Chile Tariffs

Topics: International trade, Free trade, World Trade Organization Pages: 3 (1275 words) Published: March 12, 2015

Tariffs in Chile

From 1930 through 1960 the Chilean economy was highly protected with import and export quotas, import permits, tariffs, noninterest-bearing import deposits and multiple exchange rates imposed by the government. The Central Bank negotiated, with each importer, which exchange rate to apply to each transaction. Moreover, imports included only intermediate and capital goods and a few essential consumer goods. Guidelines to approve products from other countries were followed and several goods were prohibited for importation. Because of this situation, there were three attempts to eliminate tariffs and all restrictions. By 1974, changes started taking place. Trade liberalization allowed Chile to develop where they had a comparative advantage and reduced the production of goods and services where there was no comparative advantage. Chile growth performance has dramatically changed over the last years and the elimination of trade barriers has played an important role. Chile has become one of South America’s most prosperous nations and its economy has grown an average of 5% in the last 4 years. Chile is dependent on foreign trade and its trade in good’s share in GDP rose from 44% in 1990 to 69.6% in 2008.The diversity of imports has increased and the number of countries where Chile exports their products has increased as well. Chile main imports are: crude, petroleum, chemicals, electronics and telecom equipment, natural gas, industrial machinery, vehicles, mobile phones and house equipment. In 2008 a 0% MFN was established for imports such as machinery, vehicles, tools and equipment used for production of goods and services. Moreover, there are not import duties imposed on data processing equipment. Major import partners are USA, China, Brazil, Argentina, South Korea and Japan. Others include Mexico, Colombia and Ecuador. In order to allow new exporters to access the Chilean market, many tariffs have been eliminated and non-tariffs regulated....
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