The agreement dubbed “the avocado deal” in Government circles because Chile has a surplus of the popular fruit, will herald a new age of free trade deals for Britain after Brexit.
The Daily Express has learnt that the South American country with a population of 18 million and £190 billion GDP will be the forerunner country for deals struck once the UK is free of Brussels rule.
A cabinet source has also confirmed that South Africa will follow close behind because of work already carried out by the British government.
The deals will initially replicate agreements with the EU and pass them on to the UK but will have built in mechanisms to create much deeper and more open trade agreements once the UK is free to negotiate.
It is understood that an early extra deal with Chile could include Britain dropping EU tariffs on their avocados and wine while the Chileans will drop barriers to whisky and engineering products from Britain.
The South American country, which is an ally in helping Britain support the Falklands, has been subject to a wave of diplomatic wooing from Britain with high level government visits from Boris Johnson when he was foreign secretary, foreign minister Alan Duncan, Chief Treasury Secretary Liz Truss and Scottish Secretary David Mundell.
The Princess Royal, Princess Anne is also being sent to help celebrate the 200th anniversary of Chile’s navy which was founded by British admiral Lord Cochrane, the 10th Earl of Dundonald.
A cabinet source told the Daily Express that the deal with Chile highlights that the claims Britain cannot be a success after Brexit are “absurd.”
The source said: “There has been some absurd scaremongering from certain quarters but the reality is that the UK remains highly respected around the world.
“We are regarded as a valuable trading partner and the message from ministers in Chile and around the globe is that we are open for business.
“It’s a message to which the rest of the world is very receptive.”
Currently the UK trading relationship with Chile is £1.8 billion but the government believes it is an example of one which will grow hugely as a result of Britain taking back control of its trade policy from Brussels.
The senior government source said: “People say it’s not that much but there is a huge opportunity for growth in the Chile trade relationship as with others.
“They have products such avocados and wine which we don’t produce but have been restricted by EU trade rules and tariffs.
“They are also keen to buy our products. Johnnie Walker whisky for instance is very popular over there.
“This is true of many countries around the world.”
The speed of the Chile agreement is because the UK trade value is an almost 50 per cent split between the two countries.
The UK is understood to be talking to more than 30 countries about future trade deals.
Currently, the top one is a US deal which President Donald Trump has expressed enthusiasm for.
There are also expected to be good deals with Australia and New Zealand once Brexit is completed.
Theresa May has made it a priority for Britain to become a global centre for free trade with new deals being negotiated next year.