A cargo ship in the port of Arica, northern Chile, in August 2021. John Moore (Getty Images)
Chile officially joined the Trans-Pacific Partnership Agreement (CPTPP) this Tuesday, the ambitious free trade network that connects 11 countries on both shores of the Pacific, also known as TPP11.
After almost five years of processing, the Government of Gabriel Boric has announced the entry into force of the controversial trade pact that his coalition, the Broad Front, rejected in Congress.
With the promulgation of the treaty, around 1,200 products will be subject to tax relief.
"In some cases it will benefit our exports to the countries that are members of the treaty and in other cases we will be able to import some products at a lower cost," explained the Minister of Economy, Mario Marcel, this afternoon.
The South American country is the tenth economy to become a full member of the agreement promoted in 2018, under the second government of Michelle Bachelet.
The other countries that are part of the fourth largest integration treaty in the world are: Australia, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and Brunei Darussalam.
It only remains for the latter to ratify it.
Together, they represent 12.2% of the world economy.
Other countries have shown interest in joining or have formally applied.
The most advanced is the United Kingdom, which is working to become the first European member of the bloc to join this year and, as reported by the British Administration, "negotiations are progressing well."
Representatives of the countries that make up the CPTPP, during a meeting in Tokyo, in January 2019. Eugene Hoshiko (AP)
With the entry into force of the CPTPP, there will be reductions in around 3,000 tariff lines: 1,228 subheadings or products, of which 48% belong to manufacturing, 33% to agriculture and 15% to fishing and aquaculture.
In 2022, 14% of Chilean exports went to the rest of the member countries of the treaty.
The 10 countries represent about 34% of the stock of foreign investment in Chile by 2021 and 31% of Chilean investments abroad.
This Monday night was the first time that Chile participated as a full member in a virtual meeting of senior officials of the CPTPP, coordinated by New Zealand as the host country, according to the Chilean Foreign Ministry.
During the meeting, the strategic axes of the treaty for this year were discussed, such as the green economy, electronic commerce and the integration of new members.
The Undersecretary of International Economic Relations, José Miguel Ahumada, contrary to certain aspects of the agreement, said Tuesday that the department he leads will evaluate the impact of the treaty on the export matrix, "emphasizing the analysis of products with greater technological content, environmental issues, gender and trade and the inclusion of small and medium-sized enterprises”.
Ahumada has insisted that the agreement produces “marginal” trade gains and has worked with the other member countries to exclude Chile from the investor-state dispute resolution mechanisms incorporated into the text.
Last Friday, Chile and New Zealand signed a bilateral letter (
side letter
, in English) which renders the mechanism ineffective.
Mexico and Malaysia have also committed to do the same.
“The Undersecretariat for International Economic Relations (Subrei) will continue to work together with its commercial partners within the CPTPP and in other bilateral and multilateral spaces to substantially reform the dispute resolution mechanisms between investors and States, in order to protect the autonomy strategy of the State”, said the Subrei in a statement on Tuesday.
In 2019, the Chamber of Deputies approved Chile's entry into the treaty with 77 votes in favor and 68 against.
The right en bloc and a few members of the Christian Democrats, the Radical Party and the Socialist Party gave the bill the green light to continue processing in the Senate.
The bulk of left-wing parliamentarians, including then-deputy Gabriel Boric, rejected it, arguing possible negative effects on Chilean interests in labor, environmental, and agricultural matters.
The Senate approved the entry in October of last year with 27 votes in favor and 10 against.
"Many at that time questioned the government's commitment to official ratification, the deposit of the instrument and its entry into force," said Minister Marcel this afternoon, alluding to the criticisms made for the slowness of ratification. .
“Shortly after the beginning of the year, we already have the entry into force of this treaty, which is very important.
Many of the fears, apprehensions and mistrust of that time are largely belied by the reality of what is happening”, he added.
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