|
|
|
|
| Horticultural & Tropical Products Division | Return to the H&TP Home Page |
May 10, 2002
EU-CHILE
FTA EXPECTED TO CREATE NEW COMPETITIVE CHALLENGES FOR U.S. HORTICULTURAL
PRODUCTS IN EU MARKET
On April 27, 2002, Chile and the EU successfully concluded negotiations on an Association Agreement, the major component of which is a Free Trade Agreement (FTA). The FTA reportedly liberalizes the majority of agricultural trade immediately and nearly all agricultural trade within seven years. The agreement is expected to make Chilean produce more competitive in the EU market, as immediate duty free access is being granted to a large segment of Chile’s fruit and vegetable exports. For example, Chilean apples will reportedly receive immediate duty free access from the current 5 percent duty rate. Other fruits and vegetables that will also receive immediate duty free access include plums, oranges, blackberries, almonds, avocados, pears, spinach, onions, eggplant, peppers, and dried fruit. Chilean wine will gain duty free access after four years under this Agreement, with no related quotas. The Chilean horticultural industry is reportedly disappointed with the tariff treatment for nectarines, apricots, peaches, and cherries, which will be phased out over 7 years. Negotiators from both sides would like the Agreement to go into force on January 1, 2003. The EU is an important market for Chilean fruits and vegetables, accounting for about a quarter of Chile’s total exports of these products. Also, the EU represents approximately 43 percent of the Chilean wine export market. Chile’s enhanced competitive position in the EU market will likely pose new challenges for some U.S. horticultural products, while counter-seasonality factors will continue to limit the direct competition, particularly in the case of perishable items. U.S. horticultural exports to the EU in CY2001 were valued at just over $2.0 billion, with the leading categories including tree nuts ($535 million), wine ($316 million), dried fruit ($155 million), and fresh fruit ($130 million).
|
|