From the point of view of Congress, the additional question is whether the differences in the treatment of the three labour provisions do not, in one way or another, meet the main negotiating objectives of Congress, as set out in the VPA legislation. Although the three provisions of the free trade agreement do not have exactly the same treatment, they are also not in the language of the ACCORD. Section 2102(b) (11) of the Trade Act of 2002 (TPA) states that one of the main objectives of labour negotiation is the provision that “a contracting party to a trade agreement with the United States will not miss environmental or labour laws.” This contrasts with the apparently weaker objective of “strengthening the capacity of U.S. trading partners to promote compliance with basic labour standards” and, in paragraph 2102 (a) (7), “to ensure that it does not weaken or reduce the protection afforded by national environmental and labour laws as an incentive to trade.” In addition, in a case where the formal dispute resolution procedure can be used, it differs from commercial disputes. Ultimately, if a trade dispute is not resolved, the country faces the possibility of suspending “equivalent effect” benefits under the free trade agreement (Article 22.15, paragraph 2), resulting in an increase in tariffs or the payment of a monetary tax equal to 50% of what a dispute resolution body describes as “equivalent”. This section does not apply to disputable work services. The difference lies in the fact that the possibility of not resolving a labour dispute is a monetary valuation that would be limited to $15 million per year, using an equivalent dollar value of suspended benefits (higher rates) if the monetary valuation is not paid. The monetary assessment would also be paid into a fund and would be spent on “appropriate work initiatives.” Labor advocates argue that limiting the valuation to $15 million and disserging the valuation to a late-lay-back country make the work rules ineffective. The USTR argues that, for a small country such as Chile, such a fine would be significant relative to the value of the dollar of the trade benefits it will receive. (31) Since the implementation of the U.S.-Chile Free Trade Agreement on January 1, 2004, bilateral trade between Chile and the United States has more than quadrupled and trade and investment opportunities are plentiful.
After the U.S.-Chile Free Trade Agreement came into force in 2004, 80% of U.S. exports of consumer goods and industrial goods to Chile were immediately exempt from tariffs. Tariffs on other products have almost been abolished and 100% of products are expected to be duty-free by 2015. (U.S. Department of Commerce, April 2014) 3. (return) A detailed summary of this process, with an emphasis on trade policy, can be found in: CRS Report 97-56, Chile`s Trade and Economic Reform: Impact on NAFTA membership, under [author`s name] October 17, 1997. 1-9. 25. (return) The full text of the agreement consists of 24 chapters that fill hundreds of pages. The full text can be found at: www.ustr.gov. In 1996, Chile joined MERCOSUR (the common market in South America). Chile negotiated free trade agreements with Canada (1977), Mexico (1998) and Central America (2001).
In 2006, Chile signed or ratified several trade agreements, including China and India. In total, Chile has trade agreements with more than 60 economies around the world. In addition to tariff cuts, trade aid has posed considerable challenges for negotiators. In the United States, low tariffs on most products have led domestic industry to rely on trade assistance laws to combat import competition.