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U.S.-Chile Free Trade Agreement OverviewOn July 24, 2003, the U.S. House of Representatives approved legislation to implement the US-Chile Free Trade Agreement. The US-Chile FTA is harmful to the people and environment of Chile and the US in several regards. It also is a dangerous model for agreements currently being negotiated like the Central American Free Trade Agreement (CAFTA) and the Free Trade Area of the Americas (FTAA). Some key points are:
Does not protect core labor rights or environmental protections
Labor and Environmental provisions aren’t enforceable on the same terms as commercial provisions, and only one labor and environmental provision has any enforcement: that countries enforce their own labor and environmental laws. Both countries are still able to set these laws at levels below internationally recognized standards or to lower them in order to attract investment without facing any consequences. Also, the penalty for country’s failure to enforce its own laws is capped at an amount insufficient to be a deterrent.
Contains labor rules which are weaker than existing US-Chile trade rules
Does not require Chile to adopt or enforce core International Labor Organization standards. In addition, under the Generalized System of Preferences (GSP) the U.S. is able to scrutinize whether or not a country’s labor laws actually comply with international standards in determining market access. The US-Chile FTA is contingent only on Chile enforcing its existing labor laws regardless of their adequacy.
Would reduce access to essential medicines
Intellectual property rules in the US-Chile FTA reduce the flexibility available under WTO rules for governments to make generic medicines available in order to address public health crises.
Opens Public Interest Laws up to Challenge by Foreign Corporations
Investment rules in the Chile FTA include the right for foreign corporations to sue governments when they believe that a domestic regulation unfairly infringes on their profits. Similar rules under NAFTA have led to challenges in all three NAFTA countries against health, safety, environmental, and zoning and development laws.
Threatens sustainable development
The Chile FTA restricts the use of capitol controls, which are an essential tool for developing countries in dealing with speculative capitol. Chile has used these tools effectively in the past, and even the IMF has conceded that they can be beneficial to stable development.
Establishes a new immigration policy for Chile which doesn’t protect workers’ rights
The Chile agreement sets a quota for temporary entry of professionals in addition to our existing global H1-B visa system. But unlike H1-B, it doesn’t require certification that there is a domestic need for the workers, or that those workers will be treated well. This sets up a mechanism to abuse Chilean workers and drive down wages and working conditions in the US.
Threatens Chile’s natural resources
Natural resources are at the heart of Chile’s export trade, comprising its four largest export sectors to the US, including mined products, forestry products, and fish. The primary temperate forests of Chile represent 1/3 of the remaining primary temperate forests in the world. The Chile agreement, however, does not include sufficient protections for natural resource preservation.
Ignores negotiating objectives
Many of these provisions go against the negotiating objectives delineated by Congress under Fast Track including the labor and environmental provisions, investment, and intellectual property rights.
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