The reaching of a Chile-China agreement on trade in cargo, an important step toward the establishment of a free trade area (FTA), will help strengthen trade and economic cooperation between China and South America, a senior UN official said Monday.

An FTA pact with China will allow Chile to strengthen its ties with the Asia-Pacific region and deepen its economic relations with the South American Common Market (Mercosur) and the Andean region, said Osvaldo Rosales, director for international trade under the UN Economic Commission for Latin America and the Caribbean (CEPAL).

China and Chile reached the agreement last Friday in Beijing after five rounds of negotiations. The two countries are expected to sign the agreement within this year and implement it as soon as possible, the Chinese Ministry of Commerce said following the conclusion of the talks.

The agreement will be the first China has reached with countries outside Asia and is an evidence of how much importance China pays to trade and economic cooperation with Chile, Rosales noted.

He stands for developing economic relations with China in a sub-regional way and advocates joint projects among China, Chile, Brazil and Peru.

On Nov. 9, CEPAL will organize a seminar with the chambers of commerce of Brazil, Chile and Peru to analyze options to expand commercial and investment links with China.

Rosales said there are new chances for China and he South American countries to enhance their cooperation in export, investment, tourism and aviation, as well as in infrastructure construction and energy.

He stressed that the fast growth of the Chinese economy demands a secure supply of energy, minerals, food and raw materials, which are already supplied by South America.

China's development is the main momentum of exports growth of several South American states, he said.

After Chinese President Hu Jintao's visit to South America in late 2004, China has increased its investments in Argentina, Brazil, Chile, Colombia, Peru and Venezuela.

Now the challenge facing Chile is to work to become an effective trade and investment bridge in the Asia-Pacific region and to accelerate the development of its relations with China and Japan, Rosales stressed.

Chile will start negotiations with Japan for an FTA in 2006. It has launched FTA talks with South Korea, Singapore, New Zealand and Brunei.

Source: Xinhua