On June 6, 2003, Chile signed a Free Trade Agreement (FTA) with the United States, which entered into force on January 1, 2004.
It is one of the most important trade agreements that our country possesses, considering that the United States has a population of 336 million people, its Gross Domestic Product (GDP) per capita at purchasing power parity (PPP) amounts to US$80,034 and that the nation generates 25.5% of global GDP.
“It is important to highlight that today, 20 years after the signing of the Economic Trade Agreement between Chile and the United States, this was the first treaty signed by our country that contains chapters on issues as important as the environment, labor and e-commerce, which were very new for the time it was signed. It was undoubtedly a milestone for the modernization of our country’s trade policy,” said International Economic Relations Undersecretary, Claudia Sanhueza.
Figures
Twenty years after the signing of the treaty, which, as of January 1, 2005, made 100% of merchandise trade between the two countries duty-free, the agreement registers the following figures:
- Trade with the United States reached US$35.4 billion in 2022, and has experienced an average annual growth of 9.2% since 2003.
- In the same period, imports went from US$2.813 billion in 2003 to US$21.859 billion in 2022, experiencing an annual increase of 11.4%.
- Exports expanded from US$3.793 billion in 2003 to US$13.542 billion in 2022, registering an average annual increase of 6.9%.
- The United States is a strategic market for our companies, which, thanks to the treaty, can export their products to the world’s largest economy totally free of import duties.
Importance of the US for our exports
- Number one destination for our non-traditional services exports.
- Number one destination for our food exports.
- Number one destination for our exports from women-led companies.
- Number two destination for our exporting small and medium-sized enterprises (SMEs).
- Number two destination for our non-copper exports.
- Second largest foreign investor in Chile.
In 2022:
- Non-copper exports to the United States totaled US$9.9457 billion, which represents 18.5% of non-copper shipments to the world.
- Non-traditional services exports to the United States totaled US$539.24 million, equivalent to 34% of the total exported.
- Food shipments to the US totaled US$5.51 billion, representing 27% of our sector’s sales abroad.
- The United States is, in turn, the second largest export market for our SMEs, worth US$393 million, representing 17% of the shipments made by our small and medium-sized companies.
- In terms of Foreign Direct Investment, the United States is the second largest investor in Chile. According to the latest figures from the Banco Central de Chile, the stock of US capital in our territory amounts to US$27.416 billion, which represents 10.9% of the total accumulated FDI in the country.
Dynamism of non-copper exports to the United States after the signing of the Free Trade Agreement
- After the signing of the FTA in 2003, Chilean non-copper exports to the United States tripled, from shipments worth US$3.411 billion in 2003 to US$9.946 billion in 2022, showing an average annual growth of 5.8%.
- It is important to note that currently 100% of the items in the United States tariff are free of customs duties for products originating from Chile.
- In effect, a large number of Chilean products that were not exported to the United States before the FTA, or were exported in very low number, managed to grow and become positioned as emerging sectors, including: salmon and trout, fresh grapes, fresh avocados, organic chemical products, apples, peaches, blueberries, fresh plums and Patagonian toothfish.
- The FTA also allowed various sectors that already shipped to the United States to move from emerging industries to consolidated sectors, including: salmon, fresh blueberries, wooden boards, services and wines.
- Without a doubt, the Chile-United States Free Trade Agreement has contributed decisively to the diversification of our exports to the largest economy in the world.
- In 2022, Chile was the largest supplier to the United States of a large number of products, including: salmon fillets, fresh grapes, blueberries, salt, wooden boards, various citrus fruits, apples, fresh plums, lithium carbonate, various types of seeds, and frozen turkey and chicken pieces.
- Finally, the FTA has allowed the number of Chilean companies exporting goods and services to the United States to grow by 6% over the last 20 years, going from 2,085 exporters in 2003 to 2,210 in 2022, of which 767 are SMEs.
- Today, Chile’s 16 regions export to the United States, and it is a destination of special interest for the Aysén, Biobío, Los Lagos and Metropolitan regions, where the United States is the largest recipient of their supply of goods and services.
- In 2022, Chile was the largest supplier to the United States of a total of 51 products, including fresh grapes, fresh cherries, salmon fillets, iodine, lithium carbonates, fresh oranges, fresh apples, fresh peaches, fresh plums, mussels, dried plums, inulin, MDF boards, refined copper, NKS fertilizers, matches and dried apples.