By Philip Blenkinsop
BRUSSELS, Dec 9 (Reuters) – The European Union and Chile struck a partnership on Friday that will liberalise more trade between the two and give EU companies greater access to raw materials such as lithium and copper that are key to the EU’s green transition.
The partnership, which includes cooperation on climate change, justice and science, is part of an EU push to forge alliances to respond to the fallout from Russia’s invasion of Ukraine and concerns over its economic dependence on China.
On raw materials, the agreement means EU companies will be less hindered by Chile’s dual pricing system for domestic use or exports and potential export monopolies, while still allowing Chile to promote domestic processing.
More than 60% of EU imports of lithium are from Chile, the world’s largest copper producer and second largest lithium producer, while China controls nearly two-thirds of the world’s processing of lithium into battery-grade material.
“This is certainly going to be an agreement that helps us to diversify our resources and move out of dependence on China, in particular at this stage about lithium and copper,” an EU official said.
The two partners would treat EU and Chilean investors the same as domestic investors in each other’s markets, including in energy and raw materials.
The new trade agreement will extend the existing deal from 2003 that already liberalised trade in some 96% of product lines. With the notable exception of sugar, the new agreement will liberalise the rest.
It will increase EU quotas for Chilean poultry and other meats and for olive oil. The EU will be able to sell more dairy produce, notably cheese.
It will also expand on a system to reserve food and drinks names to products made in the places where they originate. So “prosecco”, for example, will only be used for sparkling wine from Italy.
There will also be a liberalisation of services, such as deliveries, telecoms, maritime transport and financial services, and of access to public sector contracts.
The trade aspects require approval from the European Parliament and EU governments to enter force, which could be in 2024.
(Reporting by Philip BlenkinsopEditing by Mark Potter)