IMPORTANCE
According to Iowa State University Economist Dermot Hayes, the Panama agreement when fully implemented will cause hog prices to be 20 cents higher than would otherwise have been the case. To put this number in perspective, 20 cents per hog represents one percent of the estimated net return on farrow-to-finish operations during December 2006. Exports to Panama will be worth approximately $20.6 million to the U.S. pork industry in additional revenue. U.S. pork competes in Panama with pork from Canada and the EU. The U.S.-Panama Free Trade Agreement (FTA) would give U.S. pork products a competitive edge in the market. U.S. pork exports to Panama are currently restricted by a very limited quota and out-of-quota duties as high as 80 percent. The U.S.-Panama FTA if implemented will provide immediate duty free treatment on pork variety meats and expanded market access for U.S. pork through tariff rate quotas (TRQs). The TRQs will be phased out in fifteen years, and after the full implementation period, U.S. pork will have unlimited duty free access to the Panamanian market. In addition to the favorable market access provisions, significant sanitary and technical issues have been resolved. Since Panama recognizes the meat inspection system of the United States, U.S. pork producers would be able to ship pork products without being blocked by unnecessary sanitary barriers.

BACKGROUND
The United States and Panama completed free trade negotiations on December 19, 2006, and the Panamanian government confirmed that it shall recognize the meat inspection system of the United States as equivalent to its own meat inspection system. This trade agreement is still pending U.S. congressional approval.

NPPC POSITION
NPPC strongly supports congressional passage and implementation of the U.S.-Panama FTA. U.S. pork producers will benefit from the increased exports that will result from the agreement.

International Trade Press Releases

International Trade Testimony & Comments