Produced at the request of the U.S. Trade Representative (USTR), the report provides advice on the probable economic effect of the proposed modifications to the U.S.-Chile FTA rules of origin on U.S. trade under the Agreement, on total U.S. trade, and on domestic producers of the affected articles. The proposed modifications, detailed in the USTR’s request letter, cover certain woven fabrics of artificial filament yarn classified in heading 5408 of the Harmonized Tariff Schedule of the United States.
The proposed modification for the rules of origin for certain woven fabrics of artificial filament yarns would liberalize the current rules of origin by allowing the use of more non-originating rayon filament yarns. However, because U.S. imports from Chile are a small portion of total U.S imports of dyed and yarn-dyed woven fabrics, the likely effect on total U.S. imports of these products is negligible. Similarly, because the United States did not export any of these goods to Chile in 2015 and U.S. exports of these goods to Chile represented less than 1 percent of total U.S. exports in 2014, the likely effect of the proposed modification on total U.S. exports would be negligible.