International Trade Administration ensures market access for small California company under the U.S.-Chile Free Trade Agreement

(ITA) The Department of Commerce’s International Trade Administration (ITA) helped EUR Consulting (EUR), a small California-based engineering company, overcome a foreign trade barrier that unfairly excluded the company from competing for a government procurement opportunity in Chile worth $400,000 to which it was guaranteed market access under the U.S.-Chile Free Trade Agreement (FTA). Leveraging the U.S.-Chile FTA, ITA pressed the Chilean government to reconsider EUR’s eligibility to compete for this project, and opened the door for future government contracts.

Why it Matters: If ITA had not ensured compliance with the U.S.-Chile FTA, EUR and other U.S. engineering companies may have continued to experience discriminatory treatment when competing for other Chilean government procurements of public works projects. EUR Consulting was deemed ineligible to compete for a contract worth $400,000, and the case had implications for U.S. companies competing for future Chilean public works projects. In the aftermath of Chile’s 2010 devastating earthquake, the country is in the process of building and rebuilding public structures including hospitals, schools and other civic institutions. The government procurement provisions of the FTA provide that U.S. engineering and architecture design firms should have the opportunity to compete for such covered public works projects.

The Problem: In February 2011, EUR reported to ITA that Chile’s Ministry of Health excluded it from bidding on a government procurement opportunity to build a hospital because it did not have prior experience in Chile designing seismic shock resilient structures. The U.S.-Chile FTA ensures that U.S. companies are treated the same as Chilean companies when competing for covered government procurement contracts regardless of whether the U.S. company has in-country experience. EUR Consulting has prior experience designing buildings throughout the world that can withstand seismic activity and, in accordance with the FTA, that experience should have been considered when competing for this project.

The Solution: Advocating on behalf of EUR, ITA officials raised our concerns to the Chilean government and pressed the importance of upholding the government procurement provisions of the U.S.-Chile FTA. In May of 2012, Chile’s government accountability office, which oversees Chile’s bid protest process, found fault with the Ministry of Health’s decision not to consider EUR’s global experience when assessing EUR’s eligibility to participate in the procurement, setting a positive precedent for U.S. companies seeking to do business in Chile.

“Not too many people understand the benefits that free-trade agreements provide to US Corporations while doing business abroad – having the US Government and the Department of Commerce’s International Trade Administration (ITA) on your side truly helps to level the field,” said Eloy Retamal, President of EUR Consulting and Development, Inc.

Working closely with U.S. companies, ITA creates, expands, and defends market access for U.S. goods and services overseas through the Trade Agreements Compliance Program. “We promote policy that develops a more favorable business climate for U.S. companies in global markets; we employ commercial diplomacy to resolve trade barriers; and we leverage our bilateral and multilateral trade agreements to ensure our trading partners live up to their commitments so that our businesses can compete on a level-playing field.” - Assistant Secretary for Market Access and Compliance, Michael C. Camuñez.