Latin American Free Trade Deals to Boost Scotch Whisky
Trade agreements which have just come into force will provide a further boost to the growing market for Scotch whisky across Latin America. The European Union’s Free Trade Agreement (FTA) with Colombia and an Association Agreement with three Central American countries (Honduras, Nicaragua, and Panama) will create a more level playing field for Scotch whisky imports by removing tariff and non-tariff barriers to trade.
Direct Scotch Whisky exports to Central and South America reached £505 million in 2012, up 3% from £489 million in 2011. But with Scotch whisky still a relatively small part of the spirits market in these countries there is great potential for growth.
Some of the main benefits to Scotch whisky as a result of the agreements are:
* Immediate end to the import tariff in Panama
* Gradual tariff elimination in Colombia and Central American countries
*Colombia to reform its discriminatory excise tax on spirit drinks by August 2015
*Colombia’s provincial liquor monopolies required to treat imports, including Scotch whisky, in the same way as domestic products.
* Scotch whisky to be recognised as a geographical indication (GI) in each country – recognition that it must be made in Scotland
* National treatment rules to help secure the end of discriminatory tax arrangements, including in Panama.
The FTA has already entered into force with Peru in March, resulting in immediate tariff elimination and protection for the Scotch whisky GI. The Association Agreement benefits will extend to trade with Costa Rica, El Salvador, and Guatemala later this year.
David Williamson, Scotch Whisky Association deputy director of international affairs, says: “We have worked hard with the UK Government and the European Commission to ensure these agreements with Colombia and Central America will make a significant difference to the trading environment for Scotch whisky. The agreements will support economic growth, remove trade barriers and create a more level playing field for Scotch whisky. The measures will give another boost to the already growing consumer demand for Scotch whisky.”
