Message to the Congress Transmitting Proposed Legislation To Implement the United States-Chile Free Trade Agreement

To the Congress of the United States:

I am pleased to transmit legislation and supporting documents to implement the United States-Chile Free Trade Agreement (FTA). The Agreement will further open Chile's markets for U.S. manufactured goods, agricultural products, services, and investors. It will increase competition and consumer choice. The FTA will enhance prosperity in the United States and Chile, serve the interest of expanding U.S. commerce, and advance our overall national interest.

The U.S.-Chile FTA is the first United States free trade agreement with a South American country. We hope the FTA will add momentum to Chile's continued implementation of the free market economic policies that have made Chile a model for its Latin American neighbors. This Agreement will also encourage other countries in the Western Hemisphere to follow Chile's path, furthering our efforts to establish a Free Trade Area of the Americas.

My Administration is strongly committed to securing a level playing field for America's workers, farmers, and businesses. The Congress helped advance that policy by passing Trade Promotion Authority in the Trade Act of 2002 (the "Trade Act"). The Congress can help us take another important step by approving this Agreement and the implementing legislation. United States workers and businesses are currently at a competitive disadvantage in the Chilean market. Chile is an associate member in Mercosur and has FTAs with many other countries, including Canada, Mexico, and the 15 members of the European Union. Securing an FTA with Chile will ensure that U.S. workers and businesses will receive treatment in the Chilean market that is as good as or better than their competitors.

In negotiating this FTA, my Administration was guided by the negotiating objectives set out in the Trade Act. More than 85 percent of trade in consumer and industrial goods between the United States and Chile will be free of duties immediately upon implementation, and most remaining tariffs on U.S. exports to Chile will be eliminated within 4 years after that. More than three-quarters of U.S. farm goods will enter Chile duty free within 4 years and all duties on such goods will be phased out over 12 years. At the same time, the Agreement includes measures to ensure that U.S. firms and farmers have an opportunity to adjust to imports from Chile.

This Agreement opens opportunities for our services businesses, which now account for nearly 65 percent of our gross domestic product and more than 80 percent of employment in the United States. Chile will grant substantial market access to U.S. firms across nearly the entire spectrum of services, including banking, insurance, securities and related financial services, express delivery services, professional services, and telecommunications.

This Agreement provides for state-of-the-art intellectual property protection and recognizes the importance of trade in the digital age by including significant commitments on trade in digital products. In addition, it ensures that electronic commerce will stay free of duties and discriminatory rules.

United States citizens and businesses that invest in Chile will have significant increased protections. This Agreement promotes rule of law and enhances transparency and openness in order to foster a more secure environment for trade and investment. Furthermore, Chile will provide U.S. investors with important substantive protections that Chilean investors already enjoy in the United States.

The United States and Chile have also agreed to cooperate on environment and labor issues and to establish mechanisms to support those efforts. A number of important cooperative projects that will promote environmental protection are identified for future work. The FTA encourages the adoption of high labor and environmental standards, obligates each country to enforce its own labor and environmental laws, and makes clear that domestic labor and environmental protections may not be reduced in order to encourage trade or investment. The Agreement also preserves our right to pursue other legitimate domestic objectives, including the protection of health and safety, consumer interests, and national security.

Trade and openness contribute to development, the rule of law, economic growth, and international cooperation. Chile is a close partner of the United States, and this Agreement will strengthen those ties.

With the approval of this Agreement and passage of the implementing legislation by the Congress, we will advance U.S. economic and political interests, while encouraging others to work with us to expand free trade around the world.

GEORGE W. BUSH

The White House, July 15, 2003.