"New possibilities have been opened for Chile, and I have no doubts that there will be many more," he said in the ceremony at the La Moneda Palace.

The agreement will come into effect on Jan. 1, 2004.

Attending the ceremony were President of the Senate Andres Zaldivar, Minister of Foreign Affairs Soledad Alvear, Minister of Finance Nicolas Eyzaguirre, Minister of Justice Luis Bates and US ambassador William Brownfield.

Trade between the United States and Chile totaled 6.234 billionUS dollars in 2002. Chile's exports to the US averaged 18 percent of its total exports during 1996-2002 while 21 percent of its imports originated in the United States.