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Agriculture Today


U.S.-Panama Free Trade Agreement goes into effect




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December 26, 2012 | 2,372 views | Post a comment

The United States-Panama Trade Promotion Agreement signifies an end to a five-year push to solidify three free trade agreements. The agreement, which went into effect Oct. 31, joins the United States-Korea Free Trade Agreement and the Colombia Free Trade Agreement, which took effect March 15 and May 15, 2012, respectively.

“Panama is one of the most rapidly growing economies in Latin America, and represents a valuable market for American soy and the many products like poultry and pork for which soy is critical in the production process,” said American Soybean Association President Steve Wellman, a soybean farmer from Syracuse, Neb., in a press release.

As of Oct. 31, all tariffs on U.S. soybeans, soybean meal, and crude vegetable oils will be removed with the enactment of the free trade agreement. Tariffs will also be removed for many beef, poultry, and pork products, which use soybean meal as feed. Additionally, the free trade agreement will level the trade playing field between the two countries, which currently sees more than 99 percent of Panamanian exports to the United States enter duty-free under the Caribbean Basin Initiative, while the majority of American exports to Panama are subject to tariffs.

The United States exported more than $53 million in soybean products to Panama last year, down from $65 million in 2010. Soybeans and soybean products are the largest U.S. agricultural export commodity, totaling nearly 1.5 billion bushels in 2011, with a value of more than $23 billion. This represents more than half of domestic soybean production and 20 percent of total American farm exports.

For the beef industry, the three trade agreements that went into effect in 2012 will boost beef exports by $3 billion.

“Texas ranchers have worked for nearly five years to see these agreements become reality,” said Texas and Southwestern Cattle Raisers Association President Joe Parker Jr. in a cattle raisers press release. “Families, both at home and abroad, want Texas beef on their tables, and now we will be able to help meet that demand. This is a win for consumers overseas and producers here in the United States.”

Among other things, implementation of the Panama Free Trade Agreement results in the immediate repeal of the 30 percent tariff on prime and choice cuts of U.S. beef and begins to phase out all remaining tariffs.

According to the U.S. International Trade Commission, the three trade agreements will increase U.S. exports by at least $13 billion and add $10 billion to the U.S. Gross Domestic Product. Additionally, exports of U.S. goods generate an estimated 8,000 jobs for every billion dollars shipped overseas.
 

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