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FACT
SHEET:
U.S.-Panama Trade Promotion
Agreement
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Maryland Farmers Will Benefit
September 2008
Printer Friendly Version
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 Maryland. 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.
Maryland’s exports to all countries, estimated at $358 million in 2007,
supported about 3,700 jobs, on and off the farm. These export sales make an
important contribution to the Maryland farm economy which had total cash
receipts of $1.6 billion in 2006.
Poultry Meat. Broilers are Maryland’s leading agricultural export and top
source of farm cash receipts at $534 million in 2006. Maryland’s poultry
producers and processors will benefit from this agreement.
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.
Panama will provide immediate duty-free access within a preferential
tariff-rate quota (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 World Trade
Organization (WTO) commitments.
Panama will eliminate its 15-percent duties on turkey meat immediately
for frozen whole turkeys and most frozen turkey cuts. The 15-percent tariffs
on processed turkey and chicken will be eliminated within 5 years.
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. 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.
Dairy Products. Maryland dairy industry accounted for 9 percent of the
state’s farm cash receipts with sales of $153 million in 2006. This industry
will benefit from this agreement with Panama.
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
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."
Feed Grains. Maryland corn contributed $121 million in farm cash receipts,
and the state’s feed grains and product exports were estimated at $42 million in
2007. Corn growers will gain 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 2007, soybeans and products were Maryland’s
fourth largest agricultural export, and in 2006 soybeans were the 5th largest
source of farm cash receipts at $86 million. Maryland’s soybean producers 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.
Back to the
U.S.–Panama Trade
Promotion Agreement
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