Chilean Trade:

Factors Affecting U.S. Trade and Investment

GGD-92-106: Published: Jun 12, 1992. Publicly Released: Jul 6, 1992.

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Pursuant to a congressional request, GAO reviewed the conditions affecting U.S. trade with and investment in Chile, focusing on: (1) Chile's trade and investment policies and U.S. concerns about those policies; (2) factors that may affect U.S. investment in Chile's mining industry and agricultural trade with Chile; and (3) U.S. efforts to promote trade with and investment in Chile.

GAO found that: (1) Chile is considering several investment reforms, including lowering tax rates on investor profits, establishing a time frame for foreign investment application approval, and allowing companies to claim profits sooner; (2) U.S. companies are concerned that Chile's capital reserve requirement will burden U.S. companies and that, since Chile has no tax treaty with the United States, U.S. companies will be taxed twice; (3) factors affecting U.S. trade with and investment in Chile include a lack of ports and electricity in the mining sector of Chile, import taxes on agricultural products, and increased Chilean agricultural exports; and (4) the United States has begun free trade negotiations with Chile and is providing assistance to U.S. companies interested in trade with and investment in Chile.