More than a year has elapsed since the European Union and Chile began modernizing their trade agreement. After years of discussions, political shifts in Chile paused final approval, but a pivotal move is now advancing in Brussels. The updated pact aims to expand EU access to Chilean raw materials and energy resources, including lithium, copper, and hydrogen, strengthening Europe’s ability to reduce dependency on other regions and enabling European firms to operate more fully in Chile across sectors such as shipping, financial services, and telecommunications.
The EU’s relationship with Chile is deliberately strategic. Both sides have long acted as aligned partners in defending a multilateral trading system and fair global rules, a stance that gains renewed importance amid heightened geopolitical tensions following the war in Ukraine. EU trade leadership has repeatedly underscored the need to forge closer ties with trusted allies. In this frame, Valdis Dombrovskis, the Commission Vice-President and head of trade, has emphasized the goal of deepening cooperation with like-minded partners. The announcement, made together with the head of European diplomacy, Josep Borrell, highlighted the agreement as a milestone for both parties. The Chilean foreign minister, Antonia Urrejola, described the accord as historic.
The modernization of this agreement is presented as a practical accelerator for Europe’s energy transition and for diversifying supply chains. It is expected to facilitate non-tariff and tariff-related efficiencies that support stronger, more resilient supply networks. Officials project that nearly all EU exports to Chile will enjoy duty-free status, with Brussels projecting a measurable increase in Community exports and trade opportunities.
From the Chilean perspective, the pact expands access to European markets for agricultural and agri-food products, including meat and olive oil, while maintaining a robust framework for liberalization across other sectors. The new arrangement also focuses on increasing European capacity to lend in Latin America, expanding opportunities in transportation, telecommunications, shipping, and financial services. Improved access to public procurement for goods and services is part of the package, along with commitments designed to reduce bureaucratic barriers for small and medium-sized enterprises. The agreement will include strong provisions on human rights, sustainability, and innovation to align growth with responsible practices.
political dialogue
Political dialogue under the updated framework will broaden its scope to address peace, justice, and international security, as well as science, technology, research, and innovation. A dedicated section on trade and sustainable development reinforces adherence to international labor and environmental standards, including commitments linked to the Paris Agreement. A separate chapter on trade and gender emphasizes measures to eliminate discrimination against women, while another provision aims to create a more sustainable and resilient food system within supply chains.
The next step involves initiating the approval process for the legal instruments contained in the agreement. Although the process is complex, observers expect a relatively swift path to ratification once formal steps begin, given the period since the texts were signed in late 2023. Once ratified, chapters falling under the exclusive jurisdiction of the European Union could enter into force earlier, setting the stage for broader implementation. As one European official noted, the deal holds the potential to unlock Chile’s capacity to attract investment while granting non-discriminatory access to the EU market, reinforcing a mutually beneficial economic relationship.