U.S.-Chilean Trade

U.S.-Chilean trade more than doubled between 1986 and 1991. Chilean agriculture, fishery, and forestry exports to the United States have been particularly successful, and in 1991, accounted for well over half the value of Chilean exports to America. The United States, however, sells few agriculture, fishery, or forestry products to Chile. This report (1) reviews recent trends in U.S. trade with and investment in Chile for these three sectors; (2) evaluates the development of Chilean agriculture, fishery, and forestry exports to the United States; (3) analyzes the extent to which horticultural exports from Chile complement or compete with U.S. domestic production; and (4) identifies the main obstacles to bilateral agricultural trade and efforts to promote further trade liberalization.

GAO found that: (1) in 1991, U.S. agriculture exports to Chile totalled 13 percent of Chile's total agriculture imports in 1991; (2) the United States was the principal source of foreign investment in Chile, but agriculture, forestry, and fisheries investment was insignificant; (3) in 1991, Chile became the second largest supplier of agricultural products to the United States which was the principal market for agricultural, fishery, and forestry exports; (4) Chilean agricultural exports have increased by about 60 percent since 1989, fishery exports have increased by 215 percent since 1986, and forestry exports have increased 240 percent; (5) although Chile's fruit exports generally complement U.S. production, U.S. fruit and vegetable growers are concerned about the continuing increase in Chilean imports and their effect upon future U.S. agricultural production; (6) the impediments to U.S.-Chilean agricultural export trade included Chile's protection of domestic production price supports and its preferential tariffs for neighboring Latin American countries; (7) U.S. trade barriers included marketing orders which regulate crop marketing and price fluctuations, legislation protecting domestic agricultural price supports, and plant and animal health requirements; and (8) attempts to expand U.S.-Chilean trade and investment included low bilateral import tariff rates, support for programs to strengthen Latin American economies by reducing debt and supplying loans, and increased cooperation in setting agricultural policies.