U.S., Panama Enter Into Free Trade Act

The United States-Panama Trade Promotion Agreement will enter into force on Oct. 31, 2012. This announcement follows completion of a thorough review by the U.S. States and Panama of their respective laws and regulations related to the implementation of the Agreement.

After entry into the Agreement, Panama will immediately reduce or eliminate tariffs on U.S. industrial goods, currently averaging seven percent, with some tariffs as high as 81%. More than 86% of U.S. exports of consumer and industrial products to Panama will become duty-free immediately, including produce items, environmental products, and fertilizers. Additionally, U.S. agricultural exports will also benefit from this Agreement. U.S. agricultural goods currently face an average tariff of 15%, with some tariffs as high as 26%. Nearly half of U.S. exports of agricultural commodities to Panama will immediately become duty-free, including almost all fruit and vegetable products, with most of the remaining tariffs to be eliminated within 15 years.

Panama’s strategic location as a major shipping route also enhances the importance of the Agreement. Approximately two-thirds of the Panama Canal’s annual transits are bound to or from U.S. ports.

U.S. Trade Ambassador Ron Kirk welcomed the decision to have the Agreement enter into force on October 31. “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. This Agreement also provides U.S. firms and workers improved access to customers in Panama’s $22 billion services market, ” he said.

“Panama is one of the fastest growing economies in Latin America, expanding 10.6% 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,” said Ambassador Kirk. “The increased access to this expanding market is backed by the Agreement’s strong enforcement provisions.”

President Obama signed the United States-Panama Trade Promotion Agreement Implementation Act into law in the U.S. on Oct. 21, 2011

For more information, go to http://www.ustr.gov/uspanamatpa.

Produce tariffs to be lessened or eliminated starting at the end of October.