Chilean exports have experienced an impressive growth trajectory. In 2008, only 8% of fresh fruit exports where sent to Asia, mostly to Japan and Korea. By 2015, Chile had become China’s second largest supplier in terms of value - exporting almost a billion USD worth of fresh produce to the PRC.
At the root of Chile’s export success lies a united domestic industry, supported by strong trade associations, a pro-active government that supports the Chilean AQSIQ and a dedicated Chilean Embassy, represented by a dedicated Agricultural attaché based in China.
Among other products, Chile is a prominent exporter of avocados, cherries, plums, grapes and blueberries
Focus is key
Alvaro Aspee has worked for over 6 years in the fresh produce industry in China. For four years he was the Agricultural Attaché of the Chilean Embassy in China, during which time he visited wholesale markets in 25 provinces and over 50 cities across the Mainland.
According to Alvaro: “Chile has made a huge leap forward in China. The country’s success can be explained in three ways. To start with, the Chilean Embassy has appointed an Agricultural Attaché who is working full-time on the country’s agricultural portfolio. For over a decade, China has been considered a key market for Chilean exports, and Chile is one of the few countries that has adopted this kind of representation. In addition, the Chilean team in China works closely with the AQSIQ of Chile. The Chilean AQSIQ often visits China, and cooperates with Chinese parties on providing training projects and seminars. Finally, the private sector has been supportive and is investing in the process. Growers and exporters are involved through industry associations, which are well organised. The associations have a good understanding of the market and communicate back to partners in Chile and China. The Chilean embassy in China, together with the AQSIQ, and trade associations, work jointly in trying to understand what the Chinese side is interested in.”
Mutual trade, mutual interests
“The Chilean economy is supported by numerous free trade agreements. Chile is one of the countries with the most free trade agreements in the world. Chile welcomes foreign products and produce, which is one of the main reasons why Chile has been so successful in establishing market access. Counter seasonality helps as an argument to obtain market access, as one is not competing with Chinese domestic producers. However, this is only part of the explanation. All products grown in Chile are counter-seasonal, but only a few can be exported to China. Our exports are supported by mutual trade and mutual agreements. For example, there is a joint venture farming project with the Chinese Ministry of Agriculture near Tianjin. Here, Chilean growers show Chinese growers how to work with Chilean fruit varieties. Through projects like these, Chilean representatives give back to their Chinese counterparts, and are not only on the ‘asking side’.”
Careful negotiation of trade protocols
It is not only important to secure market access, the viability of trade protocols is key to a blossoming export market.
“As with any other contracts, one needs a contract that allows one to work. Every clause of the protocol is important to lower the costs and to make exports commercially viable. Sometimes, there is miscommunication, or mishandling of the situation. If the protocol negotiations are pushed too hard, without taking care of the process, the original protocol might not be sufficient. Changing any protocol is, again, a long and slow process. The Chinese AQSIQ moves forward step by step in. If the protocol has been done wrong at the start, it will be costly and time-consuming to change. This would be a waste of time that could otherwise be used to negotiate other fruits. In Chile’s case, instead of renegotiating protocols, the ones that have been agreed on have been worked out well from the start. That allowed the delegations to negotiate the subsequent product immediately.”
“For example, the negotiations for avocado market access took a long time. At the beginning, the AQSIQ insisted that avocado was a fruit that therefore could potentially bring the risk of fruit fly into the country. Consequently, they wanted Chilean growers to fumigate before export. Fumigation, or other processes, deteriorates the quality of the product. As a result, the avocado cannot travel as far as to China. So part of the responsibility of the Chilean team was to convince the Chinese side that the avocado cannot contain fruit fly. Fumigation is not part of the protocol now and Chilean growers can successfully export to China.”
“An effective way to pursue a tender is to have an agriculture attaché that is full-time based in China. If there is no-one to follow up, the process will get complex and will not be followed up. The process has to be handled hands- on.”
For more information:
Mr. Alvaro Aspee
SAFCO (Shanghai) Trading
aaspee@safcoasia.com