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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 New England. 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.
New England’s exports to all countries, estimated at $434 million in 2006,
supported about 4,900 jobs, on and off the farm. These export sales make an
important contribution to the New England farm economy which had total cash
receipts of $2.3 billion in 2006.
Dairy Products. New England’s dairy producers will benefit from this
agreement, with cash receipts across all six states reaching $573 million in
2006.
U.S. exporters will have immediate duty-free access to nine preferential
dairy tariff-rate quotas (TRQs) with a combined total of 3,986 tons. These
include 2,625 tons of skim milk powder, 728 tons of cheese, 263 tons of ice
cream, and 370 tons of other dairy products. These quantities will grow by 4
or 5 percent each year and the over-quota tariffs for these TRQs, which
range from 15 percent for ice cream to 50 percent for milk powders, will be
phased out in 15 to 17 years.
U.S. dairy exporters will continue to have access to the global TRQs for
3,830 tons of milk powder and 3,782 tons of cheese that are part of Panama’s
World Trade Organization commitments.
Panama will eliminate its 30-percent tariff on dried whey products
immediately. The tariffs on most other dairy products, which currently face
duties as high as 140 percent, will be phased out over 15 years.
In addition, Panama has already implemented our December 2006 bilateral
agreement on sanitary and phytosanitary (SPS) measures and technical
standards by recognizing the equivalence of the U.S. food safety systems for
processed foods, including dairy products, and by streamlining its product
registration system for packaged foods. This will allow U.S. food processors
to export dairy products to Panama without burdensome paper work and without
having each facility and shipment inspected by Panamanian authorities.
The National Milk Producers Association supports the Agreement, noting
that "Panama imports nearly half its dairy products, and the U.S. stands to
become a larger supplier once the FTA is finalized."
Beef. The cattle and calf industry of Vermont and New Hampshire generated cash receipts of $59 million in 2006. This industry will
benefit from the Panama 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.
Vegetables. With cash receipts of $131 million in 2006, New England’s
potato farmers located almost entirely in Maine will benefit from this
agreement.
Panama will eliminate its tariffs on nearly all frozen and processed
vegetables immediately. The tariff faced by U.S. exporters for these
products currently is 15 percent.
The tariffs for most fresh vegetables will be eliminated in 10-15 years.
Panama will eliminate its 15-percent tariffs on frozen and canned
sweetcorn immediately.
Panama will provide immediate duty-free access within a preferential TRQ
for frozen precooked French fries that starts at 3,640 tons and grows each
year by 4 percent. The 20-percent over-quota tariff will be eliminated in 5
years.
Panama will eliminate its 15-percent tariff on potato chips immediately
and the tariffs on potato flakes (15 percent) and other potato preparations
(as high as 54 percent) will be phased out in 5 to 10 years. Panama will
also establish a 765-ton duty-free preferential TRQ for fresh potatoes that
will grow each year by 2 percent.
Fruits. New England fruit growers, especially those in the blueberry and
cranberry
business, will benefit from the agreement.
Panama will eliminate its tariffs on nearly all fresh and processed
fruits immediately.
Following are examples of fruit products of importance for New England
that will be duty-free immediately (the currently applied tariff is
indicated in parentheses): apples (2 percent), blueberries (15 percent),
cranberries (15 percent), peaches (2 percent), pears (5 percent), processed
peaches and pears (Free), cranberry juice concentrate (Free).
Panama will phase out its 15-percent tariffs on cranberry puree and
single strength fruit juice mixtures in 5 years.
Maple Products. Producers of maple syrup and maple sugar products stretch
across Vermont and earned
about $11 million in cash receipts in 2006. This industry will benefit from the
agreement.
Panama will phase out its 15-percent tariffs on maple syrup and maple
sugar over 10 years.
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U.S.–Panama Trade
Promotion Agreement
