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U.S.- Panama Trade Promotion Agreement
The United States—Panama Trade Promotion Agreement (TPA) entered into force on October 31, 2012. The TPA is a comprehensive free trade agreement that provides elimination of tariffs and removes barriers to U.S. services, including financial services. It also includes important disciplines relating to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronics commerce, intellectual property rights, and labor and environmental protection.
Highlights of the U.S.-Panama TPA
New Opportunities for U.S. Workers, Manufacturers, Farmers, and Ranchers
Over 87 percent of U.S. exports of consumer and industrial products to Panama became duty-free upon entry-into-force, with remaining tariffs phased out over ten years. U.S. products that gained immediate duty-free access includes information technology equipment, agricultural and construction equipment, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals, fertilizers, and agro-chemicals. Nearly 56 percent of U.S. agricultural exports became duty-free upon entry-into-force, with most remaining tariffs phased out over 15 years. Panama eliminated duties on high-quality beef, frozen turkeys, soybeans, soybean meal, crude soybean and corn oils, almost all fruit and fruit products, wheat, peanuts, whey, cotton, and many processed products. The TPA also provides duty-free access for specified volumes of standard grade beef cuts, chicken leg quarters, pork, corn, rice, and dairy products through tariff rate quotas. Read more here.
A Level Playing Field for U.S. Investors and U.S. Services Providers
The TPA ensures that U.S. companies in Panama are protected against discriminatory or unlawful treatment, and provides a neutral and transparent mechanism for settlement of investment disputes. Panama’s TPA commitments cover Panama’s dynamic services sectors—accounting for roughly 70 percent of Panama’s economy—far more comprehensively than its WTO commitments under the General Agreement on Trade in Services. This coverage includes priority areas such as financial, telecommunications, computer, distribution, express delivery, energy, environmental, and professional services.
Commitments to Protect Labor Rights and the Environment
The TPA commits both Parties to adopt and maintain in their laws and practice the five fundamental labor rights as stated in the 1998 ILO Declaration on Fundamental Principles and Rights to Work. Both Parties are also required to effectively enforce – and may not waive – labor laws related to fundamental labor rights. Both Parties also committed to effectively enforce their own domestic environmental laws and adopt, maintain, and implement laws, regulations, and all other measures to fulfill their obligations under covered multilateral environmental agreements. All obligations in the labor and environment chapters are subject to the same dispute settlement procedures and enforcement mechanisms as the TPA’s commercial obligations.