Chile and the European Union sealed an improvement to their trade deal in Brussels on Friday that could give Europe better access to Chile’s vast lithium and copper resources.
The updated deal – which includes both trade and political upgrades – gives the EU vital access to the world’s largest reserves of lithium in Chile’s Atacama salt flats. Lithium is essential in the production of car batteries, so the European car industry is delighted.
“This is positive news as it strengthens the EU’s trade agenda. It is also of particular importance for our region as it will increase access to the raw materials needed for e-mobility,” said the European Automobile Manufacturers’ Association.
Chile’s new government, led by leftist President Gabriel Boric, has won more “policy space” to develop its own raw materials industry, an EU official explained. Now, the deal allows Chile to sell its lithium or copper at lower prices to EU companies that use Chilean processing.
coincidentally later today there are also EU negotiators ready to agree To the world’s most stringent standards for battery life. Brussels is also preparing a Critical Raw Materials Act.
For EU trade chief Valdis Dombrovskis, locking in another trade deal is a victory. Brussels has been negotiating with potential trade partners around the world to disengage from Russia, and to some extent, China – even more so after Russia’s invasion of Ukraine.
“Today’s agreement marks a real leap forward in terms of our sustainability commitments,” Dombrowski said. “It also reflects our shared strategic interest in terms of cooperation in areas such as clean energy and raw materials, which will be critical to our future economic resilience.”
Brussels is eyeing closer ties with Latin America and hopes to complete its deals with Mexico and the Mercosur bloc before elections to the European Parliament in 2024.
No dent (yet) on sustainability
But the treaty does not allow the EU or Chile to slap sanctions if one of the parties violates its sustainability provisions, unlike Brussels’ recent trade deal with New Zealand. This is because the deal was “technically concluded” before the EU Unveiled Its high green aspirations for trade deals in June, an EU official told a background briefing.
“Every negotiation is different,” the official said, adding that both sides promised to conclude additional talks within a year “as soon as the agreement enters into force.” He said this commitment is set out in a statement that Brussels and Santiago will publish next week with the full revised agreement.
“I expect this particular dialogue with Chile to be very like-minded and forward-looking,” the EU official said.
However, today’s new deal includes some novelties such as a gender equality chapter – a first in EU agreements.
“This chapter can serve as a new benchmark for making business more inclusive, with a special focus on the role of women in the global economy,” said European Parliamentarian Samira Rafaela of the Liberal Renew group, which represents the EU- Chile is in the lead on the agreement.
An EU official agreed to split the Chile and EU agreement to speed up the ratification process. ConfirmedWhich means the trade clause will only go to the Council of the EU and the European Parliament. while the political and investment clause would need to be approved by the bloc’s national – and sometimes regional – parliaments.
Joshua Posner contributed reporting.