Latin American Free Trade Agreement is a boost to Scotch whisky industry
The Scotch whisky industry has received a boost this month with the removal of tariff and non-tariff barriers to how it trades in areas of Southern and Central America including Colombia, Honduras, Nicaragua and Panama.
On August 1 the European Union's Free Trade Agreement (FTA) went into effect in Colombia, Honduras, Nicaragua and Panama, creating a more level playing field for how Scotch whisky imports are sold in those areas.
Over £500 million of Scotch whisky was imported to Central and South America in 2012, but this is a relatively small part of the spirits market in these countries.
In March the FTA entered into force with Peru which resulted in immediate tariff elimination and protection for Scotch whisky. The most recent FTA agreement will immediately end the import tariff in Panama, and will gradually eliminate the tariff in Colombia, Honduras and Nicaragua. All the countries will help to secure the end of discriminatory excise tax on imported spirits drinks through law reform and Scotch whisky is now recognised as a geographical indication in each country.
"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," said David Williamson, Scotch Whisky Association deputy director of international affairs.
Later this year the FTA agreement regarding Scotch whisky will extend to trade with Costa Rica, El Salvador and Guatemala.
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