gin Cereals Vegetables Honey Various foodstuffs preparations Wood, vegetable coal and its products Wines The MERCOSUR-Chile AgreementOn June 19, 1996 MERCOSUR and Chile signed a Free Trade Agreement which was later endorsed (June 25) by the Presidents of the five countries in San Luis, Argentina.Key features: the agreement complies with the requirements of the World Trade Organization; the principles of the customs union are maintained (the common external tariff remains unchanged). Further, it should be pointed out that Chile has not become a new member of MERCOSUR, but has joined MERCOSURs free trade zone without adopting the common external tariff system. This is a 4 + 1 type agreement.General OutlineOn October 1, 1996 tariffs on goods not subject to exceptions will be reduced by a 40%. Reductions will continue in a progressive manner until a zero tariff is reached in 8 years, more precisely by 2004. Tariffs for products considered "sensitive" will be liberalized in 10 or 15 years, according to the type of product. In this regard, Chile has decided to close its market for wheat and wheat by-products during 18 years. To counterbalance this, Chile has granted additional quotas for beef and rice and, for the first time, has opened its domestic market to dairy products from MERCOSUR. A very strict rules of origin regime has been approved by which Chilean products exported to MERCOSUR should have at least a 60% of national (Chilean) components; the remaining 40% may be from outside MERCOSUR. This system is already in force in the other MERCOSUR countries. Dispute resolution will be done by means of consensus during the first three years after the signing of the Agreement. After that it will be done through arbitration. Uruguay-ChileConsequences of the AgreementThe MERCOSUR-Chile Agreement may come to affect the fruit/vegetable and wine sectors in Uruguay. Chile is a large exporter of fruits and wine, internationally known. In Uruguay, how...
