Brazil ending exclusionary maritime shipping agreement with Chile

The agreement, which was established in 1975, now expires in January 2020, at which point the transport of goods between Chile and Brazil could be carried out on ships of any flag.    Brazil’s Chamber of Foreign Trade (CAMEX) says it has decided not to renew a 42-year-old maritime agreement with Chile which stipulates that only Brazilian- or Chilean-flagged vessels could operate between the two countries.
   The agreement, which was established in 1975, now expires in January 2020, CAMEX ruled in late July. After that point, the transport of goods between Chile and Brazil could be carried out on ships of any flag, which is expected to increase competition and reduce costs of shipping goods between the two nations.
   A study by the Institute for Applied Economic Research, a Brazil-based economic think tank, previously found that the maritime pact ads five percent to the final price of products in both countries.
   The arrangement between the countries currently gives two companies – Alianca, the Brazilian unit of Hamburg Sud, which is now owned by Maersk Line, and CSAV, the Chilean subsidiary of Hapag Lloyd AG – exclusive shipping rights between the two South American countries.
   In an action related to dropping the exclusionary maritime shipping agreement, CAMEX has also extended the waivers for roll-on/roll-on (ro-ro) and breakbulk transport, which aren’t currently subject to the above restrictions due to the low availability of specified Brazilian- and Chilean-flagged vessels.
   The waivers were extended for one year by CAMEX.