Panama Trade Promotion Act


The free trade agreement with Panama has been in the works for some time now.  The goal of the trade promotion act (TPA) is to eliminate or reduce tariffs for your U.S. exports shipments into Panama. It provides access to this excellent market. The TPA went into effect on October 31st. Panama’s commitment to strengthen its intellectual property vigilance update its tariff schedule prior to the agreement being implemented caused its delay.

Panama

The agreement will have a greater impact on US exports, which is the goal and focus of the Obama administration.  As we have discussed on other blogs (and in our about page), the President’s commitment to grow exports is the one of the primary drivers behind this on the other recent trade agreements implemented by President Obama.  US-Panama relationship has been strong for many years.  US goods and Services account for approximately 30% of Panama’s imports.  Although US product already enjoyed a relatively low duty rate of approximately 7% on products and a higher rate of about 15% on agricultural goods, the new agreement will bring the duty rate to zero on the majority of products.

Panama has also held a long standing relationship with the US and a special relationship with the South Florida market. The U.S. exported over $8.2 billion to Panama in 2011 and imported approximately $3.8 million, making it the United States’ 52 trading partner. It is also ranked as Florida’s 16th top trading partner with over $2 billion in total trade.

So… How does this trade promotion agreement benefit YOU?

Panama’s solid relationship with the US as strong trading partner will only grow stronger with this new trade promotion agreement. The benefits of this agreement will greatly impact U.S. exporters:

  • Over 85% of industrial as well as consumer products are now eligible for duty free entry.
  • Most of Your US products are now able to aggressively compete with import from other countries.
  • Simplified documentation and entry
  • Improved profit/margin on your products

Panama’s economy is one of the stronger and faster growing in the region with continuing expected growth of 10.6 percent per year over the next five years.  This Trade Promotion Act (also known as a free trade agreement) is expected to not only grow US exports to Panama but also impact job growth.

Learn more about Panama on our Panama resource page.

 

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