The Office of the U.S. Trade Representative announced that the long-awaited free trade agreement (FTA) between the U.S. and Panama will enter into force on Oct. 31.
Years of effort from every sector of agriculture will come to fruition when the Panama FTA is enacted. Tariffs on many U.S. agricultural products will be removed including corn, wheat, soybeans, soybean meal, crude vegetable oils, and many beef, poultry and pork products. Additionally, the FTA will level the trade playing field between the two countries, which currently sees more than 99% of Panamanian exports to the U.S. enter duty free under the Caribbean Basin Initiative, while the majority of American exports to Panama are subject to tariffs.
Agricultural organizations are already celebrating the changes.
“The enactment of the free trade agreement with Panama at the end of the month is a big win for soybean farmers,” said Steve Wellman, American Soybean Association president. “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. We commend the American and Panamanian governments for their work on seeing this agreement to completion and we look forward to continuing a successful partnership with our friends in Panama.”
The U.S. 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% of total American farm exports.