The CPTPP and the fruit export
A group of eleven nations from the Asia - Pacific region signed on March 8, in Santiago, Chile, the historic Comprehensive and Progressive Treaty of Transpacific Association (CPTPP). The agreement, which seeks to reduce trade barriers, is one of the main trade agreements of the last two decades. It ranks third after CETA (between Canada and the European Union) and Nafta (North American Free Trade Agreement).
Although the United States withdrew from the negotiations at the beginning of 2017, the rest of the countries continued with the process, so Chile, Mexico and Peru are part of this new and ambitious commercial alliance, which is completed by Australia, Brunei, Canada , Malaysia, Japan, New Zealand, Singapore and Vietnam, covering a market of around 500 million people, which represents 13% of world GDP.
The CPTPP, also called the Trans-Pacific Economic Cooperation Agreement (TPP), or simply TPP11, addresses various trade and regulatory matters between countries and their respective markets in the perspective of contributing to the mutual economic growth and development of new opportunities for companies, workers and consumers.
China and the USA
At the end of 2016, in a video released on the internet, the President of the United States, Donald Trump, announced that he would withdraw his country from the TPP, until then a treaty signed by 12 countries and that together represented a market of 800 million people, corresponding to 40% of the world economy.
"The TPP is a potential disaster for our country“, Trump said in the video, and announced that they would opt for bilateral trade agreements that allow him to generate more jobs and industry for his country. He finally materialized his retirement in February 2017.
China is seen as the big beneficiary of the US's absence from the treaty, as the TPP was always thought to be a strong strategic way for the US to secure leadership in Asia. “Approving the TPP is as important to me as another aircraft carrier“, declared the American authority at the time.
In this new scenario, with a clear perception of leadership vacuum, China is ready to occupy it and benefit from the CPTPP without needing to be part of the treaty.
Latin America
Undoubtedly there are many dissenting voices that have questioned the signing of the agreement, mainly civil organizations and activists in Latin America. However, only in the case of Mexico, according to estimates by the Ministry of Economy regarding the announcement of the signing of the CPTPP, the North American country could export more than USD 150.000 million to these new countries in the next five years.
The market represented by the CPTPP, of almost one billion consumers, would be impossible to obtain for Latin American countries through other bilateral or multilateral agreements. Although there are those who believe that the region can not subordinate its hopes of growth only to trade with the great powers or Asian countries, but should also aim at Latin American regional trade. Chile, Mexico and Peru, the three Latin American members of the CPTPP, also integrate the Pacific Alliance with Colombia, a bloc that promotes exchange in the region.
The fruit industry
The 2017 recorded several records in Chilean exports, reaching historical numbers of value and volume of sales abroad. These indices could be overcome with the implementation of the CPTPP agreement, since its main objective is the elimination of tariff barriers in the partner countries, to which almost 20% of Chilean merchandise is currently shipped.
Among others, the fruit industry could be one of the biggest beneficiaries, accessing large consumer markets such as Malaysia, Vietnam, Canada and Japan. As an example, only in the case of Japan, the import tax on fruit currently ranges between 16% and 32%, and with the agreements signed in the CPTPP, these would be reduced to zero in a non-renewable term. greater than eight years. The perspectives for the producers, and the whole of the fruit industry, are clearly advantageous with the entry into force of the new treaty.
Source: Blueberries Consulting - Martín Carrillo O.
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