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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 New Mexico. 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.
New Mexico’s exports to all countries, estimated at $269 million in 2007,
supported about 2,900 jobs, on and off the farm. These export sales make an
important contribution to the New Mexico farm economy which had total cash
receipts of $2.5 billion in 2006.
Dairy Products. As one the state’s top cash receipt earners at $912
million in 2006, the dairy industry accounted for 37 percent of the state’s
total. New Mexico 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. New Mexico’s cattle and calf industry also accounted for 37 percent
of the state’s total cash farm receipts in 2006. The 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.
Tree Nuts. Pecans are New Mexico’s fourth largest source of farm cash
receipts, and the state is the fourth largest exporter of tree nuts in the
nation. Tree nut farmers will benefit from this agreement.
Panama will eliminate its tariffs on all shelled and roasted nuts
immediately. The current tariff on pecans is 10 percent and the tariff for
all roasted nuts is 15 percent.
Panama will also eliminate its tariffs on most in-shell nuts
immediately, but the tariff on in-shell nut mixtures will be phased out in 5
years. These tariffs currently range from 5 to 10 percent.
Vegetables. New Mexico’s fresh and processed vegetable exports were
estimated at $18 million in 2007, and vegetable growers will 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 fresh onions that starts at 816 tons and grows each year by 2 percent.
The tariffs on dried and frozen onions will be eliminated immediately.
Panama will eliminate its15-percent tariff on
fresh peppers immediately.
Back to the
U.S.–Panama Trade
Promotion Agreement
