The UAE and Chile Aim At Inking CEPA to Boost Bilateral Trade
The UAE and Chile's bilateral ties are expanding rapidly as both countries move closer to signing a Comprehensive Economic Partnership Agreement (CEPA). Come read our blog to learn more about the CEPA.
The bilateral ties between the UAE and Chile are growing exponentially, and the Expo 2020 Dubai has proved to be an excellent launching pad for both the nations to move towards sealing a Comprehensive Economic Partnership Agreement (CEPA). Chile announced an MoU with the Gulf nation during the UAE's National Day celebrations at the Expo, with the goal of starting negotiations on the agreement as soon as possible.
Rodrigo Yanez, Vice Minister of Trade, Chile, said, “the CEPA will be an ambitious milestone in the UAE-Chile relationship, taking it further to a privileged partnership between the two countries in trade.” Once signed, the CEPA will be the UAE's first trade treaty with a Latin American country, and Chile's first in the Middle East and North Africa (MENA) region.
What Do the Numbers Say?
In the last fiscal, the trade between the two countries stood at $260 million. While Chilean exports to the UAE have witnessed a steady growth at an average rate of 6% per annum over the past decade, imports from the Arab country have seen a phenomenal growth at 18.6%. During the last 24 years, the exports of UAE to Chile have increased at an annualized rate of 30.2%, from $165,000 in 1995 to $92.4 million in 2019.
At 12%, the Chilean economy registered the strongest growth rate among all Latin American countries in 2021. As many as 221 Chilean companies exported a total of 116 products and services to the UAE last year. Exports of dairy-based preparations, potassium nitrate, copper cathodes, sawn timber, nuts, sodium nitrate, cellulose, salmon and trout, apples, kiwis, grapes, wine, and cherries were the most important exports. Food accounted for 48% of Chilean shipments to the UAE.
What Does the Agreement Mean?
“The CEPA is a priority for both countries. We will look forward to concluding the agreement that will expand the scope of online commerce, give greater market access, increase investment flows, and offer an opportunity to reduce tariffs and streamline customs procedures at both ends,” said Yanez.
With the UAE focused on reducing its dependence on oil through economic diversification, the CEPA augers well to give the country’s long-term strategic vision a major fillip and help it become one of the top global exporters in the field of green energy.
The CEPA will also include agreements on sanitary and phytosanitary measures, rules of origin, digital economy, SMEs, and intellectual property protection. The agreement will help foster mutually beneficial and comprehensive growth of trade in goods and services, investment, and economic cooperation.
The agreement will also support Chile’s ambitions to increase its presence and networks in the Gulf Cooperation Council (GCC) countries, particularly with the UAE, with which Chile shares many commonalities. Nearly 100 Chilean companies have visited the Expo 2020 Dubai, which has attracted the world’s top business players to the region.
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