Trade

Flag of AustraliaRelations between Australia and Chile are strong and based on many shared interests. Both countries are major southern hemisphere mining and agricultural economies, and share an Asia-Pacific trade focus. A free trade agreement, double taxation agreement and social security agreement underpin a growing trade and investment relationship. As members of The Cairns Group, Australia and Chile work to ensure that agricultural trade reform issues are a priority.

Flag of ChileIn 2012, Australia became an observer of the Pacific Alliance (Chile, Colombia, Mexico and Peru) and commenced a senior officials’ dialogue with the Community of Latin American and Caribbean States (CELAC) during Chile’s pro-tempore presidency of both organisations. Within the Asia-Pacific Economic Cooperation Forum (APEC), Australia and Chile cooperate to promote trade and investment liberalisation in the Asia Pacific region. There are many common interests in regional and global issues ranging from the environment, the Antarctic and illegal fishing, through to disarmament and regional security.

Air links between the two countries improved greatly following the introduction of the direct Qantas/Lan Chile codeshare flight in July 2002. This has resulted in an increase in the number of Australian business people and tourists visiting Chile and neighbouring countries.

Chile and Australia share a healthy and growing economic and trade relationship. Chile is Australia’s third-largest trading partner in Latin America, with two-way merchandise trade totalling $1.4 billion in 2013. Exports to Chile totalled $359 million in 2013 comprising coal, crude petroleum, beef and measuring and analysing instruments. Australia’s merchandise imports from Chile totalled $1 billion in 2012, and included copper, zinc ores and concentrates, wood simply worked, ores and concentrates. Chile is a significant services trading partner in Latin America, with trade-in-services totalling $352 million in 2013.

The entry into force in March 2009 of the Australia-Chile Free Trade Agreement (ACI-FTA) eliminated tariffs on 97 per cent of existing merchandise trade. By 2015, tariffs on 100 per cent of existing merchandise trade will be eliminated under the FTA. The FTA also contains provisions with respect to services and investment liberalisation, and guarantees access to government procurement markets. The ACI-FTA was Australia’s fifth free-trade pact and the first with a Latin American country.

The Australia-Chile Double Taxation Agreement (DTA) entered into force in February 2013. The agreement provides certainty for Australian and Chilean businesses through a framework for the taxation of cross-border transactions. It reduces barriers to the cross-border movement of people, capital and technology, primarily through reducing withholding taxes on dividend, interest and royalty payments.

 

Investment

Chile is developing frameworks to encourage more foreign investment and trade, with a view to stable and sustainable economic growth. In this context, Australian expertise and firms are increasing their focus on supporting the policy development framework in these countries across a number of sectors. Chile is the most like-minded country in Latin America for Australians wishing to conduct business and Australia has a significant history of investment in Chile. In 1992 Australia was Chile’s third-largest investor and recent developments in the relationship, such as the Australia-Chile Free Trade Agreement and the Australia-Chile Double Taxation Agreement, have significantly reduced barriers to trade and investment. The Australia Chile Free Trade Agreement has a review process and we would welcome advice of any further obstacles faced by Australian companies when doing business in Chile. Austrade’s Santiago office and the Australia-Chile Chamber of Commerce work on promoting trade and investment links between the two countries.

Mining and associated services remain significant players in the bilateral economic and trade relationship, however, growing income levels within Chile and a strong economic outlook for the country means Australian agribusiness, financial services, energy and water, and education providers will also see significant opportunities in the future.

Australia-Chile trade 2008-14 fact sheet (30kb pdf)
Most text see Footnote 1

 

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Footnotes
1. “Chile country brief” on the Australian Government Department of Foreign Affairs and Trade website [Online] Cited 16th November 2014