On Dec. 11, 2002, the United States concluded negotiations on a free trade agreement (FTA) with Chile, the first such arrangement with a South American country. The U.S. – Chile Free Trade Agreement entered into force on January 1, 2004. This agreement provides America’s farmers, ranchers, food processors, and the businesses they support with improved, and in many cases, new access to Chile’s market of 15 million consumers. This comprehensive agreement calls for duty-free access on all products and addresses other trade measures for both countries.

With the agreement … U.S. fresh citrus (HTS codes 080510, 080520, 080540, 080550, and 080590) gained preferential access as 6-percent tariffs were immediately eliminated.

Before the agreement … Chilean fresh grapefruit, oranges, lemons, limes and mandarins faced U.S. import tariffs of 1.5-2.5 cents/kg. An 8-percent ad valorem duty was placed on all other fresh citrus. Chile’s share of the U.S. fresh citrus import market was less than 2 percent, with an average annual value of $4.6 million from 2001-2003. Access to the U.S. market for fresh citrus is counter-seasonal.

With the agreement … Chilean fresh citrus gained preferential access as U.S. import tariffs were eliminated on different schedules. The 1.8 cents/kg. tariff on limes was immediately dropped. The 1.5 cents/kg. and 1.9 cents/kg. tariffs on oranges, mandarins, and grapefruit (entering in October) was phased out over 4 years. Tariffs of 1.9 and 2.2 cents/kg. on lemons and grapefruit (entering from August 1-September 30) are reduced and then eliminated over 8 years. Lastly, the tariff phase-out will be completed in 10 years for grapefruit (entering from November 1-July 31), which currently face a tariff of 2.5 cents/kg.