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FTA talks switched to fast track
By Zhang Jin (China Daily)
Updated: 2004-08-27 09:09

China and Chile are fast-tracking negotiations over the establishment of a free trade agreement (FTA), with the conclusion of feasibility studies to be announced in early October, according to a Chilean diplomat.

And Chile is also considering granting China market economy status (MES) in anti-dumping and anti-subsidy cases, said Pablo Cabrera, Chilean ambassador to China.

China and Chile launched the FTA talks last year, and pledged to conclude the feasibility studies this year.

"We have just finished a two-day experts meeting in Beijing during the first week of this month," said the newly-appointed ambassador. "And now the two nations are expediting the process with the conclusion to be announced, hopefully, ahead of deadline."

The FTA will surely promote already-booming bilateral trade and mutual investments, Cabrera said.

"The two countries' economies are complementary with each other," he said. "An FTA will be good to both."

"With the FTA in place, two-way trade volume will easily exceed US$10 billion by 2008."

Cabrera said he believes China will soon surpass Japan to become Chile's second largest export destination, after the United States.

China is now Chile's fifth largest trading partner, and Chile is China's third largest trading country in Latin America.

The two-way trade reached US$2.37 billion during the first half of the year, representing an increase of 52.7 per cent on a yearly basis.

Chilean wine, well known for its low price and good quality, will also flow into China in coming years, as China is lowering its import tariff, Cabrera said.

The FTA will also give a rise to Chinese investments in Chile, he said.

"Chile is a good platform for Chinese firms to penetrate Latin American markets, as the country boasts sustained economic growth, solid macroeconomic indicators and a generous endowment of natural resources," he said.

China and Chile, world's largest copper consumer and supplier, have already vowed to strengthen co-operation on copper mining.

Leading Chinese miners have expressed interest in the Chilean copper market.

Currently copper accounts for 62 per cent to 68 per cent of Chilean exports to China.

Meanwhile, the FTA will also give easy access for small and medium-sized enterprises into each other's markets, the ambassador said.

Currently Chile has launched FTAs with Canada, Central America, South Korea, European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), Mexico, USA and the EU.

China is active in FTA talks with its neighbours and major trading partners including New Zealand, Australia, the Gulf Co-operation Council and South Africa.

China has already started construction of an FTA with the Association of South East Asian Nations which, scheduled to be completed by 2010, is potentially the world's largest FTA.

WTO and MES

Cabrera said he held a positive view on China's fulfillment of its WTO commitments, adding the nation, although a new member of the world trade club, has opened itself wider and wider to the outside world, and considerably reformed its economic structure.

"China and Chile have already talked about the MES," he said, adding that Chile will make a decision on that matter in October.

Since the accession into the WTO in late 2001, China has faced an increasing number of anti-dumping charges and found itself in a disadvantaged position, as it is still labeled a non-market economy by most WTO members.

The country is now working hard to obtain market economy status from other WTO members to better protect its industries and ensure fair play in the international market.

Up to now, New Zealand, Singapore, Malaysia, Thailand and South Africa have granted market economy status to China.

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