Chile and Brazil have signed a free trade agreement that scraps red tape and tariffs between the two South American economies. Brazil President Michel Temer traveled to Santiago on Wednesday to sign the deal with his counterpart, Chilean President Sebastian Pinera. It is a move both governments said would give a boost to regional integration as well.
Both countries touted the deal as critical to reinforcing integration in Latin America. Chile is a member of the Pacific Alliance, which also includes Mexico, Colombia and Peru. Brazil, together with Argentina, leads Mercosur, which also includes Uruguay and Paraguay. The agreement, which was negotiated in under 6 months, “unites the Mercosur and Pacific Alliance,” Temer said during the signing ceremony.
Trade between the two countries reached $7.2 billion dollars between January and September, an increase of 13% over the previous year. The agreement eliminates the last remaining tariffs between the two South American economies. The majority were previously slashed as part of a complementary agreement signed between Chile and Mercosur bloc countries.