ITA Secures Market Access for Navistar Trucks in Chile

The Company

The Department of Commerce’s International Trade Administration (ITA) has helped secure market access for Illinois-based company, Navistar Inc., so it can continue to sell heavy-duty trucks in Chile. Navistar and other U.S.-based truck manufacturers faced the possibility of government-imposed trade barriers which involved overly burdensome emission standards that could have blocked access to the Chilean market.

Why it Matters

This ITA action helped preserve the Chilean export market for large trucks, like those manufactured by Navistar, for the foreseeable future. Reducing unnecessary and overly burdensome regulatory barriers is a key issue for transportation companies like Navistar as they continue to leverage the benefits of the U.S.-Chile Free Trade Agreement and expand sales in foreign markets. If the United States had not advocated against these trade-restrictive emission standards under the World Trade Organization’s Agreement on Technical Barriers to Trade, Navistar and other American trucks may have become less competitive in Chile. Navistar sold over 1,000 trucks to Chile in 2011, which helped support hundreds of American jobs. This number is likely to grow for 2012.

The Problem

In July 2011, Navistar sought ITA’s assistance in confronting a proposed regulation and potential trade barrier in Chile. The Chilean government proposed a regulation that would have established an environmental standard for heavy trucks which could only be met by using an ultra-low sulfur fuel not readily available in Chile. This could have cut Navistar and other U.S. heavy-duty trucks out of the Chilean market. The United States believed that alternative standards were available to meet Chile’s need for strong environmental regulation while also reducing the potential to restrict trade.

Photo courtesy of Navistar

The Solution

Interventions by ITA and other U.S. government representatives, including the act of raising this issue at the WTO’s Technical Barriers to Trade Committee, led Chile to adopt an environmental standard compatible with diesel fuel readily available throughout the country. This solution protects both the environment in Chile and secures market access for heavy-duty trucks in the country.