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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 Utah. 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.
Utah’s exports to all countries, estimated at $344 million in 2007, supported
about 3,600 jobs, on and off the farm. These important export sales account for
25 percent of Utah’s farm economy, which had total cash receipts of $1.2 billion
in 2006.
Beef. The cattle and calf industry generated cash receipts of $413
million in 2006, or 33 percent of the state’s agricultural total. The industry
can profit from the Panama FTA.
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 Products. Accounting for the second largest source of farm cash
receipts with earnings of $218 million in 2006, Utah’s dairy industry can
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.
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."
Pork. Utah’s hog industry is the third largest source of farm cash
receipts, and the industry can benefit from the Panama 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."
Wheat. Wheat and wheat products are Utah’s largest agricultural export
with estimated sales of $116 million in 2007. 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.
Back to the
U.S.–Panama Trade
Promotion Agreement
