Chile Tariffs free essay sample

By 1974, changes started taking place. Trade liberalizing allowed Chile to develop where they had a comparative advantage and reduced the production of goods and services where there was no comparative advantage. Chile growth performance has dramatically changed over the last years and the elimination of trade barriers has played an important role. Chile has become one of South Americas most prosperous nations and its economy has grown an average of 5% in the last 4 years. Chile is dependent on foreign trade and its trade in goods share in GAP rose from 4% in 1 990 to 69. 6% in 2008.The diversity of imports has increased and the number of countries where Chile exports their products has increased as well. Chile main imports are: crude, petroleum, chemicals, electronics and telecoms equipment, natural gas, industrial machinery, vehicles, mobile phones and house equipment. In 2008 a 0% MFC was established for imports such as machinery, vehicles, tools and equipment used for production of goods and services. We will write a custom essay sample on Chile Tariffs or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Moreover, there are not import duties imposed on data processing equipment. Major import partners are LISA, China, Brazil, Argentina, South Korea and Japan. Others include Mexico, Colombia and Ecuador.In order to allow new exporters to access the Chilean market, many tariffs have been eliminated and non-tariffs regulated. Chiles trade policy is open and ensures access of all goods and services to all markets and encouraged domestic and foreign investment. They have a very trade outward orientation policy and had achieved trade liberalizing by conducting and developing unilateral, multilateral and bilateral trade. To achieve this objective they maintain the avoidance of international discrimination. Chiles MFC tariff decreased from 11% to 6% ad valor duty and less than 2% at the beginning of 2004 as a result of trade agreements.This is a unique feature of Chiles trade policy that allows them to allocate resources more efficiently by treating all the different prod action sectors the same way. For this reason, Chile has also been able to negotiate agreements with different countries. Free Trade Agreements with different countries and the bilateral trade with USA have grown causing imports to increase. The main objective of negotiation of Fats has been to improve market access, tooth in terms of facing lower or no barriers and reducing the uncertainty caused when entering a new market.As far as services and investment, they also grant open access by accepting both national and foreign investment. Bilateral agreements are considered useful as an additional way for negotiations with other nations. Chile thinks that Pats are very important in a countrys trade policy because they can get reciprocity and expand their exports to different markets. This kind of agreements allows preferential liberalizing on trade to occur faster. Chile has signed and strengthened Fats with all Latin America and has also signed Fats with 39 partners outside the region.By 2003, Chile had signed 8 preferential agreements with 39 partners. By 2009, Chile had concluded 21 agreements with 57 trading partners and the proportion of Chiles trade in goods with preferential partners increased to 92% of its overall trade. An important factor of their Fats is that all new agreements have traditional rules that are consistent with existing agreements. The trading partners which Chile has signed preferential agreements are Korea, USA, FETA, China, Panama, Peru, Colombia, Japan, Australia and Turkey. Also, Chile has a Trans-Pacific Agreement known as P-4 with New Zealand, Singapore and Brunet Tarantulas.The Trans-Pacific Strategic Economic Partnership Agreement, also named PA or TAP, is a trade agreement between Chile, Brunet, New Zealand and Singapore signed in 2005 and has been in force since 2006. It was designed to liberalize trade between the economies of the Asia-Pacific region. However, since 201 0 negotiations have taken place to expand the original trade union to incorporate eight other countries including Mexico, USA Canada and Australia. Chiles economy has benefit from trading with countries in the TAP. In 201 2, almost $16 billion of Chiles overall $79 billion worth exports went to TAP countries. At the same time, Chile imported $25 billion in return. Since 2003, Chiles trade with T UP nations has grown by 16% each year. Chile and LISA entered into the U. S. Chile Free Trade Agreements on January 1, 2004. This agreement eliminates tariffs and open markets, reduces barriers for trade in services, provides protection for intellectual property, ensures regulatory transparency, remunerate nondiscrimination in the trade of digital products, commits both parties to maintain competition laws that prohibit anticompetitive business conduct and requires effective labor and environmental enforcement.Through duty elimination, the agreement allows U. S. Textile and apparel exporters to be more price-competitive in the Chilean market when competing with domestic suppliers and with third country suppliers that do not have duty benefits. These products have a duty-free treatment as of the entry of the Agreement. Travel goods exported to Chile are duty free as of the entry date of the Agreement. At the same time, most Chilean goods enter the United States free Of duty and it is expected that the merchandise processing fee and all products will enter free by the time it is fully implemented in 2015.Chile and Australia entered into the Australia-Chile Free Trade Agreement on March 6, 2009. This was Australias fifth FAT and the first one with a Latin American country. The agreement covers goods, services and investments, eliminates tariffs on almost 92% on tariff lines covering 97% of goods currently traded. This included Australian exports of coal, meat, wine and key dairy products. The FAT also protects IP for patents, trademarks, geographical indication and copyright.The PTA includes commitments by Chile to maintain an open and non-discriminatory market for Australian services, including different sectors such as education, professional services, mining, engineering and financial services. Chilies is Australias third largest trading partner in Latin America and there are around 120 Australian companies trading with Chile and expanding their business in Latin America. It is expected that by 201 5, riffs on all existing merchandise trade will be eliminated. Chile and Hong Kong signed a comprehensive Free Trade Agreement on September 7, 2012. The agreement includes trade in goods and services, investment and other related areas. It is fully consistent with provisions of the World Trade Organization and it will help Hong Kong tap the Chilean market and expand the free trade agreement network to the American Region. The agreement states that 88% of Chiles tariff will become duty free for products originating from Hong Kong upon the entry into force of the Agreement and will phase UT the tariffs on an additional 10% of its tariff lines over three years.