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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 South Dakota. 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.
South Dakota’s exports to all countries, estimated at $1.2 billion in 2006,
supported about 13,700 jobs, on and off the farm. These export sales make an
important contribution to the South Dakota farm economy which had total cash
receipts of $4.7 billion in 2006.
Beef. With cash receipts of $1.9 billion in 2006, or 40 percent of the
state’s agricultural total, South Dakota’s cattle and calf 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.
Feed Grains. Cash receipts from corn totaled $731 million in 2006, or 16
percent of farm earnings for the state. South Dakota feed grain farmers will benefit from this
agreement.
Panama will provide immediate duty-free access within a tariff-rate
quota (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.
Panama’s current zero-tariff treatment for barley and barley malt will
be locked in place immediately upon implementation of the Agreement.
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 and Products. 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. For South Dakota, soybeans are the third largest
source of farm cash receipts at $696 million, and the industry is the nation’s
eighth largest exporter of soybeans and products. South Dakota soybean farmers
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.
Wheat. South Dakota’s wheat producers generated cash receipts of $397
million in 2006. The nation’s sixth largest exporter of wheat and wheat
products, South Dakota growers will benefit from the Panama 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.
Pork. As the fourth largest source of state farm cash receipts with $404
million in 2006, South Dakota hog farmers will benefit from this agreement.
Panama will provide immediate duty-free access within preferential
TRQs for 2,554 tons of U.S. pork products, including 1,600 tons of fresh and
frozen pork cuts, 636 tons of pork fat and bacon, and 318 tons of processed
pork. Most of these products currently face tariffs of 70 percent. The TRQ
quantities will expand and the over-quota tariffs will be eliminated in 15
years.
Panama will also eliminate its 10-percent tariff on pork variety meats
immediately on entry into force of the Agreement.
In addition, Panama has already implemented our December 2006 bilateral
agreement on SPS measures by recognizing the equivalence of the U.S. meat
inspection system, allowing U.S. inspectors to certify pork for export to
Panama without having each facility and shipment inspected by Panamanian
authorities.
The National Pork Producers Council supports the Agreement, saying "This
agreement will contribute greatly to the bottom line of U.S. pork producers
by opening up new market access to more than 3 million additional consumers
in the Western Hemisphere."
Back to the
U.S.–Panama Trade
Promotion Agreement
