory environment for investors in the long term, and
  3. a part on trade, including the exemption of the large majority of exports from the EU from tariffs and the facilitation of the mutual provision of services.

The trade part of the Agreement also guarantees easier, non-discriminatory access of companies from the EU to raw materials that are urgently needed for the transformation of the economy.

It has been agreed to establish a Joint Council with Chile, which can take decisions on the application of the Agreement. As regards the investment protection part of the Advanced Framework Agreement, the German Federal Government advocates in accordance with its trade agenda that this Council will adopt legally binding rules of interpretation. The aim is to strengthen the political scope for action, for example in the field of climate action, and to prevent the abusive application of investment protection provisions – like in the free trade agreement with Canada (CETA).

Once the legal texts have been exhaustively examined by the parties, the European Commission will propose to the Member States that the complete Advanced Framework Agreement be ratified.

Interim Trade Agreement

In addition to the Advanced Framework Agreement, a separate Interim Trade Agreement between the EU and Chile, which replicates the major provisions of the trade part of the Advanced Framework Agreement (with the exception of the investment protection provisions), was signed yesterday. As the European Commission has the sole competence for the EU trade policy, this Interim Trade Agreement does not need to be ratified by the Member States.

The Interim Trade Agreement will come into force once the European Parliament and the Parliament of Chile approve of the Agreement. This means that companies in Germany and in the EU as well as in Chile will be able to benefit from the trade-policy advantages of the Advanced Framework Agreement in the near future.