Chinese tire export to Chile hasn't cancelled under new FTA

The upgraded China-Chile FTA came into force on March 1, 2019. China Briefing looks at bilateral trade relations between China and Chile as well as key market opportunities for foreign investors.

The upgraded China-Chile FTA will see the number of items exempt from tariffs increase to cover up to 98 percent of all items, according to China’s Ministry of Commerce. China has also said that it will gradually eliminate tariffs on some wood products from Chile over three years.

Meanwhile, Chile will immediately eliminate tariffs on Chinese imports, such as textiles and clothing, home appliances, and sugar products. 

However, tire tex is not included in non-tax Chinese export to Chile.

Actually, rubber tire is one of most important production exported to Chile from China. Taking Ningxia Province as an example, there were 671800 dollars of rubber tires exported from Ningxia Province, yearly increasing 92.44%.

Shandong Province, one of Chinese main tire producers, also planned to expand tire export to Chile.

According to FTA, Chile plans to control tire import tax from China in 3%, which is half of current tax 6%。 

In recent years, Chile has benefited from rising Chinese demand for its agricultural exports, such as fruits and meat.

Chile was the first Latin American country to establish diplomatic relations with the People’s Republic of China, dating back to December 15, 1970. However, relations stayed stagnant for decades until 2005, when the two countries signed a free trade agreement (FTA). This was the first FTA China signed with a Latin American country.

In 2016, President Xi Jinping visited Chile and announced the initiation of negotiations on upgrading the FTA. On November 11, 2017 an agreement was reached on the FTA upgrade; it finally came into force on March 1, 2019. This is only China’s second FTA upgrading agreement after the China-ASEAN FTA.

Previously, on May 24, 2015, China and Chile signed a double taxation avoidance agreement (DTA) and agreed to set up an RMB clearing center in Chile. This DTA was symbolic to China, as it was the 100th tax treaty that China signed with a foreign country.