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FACT
SHEET:
U.S.-Panama Trade
Promotion Agreement -
New Jersey Farmers Will Benefit
September 2008
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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 Jersey. 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 Jersey’s exports to all countries, estimated at $245 million in 2007,
supported about 2,600 jobs, on and off the farm. These export sales make an
important contribution to the New Jersey farm economy which had total cash
receipts of $924 million in 2006.
Fruits. New Jersey blueberry and peach growers collectively generated $120
million in farm cash receipts in 2006. Fruit producers will benefit from this
agreement.
Panama will eliminate its tariffs on nearly all fresh and processed
fruits immediately.
Following are examples of fruit products of importance for New Jersey
that will be duty-free immediately (the currently applied tariff is
indicated in parentheses): blueberries (15 percent), peaches (2 percent),
apples (2 percent) fruit juice and juice mixture concentrates (Free-15
percent).
Panama will phase out its 15-percent tariffs on single strength fruit
juice mixtures in 5 years.
Dairy Products. The dairy industry provides New Jersey with farm cash receipts
of about $30 million annually. As such, New
Jersey farmers 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 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."
Back to the
U.S.–Panama Trade
Promotion Agreement
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