United States-Chile Free Trade Agreement Implementation Act

Chile`s sensitivity to US anti-dumping investigations was based on their “frequent and sometimes unjustified use” and Chile argued that the mere fact of filing dumping duties, regardless of the outcome of the investigation, opened up a process with significant non-recoverable costs. In recent years, anti-dumping investigations on Chilean salmon, mushrooms, grapes and raspberries have been terminated. The ITC found that there was reasonable evidence that U.S. producers suffered significant damage in the cases of salmon, mushrooms and raspberries, but not in the cases of grapes. (15) The United States indicated that trade correction laws would not be negotiated unless Congress and the Bush administration had proposed to Chile to make the process more transparent. Chile responded with concrete proposals to implement this proposal. (16) The USA also expressed reservations on the part of NTB regarding the Chilean price band system for the maintenance of domestic agricultural prices and its sanitary and phytosanitary regulations limiting imports of agricultural and meat products into the USA. (17) The overall estimate of the ITC study estimated that, by 2016, if the effects of the tariff gap were fully visible, US exports to Chile would increase in a range between 18% and 52%. U.S.

imports are expected to increase between 6% and 14%. The study found that this situation would be very low compared to overall US trade and that the macroeconomic impact on trade, production and general economic well-being would be small to negligible (between 0.001% and 0.003% of GDP positive). This meets the general expectations of the start of negotiations, which recognized the limited benefits that the free trade agreement could bring, given that Chile is already a relatively small open economy, with a relatively small trade position with the United States. However, the ITC finding serves as a confirmatory estimate and focuses largely on the effects of tariff reductions, which can be quantified, unlike changes to many non-tariff barriers. (11) Developing countries, including Chile, have expressed two fundamental concerns about the inclusion of environmental and labour provisions in trade agreements: (1) that their sovereignty may be compromised if such agreements endorse higher standards; and (2) that such provisions may be adopted to justify disguised protectionism. Proponents of free trade in the United States and other developed countries have expressed similar sentiments about imposing environmental and labor provisions in trade agreements. In the first case, the non-application of national labour law may be formally challenged in the context of the dispute settlement procedure within the meaning of the Free Trade Agreement (Article 22.16(1)). For the other two provisions which receive support in principle, such a remedy is not available. .