Chile Free Trade Agreement

The United States-Chile Free Trade Agreement (FTA) entered into force on January 1, 2004. The United States-Chile FTA eliminates tariffs and opens markets, reduces barriers for trade in services, provides protection for intellectual property, ensures regulatory transparency, guarantees nondiscrimination in the trade of digital products, commits the Parties to maintain competition laws that prohibit anticompetitive business conduct, and requires effective labor and environmental enforcement. With the twelfth annual tariff reductions taking effect on January 1, 2015, 100% of U.S. exports will enter Chile duty-free.

Highlights of the U.S.-Chile FTA

New Opportunities for U.S. Workers and Manufacturers: All exports of consumer and industrial products can now enter Chile duty free. 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. Luxury tax which discriminated against U.S. automobiles has been phased out. The top U.S. exports to Chile are mineral fuel, machinery, vehicles, electrical machinery, and aircraft. Learn more here

Expanded Markets for U.S. Farmers and Ranchers: With all tariffs phased out by January 2015, key U.S. farm products can benefit from improved market access, including pork, beef, soybeans, durum wheat, feed grains, potatoes, and processed food products such as french fries, pasta, distilled spirits and breakfast cereals. U.S. exports of agricultural products to Chile totaled $891 million in 2013. Leading categories include wheat, feeds and fodders, poultry meat, and beef and beef products. Learn more here.  

Access to A Fast-Growing Chilean Services Market: 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. The Agreement includes transparency rules to ensure that service regulators operate fairly. U.S. direct investment in Chile is mostly in the finance, insurance, and manufacturing sectors. U.S. stock of foreign direct investment in Chile in 2012—latest data available—was nearly $40 billion, up from $10 billion in 2004 when the Agreement went into effect. Learn more here

Strong Protections for Labor and the Environment: Both parties commit to effectively enforce their domestic labor and environmental laws. Chile has implemented reforms of existing environmental institutions pursuant to the Environment Chapter of the Agreement, and established new institutions, such as the Ministry of Environment. Learn more here