The UAE and the Republic of Chile signed a Comprehensive Economic Partnership Agreement (CEPA) in Abu Dhabi with the aim of deepening economic collaboration between the two countries.
The deal, the latest in the UAE’s foreign trade program, will create several new opportunities by eliminating or reducing customs duties covering 99.5 percent of the value of the UAE’s imports from Chile. In addition, it will open market access to services exports, remove unnecessary barriers to trade, and facilitate investment and joint ventures.
“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,” stated Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade.
Non-oil bilateral trade boost
With the agreement in place, the UAE and Chile’s non-oil bilateral trade is expected to increase to $750 million by 2030, more than double the $306 million in 2023. The deal will also likely boost the value of UAE exports by $247 million by 2030, according to official UAE estimates.
“Importantly, this CEPA also secures a partner that shares our belief in the importance of sustainable growth, from trade technology to eco-tourism, and who we can work with to shape the economy of tomorrow,” he added.
For his part, Alberto van Klaveren, Chile’s Minister of Foreign Affairs, stated: “This agreement is very relevant for Chile. It is Chile’s first trade agreement with a country in the Middle East and the Gulf in particular.”
Klaveren added that the broad liberalization of access to both markets will substantially impact bilateral trade. Moreover, the agreement facilitates the negotiation of a future investment agreement, important for both parties.
Read: UAE, Chile sign CEPA to boost non-oil trade through tariff cuts and eased barriers
Fourth-largest economy in South America
Notably, Chile is the fourth-largest economy in South America with a GDP of over $300 billion. It is also the world’s largest copper producer and the second-largest lithium producer. In addition, the country boasts rich agriculture, fishery and forestry resources.
The UAE is already an active investor in Chile with key investments in fruit production and export, real estate and transport. Besides, the deal with Chile is the second one the UAE has signed with a South American nation this year following the CEPA with Colombia in April.
The UAE launched the CEPA program in September 2021 as a critical pillar of the UAE’s growth and diversification efforts. Foreign trade remains the cornerstone of the UAE’s economic agenda. In 2023, the UAE’s non-oil trade in goods reached an all-time high of $701 billion, a 12.6 percent increase from 2022 – and a 34.7 percent increase from 2021.
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