Us Chile Free Trade Agreement Template

Trade reform began in the 1970s and has contributed to the transformation of the economy. 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 it reached 6% on 1 January 2003. Competitive pressure from trade reform has significantly increased productivity and economic growth, but not without adjustment costs. In addition to tariff cuts, trade aid has posed considerable challenges for negotiators. In the United States, low tariffs on most products have led domestic industry to rely on trade assistance laws to combat import competition. Perhaps the most controversial issue was the application of U.S. anti-dumping legislation (to determine whether products are sold at fair value) that Chile wanted to address under the bilateral free trade agreement. This was not a new topic and was addressed in the Canada-Chile Free Trade Agreement, which provides for “mutual exemption from the application of anti-dumping legislation” except in “exceptional circumstances.” (14) The direction of this agreement does not appear to impose the abolition of anti-dumping means, but rather to use it as a last traffic, in accordance with WTO guidelines. Developing countries, including Chile, have expressed two fundamental concerns about the inclusion of environmental and labour provisions in trade agreements: 1) that their sovereignty could be compromised if such agreements approve higher standards; and 2) that such provisions can be used to justify disguised protectionism. Proponents of free trade in the United States and other developed countries have expressed similar sentiments regarding the inclusion of environmental and labour provisions in trade agreements.

Bilateral negotiations have been a difficult task for both countries and, although a comprehensive agreement has been reached, many members of Congress have faced controversial issues, as expressed in hearings in the House of Representatives and the Senate. Overall, given that several free trade agreements are now being considered, the general concern was that the provisions of the free trade agreement with Chile`s free trade agreements could become a “model” for others to follow. Particular attention was drawn to the language of dispute resolution concerning labour rules and financial transfers (capital controls) as well as the temporary entry of businessmen. These and other issues are addressed in this report, which provides context and analysis of the economy, trade relations and the bilateral free trade agreement. Given that Congress has concluded the measures for this free trade agreement and has become law, this is the final version of the report. The trade data reflect Chile`s open and independent trade policy.