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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 Idaho. 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.
Idaho’s exports to all countries, estimated at $1.2 billion in 2007,
supported about 10,800 jobs, on and off the farm. These export sales make an
important contribution to the Idaho farm economy which had total cash receipts
of $4.4 billion in 2006.
Dairy Products. Idaho’s dairy industry accounted for 30 percent of the
state’s farm cash receipts at $1.3 billion in 2006, and it ranks as the nation’s
fourth largest exporter. The Panama agreement will benefit Idaho dairy producers.
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. Idaho’s cattle and calf industry generated cash receipts of $1
billion in 2006, or 23 percent of total farm cash receipts for the state, and
stands 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.
Vegetables. As the nation’s third largest exporter of fresh and
processed vegetables – farm cash receipts from potato farming alone were $648
million in 2006 – Idaho’s potato and dried beans and lentil farmers will benefit
from this 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 lentils and most dried
beans immediately. For Kidney beans, Panama will provide immediate duty-free
access within a preferential TRQ that starts at 795 tons and grows each year
by 6 percent. The 15-percent over-quota tariff will be phased out in 12
years.
Wheat and Barley. Idaho, the nation’s 12th largest exporter of wheat and
wheat products, had cash receipts for wheat and barley totaling $344 million in
2006. Wheat and barley farmers will gain from this agreement.
Panama’s current zero-tariff treatment for wheat will be locked in place
immediately upon implementation of the Agreement.
The 10-percent tariff on wheat flour will be eliminated within 12 years.
Panama’s current zero-tariff treatment for barley and barley malt will
be locked in place immediately upon implementation of the Agreement.
Back to the
U.S.–Panama Trade
Promotion Agreement
