Updated on Sunday, October 01, 2006, 00:00 IST

Beijing, Oct 01: China and Chile on Sunday has started implementing their historic Free Trade Agreement (FTA), the first such trade arrangement Beijing has forged with a country in the resource-rich Latin American continent.

The bilateral Free Trade Agreement is expected to eventually exempt 97 per cent of all trade goods from import tariffs.

Effective from today, China will lift tariffs on 2,834 products imported from Chile, including copper.

Chile will give duty free status to 5,891 commodities from China, including vegetables, fruits, mechanical and electrical equipments.

China has agreed to maintain tariffs on 7,391 products imported from Chile, while 7,750 exported products will be charged levies by Chile, the Chinese Ministry of Finance said.

China is Chile's second largest trading partner, with copper contributing to 30 per cent of China's imports from Chile. Statistics from the International Copper Association (China) show that 50 per cent of China's imported copper comes from Chile.

Chinese factories that process and consume copper will benefit from tariff cuts, Xinhua News Agency quoted Chinese copper industry insiders as saying.

China and Chile initiated free trade talks in November 2004. It took five rounds of negotiations before a consensus was reached on November 18, 2005. Chile is the first Latin American country to sign a Free Trade Agreement with China.

The Ministry of Commerce said bilateral trade between China and Chile has been growing at an average annual rate of 20 per cent since 2000. Commodity trade volume reached 7.13 bn USD in 2005, with China's imports standing at 2.15 bn USD and Chile's imports hitting 4.98 bn USD.

Bureau Report