The United States-Panama Trade Promotion Agreement will enter into force on Oct. 31, U.S. Trade Representative Ron Kirk said Monday.
According to the Office of the U.S. Trade Representative, the agreement will call on Panama to immediately reduce or eliminate tariffs on U.S. industrial goods, which currently average 7 percent, with some tariffs as high as 81 percent.
More than 86 percent of U.S. exports of consumer and industrial products to Panama will become duty-free immediately, including information technology equipment, agricultural and construction machinery, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals, and fertilizers.
Nearly half of U.S. agricultural commodity exports to Panama will immediately become duty-free, including wheat, barley, soybeans, high-quality beef, bacon, and almost all fruit and vegetable products, with most of the remaining tariffs to be eliminated within 15 years.
U.S. agricultural goods currently face an average tariff of 15 percent, with some tariffs as high as 260 percent.
“Under this comprehensive agreement, Panama will eliminate tariffs and other barriers to U.S. exports, which will promote economic growth, and expand trade between our two countries,” Kirk said. “This agreement also provides U.S. firms and workers improved access to customers in Panama’s $22 billion services market, including in areas such as financial, telecommunications, computer, express delivery, energy, environmental, and professional services.
“Panama is one of the fastest growing economies in Latin America, expanding 10.6 percent in 2011, with forecasts of between 5 to 8 percent annual growth through 2017. That adds up to support for more well-paying jobs across the United States. The increased access to this expanding market is backed by the agreement’s strong enforcement provisions,” he added.
The agreement was signed into law
by President Obama in October 2011.
“We welcome today’s announcement that the U.S.-Panama FTA will enter into force next Wednesday,” said National Foreign Trade Council President Bill Reinsch, in a statement. “Similar to the FTAs with Colombia and South Korea, which were implemented earlier this year, implementation of the Panamanian agreement will help to grow the U.S. economy and support American jobs by increasing exports and expanding opportunities for American companies, farmers and ranchers.”
“Panama is an important market for U.S. goods and services, and American exporters, both large and small, stand to benefit from the FTA,” said NFTC Vice President for Regional Trade Issues Chuck Dittrich. “The agreement’s entry into force will further strengthen the longstanding economic relationship between our two countries – a relationship particularly important to the United States – both because of Panama’s growing economy and because the Panama Canal serves as a gateway to other leading economies in the region.” - Eric Johnson