Interim Agreement on Trade between the EU and Chile

KEY POINTS

The ITA is a temporary agreement covering only areas under the EU’s exclusive competence (see division of competences). It applies until the more comprehensive Advanced Framework Agreement (AFA) (see summary) enters into force. These two parallel instruments – the ITA and the AFA – modernise the 2002 EU–Chile Association Agreement (see summary), with the ITA replacing its trade-related provisions for as long as it applies.

The ITA sets out specific commitments across several key areas to enhance trade and investment conditions, ensure legal certainty and safeguard the parties’ right to regulate² in the public interest.

Main features

Trade in goods

The ITA aims to reduce or eliminate tariffs, which is expected to result in an increase in trade volumes and expand the range of products exchanged between the EU and Chile. These measures ensure more predictable market access and a stable legal environment for bilateral trade.

• Customs duties are reduced or eliminated in accordance with detailed schedules that define how quickly they are phased out (immediate to seven years).
• A standstill clause prevents either party from introducing new or higher customs duties on goods from the other, except in limited and clearly defined cases.
• Export duties and discriminatory charges are prohibited. Parties may not impose taxes or fees on exported goods that exceed those applied to similar goods sold domestically.
• Only cost-based charges for specific customs services (e.g. inspections, out-of-hours checks) are allowed.
• Trade rules cover a broad range of product categories, including industrial and agricultural goods.

Customs and border procedures

The ITA simplifies customs and border procedures, helping reduce delays and costs:

• customs procedures are streamlined and import/export formalities must be fair, transparent and proportionate;
• all import/export fees must reflect actual service costs and may not be percentage based (ad valorem);
• consular formalities are banned, meaning no consular invoices, stamps or fees are required;
• goods temporarily exported or imported for repair, testing or exhibitions may benefit from duty-free treatment under specified conditions;
• the agreement includes clear definitions of terms like ‘remanufactured goods’, ‘repair’, ‘originating product’ and ‘temporary admission’, ensuring uniform application by customs authorities.

These rules particularly support small and medium-sized enterprises (SMEs) and reduce uncertainty in cross-border trade.

Trade in services

The ITA facilitates access to services markets between the EU and Chile, in accordance with WTO rules, reduces and eliminates restrictions and expands opportunities for EU and Chilean service providers and investors. It guarantees market access and national treatment³ for service suppliers from both parties, ensuring they are not treated less favourably than domestic providers. These commitments apply to sectors such as business, finance, telecommunications, maritime transport and digital services, and cover both cross-border supply and establishment⁴ through a commercial presence, including branches or subsidiaries.

The agreement requires the publication of relevant licensing and regulatory requirements to ensure transparency, while confirming each party’s right to regulate in the public interest, including in areas such as health, environmental protection and consumer rights. Specific rules on digital trade facilitate cross-border data flows, support the use of electronic contracts and enhance consumer protection in online transactions.

Investment and establishment

The agreement facilitates investment flows and supports the establishment of enterprises in each party’s territory. Once established, investors and businesses benefit from non-discriminatory treatment and operate within a stable and transparent legal environment. These conditions are designed to promote long-term cooperation, enterprise growth and innovation. Each party retains the right to regulate to achieve legitimate public policy objectives, such as protecting public health, safety and the environment. Investment rules are closely linked to commitments on services, capital flows and sustainable development.

Capital and payments

The agreement ensures the free movement of capital and current payments related to trade in goods and services, establishment and investment. Transfers such as profits, dividends, interest, royalties and funds used to set up or operate a business must be allowed to move freely, without undue restriction or delay and in a freely convertible currency. To ensure legal certainty, these commitments apply across all transactions covered by the agreement. In exceptional cases, such as serious balance-of-payments or monetary difficulties, either party may adopt temporary, proportionate safeguard measures under defined conditions.

Public procurement

The ITA grants suppliers from both the EU and Chile non-discriminatory access to each other’s public procurement markets. This applies to contracts awarded by central, regional and local authorities, along with selected state-owned companies.

Procurement procedures must be transparent and conducted under fair and non-discriminatory conditions. The agreement requires public notice of tender opportunities, clear deadlines and award criteria, and access to effective and independent review mechanisms. Procurement opportunities must also be published electronically in a timely and accessible manner, facilitating participation by suppliers from both parties.

Intellectual property

The agreement strengthens the protection and enforcement of IP rights, reaffirming both parties’ commitments under the Agreement on Trade-Related Aspects of Intellectual Property Rights and other multilateral treaties administered by the World Intellectual Property Organization. It provides for adequate, effective and non-discriminatory protection of a broad range of IP rights, including:

• trademarks
• geographical indications
• copyright and related rights
• industrial designs
• patents
• trade secrets
• rights over new plant varieties.

It lays down clear rules to combat counterfeiting and piracy, including enforcement measures at the border and in the digital environment. These rules enhance legal certainty for rightholders and users and promote innovation, creativity and fair competition in both markets.

The agreement also protects typical European and Chilean food and drinks products (geographical indications), with the possibility to add others in the future.

Competition rules

The agreement promotes effective competition by requiring both parties to maintain open and competitive markets and to prevent anti-competitive practices such as cartels, abuse of dominance and mergers that distort trade or investment. These rules apply across all areas covered by the agreement, including goods, services, investment and public procurement, while respecting each party’s right to regulate. The rules aim to ensure that liberalised trade takes place under fair, transparent and predictable market conditions.

Sustainable development

The ITA recognises sustainable development as a core objective and commits the EU and Chile to promoting economic growth, social progress and environmental protection in a balanced and integrated manner. It recalls international commitments, including the 2030 Agenda for Sustainable Development and the Paris Agreement, and applies sustainability principles across all areas it covers. Each party retains the right to regulate in the public interest to pursue these objectives, ensuring that trade and investment are consistent with their broader environmental and social commitments.

Dispute settlement

The agreement establishes a binding mechanism to resolve disputes between the parties concerning the interpretation and application of its rules. It ensures fairness, legal certainty and predictability, and includes:

• consultations
• arbitration panels
• compliance reviews
• optional mediation.

It reaffirms the parties’ obligations under the WTO and other relevant international agreements, while ensuring that disputes under this agreement are handled in accordance with its own dedicated procedures.

Implementation and enforcement

A trade council composed of representatives from the EU and Chile oversees the implementation and smooth operation of the agreement and may adopt decisions or recommendations to ensure its effective application.

It is assisted by a trade committee and several sectoral subcommittees or working groups, which support ongoing dialogue and cooperation on specific trade-related matters.

Each party must take the necessary general or specific measures to comply with the ITA. If either party considers that the other has failed to meet its essential obligations – particularly those linked to the future AFA – it may adopt appropriate measures, including temporary suspension, in line with international law.