[PEN-L:33026] US-Chile fta

["Ian Murray" <seamus2001@xxxxxxxxx>]

December 11, 2002
U.S. and Chile Reach Agreement on Free Trade
By THE ASSOCIATED PRESS
Filed at 2:14 p.m. ET


WASHINGTON (AP) -- Chile and the United States reached an agreement
Wednesday for a free trade accord that will lift tariffs on more than 85
percent of goods from both countries in the first year.

Trade officials hope to present the agreement early next year to
Congress, which must approve any pact.

``This is a partnership for growth, a partnership for creating economic
opportunities for both countries,'' Trade Representative Robert Zoellick
said.

He said the agreement could serve as a template to other agreements,
specifically with Central America, which he said he hopes to pursue at
the first of the year.

White House spokesman Ari Fleischer said President Bush was pleased that
the ``long-sought'' agreement had finally been reached -- but made it
clear that the White House was nowhere near finished promoting
free-trade pacts with South American nations.

``It's important to America's economy and to the economy of Chile,'' he
said. ``This agreement with Chile will mean higher, better-paying jobs
for Americans and it's important to our outreach in the hemisphere with
our friends and allies.''

``The president looks forward to other initiatives in the hemisphere,''
Fleischer added.

In the fourth year of the agreement, 97 percent of Chile's products will
come into the United States tariff-free. By the twelfth year, all
tariffs will be phased out.

A National Association of Manufacturers study said that the lack of a
trade agreement with Chile costs U.S. exporters $800 million per year in
sales and a loss of 10,000 U.S. jobs.

Zoellick said that among the U.S. exporters who will benefit include
manufacturers of agriculture and construction equipment, automobiles,
computers, medical equipment and paper products. More than three
quarters of U.S. farm goods will enter Chile tariff-free within four
years.

The agreement will protect intellectual property rights, labor and the
environment, said Zoellick, who did not immediately provide details.

The agreement ``levels the playing field'' for U.S. companies, Zoellick
said, citing the example of an American-made Caterpillar tractor.

Chilean President Ricardo Lagos, announcing the agreement earlier in
Santiago, noted it was reached after 11 years of negotiations.

``We started with President Bush the father, and we finished with
President Bush the son,'' Lagos said.

He said the agreement ``will mean more jobs, more work, more
development, more growth for our country.''

Earlier this year, Chile struck free trade accords with the European
Union and with South Korea.

Sources in Chile said that the 14th round of bilateral talks in
Washington finally solved discrepancies in several key matters,
including intellectual property, labor policies, environment protection
and mutual market access to agricultural products.

Another subject of negotiations was Chile's insistence on controls over
the flow of capital, according to Chilean officials.

The talks were scheduled to end last Friday, but both parties agreed to
extend them. Lagos sent Foreign Minister Soledad Alvear and Finance
Minister Nicolas Eyzaguirre to Washington over the weekend to reinforce
the Chilean negotiating team.

Chile's main exports to the United States include copper, cellulose,
fruits and salmon and other fisheries products. Imports include
automobiles, machinery and electronics.

Bilateral trade between the countries currently stands at $6 billion a
year, and a free trade agreement could increase that figure by one-third
in five years, Chilean experts say.