Chile braced for Brexit impact

Although the UK only accounts for a small fraction of Chile’s salmon exports, it is possible that Brexit will cause the existing Free Trade Agreements to be modified.    

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ProChile, the government organisation in charge of promoting exports, explained that "any change that modifies the current conditions of access for Chilean products to the UK market, will affect the competitiveness of major shipments from our country”.

However, they added, we still must assess the conditions in which UK will withdraw from the EU.

"Article 50 of the Treaty on the EU provides that treaties shall cease to apply to the outgoing member enters into force the withdrawal agreement or within two years of the notification to the European Council, which period may be extended”.

Relationship with the UK

"In this context, a possible scenario is that Britain and the EU agree a legal solution to the trade relations of the country with third markets with which the EU has existing trade agreements, as is the case of Chile. In this case, during that period, our country will continue to apply the rules of economic and commercial relationship between Chile and the United Kingdom, referred to in the Association Agreement between Chile and the European Union," he explained.

"Chile has good bilateral trade relations with the United Kingdom, they have significant investments in our country. Hence we expect to maintain or improve the current legal conditions that bind us economically and commercially to ensure a positive development of the business relationship," commented government sources.

As a result, two scenarios appear the most likely: either to continue with the same legal body of the Chile-EU Agreement, with the necessary adaptations; or develop a bilateral FTA Chile-UK on its own terms.

Chilean salmon in the UK

According to reports from Direcon-ProChile, the only salmon exports to the UK from Chile were of frozen fish. Currently, salmon enter with zero tariffs when they are fresh, chilled and/or frozen.

"However, [Chilean] salmon exports to UK are very small relative to the rest of the world, mainly because the British import Norwegian salmon," the organisation added.

Meanwhile the Chilean Government commented that "the UK is not an important market for salmon exports, due to its proximity to Norway".

Indeed, in 2015, from the $3.5 billion exported by Chile’s salmon industry, only $9.3 million were exports to the UK, 10% less than in 2014.