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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 Oregon. 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.
Oregon’s exports to all countries, estimated at $1 billion in 2006, supported
about 11,800 jobs, on and off the farm. These export sales make an important
contribution to the Oregon farm economy which had total cash receipts of $4
billion in 2006.
Beef. The cattle and calf industry is the state’s second largest source
of farm cash receipts and sales reached $544 million in 2006, or 14 percent of
the state’s total. The industry 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
sanitary and phytosanitary (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.
Dairy. Oregon dairy industry accounts for 8 percent of farm cash
receipts totaling $326 million in 2006. The industry will benefit from the
Panama agreement.
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 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."
Wheat. State wheat and wheat product exports were estimated at $138
million in 2006, and Oregon’s wheat growers can benefit from this agreement.
Panama’s current zero-tariff treatment for wheat will be locked in place
immediately upon implementation of the Agreement.
The 10-percent tariff on wheat flour will be eliminated within 12 years.
Vegetables. Oregon vegetable growers and processors are the ninth largest
exporter nationwide with shipments valued at $112 million in 2006. This industry,
which grows potatoes, sweet corn, green beans and other vegetables, 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 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 by 2 percent each year.
Panama will eliminate its 15-percent tariffs on frozen and canned
sweetcorn immediately.
Fruits. Oregon is the nation’s fourth largest exporter of fresh and
processed fruits. This industry, which grows pears, cherries, assorted berries
and other fruit, 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 Oregon that
will be duty-free immediately (the currently applied tariff is indicated in
parentheses): apples (2 percent), pears (5 percent), grapes (Free), fresh
cherries (1 percent), blueberries (15 percent), cranberries (15 percent),
raspberries (15 percent), processed pears and cherries (Free), cranberry
juice concentrate (Free).
Panama’s 15-percent tariff on strawberries will be eliminated in 10
years.
Tree Nuts. A major global supplier of hazelnuts (filberts), Oregon is the
2nd largest exporter of tree nuts in the nation with overseas sales
estimated at $45 million in 2006. Hazelnut growers can benefit from this
agreement.
Panama will eliminate its tariffs on all shelled and roasted nuts
immediately. The current tariffs are 10 percent for hazelnuts and 15 percent
for all roasted nuts.
Panama will also eliminate its tariffs on most in-shell nuts
immediately, but the tariff on in-shell nut mixtures will be phased out in 5
years. These tariffs currently range from 5 to 10 percent.
Back to the
U.S.–Panama Trade
Promotion Agreement
