U.s.-Chile Free Trade Agreement

The evolution of goods trade between the United States and Chile is illustrated in Chart 3 (The data are in Appendix B) and reflects the evolution of economic growth in Chile. U.S. exports increased significantly in the first half of the last decade and increased by 77% between 1992 and 1997. Subsequently, they declined sharply for two years, which coincided with the sharp decline in economic growth in Chile, from 7.4% in 1996 and 1997 to 3.4% in 1998 and -1.1% in 1999 (see Table 1). When economic growth picked up in 2000 to 5.4%, demand for U.S. goods also increased, but economic and U.S. export trends were again shaken in 2001 and 2002, with the United States running a trade deficit with Chile for the first time since 1988. In 2002, U.S. exports were not much higher than in the previous decade.

This pattern corresponds to the overall decline in exports to Latin America, due to weak economic conditions and hence demand for imports in general. The U.S.-Chile Free Trade Agreement is a free trade agreement between the United States and Chile on June 6, 2003. [1] The pact[2] came into force on 1 January 2004. To that date, tariffs on 90% of U.S. exports to Chile and 95% of Chilean exports to the United States were eliminated. [3] The agreement also provides that Chile and the United States will import duty-free trade in all products within a maximum of 12 years (2016). [4] In 2009, bilateral trade between the United States and Chile reached $15.4 billion, an increase of 141% over bilateral trade levels prior to the entry into force of the U.S.-Chile Free Trade Agreement. In particular, U.S.

exports to Chile increased by 248% in 2009 from pre-free trade levels. [5] The free trade agreement improves market access, with 85% of bilateral trade in consumer and industrial products being treated immediately as tariff-free and reducing other tariffs over time. Approximately 75% of U.S. agricultural exports will arrive in Chile duty-free within four years and all tariffs will be completely eliminated within 12 years of the implementation of the agreement. In Chile, 95% of its export products are immediately franchised and only 1.2% enter the longest 12-year exit phase. Other critical issues have been resolved: environmental and labour provisions, more open procurement rules, improved access to trade in services, improved protection of U.S. investment and intellectual property, and the creation of a new chapter on e-commerce. The trade remedial measures chapter is limited to safeguard measures, so that the options currently available to both countries for anti-dumping and countervailing duties remain unchanged. In recent years, the United States has signed bilateral free trade agreements with Jordan, Singapore and Chile. All three have common elements, but each reflects country-specific issues. A recurring question for the U.S. Congress regarding the trade negotiation process was to what extent one agreement becomes a model for another? For example, when the U.S.-Chile Free Trade Agreement was signed in December 2002, U.S.

Trade Representative Robert Zoellick announced that it could serve as a „model“ for the Central American Free Trade Agreement (CAFTA) in the United States. (24) Trade reform began in the 1970s and has contributed to economic transformation. By dismantling its multi-tiered tariff plan and removing non-tariff barriers, Chile has tried to make foreign markets more aggressive and open up to international competition. The average rate of unit import duties increased from 105% in 1973 to 15% in 1988 and 11% in 1991 under the civilian government. Chile then reduced the tariff by 1 percentage point each year, until