Chile–United States Free Trade Agreement
The United States-Chile Free Trade Agreement is a free trade agreement (FTA) between the United States and Chile signed on June 6, 2003.[1] The pact[2] came into force on January 1, 2004. On 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 established that Chile and the U.S. will establish 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 US$15.4 billion, a 141% increase over bilateral trade levels before the U.S.-Chile FTA took effect. In particular, U.S. exports to Chile in 2009 showed a 248% increase over pre-FTA levels.[5]
History[edit]
The first steps toward a trade agreement between the two countries began in 1992 when U.S. President George H. W. Bush agreed with Chile's President Patricio Aylwin to "want to pursue free-trade negotiations as quickly as that is feasible."[6] At the 1994 Summit of the Americas U.S. President Bill Clinton, Canada's Prime Minister, Jean Chrétien, and Ernesto Zedillo, the President of Mexico, had agreed to admit Chile to the North American Free Trade Agreement (NAFTA).[7] In February 1997 Chile's President Eduardo Frei Ruiz-Tagle visited the U.S. Congress and declared his support for his country to join NAFTA.[8] However, NAFTA expansion could not be accomplished because the Clinton administration failed to obtain “fast-track†negotiation abilities from the U.S. Congress.[9] Meanwhile, Chile signed a pact with Canada in 1996 and with Mexico in 1998.[10]
On August 1, 2002, the U.S Senate granted fast-track authority to President George W. Bush to negotiate a free trade agreement with Chile and other countries.[11] On December 11, 2002, the U.S Trade Representative Robert Zoellick announced it had reached an FTA agreement with Chile.[12] On January 30, 2003, President Bush notified the U.S Congress of his intention to sign the treaty within 90 days.
Negotiations were complicated by Chile's opposition to an imminent U.S. invasion of Iraq. U.S Trade Representative Robert Zoellick stated that both President Bush and the U.S Congress were "disappointed" by Chile's lack of support in the Iraq war and said there was no set time-frame for a signing of the pact. On April 23, 2003 U.S Secretary of State Colin Powell said the FTA would be signed and approved but they were looking for the appropriate moment to submit it to Congress. On May 7, 2003, President Bush said the "important FTA with Chile would go ahead".[13]
The treaty was finally signed on June 6, 2003, at the Vizcaya Palace in Miami by Chile's Foreign Affairs Minister Soledad Alvear and Zoellick. It was ratified by the U.S. House of Representatives on July 24, 2003, by a vote of 270-156, and ratified by the U.S. Senate on July 31, 2003, by a vote of 65-32.[14] It was ratified by the Chamber of Deputies of Chile on October 7, 2003, by a vote of 87-8,[15] and ratified by the Senate of Chile on October 22, 2003, by a vote of 34-5.[13] The treaty was promulgated by President Bush on September 3, 2003, and by Chilean President Ricardo Lagos on December 4, 2003.
Proponents of the US-Chile FTA claim that the reduction in trade barriers brought on by the pact will lead to an increase in trade between the two countries.
Views opposed to the U.S.-Chile FTA[edit]
Environment and social issues[edit]
Opponents of the US-Chile FTA claim that it will worsen Chile's over-dependence on scarce natural resource exports, and contribute to worsening inequality in both countries.
Quotas and regulatory issues[edit]
Opponents of the US-Chile FTA claim that it will worsen Chile's over-dependence on scarce natural resource exports, and contribute to worsening inequality in both countries. The former Chilean minister of foreign relations, Hernán Errázuriz questioned whether the accord should “even be called a free trade agreement†because it “contains quotas for many products, allows the United States to retain broad antidumping attributes and does not control the damage of billions of dollars in distorted agricultural subsidies.â€[18]
Short-term capitals’ regulation[edit]
The U.S. House Representative Barney Frank, criticizes the agreement for their deregulation over short-term capital flows, a key factor for Chile's successful economy. [19]