Frutas de Chile President on US Tariff exemptions: 'A pity' key exports were excluded

In the midst of the inauguration of the first sea shipment of Chilean cherries to China, Ivan Marambio, president of the local guild organization Frutas de Chile, took some time to reflect on this moment for his industry, particularly regarding one of the country’s largest trading partners—the United States. 

In conversation with FreshFruitPortal.com, Marambio talked about the Trump Administration’s latest tariff exemptions and the executive order’s impact on the Chilean fruit industry.

He lamented the exclusion of table grapes from the categories eligible for tariff exemptions and emphasized that the country must continue working to protect its main agricultural products from the burden of tariffs. 

Finally, the executive referred to the hard turn of events affecting the Chilean table grape industry. The suspension of the Systems Approach by a DC court back in September upended over 24 years of work between the two countries, in what Marambio labeled a “very unfair resolution. 

What are the next steps regarding the Systems Approach situation in Chile? 

We’re already fumigating our fruit—we are not able to do the System Approach anymore. For the next steps, we are awaiting the decision of the United States Department of Agriculture (USDA) and the Animal & Plant Health Inspection Service (APHIS) to appeal this very unfair resolution. 

It’s good to remember that the approval of the System Approach for Chilean table grapes exports took more than 24 years. The protocol has more than 30,000 pages of arguments and decisions, so it is very unfair that in a couple of months, a judge in the US says this is a bad outcome. We hope we can revert it.

What’s challenging about the situation is that the decision was made against the USDA, not against Chile. Is the agency working with the Chilean government? Is there a direct relationship there? 

Yes. We have a direct relationship with them on the technical side. The SAG [Chile’s Agricultural and Cattle Service] and the USDA are working together, but the decision to appeal will be made at a political level, so we are awaiting that decision. 

No tariff exemptions for critical Chilean exports 

Sticking with Chilean table grapes, President Donald Trump issued tariff exemptions for many fruit and produce categories. Table grapes were not included. What does Frutas de Chile think about this executive order? 

All of this is sad because, in general terms, these 102 pages of products eligible for tariff exemptions don’t include any important products for Chile—grapes, blueberries, stone fruit, etc. It also does not include wines, beef, or salmon. So, it is a pity that we are not included in that resolution.

Seeing the glass half full, tariff exemptions included avocados, oranges, and kiwifruit, and we are happy for those categories.

But we are waiting. We need our leading exports, at least grapes and blueberries, without tariffs. If not, we will have a big impact with a 10 percent additional cost.

Chile and the US are big trading partners. Given this new landscape of tariff exemptions, is Chile in a bad position, competition-wise? 

Peru is our main competitor, and we’re in the same situation as them. But at the same time, we are in a better position than other competitors in the southern hemisphere. In Brazil, they have a 50 percent tariff; in South Africa, a 30 percent tariff; and in New Zealand, a 15 percent tariff, so in that regard, we are better off than they are. 

But protectionism is not good in any way, for anyone. When applying protectionist measures, like tariffs or tariff exemptions, to your competitors, you may feel you are in a better position, but maybe that is short-sighted. Because in the long term, you don't know what is going to happen with the rest of the market.

For example, we are very strong in Asia, and South Africans cannot export to the US because of the 30 percent tariff. Now, they may put their fruit in Asia, where our fruit is going to suffer. You never know. 

We, as a country, but especially as Frutas de Chile, pray for an open market, in every way and every time. 

Chile is exporting a lot of fruit to the United States—you mentioned blueberries, avocados, and table grapes. Is there a new category that's currently growing there? Are there any Chilean initiatives to promote these categories there? 

Yeah, every two years we try to increase the amount of financing that we are putting into the US. In terms of volume, this is our most important market in the world, so we care for them. 

We are doing a lot of actions; in fact, there are going to be new surprises in the upcoming months.

The table grapes initiative with the Global Grape Group is one of the big things that we are doing. We want to coordinate our efforts with our main competitors, such as Peru and Mexico, to increase demand. 

Our focus across all markets, especially in our largest ones like the US and China, is to increase consumption. We are doing exciting new promotions to get to that point where we are giving the consumer the best experience.

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