Tax News | 18 April 2012

Canada, Chile Expand FTA

by Mike Godfrey, Tax-news.com, Washington

Canada and Chile have signed a modernized and expanded free trade agreement (FTA), designed to deepen commercial ties between the two countries.

The new agreement was inked during a visit of Canadian Prime Minister Stephen Harper to Chile. The original FTA came into force in 1997, and bilateral merchandise trade has more than tripled since then, reaching more than CAD2.7bn (USD2.7bn) last year. Canada has also been the largest source of new direct investment in Chile over the last decade.

The original FTA covered trade in goods and services, but did not include provisions on financial services. The amended agreement now includes a financial services chapter.

This will ensure that Canadian financial institutions enjoy preferential access to the Chilean market and can compete on a level playing field in relation to their competitors. According to the Canadian government, the changes will help institutions develop new markets in the banking, insurance and asset management sub-sectors in Chile.

Commenting on the signing, Harper said: “The Canada-Chile Free Trade Agreement has been the cornerstone of our commercial relationship with Chile for the past 15 years. The enhancements announced today will generate further economic growth and job creation in Canada by increasing commercial opportunities for our businesses.”