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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 Wisconsin. 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.
Wisconsin’s exports to all countries, estimated at $1.5 billion in 2006,
supported about 17,800 jobs, on and off the farm. These export sales make an
important contribution to the Wisconsin farm economy which had total cash
receipts of $6.8 billion in 2006.
Dairy Products. Wisconsin dairy industry is the nation’s second largest
exporter, and with cash receipts of $3.1 billion or 45 percent of farm earnings
in 2006, it is by far the state’s largest agricultural industry. The dairy
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 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. Wisconsin’s cattle and calf industry accounted for cash receipts of
$937 million in 2005. This 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
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 third largest source of state farm cash receipts
with sales of $789 million in 2006. The state is the nation’s eigth largest
exporter of feed grains and products. Wisconsin’s feed grain producers will
benefit from this 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 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. In 2005, Wisconsin’s soybean growers earned $275
million, the state’s fourth largest source of farm revenue. Soybean growers and
processors 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.
Vegetables. As the nation’s sixth largest exporter of fresh and processed
vegetables, Wisconsin growers of sweet corn, peas, green beans and other
vegetables can benefit from the Panama 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 each year by 2 percent.
Panama will eliminate its 15-percent tariffs on frozen and canned
sweetcorn immediately.
Back to the
U.S.–Panama Trade
Promotion Agreement
