Publication Number: 3948

Report Title: U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects

Investigation Number: TA-2104-025

Author's name(s): Jennifer Baumert, Project Leader, Alan Treat, Deputy Project Leader

Date Published: September 2007

Report Description/Introductory Text: Panamanian exporters generally face substantially lower tariffs in the U.S. market than do U.S. exporters in the Panamanian market because most U.S. imports from Panama enter free of duty either unconditionally or under trade preference programs. Because of this tariff asymmetry, the primary impacts of the TPA likely would be improved U.S. access to the Panamanian market and an increase in U.S. exports to Panama. Nevertheless, the overall impact of the U.S.-Panama TPA on the U.S. economy would likely be small because of the small size of the Panamanian market relative to total U.S. trade and production.

The partial equilibrium model used by the Commission indicates that full implementation of the market access provisions (elimination of tariffs and tariff-rate quotas (TRQs)) of the TPA would likely cause U.S. exports to Panama of the products selected for analysis in this report to increase by between 9 and 145 percent.

The Commission analyzed the impact of both the immediate and the phased elimination of tariffs and TRQs by the TPA using sector-specific analysis of selected U.S. product sectors. The sectors analyzed were meat (beef, pork, and poultry), grain (corn and rice), frozen potato products (e.g., frozen French fries), certain processed foods, sugar and sugar-containing products, passenger cars and light trucks, and certain machinery. For most of these sectors, the TPA would provide small but positive benefits for U.S. exports.

The TPA would likely generate a small increase in U.S. services exports to Panama. Finally, the TPA also could increase trade and investment through trade facilitation, such as the reduction of impediments in customs processing; an improved regulatory environment, such as enhanced investor protections; and increased regulatory transparency. The effects of such measures on bilateral trade and investment flows could become more significant in the medium and long term.

Topics Covered: foreign trade, international trade, free trade, trade agreement, FTA, trade dispute, trade promotion agreement, TPA

Countries: United States, Panama

HTS Numbers: 020110, 020120, 020130, 020210, 020220, 020230, 020311, 020312, 020319, 020321, 020322, 020329, 020610, 020621, 020622, 020630, 020641, 020649, 020713, 02072520, 02072540, 02072700, 021011, 021012, 021019, 021020, 021022, 100590, 100610, 16023110, 160241, 160242, 160249, 160250, 170111, 190120, 190190, 190590, 2004108020, 2004108040, 210390, 210410, 210690, 8414, 8415, 8418, 8450, 870322, 870323, 870324, 870331, 870332, 870333, 870390, 870421, 870431

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