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The U.S.-Panama Trade Promotion Agreement eliminates tariffs and other
barriers on most U.S. goods, increasing export opportunities for agricultural
products important to Kentucky. With immediate elimination of duties on over 60
percent of current U.S. trade, this agreement changes the one-way street of
duty-free access currently enjoyed by most Panamanian exports into a two-way
street benefiting both countries. The American Farm Bureau strongly supports the
agreement, predicting widespread gains for U.S. agriculture exceeding $190
million per year.
Kentucky’s exports to all countries, estimated at $1 billion in 2006,
supported about 12,900 jobs, on and off the farm. These export sales make an
important contribution to the Kentucky farm economy which had total cash
receipts of $3.9 billion in 2006.
Poultry Meat. With $604 million in farm cash receipts in 2006, broilers
are Kentucky’s second largest agricultural industry accounting for 18 percent of
total farm cash receipts. Broilers are also the state’s top agricultural export.
Kentucky’s poultry industry will benefit from this agreement.
The 260-percent tariff currently applied to chicken cuts will be
eliminated immediately for mechanically de-boned chicken, within 5 years for
wings and 10 years for other chicken cuts except leg quarters.
Panama will provide immediate duty-free access within a preferential
tariff-rate quota (TRQ) for chicken leg quarters that starts at 660 tons and
grows each year by 10 percent. The 260-percent over-quota tariff will be
eliminated in 18 years.
U.S. poultry exporters will continue to have access to the global
756-ton TRQ for chicken cuts that is part of Panama’s World Trade
Organization commitments.
Panama will eliminate its 15-percent duties on turkey meat immediately
for frozen whole turkeys and most frozen turkey cuts. The 15-percent tariffs
on processed turkey and chicken will be eliminated within 5 years.
In addition, Panama has already implemented our December 2006 bilateral
agreement on sanitary and phytosanitary (SPS) measures by recognizing the
equivalence of the U.S. poultry inspection and disease monitoring systems,
allowing U.S. inspectors to certify poultry for export to Panama without
having each facility and shipment inspected by Panamanian authorities.
Beef. Kentucky’s cattle and calf industry provides the second largest
source of state farm cash receipts. They will benefit from this agreement.
Panama will immediately eliminate its 30-percent duty on beef products
of most importance to the U.S. beef industry--prime and choice cuts.
Panama’s tariffs on other cuts of beef will be phased out over 15 years.
The 10-percent tariff on beef tongues and livers will be eliminated in 5
years, and the 15-percent tariffs on other edible offal will be eliminated
immediately.
Panama has already implemented our December 2006 bilateral agreement on
SPS measures, reopening its market to U.S. beef by bringing its import
requirements related to BSE into compliance with international standards.
Panama also accepted the equivalence of the U.S. meat inspection system,
which allows U.S. inspectors to certify beef for export to Panama without
having each facility and shipment inspected by Panamanian authorities.
Feed Grains. Corn is the state’s fourth largest source of farm revenue
generating cash receipts of $339 million in 2006. Feed grain growers will
benefit from the Panama agreement.
Panama will provide immediate duty-free access within a TRQ for 298,700
tons of U.S. corn that will grow at a rate of 3 percent each year. The
40-percent over-quota tariff will be eliminated in 15 years.
The current zero-tariff treatment for crude corn oil will be locked in
place immediately and Panama will provide immediate duty-free access for
refined corn oil within a 368-ton TRQ that grows each year by 5 percent. The
30-percent over-quota tariff will be phased out within 10 years.
Soybeans. Kentucky soybean and product exports were estimated at $157
million in 2006. Panama is the twelfth largest export market for U.S. soybean
meal with exports for the most recent three years averaging 109,000 tons valued
at $24.7 million. Kentucky soybean producers will benefit from this agreement.
Panama’s current zero-tariff treatment for soybeans and soybean meal
will be locked in place immediately upon implementation of the Agreement.
The current zero-tariff treatment for crude soybean oil will also be
locked in place immediately, while the 20-percent tariff on refined soybean
oil will be phased out in 15 years.
Back to the
U.S.–Panama Trade
Promotion Agreement
