Today, the new automotive agreement between Argentina and Chile, which was entered into on 16 December 2020, has been made official by publication in the Official Gazette. It is estimated that the agremeent will allow Argentina to increase its annual exports of vehicles to Chile by ten thousand units, which accounts for USD 150 million.
Under the agreement, which will enter into force next 13 April, a Regional Content Index (ICR) is set forth requiring a 50% share of domestic content, thereby encouraging a substantial growth in bilateral trade flows with a view to boosting bilateral trade and investment and advancing the regional productive chain.
“With Chile, we have modified what is known as rule of origin, so from now on we will be able to export approximately 10,000 more pickup trucks, which means a lot of money and a lot of new jobs,” stated Foreign Minister Felipe Solá.
Chile and MERCOSUR have had a comprehensive trade agreement (Economic Complementarity Agreement No. 35) in place since 1996, which in 2014 met the requirements for free trade in goods. In 2019, Argentina and Chile expanded that agreement by including new sectors such as government procurement, services, trade and SMEs, and trade and gender.
Under the system currently in place, a 60% share of domestic manufacturing is required for external tariffs to be waived, and as a result of the efforts led by the Secretariat for International Economic Relations of the Argentine Foreign Ministry, headed by Jorge Neme, this share will be reduced to 50% for the automotive sector.
The agreement is the result of the work carried out actively by the Embassies in both countries, and reflects the strong bonds of political and economic integration between Argentina and Chile through projects in various fields. President Alberto Fernández and his counterpart Sebastián Piñera reinforced such bonds during the recent visit of Fernández to Chile by signing a joint statement which placed special emphasis on issues of connectivity, infrastructure, physical and digital integration, border facilitation, bilateral trade expansion, and health, science and tourism cooperation.