WT/REG303/M/1  
 
23 July 2013  
(13-3950) Page: 1/4  
Committee on Regional Trade Agreements 
Sixty-ninth Session    
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
CHILE AND HONDURAS, GOODS AND SERVICES 
NOTE ON THE MEETING OF 3 JULY 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 69th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4130/Rev.1 dated 21 June 2013. 
1.2.  Under Agenda Item B.II of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Chile and Honduras (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 19 July 2008. It had been 
notified to the WTO by the Parties on 28 November 2011 under Article XXIV:7(a) of the 
GATT 1994 and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade area (document WT/REG303/N/1) and under GATS 
Article V:7(a) as an Agreement providing for the liberalization of trade in services within the 
meaning of Article V of the GATS (document S/C/ N/612). The text of the Agreement was available, 
together with its Annexes, on the Parties' official websites. The Factual Presentation on the goods 
and services aspects (document WT/REG303/1 dated 20 March 2013) had been prepared by the Secretariat on its own responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional Trade Agreements (document 
WT/L/671) (TM). Written questions and replies on this Agreement had been distributed in 
document WT/REG303/2 dated 28 June 2013. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to give any general comments and 
then turn to the specifics of the Agreemen t, using the Factual Presentation, document 
WT/REG303/1, to guide the discussion. Then they  would turn to the Questions and Replies 
document. 
1.4.  The representative of Honduras stated he was pleased to present the review of the 
Agreement between Chile and the Central American countries, particularly the bilateral Protocol 
signed by Chile and Honduras on 19 October 1999 and in force since 19 July 2008. Honduras was convinced that improving transparency and the und erstanding of regional trade agreements was a 
systemic interest and would benefit the Members of the WTO. He thanked the Secretariat for its 
work, in particular for preparing the factual presentation and for providing technical support for the process. He also thanked Chile for the assistan ce in the preparation for the review and the 
delegations of Australia, Colombia and the European Union for their questions. 
1.5.  The Agreement included market access,  agriculture, customs administration, trade 
facilitation, sanitary and phytosanitary measures, technical barriers to trade, safeguard measures, 
unfair trade practices, public procurement, in vestment, services and other areas, such as 
transport, telecommunications, and the tempor ary entry of business persons. The Bilateral 
Protocol between the Parties, included annexes containing existing non-conforming measures, future measures and non-discriminatory quantitative restrictions. The Agreement was 
administered by the Free Trade Commission, whose decisions applied to Honduras and Chile only. 
1.6.  Bilateral trade between Chile and Honduras between 2005-2007 had fallen, but had grown 
sharply since 2008. Average exports from Honduras between 2009-2013 had increased by 275%, WT/REG303/M/1 
 
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  as compared to 2005-2008, prior to the entry into force of the Agreement. As a result of tariff 
preferences Honduras had had a trade deficit in  2008 of US$86.86 million, but at the end of 2012, 
4 years after the entry into force of the Agreemen t the trade deficit had fallen to US$50.55 million, 
a reduction of 58.2%. 
1.7.  Foreign direct investment, from Chile to Honduras, in December 2011, totalled US$4 million, 
in particular for airport terminal concessions. Honduras had understood that the efficient implementation of the Agreement would facilitate its administration and the efforts of the Free 
Trade Commission, technical committees and the free trade subcommittee. Honduras continued to 
benefit from preferential tariffs in its relations with Chile, and would continue to make efforts to ensure better access to the Chilean market, as we ll as better benefit sharing and management of 
the Agreement, and to ensure its improved operatio n to the benefit of the productive sectors. In 
conclusion, he stated that Honduras would continue to strengthen its participation in setting rules 
that govern international trade, considering the systemic consequences for the multilateral trading system. Honduras would also continue to respect the principles of international trade on which the 
Agreement with Chile was based. 
1.8.  The representative of Chile thanked the Committee and the Secretariat for the work done in 
preparing the review, as well as colleagues from the Mission of Honduras for their close 
cooperation in preparations for the meeting. She also welcomed the questions from Australia, 
Columbia and the European Union. Economic and trade relations between Chile and Honduras were 
governed by the FTA between Chile and Central Am erica and the related bilateral protocol between 
Chile and Honduras. The basic structure of the Ag reement consisted of two sections. The first is 
composed of 21 chapters across seven parts containing the common rules between Chile and each 
Central American country regarding administration , trade in goods, services and investment. The 
second part was composed of the respective b ilateral protocols between Chile and each of the 
Central American countries, including tariff elimination programmes, specific rules of origin, 
customs valuation and cross-border trade in services.  
1.9.  The Protocol had come into force on 19 July 2008. A Free Trade Commission meets 
periodically, with the participation of all the Central American countries with bilateral protocols, in 
this case, Honduras, to administer the Agreement. On 27 September 2011, the Free Trade Commission between Chile and Honduras met to examine bilateral trade between the Parties. It reached the conclusion that this trade was not very significant and that to make better use of the 
Agreement it was important to publicize and promote it. The Commission also discussed the 
possible advantages of expanding the liberaliza tion programme and implementing commitments 
on geographical indications and the import ance of resolving outstanding SPS issues. 
1.10.  Under the bilateral protocol between Chile and Honduras for Chile's exports 6,000 tariff lines 
were covered by the Agreement and 90.1% of those were liberalized, that is over 5,000 lines entered Honduras duty free. At the end of impl ementation, 97.3% of the products negotiated 
would enter the country duty free. For Honduras' exports, over 7,000 products were covered, of 
which 99.4% had been subject to trade liberalization already and within ten years 99% of Honduras' exports would come into Chile duty free.  
1.11.  Over the past year Chilean trade with Honduras had grown by 13.1%. Since the entry into 
force of the Agreement trade had grown at an annual average rate of 4.2% reaching 
US$50.8 million in 2012. If compared to trade before the entry into force of the Agreement, Chile now exported over 200 new products that had not been exported before 2007. The Parties were 
aware that work needed to continue to ensure  the Agreement was more successful, particularly 
the transposition of specific rules of origin, electronic certification, modernization and updating of the Government Procurement chapter, and registration of trademarks and of processed food 
products. 
1.12.  More specifically there were a number of areas that needed to be improved in the Bilateral 
Protocol with Honduras such as deepening the trade liberalization programme with the elimination of tariffs on products currently subject to exceptions, publicizing the Agreement more energetically 
in both countries and maintaining updated information on it, and moving forward on sanitary and 
phytosanitary issues so as to enable livestock and fish products to be sold more efficiently. Chile was very optimistic about the future of its trade relationship with Honduras and believed in the 
commitment to free and open trade in compliance with rules and standards. The Parties were WT/REG303/M/1 
 
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  confident they would achieve new trade objectives because they had a solid foundation on which 
to work and a good Agreement. 
1.13.  The Chairman opened the floor for general comments. 
1.14.  The European Union welcomed Croatia which had become the EU's 28th member on 
1 July 2013. The EU was proud and happy about the accession, and given the history of the 
country it was a general and a timely reminder of the original objectives and values of the EU, that is, ensuring peace and prosperity on the European  continent. This was a timely reminder for the 
current generations of the Europeans. 
1.15.  The EU took the consideration of Agr eements under the Transparency Mechanism very 
seriously and had submitted questions under all the agenda items on 15 April. However, the Parties responses had only been circulated on 28 June, which provided Members only two working 
days to prepare for the meeting which was not po ssible. The EU therefore reserved the right to 
come back to the Parties regarding the RTAs on the agenda, but also sought clarification on whether there was a time limit before the meeting by when the replies should be circulated. 
1.16.  The Secretariat clarified that the deadline  for the circulation of the Questions and Replies 
document was 3 working days before the meeting. 
1.17.  The representative of Colombia thanked Chile and Honduras for their replies to the 
questions put forward by Colombia 3 months ago. The responses were being studied in the Capital 
and if there were any follow up questions,  they would come back to the Parties. 
1.18.  The representative of the United States thanked the Secretariat and the Parties for the 
materials provided, including the Questions and Answers document and for the presentations at 
the meeting. The United States had no questions at present and just wanted to thank the Parties. 
1.19.  The representative of the European Union thanked the Parties for the comprehensive 
presentation of the Agreement, as well as for the replies. These were still being assessed, in 
particular intellectual property rights issues and therefore the EU reserved the right to come back 
to the Parties with additional comments or question s. The EU was appreciative of the fact that the 
bilateral protocol signed in the Framework of the 1999 Agreement on Free Trade between Chile 
and Central America ensured almost full reciprocal tariff line liberalization for goods at the end of 
the implementation period. Also notable was the significant improvement in the level of 
commitments made by the Parties on services compared to their GATS Commitments.  
1.20.  The Chairman turned to the specific aspe cts of the Agreement in line with the factual 
presentation. With regard to the responses pr ovided by the Parties contained in document 
WT/REG303/2 the representative of Australia thanked the Parties for the responses to their 
questions. Australia was still analysing them and at that stage did not have any follow up 
questions. Australia realized that the TM provid ed for a 3 working day deadline for the circulation 
of responses and there were challenges in processi ng those documents, as some of them had been 
sent before they had been circulated to the Members. He suggested that if there was a way of 
informally circulating them to the Members who had submitted questions, that might be one way 
of facilitating the consideration of those replies by those Members, thereby aiding the work of the 
Committee. 
1.21.  The Chairman encouraged delegations to try to send the responses in good time so that 
both smaller and larger delegations had time to analyse them sending them to their Capitals. 1.22.  The representative of Honduras thanked a ll the delegations who had expressed interest in 
the review. He noted that there was also coordination work between the Missions of Chile and 
Honduras with their respective Capitals and both ha d worked hard to be able to give the responses 
on time. Document WT/REG303/2 quite clearly stated that the responses had been sent by the delegations of Chile and Honduras on 14 June 2013, thereby respecting the time frame established 
for the responses. 
1.23.  The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between Chile and Honduras had allowed the Committee to clarify a number of WT/REG303/M/1 
 
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  questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 
of the Transparency Mechanism. If any delegations wished to ask follow up questions they were invited to forward submissions in writing to the Secretariat by 10 July 2013 and Parties were asked to submit replies in writing by no later than 24 July 2013. In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions, as well as minutes of this meeting would be 
circulated promptly, in all WTO official languages, and would be made available on the WTO website.  
1.24.  The Committee took note of the comments made. 
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