EFTA updates free trade agreement with Chile

The revised deal opens up wider market access and improves the legal framework and predictability for businesses, the Swiss economics ministry said on Saturday. © Keystone / Gian Ehrenzeller

The countries of the European Free Trade Association (EFTA), of which Switzerland is a member, and Chile have concluded negotiations to modernise their free trade agreement. Switzerland hopes this will boost the competitiveness of its economy.

With this modernisation, the agreement is now largely in line with the most recent free trade agreements concluded by EFTA (Switzerland, Iceland, Liechtenstein and Norway), the State Secretariat for Economic Affairs (SECO) said on Saturday. It opens up wider market access and improves the legal framework and predictability for economic players.

Virtually all Swiss exports to Chile will be exempt from customs duties. The agreement is supplemented by provisions on trade, sustainable development, financial services, SMEs and e-commerce.

Protected geographical indications

The agreement also guarantees protection for important Swiss geographical indications. It also covers all intellectual property rights and their application.

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In a message on X (formerly Twitter), Economics Minister Guy Parmelin welcomed an agreement that will offer new opportunities and greater predictability for economic players. “An important step has been taken tonight to strengthen our cooperation between Switzerland and Chile”, he said.

At the Davos World Economic Forum this week, Parmelin described the idea of an agreement between EFTA and Mercosur (a bloc of South American economies) this year as “optimistic” but not impossible. Discussions are expected to resume soon.

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A 20-year-old agreement

SECO points out that the free trade agreement between EFTA members and Chile, which has been in force since 2004, had a number of shortcomings compared with Switzerland’s more recent agreements. To remedy this, negotiations were launched in 2019.

Chile is an important trading partner for Switzerland in Latin America. Since the free trade agreement came into force, trade in goods between the two countries has grown steadily, reaching a volume of CHF1.2 billion ($1.38 billion) in 2022. Trade in services has also grown over the years, reaching around CHF500 million in the same year.

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