WT/COMTD/PTA/2/3  
 
24 July 2015  
(15-3794)  Page: 1/3  
Committee on Trade and Development  
Dedicated Session on Preferential Trade Arrangements  Original: English/Spanish  
 
   
CHILE - DUTY-FREE AND QUOTA-FREE SCHEME FOR LEAST DEVELOPED COUNTRIES 
 
QUESTIONS AND REPLIES 
 The following communication, dated 21 July 2015,  is being circulated at the request of the 
delegation of Chile.   
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  This communication provides replies to two questions from the delegation of the 
United States that were raised in the context of the consideration by the Committee on Trade and 
Development (CTD), at its 2
nd Dedicated Session on Preferential Trade Arrangements (PTAs) on 
9 June 2015, of Chile's duty-free and quota-free (DFQF) scheme for least developed countries 
(LDCs).  
 
 Question 1 
 We recognize that the programme entered into force just over a year ago (28 February 2014), and most of the bene ficiary countries became eligible on 
1 January 2015. The statistics cited in the factual presentation only cover the period 
ending in 2013. Can Chile provide any update on the early effects of the programme on its imports from LDCs, including volu me of trade and product breakdown?
1 
 
 Reply 
 
Chile's total imports from LDCs2 in 2014 were worth US$504,357,331 - an increase by 262% in 
comparison to 2013, where imports from LDCs reached US$139,153,816.   
Imports recorded by Customs as entering under the DFQF scheme amounted to US$386,424,563. 
These imports, all from Angola, were recorded under tariff line 27090020 ("Petroleum oils and oils obtained from bituminous minerals, crude: API gravity 25 or more") and accounted for about 77% 
of total imports from LDCs.  
 Table 1 shows Chile's imports from LDCs in 2014 under all tariff regimes, by product group and ranked by value in US$ thousands. Chile's total world imports are also shown. Imports from LDCs 
accounted for 0.7% of Chile's total world imports. 
  
                                               
1 This question was submitted in writing prior to the CTD's 2nd Dedicated Session on PTAs. Chile had 
indicated in the Questions and Replies document circul ated on 2 June 2015 (WT/COMTD/PTA/2/2) that updated 
figures relating to imports from LDCs would be circulated in due course.  
2 The Secretariat factual presentation (WT/COMTD/PTA/ 2/1) included Samoa as an LDC for purposes of 
calculations, as Samoa is listed in Decree No. 1.432 as a beneficiary of the DFQF scheme. However, as Samoa 
has graduated from LDC status and will soon be removed from the list of be neficiaries of the DFQF scheme (as 
indicated by Chile in document WT/COMTD/PTA/2/2), it  is not included in the calculations here.     WT/COMTD/PTA/2/3 
 
- 2 - 
 
  Table 1: Chile's imports from LDCs, by product group (2014) 
Product Groups3 US$ thousands 
Petroleum      386,424.6   
Minerals and metals        52,712.2  
Clothing        52,429.7  
Leather, footwear, etc            8,649.1  
Textiles            1,398.6  
Electrical machinery               540.8  
Manufactures n.e.s.               435.1  
Cereals and preparations               399.9  
Non-electrical machinery               353.9  
Fish and fish products               263.2  
Fruits, vegetables, plants               179.4  
Other agricultural products               171.9  
Transport equipment               153.0  
Coffee, tea               123.3  
Chemicals                  40.0  
Oilseeds, fats and oils                  35.6  
Wood, paper, etc                  29.3  
Beverages and tobacco                  17.7  
Total imports from LDCs 504,357  
Total imports from World 72,134,133  
Source: WTO Integrated Database 
 
 Question 2 
 How does Chile’s DFQF scheme align with th e Bali Decision on Preferential Rules of 
Origin for LDCs, which encourages cumulati on in unilateral preference programmes?
4 
 
 Reply 
 
In light of the Bali Ministerial Decision of Dece mber 2013 on Preferential Rules of Origin for LDCs, 
which is based on guidelines that seek to facilitate market access for LDCs provided under non-reciprocal preferential trade arrangements, Chile's reply to the question is as follows: 
 
1. As noted in the Decision, these guidelines do not stipulate a single set of rules of origin 
criteria. Rather, they provide elements upon wh ich Members may wish to draw for preferential 
rules of origin applicable to import s from LDCs under such arrangements. 
2. The Ministerial Decision also states that rules of origin should be as transparent, simple and 
objective as possible, recognizing that other than wholly obtained products, origin may be conferred by substantial or sufficient transformation, which can be defined in a number of ways, 
including through: (a) ad valorem  percentage criterion; (b) change of tariff classification; and 
(c) specific manufacturing or processing operation,  or a combination thereof. It also states that 
cumulation should be considered as a feature of  non-reciprocal preferential trade arrangements, 
that the documentary requirements regarding compliance with the rules of origin should be simple 
and transparent, and that there should also be transparency in terms of notifying preferential 
regimes for LDCs. 
                                               
3 The definition of product groups is based on the Multilateral Trade Negotiat ions (MTN) categories.  
4 This question was raised during the CTD's 2nd Dedicated Session on PTAs, and was submitted in writing 
after the meeting. WT/COMTD/PTA/2/3 
 
- 3 - 
 
  3. In accordance with the above, Chile established, in September 2013, through Law 
No. 20.690, its DFQF scheme for LDCs, the regulations of which specify a system of rules of origin that complies with the main objective of the Bali Ministerial Decision: to facilitate market access for LDCs. 
4. Furthermore, the system of rules under th e scheme adopted by Chile is simple and 
transparent and grants LDCs more than one of the conditions indicated in point 2. 
• As regards originating goods, the mechanism allows that they be produced in the territory of 
an LDC from originating materials, where the regional value content is not less than 50% 
or there is a change in the tariff heading. 
 
• With a view to simplifying the functioning of the mechanism and thereby facilitating its use, 
Chile has modified the format of the certificat e of origin twice, through Decrees No. 910 of 
11 June 2014 and No. 589 of 18 June 2015. 
 
• More specifically, as regards cumulation of origin, Chile has established, in general, within 
the framework of its trade agreements, cumulation mechanisms and rules of origin that favour bilateral and regional cumulation and cumulation with third countries under certain 
conditions. However, it should be noted that since mechanisms of this nature involve 
certain difficulties and challenges in terms of monitoring and functioning, possible cumulation mechanisms for LDCs have not yet been envisaged. 
 
• Lastly, it should be emphasized that, as noted by the LDCs in the document of October 2014 
submitted to the Committee on Rules of Origin, entitled "Challenges Faced by LDCs in Complying with Preferential Rules of Origin Under Unilateral Preference Schemes", 
"Although laudable and highly desirable, cumulation is not a substitute for liberal rules of 
origin. With liberal rules of origin, the LDC producers may source their inputs worldwide from the most competitive producer at the best prices". This implies that cumulation is not 
the most effective mechanism for LDCs. 
 5. Chile reiterates its support for the Bali Ministerial Decisions and, in particular, market access 
for LDCs, and is therefore open to seeking soluti ons and possible improvements in respect of the 
DFQF scheme for these countries, should any problems be detected. 
 
 
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