Agreement to bolster Scotch sales in Central America

The Scotch Whisky Association (SWA) has said that the new Fair Trade Agreements between the EU and Panama, Nicaragua, Honduras and Columbia will bolster the Scotch sales in Central America.

The new agreement expected by SWA to boost Scotch sales in Central America

Exports to the region are set to receive a boost under the new agreement, which comes into effect today (1 August), with the SWA describing the legislation as representative of a ‘new era of trade with Central America’.

Scotch whisky exports to the region were valued at £66 million in 2012, with nearly 80% of the total accounted for by Panama, which is a major player in the re-exportation of products to the wider Latin American area.

David Williamson, deputy director of International Affairs for the SWA, said there was room for local growth and that the agreement will “support the regional economic growth, remove trade barriers, and create a more level playing field for exporters.”

He said: “To improve conditions, w have worked hard with the UK Government, our regional embassies, and the European Commission, to ensure recent negotiations on a new EU-Central America agreement include provisions that will make a significant difference to the trading environment for Scotch whisky.”

Under the agreement, Scotch whisky will be recognised as a geographical indication (GI) and new rules to end discriminatory tax arrangements will be introduced.

A 15% tariff on whisky entering Panama will be immediately eliminated, with Nicaragua 5% tariffs and El Salvador 30% tariffs set to be removed over the next six years.

The SWA also said that region-wide labelling rules will reduce costs, while recognition of the ‘Scotch whisky’ geographical indication will protect the category from unfair competition.

The Agreement also includes rules that should help secure reform of discriminatory tax arrangements in El Salvador and Panama that favour local products.

Williamson added: “Central America looms large in the history of Scottish trade. Today, expectations of what might be possible are more realistic than they were in the days of Darien.

“However, we can look forward to increased bilateral trade and renewed interest in exports to the region. Today marks the start of a new chapter in trade with Central America.”

The deal will extend to Costa Rica, El Salvador and Guatemala later this year.