Big three want warmer reception in Chile

It's not likely to happen this year, but U.S. automakers are eager to see Chile gain entry into the North American Free Trade Agreement (NAFTA). Adding Chile to NAFTA (with the U.S., Canada and Mexico) could be a big boost for Detroit's automakers, which now supply only 3% of the Chilean passenger vehicle market from their U.S. plants. With Chile in NAFTA, that could jump to 10% within two years,

It's not likely to happen this year, but U.S. automakers are eager to see Chile gain entry into the North American Free Trade Agreement (NAFTA). Adding Chile to NAFTA (with the U.S., Canada and Mexico) could be a big boost for Detroit's automakers, which now supply only 3% of the Chilean passenger vehicle market from their U.S. plants. With Chile in NAFTA, that could jump to 10% within two years, says Jaime Ardila, finance director at General Motors Corp.-Chile. "The advantage to us is that we could switch sources from countries like Germany, Japan and Brazil, where we have to pay 11 import duty, to NAFTA countries like the U.S. and Mexico, where we'd be able to import duty-free," Mr. Ardila says. "The potential is very significant because even though U.S.-sourced product is only 3% of the market, U.S. companies have a much bigger share of the market, about 22%. But that includes product we source from non-NAFTA countries. Just by switching sources to NAFTA countries, there would be an immediate increase."

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