Chile was the United States' thirty-first largest export market in 1994. U.S. direct investment in Chile is largely concentrated in finance, banking and manufacturing. Chile's applies a uniform 11 percent ad valorem tariff on imports. Chile's tariffs are GATT bound at 35 percent ad valorem, although Chile agreed to reduce this to 25 percent by July 1995, when the Uruguay Round agreements are implemented. Chile's major border measure barriers are in the agricultural sector.
Chile maintains a price band system for wheat, wheat flour, edible oils and sugar.
This variable tariff system is designed to maintain domestic prices for these commodities within a predetermined band, which shields Chilean producers from price fluctuations in international market prices. Chile also maintains minimum customs value requirements for imports on occasion in response to low world prices. These have been established for spun cotton, milk, rice, corn and wheat flour. The United States has encouraged Chile to reduce tariff rates further, particularly in areas of commercial interest to the United States, as part of the Uruguay Round and bilaterally. The United States has also indicated our opposition to Chile's price band system for certain agricultural products.