Dynamic Export

Barriers
For exporters sending products, the lack of a direct shipping route is a major problem, with shipping taking more than a month to reach Chile. Another consideration is the time zones, which vary from a 12 to 15 hour difference across Australia. Having a good partner in Chile is thus important when you can’t be reached here.

Although Australia has an FTA with Chile due to commence on January 1, 2009, there is currently no double tax agreement in place to prevent taxation in both countries. “The issue there is banking secrecy laws. Chile has quite strict secrecy laws and they don’t want to relinquish those,” remarks Gomez. Negotiations are still underway, according to Warren.

An additional legal issue is the protection of intellectual property. “No Latin country is a member of the Madrid Protocol, which means you need to register your IP in each country,” says Gomez. “It can be a bit of a hassle and costly if you’re tapping into two or three countries, because you’ll need to start the process in each.”

One thing he hopes the FTA will fix is the transfer of money, which currently goes via New York: “If you want to pay your people in Chile, it can take up to 10 days, which is a long time in business.”

The future
The signing of the Australia-Chile FTA has put a spotlight on the trade relationship between the two countries. As it is Australia’s first agreement with a Latin American country, it also focuses attention on the region, one that few exporters consider as an export destination despite its growing influence.

Gomez believes there are plenty of areas where Australian businesses can add value, even in competitive spaces. “There are opportunities in beauty products, spa centres, all the way through to coffee, believe it or not. You get nice beans over there, but the retail environment isn’t quite there,” he says.

“On paper there’s competition in areas like wine, but in that space what Chile is good at, Australia isn’t and vice versa. Using wine as an example, there are some technologies that Australian wineries have in terms of production. Australians are also very good at marketing and branding their wine and Chileans want to learn.”

There’s plenty of room for Australian trade to grow, agrees Warren. “Chile is a competitive market, but the market is growing and the economy is strong and they’re looking for a whole range of products and services to modernise the economy. There’s still room on the export side to grow more business there.”

Trade links
Australia Chile Chamber of Commerce: www.chilechamber.com
Australia-Latin America Business Council: www.alabc.com.au
Chilean-Australian Chamber of Commerce: www.auscham.cl
Department of Foreign Affairs and Trade: www.dfat.gov.au/geo/chile
Prochile Australia (Chilean Export Promotion Bureau): www.chileinfo.com

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