WORLD TRADE  
ORGANIZATION  WT/REG230/M/1 
24 October 2008 
 
 (08-5183) 
Committee on Regional Trade Agreements 
Fiftieth Session  
 
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
CHILE AND CHINA, GOODS 
 
Note on the Meeting of 18-19 September 2008  
 
Chairman:  Mr. D. Brauns (Germany) 
 
 
1. The meeting was convened in document WTO/ AIR/3202 and Corrigendum 2, dated 5 June 
and 9 July 2008, respectively. 
2. Under Agenda Item B.IV of its 50th Session, the Committee on Regional Trade Agreements 
(CRTA or the Committee) took up consideration of  the Free Trade Agreement (FTA) between Chile 
and China (hereinafter referred to as 'the Agreement'), goods. 
3. The Chairman  said that the Agreement had been notified by the Parties to the WTO on 20 June 
2007 under Article XXIV:7(a) of the GATT 1994 and the Understanding on the Interpretation of 
Article XXIV of GATT 1994 as an Agreement es tablishing a free-trade area (document 
WT/REG230/N/1).  The text of the Agreement was available, together with its Annexes, on the 
Parties' official websites.  The Factual Presen tation on the goods aspects (document WT/REG230/1, 
dated 23 April 2008) had been prepared by th e 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).  In addition, written questions and replies on the 
Agreement had been recently distributed in do cument WT/REG230/2, dated 7 July 2008.  He 
proposed to organize the consideration of the Agre ement 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, doc ument WT/REG230/1, to guide the debate. 
4. The representative of China  noted that China had started building its FTA network in 2003.  
FTAs had become a new tool and a starting point of  China's policy of openness and a platform to 
establish win-win relations with other economies after its accession to the WTO in 2001.  China 
believed FTAs supplemented the mu ltilateral trading system and had a role in promoting trade 
liberalization and development.  There were two major reasons fo r China negotiating an FTA with 
Chile.  Firstly, she mentioned the importance and comp lementary nature of bilateral trade.  Over the 
years, Chile had been an important trading partner in Latin America, and bilateral trade and economic 
cooperation had maintained sound development mo mentum.  Bilateral trade in goods had been 
growing rapidly.  At the same time, the industria l structure and imports and exports of China and 
Chile were highly complementary.  Secondly, the Parties had good long standing relations.  Since 
1970 when China and Chile had established diplom atic relations, the two countries had always 
maintained sound and stable bila teral relations.  They had jointl y announced the launching of the 
negotiation in November 2004, the Agreement had been signed in November 2005 and had entered 
into force in October 2006. WT/REG230/M/1 
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  5. In her delegation's view, the Ag reement covered substantially a ll the trade between the Parties 
and did not raise protection to non parties.  Under the Agreement, a total of 97.2% of tariff lines were 
liberalized by China, corresponding to 99.1% of imports by value from Chile in 2003-2005.  In the case of Chile, a total of 98.1% of tariff lines were  liberalized, corresponding to 96.9% of imports by 
value from China for the same period.  The Agreem ent made reference to existing WTO Agreements 
where relevant.  At a first stage, the Agreemen t covered trade in goods, related rules, a dispute 
settlement mechanism, and cooperation.  After ha ving concluded this stage, China and Chile had 
started negotiations on trade in  services and investment.  The Parties had already signed the 
Agreement on trade in services.  Lastly, she emphasi zed the provisions on cooperation.  The Parties 
would strengthen economic coopera tion, and cooperation in small and medium sized enterprises, 
culture, education, science and technology, enviro nmental protection, intellectual property rights 
(IPR), investment promotion, as well as mining and industrial sectors. 
6. Turning to the overall benefits of the Agreement,  according to China's tr ade statistics, before 
the entry into force of the Agreement, bilateral tr ade growth had been about 20% while after the entry 
into force of the Agreement trade growth had r eached 65%.  In 2007, bilateral trade had reached 
US$14.7 billion.  China's total exports to Chile ha d amounted to US$4.4 billion, an increase of 42% 
while its total imports from Chile were US$10.3 bill ion, an increase of 79%.   The Agreement which 
had enjoyed a high rate of utilization and had ge nerated sound effects, had been welcomed by 
businesses from both sides.  Overall, the Parties considered that the economic potential of the 
Agreement was still underutilized and more needed to be  done on China's part to inform its traders 
and investors of the opportunities that remained to be tapped under the Agreement.  She thanked 
Members for their interest in the Agreemen t, in particular, the United States, the 
European Communities, Chinese Taipei and Turkey th at had raised questions and she looked forward 
to the opportunity to exchange views with other Members. 
7. The representative of Chile
 thanked the Secretariat for having produced a thorough Factual 
Presentation, colleagues from China for their help a nd cooperation in this undertaking, and in the 
Agreement.  Chile was very satisfied with the developments in trade relations between the two 
countries.  In her delegation's view, this was a pioneering Agreement between the two regions.  
Moreover, the Agreement was ambitious  and covered over 97% of  tariffs.  As a result, in the first year 
of the implementation of the Agreement, China ha d became the prime export destination for Chilean 
products.  In 2007, the total had amounted to over US $10 billion.  A large percentage of that trade 
was in the mining sector, but it was necessary to point  out that spectacular gr owth in Chilean exports 
to China had also been reflected in other sectors such as agriculture and food, and this had served to 
diversify Chilean exports.  In addition to mark et access for goods, the Agreement laid down rules 
which she believed were fully compliant with the WTO – rules of origin, customs procedures, trade 
defence, SPS and TBT, transparency and disput e settlement were all covered.  As China had 
mentioned, there was also a chapter on coopera tion which laid down a legal framework for the 
development of cooperation between the Parties.  Under this Chapter, th ere was a memorandum of 
understanding (MOU) on labour affairs and environm ental cooperation, and in April a MOU had been 
signed for cooperation between the authorities on th eir small and medium-sized enterprises (SMEs).  
Likewise, talks were underway with regards to customs cooperation.  The Agreement had been 
designed for phased liberalization.  There was a de velopment clause whereby future talks in services 
and investment were to be accelerated with a view  to completing the Agreement.  Her delegation was 
proud to inform the Committee, as China had menti oned, that the services Agreement had been signed 
in April 2008 and was currently going through Pa rliament.  The coming challenge was to undertake 
negotiations on investment, which would consolidate relations between the tw o countries, and provide 
legal advice for investors in both Parties.  She w ould be honoured to present an ambitious Agreement 
which would include services and investment, in th e short to mid-term, respectively.  In her 
delegation's view, this would contribute to trade liber alization and reciprocal promotion of investment 
within a modern legal framewo rk between the two countries.  WT/REG230/M/1 
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  8. The Chairman  thanked the Parties for their presentati on and opened the floor to Members for 
general comments and questions on the Agreement. 
9. The representative of the United States  thanked the Parties and the Secretariat for the 
information provided on the Agreement.  While noting the 214 and 152 tariff lines that China and 
Chile had not liberalized under the Agreement, re spectively, the United States commended the Parties 
on having negotiated an Agreement that liberalized  both markets, creating opportunities for growth 
and economic improvement. 
10. On the questions and replies document,  the representative of the United States  sought 
completion of the answer by China on question 15 re garding the average tariff rates for HS sections 
II-IV, VI, IX, and XI, where tariff lines rema ined dutiable.  The representative of China  said her 
delegation would submit the information in writing after the meeting. 
11. The representative of the European Communities (EC)  posed two follow-up questions. 
Regarding question 7 on transparency provisions, the Parties had indicated that other provisions on 
transparency had not been applied.   She asked whether the Parties planned to publish those measures 
and provide stakeholders and econom ic agents sufficient time to comment on them.  Further, she 
asked how the Parties defined "reasonable period", and how the provisions would be put into in 
practice, for example, through special bilateral arrang ements or through the Pa rties' general practice. 
Regarding question 8 on geographical indications (G Is), her delegation noted that the Agreement 
provided for protection of GIs as indicated in Anne xes 2A and 2B, but that these lists were rather 
limited containing only two GIs for China and one for Chile.  She wondered what the selection process of GIs was and whether there was any plan  to expand upon the lis ts.  Further she sought 
clarification as to whether inclusion in the list me ant that the other Party's GI was granted equal 
protection as its own domestic GI. 
12. In response to the questions raised by the EC, the representative of Chile
 emphasized that 
both Parties were entirely committed to complying w ith all the transparency provisions under Chapter 
9 including publication, notification, information exchange, as stated in Articles 63 and 64 of the 
Agreement.  With regard to publication obligati ons the Article was self-explanatory.  Each Party 
could determine what a reasonable period of ti me was depending on the matter at hand.  The 
Commission under the Agreement made it possible to determine that these matters could be settled by 
the contacts points and this was why the Parties had made a special reference to the contact points as 
they were the ones exchanging this kind of information. 
13. In response to the question about GIs, he answ ered that there were no specific criteria or 
process for selecting GIs.  The Parties had incl uded those GIs where export interest had been 
identified.  In the case of Chile, Pisco was incl uded as the only GI in most of the FTAs signed, 
including the agreement with the EC.  He also in formed Members that there were no plans to expand 
the list for the time being.  With respect to the le vel of protection, Article 10 of the Agreement stated 
that the terms included in the Annexes were GIs within the meaning of paragraph 1 of Article 22 
(protection of geographical indications) of the TR IPS Agreement, and subject to the domestic laws 
and regulations in a manner consistent with TRIP S, such terms would be protected as GIs in the 
territory of the other Party.  In other words, each Party recognized the GI of the other Party but not the 
level of protection that that Party afforded to such a GI.  The GI would be subject to the protection 
afforded by the national laws and regulations of th e country recognizing the GI.  For example, Pisco 
would be protected in China according to the protec tion afforded in China's laws and regulations to 
wine and spirits and consistent with Article 23 (a dditional protection for geographical indications for 
wines and spirits) of the TRIPS Agreement. 
14. Regarding question 13 on trade in services, the representative of Japan  asked the Parties to 
indicate the possible timeframe towards the entr y into force of the services agreement.  The WT/REG230/M/1 
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  representative of Chile  replied that the agreement had been signed and was going through the 
respective legislative authorities in both countries.  The services agreement could be fully in effect by 
the beginning of the following year. 
15. The Chairman  noted that the consideration of the goods aspects of the Free Trade Agreement 
between Chile and China had allowed the Committ ee to clarify a number of questions and oral 
discussion of the Agreement could be  concluded in accordance with pa ragraph 11 of the Transparency 
Mechanism.  If any delegations wished to ask fo llow-up questions they were invited to forward 
submissions in writing to the Secretariat by 25  September 2008 and Parti es were asked to submit 
replies in writing by no later than 9 October 2008.  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. 
16. The Committee took note  of the comments made. 
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