The trade agreement’s entry into force means gains in productivity and competitiveness such as a reduction of tariff barriers, more agile and less obstructed exports, as well as a technology boost for its member countries. For Chilean pork exports, the TPP-11 offers for a preferential tariff in Japan, a benefit other competing countries already enjoyed.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP-11, is a multilateral free trade agreement for the Asia-Pacific region, which was signed by Chile in 2018 and came into force almost five years later, last February the 21st. Chile became the tenth full member of the agreement signed also by Australia, Brunei, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The TPP-11, the third largest FTA in the world, provides tariff reductions for 11 Asia-Pacific countries and considers improvements in labor, gender, and environmental matters. Its ratification represents a big opportunity, as it offers Chilean products already present in large international markets more competitive conditions.
For white meat and pork in particular, the entry into force will mean a great boost for the entire industry. Today, Chile is the world’s seventh largest white meat exporter, and the sector is the country’s fourth largest exporting sector; thus, the benefits for productivity and competitiveness will be considerable.
In the words of ChileCarne’s President, Juan Carlos Domínguez, one of the TPP’s main advantages is “a preferential tariff for pork in Japan, a benefit that Chile’s competitors like Canada and Mexico were already enjoying before ratifying the agreement. In addition, the United States and the European Union have signed FTAs with similar conditions for their pork exports to Japan; therefore, the TPP’s entry into force will secure us fair competition in the Japanese market. Chile is currently Japan’s sixth largest pork supplier, exceeded only by the United States, Canada, Spain, Mexico, and Denmark.”
It should be noted that Japan is the third largest destination market for Chilean pork exporters, who sold 118 million USD in 2022, a figure that represents 18% of total pork exports. In 2023, sales are expected to recover with 10% growth, reaching 130 million USD. The TPP-11’s entry into force will play a strategic role in reaching the industry’s goal. These figures alone show how crucial the agreement is for white meat producers and exporters, as well as Chile’s growth.
The Chilean Undersecretariat for International Economic Affairs (SUBREI) expects 2,930 tariff lines to obtain additional reductions with the entry into force of the TPP-11, provided they comply with rules of origin and the tariff elimination schedule. Similarly, the agreement should make Chilean exports more agile and less obstructed, increasing trade with Asia-Pacific countries, while updating trade regulations.
“In addition to changes for the Japanese market, the linear tariff elimination schedule agreed in Chile’s FTA with Vietnam was shortened. Initially, zero tariff was going to be reached in 2029. Thanks to the TPP, that will occur in 2024. For poultry, we will enjoy tariff reductions and linear tariff elimination in Japan and Vietnam; and we will be able to export a zero-tariff quota to Canada with an annual increase in volume for six years,” added ChileCarne’s President.
“Regarding market opening and retention, we plan to work in coordination with SUBREI to carry out actions that promote the significance of the TPP’s entry into force for our sector in every market where Chilean pork has been present for years,” concluded Domínguez.