The Australia–Chile Free Trade Agreement is a

trade agreement A trade agreement (also known as trade pact) is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other. The most common tr ...

between the countries of

Chile Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the east a ...

and Australia. It was signed on July 30, 2008 and went into effect in the 1st quarter of 2009. The agreement was intended to go into effect on January 1, 2009, but was delayed due to Chile not being able to finish its ratification in time. ABS-5368

Trade between Chile and Australia is modest, involving A$856m in 2007. Australia is the fourth largest provider of foreign direct investment in Chile with over A$3 billion in 2007. Chile ranks as Australia's 41st trading partner. Australia's main exports to Chile were coal (A$94 million) and civil engineering equipment (A$21 million). Trade from Chile is copper (A$96 million), and pulp and waste paper (A$57 million). When enacted, the Agreement calls for Chile to eliminate

tariffs A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...

on 91.9% of tariffs which cover 96.9% of trade from Australia. Australia will cut 90.8% of tariffs which cover 97.1% of trade from Chile. By year six of the Agreement (2015), all tariffs will be discarded except for Chile's sugar tariff which will remain subject to its current ‘price band’ system. The tariffs in Australia, that will stay in place until 2015, will be relating to textile and the clothing industry along with

table grapes Table grapes are grapes intended for consumption while fresh, as opposed to grapes grown for wine production, juice production, or for drying into raisins. ''Vitis vinifera'' table grapes can be in the form of either seeded or non-seeded varieta ...

. In Chile, the agreement will protect the textile and clothing industry and some other manufactured products. According to the Australian Government, the government hopes to use the Agreement as a model for other free trade agreements with other countries. Before passage of the Agreement

farmers A farmer is a person engaged in agriculture, raising living organisms for food or raw materials. The term usually applies to people who do some combination of raising field crops, orchards, vineyards, poultry, or other livestock. A farmer mi ...

and

horticulturists Horticulture is the branch of agriculture that deals with the art, science, technology, and business of plant cultivation. It includes the cultivation of fruits, vegetables, nuts, seeds, herbs, sprouts, mushrooms, algae, flowers, seaweeds and no ...

protested the Agreement in front of the Australian Parliament. The protesters claim that this agreement would undercut Australian food producers by allowing in cheap food goods from Chile.

Simon Crean Simon Findlay Crean (born 26 February 1949) is an Australian politician and trade unionist. He was the Member of Parliament for Hotham from 1990 to 2013, representing the Labor Party, and served as a Cabinet Minister in the Hawke, Keating, R ...

, Australia's Minister for Trade, responded to the farmers concerns by stating that tariffs are quite low or in some cases nonexistent due to previous international trade agreements. Chile and Australia agreed in principle to start negotiations on December 8, 2006. Negotiations started on July 18, 2007 and after four rounds of talks, concluded on May 27, 2008.

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