The “Golden Dream” between Russia and Chile
For the Director of the National Committee for Economic Cooperation with Latin American Countries, Tatiana Mashkova, the signing of a Free Trade Agreement between Chile and Russia would be “a golden dream” . Why so much illusion?
The first thing we must consider is that there is no agreement or special treaty at the level of foreign trade both countries. Currently, Chile enjoys a regime of tariff preferences, as well as a bilateral agreement of 2011 that cancels the tourist visa requirement for both Chile and Russia. It should be noted that to date there is also an investment protection agreement and a Double Taxation Agreement.
For both countries, a Free Trade Agreement would open the doors to a significant increase in exports / imports. In the case of Chile, the agricultural sector in particular would be highly benefited while for Russia the sale of wheat as well as goods related to the industry in general would grow. As an example, in 2015 the export of dairy products from Chile to Russia grew by 383% ** due to the sanctions decreed by Russia in 2014 against the USA, the European Union, Australia, Canada and Norway. In addition, Russia is part of the Eurasian Union (which includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan), which would allow Chile to extend its commercial presence in the Region.
Chile must bear in mind that Russia is not only an exporter of products, but also of services and in particular technology. An exchange between Chilean companies and Russian entities grouped in Skolkovo (Russian “Silicon Valley”) can be of great benefit.
Although everything seems easy, there are many obstacles and differences, both social, cultural and idiomatic. On the one hand, sanctions imposed by Russia can cause significant damage to the economy of a country. On the other hand, the high demand regarding the veterinary and customs norms regarding the quality of the products that arrive in Russia, can restrain some Chilean exporters (if one does not have an importer in Russia, it is almost certain that the product will be rejected). Finally, the command of English and even better of Russian is essential. According to my experience as a Russian lawyer in Chile and in my opinion, Chile and Russia are two countries that can achieve large commercial operations on condition that each one respects the rules of the other’s game.
Cuevas Abogados is in the process of developing its Russian clientele and offers them an integral accompaniment in its installation in Chile in visa services, business creation, expansion of its network of contacts, among others.