Chile closes its 37th trade deal with the Philippines and opens talks with Bangladesh

Chile’s Minister of Foreign Affairs, Francisco Pérez Mackenna, closed a tour of Indonesia, Singapore and the Philippines on 25 July with one concrete result and two promises. The result: negotiations for the Comprehensive Economic Partnership Agreement (CEPA) with the Philippines are complete. The promises: free trade talks with Bangladesh, and progress on investment cooperation with Indonesia.

“We are coming back with concrete agreements,” the minister said at the end of the trip. The tour focused on diversifying Chile’s trading partners in Southeast Asia, a goal Pérez Mackenna repeated at each stop.

Number 37

The agreement with the Philippines, known as CEPA, was closed after more than a year of negotiations. It is the 37th treaty in the Chilean trade network, joining those already in place in the region with Thailand, Singapore, Vietnam, Malaysia and Indonesia.

The Philippines has more than 110 million inhabitants, a young population and an economy growing above 4 percent a year. The undersecretary for international economic relations, Paula Estévez, said that once signed, Chile will be the first Latin American country with a trade agreement with Manila, “which reflects the interest of both countries in promoting greater integration between Asia and Latin America.”

The minister pointed to where the concrete opportunity lies: the Philippines is a significant importer of agricultural and food products, sectors where Chilean exporters have room to grow.

Chart by Revista Diplomática with figures from the Ministry of Foreign Affairs.

Bangladesh, the market almost nobody watches

The least expected move of the tour was with Bangladesh. Alongside that country’s foreign minister, Khalilur Rahman, the Chilean minister agreed to open negotiations for a free trade agreement. That is a market of 177 million inhabitants where no country in the region has yet staked a position.

Jakarta and lithium

In Indonesia, the fourth most populous country in the world with 287 million inhabitants, Pérez Mackenna met Trade Minister Budi Santoso and Foreign Minister Sugiono. The conversation covered critical minerals, and with the board of Indonesia’s National Authority the two sides discussed cooperation in the lithium industry.

Singapore, security and the green economy

With Singapore’s Prime Minister, Lawrence Wong, the minister discussed cooperation on security, an area in which Singapore is regarded as a world reference, and interest in concluding a Green Economy Partnership Agreement.

The tour took place around the 50th anniversary of the Treaty of Amity and Cooperation in Southeast Asia, the founding instrument of the relationship with ASEAN. In that context the minister also held bilateral meetings with his counterparts from Singapore, Vivian Balakrishnan; Sri Lanka, Vijitha Herath; Norway, Espen Barth Eide; and Serbia, Marko Djuric.

A candidacy in the luggage

In all those meetings the minister promoted something that is not commercial: Valparaíso’s candidacy to host the secretariat of the BBNJ, the High Seas Treaty. It is the kind of work that rarely appears in trade balances but that helps determine a country’s institutional standing in the multilateral system.

The agreement with the Philippines still has to be signed, and talks with Bangladesh are only beginning. The real measure of this tour will be known once those two steps have a date.

Source: Ministry of Foreign Affairs of Chile and Ministry of Foreign Affairs of Chile.