Chile keen on PTA

Chile and India will sign a preferential trade agreement (PTA) soon to promote bilateral trade, Jorge Heine, Chilean ambassador in India, announced today.

The initial groundwork for the treaty has already started with both countries exchanging the items to be put on the PTA list. The ambassador said the first round of negotiation would take place in Delhi next month.

The first round would be between officials of ministry of commerce and industries from Indian side and ministry of external affairs from Chile.

"The president of Chile is likely to visit India next January. If the treaty is signed by during his visit, it will be the ideal situation," he added.

So far India has put forward a list of 300 items while its counterpart has handed over a list of 800 items. Two countries are looking a preferential trade agreement instead of a free trade agreement since the latter is more time consuming with thousands of articles to be dealt with.

Incidentally, Chile has free trade agreements with 38 nations, second only to Mexico. It is going to sign a FTA with China soon. Chile is one of the largest exporting country in South America with total exports of $30 billion in 2003. This is almost half of what India exports. Chile's population is only 15 million. Its import is in the region of $ 25 billion.

China's export to Chile stood at $3.1 billion in 2003 while India's total trade with Latin America was about $2.7 billion in the same period. India's export to Chile was $70 million in 2003 while Chile's export to India $230 million. In the first five month of this year, Chile's export has gone up to $200 million.

The ambassador said the PTA would send right signals to the business communities of both countries. However, he said India had huge tariff barriers in items like wine.

Chile is the fifth largest exporter of wine in the world. Chile's export to India is almost entirely copper. India's export included cars, pharmaceuticals, pesticide, garments and information technology products.

Incidentally Chile is the world's largest producer of copper with 34 per cent global market share, besides being a major fresh fruit and fish exporter.