The Minister of Foreign Affairs, Roberto Ampuero, and the Ambassador of the United Kingdom in Chile, Jamie Bowden, signed on Wednesday in Santiago, a bilateral trade instrument that will serve as a safeguard, following the eventual exit of the United Kingdom from the European Union, for national exporters that make shipments to the UK, as it changes the conditions of the Association Agreement (AA) between Chile and the European Union (EU) to a bilateral one with the United Kingdom.
Foreign Minister Ampuero stated, "faced with a scenario that could lead to a complex situation, the Foreign Ministry anticipated what could happen and achieved a positive solution."
"This highlights the Foreign Ministry's core orientation: that our work brings concrete benefits for Chileans. In this case, it means protecting bilateral trade, Chilean exporters, and, above all, protecting jobs," said the Minister. "Chile now becomes the first country in the world to sign an agreement of this type with the United Kingdom as an insurance for our exporters," he added.
In turn, Ambassador Bowden said: "It is an enormously important milestone for the independent trade policy of the United Kingdom. It is also historically significant that we are signing the agreement with a country with which we have developed an important commercial relationship for more than two hundred years."
According to information from Direcon this Agreement replicates the scope of the existing Association Agreement between Chile and the European Union, with the aim of ensuring continuity in the commercial relationship between Chile and the United Kingdom, when the United Kingdom ceases to be a party to said Agreement. This Agreement will allow Chile to safeguard the import and export processes, so that they suffer the least possible setbacks after the United Kingdom departs the EU (Brexit).
It should be noted that, to achieve this Agreement, both parties carried out seven trade dialogues during the last months to transfer the Association Agreement between Chile and the EU to a bilateral one with the United Kingdom, safeguarding the conditions and norms that are currently in that agreement. Both countries have guaranteed certainty for businesses, consumers, and investors after the withdrawal of the United Kingdom from the EU.
The Agreement's structure
The instrument maintains the same tariff preferences for the access of Chilean products to the British market. The quotas for beef, poultry, pork, sheep, and goat meat were also maintained.
Another relevant element is the evolving nature of the agreement, which contains a series of instruments to expand and modernize its coverage, with an evolutionary clause on agricultural goods that establishes that in a two-year period (and every two years thereafter) the parties will review the situation of tariff liberalization for agricultural products.
In addition, the general evolutionary clause was modified to ensure that, two years after its entry into force (and every two years thereafter), the parties will discuss how to improve their business relationship.
"This new agreement contains a general evolutionary clause to ensure that we will discuss how to improve the commercial relationship by improving the legal instrument and its conditions every two years. This shows that it foresees modernizing and expanding its coverage over time," said Director General of the Direcon, Rodrigo Yañez.
According to statistical information from ASOEX, England is the second destination of fresh Chilean fruits within Europe. In the 2017-2018 season, Chile exported 120,040 tons of fruit to England, a figure that was 10.71% higher than in the 2016-2017 campaign.
The main fruits exported to England were apples, table grapes, avocados, and blueberries.
Source: SimFRUIT with information from Direcon and Asoex's Expordata