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FACT
SHEET:
U.S.-Panama Trade Promotion
Agreement
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Mississippi 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 Mississippi. 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.
Mississippi’s exports to all countries, estimated at $1.1 billion in 2007,
supported about 11,200 jobs, on and off the farm. These export sales make an
important contribution to the Mississippi farm economy which had total cash
receipts of $3.8 billion in 2006.
Poultry Meat. Mississippi is the nation’s fifth largest poultry exporter,
and broilers are the state’s leading source of cash receipts accounting for 47
percent of the total with sales of $1.8 billion in 2006. From 2004 through 2006,
U.S. suppliers shipped an average 5,700 tons of poultry meat valued at $7
million to Panama each year. However, exports are mostly limited to turkey cuts
and whole turkeys due to a 260-percent tariff on broiler leg quarters.
Mississippi’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.
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. Soybeans and products are Mississippi’s third
largest agricultural export, and cash receipts from soybeans were $290 million
in 2006. Mississippi 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.
Beef. The state’s cattle and calf industry generated cash receipts of
$206 million in 2006. Ranchers will profit from the Panama 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.
Rice. As the nation’s fourth largest exporter of rice with estimated
sales of $88 million in 2007, Mississippi’s rice producers will benefit from
this agreement.
Panama will provide immediate duty-free access within TRQs for 12,190
tons of U.S. rice, including 7,950 tons of rough rice and 4,240 tons of
milled rice. The 90-percent over-quota tariffs will be eliminated in 20
years and the TRQ quantities will grow by 6 percent each year.
U.S. rice exporters will continue to have access to the global 9,711-ton
TRQ for rice that is part of Panama’s WTO commitments.
Panama has also committed to increase the size of the preferential TRQs
when it has a short supply situation, as has occurred in recent years.
Back to the
U.S.–Panama Trade
Promotion Agreement
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