Vietnam – Chile FTA to benefit Vietnamese tuna sector

Vietnam – Chile Free Trade Agreement (VCFTQA) has become effective since 01 April 2014. Sales of Vietnamese tuna to Chile have increase consecutively since then. Chile ranks sixteenth among single Vietnamese importers.

Sales of Vietnamese tuna to Chile reached only 146 thousand USD in 2010. However, two years later when Vietnam entered a free trade agreement with Chile, it jumped by 212%. When VCFTA became effective five years later, Vietnam’s sales of tuna to Chile increase by 633%, from 1.4 million USD to 10.2 million USD in 2014.

Chile is importing canned skipjacks for domestic consumption, which accounts for 98% of total imported tuna of Chile, and the rest is frozen loin/fillet tuna. Main countries supplying tuna to Chile include Thailand, Ecuador, Spain, China and Vietnam.

Although Chile is not a large buyer of Vietnamese tuna, it is the first country of Latin America signing a free trade agreement with Vietnam. This is paving a way for Vietnamese tuna to penetrate other countries of this region like Brazil or Argentina. Besides, once VCFTA bring high efficiency to both countries, it will create a basis for Vietnam to establish economic relation with other countries in the region.

Chile, Mexico, Peru and Columbia have just founded Pacific Alliance       and Chile signed free trade agreements with countries in the region. Thus, if Vietnamese tuna can be sold in Chile’s market, they will have opportunities to penetrate countries of Pacific Alliance and Latin America.

Before VCFTA’s effectiveness, Chile signed 23 free trade agreements with large countries involved into fishing, processing and exporting tuna such as the US, Mexico, Korea, China, Japan and Australia. Vietnamese tuna, therefore, will have to face many competitors. Thus, Vietnam must put price and quality in the first priority so that it can hold market share in Chile.