The UAE and Chile recently signed a Comprehensive Economic Partnership Agreement (Cepa), marking a significant milestone in their bilateral relations. The agreement aims to enhance economic collaboration between the two countries by eliminating or reducing customs duties on 99.5% of the value of the UAE’s imports from Chile. The signing of the deal coincided with an official visit to the UAE by Gabriel Boric, President of Chile, who discussed strengthening cooperation with President Sheikh Mohamed. The agreement is expected to boost non-oil bilateral trade to $750 million by 2030, doubling the figure from 2023.
Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, praised the Cepa as a vital step in the UAE’s foreign trade ambitions and its growing relationship with South America. He highlighted the opportunities for the private sector in sectors such as manufacturing, mining, financial services, renewable energy, tourism, and agriculture. Al Zeyoudi emphasized that the agreement aligns with the UAE’s vision of sustainable growth and collaboration in shaping the economy of the future. Alberto van Klaveren, Chile’s Minister of Foreign Affairs, emphasized that the Cepa is Chile’s first trade agreement with a country in the Middle East, expressing confidence that the liberalization of access to both markets will significantly impact bilateral trade.
Chile, as the fourth-largest economy in South America, offers a diverse economy with a GDP exceeding $300 billion, being the world’s largest copper producer and the second-largest lithium producer. The country also possesses 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. The signing of the UAE-Chile Cepa follows a similar agreement with Colombia earlier this year, as part of the UAE’s strategy to diversify its trade partnerships. The UAE has experienced substantial growth in its non-oil trade, reaching $701 billion in 2023, a 12.6% increase from the previous year.
The Cepa between the UAE and Chile represents a new chapter in their economic relations, creating opportunities for both countries to expand trade and investment ties. The agreement includes provisions to enhance market access for services exports, remove trade barriers, and facilitate investment and joint ventures. With a focus on sustainable growth and economic cooperation, the UAE-Chile Cepa is projected to increase the value of UAE exports by $247 million by 2030. This comprehensive agreement signifies a step towards diversifying the UAE’s trade portfolio and strengthening its presence in South America.
The signing of the UAE-Chile Cepa underscores the importance of international trade for both countries, positioning them for increased economic growth and resilience. By leveraging their complementary strengths and resources, the UAE and Chile can unlock new opportunities for collaboration in key sectors such as renewable energy, tourism, and agriculture. The Cepa’s broad liberalization of market access and the potential for a future Investment Agreement demonstrate a commitment to fostering long-term economic partnerships and mutual prosperity. As the UAE continues to expand its trade agreements globally, the Cepa with Chile offers a strategic gateway to the South American market and reinforces the UAE’s position as a key player in the global economy.
