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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 Indiana. 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.
Indiana’s exports to all countries, estimated at $2.4 billion in 2007,
supported about 24,200 jobs, on and off the farm. These export sales make an
important contribution to the Indiana farm economy which had total cash receipts
of $5.7 billion in 2007.
Feed Grains. Indiana farmers earned $2.7 billion from corn in 2007, 35 percent of the total as the largest source of farm cash
receipts in the state. Feed grain producers 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.
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. Farm cash receipts from soybeans in
2007 equaled $1.8 billion, and the state is the 4th largest exporter of soybeans and
products with exports estimated at $898 million in 2007. 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.
Indiana soybean producers will benefit from the Panama 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.
Pork. With hog production being the state’s third leading source of farm
cash receipts($777 million in 2007), Indiana pork producers 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 sanitary and phytosanitary (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."
Dairy Products. Dairy is Indiana’s fourth leading source of farm cash
receipts ($659 million in 2007), and the Panama agreement will benefit Indiana’s dairy farmers.
U.S. exporters will have immediate duty-free access to nine preferential
dairy 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 (WTO) 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."
Beef. Indiana’s cattle and calf industry generated cash receipts of $275
million in 2007. Cattlemen stand to 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.
Poultry Meat. Indiana is the nation’s seventh largest exporter of poultry
meat and products. Indiana poultry producers will benefit from this agreement.
Panama will eliminate its 15-percent duties on turkey meat immediately
for frozen whole turkeys and most frozen turkey cuts and within 5 years for
the rest.
The 260-percent tariff currently applied to chicken cuts will be
eliminated immediately for mechanically de-boned chicken, within 5 years for
wings and 10 years for other chicken cuts except leg quarters.
The 15-percent tariffs on processed chicken and turkey will be
eliminated within 5 years.
Panama will provide immediate duty-free access within a preferential TRQ
for chicken leg quarters that starts at 660 tons and grows each year by 10
percent. The 260-percent over-quota tariff will be eliminated in 18 years.
U.S. poultry exporters will continue to have access to the global
756-ton TRQ for chicken cuts that is part of Panama’s WTO commitments.
In addition, Panama has already implemented our December 2006 bilateral
agreement on SPS measures by recognizing the equivalence of the U.S. poultry
inspection and disease monitoring systems, allowing U.S. inspectors to
certify poultry for export to Panama without having each facility and
shipment inspected by Panamanian authorities.
Back to the
U.S.–Panama Trade
Promotion Agreement
