.  WORLD TRADE  
ORGANIZATION  WT/REG239/M/1 
29 September 2009 
 (09-4540) 
Committee on Regional Trade Agreements 
Fifty-fourth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE TREATY BETWEEN  
CHILE AND PANAMA, GOODS AND SERVICES 
 
Note on the Meeting of 15 September 2009  
 
Chairman:  Mr D. Brauns (Germany) 
  
1. The meeting was convened in document  WTO/AIR/3410, dated 7 August 2009. 
2. Under Agenda Item B.X of its 54
th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) took up cons ideration of the Free Trade Treaty between Chile 
and Panama (hereinafter 'the Treaty' or the 'Agreement'), goods and services.  
3. The Chairman  noted that the Agreement had entere d into force on 7 March 2008 and had 
been notified by the Parties to the WTO on 17 Ap ril 2008 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 agreement (document WT /REG239/N/1) and under GATS Article V:7(a) as 
an Agreement providing for the liberalization of tr ade in services within the meaning of GATS Article 
V (document S/C/N/443).  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/REG239/1, dated 6 July 2009) had been prepared  by the Secretariat on its own responsibility in 
full consultation with the Parties, in accordance w ith paragraph 7(b) of the Transparency Mechanism 
for Regional Trade Agreements (document WT/L/671).  In addition, written questions and replies on 
the Agreement had been recently distributed in document WT/REG239/2, dated 8 September 2009.   
He proposed to organize the consideration of the Ag reement by asking first the Parties and then other 
Members to give any general comments.  The Co mmittee would then turn to the specifics of the 
Agreement using the Factual Presentation to guide th e debate.  He proposed to go through the Factual 
Presentation by section, and then through the questions and replies document.  
4. The representative of Chile
, speaking on behalf of the Parties, thanked the WTO Secretariat 
for having prepared the Factual Presentation, Me mbers for their interest in the Agreement, the 
national authorities of the Parties, and delegations in Geneva for their efforts in having coordinated 
the work for the Factual Presenta tion.  The Agreement had been signed on 27 J une 2006 and had 
entered into force on 7 March 2008.  It had allowe d the Parties to broaden and improve their trade 
relations by basing trade liberalization on broad cove rage including trade in goods and services.  For 
Panama, Chile was an attractive export market ;  'non-traditional' e xports through innovative 
technology, information and capital were benefited th e most.  For Chile, Panama was an entry port, a 
platform for the distribution of its products from the Colon Free Trade Area, and also its second 
largest export market in Central America and the Caribbean.   
 
 WT/REG239/M/1 
Page 2  
 
  5. For trade in goods, upon the entry into force of  the Agreement, Panama and Chile had gained 
immediate duty free access for 93% and nearly 65%, resp ectively, of their tariff lines.  In ten years, 
98% and 93% respectively of Panama and Chile's ta riffs would be covered.  With immediate access 
for 93% of its tariffs upon entry into force, Panama had gained duty free access for all of its exports to 
Chile.  This had directly supported Panama's industries as its main e xports were concentrated in this 
sector.  In 2003, bilateral trade amounted to US$25,8 million, of which 98.7% corresponded to 
exports by Chile and 1.3% by Panama.  In 2008,  trade flows had doubled reaching US$54.6 million, 
of which 95.1% corresponding to exports by Chile  and 4.9% by Panama.  These figures denoted an 
increase in bilateral trade flows by an annual average of 14.4%, stimulated, in particular by an average 
increase of 66.1% in exports by Panama and of 13.4% in exports by Chile.  In 2008, when the 
Agreement came into effect, Chile's main exports to Panama had been: non-alcoholic preparations 
based on extracts of syrups;  concentrated syrups or other forms for the preparation of drinks;  wines;  
medicines;  peach concentrate;  fresh  grapes;  apples;  crushed grains or oats;  and frozen fish fillets.  
Panama’s main exports to Chile had been:  rum a nd sugar brandies;  paper and pulp waste;  iron and 
steel smelting waste;  condiments and seasonings ;  pure alcohol;  and roasted coffee.   
6. The Agreement included basic disciplines on tr ade in services, such as national and MFN 
treatment, and local presence.  However, the Parties could maintain certain reservations to these principles, as included in the Annexes of non-confor ming measures.  For investment, the objectives of 
the Agreement were to ensure transparency and legal certainty for investors of the Parties.  To this 
end, the Convention on the Reciprocal Promotion and Protection of Investment, concluded by the 
Parties in Santiago on 8 November 1996, had been in corporated into the Agreement.  The Convention 
guaranteed that there would not be any discriminati on against investments and investors of the other 
Party in any types of measures.  Investors viol ating the Convention would have access to the 
investment dispute settlement mechanism under the arbitration procedures.  The Agreement also 
contained horizontal measures, such as the dispute settlement mechanism, in case of disputes related 
to any  incompatible measures affecting the prop er functioning of the Agreement or the Parties’ 
commitments.  There were also general rules on tr ansparency ensuring the publication and immediate 
application of all laws, rules, regulations, pr ocedures and administrative settlements of general 
application on any matter related to the Agreement.   The Parties had also negotiated two cooperation 
agreements on labour and environm ent, which had a close connection with trade and an important 
impact on the development of  their commercial relations. 
7. The representative of the United States
 noted a discrepancy between Table III.1 of the Factual 
Presentation, which said that Panama had excluded 2 54 tariff lines, and Table III.2, where it was said 
that Panama had excluded 241 tariff lines from liberalization.  The representative of Chile  took note 
of the observation by the US and said she would co nsult with the capital to provide an answer.  The 
representative of the United States  indicated that a number of questions on trade in services would be 
sent in writing to the WTO Secretariat.  The Chairman  also invited the Parties and the WTO 
Secretariat to consult on any required revisions  to the tables of the Factual Presentation. 
8. The representative of the European Communities (EC)  thanked the Parties for the 
presentation of the Agreement and for their written answ ers.  She noted that Table V.2 of the Factual 
Presentation indicated that some agreements concl uded by the Parties had not been notified to the 
WTO.  In some cases, these agreements had entered into force recently, but for others they had been 
in force for several years and she asked the Par ties to explain why these agreements had not been 
notified yet.  The representative of Chile  said that the agreement between Chile and Colombia had 
been recently notified to the WTO;  whereas the agr eement with Peru, recently entered into force, and 
the agreement with Honduras had not been notified yet.  Several other agreements included in the 
Table had been notified under the Enabling Clause in the framework of the LAIA some time ago. The 
Chairman  informed Members of his intention to ta ke up the issue of notification in future 
consultations.  WT/REG239/M/1 
 Page 3 
 
 
  9. The Chairman  noted that the consideration of the go ods and services aspects of the Free Trade 
Treaty between Chile and Panama had allowed the Committee to clarify a number of questions and 
oral discussion of the Agreement could be conc luded 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 22 September 2009  and the Parties were asked to 
submit replies  in writing by no later than 6 October 2009.   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 la nguages, and would be made available on the 
WTO website. 
10. The Committee took note  of the comments made. 
__________