Proposal for a COUNCIL DECISION concerning the conclusion of the framework cooperation Agreement in preparation for the eventual establishment of a political and economic association between the European Community and its Members States, of the one part, and the Republic of Chile, of the other part
Date: 1996-06-11
Institutions: European Commission
Subjects: Chile, association agreement (EU), cooperation policy, economic cooperation, trade cooperation

* ** 
*  '  "* 
* 
* 

* ** 

I  COMMISSION  OF THE  EUROPEAN  COMMUNITIES 
j 
I 
I 

Brussels,  11.06.1996 
COM(%)259  final 

96/ 0149  (ACC) 

96/0150 (ACC) 

Proposal  for  a 

COUNCIL  DECISION 

concerning the conclusion of the framework  cooperation Agreement  in preparation  for the 
eventual establishment of a political and economic association between the European 
Community and its Members States, of the one part, and the Republic of Chile, of the 
other part 

(presented  by  the  Commission) 

.mm  mum 

•

•

• n . — —— 

ni 

• 

— i- 

i 

• 

,.  — » • •• 

Proposal  for  a 

COUNCIL  DECISION 

on the exchange of letters between the European  Community and Chile concerning the 
provisional application of certain provisions of the framework cooperation Agreement in 
preparation for the eventual establishment  of a political and economic association  between 
the European Community and its Members States, of the one part, and the Republic of 
Chile, of the other part 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 
By means of a decision  of 29 January,  the  Council  authorized  the  Commission  to 
open  negotiations  with  Chile  with  a  view  to  concluding  a  framework  cooperation 
agreement  in  preparation  for  the  eventual  establishment  of  a  political  and  economic 
association between the European Community and its Member States, of the one part,  and 
the Republic of Chile, of the other part,  and adopted  directives to that end. 

Two negotiating  sessions were held  in Brussels, the first  on 25  and  26 March  and 
2. 
the second  on 25 and 26 April at which the Agreement  was initialled.  A meeting was held 
between those two sessions between Mr Prat and the representatives of the Troika and  the 
Chilean  negotiators  in  Santiago,  Chile,  on  19 April.  The  text  of this  Agreement  has  now 
been submitted to the Council for  signature and conclusion. 

3. 
In  consultation  with  the  special  committee  appointed  by  the  Council  to  oversee 
negotiations,  when  the  Agreement  was  initialled,  the  negotiators  agreed  to  adopt  the 
arrangements  for  the  provisional  application  of  the  Agreement,  and  in  particular  those 
provisions relating to Community responsibility on trade cooperation  under Title III of the 
Agreement and the institutional framework  for  such cooperation. 

The  Commission  also  proposes  that  the  Council  approve  and  sign  an  exchange  of  letters 
on the provisional  application  of the Agreement's provisions. The Agreement  between  the 
European  Community  and  Chile  signed  on  20 December  1990  will  remain  in  force  until 
the new Agreement  comes into force.  However,  in order to ensure continuity between  the 
two  Agreements,  the  Joint  Committee  set  up  under  the  new  Agreement  will  assume  the 
duties of the  1990 Agreement's Joint  Committee. 

The  Commission  considers  that  the  initialled  Agreement  conforms 

4. 
negotiating directives adopted  by the Council. 

to 

the 

5. 
With  a view  to  signing  and  concluding  the  framework  cooperation  Agreement  in 
preparation for the eventual establishment  of a political  and economic association  between 
the  European  Community  and  its  Member  States,  of  the  one  part,  and  the  Republic  of 
Chile, of the other part, the Commission  proposes that the Council adopt the proposals  for 
Decisions in the Annex. 

i-  ? 

Proposal for a 

^  /. 

Î5  J H^  (fc^O 

COUNCIL DECISION (EC) No 

concerning the conclusion of the framework  cooperation  Agreement in preparation for the 
eventual establishment of a political and economic association between the European 
Community and its Members States, of the one part, and the Republic of Chile, of the 
other part 

(presented by the Commission to the Council) 

7 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles  113 and  130y thereof, in conjunction  with the first sentence of Article 228(2) and 
the first  subparagraph  of paragraph 3 thereof, 

Having regard to the proposal from  the Commission, 

Having regard to the opinion of the European  Parliament, 

Whereas  Article  13 Ou  of  the  Treaty  provides  that  Community  policy  in  the  sphere  of 
development  cooperation  should  foster  the  sustainable  economic  and  social  development 
of the developing countries, the smooth and gradual integration  of those countries into the 
world economy and the combating of poverty in those countries; 

the  eventual 
Whereas  the  framework  cooperation  Agreement 
establishment  of  a  political  and  economic  association  between  the  Community  and  its 
Member  States,  of  the  one  part,  and  the  Republic  of  Chile,  of  the  other  part,  should  be 
approved, 

in  preparation  for 

HAS DECIDED AS FOLLOWS: 

Article 1 

The framework  cooperation  Agreement  in preparation  for  the eventual  establishment  of a 
political  and  economic  association  between  the  European  Community  and  its  Member 
States, of the one part, and the Republic of Chile, of the other part,  is hereby approved  on 
behalf of the European  Community. 

The text of the Agreement  is attached  to this Decision. 

Article 2 

In accordance with  Article 33 of the framework  cooperation  Agreement,  the  President  of 
the Council  shall  chair the Joint  Cooperation  Council  and  shall  represent  the  Community 
on  that  Council.  A  representative  of  the  Commission  shall  chair  the  Joint  Cooperation 
Committee  and  the  Joint  Subcommittee  on  Trade  in  accordance  with  their  rules  of 
procedure  and,  assisted  by the  representatives  of  the  Member  States,  shall  represent  the 
Community on those committees. 

Article 3 

The  President  of the  Council  shall  give  the  notification  provided  for  in  Article  42  of  the 
Agreement  on behalf of the European  Community. 

Article 4 

This Decision  shall be published  in the Official  Journal of the European  Communities. 

Done at Brussels, 

For the Council 
The President 

/ 

DRAFT FRAMEWORK COOPERATION AGREEMENT 
IN PREPARATION FOR THE EVENTUAL ESTABLISHMENT OF A POLITICAL 
AND ECONOMIC ASSOCIATION BETWEEN THE EUROPEAN COMMUNITY 
AND ITS MEMBER STATES, OF THE ONE PART, AND THE REPUBLIC OF 
CHILE, OF THE OTHER PART 

* 

THE KINGDOM OF BELGIUM, 

THE KINGDOM OF DENMARK, 

THE FEDERAL REPUBLIC OF GERMANY, 

THE HELLENIC REPUBLIC, 

THE KINGDOM OF SPAIN, 

THE FRENCH REPUBLIC, 

IRELAND, 

THE ITALIAN REPUBLIC, 

THE GRAND DUCHY OF LUXEMBOURG, 

THE KINGDOM OF THE NETHERLANDS, 

THE REPUBLIC OF AUSTRIA, 

THE PORTUGUESE REPUBLIC, 

THE REPUBLIC OF FINLAND, 

THE KINGDOM OF SPAIN, 

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, 

Parties to  the Treaty establishing the European  Community  and the  Treaty  on European 
Union, hereinafter referred to as the "European Community Member States", 

t 

THE EUROPEAN  COMMUNITY, 

hereinafter  referred  to as the  "Community" 

THE REPUBLIC OF CHILE 

hereinafter  referred  to as "Chile", 

of the one part, and 

of the other part, 

CONSIDERING  their  common  cultural  heritage  and  the  deep  historical,  political  and 
economic ties which unite them; 

CONSIDERING  the  significant  contribution  made  by  the  Framework  Agreement  for 
Cooperation  between  the  Community  and  Chile  signed  on  20  December  1990  to 
strengthening all these ties; 

CONSIDERING  their  full  commitment 
fundamental  human rights as set out in the Universal Declaration of Human Rights; 

to  respect  for  democratic  principles  and 

CONSIDERING the importance which both Parties attach to the principles and values set 
out  in the final Declaration  of the World  Summit  for  Social  Development  in  Copenhagen 
in March  1995; 

MINDFUL  of both Parties' desire to  ensure sustainable development  and  also to  conserve 
and protect  the environment; 

CONSIDERING their attachment to the market  economy and reaffirming  their willingness 
to maintain and strengthen the rules of free international trade in compliance with the rules 
of the World Trade Organization  (WTO) and emphasizing, in particular,  the importance of 
open regionalism; 

CONSIDERING  their  mutual  interest  in  establishing  new  contractual  links  in  order  to 
develop  closer  and  more  extensive  cooperation,  to  expand  and  diversify  trade  and  to 
increase investment; 

CONSIDERING  the  political  will  of  both  Parties  to  achieve  the  ultimate  objective  of  a 
political  and  economic  association  between  the  European  Community  and  its  Member 
States  and  Chile founded  on  greater  political  cooperation  and  progressive  and  reciprocal 
liberalization  of all trade, with  due allowance for  the sensitivity  of certain  products  and in 
compliance with the rules of the World Trade Organization,  and on investment  promotion 
and closer  cooperation; 

J 

MINDFUL  of  the  terms  of  the  Joint  Solemn  Declaration  on  political  dialogue  in  which 
both  Parties  have  agreed  on  closer  political  dialogue  to  promote  more  intensive 
consultation  on  matter  of  mutual  interest,  with  a  view  to  basing  their  relations  on  the 
above long-term aim, 

HAVE DECIDED to conclude this Agreement: 

cyCo 

TITLE I 

NATURE AND SCOPE 

ARTICLE 1 

Basis of the Agreement 

Respect  for  democratic  principles  and  fundamental  human  rights  as  set  out  in  the 
Universal  Declaration  of  Human  Rights  is  at  the  heart  of  both  Parties'  domestic  and 
external policies and constitutes an essential element of this Agreement. 

ARTICLE 2 

Nature and scope 

1. 

This  Agreement  shall  be  aimed  at  strengthening  existing  relations  between  the 
Parties  on  the  basis  of  reciprocity  and  mutual  interest,  paving  the  way  for  the 
progressive  and  reciprocal  liberalization  of  trade,  ultimately  leading  to  the 
establishment  of  a  political  and  economic  association  between  the  European 
Community  and  its  Member  States  and  Chile  in  conformity  with  the  rules  of  the 
World  Trade  Organization  (WTO)  and  with  due  allowance  for  the  sensitivity  of 
certain products. 

2. 

To this end, the Agreement  covers political  dialogue, trade and  economic matters, 
cooperation  and  other  matters  of  mutual  interest,  its  objective  being  to  forge 
closer relations between the Parties and their respective institutions. 

TITLE II 

Political  dialogue 

ARTICLE 3 

1. 

2. 

The  Parties  agree  to 
institute  regular  political  dialogue  on  bilateral  and 
international  matters  of  mutual  interest.  Such  dialogue  shall  be  conducted  in 
accordance  with  the  Joint  Declaration,  which  shall  form  an  integral  part  of  the 
Agreement. 

The  ministerial  dialogue  provided  for  in  the  Joint  Declaration  shall  take  place 
within  the  Council  established  by  Article  33  of  this  Agreement  or  within  other 
agreed  forums  of an equivalent level. 

SA 

TITLE III 

TRADE COOPERATION  AND PREPARATION  FOR 
LIBERALIZATION  OF TRADE 

ARTICLE 4 

Objectives 

The Parties undertake to forge  closer  relations with the aim of increasing  and  diversifying 
trade,  preparing  for  progressive  and  reciprocal  liberalization  of  trade  and  creating 
conditions  conducive  to  the  eventual  establishment  of  a  political  and  economic 
association,  in conformity  with  WTO  rules  and  with  due  allowance  for  the  sensitivity  of 
certain products. 

ARTICLE 5 

Dialogue on trade and economic matters 

1.  The Parties undertake to hold regular dialogue on trade and economic matters, within 
the  institutional  framework  established  by  Title  VII  of  the  Agreement,  in  order  to 
meet  the  Agreement's  trade  objectives  and  prepare  the  ground  for  the  eventual 
liberalization of trade. 

2.  The  Parties  shall  agree  on  the  areas  to  be  covered  by  trade  cooperation  without 

excluding any sector. 

3.  Such cooperation  shall in particular focus  on the following: 

(a)  market  access  and  liberalization  of  trade,  the  study  and  establishment  of 
programmes for  the reciprocal  liberalization  of trade (timetable and  structure  of 
negotiations, transitional periods, etc.); 

(b) 

tariff and non-tariff barriers, quantitative restrictions on imports and exports and 
measures having equivalent  effect:  analyses,  studies  and  management,  including 
quotas,  administrative  standards  applied  to  external  trade,  anti-dumping  duties, 
safeguard  clauses,  technical  standards,  health  and  plant  health  legislation, 
mutual recognition  of certification  systems, etc; 

(c) 

the Parties' tariff  structure; 

(d)  compatibility of trade liberalization with WTO rules; 

(e) 

identification  of  potential  tariff  reductions  and  elimination  of  quasi-tariff 
measures; 

(f)  definition  of sensitive products and products given priority by the Parties; 

.^2-

(g)  cooperation and exchange  of information,  within  the Parties' respective areas  of 

responsibility  on transport,  insurance and financial services, 

(h)  monitoring of restrictive practices; 

(i) 

rules  of  origin  which  promote  the  use  of  regional  inputs  with  a  view  to 
encouraging  integration. 

ARTICLE 6 

Cooperation  on standardization,  accreditation,  certification,  metrology and 
conformity  evaluation 

1.  The  Parties  agree  to  cooperate  on  standardization,  accreditation,  certification, 
metrology  and  conformity  evaluation.  Such  cooperation  shall  take  the  form  in 
particular  of: 

(a)  provision  of  technical  assistance  for  Chile  on  standardization,  accreditation, 
certification  and  metrology  to  develop  an  appropriate  system  and  structures 
compatible: 

-  with international  standards; 

-  with the basic requirements  of health  and  safety  protection,  plant  and  animal 

protection,  consumer protection  and environmental  conservation; 

(b)  negotiation  of  a mutual  recognition  framework  agreement  once  an  appropriate 

level of technology has been reached  in the sectors concerned; 

(c)  cooperation  between  the  Parties  on  technical  standards  to  facilitate  market 

access. 

ARTICLE 7 

Customs  cooperation 

1.  The Parties shall promote customs cooperation,  acting within their respective areas of 
responsibility,  with  a view  to  improving  and  consolidating  the  legal  framework  for 
their trade relations. 

A further  objective of customs cooperation  shall be to  strengthen  the Parties' customs 
arrangements  and  improve  their  operation  within  the  framework  of  interinstitutional 
cooperation. 

2.  Such cooperation  may take the form  in particular  of: 

(a)  exchanges of information,  taking into account the need to protect personal  data; 

(b)  development of new training techniques and coordination of activities within the 

relevant international organizations; 

(c)  exchanges of officials  and senior personnel from customs and tax departments; 

(d)  simplification  of customs procedures; 

(e) 

technical assistance. 

The  Parties  affirm  their  intent  to  give  future  consideration,  within  the  institutional 
framework  established  by  this  Agreement,  to  the  conclusion  of  a  customs  mutual 
assistance protocol. 

k 

ARTICLE 8 

Temporary importation of goods 

The  Contracting  Parties  undertake  to  take  account  of  relief  from  duties  and  taxes  on 
temporary  importation  into  their territory  of  goods  covered  international  agreements  on 
such matters. 

ARTICLE 9 

Cooperation on statistics 

The  Parties  agree  to  promote  the  approximation  of  statistical  methods  with  a  view  to 
using,  on  a mutually  acceptable  basis,  statistics  on  trade  in goods  and  services  and,  in 
general, statistics in any area which lends itself to statistical processing. 

ARTICLE 10 

Cooperation on intellectual property 

1.  The Parties agree  to  cooperate  on intellectual  property  matters in order to  promote 
trade  in  goods  and  services,  investment,  technology  transfer,  dissemination  of 
information, cultural and creative activities and related economic activities. 

M 

2.  For  the  purposes  of  this  Article,  intellectual  property  shall  in  particular  encompass 
copyright,  including  copyright  for  computer  programmes  and  databases,  and  related 
rights,  trade  or  service  marks,  geographical  indications,  including  designations  of 
origin,  industrial  designs  and  models,  patents  and  integrated  circuit  topographies, 
data protection and prevention of unfair  competition as defined  in Article  lObis of the 
Paris Convention for the Protection  of Industrial Property. 

3.  The Parties agree to guarantee, within their respective laws, regulations  and policies, 
adequate  and  effective  protection  of  intellectual  property  rights  in  accordance  with 
the  highest  international  standards  laid  down  in the  Agreement  on  aspects  of trade-
related intellectual  property rights (TRIPS) concluded  in the framework  of the WTO, 
and,  where  necessary,  to  consider  strengthening  it,  for  example  by  concluding  an 
agreement  on  the  reciprocal  protection  and  recognition  of  geographical  indications 
and designations of origin. 

4.  Cooperation  in this  area  may  include  technical  assistance  between  the  Parties  in  the 

form  of joint programmes and  projects. 

5. 

6. 

In the  event  of trade  disputes  connected  with the protection  of  intellectual  property, 
the Parties may hold consultations in order to settle any doubt  or difficulty  relating to 
the  application  of  their  respective  rules  on  the  protection  of  intellectual  property 
rights. 

In  research  and  other joint  scientific  activities  undertaken  in the field of  science  and 
technology,  the Parties  shall  agree  on the intellectual  property  rules  to  be  applied  to 
their results. 

ARTICLE 11 

Cooperation  on public procurement 

1.  The  Parties  agree 

to  ensure,  on  a  reciprocal  basis,  open, 
non-discriminatory  and  transparent  procedures  for  their  respective  government  and 
public sector procurement  at central, federal,  regional, provincial and local level. 

to  cooperate 

2. 

In  order  to  attain  this  objective,  the  Parties  agree  to  consider  the  possibility  of 
concluding  an  agreement  on  access  in  these  sectors  of  procurement,  generating 
transparent, fair conditions subject to clear complaint  procedures. 

3.  Cooperation  between  the  Parties  in  this  area  shall  include  technical  assistance  in 

matters connected  with the Agreement  on Government  Procurement. 

4.  The  Parties  shall  consider  the  possibility  of  holding  annual  consultations  on  this 

sector. 

^ 

TITLE IV 

ECONOMIC  COOPERATION 

ARTICLE  12 

Objectives 

1. 

In  the  light  of  the  achievements  of  the  Framework  Agreement  for  Cooperation 
between  the Community and  Chile of December  1990, both Parties undertake,  under 
this  Agreement,  to  consolidate  and  expand  all  areas  of  economic  cooperation  by 
cultivating  synergies  in  productive  activities,  creating  new  opportunities  and 
increasing economic competitiveness. 

2.  Economic  cooperation  between  the  Parties  shall be as broad-based  as  possible.  No 
sector  shall  be  excluded  from  the  outset,  and  account  shall  be  taken  of  the  Parties' 
respective priorities, mutual interests and areas of responsibility. 

3.  The Parties shall focus on cooperation which will foster  economic and  social  relations 
and  networks  between  companies  (trade,  investment,  technology,  information  or 
communication  systems). 

4.  Within  the  framework  of this  cooperation  the Parties  shall  promote  the  exchange  of 
regular  monitoring  of 

information  which  will  serve  as  a  basis 
macro-economic policies and balances and efficient  market  operation. 

the 

for 

5. 

In  view  of  the  degree  of  liberalization  achieved  by  Chile  in  the  area  of  services, 
investment  and  scientific,  technological  and  industrial  cooperation,  the  Parties 
undertake  to  make  a  special  effort  to  expand  and  consolidate  cooperation  in  these 
areas. 

6.  The  need  to  conserve  the  environment  and  ecological  balances  shall  be  taken  into 

account by the Parties in any economic cooperation  measures they undertake. 

7.  Any measures  sponsored  by the Parties in this field shall be guided  by the principle of 
social development,  and the promotion of fundamental  social rights in particular. 

yU 

ARTICLE 13 

Industrial and business cooperation 

1.  The  Parties  shall  promote  industrial  and  business  cooperation  with  the  aim  of 
establishing  a  climate  conducive  to  economic  development  taking  account  of  their 
mutual interests. 

2.  Such cooperation  shall focus in particular on: 

(a) 

increasing  trade  flows,  investment,  industrial  cooperation  and  technology 
transfer; 

(b)  supporting industrial modernization  and  diversification; 

(c) 

identifying  and  eliminating  obstacles  to  industrial  cooperation  between  the 
Parties by means of measures which encourage respect for  competition  laws and 
help  gear  industry  to  market  requirements,  allowing  for  the  participation  and 
consultation  of operators; 

(d)  encouraging  cooperation  between  economic  operators  on  both  sides, 

particularly  small and medium-sized  enterprises (SME); 

(e)  promoting  industrial  innovation  by  developing  an  integrated  and  decentralized 

approach to cooperation  among operators on both sides; 

(f) 

ensuring  the  overall  consistency  of  measures  which  may  have  a  positive 
influence  on cooperation between businesses on both sides. 

3.  Such  cooperation,  which  shall  be based  on  a dynamic,  integrated  and  decentralized 

approach,  shall take the form  in particular  of: 

(a)  encouraging  closer  organized  contacts  between  businesses,  particularly  small 
and  medium-sized  enterprises  (SME),  and  economic  operators  on  both  sides 
which  will  provide  them  with  an  opportunity  to  identify  and  exploit  areas  of 
mutual  interest,  paving  the  way  for  increased  trade,  investment  and  industrial 
and  business  cooperation  projects  in  general,  particularly  by  promoting  joint 
ventures, 

(b)  promoting business initiatives and  cooperation  projects  which  shall be  identified 
through  closer dialogue between Chilean and European  operators' networks; 

(c)  undertaking  measures  to  support  business  cooperation,  notably  regarding 
industrial  quality  policies  and  industrial  innovation,  training  and  applied 
research,  development  and technology  transfer. 

^ 

ARTICLE  14 

Cooperation on services 

1.  The  Parties  recognize  the  growing  importance  of  services  for  their  economic 
development.  To  this  end  they  shall  consolidate  and  step  up  cooperation  in  this 
sector, within their respective areas of responsibility  and in accordance with the rules 
of the General Agreement  on Trade in Services (GATS). 

2. 

In  terms  of  practical  implementation  the  Parties  shall  identify  the  priority  sectors  in 
this area in order to ensure efficient  use of available instruments. 

Measures shall focus mainly on: 

(a)  helping SME gain access to capital resources and market technologies; 

(b)  promoting trade between the Parties and with the markets of third countries; 

(c)  encouraging  better  and  diversified  productivity  and  competitiveness  in  this 

sector; 

(d)  exchanging information  on the rules, laws and regulations which govern trade in 

services; 

(e)  exchanging information  on the procedure for granting: 

- licences and certificates  to professional  service providers and 
- recognition  of professional  qualifications. 

(f)  developing  the  tourism  sector,  with  a  view  to  improving  the  exchange  of 
information  and  know-how  in  order  to  promote  a  sustainable  and  ordered 
development  of the tourist  amenity.  To this end  human  resources  development 
and  joint  operations  in  the  tourist  promotion  and  marketing  fields  will  be 
encouraged. 

ARTICLE  15 

Investment  promotion 

The Parties  shall  help  create,  within  their  respective  areas  of  responsibility,  an  attractive 
and stable environment  for reciprocal  investment. 

Such cooperation  shall take the form  inter alia  of: 

(a)  arrangements  for  information,  identification  and  dissemination  relating  to  investment 

legislation and opportunities; 

(b)  promoting the development  of a legal  environment  conducive to  investment  between 
if  necessary,  Chile  and  Community  Member  States  could  conclude 

the  Parties; 

bilateral  agreements  to  promote  and  protect  investment  and  bilateral  agreements  to 
prevent double taxation; 

(c)  developing harmonized and simplified  administrative procedures; 

(d)  developing joint investment, in particular with SME on both sides. 

ARTICLE 16 

Scientific and technical cooperation 

1.  The  Parties  agree  to  cooperate  in  the  field  of  science  and  technology  in  areas  of 

mutual interest, taking account of their respective policies. 

2.  The aims of such cooperation shall be: 

(a) 

to  encourage  exchanges  of  information  and  know-how  on  science  and 
technology, especially on the implementation of policies and programmes, 

(b) 

to  promote  sustainable  relations  between 
communities; 

the 

two  Parties'  scientific 

(c) 

to foster innovation in Chilean and European businesses; 

(d) 

to promote technology transfer; 

3.  Cooperation shall take the form in particular of: 

(a)  joint  research projects in areas of mutual  interest,  with  the  active  participation 

of business where appropriate; 

(b)  exchanges  of scientists to  promote  research,  project  preparation  and high-level 

training; 

(c) 

joint  scientific  meetings  to  promote  the  exchange  of  information,  encourage 
interaction and identify areas where joint research might be undertaken; 

(d)  dissemination of results and development of links between the public and private 

sectors; 

(e)  exchanges of know-how on standardization; 

(f) 

evaluation of the activities concerned. 

4. 

In  terms  of  practical  implementation,  the  Parties  shall  encourage  their  respective 
higher  education  institutions,  research  centres  and  industrial  sectors,  in  particular 
SME, to play an active role. 

sV 

5.  The Parties  shall  agree,  without  excluding  any  sector  from  the  outset,  on  the  areas, 
scope,  nature  and  priorities  of  this  cooperation,  by  establishing  a  multiannual 
programme which can be adapted  to circumstances. 

ARTICLE  17 

Energy  cooperation 

Cooperation  between  the  Parties  shall  focus  on  fostering  closer  links  between  their 
economies  in  the  sectors  of  renewable  and  non-renewable,  conventional  and  non-
conventional  energies, and energy-saving technologies. 

Cooperation  shall in particular take the following  forms: 

(a)  exchanges  of  information  in  all  appropriate  forms,  including  the  development  of 
databanks  to  be  shared  by  economic  operators  on  both  sides,  training  and  joint 
conferences; 

(b)  technology  transfer; 

(c)  preparatory  studies  and  project  implementation  by  the  relevant  institutions  of  both 

Parties; 

(d)  the  participation  of  economic  operators  from  the  two  Parties  in joint  technological 

development  or infrastructure  projects; 

(e)  where  appropriate  the  conclusion  of  specific  agreements  in  key  areas  of  mutual 

interest; 

(f)  aid for  Chilean institutions dealing with  energy matters and the formulation  of energy 

policy; 

(g)  technical training programmes. 

2x> 

ARTICLE  18 

Cooperation on transport 

1.  Cooperation in this area shall be aimed essentially at: 

(a) 

support for the modernization  of Chile's transport  systems; 

(b)  efforts  to  increase  personal  mobility,  the  movement  of goods  and  access  to  the 

transport  market; 

(c)  promotion of operating standards. 

2.  Cooperation  shall take the form in particular  of: 

(a)  exchanges of information  on respective transport  policies and on other topics of 

mutual  interest; 

(b) 

training programmes for economic operators and senior public  officials; 

(c)  exchange  of information  on the  installation  of monitoring  stations  forming  part 

of the infrastructure  of the Global Navigation  Satellite System (GNSS). 

3.  Acting  within  their  respective  areas  of  responsibility, 

international 
undertakings,  the  Parties  shall  look  at  all  aspects  relating  to  international  maritime 
transport  services to  ensure that  they  do  not  hamper  the  mutual  expansion  of trade, 
paying particular  attention  to the maintenance  of unrestricted  access to  markets  on a 
commercial and non-discriminatory basis. 

laws  and 

ARTICLE  19 

Cooperation  on the information  society and  telecommunications 

1.  The Parties recognize that advanced  information  and communication  technologies  are 
a key sector  in modern  society and  are vital to  economic and  social  development  and 
the smooth transition to an information  society. 

2.  Cooperation  between  the  Community  and  Chile  in this  area  shall  focus  in  particular 

on: 

(a)  dialogue  on all aspects  of the  information  society  including  telecommunications 

policy; 

(b)  exchanges  of  information  and  any  technical  assistance  required  on  regulations 
and  standardization,  conformity  testing  and  certification  for  information  and 
telecommunication  technologies; 

(c)  dissemination  of  new  telecommunications  and  information  technology  and 
development  of  new  advanced  communication,  services  and  information 
technology facilities; 

(d)  promoting  and  undertaking  joint  research  and  technological  or  industrial 
development projects in the field of new information, communication, telematics 
and information society technologies; 

(e)  providing  an opportunity  for  Chilean  institutions  to  take  part  in  pilot  projects 
and  Community  programmes,  especially  in  the  regional  field,  under  the 
arrangements pertaining to the areas concerned; 

(f) 

interconnection  and  interoperability  of  telematic  networks  and  services  in the 
Community and Chile. 

ARTICLE 20 

Cooperation on environmental protection 

1.  The  Parties  undertake  to  develop  cooperation  to  protect,  improve  and  prevent 
degradation  of the environment,  control  pollution  and encourage  the rational  use  of 
natural resources, in the interests of sustainable development. 

The emphasis shall be on conservation of ecosystems,  the integrated  management  of 
natural  resources,  the  environmental  impact  of  economic  activities,  the  urban 
environment and depollution programmes. 

2.  Cooperation shall focus on: 

(a)  projects to strengthen environmental  structures and policies in Chile; 

(b)  exchange  of  information  and  know-how  covering  various  areas  including  the 

Parties' respective rules and standards; 

(c)  environmental training and education; 

(d) 

technical assistance and the establishment of joint research programmes. 

12-

ARTICLE 21 

Cooperation on the agricultural  and rural  sector 

1.  The Parties shall promote mutual cooperation  in the agricultural  and rural  sector.  To 

this end they shall examine: 

(a)  measures to promote mutual trade in agricultural products; 

(b)  environmental  health  and  plant  health  measures  and  other  related  aspects,  taking 
account of the legislation in force for both parties, in compliance with WTO rules. 

2.  The  Parties  shall 
take  measures  such  as  the  mutual  exchange  of  information, 
technical  assistance  and  scientific  and  technological  experiments  to  promote  agricultural 
development  cooperation. 

TITLE V 

OTHER AREAS OF COOPERATION 

ARTICLE 22 

Objectives and scope 

The  Parties  will  maintain  cooperation  on  social  development,  public  administration, 
information  and communication,  training and regional integration with particular  emphasis 
on  areas  likely  to  contribute  to  the  process  of  cooperation  and  to  the  eventual 
establishment  of a political  and economic association between the Parties. 

ARTICLE 23 

Financial and technical cooperation  and cooperation  on social development 

1.  The  Parties  reaffirm  the  importance  of  their  financial  and  technical  cooperation, 
which  should  be  geared  towards  combating  extreme  poverty  and  generally  assisting 
the most deprived  sections of the community. 

2.  Such cooperation  may take the form of pilot programmes in the following  areas: 

(a) 

job creation and vocational training; 

(b)  management  and administration  of social services; 

(c) 

rural development  and housing and regional planning; 

(d)  health and primary education; 

(e) 

support  for the grassroots  organizations  in civil society; 

(f)  programmes  and  projects  to  create  business  and  employment  opportunities  and 

thereby help to combat  poverty. 

(g)  programmes to improve the quality of life, notably of the most  deprived  sections 

of the community. 

ARTICLE 24 

Cooperation  on public administration  and regional  integration 

1.  The  Parties  shall  support  cooperation  on  public  administration  to  promote  the 
adjustment  of  Chilean  administrative  systems to  open  trading  in  goods  and  services 
with Europe. 

2. 

In this context  the Parties  shall work  together  to promote the administrative  changes 
deriving from  Latin American  integration. 

3.  To  this  end,  in  support  of  Chile's  objectives  of  administrative  modernization, 
decentralization  and  regionalization,  the  Parties  shall  encourage  cooperation  within 
all  institutions,  drawing  lessons  from  the  instruments  and  policies  of  the  European 
Community. 

4.  Cooperation  shall be undertaken  in particular through: 

(a) 

(b) 

technical  assistance  to  Chilean  policy-making  and  executive  bodies,  including 
their  Chilean 
contacts  between  staff  of  the  European 
counterparts; 

institutions  and 

regular  exchange  of information  taking whatever  form  is appropriate,  including 
the  use  of  computer  networks;  personal  data  protection  shall  be  guaranteed  in 
all areas where data are to be exchanged; 

(c) 

transfers  of know-how; 

(d)  preliminary  studies and implementation  of joint  projects; 

(e) 

training and institutional  support. 

if 

ARTICLE 25 

Inter-institutional  cooperation 

1.  The Parties  agree on the need  to  promote  closer  administrative  cooperation  between 

the institutions  concerned. 

2.  Such cooperation  shall be as broad-based  as possible and shall focus in particular on: 

(a)  any  means  of  fostering  regular  exchanges  of  information,  including  joint 

development  of computerized  communication  networks; 

(b)  advice and  information; 

(c) 

transfer  of know-how. 

ARTICLE 26 

Cooperation  on communication,  information  and  culture 

1. 

In view of Chile's very close cultural ties with Community Member  States, the Parties 
will intensify  cooperation  in this area and on communication  and  information. 

2.  Within the Parties' respective areas of responsibility, the aim of such cooperation  shall 

be to promote: 

(a)  meetings  between  senior  information  and  communication  representatives  and, 

where appropriate, technical assistance; 

(b)  greater exchanges of information  on matters of mutual  interest; 

(c)  organization  of cultural events. 

(d)  activities  -  studies  and  training  schemes  -  aimed  at  protecting  the  cultural 

heritage. 

3.  The parties agree to promote the broadest  possible cooperation  in the audiovisual and 
press sector. 

K 

ARTICLE 27 

Cooperation on training and education 

1.  The  Parties  shall  identify,  within  their  respective  areas  of  responsibility,  ways  of 
improving  primary  education,  youth  training,  vocational  training  and  inter-university 
and  inter-business  cooperation.  Particular  emphasis  shall  be  given  to  vocational 
training for the most deprived  sections of the community. 

2.  The  Parties  shall  place  emphasis  on  measures  designed  to  create  permanent  links 
between  Community  and  Chilean  specialized  agencies  which  will  encourage  the 
pooling of technical resources and exchanges of know-how. 

3.  These projects  shall be undertaken mainly through: 

(a)  agreements between educational  and training institutions; 

(b)  meetings between bodies responsible for education and training. 

4.  A  further  objective  of  cooperation  in  this  area  shall  be  the  conclusion  of  sectoral 

agreements on education, training and youth-related  matters. 

ARTICLE 28 

Cooperation  on combating drug  trafficking 

1.  Within their respective areas of responsibility, the Parties shall coordinate their  efforts 
and  intensify  their  cooperation  to  prevent  drug  abuse and  illegal  trafficking  in drugs, 
the misuse of chemical precursors and the laundering of profits from  drug-trafficking. 
To  this  end  the  Parties  shall  coordinate  their  cooperation  activities  and  areas  at 
bilateral level and in international organizations and  forums. 

2.  Such cooperation,  which shall make use of specialized  agencies, shall focus on: 

(a)  projects  to train,  educate, treat  and rehabilitate drug addicts and programmes  to 

prevent the illegal consumption  of drugs; 

(b) 

joint  research programmes; 

(c) 

training  programmes  for  public  officials  on  preventing  and  controlling  drug 
trafficking,  money  laundering  and  on  monitoring  trade  in  essential  chemical 
precursors etc; 

(d)  exchange  of  relevant  information  and  adoption  of  appropriate  measures  to 
combat  drug trafficking  and  money laundering,  in the framework  of  multilateral 
agreements  in  force  and  the  recommendations  of  the  Financial  Action  Task 
Force on Money Laundering (FATF); 

24 

(e)  prevention  of  the  diversion  of  chemical  precursors  and  other  essential 
substances used  for the illegal production  of drugs and  psychotropic  substances. 
This prevention  is based  on the  1988 United  Nations  Convention,  the  principles 
adopted  by the  Community and  the relevant  international  authorities  and  on  the 
recommendations  of the Chemical  Action Task Force (CATF). 

3.  The Parties may agree to extend such cooperation to other areas. 

ARTICLE 29 

Cooperation  on consumer  protection 

1.  The  Parties  agree  that  cooperation  in  this  area  should  be  aimed  at  refining  their 
consumer  protection  systems  and  seeking,  within  their  respective  legislations,  to 
make their systems compatible. 

2.  Cooperation  shall focus  mainly on: 

(a)  exchange of information  and experts; 

(b)  organization  of training schemes and provision of technical assistance. 

ARTICLE 30 

Cooperation  on fishing 

1.  The  Parties  agree 

that,  acting 

trade  and 
environmental  undertakings,  cooperation  in this area  shall  take  the  form  of a  regular 
dialogue to  examine the possibility  of  establishing  closer  cooperation  in the  fisheries 
sector which could lead to a fisheries agreement. 

in  compliance  with 

international 

ARTICLE 31 

Triangular  cooperation 

The Parties, acknowledging the value of international cooperation for promoting  equitable 
and sustainable development,  agree to encourage triangular cooperation  programmes with 
other countries in areas and sectors of mutual interest. 

TITLE VI 

MEANS 

2. ? 

ARTICLE 32 

In  order  to  help  attain  the  cooperation  aims  set  out  in  this  Agreement,  the  Parties 
undertake  to  make  available, within the  limit  of  their  abilities  and  through  their  own 
channels, the appropriate resources, including financial resources. 

The  Parties  shall  call  on  the  European  Investment  Bank  to  step  up  its  activities  in 
Chile in accordance with its own procedures and financing criteria. 

TITLE VI 

INSTITUTIONAL  FRAMEWORK 

ARTICLE 33 

1.  A Joint  Council  of the Framework  Cooperation  Agreement,  hereinafter  referred  to as 
the Joint  Council,  is hereby established.  It  shall  supervise the  implementation  of this 
Agreement  and  shall  meet  at  ministerial 
level  periodically  and  whenever 
circumstances require. 

2.  The  Joint  Council  shall  discuss  important  matters  arising  in  connection  with  the 
Agreement  and  any  other  bilateral  or  international  issues of mutual  interest,  with  the 
aim of fulfilling  the Agreement's objectives. 

3.  The  Council  may  also  make  appropriate  proposals  by  agreement  with  both  Parties. 
In  carrying  out  its duties,  the  Cooperation  Council  shall  be  responsible  in  particular 
for  making  recommendations  which  contribute  to  the  ultimate  objective  of  political 
and economic  association. 

ARTICLE 34 

1.  The  Joint  Council  shall  be  composed  of  members  of  the  Council  of  the  European 
Union  and  Members  of  the  European  Commission  on  the  one  hand,  and  Chilean 
representatives,  on the other. 

2.  The Council  shall adopt its own rules of procedure. 

3.  The  Council  shall  be  chaired  in  turn  by  a  Community  representative  and  a  Chilean 

representative. 

ARTICLE 35 

The  Joint  Council  shall  be  assisted  in  the  performance  of  its  duties  by  a  Joint 
Committee  composed  of  members  of  the  Council  of  the  European  Union  and 

tt 

Members  of  the  European  Commission,  on  the  one  hand,  and  of  Chilean 
representatives,  on the other. 

2.  The  Joint  Committee  shall generally  meet  once  a year,  on  a date  and  with  an  agenda 
agreed  in  advance  by  the  Parties,  in  Brussels  one  year  and  Chile  the  next.  Special 
meetings  may be convened  by mutual  agreement.  The office  of chairman  of the Joint 
Committee shall be held alternately by a representative of each of the Parties. 

3.  The Joint  Council  shall  set  out  the Joint  Committee's  operating  procedures  in its own 

rules of procedure. 

4.  The Council may delegate all or part  of its powers to the Joint  Committee.  The latter 

shall provide continuity between its meetings. 

5.  The  Joint  Committee  shall  assist  the  Council  in  the  performance  of  its  duties 

In 

fulfilling  these functions,  the Joint  Committee shall in particular: 

(a) 

(b) 

(c) 

foster  trade relations in accordance with the objectives  of this Agreement  and in 
accordance with the provisions of Title III; 

exchange  opinions  on  future  cooperation  programmes  and  the  resources 
available  for  their  implementation  and  on  any  matter  of  mutual  interest  which 
relates to progressive and reciprocal liberalization of trade; 

submit to the Joint  Council  proposals made by the Subcommittee  on Trade with 
the  aim  of  cultivating  preparations  for 
the  progressive  and  reciprocal 
liberalization  of trade  and  proposals  intended  to  bring  about  closer  cooperation 
in this area; and 

(d) 

in  general,  make  proposals  to  the  Joint  Council  which  will  contribute  to  the 
ultimate aim of an EU-Chile political and economic association. 

ARTICLE 36 

The Joint  Council  may  decide to  set  up  any  other  body  to  assist  it  in the  performance  of 
its  duties  and  shall  determine  the  body's  composition,  objectives  and  operating 
procedures. 

tî 

ARTICLE 37 

1.  The Parties agree to  establish  a Joint  Subcommittee  on Trade  which  shall  ensure that 
the  trade-related  objectives  set  out  in  Article  5  of  the  Agreement  are  fulfilled  and  shall 
undertake the preparatory work for the progressive and reciprocal  liberalization of trade. 

2.  The  Joint  Subcommittee  on  Trade  shall  be  composed  of  members  of  the  Council  of 
the  European  Union  and  Members  of  the  European  Commission,  on  the  one  hand,  and 
Chilean representatives, on the other. 

^  It may commission any studies or technical analyses which it deems necessary. 

i\  The  Joint  Subcommittee  on  Trade  shall  report  at  least  once  a  year  to  the  Joint 
Committee set up under Article 35 of the Agreement on the development  of its work,  and 
shall make proposals regarding the subsequent  liberalization  of trade. 

5",  The  Joint  Subcommittee  on  Trade  shall  submit  its  rules  of  procedure  to  the  Joint 
Committee for approval. 

ARTICLE 38 

Consultation 

Within their respective areas of responsibility,  the Parties undertake  to  hold  consultations 
on any matter covered by this Agreement. 

The  procedure  for  the  consultations  referred  to  above  shall  be  laid  down  in  the  rules  of 
procedure of the Joint Committee. 

TITLE VIII 

FINAL  PROVISIONS 

ARTICLE 39 

Definition  of the Parties 

For the purposes  of this Agreement,  "the Parties" shall mean the Community,  its Member 
States  or  the  Community  and  its  Member  States,  within  their  respective  areas  of 
responsibility,  as defined  in the Treaty  establishing the European  Community,  on  the  one 
hand, and Chile, on the other. 

J •o 

ARTICLE 40 

Future  developments 

The  Parties  may  agree  to  extend  the  Agreement  with  the  aim  of  broadening  and 
supplementing  the  scope  and  level  of  cooperation  in  accordance  with  their  respective 
legislation,  by  concluding  agreements  on  specific  sectors  or  activities  in  the  light  of  the 
experience gained  during its implementation. 

ARTICLE 41 

Territorial  application 

This Agreement  shall apply to the territories in which the Treaty establishing the European 
Community is applied under the conditions laid down in that Treaty, on the one hand, and 
to the territory of the Republic of Chile, on the other. 

ARTICLE 42 

Duration and entry into force 

l.This Agreement  shall be valid  indefinitely. 

2.The Parties shall determine the suitability and timing of transition to political and 
economic association  in the light of progress made under the Agreement  in accordance 
with their own procedures and in the light of the work carried  out and the proposals made 
within the institutional framework  of this Agreement. 

3.This Agreement  shall enter into force on the first day of the month following  the date on 
which the Parties notify  each other of the completion  of the procedures necessary for this 
purpose. 

4.Notification  shall be sent to the Secretariat-General  of the Council of the European 
Union which shall be the depositary for the Agreement. 

5.On its entry into force the Agreement  shall replace the Framework  Agreement  for 
Cooperation between the European  Community and the Republic of Chile signed on 
20 December  1990. 

yi 

ARTICLE 43 

Non-execution 

l.The Parties shall adopt  any general or specific measure required  for them to fulfil  their 
obligations under this Agreement and shall ensure that they comply with the  objectives 
laid down in the Agreement. 

If one of the Parties considers that another Party has failed  to fulfil  an obligation under 
this Agreement it may take appropriate measures.  Before  doing so, except in cases of 
special urgency, it must  supply the Joint Committee with all the relevant  information 
required for  a thorough  examination  of the situation with a view to seeking a solution 
acceptable to the Parties. 

In this selection of measures, priority must be given to those which least disturb the 
functioning  of this Agreement.  These measures shall be notified  immediately to the Joint 
Committee and shall be the subject  of consultation  in that Committee if the other Party so 
requests. 

2. The Parties agree that the term  "cases of special urgency" in paragraph  1  of this Article 
means a case of material breach of the Agreement by one of the Parties.  A material 
breach of the Agreement  consists  of: 

(a)  repudiation of the Agreement not sanctioned by the general rules of international law; 
(b)  violation of the essential elements of the Agreement  referred  to in Article 1. 

3.The Parties agree that the "appropriate measures" referred  to in this Article are 
measures taken in accordance with international law.  If a Party takes a measure in a case 
of special urgency as provided  for under this Article, another Party may ask that  an urgent 
meeting be called to bring the Parties together within  15 days. 

ARTICLE 44 

Authentic text 

This Agreement  is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, 
German, Greek, Italian, Portuguese,  Spanish and  Swedish languages, each of these texts 
being equally authentic. 

3L 

JOINT DECLARATION ON POLITICAL DIALOGUE 
BETWEEN THE EUROPEAN UNION AND CHILE 

Annex I 

1.  Preamble 

The European Union and Chile, 

Conscious of their  common cultural heritage and the deep historical, political and 
economic ties which unite them, 

Guided by their attachment to democratic values, and reiterating the fact that respect 
for human rights, the freedom of the individual and the principles of the rule of law, as 
the foundations of a democratic society, lie at the root of their domestic and foreign 
policies and of their joint undertaking, 

Wishing to consolidate international peace and security in accordance with the 
principles set out in the United Nations Charter, and determined to apply the 
principles of preventing and peacefully resolving international disputes, 

Declaring their interest in using regional integration to promote sustainable and 
harmonious development for their inhabitants, using as a foundation the principles of 
social progress and solidarity between their members, 

Taking as a basis the special ties established by the Framework Cooperation 
Agreement between the European Community and Chile, 

Have decided to give relations between them a long-term perspective. 

2.  Aims 

Mindful of the conclusions adopted by the Council of the European Union on  17 July 
1995 in the wake of the communication on the strengthening of relations between the 
European Union and Chile, the Parties reiterate their intention to enter into an agreement 
which will express their political will to achieve their ultimate goal of political and 
economic association. 

To that end, the Parties have agreed to step up political dialogue in order to ensure that 
there is closer consultation in areas of common interest, primarily through coordination of 
the Parties' positions in the appropriate multilateral forums. 

Such dialogue could include other participants from the region or, where possible, be 
conducted simultaneously with other established forms of political dialogue. 

33 

3  Procedures 

The Parties have agreed that political dialogue on bilateral and international  issues of 
common interest should take the form  of: 

(a)  periodic meetings between the President of Chile and the highest authorities of the 

European Union; the Parties should  decide on the procedure to be used; 

(b)  periodic meetings between Foreign Ministers; the Parties should decide on the 

procedure to be used; 

(c)  periodic meetings between other ministers to discuss matters of common interest in 
cases in which the Parties consider that such meetings will result in closer relations; 

(d)  periodic meetings between senior officials  of both Parties. 

4.  The European Union and Chile agree that this Joint Declaration  should  signal the 

beginning of closer and deeper relations. 

W 

[Annex II] 

JOINT DECLARATION ON THE DIALOGUE AT PARLIAMENTARY LEVEL 

The Parties support the initiative put forward by the European Parliament and the Chilean 
Parliament to institutionalize a dialogue between them and state their willingness to foster 
the establishment and development of this Parliamentary dialogue. 

jr 

Annex III 

JOINT DECLARATION  ON INTER-REGIONAL  ECONOMIC  COOPERATION 

1.  By common accord the Parties will seek ways of linking their methods of preparing 
for the liberalization of trade with the methods they employ in connection with other 
individual countries or regional entities, and particularly with the Southern Cone Common 
Market (Mercosur).  Such activities will depend on how regional integration has 
progressed  and on the degree to which they help to achieve the aims of the Agreement. 

2.  In that  connection, the Parties will examine the possibility of Chile becoming involved 
in the cooperation  programmes provided  for in the Agreement between the European 
Community  and its Member  States and the Southern Cone Common Market  and its 
member countries, and of Mercosur becoming involved in the cooperation  programmes 
provided  for  in this Agreement. Procedures will be determined  on a case-by-case basis by 
all interested Parties. 

fcf 

Proposal  for  a 

g  Q  [^  ^^ 

r > < ^ >) 

COUNCIL DECISION  (EC) No 

on the exchange of letters between the European  Community and Chile concerning the 
provisional application of certain provisions of the framework  cooperation  Agreement in 
preparation for the eventual establishment of a political and economic association between 
the European Community and its Members States, of the one part, and the Republic of 
Chile, of the other part 

(presented  by the Commission to the Council) 

.U 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular' 
Articles 113  thereof, in conjunction with the first sentence of Article 228(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas  the  framework  cooperation  Agreement  in  preparation  for  the  eventual 
establishment  of a political  and economic  association between the European Community 
and its Member States, of the one part, and the Republic of Chile, of the other part, was 
signed by the Community and its Member States on 

; 

Whereas the European Community and Chile undertook  to  establish procedures for  the 
early  application  of  certain  provisions  of  that  Agreement  which  deal  with  trade 
cooperation between the parties and the institutional framework for such cooperation; 

Whereas  the  provisional  application  of  the  provisions  in  question  will  facilitate  and 
promote closer trade relations between the European Community and Chile, pending the 
completion of the procedures required to bring the Agreement into force, 

HAS DECIDED AS FOLLOWS: 

Article 1 

The attached exchange of letters between the Community  and Chile, which provides for 
the provisional application of certain provisions of the framework cooperation Agreement 
in  preparation  for  the  eventual  establishment  of  a  political  and  economic  association 
between  the  European  Community  and  its  Member  States,  of  the  one  part,  and  the 
Republic  of  Chile,  of  the  other  part,  is  hereby  approved  on  behalf  of  the  European 
Community. 

Article 2 

The  Commission  shall  represent  the  Community  within  the  bodies  referred  to  in 
Articles 35 and 37 of the Agreement. 

Article 3 

This Decision shall be published in the Official Journal of the European Communities. 

Done at Brussels, 

For the Council 
The President 

3? 

Annex 

EXCHANGE OF LETTERS 

concerning the provisional application of certain provisions of the framework  cooperation 
Agreement in preparation for the eventual establishment of a political and economic 
association between the European Community and its Members States, of the one part, 
and the Republic of Chile, of the other part 

Brussels, 

1996 

Sir, 

Letter No 1 

I have the honour to refer to the framework  cooperation Agreement in preparation for the 
eventual  establishment  of  a  political  and  economic  association  between  the  European 
Community and its Member States, of the one part, and the Republic of Chile, of the other 
part, signed on 22 June 1996. 

Pending  the  entry  into  force  of  that  Agreement,  I  would  propose  that  the  European 
Community  and the Republic  of  Chile,  if the  legal  system  of the  latter  so  permits,  apply 
provisionally the provisions of that trade cooperation Agreement as set out in Articles 4 to 
7 and 9 of Title III of the Agreement. 

During  the  period  of  provisional  application,  the  relevant  provisions  of  the  framework 
cooperation  Agreement  between  the  European  Community  and  the  Republic  of  Chile, 
signed on 20 December  1990, will  remain in force  provided that they  do  not  replicate or 
conflict  with the provisions  of the Agreement  signed  on 22 June  1996  which  are applied 
provisionally. 

I would  propose,  in addition,  the provisional  application of certain  provisions  concerning 
the setting-up of bodies to supervise the implementation of the cooperation  Agreement as 
set out in Articles 35, 37 and 38 of the Agreement signed on 22 June 1996. 

The  Joint  Committee  specified  in  Article  35  of  that  Agreement  will  be  responsible  for 
matters  which  fell  within  the  scope  of  the  Joint  Cooperation  Committee  set  up  under 
Article  17 of the Agreement signed on 20 December  1990. 

3? 

The  subcommittees  and  working  groups  set  up  under  the  1990  Agreement  will  continue 
to perform  the functions  which fall within their scope. 

Finally,  I have the  honour  to  propose  that,  if the  foregoing  points  are  accepted  by Chile, 
this  letter  and  its  confirmation  should  together  constitute  an  agreement  between  the 
European  Community and Chile which would enter into force with effect  from  the date of 
your letter of confirmation. 

Please, accept,  Sir, the assurance of my highest  consideration. 

For the Council of the European  Community 

Ho 

Letter No 2 

Sir, 

I  have the  honour to  acknowledge  receipt  of your  letter  of today's  date  concerning  the 
provisional  application  of certain provisions of the framework cooperation  Agreement in 
preparation for the eventual establishment of a political and economic association between 
the European  Community  and  its  Member  States,  of  the  one  part,  and  the  Republic  of 
Chile, of the other part, signed on 22 June 1996, which reads as follows: 

"Pending  the  entry  into  force  of  that  Agreement,  I  would  propose  that  the  European 
Community and the Republic  of  Chile,  if the  legal  system  of the latter  so  permits,  apply 
provisionally the provisions of that trade cooperation Agreement as set out in Articles 4 to 
7 and 9 of Title III of the Agreement. 

During  the  period  of  provisional  application,  the  relevant  provisions  of  the  framework 
cooperation  Agreement  between  the  European  Community  and  the  Republic  of  Chile, 
signed on 20 December  1990, will  remain in force provided that they  do  not  replicate or 
conflict  with the provisions  of the Agreement  signed  on 22 June  1996  which  are applied 
provisionally. 

I would propose,  in addition, the provisional  application of certain provisions  concerning 
the setting-up of bodies to supervise the implementation of the cooperation Agreement as 
set out in Articles 35, 37 and 38 of the Agreement signed on 22 June 1996. 

The  Joint  Committee  specified  in  Article  35  of  that  Agreement  will  be  responsible  for 
matters  which  fell  within  the  scope  of  the  Joint  Cooperation  Committee  set  up  under 
Article  17 of the Agreement signed on 20 December 1990. 

The subcommittees  and working groups  set up under the  1990  Agreement  will  continue 
to perform the functions which fall within their scope. 

Finally,  I have the honour to propose that,  if the foregoing  points are accepted  by Chile, 
this  letter  and  its  confirmation  should  together  constitute  an  agreement  between  the 
European Community and Chile which would enter into force with effect  from the date of 
your letter of confirmation." 

I  have  the  honour  to  confirm  that  the  Government  of  Chile  is  in  agreement  with  the 
contents of your letter. 

Please accept, Sir, the assurance of my highest consideration. 

For the Republic of Chile 

7/ 

FINANCIAL  STATEMENT 

1.  TITLE OF OPERATION: 

Framework  cooperation  agreement with Chile 

Recommendation  for  a  Council  Decision  authorizing  the  Commission  to  negotiate  a 
framework  cooperation  agreement  with Chile. 

2.  BUDGET HEADING  INVOLVED 

(a) Implementation  of the agreement will directly involve the following items: 

B7-310: 

B7-311 
B7-870 
B7-872 

B7-6200: 
B7-6201: 
B7-611: 
B7-6210: 

B7-703: 
B7-6211: 

B7-6000: 

B7-643: 
B7-651: 

B7-653: 
B7-650: 

Financial  and  technical  cooperation  with  Latin  American  developing 
countries 
Economic cooperation with Latin American developing  countries 
Commercial  and economic cooperation  agreements with third  countries 
Promotion  of  Community  investment  in  developing  countries  in  Asia, 
Latin  America  and the Mediterranean  and  in  South  Africa  by  economic 
cooperation  and trade agreements 
Environment  in the developing  countries 
Tropical  forests 
Women in development 
North-South  cooperation  schemes  in  the  context  of  the  campaign 
against drug abuse 
Democratization  process in Latin America 
Health  programmes  and  the  fight  against  HIV/AIDS  in  developing 
countries 
Community  contributions  towards  schemes  concerning  developing 
countries carried  out by non-governmental  organizations 
Decentralized  cooperation  in the developing countries 
Coordination  of  development  policy,  evaluation  of  the  results  of 
Community aid and practical follow-up  measures 
Development  cooperation  inspectorate 
Measures to combat fraud  in the cooperation  sector 

(b)  Other items that may be used: 

B6-7211: 

B4-1041: 

B4-1000: 

B7-631: 

international 

third  countries  and 

International  cooperation  with 
organizations 
European  Energy  Charter  and  cooperation  with  third  countries  in  the 
energy  field 
Thermie  II  (Community  programme  of  financial  support  for  the 
promotion  of energy technology in Europe) 
Aid  for  population  policies  and  programmes  in  developing  countries, 
and follow-up  of the Conference  on population and  development 

Hi-

3.  LEGAL  BASIS 

Bilateral framework  agreement  on trade and economic  cooperation. 

4.  DESCRIPTION  OF OPERATION 

4.1  General  objective 

Conclusion  of a framework  cooperation  agreement with Chile. 

4.2  Period  covered and arrangements for renewal or extension 

This  is  an  interim  agreement  intended  to  pave  the  way  for  a  political  and 
economic association between the Union and Chile. 

5.  CLASSIFICATION  OF EXPENDITURE  OR REVENUE 

5.1  Non-compulsory  expenditure 

5.2  Differentiated  appropriations 

5.3  Type of revenue involved 

Not  applicable 

6. TYPE OF EXPENDITURE OR REVENUE 

Expenditure  will  usually  take  the  form  of  a  100%  grant,  though  operations  may 
sometimes be cofinanced  by other donors (Member States). 

The recipients will systematically be required to contribute according to their means. 

7.  FINANCIAL IMPACT 

7.1  Method  of calculating total cost of operation  (definition  of unit  costs) 

This  agreement  establishes  a  framework  for  new  measures  to  reflect  the 
changing  content  and  methods  of  Community  cooperation/relations  with  Chile 
in the light both  of recent  social  and  economic  developments  in the country  and 
of the process of strengthening ties between the parties. 

Although  the  quality  and  quantity  of  cooperation  with  Chile  will  be  improved, 
there will be no specific budget for  new operations. 

8.  FRAUD PREVENTION  MEASURES; RESULTS OF MEASURES  TAKEN 

In  order  to  ensure  maximum  accountability  in the  management  of budget  resources, 
projects  are subject  to the following  procedures: 

committee  for  the  assessment  of  restricted  invitations  to  tender  (technical 
assistance); 

system of co-directors (one local and one Community); 
project  administration  involving analytical accounts; 
supervisory missions by desk officers  and/or technical and/or financial  units, 
if necessary,  evaluation by independent  experts; 
if  necessary,  ad  hoc  evaluation  in  conjunction  with  the  relevant  units  of 
DG VIII. 

For  projects  of  above-average  duration  and  involving  large  budgets,  there  will  be 
annual  audits  by  internationally  recognized  firms,  e.g.  Price  Waterhouse  or  Ernst  & 
Young. 

9.  ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1  Specific  and quantified  objectives; target  population 

The  specific  objectives  of each project  worth  over ECU  1 million  are  set  out in 
the  relevant  financing  proposal  approved  by  the  ALA  Committee,  which 
includes  an  economic  and  financial  analysis.  For  all  other  projects,  specific 
objectives  are  set  out  in the  detailed  commitment  form  that  accompanies  each 
one. 

The target  population  is everyone in Chile, but more particularly: 

- 
- 

the manufacturing  and service sectors, especially SME; 
the most disadvantaged  groups. 

9.2  Grounds  for the operation 

The  projects  launched  will  be  financed  under  existing  budget  items  and  are 
therefore  underpinned  by the financial statements  accompanying  those  items in 
thePDB. 

10  ADMINISTRATIVE  EXPENDITURE  (PART  A  OF  SECTION  m  OF  THE 

BUDGET) 

10.1 Extra  staff 

The  administrative 
the 
Commission's annual decision  on resource  allocation  depending  on the  staff and 
finance  approved  by the budgetary  authority. 

resources  needed  will  be  mobilized 

through 

Staffing 

Relations with Chile have so far  been handled  by an A official  assisted  by a part-time 
C  official.  They  are  unable  to  cope  with  the  steady  increase  in  political  contacts, 
cooperation  programmes  and  the  day-to-day  workload  of the  desk  office  generated 
by the stepping-up  of relations over the past year. 

The  objective  of  the  framework  agreement  is to  strengthen  relations  between  Chile 
and the Union  in all areas with  a view to  a future  political  and  economic  association. 

if 

The agreement will therefore  bring with it qualitative requirements  quite distinct  from 
the volume of aid granted. 

This agreement  has to  reflect  the Union's will to  maintain closer  relations  not  only in 
the  context  of  cooperation  but  in  the  form  of  deeper  political  dialogue  and  trade 
cooperation geared to the future  liberalization  of trade. 

It  is  estimated,  therefore,  that  the  following  extra  staff  will  be  needed:  one  new  A 
official,  one B official  and one part-time C official.  Their tasks will be as follows. 

Grade A official  and temporary member of staff 

* 

*  Overall  direction,  general  consistency,  coordination  of  activities,  in-house 
coordination,  dealings  with  Chile,  information  and  dissemination,  overall 
administration; 
technical  monitoring  of trade  relations,  supervision  of the  working  parties  that 
will be set up, coordination  of trade-related  issues with other departments,  day-
to-day  handling  of trade  questions,  preparations  for  meetings  of the joint  trade 
subcommittee,  drawing-up  of reports,  studies  and  analyses  on  trade  aspects  of 
the future  bilateral association  agreement; 
cooperation:  identification,  implementation,  management, monitoring, etc. 

* 

Grade B  official 

* 

Support  for  A officials,  particularly  data  searches,  processing  of  statistics,  data 
processing, administration  and accounting. 

Grade C  officials 

* 

Secretarial back-up. 

The  above  estimates  do  not  include  extra  staff  that  might  be  needed  by  other 
Directorates General  as a result of closer ties with Chile. 

yr 

Posts 

to  be  allocated 

Staff 
administering  operation 

to 

Source 

Period 

Permanent 

Temporary 

Additional 
resources 

Existing 
resources 
within  DG  or 
department 

1 

0.5 

1 
1 
0.5 

Indefinite, 
starting  1996 

2 
1 
1 

or 

A 
B 
C 
(Officials 
temporary 
staff) 

Other 
resources 

TOTAL 

4 

1.5 

2.5 

The  above  remarks  concerning  the  need  for  additional  resources  are  subject  to  a 
Commission  decision. 

The  allocation  of  the  additional  posts  will  have  to  be  considered  in  terms  of  the 
Commission's priorities when it examines the  1996 budget. 

10.2 Total  financial  implications  of extra  staffing 

A officials 
B 
C 

TOTAL 

Amounts 

100 000 
90 000 
64 000 

254 000 

Calculation  method 

Gross salary. List of average 
annual cost of existing posts 

The amounts represent the total cost of extra staff for the duration of the operation,  if it is 
of fixed duration,  or for one year if it is open-ended. 

11.  MISSION  EXPENSES 

From  its  very  first  contacts  with  the  EC,  Chile  has  expressed  a  desire  for  technical 
assistance  from  the  EC  in  a number  of fields in  which  Community  institutions  have 
acquired  experience.  To  this  end,  it  has  expressly  asked  to  be  allowed  to  work 
directly with the officials  of the institutions concerned. 

u 

In  response  to  these  requests,  the  Commission  has  attempted  to  involve  its  various 
DGs  and  departments  in  one-off  projects  to  impart  the  benefits  of  its  experience  of 
integration. 

While  a number  of DGs  have  expressed  a desire  to  take  part  in this type  of  project, 
they  have  been  seriously  hampered  in financing the  relevant  missions  and  many  of 
Chile's  requests  have  had  to  be  turned  down  for  want  of  a  specific  budget  for  such 
assistance. 

If appropriate machinery is not set up to facilitate these specific  projects, the situation 
will  become  even  more  serious  with  the  advent  of  the  framework  cooperation 
agreement, which seeks to expand the scope of technical assistance. 

Since  it  is impossible  to  predict  how  much  extra  will  be  needed  for  each  DG  in the 
absence of agreements between DGs on mission authorizations,  a budget  of an extra 
ECU 50 000  a  year  from  1996  should  be  planned  to  finance  projects  solely  in  this 
field.  The budget  should  be initiated  and  coordinated  by the relevant  departments  of 
the DG responsible for  relations with Chile. 

An  extra  allocation  is therefore  requested  for  EC-Chile  know-how  transfer  projects 
concerned  specifically  with the Community institutions. 

The amounts requested  represent  the cost  of organizing missions averaging  one week 
for  10 officials. 

Budget heading 

Amount (ECU) 

Calculation  method 

A-1300 

TOTAL 

50 000 

50 000. 

See table below 

No of missions  Average  cost 

trip 

3  800 

10 

oflA verage 
expenses 

dailyffotal  (ECU) 

Rounded 
(ECU) 

total 

135 

W7 450 

50 000 

The amounts represent  the total  cost  for the duration  of the operation,  if it is of  fixed 

duration, or for  one year if it is open-ended. 

H } 

ISSN  0254-1475 

COM(96) 259 final 

DOCUMENTS 

EN 

H 

Catalogue number  : CB-CO-96-269-EN-C 

ISBN 92-78-05246-9 

Office  for Official  Publications of the European Communities 

L-298S  Luxembourg