Month: Septiembre 2012
China-Chile Investment Agreement
On September 9th, 2012, China and Chile signed the Supplementary Agreement on Investment to the Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Republic of Chile (China-Chile Investment Agreement).
Key Outcomes
China-Chile Investment Agreement consists of 33 articles and 4 annexes. It covers substantive provisions on investment and treatment as well as procedural provisions on dispute settlement which are divided into the following 5 sections:
- Definitions of applicant, investment commission, both parties to the dispute, one party to the dispute, China-Chile FTA, freely usable currency, additional facility rules by the International Center for Settlement of Investment Disputes (ICSID), the ICSID Convention, investment, investor, China-Chile Supplementary Agreement on Trade in Services, arbitral tribunal, arbitration rules, etc.
- Substantive provisions involving market access for investment, national treatment, requirement of achievements, most-favored nation treatment, minimum standard of treatment, loss compensation, expropriation and compensation, transfer, subrogation, refusal to provide preferential treatment, etc.
- Procedural provisions on the rules and procedures for investor-state dispute settlement, including consultations and negotiations, submission of the applications for arbitration, consent to arbitration, limits and conditions of consent to arbitration, appointment of arbitrators, preliminary objection, applicable law, arbitration award, etc.
- Exceptions regarding national security, taxation, measures to maintain balance of payment, etc.
- Provisions related to transparency, dispute settlement, investment commission, annexes, footnotes, the relationship between China-Chile Investment Agreement and China-Chile FTA, amendment, implementation, period, termination, etc.
General Comment:
China-Chile FTA, covering mainly trade in goods and cooperation, was signed in November 2005, and entered into effect as of October 2006. Significant effects can be seen since its enforcement, bilateral trade rapidly going up. In April 2008, China and Chile signed the Supplementary Agreement on Trade in Service which implemented on August 1, 2010.
At present, Chile is China’s third largest trading partner in Latin America, while China is Chile’s largest trading partner in the world. The signing of China-Chile Investment Agreement completes the full establishment of Sino-Chilean Free Trade Area. It’s set to contribute greatly to improving the environment and expanding the areas for investment.
Hong Kong and Chile Sign Free Trade Agreement
On September 7th, 2012, Hong Kong and Chile signed a bilateral Free Trade Agreement (the Agreement), marking a new milestone in the furtherance of trade and investment co-operation between the two economies. The Agreement will enter into force on a date to be mutually determined by Hong Kong and Chile after completing necessary domestic procedures.
Key Outcomes
The Agreement consists of 19 Chapters and covers a wide range of areas of mutual interest to Hong Kong and Chile. The major features and liberalization measures of the Agreement are summarized below.
- On trade in goods, for goods originating from Hong Kong, Chile will abolish import tariffs on around 88 per cent of its tariff lines, and will phase out the tariffs on an additional 10 per cent over three years.
- On trade in services, Hong Kong service providers will enjoy legal certainty in market access and national treatment for a comprehensive range of services in the Chilean market.
- On investment, Hong Kong investors will have legal certainty on national treatment in respect of their investments in specified non-services sectors in Chile. To enhance investment flows between the two economies, Hong Kong and Chile agreed to further negotiate a more comprehensive agreement on investment promotion and protection.
- The Agreement also contains provisions to promote competition, facilitate access to each other's government procurement market, enhance co-operation in customs procedures and protect the environment. Under the Agreement, Hong Kong and Chile will co-operate in the areas of sanitary and phytosanitary measures and technical barriers to trade, with the objective of reducing trade barriers and facilitating bilateral trade as far as possible.
General Comment:
Total merchandise trade between Hong Kong and Chile was HK$7,058 million (US$904.87 million) in 2011 while total service trade was HK$950 million (US$121.79 million) in 2010. On trade in goods, Chile ranked 29th among Hong Kong’s worldwide trading partners and fourth among those in Latin America in 2011. On trade in services, Chile ranked 32nd among Hong Kong's worldwide trading partners and fourth among those in Latin America in 2010.
The Agreement will help Hong Kong businesses tap the Chilean market, which offers potential opportunities as an emerging market in itself, as well as opportunities as a gateway to the South American region. It will also expand Hong Kong's free trade agreement network to the American region, in addition to the existing linkage with the Asia-Pacific and European regions.
As regards to Chile, with the addition of this agreement, it now has 60 FTAs with various countries and regions representing more than 90% of the world GDP, making it the most open economy in the world.