Raúl Allard: “There is always room for growth where Asia is concerned”

Just days away from the signing of a cooperation agreement between the ports of Valparaiso and Shanghai, this Portal had the chance to interview one of Chile’s foremost maritime shipping experts. Raúl Allard N. is a member of the Board of the Port Authority of Valparaíso who served as National Director of Customs in Chile. He took time out from his busy academic and public service schedule in order to share his deep insight on the issue of ports.

The Port of Shanghai is the main entry point for Chilean exports to China. In fact, it processes 236,000 tons of products annually. In light of this, what does this new agreement represent for the Port of Valparaiso?

It is very important because it constitutes a mutual (port) cooperation agreement, which is more than a simple protocol agreement. It was signed as part of the Port of Valparaiso’s international integration strategy. The port maintains relations with various port complexes (around the globe). Thus, for example, the Port of Los Angeles has relied on this strategy to insert itself into the (larger) Latin American market. Miami collaborated on security issues aimed at the cruise industry. And the Port of Genoa has provided port training. In the case of Shanghai, we can do all these things, and more, because it is the biggest freight transfer port in the world. This agreement is also very useful in that it will maintain the spectacular figures for the first half of this year at both ports.

What services can the Port of Valparaiso optimize by way of this cooperation agreement?

The Port of Shanghai has a lot of experience in logistics, port complex management. They are advising us on the development of our ZEAL (Extended Logistics Support Zone) and on the issue of traceability. This involves tracking the freight backwards and forwards from the time it leaves the production site until it reaches its destination.

(Shanghai) is helping us to promote Valparaiso via their shipping services and have also helped us to optimize our intermediary role in fruit shipping. We need to ensure that the fruit leaving Chile departs quickly and smoothly to Chinese ports. Broadly stated, we are sharing information and experience on various topics that will enrich our knowledge (and ability) to address issues such as logistics, safety, training, growth and (the whole) city-port relationship.

In light of all this, and given your unique experience as a Director of Customs, what do you expect to see from Chile-China trade in the medium term?

China is clearly among the top five economies in the world. With a growth rate of 9%, which in some years exceeds 10%, it represents quite a demand for the kind of raw material that Chile produces. This is clearly seen in the composition of our exports to China, particularly as regards copper and minerals. In order to sustain said growth rates, China will continue to depend on Latin America, in general, and Chile, in particular, as a trading partner and destination for imports and exports. In this aspect Chile has one advantage in that is open to international trade, but has tariffs for all Category VI. If we review the statistics from Customs for the first half of 2007, we find that 26.33% of our exports were shipped to Europe, 15.7% to China, 13.7% to the United States and 10% to Japan. Therefore, China is our largest single destination, surpassing even the United States. This clearly shows that relations with the Asian country, especially in terms of export shipments, which grew 104% in the first half of this year, are strengthening and will ostensibly continue to do so.

So, one might say that, although the Port of Shanghai transfers nearly 70 times more than Valparaiso, the desire to deepen the port-to-port relationship is reciprocal.

Exactly. In the case of ports, this type of growing international trade means that China needs efficient, safe and reliable ports in the countries with which it has major relationships. This includes Chile. The Port of Valparaiso continues to deliver a high level of service in this regard. This is part of Chile's plan to position itself as a bridge between Asia and the Southern Cone of Latin America; as a platform country. That is, in many cases, products arriving to Chile from Asia are slated for export.

What is needed for Chile to achieve successful relationships with China in every field?

It requires trust, which, in turn, means learning to work together and negotiate at the public, private and civil society level. The greatest learning in this regard has been obtained mainly through APEC and the negotiations that led to the signing of the Chile-China FTA. In the case of entrepreneurs, we need to facilitate Chinese investment in Chile and Chilean investment in China. Regarding civil society, we must encourage partnerships to develop between Chilean and Chinese regions, as has happened in Shanghai. It was interesting to note that this cooperation agreement is the first with a shipping complex in Latin America. It is also the first signed outside ASEAN (Association of Southeast Asian Nations), which demonstrates a great deal of interest in Chile. This is the result of lot of hard work, mutual appreciation, good negotiating, and mainly because of the confidence we have built in reaching cooperation agreements. We must realize that Chile still has much gain much from these ties. Proof of this came recently from Foreign Minister Alejandro Foxley, who pointed to the EU-Chile FTA as a sign it was time to play in bigger stadium, to broaden quotas, to include food categories that are not yet duty-free. And there is always room to grow, especially with Asia.