Higher Tariffs to Kick In on Certain Chile FTA Imports

18 Agosto 2006
The Office of the U.S. Trade Representative (USTR) this week announced Chilean apple, quince and pear pastes and purees will no longer be given duty-free access under the U.S.-Chile Free Trade Agreement because of a “snapback” provision that allows higher tariffs to kick in if imports of certain agricultural products rise about a specific threshold.




Specifically, more than 50 percent of all U.S. imports of apple, quince and pear pastes and purees in 2005 came from Chile, which accounted for $1.2 million of the total $2.2 million of these imports. USTR announced the snapback had been triggered and higher tariffs would be imposed in an Aug. 16 Federal Register notice.






The provision means the tariff on Chilean apple, quince and pear pastes and purees will rise to 7.5 percent on Oct. 1. Under the snapback provision, it will drop each year by 1.5 percent until it completely phases out on Jan. 1, 2011, sources said.






The snapback provision phases out for all goods covered by it after 8 years.






The snapback kicks in if imports of a product exceed 50 percent of all U.S. imports for that good, or when the value of imports from a specific tariff line from Chile exceeded $110 million. Only a handful of products are subject to the snapback provision, including certain cucumbers, strawberries and peppers.






One U.S. industry source estimated this snapback would not impose a high enough tariff to substantially affect trade volume.





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