Developing countries, including Chile, have expressed two fundamental concerns about the inclusion of environmental and labour provisions in trade agreements: 1) that their sovereignty could be compromised if such agreements approve higher standards; and 2) that such provisions can be used to justify disguised protectionism. Proponents of free trade in the United States and other developed countries have expressed similar sentiments regarding the inclusion of environmental and labour provisions in trade agreements. In addition, in a case where the formal dispute resolution procedure can be used, it differs from commercial disputes. Ultimately, if a trade dispute is not resolved, the country faces the possibility of suspending « equivalent effect » benefits under the free trade agreement (Article 22.15, paragraph 2), resulting in an increase in tariffs or the payment of a monetary tax equal to 50% of what a dispute resolution body describes as « equivalent ». This section does not apply to disputable work services. The difference lies in the fact that the possibility of not resolving a labour dispute is a monetary valuation that would be limited to $15 million per year, using an equivalent dollar value of suspended benefits (higher rates) if the monetary valuation is not paid. The monetary assessment would also be paid into a fund and would be spent on « appropriate work initiatives. » Labor advocates argue that limiting the valuation to $15 million and disserging the valuation to a late-lay-back country make the work rules ineffective. The USTR argues that, for a small country such as Chile, such a fine would be significant relative to the value of the dollar of the trade benefits it will receive. (31) Bilateral negotiations have been a challenge for both countries and, although a comprehensive agreement has been reached, some issues, as expressed in the Debate in the House of Representatives and the Senate, have been controversial.
Given that several free trade agreements are now being considered, there has been concern about the potential that Chilean provisions could become a « model » for free trade agreements. In particular, immigration, investment (capital controls) and labor rules have appeared on hot topics, and many members of Congress have actually sent the message that language in the U.S.-Chile free trade agreement would not be acceptable in future trade agreements. A summary of these problems appears at the back of the report. As EsTV came into force, this is the final version of the report. In addition to the benefits expected by U.S. businesses, investors and consumers, a free trade agreement with Chile was also seen as an opportunity for the United States to support economic and trade reforms in Latin America, of which Chile had become a regional model. Trade has been a major part of Chile`s history of economic growth and development and has been directly linked to higher productivity, a higher standard of living, greater diffusion of technology and a complete modernization of the country. That is why the United States should, it was said, support these achievements, as they form the basis for sustainable economic, social and political stability and sustainable progress in the region. Trade agreements have also been presented as a role in development and have the added benefit of « including » reforms, giving economic and political conditions a sense of stability that promotes the attraction and maintenance of foreign trade and investment.