“Both the Government and the National Congress were interested in advancing with the processing of this instrument, as part of our country's commitment to the Pacific Alliance and the Pro Tempore presidency that we have this year of this regional integration initiative,” said the Chilean undersecretary of international relations, Claudia Sanhueza.
The projects that modernize Chile's agreements with Indonesia and with the Pacific Alliance (AP) were ready to become Law of the Republic, after the Senate approved both initiatives unanimously this week.
The Undersecretary of International Economic Relations, Claudia Sanhueza, valued the speed and relevance that both Chambers of the National Congress dedicated to these initiatives, which will help Chile continue to diversify its export basket.
In the case of the Protocol of Amendment to the Comprehensive Economic Partnership Agreement (CEPA) between Chile and Indonesia, it incorporates provisions to expand trade in services, contemplating direct benefits to Chile for professional services of different types (legal, architecture, engineering, computing; research and development; cultural, and transportation, among others).
In this way, this instrument will provide certainty and predictability to exports of local services to said market, as well as provide a common framework to promote them.
“Indonesia is the leading economy in Southeast Asia and with high growth potential. Our trade exchange with that country reaches US$507 million, so there are many opportunities for growth given the interest of the private sector in increasing its presence in that market. The approval of this Protocol will help in that direction, boosting our exports of services to that country,” added the authority, who will travel to Indonesia between June 13 and 14 to meet with local authorities and continue deepening commercial relations between both countries.
Indonesia has a population of more than 27 million people and a GDP of US$ 1,319 billion. It is part of the Association of Southeast Asian Nations (ASEAN), which represents Asia's third largest economy. In addition, it is the first country in Southeast Asia that is submitting its application to join the OECD.
PACIFIC ALLIANCE
Meanwhile, the Draft Agreement that approves the Third Modifying Protocol of the Additional Protocol to the Framework Agreement of the Pacific Alliance – signed between Chile, Colombia, Mexico and Peru – seeks to expand the scope of the accumulation of origin to the Associated States of the bloc, since, until now, it is only possible to apply this tool among its Member States.
Accumulation of origin consists of a mechanism that is incorporated into free trade agreements through provisions that allow producers in one country to source parts and inputs from other nations without said inputs losing their originating status. The above allows producers to expand the availability of inputs to generate goods eligible for the tariff preferences established in trade agreements, increasing the possibilities of effectively using these benefits.
"Both the Government and the National Congress were interested in advancing with the processing of this instrument, as part of our country's commitment to the Pacific Alliance and the Pro Tempore presidency that we have this year of this regional integration initiative," added the Undersecretary Sanhueza.
The Pacific Alliance stands out as the eighth largest world economy in 2023, with a population of 237 million people and a GDP per capita of US$22,858. In addition, the AP receives 40.2% of the Foreign Direct Investment that entered Latin America and the Caribbean in 2022.
