“The Obama administration’s announcement of a deal to advance the Panama free trade agreement is welcome news for America’s farmers and ranchers.

“US farmers and ranchers could face losses in market share in Panama to our competitors who have trade agreements with the country. Panama has duty-free access to the US market, while our products face excessive tariffs when sold to the Panama market. Once implemented, the Panama FTA will level the playing field for US farmers and ranchers by eliminating these tariffs.

“The Panama, Colombia and South Korea agreements will create expanded markets for American farm and ranch products and boost our overall economy. Together, the three agreements represent nearly $2.5 billion of additional agricultural exports from the United States and would support as many as 27,000 new US jobs.

“Increased trade will help the United States build stronger bonds with our Latin American neighbors, and it makes sense given our advantage of proximity and history of cooperation. We urge the administration to work with Congress to ensure passage of all three agreements by summer so we can enhance our nation’s trade balance and add American jobs.“

“Implementing the pending trade agreement with Panama will level the playing field so that US producers and exporters of food and farm products receive reciprocal market access,“ said NPPC President Doug Wolf, a pork producer from Lancaster, Wisconsin. “It also will open to US pork producers, other agricultural sectors and US businesses a market of almost 3.4 million consumers.“

According to Iowa State University economist Dermot Hayes, the Panama trade agreement will add 20 cents to the price producers receive for each hog marketed, with pork exports to Panama expected to increase by about $16 million a year. It also will create more than 200 U.S. pork industry jobs.

US pork exports to Panama currently are restricted by a small quota and out-of-quota duties as high as 80 per cent. Under the Panama Trade Promotion Agreement, US pork variety meats would receive immediate duty-free treatment, and the trade deal would expand market access for US pork muscle meat through larger tariff rate quotas that will grow by 6 per cent annually. The out-of-quota tariffs will be phased out in 15 years, and all other tariffs on US pork will be phased out over 12 years.

In addition to the favorable market access provisions, the agreement resolves significant sanitary and technical issues. Panama, for example, will recognize the meat inspection system of the United States as equivalent to its meat inspection system.

“With conclusion of this deal,“ Mr Wolf said, “the three trading agreements – Colombia, Panama and South Korea – are ready for Congress to consider. We ask the administration to send implementing legislation for all three, and we urge Congress to approve them before its August recess.“

Further Reading

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You can view the fact sheets on the US-Panama trade promotion agreement by clicking here.