Publication Number: 4042

Report Title: Probable Economic Effect of Certain Modifications to the United States–Chile Free Trade Agreement Rules of Origin

Author's name(s): Gail Burns, Raymond Cantrell, Dennis Fravel, Gerald Houck, Ruben Mata, Aaron Miller, Elizabeth Nesbitt, Douglas Newman, and Mark Simone

Date Published: October 2008

Report Description/Introductory Text: This report provides the U.S. International Trade Commission’s (Commission) advice on the probable economic effect of certain proposed modifications to the rules of origin contained in the United States-Chile Free Trade Agreement (UCFTA) as requested by the Office of the United States Trade Representative (USTR). The Commission’s advice is based on an assessment of whether a proposed rule modification would likely increase or decrease preferential trade flows of U.S. exports to and imports from Chile, and the resulting effect on total U.S. imports, exports, and production.

The Commission assessed each proposed modification to determine the probable economic effect on U.S. trade and U.S. industries. The Commission first compared the rules incorporating the proposed modifications with the current rules to ascertain any changes in the terms of the UCFTA rules of origin; the Commission then assessed the probable economic effect of the modifications. The Commission took into consideration production and sourcing patterns of the affected products in the United States and Chile, product input sourcing patterns, overall levels of production and trade, and UCFTA and normal trade relations (NTR) duty rates.

The proposed rules of origin modifications covered 24 agricultural and manufactured product groups for which the Commission presented its advice in the form of 24 product groups (digests).

Probable Economic Effect on U.S. Imports: The Commission determined that for 11 digests, there would be no probable economic effect on U.S. imports for those items affected by the rule change; for the remaining 13 digests, the Commission determined that the probable economic effect on U.S. imports would be negligible.

Probable Economic Effect on U.S. Production and Exports: For 2 digests, there would be no probable economic effect on U.S. production and exports for those items affected by the rule change; for the remaining 22 digests, the probable economic effect on U.S. production and exports would be negligible. A negligible determination means that the value of U.S. trade or U.S. production for the affected product is likely to change by less than 6 percent.


Topics Covered: U.S.-Chile Free Trade Agreement, UCFTA, FTA, rules of origin, marjoram, savory, cilantro, coffee, spice mixtures, celery seeds, basil, rosemary, sage, cocoa, cocoa preparations, miscellaneous edible preparations, sauces and preparation, chemicals, compound rubber, pearls, air conditioners, heating machinery, rolling machines, filtering machinery, heavy construction equipment, dair machinery, beverage machinery, papermaking machinery, washing machines, textile machinery, metal-rolling mills, typewriters, word processors, office automation machinery parts, lamps, measuring instruments

Countries: Chile, United States

HTS Numbers: 07, 09, 12, 18, 2103, 40, 7101, 8415, 8419, 8421, 8424, 8425, 8426, 8427, 8428, 8429, 8430, 8434, 8435, 8439, 8440, 8450, 8451, 8455, 8469, 8473, 8539, 9030, General Note 26, HTS Chapter 28, HTS Chapter 29, HTS Chapter 30, HTS Chapter 31, HTS Chapter 32, HTS Chapter 33, HTS Chapter 34, HTS Chapter 35, HTS Chapter 36, HTS Chapter 37, HTS Chapter 38

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