U.S.-Chilean Trade

The United States and Chile are preparing to negotiate a free trade agreement that would lift tariffs and other import barriers and should promote more bilateral trade. Agricultural products account for a major portion of U.S.-Chilean bilateral trade, although Chile exports far more agricultural products to the United States than it imports from this country. This report (1) compares U.S. and Chilean processes for registering pesticides, setting pesticide residue tolerances (maximum legal limits) on foods, and monitoring compliance with these tolerances and (2) determines whether Chilean sanitary and animal and plant health rules restrict potential U.S. agricultural exports.

GAO found that: (1) the United States and Chile have relatively open processes for setting pesticide standards; (2) the countries' different standards and procedures for registering pesticides have not impeded agricultural trade between the two countries; (3) the United States sets its pesticide residue tolerances independently, while Chile accepts international standards; (4) the United States routinely monitors all types of domestic and imported foods for pesticide residues, but Chile only routinely monitors certain domestic dairy products and samples for particular pesticide residues; (5) Chilean exporters have established extensive controls to ensure that their exports meet U.S. standards and their violation rate is significantly lower than that of all other foreign countries; (6) certain Chilean sanitary rules, or the lack thereof, could impede U.S. exports of some agricultural products; (7) Chile's process for establishing sanitary regulations is not always clear and Chile lacks formal procedures that would facilitate U.S. access to Chilean markets; (8) U.S. officials are working with Chilean officials to resolve pesticide and sanitary issues in advance of formal negotiations on a free trade agreement between the two countries; and (9) efforts are under way to find a substitute for treatment of imported pine logs with methyl bromide, an ozone depleter that is being phased out.