Tariffs on 90 per cent of products traded between Thailand and Chile will be eliminated immediately, under a new free trade agreement (FTA) struck between the two countries.
Chilean President Sebastian Pinera and Thai prime minister Yingluck Shinawatra signed the pact in Bangkok last week.
The agreement will be implemented early next year, according to Thai newspaper The Nation, with the two countries agreeing to eliminate tariffs on all tradable products over the next five years.
Chilean foreign affairs minister Alfredo Moreno was optimistic about what the deal will mean for the South American nation’s push into Asia.
“The agreement will boost bilateral trade and investment between the countries as part of Chile’s plans to expand access to Chilean products in the Asia Pacific,” Moreno told The Santiago Times.
Combined trade between Thailand and Chile was valued at US$980m in 2012. According to Chilean government figures, exports to Thailand totalled US$315m last year, with walnuts, avocados, raisins, table grapes and apples making up the majority of horticultural products shipped to the Thai market, Chile’s largest in South East Asia.
While the trade balance may appear to be in Thailand’s favour, with US$715m worth of products shipped to Chile in 2012, Shinawatra said the deal signalled a landmark moment for her country.
“This free trade agreement is historic because it is the first that Thailand has signed with a Latin American country,” Shinawatra said.
Jintana Chaiyawonnagal, deputy director of Thailand’s Trade Negotiations Department said the agreement would help Thailand bolster trade links in Latin America and beyond.
“This FTA is a strategic tool for the Kingdom to penetrate the Latin American region, and Chile's trading partners,” Chaiyawonnagal told The Nation. “Chile has more than 60 bilateral trade pacts with countries worldwide.”
Negotiations for the agreement began in 2011, following initial consultations 10 years ago.