The US-Panama Free Trade Agreement (FTA) went into effect on 31 October 2012, making it the final of three US FTAs implemented this year and bringing with it the potential for major cost savings through tariff reductions for US businesses exporting to Panama. Don’t miss out on the opportunity to take advantage of reduced tariffs for your business’ exports to Panama.
The long-awaited implementation date comes nine years after starting negotiations and five years after signing of the agreement. Over 87% of US industrial goods and over half of US agricultural commodities immediately became duty-free, including many processed food products. For goods that are not duty-free immediately upon implementation, 31 October 2012 marked the first round of tariff reductions. On 1 January 2013, tariffs will reduce again and quota amounts will also increase for goods subject to a tariff-rate quota.
Perhaps even more importantly, the US implemented its free trade agreement with Panama ahead of the EU and Canada. Tariffs on US exports will be reduced two times before the EU and Canada implement their respective agreements with Panama (expected to occur in January 2013), which will give US exports an important advantage over EU and Canadian exports in Panama.
The FTA is bilateral and reciprocal which means US exports will benefit from lower tariffs into Panama just as many imports from Panama already benefit from lower tariffs into the United States under the Generalized System of Preferences (GSP) for developing countries. The FTA levels the playing field and creates more opportunities for US exporters to increase sales to new customers in Panama at lower cost.
In addition to the reduced tariffs and increased trade flows, the trade agreement with Panama is especially advantageous for US companies for several reasons.
To see Panama’s preferential tariff rates on your company’s products, check out export.gov’s free FTA Tariff Tool.
If you are looking for more personalized advice on expanding your US exports, sourcing materials internationally, or exporting to the Panamanian market for the first time, a consultation with TradeMoves can help make sure you realize your company’s maximum benefit from the US-Panama FTA.
Lori Hammer - LHammer@TradeMoves.net - International Trade Analyst
Shawn Marie Jarosz - SJarosz@TradeMoves.net - 202.415.4016