U.S.-Panama FTA to Take Effect Oct. 31
The U.S.-Panama Trade Promotion Agreement will take effect Oct. 31, following an exchange of diplomatic notes confirming both sides’ implementation of the agreement’s provisions on Oct. 22, the U.S. Trade Representative said. On the agreement’s effective date, Panama will immediately reduce tariffs on U.S. goods and provide access to Panama’s services market.
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Panama Tariffs on U.S. Industrial and Agricultural Goods to Fall Oct. 31
On Oct. 31, Panama will immediately reduce or eliminate tariffs on U.S. industrial goods, currently averaging seven percent, with some tariffs as high as 81 percent, USTR said. Over 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 equipment, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals, and fertilizers.
Additionally, U.S. agricultural exports will also benefit from this Agreement, said USTR. U.S. agricultural goods currently face an average tariff of 15 percent, with some tariffs as high as 260 percent. Nearly half of U.S. exports of agricultural commodities 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.
Increased Access to Panama Services Market
The U.S.-Panama FTA will also provide new access to Panama’s $22 billion services market, supporting increased market opportunities for U.S. service providers, said USTR. For example, Panama agreed to eliminate measures that prevented firms from hiring U.S. professionals, and to phase-out market restrictions in cable television. The Agreement also includes important disciplines relating to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, and labor and environmental protection, it said.
(See ITT’s Online Archives 12011010 for summary of product duty rates for the U.S. Panama TPA. See also ITT’s Online Archives 11102103 for summary of the President signing legislation to implement the free trade agreement in the U.S. in October 2011.)
Email ITTNews@brokerpower.com for a copy of USTR's release.