Commodity Fact Sheet
What’s at Stake for Fresh Citrus?
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.
U.S. Fresh Citrus Tariffs Eliminated
Before the agreement … U.S. fresh citrus faced 6-percent import tariffs. Chile’s total annual imports of citrus averaged$218,000 from 2001-2003, and the U.S. share of Chile’s citrus import market was 48 percent. Argentina and Peru were the other major suppliers. Demand is met largely through domestic production. Chile’s citrus fruit production was 212,000 metric tons in 2001. Lemons and limes account for 57 percent and oranges for the remainder. In addition to tariffs, U.S. fresh citrus was subject to a number of phytosanitary restrictions.
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.
Chilean Fresh Citrus Secures Improved Access to U.S. Buyers
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.
Return to U.S.-Chile FTA Commodity Fact Sheet Page