EU–Chile Advanced Framework Agreement

KEY POINTS

The EU and Chile concluded an association agreement in 2002, which includes a comprehensive free trade agreement that entered into force in 2003 covering EU–Chile trade relations. The modernised legal framework of EU–Chile relations is composed of the following two parallel legal instruments.

• The AFA.
• An interim trade agreement covering the parts of the trade and investment pillar of the AFA that fall into EU exclusive competence (see division of competences). It was concluded through the EU-only ratification process. It entered into force on 1 February 2025 and will expire when the AFA is concluded.

The AFA is a mixed international agreement, with competence shared between the EU and the Member States.

Objectives

The main objectives of the AFA are:

• to strengthen the partnership, reinforce political dialogue and enhance cooperation on issues of mutual interest;
• to foster increased trade and investment between the parties;
• to strengthen the existing cooperation relationship between the parties.

Main features

The agreement is divided into three main parts.

1. Political dialogue and cooperation, which aim to:

• promote bilateral relations;
• strengthen regional cooperation on global issues and challenges;
• strengthen the institutional capabilities of the parties.

The AFA reaffirms commitments on issues such as the rule of law and human rights, extends political dialogue to include international peace, justice and security, commits strongly to sustainable trade practices and emphasises cooperation in areas including:

• health,
• the environment and climate change,
• energy,
• tax,
• education and culture.

The AFA also supports legal cooperation with the aim of tackling issues such as money laundering, terrorist financing and organised crime.

2. Trade and investment

The AFA:

• significantly enhances trade and investment relations between the parties – 99.9 % of EU exports will be tariff-free, potentially increasing EU exports to Chile by up to €4.5 billion;
• facilitates greater access to raw materials and clean fuels essential for the green economy transition, such as lithium, copper, and hydrogen;
• simplifies the provision of services by EU companies in Chile, including in sectors such as:
  • telecommunications,
  • maritime transport,
  • financial services;
• ensures equal treatment for EU and Chilean investors and improves access for EU companies to Chilean government procurement contracts.

3. An institutional framework

A joint council comprising representatives at the ministerial level from each of the parties oversees the fulfilment of the AFA’s objectives and supervises its implementation.