The U.S.-Chilean tax treaty took a step closer to ratification Wednesday as the Senate voted overwhelmingly to advance it despite a lengthy period of time for the measure to hit the floor.
The Senate voted 97-2 to end debate on the treaty, which dates to 2012. The treaty has been under consideration for years in the upper chamber as the Senate Foreign Relations Committee voted for it on four occasions in that time.
Sens. Josh Hawley (R-Mo.) and Rand Paul (R-Ky.) voted against the treaty, while Sen. Lindsey Graham (R-S.C.) did not vote.
Sixty votes were needed for it to advance. A final floor vote is expected to take place Thursday.
The treaty was initially signed in 2010 and made its way to the Senate two years later, but it has languished ever since, in large part because of opposition from Paul. The Kentucky Republican has been concerned that provisions of the treaty would allow foreign tax authorities access to information on U.S. citizens.
Senate Majority Leader Charles Schumer (D-N.Y.) voiced support for the treaty earlier this week, calling for it to pass to allow the U.S. to increase its access to lithium. As Schumer noted, Chile is home to the world’s largest lithium reserves and is the second-largest lithium producer.
“This treaty has been in the works for over a decade; it now has strong bipartisan support, and now is the time to finally get it across the finish line,” Schumer said on the Senate floor.
Proponents argue the treaty will boost investment between the two countries. Among other things, the treaty would drastically reduce withholding tax rates on interest payments and royalties paid from Chile and cut the Chilean capital gains tax rate in certain cases.
“Right now, American companies are at a significant disadvantage. Because the U.S. doesn’t have a tax treaty in place with Chile, they face double taxation and other barriers to investment and trade,” Schumer said. “Countries like China have an edge on us. It’s an unnecessary roadblock to a fruitful and economically prosperous partnership between Chile and the United States.”
“Ratifying the Chile tax treaty would quickly remedy this issue,” he added.
The Foreign Relations Committee passed it 20-1 earlier this month, setting it up for passage in the upper chamber.
If ratified, the Chilean tax treaty would become the third such treaty between the U.S. and a South American country.