Chile: Asoex requests improved FTA with Korea

The highest representatives of the Fruit Exporters Association of Chile AG (ASOEX) met with the General Director of the Directorate General of International Economic Relations of the Ministry of Foreign Affairs, Rodrigo Yañez, to discuss the main topics of interest for the Chilean fruit export sector, regarding international matters, and several proposals for improvements and changes in the sector.

The meeting was attended by Ronald Bown, the President of ASOEX, Miguel Canala-Echeverria, the General Manager of the entity, Andrea Cerda, the Head of Direcon's Market Access Department, Cristina Bas, area assistant, and Francisca Ortega, the Head of the Asia and Oceania Department of Direcon.

"It was an excellent work meeting. It's always necessary to know the priorities, challenges, and main obstacles that our exporters and producers face; and to present the work agenda that we are developing. This allows us to identify the strategies and work areas that need to be strengthened and improved, as well as those that have shown good results," said the Director of Direcon, RodrigoYañez.

"It is fundamental to work together in an agenda that includes the promotion of goods and services, such as investment attraction, country image and tourism, optimizing our presence in external markets, and improving coordination and efficiency in the use of the resources. This has to be done through a coordinated and joint, public-private presence in the activities we do in our main destination markets, such as the United States, Europe, China and Southeast Asia," he added.

"The Director of Direcon paid close attention to the issues we raised, which are of great interest to the sector, such as the need to accelerate or improve some free trade agreements, promote a better and more coordinated work of the Chilean agricultural and commercial attaches abroad, as well as the promotions through ProChile and Country Image, and intensifying the defense of Chilean kiwi in the different international instances where Chile participates, among other issues," Ronald Bown said.

Improving trade agreements and defending the Chilean kiwi
The representatives of ASOEX discussed the need to accelerate the approval process of the Comprehensive Economic Agreement (CEPA) signed between Chile and Indonesia, which is currently being processed in Congress. This, because it could double Chilean fruit shipments to that market.

During the 2016-2017 season, Chile exported 8,649 tons of fresh fruits to Indonesia, i.e. 81.94% more than in the 2015-2016 season. Thus, an improvement in the entry conditions of the national fruit and decrease in tariffs that the agreement would provide, could increase shipments more.

The also said that improving the Trade Agreement with South Korea was a matter of great importance for ASOEX, especially considering the momentum that the sector is giving to shipments to the Asia-Pacific region. "In general terms, the FTA between Korea and Chile has been positive for our exports. However, the tariff advantage achieved at the signing of the Treaty has been lost, as a result of the negotiations that Korea has subsequently carried out with third countries, some of which are our competitors, and that has given them better access conditions for their products," Bown said.

The leader of the fruit exporters said that in the case of the treaty with Korea, a bilateral renegotiation of the FTA was necessary. The goal is to improve tariffs for table grapes because, even though they have a 0% tariff; between May 1 and October 31 of each year the tariff increases to 45%, affecting the shipments that reach that market in that period. It must be noted that the maritime cargo from Chile takes about 35 days to reach that market.

"The situation of our oranges, which enter the market with a tariff of 54.9%, must also be analyzed because they were left in the DDA category, which means they are subject to renegotiation depending on of the results of the Doha Round. However, this has not been done yet; its a very complex situation to administer commercially, if we consider that third countries, which signed FTAs ​​with Korea after Chile, now enjoy better tariffs than us, which is paradoxical and even discriminatory," the President of ASOEX said.

"We also believe it would be very positive to raise the possibility of accelerating the processes of market opening in Korea and China, as achieving the entry of a fruit may take 3 to 4 years on average, and only one product can be negotiated at a time. Currently, we are working on the opening of Korea for Chilean avocado, and we are in stage 2 of eight in the negotiation," he said.

The representatives of ASOEX also pointed out the need to improve the work of Chile's agricultural and commercial attaches abroad, in terms of monitoring and achieving objectives of key issues for the country, in this case for the fruit sector, especially in markets of maximum importance for the industry, highlighting the work done by the former President of the Republic, Eduardo Frei, as Ambassador Extraordinary and Plenipotentiary on a Special Mission in the Asia-Pacific region.

In addition, the ASOEX professionals also proposed actions to encourage international free trade, specifically in reference to the Zespri case, where it is necessary to generate a national strategy to support the Chilean kiwi. "It is important to have a competition without obstacles from any participant at the international level, something that doesn't always happen in the case of Zespri which, since it has a dominant position in the markets and is privileged by a legal status that protects it, has made the situation of the competitors of both hemispheres more difficult in many opportunities. We hope Chile doesn't have to undergo the experience the damage it suffered again, as was in Korea, where we had to resort to the instances of defense of free competition, which severely sanctioned the existence of its anti-competitive practices."

Additionally, the implementation of ProChile's restructuring and the creation of the Under-Secretary of Foreign Trade were also analyzed in the meeting.

Finally, they discussed the need to adjust the Agricultural and Forestry Export Promotion Fund of the Ministry of Agriculture, administered by ProChile, so that it responds to the country's requirements at the international level, and promoting more coordinated work with Country Image.

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