Written by Josefa Barbera Rojas, Paralegal
On May 2, 2025, a landmark agreement came into force between Singapore and the Pacific Alliance (PA)—a regional trade bloc comprising Chile, Colombia, Mexico, and Peru. Known as the Pacific Alliance–Singapore Free Trade Agreement (PASFTA), this deal marks a significant step in deepening economic integration between Latin America and Asia.
While Singapore has long maintained a zero Most Favoured Nation (MFN) tariff policy on nearly all products, PASFTA adds legal certainty, simplifies procedures, and opens new doors for trade in services and investment. For countries like Chile, the agreement will remove trade barriers but also unlock new growth opportunities for businesses, particularly small and medium-sized enterprises (SMEs), in key sectors like agribusiness, technology, and professional services.
In this blog, we explore the key features of PASFTA, how it benefits Chilean exporters and service providers, and why this agreement matters for the future of Chile’s global trade strategy.
Key context
Singapore is known for its zero Most Favoured Nation (MFN) tariff policy on virtually all products, with the exception of beer. This means Chilean exporters already enjoyed tariff-free access to the Singaporean market even before PASFTA.
However, the agreement reinforces and formalises this access, providing greater legal certainty and predictability for exporters. So, popular Chilean products in the Asian country like salmon, berries, grapes and copper will improve and increase their competitiveness in the Singapore market.
Additionally, PASFTA introduces mechanisms that facilitate cumulation of origin, allowing inputs originating from PA member countries to be considered as domestic for the purposes of rules of origin This is particularly beneficial for small and medium-sized enterprises (SMEs), as it allows them to integrate into regional value chains and access broader markets.
Other benefits
PASFTA is not limited to trade in goods; it also establishes a robust framework for trade in services. Including provisions that guarantee national treatment and most-favoured nation treatment, ensuring that Chilean service providers receive treatment no less favourable than that granted to local or third-country providers.
For Chilean companies interested in exporting services to Singapore, the agreement simplifies authorisation procedures and establishes principles of transparency and non-discrimination.
One of the most relevant benefits on this matter is the Elimination of Local Presence Requirements; this translates that providers are not required to establish an office or residence in the country to offer their services.
All off this facilitates the internationalisation of companies in sectors such as technology, education, and professional services.
Impact on the Chilean Economy
Trade between Chile and Singapore has shown sustained growth in recent years. In 2024, bilateral trade reached USD 183 million, with an average annual growth of 3.9% over the past six years.
PASFTA has the potential to further boost this commercial relationship. By facilitating access to the Singaporean market and promoting integration into regional value chains, Chilean exports are expected to increase, especially in sectors such as technology, professional services, and agribusiness.
In addition, the agreement may attract Singaporean investments to Chile, taking advantage of opportunities in strategic sectors and strengthening Chile’s position as a regional hub.
Conclusion
PASFTA represents a strategic bridge between Latin America and Southeast Asia. For Chile, it offers a significant opportunity to diversify its export destinations, deepen its participation in global value chains, and attract high-quality investment.
By formalising tariff-free access, simplifying service export procedures, and promoting regional integration through cumulation of origin, PASFTA creates a more predictable and accessible framework for Chilean businesses, and especially SMEs, to compete and grow on the international stage.
As global trade becomes increasingly interconnected, agreements like PASFTA are essential tools for strengthening Chile’s economic resilience and positioning it as a key player in the Asia-Pacific region. The real challenge now lies in ensuring its effective implementation, so that its full benefits are felt across all sectors of the Chilean economy.
Harris Gomez Group METS Lawyers ® opened its doors in 1997 as an Australian legal and commercial firm. In 2001, we expanded our practice to the international market with the establishment of our office in Santiago, Chile. This international expansion meant that as an English-speaking law firm we could provide an essential bridge for Australian companies with interests and activities in Latin America, and to provide legal advice in Chile, Peru and the rest of Latin America. In opening this office, HGG became the first Australian law firm with an office in Latin America.
As Legal and Commercial Advisors, we partner with innovative businesses in resources, technology and sustainability by providing strategy, legal and corporate services. Our goal is to see innovative businesses establish and thrive in Latin America and Australia. We are proud members of Austmine and the Australia Latin American Business Council.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. It does not create a solicitor-client relationship, and readers should seek independent legal advice for their specific circumstances. Harris Gomez Group accepts no liability for reliance on this content.