The first round of talks was launched with Chile on Tuesday on the possibility of setting up a Free Trade Agreement (FTA).

If discussions proceed smoothly, they may conclude before March next year, Chilean officials predicted.

Three-day talks in Beijing will finalize an outline for FTA negotiations, stipulating the sectors to be considered and a timetable for talks.

Assistant Minister of Commerce Yi Xiaozhun and Carlos Furche, director-general of Chile's General Directorate of International Economic Relations, headed the delegations at Tuesday's meeting.

A negotiation committee will be established during this first round, which will look at areas including rules on place of origin and inspection and quarantine.

"We hope the talks can end before the presidency of Ricardo Lagos Escobar concludes, which means March next year," said Furche.

His forecast is based on the expectation that there are no sensitive issues involved and both sides are keen to move forward.

Yi said China and Chile have gained much experience in negotiating FTAs with other economies. "Such experiences can help the FTA talks proceed smoothly."

Chile has signed FTAs with South Korea, Canada, the EFTA (the European Free Trade Association), Mexico, the US and the EU.

China has completed talks on free trade and dispute settlement with ASEAN, and is also in talks with New Zealand, South Africa and the Gulf Cooperation Council.

Trade volume between China and Chile has witnessed an average 22 percent annual growth since 2000, while imports from Chile surged 42 percent over the past four years.

Last year, China's exports to Chile increased 31.6 percent to nearly US$1.7 billion and imports from Chile jumped 63.5 percent to US$3.7 billion.

China mainly exports textiles, high-tech goods, shoes and toys to Chile, while Chile mainly exports copper, paper pulp and iron ore.

Furche said he expected the FTA would drive agricultural exports from Chile: "We want to sell more fruit, vegetables and seafood to China."

The talks were formally announced by President Hu Jintao and Chilean President Ricardo Lagos Escobar during Hu's Latin American tour last November.

Chile has recognized China as a full market economy, and anticipates becoming a bridge for China to expand exchanges and cooperation with Latin America.

Other countries in the region are paying a great deal of attention to the negotiations, said Furche. "They will know the trade modes with China they may follow and it is a good opportunity for China to improve its presence in Latin America," he said.

Paraguay will also negotiate an FTA with China if it receives approval from Mercosur (the South American common market), their Foreign Minister Leila Rachid said on Monday.

Mercosur has Argentina, Brazil, Paraguay and Uruguay as full members and Bolivia, Chile, Peru and Venezuela as associate states.

(China Daily January 26, 2005)