The Mutual Recognition Agreement (MRA) between the Authorized Economic Operator (AEO) programs of the Chilean and Chinese customs services came into effect on Friday, October 8. It marks a new milestone in the trade relationship between the two countries. The Asian giant has been Chile’s main trade partner since 2010.
This has been shown month after month in the solid trade figures published by the National Customs Service’s Research Department. Between January and September 2021, Chilean exports to China increased 39.5% to US$26.2 billion, while imports from China to the South American nation grew 61.6% to US$17.5 billion, compared to the same period in 2020.
“Achieving mutual recognition of our AEO programs is a result of the customs relationship that we have established with our Chinese peers. It is also an incentive to keep strengthening the facilitation and oversight that we are carrying out regarding Chinese trade. These types of tools allow us to be more efficient and to increase security in the logistics chain, in order to better address risks while maintaining trade fluidity,” explained National Customs Director José Ignacio Palma.
Exports
During this period, China continued to be the main buyer of Chilean products, acquiring 38.4% of the country’s exports. These were strongly linked to the mining sector, which represented 83.9% of total shipments to China, totaling US$22 billion, a 48.4% increase over the same period the previous year.
Notable products include copper minerals and copper concentrates, which represented 64.3% of mining sector exports, an increase of 84.3%, and copper, which represented 25.4%, a 2.7% decrease.
16.1% of exports to China were non-mining products, totaling US$4.2 billion. Fruit represented 35.1%, up 12.1%, totaling US$1.5 billion. This is mainly due to the 19.7% increase in cherry sales, compared to the same period in 2020.
Forest and related products represented 33.4% of non-mining product sales to China, up 23% over the same period in 2020. This is mainly due to the 26.9% increase in cellulose shipments during the period. Other food products represented 12.6% of non-mining exports, although they saw a 5.9% decrease.
The wine industry presented 65.9% growth due to an increase in wine exports, which increased 57%, and grape must exports, up 123.4%. Seafood, salmon and trout sales totaled US$51 million, a 59.2% decrease.
Imports
China was Chile’s most important supplier between January and September, providing 28.3% of the country’s imports. Fuel and lubricants represented 1.3% of Chinese imports to Chile, a 21.2% increase. Imports of non-fuel products increased 62.3% over the same period in 2020.
Purchases of Chinese machinery increased 30.1% over 2020, due to acquisitions of mechanical shovels, excavators, loaders and front-loaders, which increased by 322.7%, and imports of centrifuges and devices for filtering and purifying liquids, gases or their parts, which increased by 77.2%.
The technology sector posted 75.8% growth over the same nine-month period of 2020, due to an increase in purchases of all products, especially televisions (132.9%), videogame consoles and machines (103.8%) and computers and computer parts (100%).
Imports of means of transport and their parts increased by 178.7%. The period also saw a 25.4% increase in clothing, accessories and footwear imports.
AEO Agreement
In July of this year, following work that began in March 2019, Chilean Customs Service Director José Ignacio Palma and the Deputy Director General of the Chinese Customs Service’s Business Management Department, Zhang Xiuqing, signed the MRA. It means that companies from the two countries that have been certified as Authorized Economic Operators (AEO) will obtain benefits such as reduced delays and product inspection rates for imports and exports.
Chile is China’s second most important South American trade partner. As such, these tools are critical to continue deepening the relationship between the two countries. The MRA is a mechanism developed by the World Customs Organization (WCO). It allows validations and authorizations granted to a company that is AEO-certified in its home country to be recognized by other countries with which it holds an MRA. The mechanism thus grants mutual benefits to operators in the countries with which this type of agreement has been signed.
Chile’s AEO program has been in place since 2017. A total of 20 customs agents, two import companies, one express mail company and three export companies have been certified since 2018.