WT/REG344/M/1
31 October  2014
(14-6329)  Page: 1/3
Committee on Regional Trade Agreements 
Seventy-fourth Session  
 
FREE TRADE AGREEMENT BETWEEN CHILE AND NICARAGUA 
GOODS AND SERVICES 
NOTE ON THE MEETING OF 23 SEPTEMBER 2014 
Chairman: Ambassador Francisco Pirez Gordillo (Uruguay) 
1.1.  The 74th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4338 dated 11 August 2014. 
1.2.  Under Agenda Item B.V of the session, the CRTA considered the Free Trade Agreement 
between Chile and Nicaragua, (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 19 January 2012. It had 
been notified to the WTO by the Parties on 14 June 2013 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/REG344/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/697). 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/REG344/1 dated 30 June 2014) and written questions and replies (document WT/REG344/2 dated 16 September 2014) had been issued. He proposed to organize the consideration of the Agreement by first asking  the Parties and then other Members to give any 
general comments, then he would turn to the specifics of the Agreement, using the Factual 
Presentation to guide the debate. They would then  go through the questions and replies document.  
1.4.  The representative of Nicaragua congratula ted the Chairman on his appointment and wished 
him every success. He reiterated his delegation's commitment to cooperating with him to ensure 
success in fulfilling the Committee's work under his leadership. Nicaragua was grateful to the Committee for the opportunity to consider the FTA between Chile and the countries of 
Central America, in particular the Bilateral Pr otocol between Chile and Nicaragua signed on 
19 October 1999 as an integral part of that Agreement, which had entered into force on 19 October 2012. He thanked the Secretariat for preparing the Factual Presentation in excellent coordination with capital; it clearly reflected the commitments and obligations of the Parties. He 
was grateful to the delegations of the European  Union and Peru for the interest shown in the 
Agreement through their questions. The Agreement provided for the creation and implementation 
of a free trade area between the Parties and sought to stimulate the expansion and diversification 
of trade in goods and services; to promote conditions of fair competition; to eliminate trade 
barriers and facilitate the movement of goods and services; and to promote, protect and increase investment. The FTA under consideration was a reflection of the cordial relations between 
Nicaragua and Chile that rested on a long history of friendship and cooperation with the common 
aim of reducing poverty and enhancing the welfare of their peoples. The relationship had been strengthened by the vitality of foreign trade and by technical cooperation programmes that had contributed to the modernization and social welfare process introduced by Nicaragua's Government 
of Reconciliation and National Unity. In addition to the different areas relating to trade in goods, 
such as market access, rules of origin, customs procedures, safeguards, anti-dumping measures, SPS measures, technical barriers to trade and competition policy, the Agreement also included 
provisions on trade in services, investment and government procurement. WT/REG344/M/1 
 
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  1.5.  Nicaragua believed that the Agreement had be nefited both countries, inter alia by eliminating 
barriers to trade, facilitating cross border movement of goods and services, opening up investment opportunities, creating efficient procedures for its implementation and administration, and establishing a framework for bilateral and re gional cooperation. The Agreement had been 
negotiated in conformity with the provisions of Article V of the GATS and Article XXIV of the GATT. 
With respect to goods, this was the second ag reement negotiated by Nicaragua involving large 
scale opening up of trade, with only about 1.4% of eight-digit tariff lines excluded from trade 
liberalization by Nicaragua, and less than 1% by  Chile. Currently, a little more than 90% of 
bilateral trade entered duty free. In connection with  the provisions relating to trade in goods, the 
Parties had committed themselves, with the exceptions set forth in the Agreement, to adopt or maintain only export and import restrictions which were consistent with Article XI of the 
GATT 1994. Thus, Nicaragua could adopt or maintain export and import restrictions on basic food 
products, used products such as clothing, shoes, tyres, machinery, and vehicles, amongst others.  
1.6.  As far as rules were concerned, both count ries confirmed their rights and obligations set out 
in the WTO Agreements. Although little more than a year had gone by since the entry into force of 
the Bilateral Protocol, trade between Chile an d Nicaragua had been on the rise, totalling 
US$45.9 million in 2013 - a 28.9% increase on 2012. This increase was due to Nicaragua's imports 
from Chile, which were more dynamic than its exports to Chile, to the extent that in 2013 
Nicaragua reported its greatest ever trade deficit with Chile, prompting an urgent analysis of its exportable supply and the export promotion mechanisms in place with respect to Chile. It was important to note that the decrease in exports to  Chile was essentially due to the opening up of 
other markets, such as the European Union in August 2013 and Venezuela, which had absorbed a 
significant share of the country's exportable su pply. The ten main exports to Chile in 2013, in 
order of importance, were rum; cane sugar; raw coffee; baker's wares; articles of apparel and 
clothing, not knitted or crocheted; footwear and worn clothing; waste and scrap of paper for 
recycling; articles of apparel and clothing accesso ries; live plants; and finally, roasted coffee. As 
regards implementation, both Chile and Nicaragua were pursuing efforts to make the most of the 
Agreement by promoting awareness so that the pr oduction and trade sectors could fully enjoy the 
benefits it offered. In conclusion, Nicaragua reiterated its commitment to the multilateral trading system, and would continue to strengthen its role in defining the rules governing international trade. Nicaragua was convinced that this type of agreement should be negotiated and 
implemented in conformity with WTO rules and disci plines and with the aim of promoting economic 
growth to ensure the welfare of all. 
1.7.  The representative of Chile welcomed the Mi nister of Production and Trade of Nicaragua who 
was attending the meeting.  He thanked the Secretariat for the Factual Presentation and the 
European Union and Peru for their interest in the FTA and their advance questions, to which the Parties had replied. He also expressed his gratitude to Nicaragua for its close and fruitful 
cooperation throughout the process. From a region al standpoint, Chile recognized Central America 
as a dynamic and competitive area with open markets and growing investment. This was borne out by the UNCTAD World Investment Report 2014, according to which foreign direct investment in Central America had increased by 64% in 2013. Chile particularly appreciated the openness of the 
Nicaraguan economy, as reflected in the numerous free trade agreements in force. Nicaragua was 
currently in the process of building up a legal framework that would enable it to attract more foreign investment. The countries exchanged information and knowledge on the benefits and 
opportunities of the multilateral trading system  and trade agreements. In this context, Chile 
valued the country's macroeconomic management and the close relations it maintained with multilateral financing institutions. Chile was confident that foreign trade would help to attract 
domestic and foreign investment and contribute to growth, employment, social development, and 
hence poverty reduction. 
1.8.  The FTA between Chile and Central America,  signed on 19 October 1999, had created a free 
trade area between Chile and Costa Rica, El Salvad or, Guatemala, Honduras and Nicaragua. It was 
a so-called "third generation" agreement. Nicaragua was the fifth country to join this FTA, signing 
a Bilateral Protocol. The Agreement had entered into force in October 2012 and had been notified in June 2013. In order to ensure that the FTA was properly implemented, a meeting of the Free 
Trade Commission was held periodically with the participation of all of the countries of the region, 
followed by a meeting of the Free Trade Commission for each Bilateral Protocol with Chile. A meeting of this kind had been held in October of last year. The Bilateral Protocol between 
Chile and Nicaragua in the framework of the FTA with Central America provided for an asymmetric 
tariff elimination programme under which, upon its entry into force, 97.6% of Nicaragua's exports WT/REG344/M/1 
 
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  to Chile were free of duty. In the next seven years that figure was expected to reach 100%. At the 
same time, upon entry into force, 66.8% of Chilean exports to Nicaragua were duty free, and in three stages, that figure would be 98.5% by 20 26. In 2009, the value of trade between the two 
countries stood at a mere US$15 million, a figure which had now more than doubled; but there 
was still plenty of potential to continue developing bilateral trade. This would require further 
efforts to promote trade and open up new opportunities for producers of both countries, taking full advantage of the Agreement. His delegation was fully committed to deepening the ties of 
commercial relationship and technical cooperation. 
1.9.  The representative of the United States  thanked the participants for the excellent and 
informative presentations that had put the Agreement in context.  Both Parties were important and 
valued US FTA partners and he welcomed the consideration of the Agreement.  
1.10.  The representative of the European Union said that both Chile and Nicaragua were dynamic 
trading partners of the EU and his delegation appreciated its cooperation with both of them. He 
thanked the Parties for their swift and comprehensive responses to the EU's questions. 
1.11.  The Chairman said that consideration of the Goods and Services Aspects of the Free Trade 
Agreement between Chile and Nicaragua had allowed the Committee to clarify a number of 
questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 
of the Transparency Mechanism. If any delegation  wished to ask follow up questions they were 
invited to forward submissions in writing to the Secretariat by 30 September 2014 and Parties 
were asked to submit replies in writing by no later than 14 October 2014. In accordance with paragraph 13 of the Transparency Mechanism all wr itten 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.  
1.12.  The Committee took note of the comments made. 
 
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