Francisco Sánchez serves as the Under Secretary of Commerce for International Trade. Follow him on Twitter @UnderSecSanchez.
The wait is over. On October 31, 2012, the U.S.-Panama Trade Promotion Agreement (TPA) will go into effect, guaranteeing American access to one of the fastest growing economies in Latin America and supporting American jobs and U.S. competitiveness.
Panama’s nearly $22 billion services market. This is yet another big step for our country, as it is an integral part of the President’s efforts to increase opportunities for U.S. businesses, farmers, and workers through improved access for their products and services in foreign markets. The Panama TPA supports President Obama’s National Export Initiative goal of doubling U.S. exports by the end of 2014.
The Agreement with Panama is one that holds significant potential for the future of American exports. Panama’s economy expanded over 10.6 percent in 2011, and is forecast to continue high annual growth through 2017. The TPA will ensure that U.S. firms have an opportunity to participate on a competitive basis in the $5.25 billion Panama Canal expansion project. Panama’s strategic location as a major shipping route and the massive project underway to expand the capacity of the Canal enhances the importance of the U.S.‐Panama TPA. Panama’s government has also announced almost $10 billion in additional infrastructure projects, and the agreement will help U.S. companies and workers benefit from these opportunities.
The U.S.-Panama TPA will eliminate or reduce trade barriers to U.S. exports to the Panamanian market as well as create a more stable and transparent trading and investment environment. This will result in a level tariff playing field and more job opportunities in America. U.S. industrial goods currently face an average tariff of 7 percent in Panama, with some tariffs as high as 81 percent. U.S. agricultural goods face an average tariff of 15 percent, with some tariffs as high as 260 percent. This is all about to change. As of October 31, when the Agreement enters into force, U.S. exporters to Panama will experience the immediate beneficial effects of the TPA in the drop to zero of tariffs on industrial goods such as computers and IT equipment, agricultural and construction products, medical and scientific equipment, pharmaceuticals, and environmental products. Agricultural product exporters will also enjoy the immediate benefits of duty-free treatment on this date, particularly for the following products: high-quality beef, frozen turkeys, sorghum, soybeans, almost all fruit and fruit products, wheat, peanuts, whey, cotton, and many processed items.
The Agreement with Panama will give America access to Panama’s nearly $22 billion market for services, including in priority areas such as financial, telecommunications, computer, distribution, express delivery, energy, environmental, and professional services. I urge everyone to visit http://trade.gov/fta/panama to review industry-specific and state-by-state opportunity reports between the U.S. and Panama in the recent years . Without a doubt, this TPA will play a tremendous role in increasing exports and continuously supporting American businesses.