U.S. Will Suspend Chile’s Duty-Free Trade Privilege

President Reagan moved Thursday to suspend Chile’s duty-free trade status, saying President Augusto Pinochet’s government is “not taking steps to afford internationally recognized worker rights.”

Administration officials said the arrest of several Chilean union leaders after a one-day national strike last October “suggested a retrogression in the workers rights climate in that country. . . . “

$60 Million in Imports

Under Reagan’s proclamation, duty-free status will be removed for about $60 million in annual imports of products from Chile--primarily plywood, fish, copper, sodium chloride, lithium compounds and assorted vegetables.

Deputy U.S. Trade Representative Alan F. Holmer said that Chile’s suspension from the Generalized System of Preferences (GSP) program, intended to assist developing nations, will become effective 60 days after Reagan’s proclamation is published in the Federal Register within a few days.

During its first few years, the Reagan Administration seemed to focus on Chile’s free-market economy and avoid stressing its violations of human rights. But in the past few years, it has tried to exert pressure on the Pinochet regime to return the country to a democratic political system.

Reagan warned Pinochet a year ago when the United States suspended duty-free trade status with Romania, Nicaragua and Paraguay that Chile’s record of suppressing free trade unions and violating other worker rights was jeopardizing its status, too.

Reagan said Thursday that the “suspension is the result of my determination that Chile has not taken and is not taking steps to afford internationally recognized worker rights.”

On AFL-CIO List

Chile was one of the countries on a list that the AFL-CIO has been trying to get the Administration to suspend from the GSP program.

Instituted in 1976, the program provides preferential duty-free entry to the United States for 3,000 products valued at nearly $15 billion annually from 141 designated countries or territories.

Over the Reagan Administration’s opposition, Congress made progress on labor rights a condition for continuing the preferences when it renewed the program for another 10 years in 1984.