Chile applies to join RCEP, opening a new chapter in Latin American trade!

On June 14, 2024, local time, Chiles Deputy Minister of International Economic Relations, Sanhueza, submitted Chiles application to join the Regional Comprehensive Economic Partnership Agreement (RCEP). This marks that Chile is expected to become the first Latin American country to join the RCEP, which is of great significance for its trade and economic development.foreign tradeThe Chilean Ministry of Foreign Affairs announced that during Sanhuezas visit to Indonesia, he met with Satvinder Singh, the Deputy Secretary-General of ASEAN responsible for economic community affairs, in Jakarta and submitted a formal application letter for Chile to join the RCEP. This move by Chile indicates its hope to further integrate into the global economic system and enhance its foreign trade competitiveness by joining the RCEP.

The Regional Comprehensive Economic Partnership Agreement (RCEP) is a free trade agreement initiated by ASEAN in 2012. It took eight years to be formulated by 15 members, including China, Japan, South Korea, Australia, New Zealand, and the ten ASEAN countries. On November 15, 2020, the ten ASEAN countries, China, Japan, South Korea, Australia, and New Zealand officially signed the RCEP, marking the official launch of the free trade area with the largest population, the largest economic and trade scale, and the greatest development potential in the world.

According to the foreign trade report released by the Central Bank of Chile, in 2023, Chiles total exports to China were $37.449 billion, accounting for 39% of Chiles total exports, ranking first. The main export products were copper, cellulose, and fruits such as cherries and grapes. Chiles total imports from China were $19.83 billion, accounting for 23% of Chiles total imports, also ranking first. The main imported products were mobile phones, televisions, and automobiles.

RCEP officially took effect on 2022年1月1, with the first batch of countries including six ASEAN nations (Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam) and four non-ASEAN countries (China, Japan, New Zealand, Australia). On 2023年6月2, RCEP came into effect for the Philippines, marking full implementation across all 15 signatory countries.

In the first quarter of 2024, the export value of Chiles non-copper lithium products was $12.337 billion. China remained Chiles largest export destination, with an export value to China of $3.618 billion, a year-on-year increase of 8.4%. The main export products to China included cherries, cellulose, iron, fresh plums, and iodine, accounting for 82% of the total export value of non-copper lithium products to China. Fernando Fernández, the director of the Chilean Export Promotion Bureau, said that these data reflect that China remains one of Chiles important export markets, and its market share is showing a continuous growth trend.

Chinas investment in Chile has achieved remarkable development in recent years. According to data released by the Chilean Foreign Investment Promotion Agency (InvestChile), in 2016, there were only 5 investment projects participated by Chinese enterprises in Chile, involving an amount of $310 million. By 2023, this number had increased to 21, with a total value of over $4.25 billion, an increase of 1370%. Chinese enterprises investment in Chile covers multiple fields such as energy, agriculture, mining, and finance. For example, Joyvio Group acquired the Australis Salmon farm, Tianqi Lithium acquired more than 20% of the equity of Chilean Chemical and Mining Company, and financial institutions such as China Construction Bank and Bank of China also provided convenience for enterprise investment.

Chiles application to join the RCEP aims to further promote its economic growth and foreign trade development by integrating into this largest free trade area in the world. The entry into force of the RCEP has reduced tariff barriers and increased market access among member states, which will bring more opportunities for Chiles exports.

After joining the RCEP, Chile can not only strengthen economic and trade cooperation with countries in the Asia-Pacific region but also attract more foreign investment by leveraging the extensive market of the RCEP. As the first country in Latin America to apply to join the RCEP, Chile shows its hope to enhance its international competitiveness through multilateral economic cooperation.

If Chiles application to join the RCEP is approved, it will open a new chapter in economic cooperation between China and Chile, as well as between Chile and other RCEP member states. Chiles accession will not only promote its own economic development but also inject new vitality into the RCEP.

Against the backdrop of a complex and changing global economic situation, enhancing the level of trade liberalization through multilateral cooperation is an important strategy for Chile to cope with global economic challenges. In the future, with Chiles active participation within the framework of the RCEP, its foreign trade and economic development are expected to welcome new opportunities and growth points.

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