Chile and Paraguay: Strategic partners jointly targeting Asia

RIO DE JANEIRO, BRAZIL – The agreement will considerably boost economic, political and cultural relations between the two countries, with a trade exchange that in 2021 will exceed US$1.2 billion and which is growing at an annual rate of 8%.

According to Chilean-Paraguayan Chamber of Commerce director Carlos Medina, the scope of the FTA “represents an institutional landmark that reaffirms the strategic ties between Chile and Paraguay.”

He emphasized that the FTA will consist of over 20 chapters, with new high-standard provisions on matters pertaining to the 21st century, the digital era and inclusive trade.

FTA SCOPE

It will include e-Commerce, Trade in Services, Trade Facilitation, Regulatory Aspects, Bank Financing, Global Value Chains, Entrepreneurs, Micro, Small and Medium Enterprises (MSMEs), Trade and Gender, Trade and Environment, Trade and Labor Issues, among others that will take bilateral ties to a deeper level of integration.

“This agreement will offer greater predictability to trade flows with clear and updated rules to facilitate trade, including innovative and non-discriminatory regulations for e-commerce suppliers,” Medina stressed.

The two countries agreed on market access to their service providers in key sectors to boost their economic relationship, which in turn will allow Chilean and Paraguayan companies to take part in public tenders in both countries, he noted.

He further stated that the signing of the agreement by Foreign Ministers Acevedo and Allamand on the bi-oceanic route should not be ignored, as it is South America’s most important logistics project that will link the center of Brazil, the Paraguayan Chaco and northwest Argentina.

This corridor will connect with Chilean Pacific ports, particularly Antofagasta, the logistics mega-city through which Chile exports copper and lithium to Asia and the world, engaged in an electro-mobility process that was unthinkable a few years ago. In this context, he stressed that by 2030, 40% of the food produced in South America is expected to be shipped to world markets through this new “silk road.”

COMPATIBILITY

He noted that Antofagasta is an example of how compatible the economies of Chile and Paraguay are, and how they can jointly successfully conquer the markets of the Pacific Basin. “The same shipping logistics that Chile uses to export its minerals can be used by Paraguay to ship its meat, grains, manufactured goods and foodstuffs to Asia, the planet’s fastest-growing economic area,” he added.

In addition to Paraguay’s Free Trade Warehouse in the port of Antofagasta, and the upcoming inauguration of a Paraguayan Free Trade Zone in the same city, the prospects for Chilean and Paraguayan entrepreneurs to join forces, form companies and jointly sell to the world are endless, Medina stated.

Thus, the productive linkage between companies from the two countries should be the goal, to ensure their insertion in regional and global value chains, an effort to be promoted by the ambitious Humboldt Project.

This project consists of the development of a submarine cable that will link South America to Asia along 14,810 kilometers, with the aim of enhancing data transmission, expediting trade and deploying artificial intelligence to its fullest extent. “The world is moving in that direction and we Chileans and Paraguayans should board that train,” the Chamber president said.