Commodity Fact Sheet
What’s at Stake for Sauces and Condiments?
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. Sauces and Condiments Gain Improved Access to Chile’s Market
Before the agreement … U.S. sauces and condiments such as tomato sauce, soy sauce, ketchup, mustard, mayonnaise, and salsa faced import tariffs of 6 percent in Chile. Without preferential access, U.S. sauces and condiments were at a disadvantage to products from countries like Argentina.
With the agreement … In most cases, U.S. sauces and condiments gained preferential access as 6-percent tariffs were immediately eliminated. For tomato salsa, the 6-percent tariff was phased out after 4 years. Tariff elimination put U.S. exporters on an equal footing with Chile’s regional trading partners, such as Argentina, Peru, and Brazil.
Chilean Sauces and Condiments Secure Improved Access to U.S. Buyers
Before the agreement … Most Chilean sauces and condiments faced tariffs of 10 percent or less in the U.S. market, but some tariffs were as high as 40.3 percent.
With the agreement … Chilean sauces and condiments gained preferential access as tariffs were reduced and finally eliminated. For ketchup, mustard, and soy sauce and other sauces not derived from tomatoes, U.S. tariffs that ranged from 1.1 to 6.4 percent were immediately eliminated. The tariff on tomato sauces is subject to the non-linear reduction formula. It remained at 11.6 percent for the first 4 years, is reduced by one-third over the next 4 years, and the remaining duty is phased out over the subsequent 4 years.
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