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U.S.-Panama FTA

         

Timetable/Milestones

  • Entered into force: October 31, 2012
  • Senate vote to implement agreement : 77-22 (Oct.12, 2011)
  • House vote to implement agreement: 300-151 (Oct.12, 2011)
  • Agreement signed by governments: June 27, 2007
  • Negotiations completed: December 19, 2006
  • Negotiations began: April 24, 2004
  • Congressional notification: Nov. 18, 2003

Panama Sugar Facts

  • Production (Avg. 2005-2007): 165,000 metric tons
  • Consumption (Avg. 2005-2007): 117,333 metric tons
  • Imports (Avg. 2005-2007): 2,000 metric tons
  • Exports (Avg. 2005-2007): 50,000 metric tons

Panama is one of only two Latin American countries that is not a member of a regional trade agreement.

Prohibitive duties are in place and are directed at preventing raw sugar imports. These are in accordance with the WTO commitments agreed to at the Uruguay Round. Domestic prices are supported above the world market level by the import tariffs.

Historical Access to U.S. Market

Under the tariff-rate quota required by the WTO, the U.S. imports a minimum of 30,358 metric tons of sugar from Panama, which represents 2.73% of the total access to 41 countries. This amount is also equal to two–thirds of Panama’s exports to all countries (45,000 metric tons, 2002/03-04/05 average, USDA estimate, May 2004).

Additional Access Granted to U.S. Market

Market access granted for sugar exported to the U.S. from Panama is governed by the following provisions:

  • The second tier, over-quota tariff remains intact. The compensation mechanism applies in the case of all of the tariff-rate quotas (TRQ’s) set below. (The U.S. may compensate Panama – cash or in-kind – in lieu of importing the sugar.)
  • A duty-free TRQ of 500 metric tons (mt) is established for the basket of raw and refined sugar and sugar-containing products – i.e., all the products covered by the current U.S. TRQ import program for sugar. This amount is subject to the net exporter provision. The TRQ amount will increase by 1% simple growth, or 5 mt each year, forever.
  • A separate duty-free TRQ of 500 mt is established for specialty sugar. It is not subject to the net exporter provision. There is no growth in this TRQ.
  • A separate duty-free TRQ of 6,000 mt is established for raw sugar. It is not subject to the net exporter provision. The TRQ amount will increase by 1% simple growth, or 60 mt, for ten years only. After that, there will be no growth.

Market access granted for sugar exported by the U.S. to Panama is as follows:

  • Raw cane sugar and refined sugar (including refined beet sugar) becomes duty-free immediately.
  • The duty on raw beet sugar will be phased out over 15 years.

Market access granted for high fructose corn syrup (HFCS): Duties will be phased out either immediately or within 5 years depending on the category.

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