After several delays and negotiations stretching late into the night, bleary-eyed trade negotiators from 12 countries, including the US, Japan and Indonesia, stepped into the Atlanta morning in October last year to announce that they finally reached agreement on the much-debated Trans Pacific Partnership (TPP).
Hailed as the most important multilateral trade deal of the last 20 years, the tpp promises to form one of the building blocks of international trade over the coming years while negotiations in the Doha round of world trade talks remain stalled.
For Chile, one of the founder members of the deal (along with Brunei, New Zealand and Singapore), the gains in terms of market access are slight. A pioneer in bilateral trade agreements, it already has deals in place with the other 12.
“It was always known that the gains for the fresh fruit sector would be small,” says Ronald Bown, president of the Chilean association of fruit exporters Asoex.
However, there are some improvements, particularly with Japan whose free trade agreement with Chile left in place numerous tariff barriers to shield its agriculture sector.
Now under the TPP, Japanese tariffs on Chilean lemons will be abolished immediately while tariffs on imports of grapefruit, mandarins and oranges will be phased out over six years. As a result, Bown expects Chile’s fresh fruits exports to Asia to continue growing apace, especially, if some observer countries to the deal, such as South Korea, become full members.
But rather than improved market access, the greatest gains for Chile’s fruit exporters should be greater certainty about when and how export markets can close their doors.
According to Fernando Acuña, an advisor on phytosanitary issues at Chile’s international trade office direcon, the TPP’s chapter of phytosanitary measures offers significant advances for Chile compared those in its bilateral agreements.
For example, the deal requires such measures to have a scientific or risk-based justification. So when Chile detects a fruit fly outbreak, the ban on exports will apply only to farms within a 22km radius rather than the whole country.
The deal also obliges countries to hold discussions when disagreements arise. If agreement is not reached, either party can request dispute resolution.
“This is one of the fundamental points and main advances of this agreement…it gives us the power to challenge these decisions,” says Acuña.
The proposal has earned the praise of industry too. “It will allow us to reach solutions rather than close the market first and then negotiate,” notes Bown.
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