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Brussels urges Chile’s incoming president to endorse EU trade deal

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The EU’s trade commissioner has urged Chile’s incoming leftwing government, led by president-elect Gabriel Boric, to sign a deal with the bloc negotiated by the country’s rightwing predecessor.

Valdis Dombrovskis told the Financial Times he hoped the new administration, which takes office in March and includes the Communist party, would endorse the pact. He is also pressing EU member states to do the same after France held up the deal, which updates and deepens a 2002 agreement.

“We very much hope that the incoming government in Chile will endorse this modernised agreement,” Dombrovskis told the FT.

“This is a good deal for both Chile and EU member states, boosting our mutual trade and doing so in a way that is sustainable — in fact, the most sustainable trade deal we will have done so far.

“Strategically, it also gives the EU greater access to lithium, which will bolster our capacity to produce batteries.”

He also warned EU countries, which make up the world’s largest trade bloc, against growing protectionism.

“We should not lose sight of the benefits that trade deals bring for our economies, our businesses and workers, especially as we emerge from the [Covid-19] crisis,” he said.

France has persuaded the European Commission, which negotiates such deals on behalf of the union, to delay the Chile deal and talks with New Zealand. President Emmanuel Macron faces an election in April and was nervous about French farmers’ reactions to cheap Chilean chicken imports, diplomats said. Chile would get an 18,000 tonne tariff-free quota for chicken — less than 0.2 per cent of EU consumption.

Paris has cited sustainable development issues and agricultural sensitivities as reasons for its opposition.

An EU deal with Mercosur, the South American trade bloc, has been held up because some countries want binding commitments from Brazil to protect the Amazon rainforest.

Chile’s incoming president Boric is part of a broad leftwing coalition. His election ends three decades of moderate centrist governments, which have attracted investment to what today is the wealthiest nation in Latin America.

Boric has unnerved investors with opposition to some mining projects. However, he said at an October meeting with diplomats in Santiago that the EU deal was hugely relevant and that he would respect the results of the negotiations if elected.

Rodrigo Yáñez, director of international economic relations for the Chilean foreign ministry, said 60 per cent of the country’s economy depended on foreign trade and added that any leader must prioritise international partnerships.

“The EU deal is also the greenest accord Chile will have and the environment is a key part [of Boric’s] mandate,” Yáñez, who is involved in the EU negotiations, told the FT.

Boric’s team has plans for greater multilateralism, “with a Latin American vocation, respectful of human rights, international law, co-operation, international treaties and sustainability”, said senator Juan Ignacio Latorre, who was a foreign affairs spokesperson during the Boric election campaign.



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