The U.S.—Panama Trade Promotion Agreement (TPA)

General Information

The U.S.‐Panama Trade Promotion Agreement (TPA) is an integral part of the President’s efforts to increase opportunities for U.S. businesses, farmers, and workers through improved access for their products and services in foreign markets. The Panama TPA supports President Obama’s National Export Initiative goal of doubling U.S. exports by 2015.

The U.S.‐Panama TPA is expected to increase U.S. exports to Panama by removing or reducing trade barriers in the Panamanian market and by leveling the playing field through reducing or removing tariffs on U.S. exports. Ninety-eight percent of Panama’s exports to the U.S. entered duty‐free in 2010, while less than 40 percent of U.S. goods entered Panama without tariffs. U.S. industrial goods currently face an average tariff of 7% in Panama, with some tariffs as high as 81%. U.S. agricultural goods face an average tariff of 15%, with some tariffs as high as 260%.

Over 87% of U.S. exports of consumer and industrial products to Panama will become duty-free immediately upon entry into force of the U.S.-Panama TPA, with remaining tariffs phased out over ten years. U.S. products that will gain immediate duty-free access include information technology equipment, agricultural and construction equipment, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals, fertilizers, and agro-chemicals. U.S. agricultural exports will also benefit. Panama will immediately eliminate duties on high-quality beef, frozen turkeys, soybeans, soybean meal, crude soybean and corn oil, almost all fruit and fruit products, wheat, peanuts, whey, cotton, and many processed products.

The U.S‐Panama TPA will also ensure that U.S. firms have an opportunity to participate on a competitive basis in the $5.25 billion Panama Canal expansion project. Panama’s strategic location as a major shipping route and the massive project underway to expand the capacity of the Canal enhances the importance of the U.S.‐Panama TPA. In addition to the Panama Canal expansion project, the Government of Panama has identified almost $10 billion in other significant infrastructure projects. Construction equipment and infrastructure machinery used in such projects accounted for $280 million in U.S. exports to Panama in 2010. Tariffs for this sector average 5% with almost all being eliminated upon entry into force of the U.S.-Panama TPA.

At this time, the U.S.-Panama TPA is not in force.  On October 21, 2011, President Obama signed legislation approving the U.S.-Panama TPA. Before the agreement can enter into force, Panama must be able to demonstrate that it is in compliance with those obligations that will take effect on day one.

For additional information on how the Panama TPA will benefits U.S. businesses, farmers, and workers, please visit: www.trade.gov/fta/panama.

Additional Information