N.P.P.C. urges passing Panama trade agreement
May 26, 2009
by Bryan Salvage
WASHINGTON — New market opportunities for a variety of American agricultural products will be provided following a U.S. trade agreement with Panama, the National Pork Producers Council recently told a Senate committee. Such an agreement will also level the playing field for U.S. pork producers and other food producers.
Most products from Panama enter the U.S. with no tariff because of the Caribbean Basin Economic Recovery Act and the Generalized System of Preferences, while most U.S. agricultural products going to the Central American country are subject to an average tariff of 43%, said Sam Carney, N.P.P.C. president-elect, a pork producer from Adair, Iowa, in testifying before the Senate Committee on Finance. .
"Implementing the pending trade agreement with Panama will level the playing field so that U.S. producers and exporters of food and farm products receive reciprocal market access," he added. "It also will open to U.S. pork producers, other agricultural sectors and U.S. businesses a market of almost 3.4 million consumers."
At present, U.S. pork exports to Panama are restricted by a small quota and out-of-quota duties as high as 80%. Under the Panama Trade Promotion Agreement, U.S. pork variety meats would receive immediate duty-free treatment, and the trade deal would expand market access for U.S. pork muscle meat through tariff rate quotas (T.R.Q.s). The T.R.Q.s will be phased out in 15 years, and when the agreement is fully implemented, U.S. pork will have unlimited duty-free access to the Panamanian market.
The agreement also resolves significant sanitary and technical issues. Panama will recognize the U.S. meat-inspection system as equivalent to its meat-inspection system.
The Panama trade agreement will add 20 cents to the price producers receive for each hog marketed, with pork exports to Panama expected to be worth about $23 million a year, according to Dermot Hayes, Iowa State University economist.