Free Trade Agreement Between US and Chile: What You Need to Know

In 2004, the United States and Chile entered into a free trade agreement (FTA) that aimed to promote trade and investment between the two countries. The agreement has helped to increase exports in various sectors, including agriculture, manufacturing, and services. In this article, we will take a closer look at the US-Chile FTA and its benefits.

What is the US-Chile FTA?

The US-Chile FTA is a bilateral trade agreement that was signed on June 6, 2003, and implemented on January 1, 2004. The agreement provides comprehensive market access for goods and services between the two countries. It eliminates tariffs on most goods and establishes rules on various trade-related issues, such as intellectual property rights, labor, and environmental standards.

What are the benefits of the US-Chile FTA?

The US-Chile FTA has generated many economic benefits for both countries. For the US, it has opened up new opportunities for US exporters to access the Chilean market by eliminating tariffs and other trade barriers. This has resulted in increased exports of goods and services to Chile, such as machinery, chemicals, and transportation equipment.

For Chile, the agreement has provided access to one of the world`s largest economies, creating new opportunities for Chilean businesses to export their goods and services to the US market. The agreement has also helped to attract foreign investment to Chile, which has led to the creation of new jobs and economic growth.

How has the US-Chile FTA impacted the agriculture sector?

The US-Chile FTA has had a significant impact on the agriculture sector in both countries. For the US, the agreement has opened up new markets for agricultural exports to Chile. Since the agreement was implemented, US agricultural exports to Chile have increased by over 400%. Some of the top US exports to Chile include beef, pork, dairy products, fruits, and vegetables.

For Chile, the agreement has provided an opportunity to increase exports of its agricultural products to the US market. Chile is one of the world`s leading exporters of fresh fruit, including grapes, berries, and cherries. Since the agreement was implemented, Chilean fruit exports to the US have increased by over 150%.

What are the challenges facing the US-Chile FTA?

Despite the many benefits of the US-Chile FTA, there are also some challenges facing the agreement. One of the main challenges is the issue of non-tariff barriers, such as technical regulations and standards, that can limit trade flows between the two countries. These barriers can create additional costs and delays for businesses trying to export goods and services.

Another challenge is the issue of labor standards and enforcement. While the FTA includes provisions on labor rights and protections, there have been concerns about the enforcement of these provisions in practice. This has led to criticisms about the impact of the FTA on workers` rights in both countries.


Overall, the US-Chile FTA has been a success story in promoting trade and investment between the two countries. The agreement has provided significant economic benefits for both the US and Chile, opening up new markets for exports and creating new opportunities for businesses. However, there are also challenges facing the agreement, particularly with regards to non-tariff barriers and labor standards. By focusing on addressing these challenges, the US and Chile can continue to build on the success of the FTA and strengthen their economic partnership for the future.