This employment impact review was preparedpursuant to section 2102(c)(5) of the Trade Act of 2002 which requires the President to review and report to the Congress on the impact of future trade agreements on U.S. employment, including labor markets. This review presents an overview of the employmentimpact...
This employment impact review was preparedpursuant to section 2102(c)(5) of the Trade
Act of 2002 which requires the President to review and report to the Congress on the
impact of future trade agreements on U.S. employment, including labor markets. This
review presents an overview of the employmentimpact review process, the background
and contents of the U.S-Chile Free Trade Agreement (FTA), and assessments of the
potential economic andemployment effects ofthe FTA. In addition, the review
considers four selected issuesrelated to the FTA that are relevant to employment and
labor markets in the United States: the laborprovisions of the FTA; the investment
provisions in the FTA; the temporary entry provisions for business persons in the FTA;
and trade adjustment assistance (TAA) and other federal programsto assist U.S. workers
that may be displaced by international trade. The Trade Act of 2002 not only included
the Trade Promotion Authority (TPA) but also renewed the TAA programand greatly
expanded and enhanced the coverage,benefits, and services available to workers certified
under the program.
The major finding of this review is, given the current volume, composition, and structure
ofbilateral trade between Chile and the United States, the U.S.-Chile FTA is not
expected to have any significant effects on employment in the United States. The
absence of any significant adverse domestic employment effects fromthe FTA is
attributable to, amongother factors,the gradual removal over a 12-year period of the
remaining U.S. tariffson imports fromChile and safeguards for increases in imports if
they cause serious injuryto a domestic industry.
As Chile’s markets becomemore open to U.S. goods and services with the introduction
of the U.S.-Chile FTA, and U.S. goods becomemore competitive in the Chilean market,
it is expected that U.S. exports to Chile will increase. This especially ought to be the case
for the current leading U.S. exports to Chile such as aircraft, construction and engineering
equipment, motor vehicles, computers, chemical and plastic products,and
telecommunications equipment. New U.S. export opportunities mayalso arise in the
areas of agriculture,manufacturing,and services as the access of U.S.exports to the
relatively small Chileanmarket improves. U.S. imports from Chile are also expectedto
increase as the result of the FTA, especially in products such as fruits, copper, fish,
precious metals, and wine.