Export subsidies for agricultural products will be eliminated, but both countries will be able to respond in kind if they are harmed by third-party export subsidies. There is also a security mechanism to deal with a possible increase in agricultural imports from Chile. (26) It is important that the trade remedies chapter deals only with security measures, so that the anti-dumping and countervailing options currently available in both countries under WTO rules remain unchanged. For the United States, market access and, in particular, tariff reduction were a central objective of the negotiations. For countries that have trade agreements with Chile, such as Canada, the uniform 6% tariff will be waived for most goods, a benefit that the United States wanted to eliminate. On the other hand, U.S. imports from Chile face different tariffs, although some products enter the United States duty-free under normal trade relations (see Appendix C for the customs processing of Chile`s major exports). Major U.S. imports from Chile are not eligible for duty-free treatment under the Generalized Preference System (GSP), a preferential trade agreement made by industrialized countries for imports from developing countries. The United States and Chile negotiated the timetable for phased tariff reductions on the product negotiation schedule, which differentiates the processing of sensitive products, as was the case with the North American Free Trade Agreement (NAFTA).

With the implementation of the U.S.-Chile Free Trade Agreement, Chile joined a select group of only five other countries that have a free trade agreement with the United States (Canada, Mexico, Jordan, Israel and Singapore). Market access was a critical provision that negotiated duty-free access for all goods traded between the two countries. When the agreement enters into force on 1 January 2004, 87% of bilateral trade in consumer and industrial products will be immediately exempt from tariffs, while the remainder will benefit from reduced tariff treatment over time. Approximately 75% of U.S. agricultural exports will arrive in Chile duty-free within four years, and tariffs on all products will be completely eliminated within 12 years. With a few exceptions, the agreement will also increase market access for a wide range of services, with new opportunities, among others, for the financial services sector. (25) From a Congressional perspective, the additional question arises as to whether the differences in the treatment of the three labour provisions fully meet the main negotiating objectives of Congress, as set out in the TPA legislation. Although the three provisions of the free trade agreement do not have exactly the same treatment, they are also not in the language of the ACCORD. Section 2102(b) (11) of the Trade Act of 2002 (TPA) states that one of the main objectives of labour negotiation is the provision that “a contracting party to a trade agreement with the United States will not miss environmental or labour laws.” This may be in contrast to the seemingly weaker goal of “strengthening the capacity of U.S. trading partners to promote compliance with core labour standards,” and at Sec.

Friday, April 9th, 2021


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