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The U.S. Senate and House recently passed implementing legislation for a Free Trade Agreement (FTA) with Chile. When fully implemented the FTA will eliminate bilateral tariffs, lower trade barriers, promote economic integration and expand opportunities for the citizens of both countries. The U.S.-Chile FTA is the first between the United States and a South American country.

The U.S.-Chile FTA will increase U.S. market access for goods and services and provide strong protections for U.S. investors in Chile. American workers, consumers, businesses and farmers will enjoy preferential access to one of the world's fastest growing economies, enabling products and services to flow back and forth from the United States and Chile with no tariffs and under streamlined customs procedures.

"This new Chile free trade agreement ensures Ohio and U.S. producers are on an equal footing with major competitors in the Chilean market such as Canada and the EU," said Constance Jackson, OFBF vice president of agricultural ecology. "The appropriate treatment of non-tariff barriers means that we'll be able to step up our sales of beef, pork, poultry and soybeans in addition to our traditional sales of corn to Chilean customers."

Some of the key opportunities the FTA provides for are:

• New opportunities for U.S. workers and manufacturers – More than 85 percent of bilateral trade in consumer and industrial products becomes tariff-free immediately, with most remaining tariffs eliminated within four years. Key U.S. export sectors benefit, such as agricultural and construction equipment, autos and auto parts, computers and other information technology products, medical equipment and paper products.
• Expanded markets for U.S. farmers and ranchers – About three-quarters of both U.S. and Chilean farm goods will be tariff-free within four years, with all tariffs and quotas phased out within 12 years. U.S. farmers’ access to Chilean markets will be as good or better than the European Union (EU) or Canada, both of which already have FTAs with Chile. Farmers will gain duty-free treatment within four years for important U.S. products such as pork and pork products, beef and beef products, soybeans and soybean meal, durum wheat, feed grains, potatoes and processed food products such as french fries, pasta, distilled spirits and breakfast cereals.
• Access to a fast growing Chilean services market – The agreement offers new access for U.S. banks, insurance companies, telecommunications companies, securities firms, express delivery companies and professionals. U.S. firms may offer financial services to participants in Chile's highly successful privatized pension system.
• A trade agreement for the digital age – State-of-the-art protections and nondiscriminatory treatment are provided for digital products such as U.S. software, music, text and videos. Protections for U.S. patents, trademarks and trade secrets exceeds past trade agreements in the region.
• Strong protections for U.S. investors - The agreement establishes a secure, predictable legal framework for U.S. investors in Chile.
• Open and fair government procurement – Provides for groundbreaking anti-corruption measures in government contracting. U.S. firms are guaranteed a fair and transparent process to sell goods and services to a wide range of Chilean government entities, including airports and seaports.
• Strong protections for labor and environment – Both governments commit to enforce their domestic labor and environmental laws. An innovative enforcement mechanism includes monetary assessments to enforce commercial and labor and environmental obligations.

Cooperative projects will help protect wildlife, reduce environmental hazards and promote internationally recognized labor rights.

Two-way trade in goods (exports plus imports) between the United States and Chile totaled $6.4 billion in 2002. Two-way trade in services in 2001 (latest year available) amounted to $2.2 billion. Since 1994, U.S. goods trade with Chile has expanded by 39 percent (to 2002) and services trade by 37 percent (to 2001).

Upon Congressional approval of this FTA, 85 percent of industrial products will be traded without duties. In less than four years, 75 percent of farm production will also be freely traded. After just 10 years, all trade in nonagricultural goods will take place without tariffs or quotas; for agriculture, the phase out will take just 12 years.