WORLD TRADE  
ORGANIZATION  WT/REG160/3 
14 January 2005 
 
 (05-0149) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN THE UNITED  STATES AND CHILE 
 
GOODS ASPECTS
 
 
Communication from the Parties  
 
 The following communication, dated 11 January 2 005, is being circulated at the request of the 
Delegations of the United States and Chile.  
_______________ 
 
 
I. BACKGROUND INFORMATION ON THE AGREEMENT 
1. Membership And Dates Of Signature, Ratification And Entry Into Force 
 The Free Trade Agreement (Agreement) between the United States of America (United 
States) and the Republic of Chile (Chile) was si gned on June 6, 2003 and entered into force on 
January 1, 2004.  The tariff schedules under the Agreement went into effect on that date. 
 
2. Type Of Agreement 
 In Article 1.1 of the Agreement, the Parties establish a free-trade area consistent with     
Article XXIV of the GATT 1994.  
 
3. Scope  
 The Agreement is comprehensive and includ es commitments by the United States and Chile 
on all goods in Chapters 1 to 97 of the Harmonize d Tariff System.  Each Party undertakes not to 
increase any existing customs duty, or adopt any cust oms duty, on an originating good.  Furthermore, 
each Party undertakes to progressively eliminate its customs duties on originating goods in 
accordance with its Tariff Elimination Schedule attached  to Annex 3.3.  Each tariff line is assigned to 
a “staging category” specifying the timetable a nd conditions for reducing customs duties to zero 
percent.  For some products, market access will be provided through the cr eation and expansion of 
preferential tariff-rate quotas during the transition pe riod.  The United States and Chile agreed on 16 
different staging categories to eliminate tariffs  on goods, including the over-quota tariffs for all 
preferential tariff-rate quotas.   Details for the staging categories are found in Annex II.    
  For the purpose of the elimination of customs duties in accordance with Article 3.3, interim 
staged rates shall be rounded down, at least to the ne arest tenth of a percentage point or, if the rate of 
duty is expressed in monetary units, at least to the nearest 0.001 of the official monetary unit of the 
Party.   
  More than 85 percent of two-way trade in  consumer and industrial products becomes duty-
free immediately, with most remaining duties eliminated within four years. More generally, over 90 WT/REG160/3 
Page 2  
 
 percent of the total amount of trade between the Un ited States and Chile will be liberalized within a 
period of 4 years following entry into force of the Agreement. The 90 percent figure includes trade 
covered by tariff reduction commitments and by pref erential tariff-rate quotas, taking the trade figures 
for 2003, when the negotiations were completed. (See Tables 3.1 and 3.2.) 
 
 
TABLE 3.1  
UNITED STATES’ LIBERALIZATION COMMITMENTS IN  
THE U.S. – CHILE FREE TRADE AGREEMENT 
 
A) LIBERALIZATION THROUGH TARIFF REDUCTION COMMITMENTS 
 
Time Period for Duty 
Elimination Number of Lines% of Total 
Lines in 
U.S. Tariff 
Schedule Value US 
Imports* from 
Chile, 2003, 
Actual Dollars % of Total  
Imports from 
Chile 
Immediate 9,814 93.6% 3,057,348,848 78.1%
4 years 203 1.9%        8,969,644 0.2%
8 years 146 1.4%      42,674,005 1.1%
10 years 66 0.6%          444,215 0.0%
12 years 61 0.6%    141,108,581 3.6%
 Total 10,290 98.1% 3,250,545,293 83.0%
 
B) LIBERALIZATION THROUGH PREFERENTIAL TARIFF-RATE QUOTAS  
Time Period for Duty-Free, 
Quota-Free Access Number 
of lines % of 
Total 
Lines Value US 
Imports 
from Chile, 
2003, 
 Actual 
Dollars % of Total 
Imports* 
from ChileInitial In-
quota 
Tariff 
Rates Reduction 
of In-quota 
Tariff 
Rate/time 
Frame, If 
Any Expansion of 
Initial TRQ 
Quantities during 
Implementation 
Period (yes/no) 
2 years 1 0.0% 543,773,870 13.9% 0 n/a yes
4 years 6 0.1% 0 0.0% 0 n/a yes
8 years 2 0.0% 26,973,882 0.7% 0 n/a yes
10 years 5 0.0% 0 0.0% 0 n/a yes
12 years 186 1.8% 94,980,906 2.4% 0 n/a yes
Total 200 1.9% 665,728,658 17.0%    
* Based on imports for consumption, U.S. Department of Commerce 
 
C) NOT INCLUDED IN THE AGREEMENT  
Number of Lines 0
Value of US Imports from Chile 0
                                                  Total 0
  WT/REG160/3 
 Page 3 
 
 
 TABLE 3.2  
CHILE’S LIBERALIZATION COMMITMENTS 
IN THE U.S. – CHILE FREE TRADE AGREEMENT 
 A) LIBERALIZATION THROUGH TARIFF REDUCTION COMMITMENTS 
 
Time Period 
for Duty 
Elimination Number o f 
Lines % of Total 
Lines in 
U.S. Tariff 
ScheduleValue Chilean 
Imports from 
United States, 
2003, 
 Actual Dollars % of Total  
Imports from 
United States 
Immediate 7,120 88.5% 2,165,169 86.6%
2 years 10 0.1%        2,349                 0.1% 
3 years 24 0.3%       56,953                  2.3%
4 years 399 5.0%     181,256                 7.2%
8 years 231 2.9%      52,910                  2.1%
10 years 28 0.3%              0 0.0%
12 years 165 2.1%      42,573 1.7%
 Total 7,977 99.2% 2,500,861 100.0%
 
B) LIBERALIZATION THROUGH PREFERENTIAL TARIFF-RATE QUOTAS  
Time Period 
for  
Duty-Free, 
Quota-Free 
Access Number o f 
Lines % of Total 
Lines Value Chilean 
Imports from 
United States, 
2003,  Actual 
Dollars % of Total 
Imports 
from 
United 
States Initial 
In-
Quota 
Tariff 
Rates Reduction of 
In-Quota 
Tariff 
Rate/time 
Frame, If 
Any Expansion of Initial 
TRQ Quantities 
during 
Implementation 
Period (yes/no) 
4 years 10 0.1% 0 0.0% 0 n/a yes
10 years 11 0.1% 0 0.0% 0 n/a yes
12 years 45 0.6% 0 0.0% 0 n/a yes
Total 66 0.8% 0 0.0%     
 
C) NOT INCLUDED IN THE AGREEMENT  
Number of lines 0
Value of US Imports from Chile 0
                                                Total 0
 
 As regards Chilean market access for U.S. prod ucts, nearly 87 percent of U.S. exports are 
provided immediate access.  In addition, the Agre ement provides that Chile will establish preferential 
tariff rate quotas for certain beef and poultry items  with zero duty access for an expanding quantity of 
imports.   Duties on the remaining goods, including the over-quota duties on the preferential tariff-rate 
quotas, will be phased out over varying periods, but within a maximum of 12 years after the 
Agreement’s entry into force. WT/REG160/3 
Page 4  
 
  The United States provides immediate market acce ss on about 94 percent of U.S. tariff lines, 
covering nearly 80 percent of Chilean exports.  In addition, the Agreement provides that United States 
will establish preferential tariff rate quotas for certain  beef, poultry, dairy, sugar, tobacco, avocado, 
processed artichoke, tire, copper and hotel or restau rant chinaware items with zero duty access for an 
expanding quantity of imports.  Duties on the remaining goods, including the over-quota duties on the 
preferential tariff-rate quotas, will be phased out ov er varying periods, but within a maximum of 12 
years after the Agreement’s entry into force.   The United States undertakes to eliminate customs duties on any non-agricultural originating goods that, after the date of entry into force of th e Agreement, are designated as articles eligible for 
duty-free treatment under the U.S. Generalized System of Preferences, effective from the date of such 
designation.   
4. Trade Data 
 Trade between the United States and Chile h as been increasing gradually over the past few 
years.  Chile is currently the 43rd largest export market for U.S. goods, and the United States is the 
second largest export market for Chilean goods.  A nnex I presents the level and composition of 
imports and other trade data for each party.  
United States: Trade with Chile
1997-2003
-2,000-1,00001,0002,0003,0004,0005,000
US$
 millions
Exports 4,368 3,979 3,078 3,460 3,118 2,609 2,719
Imports 2,293 2,453 2,953 3,269 3,495 3,784 3,703
Balance 2,075 1,527 125 191 -377 -1,176 -9841997 1998 1999 2000 2001 2002 2003
 
Source of Data: U.S. Government  
  WT/REG160/3 
 Page 5 
 
 
  Chile: Trade with US  
1997- 2003  
-1 750 -1 500 -1 250 -1 000 -750 -500 -250 - 250 500 750 1 000 1 250 1 500 1 750 2 000 2 250 2 500 2 750 3 000 3 250 3 500 3 750 4 000 4 250 4 500 
1997 1998 1999 2000 2001 2002 2003 U
S$ 
milli
on
s
Exports  Imports Balance
 
Source of Data: Government of Chile 
 
 
II. TRADE-RELATED PROVISIONS 
1. Import Restrictions  
 Except as otherwise provided in the Agreement,  neither Party may adopt or maintain any 
prohibition or restriction on the importation of an y good of the other Party, except in accordance with 
Article XI of GATT 1994 and its interpretive notes, whic h are incorporated into and made part of the 
Agreement, mutatis mutandis . 
 
 1.1 Duties And Charges   Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994 and its interpretive 
notes, that all fees and charges of whatever character  (other than customs duties, charges equivalent to 
an internal tax or other internal charge applie d consistently with Article III:2 of GATT 1994, and 
antidumping and countervailing duties) imposed on or in connection with importation are limited in 
amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of im ports or exports for fiscal purposes.  Parties are prohibited from 
requiring consular transactions connected to the im portation of any good of the other Party.  The U.S. 
shall eliminate its merchandise processing fee on goods originating in Chile.  Finally, each Party shall 
make available electronically the current list of  fees and charges it charges in connection with 
importation.  WT/REG160/3 
Page 6  
 
  1.2 Quantitative Restrictions 
  Except as otherwise provided for in the Agreement, the Parties undertake not to adopt or maintain any prohibition or restriction on the impor tation of any good of the other Party except in 
accordance with Article XI of GATT 1994 and its interpretive notes.   
 
 1.3 Common External Tariff   The Agreement does not include among its objectives the establishment of a common external tariff for third markets. 
 
2. Export Restrictions 
 Except as otherwise provided in the Agreement,  neither Party may adopt or maintain any 
prohibition or restriction on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretive notes, which 
are incorporated into and made part of the Agreement, mutatis mutandis . 
  2.1 Duties And Charges   The Parties agree not to adopt or maintain an y duty, tax or other charge on the export of any 
good to the territory of the other Party, unless such dut y, tax or charge is adopted or maintained on 
any such good when destined for domestic consumption. 
  2.2 Quantitative Restrictions   Except as otherwise provided for in the Agreement, the Parties undertake not to adopt or 
maintain any prohibition or restriction on the expo rtation of any good of the other Party except in 
accordance with Article XI of GATT 1994 and its interpretive notes.    
3. Rules Of Origin 
 Rules of origin are covered by Chapter 4 (Rules of Origin) of the Agreement.  Section A 
(Rules of Origin) provides the general rules regardi ng origin, with the more specific requirements set 
out in Annex 4.1.  Broadly speaking, the main criteria for qualification as originating goods are: 
 
(a) the goods be wholly obtained or produced entirely in the territory of one or both of 
the Parties;  
(b) the goods be produced entirely in the territory of one or both of the Parties  and  
(i) each of the non-originating materials used in the production of the good 
undergoes an applicable change in ta riff classification specified in the 
specific rules of origin annex, or 
(ii) the good otherwise satisfies any applicab le regional value content or other 
requirements specified in that annex; or 
(c) the goods be produced entirely in the territory of one or both of the Parties 
exclusively from originating materials. 
 A good shall not be considered to be an originating good and a material shall not be 
considered to be an originating material by vi rtue of having undergone simple combining or  WT/REG160/3 
 Page 7 
 
 
 packaging operations or mere dilution with water or  with another substance that does not materially 
alter the characteristics of the good or material.     The Agreement contains a series of provisions to help enterprises determine the origin of the 
goods they produce, including regional value conten t (Article 4.2); accumulation (Article 4.6) and de 
minimis  rules (Article 4.7).  There are also provisions for determining the origin of raw materials used 
in producing export goods; among the key provisions are indirect ma terials (Article 4.8), fungible 
goods (Article 4.5) and accessories, spare parts and tools (Article 4.4).     As regards transshipment and transit, the Agreement specifies that goods shall not be 
considered originating if they undergo subsequent production or a ny other operation outside of the 
territories of the Parties, other than unloading, reloading or any other process necessary to preserve 
the good in acceptable condition or to transport the good to the territory of a Party.     Section  B (Origin Procedures) provides rul es regarding claims of origin for purposes of 
claiming preferential tariff treatment, provisions rela ting to certificates of origin, obligations relating 
to importations and exportations, procedures for verify ing the origin of goods and a requirement that 
the Parties agree and publish common guidelines for the interpretation, application, and 
administration of the Chapter.    
4. Standards 
 4.1 Technical Barriers To Trade 
  Chapter 7 (Technical Barriers to Trade) a ddresses all standards, technical regulations, and 
conformity assessment procedures that may, directly or indirectly, affect trade in goods between the 
Parties.  The Parties affirm their existing rights a nd obligations with respect to each other under the 
WTO TBT Agreement. 
  The Chapter provides that in determining wh ether an international standard, guide, or 
recommendation exists within the meaning of relevant provisions of the WTO TBT Agreement, each Party will apply the principles set out in Decisions and Recommendations adopted by the Committee 
since 1 January 1995 , G/TBT/Rev.7, 28 November 2000, Section IX ( Decision of the Committee on 
Principles for the Development of International Standards, Guides and Recommendations with 
relation to Articles 2 , 5 and Annex 3 of the Agreement ), issued by the WTO Committee on Technical 
Barriers to Trade.     In addition, the Chapter includes provisions  regarding acceptance of foreign technical 
regulations and conformity assessments, as well as provisions for transparency in the development of 
standards, technical regulations, and conformity assessments.   This Chapter also establishes a Committee on Technical Barriers to Trade, comprising 
representatives of each Party.  The Committee has the responsibility of monitoring the implementation and administration of this Chapter a nd promptly addressing any issues that the Parties 
raise in relation to this Chapter.   
  4.2 Sanitary And Phytosanitary Measures   In Chapter 6 (Sanitary and Phytosanitary Measu res), the Parties affirm their existing rights 
and obligations with respect to each other under the SPS Agreement and seek to enhance 
implementation of the Agreement.  WT/REG160/3 
Page 8  
 
  The Chapter establishes a Committee on Sanita ry and Phytosanitary Measures, comprising 
representatives of each Party, who are responsible for sanitary and phytosanitary matters.   The 
Committee shall meet annually to consult on matter s involving sanitary and phytosanitary concerns 
and/or measures that affect trade between the Parties or those that must be discussed in preparation for 
meetings of the WTO SPS Committee, the vari ous Codex committees, the International Plant 
Protection Convention, the International Office of Ep izootics and other international and regional fora 
on food safety and human, animal and plant health.    
5. Safeguards 
 Chapter 8 (Trade Remedies), Section A (Safeguards) establishes a mechanism allowing the 
Parties to impose temporary safeguard measures if, as a result of the reduction or elimination of a duty 
pursuant to the Agreement, a good originating in the territory of the other Party is being imported into 
the Party’s territory in such increased quantities, in  absolute terms or rela tive to domestic production, 
and under such conditions as to constitute a substantia l cause of serious injury, or  threat thereof, to a 
domestic industry producing a like or  directly competitive good.   
 
 The Chapter also specifies conditions con cerning safeguard measures, investigation 
procedures and transparency, notification and compensation.   With regard to global actions, each Party reta ins its rights and obligations under Article XIX 
of GATT 1994 and the Safeguards Agreement.  The Ag reement does not confer any additional rights 
or obligations on the Parties with regard to acti ons taken pursuant to Article XIX of GATT 1994 and 
the Safeguards Agreement.  
6. Anti-Dumping And Countervailing Measures 
 Chapter 8 (Trade Remedies), Section B (An tidumping and Countervailing Duties) provides 
that each Party retains its rights and obligations  under the WTO Agreement with regard to the 
application of antidumping and countervailing duties.   
7. Subsidies And State Aid 
 The Free Trade Agreement between the United States and Chile does not include provisions 
addressing subsidies and state aid.   
 
8. Sector-Specific Provisions 
Agriculture
 
 
• The Parties agreed to work together to promote a multilateral agreement within the 
WTO to permanently eliminate agricultural export subsidies. 
 
• The Parties agreed not to introduce or maintain export subsidies on agricultural goods 
destined for the other Party.  An exceptio n is provided in the event that one party 
considers that a non-Party is subsidizing agricu ltural exports to the territory of the other 
Party.  In this situation, the parties may agree upon measures to be taken by the 
importing party.  
 
• The U.S. and Chile agreed to provisions for recognizing grading, quality, or marketing 
measures. 
  WT/REG160/3 
 Page 9 
 
 
 • The Parties agreed to the use of an automa tic and transitional “agricultural safeguard 
mechanism” for specified products if th e unit import price of the good enters the 
Party´s customs territory at a level below a trigger price for that good as set out in the Annex 3.18 to the Agreement.  The mech anism allows the possibility of adding 
additional import charges to the preferentia l tariff but never above MFN rates.  The 
ability to use this mechanism disapp ears once the tariffs are at zero.  
 Textiles And Apparel 
 
 
• Textiles and apparel are duty-free immediately if they meet the Agreement’s rules of 
origin.  The Agreement also provides that  limited yearly amounts of textiles and 
apparel containing non-U.S. or non-Chilean yarn s, fibers or fabrics may also qualify for 
duty-free treatment.  
 
9. Other  
Customs Administration  
 The Agreement establishes a series of provisions to govern customs administration, including 
requirements to publish customs la ws, regulations and procedures and,  to the extent possible, to 
provide advance notice and comment on proposed cust oms regulations.  The Parties have agreed to 
grant Chile three years for compliance of articles 5.1(1) and (2), 5.7(b) and 5.10(1)(b).  Government Procurement (Chapter 9) 
 
 
• The provisions on Government Procurement apply to the central government entities, 
sub-central government entities, and othe r government-related entities listed in the 
schedules for each country. 
 
• The Agreement provides for National Treatment  and Non-Discrimination in regards to 
goods and services of the each Party for the entities covered, subject to specified thresholds and certain exceptions.  
 
• The Agreement provides robust disciplines on procurement procedures, including 
advance public notice of purchases and transparent bid review procedures. 
 Intellectual Property Rights (IPR) (Chapter 17)
 
 
 The Agreement includes provisions on tradem arks, geographical indications, copyrights, 
patents and data protection.  The Agreement al so calls for strong enforcement mechanisms.   
 Transparency (Chapter 20)
 
 
 The Chapter on Transparency sets out require ments designed to facilitate communications 
between the Parties on any matter covered by this Ag reement.  It also provides the obligation for each 
Party to ensure that its laws, regulations, procedur es, and administrative rulings of general application 
respecting any matter covered by the Agreement are promptly published or otherwise made available 
in such a manner as to enable interested persons and the other Party to become acquainted with them.   
Furthermore, it requires that, to the extent po ssible, Parties shall publish in advance proposed 
measures and provide interested persons and the ot her Party a reasonable opportunity to comment.  
Finally, this Chapter provides for independent re view and appeal of final administrative actions. 
 WT/REG160/3 
Page 10  
 
 III. GENERAL PROVISIONS OF THE AGREEMENT 
1. Exceptions And Reservations 
 The rules relating to exceptions are contained in Chapter 23.  They provide for the non-
application of the provisions of the Agreement in various circumstances.  
 
 1.1 General Exceptions 
  As regards general exceptions, Article XX of the GATT 1994 and its interpretive notes are 
incorporated into and made part of the Agreement for the purposes of:  
• National Treatment and Market Access for Goods 
 
• Rules of Origin and Origin Procedures 
 
• Customs Administration 
 
• Sanitary and Phytosanitary Measures 
 
• Technical Barriers to Trade 
 
 In addition, Article XIV of the GATS (including footnotes) is incorporated  into and made part 
of the Agreement for the purposes of:  
• Cross-Border Trade in Services 
 
• Telecommunications 
 
• Electronic Commerce 
  1.2 National Security   As far as national security is concerned, the Pa rties may provide exceptions  in order to protect 
their essential security interests or take action in  pursuance of their obligations under the United 
Nations Charter with respect to the maintenance of  international peace and security.  A Party is not 
required to furnish or allow access to any inform ation the disclosure of which it determines to be 
contrary to its essential security interests.      1.3 Balance Of Payments  
 The Agreement includes a provision addressing the imposition of balance of payments 
measures on trade in goods.  Should a Party decide to impose such a measure, it shall do so only in 
accordance with that Party’s rights and obligations under GATT 1994, including the Declaration on 
Trade Measures Taken for Balance of Payments Purposes  (1979 Declaration) and the Understanding 
on the Balance of Payments Provisions of the GATT 1994  (BOP Understanding).  In adopting such 
measures, the Party shall immediately consult with the other Party and shall not impair the relative 
benefits accorded to the other Party under this Agreement.     WT/REG160/3 
 Page 11 
 
 
 1.4 Disclosure Of Information 
  Nothing in the Agreement shall be construed to  require a Party to furnish or allow access to 
information the disclosure of which would impede law enforcement or would be contrary to the 
Party’s law protecting personal privacy or the fina ncial affairs and accounts of individual customers 
of financial institutions.  
  1.5 Taxation   With certain exceptions, the provisions of the Agreement do not apply to tax measures or 
affect the rights and obligations of the Parties unde r tax conventions.  In the event of inconsistency 
between the Agreement and any such convention, th at convention prevails to the extent of the 
inconsistency.    1.6 Reservations 
 
 The Agreement does not provide for reservations.  
2. Accession 
 There is no specific provision for othe r countries to accede to the Agreement. 
 3. Dispute Settlement Procedures 
 Except as otherwise provided in the Agreement,  the dispute settlement procedures contained 
in Chapter 22 apply to all disputes between the Par ties regarding the interpretation or application of 
this Agreement, wherever a Party considers that th e other Party’s measure is  inconsistent with the 
Agreement’s obligations or that the other Party has otherwise failed to carry out its obligations, and 
wherever a Party considers that the other Party’ s measure causes nullification or impairment as a 
result of a measure not inconsistent with the Agreement as specified in Annex 22.2.  
  The Agreement stipulates that when a ma tter arises under both th e Agreement and under 
another free trade agreement to which both Parties are party, or the WTO Ag reement, the complaining 
Party may opt to pursue the claim in either forum.  Once a forum has been selected, it must be used to 
the exclusion of the other.   
  If consultations are requested under the Agreemen t, the Parties shall attempt to arrive at a 
mutually satisfactory resolution of the matter.  If the Parties fail to resolve the dispute, within a 
specified period of time, a Party may request a me eting of the Free Trade Commission, which shall 
then seek to resolve the dispute.  If the Commission is unable to resolve the dispute within a specified 
period of time, either Party may request in writing the establishment of an arbitral panel made up of 
three members.     Once the panel issues its final report, the Parti es shall agree on the resolution of the dispute.  
If the Parties fail to agree on a resolution to the disp ute, they shall enter into negotiations to develop 
mutually acceptable compensation.  If they are unable to agree on such compensation, or if they have 
agreed to compensation or resolution of the dis pute but the complaining Party considers the other 
Party is failing to observe the terms of the agreemen t, the complaining Party may resort to suspension 
of benefits of equivalent effect. WT/REG160/3 
Page 12  
 
  
4. Relation With Other Trade Agreements 
 The Parties reaffirm their existing rights and obligations with respect to each other under 
existing bilateral and multilateral agreements to which both Parties are party, including the WTO 
Agreement.   
 
5. Institutional Framework 
 The Agreement establishes a series of rules for its administration in Chapter 21.   
  IV. OTHER 
1. Final Provisions 
 Chapter 24 (Final Provisions) contains the fina l provisions of the Agreement.  These rules 
regulate procedures ranging from amendments to term ination.  The Agreement has an indefinite 
duration.   
 
 The full text of the Agreement is available on the following websites:  In Chile:    http://www.direcon.cl/tlc_eeuu_1.php
 
 
In the United States:   http://www.ustr.gov/Trade_Agreements/Bilatera l/Chile_FTA/Final_Texts/Section_Index.html
 
  WT/REG160/3 
 Page 13 
 
 
 ANNEX I.A 
U.S. IMPORTS FROM CHILE  
 
- Chile was the United States= 43rd largest supplier of goods in 2003 . 
 
- Total U.S. goods imports*  from Chile totaled $3.7 billion  in 2003 , a 2.2 percent decrease 
($81 million) from 2002, and an increase of 104% over the last nine years.  U.S. imports from Chile account for 0.3% overall U.S. imports in 2003. 
 - The five largest import categories in 2003 were:  fruit and nuts (grapes) ($798 million), fish 
and seafood (salmon fillets) ($630 million), w ood ($591 million), copper ($400 million), and 
beverages (wine) ($140 million). 
 - U.S. imports of private commercial services**
 (i.e., excluding military and government) 
were $650 million in 2003, down 12.2% ( $90 million) from 2002, but up 56.3% ($234 
million) from 1994 levels.  Travel and transporta tion categories accounted for most of U.S. 
services imports from Chile. 
 - Sales of services in the United States by majority Chile-owned firms were $29 million
. 
 
*Based on total U.S. imports from the U.S. Department of Commerce. 
**NOTE: Refers to private services trade not including U.S. military sales, direct defense expenditures, and 
other miscellaneous U.S. government services. 
 
Trade Balance  
 
- The U.S. goods trade deficit  with Chile was $990 million  in 2003, a 15.8 percent decrease 
($185 million) over 2002. 
 
- The United States has a service trade surplus  of $382 million with Chile in 2003. 
 
Historical Trade Data  
 
U.S. Goods Trade with Chile (in billions of dollars)   
  
2000  
2001  
2002  
2003  
2004* 
 
Balance  
0.2  
-0.4  
-1.2  
-1.0  
-1.0 
 Exports  
3.5  
 3.1  
 2.6  
 2.7  
 3.6 
 Imports  
3.2  
 3.5  
 3.8  
 3.7  
 4.5 
*Annualized based on data for January-October 
 
U.S. Services Trade with Chile (in billions of dollars) 2000-2004  
  
2000  
2001  
2002  
2003  
2004* 
 
Balance  
0.5  
0.4  
0.4  
0.4  
 
 Exports  
1.4  
1.3  
1.2  
1.0  
 
 Imports  
0.9  
0.9  
0.7  
0.7  
 
*Data not available. WT/REG160/3 
Page 14  
 
 Investment
 
 
- U.S. foreign direct investment (FDI) in Chile (stock)  was $10.0 billion in 2003, a 0.1 
percent decrease from 2002. 
 
- Chile FDI in the United States (stock)  was $63 million in 2003. 
 - Sales of services  in Chile by majority U.S.-owned affiliates were $2.3 billion
 in 2002 (latest 
data available). 
 
*NOTE: Refers to private services trade not including U.S. military sales, direct defense expenditures, and other 
miscellaneous U.S. government services. 
  WT/REG160/3 
 Page 15 
 
 
 ANNEX I. B 
CHILEAN IMPORTS FROM THE UNITED STATES 
 
• The United States was Chile’s second largest supplier of goods in 2003.   
 
• Chilean goods imports  from the United States totaled $2.5 billion  in 2003, an increase of 0.3 
percent from 2003, and a decrease of 4.9% over the last nine years.  Chilean imports from the United States account for 14.6 percent of overall Chilean imports in 2003. 
 
• The five largest import categories in 2003 we re: machines, apparatuses of recording or 
reproduction of sound ($706 million), nuclear re actors, boilers and machines ($427 million), 
vehicles and tractors ($188 million), optical instruments, photograph or cinematography ($136 million), and plastics and their manufacturers ($130 million). 
 
• Sales of services  in Chile by majority U.S.-o wned affiliates were $2.9 billion
 in 2001 (latest 
data available). 
 
Historical Trade Data  
 
Chilean Goods Trade with the United States (in billions of dollars)  
 
  
2000  
2001  
2002  
2003  
2004* 
 
Balance  
-0.1  
0.6  
1.1  
1.0 1.2 
 
Exports  
3.0  
3.2  
3.5  
3.5  
4.2 
 
Imports  
3.1  
2.6  
2.4  
2.5  
3.0 
Data for January to November 
  Source: Chilean Custom Service 
 
Investment  
 
• U.S. foreign direct investment (FDI) materialized in Chile (stock) was $47.9 million in 
2003, a 19.2 percent decrease from 2002.   
 
• U.S. direct investment in Chile is primarily concentrated in  communications, electricity, 
gas and water and wood an d papers products.   
 WT/REG160/3 
Page 16  
 
 ANNEX II 
TARIFF STAGING CATEGORIES 
 
The United States and Chile agreed on 16 different  staging categories to eliminate tariffs on 
goods, including the over-quota tariffs for all pref erential tariff-rate quotas. The following tables 
provides a summary of the time periods associat ed with each staging category and detailed 
explanations of each staging category.  
Time period for duty 
elimination Staging Category in FTA (either U.S. or Chile or both) 
Immediate A, F, N 
2 years K, O 
3 years P 
4 years B 
8 years C 
10 years D, H, L, M, 
12 years E, G, J, V 
 
Category Tariff elimination schedule 
A Immediate elimination upon entry into force of the Agreement 
B Phasing out over a period of four years in equal annual increments from January 1, 2004 
C Phasing out over a period of eight years in equal annual increments from January 1, 2004 
D Phasing out over a period of 10 years in eq ual annual increments from January 1, 2004 
E Phasing out over a period of 12 years in eq ual annual increments from January 1, 2004 
F Goods shall continue to receive duty-free treatment 
G Duties shall remain at base rates during years one through four; shall be reduced by 8.3 
percent of the base rate on January 1 of year fi ve and by an additional 8.3 percent of the base 
rate each year thereafter, through year eight.  Beginning on January 1 of year nine, duties 
shall be reduced by an additional 16.7 percent of  the base rate annually through year 12 and 
shall be duty-free effective January 1 of year 12 
H Duties shall remain at base rates during years one and two. Beginning January 1 of year 
three, duties shall be removed in eight equal an nual stages and such goods shall be duty-free 
effective January 1 of year 10.   
 
Additional Staging Categories:  Chile 
Category Tariff Elimination Schedule 
P On date of Agreement’s entry into force, duties shall be reduced by 80 percent. Beginning 
January 1 of year two, duties shall be reduced by 90 percent. Such goods shall be duty free, effective January 1 of year three. 
O Duties shall remain at base rates for years one through two.  Beginning January 1 of year 
three, such goods shall be duty-free. 
V Duties shall remain at base rates for years one through six.  Beginning January 1 of year 
seven, duties shall be reduced by 3.3 percent.  Beginning January 1 of year eight, duties shall be reduced by 21.7 percent.  Beginning January 1 of year nine, duties shall be reduced by 40.0 
percent.  Beginning January 1 of year 10, duties shall be reduced by 58.3 percent.  Beginning 
January 1 of year 11, duties shall be reduced by 76.7 percent.  Such goods shall be duty-free 
effective January 1 of year 12. 
  WT/REG160/3 
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Additional Staging Categories:  United States 
Category Tariff Elimination Schedule 
J Duties shall remain at base rates for years one through seven.  Beginning January 1 of year 
eight, duties shall be removed in five equal annual stages, and such goods shall be duty-free 
effective January 1 of year 12. 
K Duties shall  be removed in two equal annual stages beginning on the date this Agreement 
enters into force, and such goods shall be duty-free, effective Janu ary 1 of year two. 
L Duties shall be removed in ten stages.  Beginning on the date this Agreement enters into 
force, duties shall be reduced by five percent each year through January 1 of year six.  On 
January 1 of year seven duties shall be reduc ed by an additional ten percent each year 
through year nine, and such goods shall be duty-free effective Ja nuary 1 of year 10. 
M Duties shall be subject to the following provisions during the tariff elimination period until 
January 1 of year 10, at which time such goods shall be free of duty. 
 
(i) For goods described in tariff line 9802.00.60, at the time of entry the duty imposed 
upon the value of the proces sing outside the United States to be applied in accordance 
with the procedures specified  in U.S. note 3 of subchapter II, chapter 98, of the 
HTSUS, shall be the rate which would appl y to the article itself under the staging 
obligations set forth for the appropriate provision in Chapters 1 to 97 of this schedule. 
(ii) For goods described in tariff line 9802.00.80, at the time of entry the duty imposed 
upon the assembled article to be applied in accordance with the procedures specified 
in U.S. note 4 of subchapter II, chapter 98, of the HTSUS, shall be the rate applicable 
to the full value of the article itself under the staging obligations set forth for the appropriate provision in Chapters 1 to 97 of this schedule. 
(iii) For goods described in tariff line 9817.61.01, at the time of entry the duty imposed 
upon the assembled article shall be the rate applicable to the full value of the article itself under the staging obligations set forth for the appropriate provision in Chapters 1 
to 97 of this schedule. 
(iv) For goods described in tariff line 9818.00.05, at the time of entry the duty imposed 
upon the cost of such parts shall be the rate applicable to the full value of such parts 
under the staging obligations set forth for the appropriate provision in Chapters 1 to 
97 of this schedule. 
 
N Duties shall be eliminated entirely and such goods shall be duty-free beginning on the date 
this Agreement enters into force.  For goods in tariff lines 9812.00.20, 9812.00.40, 
9813.00.05, 9813.00.10, 9813.00.15, 9813.00. 20, 9813.00.25, 9813.00.30, 9813.00.35, 
9813.00.40, 9813.00.45, 9813.00.50, 9813.00.5 5, 9813.00.60, 9813.00.70, 9813.00.75, and 
9814.00.50 duty-free means free without bond. 
 
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