U.S.-Chile Free Trade Agreement Updates

                  On January 1, 2004, the United States and Chile’s Free Trade Agreement came into force. Like many free trade agreements, this agreement’s purpose is to ease trade between the two countries. This agreement consists of 24 chapters, ranging from trade in goods and services to intellectual property rights and dispute settlement. Since the agreement became official, each country has realized a number of benefits. One of these benefits was the growth in trade, which has grown to $28 billion in trade revenue, an increase in U.S. exports to Chile of 545%, and an increase in Chile’s exports to the U.S.  of 180%. The 2004 agreement has also led to cooperation in completing the Trans-Pacific Partnership negotiations which aim to open markets and set standards for trade and investment; this partnership includes ten other countries in addition to Chile and the U.S.  The fifth chapter of this ten-year old agreement addresses customs administration encouraging transparency and cooperation; recently the countries have enhanced this cooperation by signing a Customs Mutual Assistance Agreement. The Mutual Assistance Agreement’s purpose is to provide a legal foundation so that each country’s customs administration can exchange information and evidence more easily in order to detect, prevent, and investigate customs offenses, terrorism-related activities, and so forth.  Chile is the 70th country to sign a CMMA with the U.S.  Further, the countries will sign a Memorandum of Understanding concerning the promotion of entrepreneurship and support of small business growth.

                  The United States and Chile have also agreed to work together on energy development in Chile that will support U.S. exports and expand the Memorandum of Understanding that was signed in 2009 by increasing cooperation on oil and natural gas development, electricity policy and technology, renewable energy, and energy efficiency.

                  Regarding education, the countries have agreed to continue to strengthen their student exchange program, 100,000 Strong in the Americas, which encourages academic exchange, funds grants and partnerships between universities in both countries, and promotes offers and scholarships for Chilean teachers to receive their Masters in Education in the United States.

                   The U.S. and Chile also plan to expand their partnership in the Caribbean, supporting programs led by USAID and the Chilean Agency for International Cooperation; the focus will be on fostering good governance and the prevention of gender-based violence in Jamaica, Haiti, and the Dominican Republic. The two countries will also sign a Memorandum of Understanding expanding the U.S.-Chile Trilateral Development Cooperation Initiative that was established in 2009. This will help facilitate consultations with countries outside of the Americas such as those in the Asia-Pacific Region.

                  Finally, both countries have reached agreement on several global issues. Chile is contributing to regional security with Central American countries and will be signing a Joint Statement on Human Trafficking to increase cooperation with law enforcement between the countries. The countries have  also agreed to cooperate in strengthening health and environmental security by working together on a package for rapid response on health issues.  In addition, they pledge to support the nuclear summit process.  

Akemi Malone, Intern, Global Trade Expertise