   
  
WT/REG387/M/1  
 
30 April 2019 
(19-2941) Page: 1/3 
Committee on  Regional Trade Agreements  
Ninety -second  Session    
 
FREE TRADE AGREEMENT  BETWEEN CHILE AND THAILAND  
(GOODS  AND SERVICES ) 
NOTE ON THE MEETING OF 1 APRIL  2019 
Chairm an: Ambassador Carlos Mario FORADORI (Argentina)  
1.1.  The 92nd Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/17/Rev.1 dated 22 March 2019.  
1.2.  Under Agenda Item F. II of the Session, the CRTA considered the  Free Trade Agreement 
between Chile and Thailand  (Goods  and Services ), (hereinafter "the Agreement").  
1.3.  The Chairman  noted that the Agreement had entered into force on 5 November 2015. It had 
been notified to the WTO by the Parties on 12 September 2017 under Article  XXIV:7(a) of the 
GATT  1994 and the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an 
Agreement establishing a free trade area (document  WT/REG387/N/1) and under 
GATS  Article  V:7(a) as an Agreement providing for the liberalization of trade in services within t he 
meaning of Article V of the GATS (document S/C/N/895). The text of the Agreement was available, 
together with its Annexes, on the Parties' official websites.  The Factual Presentation  on the goods 
and services aspect s (document  WT/REG 387/1 dated 11 January 2019) and questions and replies 
on the Agreement (document WT/REG387 /2 dated 22 March 2019 ) had been distributed.  
1.4.  The representative of Chile thanked the Secretariat for preparing the factual presentation , the 
delegation of Thailand, with whom Chile had worked in an amicable and coordinated manner to reply 
to the numerous questions submitted , and Chinese Taipei, Ecuador, the European Union, Japan and 
Mexico for the ir questions to which the Parties had responded . 
1.5.  It was important to point out that  the Agreement complied with the standards established in 
Article XXIV of the GATT, insofar as it eliminated tariffs for a substantial part of bilateral trade, with 
the removal of tariffs for 89% of products of Chilean origin  on entry into force . Under the  Agreement 
7.6% of products would obtain full tariff liberalization benefit as from 2020 and 2.2% as of 2023. 
There  were no exceptions to tariff elimination.  
1.6.  Since its entry into force in November 2015 the Agreement  had had a positive impact on 
bilateral t rade, with Thailand becoming one of the main destination s for Chilean exports to ASEAN. 
Chile's exports had grown by 33% since the entry into force of the Agreement. Between January 
and November 2018, exports had amounted to USD 375 million, compared with USD 280 million for 
the same period in 2015.  
1.7.  In services , the scheduling of services commitments  was based on a positive list in which each 
Party identified, within its own schedule, the services to which Articles 9.3 and 9.4 on market access 
and national treatment applied, including any relevant limitations and conditions.  
1.8.  In Chapter 11 on cooperation, Article 11.9 required the Parties to protect geographical 
indications, in accordance with their national laws and regulations, in conformity with the WTO TRIPS 
Agreement with a view to strengthening such protection.  
1.9.  The FTA was a dynamic Agreement, since Article 16.4 provided for a future work programme  
through which  the Parties were committed to extending the scope of the Agreement, initiat ing WT/REG387/M/1  
 
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  negotiations on investment and review ing relevant Articles of the Agreement as necessary. The 
Parties were committed to the effective implement ation of the Agreement .  
1.10.   In conclusion, he believe d that it was important to underscore the pledge made by Chile and 
Thailand to take forward the commitments made under the Agreement and move towards 
implementation that was efficient and beneficial for both nations. Since the Agreement's entry into 
force, two meetings ha d been held by the FTA Administrative Commission , the first had been  held 
in Bangkok in May 2017 and the second in Santiago in August 2018. These meetings demonstrate d 
the commitment of both countries to ensuring the proper administration of the Agreement.  
1.11.   The representative of Thailand  thank ed Chile for its openin g remarks , the Secretariat for 
preparing the factual presentation and Members for their interest and questions. Thailand value d 
the opportunity to present the Agreement . The RTA Transparency Mechanism  would continue to 
support the functionality of the multilateral trading system.  
1.12.   The Agreement served as the foundation for the trade and economic relationship  between 
Thailand and Chile . Its objectives were to further liberalize and facilitate trade in goods and services 
between the Parties  and at the same ti me to ensure adequate, effective and non -discriminat ory 
protection of trade between the Parties . The Agreement ha d helped deepen and strengthen mutual 
economic cooperation in fields such as e-commerce and environment.  
1.13.   Under the Agreement, tariffs for vario us categories of products such as vehicles, agricultural 
products and consumer products ha d been reduced. The result of the tariff reductions ha d steadily 
increased bilateral trade between Thailand and Chile. In 2014 before the Agreement had enter ed 
into force, trade between the two countries was around USD 955.8 million. In 2018, three  years 
after its entry into force, bilateral trade ha d increased to USD 1.2 billion , a 29% increase in total 
trade volume. Chile ha d become Thailand's third  largest tr ade partner in South America and Thailand 
believed that trade  would  continue to grow in the coming years. Apart from the benefit of tariff 
reductions, Thailand attached great  importance to trade facilitation and transparency in order to 
further enhance tra de and market environment in both countries, as shown in chapter s 5 and 12 
respectively.   
1.14.   In trade in services, the Parties  recognize d the key role that services could  play in economic 
development as they provide d indispensable inputs for other sectors of  the economy, contributing 
to economic growth and job creation. For this reason, the commitments made by both Parties  under 
the FTA were wider in scope and freer in term s of market access and related restrictions  than the 
GATS . For example, Thailand ha d extended benefits to Chilean businesses to own certain businesses 
in Thailand through  holding up to 70% of registered capital, compar ed to 49% under the GATS.   
1.15.   In addition to tariff reductions and lowering barriers to trade, the Agreement  emphasized the 
importance of consultations through relevant committees as in Chapter 14. Consultations were 
intended  to solve any problems before proceeding to dispute settlement procedures. Moreover, the 
Agreement stipulated that the arbitral panels must be independent of the Parties  and would  have to 
comply with a Code of Conduct which would  be agreed by the Parties .   
1.16.    He reiterate d that the Agreement was an important landmark for the bilateral trade and 
economic relationship  of the Parties , as well as serv ing as a platform for increasing welfare through 
freer trade. In conclusion, he thanked  Chile for the close collaboration during the preparation of th e 
meeting  and M embers, namely Chinese Taipei, Ecuador, European Union, Japan and Mexico for their 
questions. He hoped  that the answers provided prior to th e meeting would  help clarify the various 
points which had been raised.  
1.17.   The representative of the United States  thanked the Parties for their presentations and the 
additional context that they had provided . He acknowledged that Chile would eliminate duties on all 
tariff lines under the Agreement, but a sizeable number of tariff lines had been excluded from 
elimination by Thailand and tariffs remained quite high in those excluded lines. The United States 
was enco uraged to see customs -related provisions based on the TFA and other FTAs incorporated 
into the Agreement  such as binding provisions on advance rulings, which had a TFA plus scope of 
classification, valuation and origin, risk management as well as a specifi c discipline regarding 
valuation and consistency with the Customs Valuation Agreement. He acknowledged that traders WT/REG387/M/1  
 
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  could  avail themselves of administrative and judicial review in customs -related matters which was 
an important TFA plus provision. On goods,  he highlighted the important commitment by the Parties 
to apply the principles set out in the TBT Committee 's decisions and recommendations with respect 
to determining and using international standards , an issue which had arisen in a number of the 
agreeme nts under review in the meeting .  
1.18.   On services he noted Chile's improved sectoral coverage in professional services, computer 
and related services and distribution services. The Agreement had some of what  the United States 
considered to be key elements of m odern agreements such as a standalone financial services chapter 
and some important domestic regulations for services suppliers which was not surprising given that 
the Parties were proponents of that work in the WTO. He noted the improvements in Thailand's  
commitments beyond its current GATS commitments including computer and related services and 
business -related services. Most significantly, the United States was encouraged by the commitment 
from Thailand to raise its foreign equity ceiling from 49% of reg istered capital to 70%. On 
telecommunications, he noted Thailand's improvements over its GATS commitments and wondered 
whether  the commitment reflected Thailand's current regime . If so, he encouraged Thailand to 
submit a revised GATS schedule to reflect its commitment made back in 1997 to WTO Members to 
revise its GATS schedule by the end of 2006 to reflect the results of subsequent legislation which he 
understood had been  passed in 2002 and amended in 2019. It looked like this process had been 
completed so  he would welcome that.  
1.19.   The Secretariat's factual presentation referred to the difficulty of comparing Thailand's GATS 
schedule with the Agreement because of the use of a different classification scheme. He 
acknowledged that difficulty and suggested that one way such challenges could be overcome was 
through a negative list of scheduling commitments. He wondered if the Parties had considered that 
approach. He noted that the chapter on e -commerce  contained no binding obligations on the Parties 
and focused on ly on cooperation in this important area. He wondered if the Parties were thinking of 
making that aspect more robust.  
1.20.   The representative of the European Union  thanked the Parties for the valuable information 
provided and recalled that it had submitted two questions on services  for which  detailed replies had 
been provided. The EU had no follow up questions.  
1.21.   The representative of China  congratulated the Parties as the Agreement had the key elements 
of a high standard trade agreement. He said that Thailand had not specified TRQ quantities as set 
out on the last page of the factual presentation. He asked Thailand to provide the m and to explain 
how they were  determined within the quota quantit ies committed by Thailand under the WTO.  
1.22.   The repr esentative of Thailand  said he had noted the comments and observations of the 
United States, the European Union and China. He would consult with capital and revert as soon as 
possible.  
1.23.   The Chairman  said consideration of the Goods and Services Aspects of t he Free Trade 
Agreement between Chile and Thailand ha d allowed the Committee  to clarify a number of questions 
and it could  now conclude oral discussion of th e RTA in accordance with paragraph 11 of the 
Transparency Mechanism. If any delegations wish ed to ask follow -up questions they were invited to 
forward submissions in writing to the Secretariat by 8  April 2019 and Parties were asked to submit 
replies in writing by no later than 22 April 2019. In accordance with paragraph  13 of the 
Transparency Mechanism all written submissions, as well as minutes of this meeting would  be 
circulated promptly, in all WTO  official languages, and would  be made available on the WTO website.  
1.24.   The Committee took note  of the comments made.  
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