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.

Before the agreement … U.S. planting seeds faced a 6-percent import tariff. Without preferential access, U.S. planting seeds were at a disadvantage to products from the European Union (EU) and Argentina that faced lower duties. The U.S. export value averaged $2 million from 2002-2003. The United States mainly shipped field corn and vegetable seeds.

With the agreement … U.S. planting seeds gained preferential access as the tariff was immediately eliminated. This put the United States on an equal footing with EU, the other primary supplier, which now enjoys duty-free access under their trade agreement with Chile.

Before the agreement … Chilean planting seeds already entered the U.S. market duty free. Chile has a well-developed commercial seed industry and grows seeds for its domestic market and for exports. Before the agreement, Chile was the largest supplier of planting seeds to the United States.

With the agreement … Chile will continue to enjoy duty-free access to the U.S. market.