Pass Panama Trade Agreements, urges NPPC

25-05-2009 | |

A US trade agreement with Panama will provide new market opportunities for a wide range of American agricultural products, the National Pork Producers Council has told a Senate committee, and it will level the playing field for US pork producers and other food producers.

NPPC President-Elect Sam Carney, a pork producer from Adair, Iowa, testifying before the Senate Committee on Finance, noted that most products from Panama enter the United States at a zero tariff rate because of the Caribbean Basin Economic Recovery Act and the Generalized System of Preferences, while most US agricultural products going to the Central American country are subject to an average tariff of 43%.

Level the playing field
“Implementing the pending trade agreement with Panama will level the playing field so that US producers and exporters of food and farm products receive reciprocal market access,” said Carney. “It also will open to US pork producers, other agricultural sectors and US businesses a market of almost 3.4 million consumers.”

US pork exports to Panama currently are restricted by a small quota and out-of-quota duties as high as 80%. Under the Panama Trade Promotion Agreement, US pork variety meats would receive immediate duty-free treatment, and the trade deal would expand market access for US pork muscle meat through tariff rate quotas (TRQs). The TRQs will be phased out in 15 years, and when the agreement is fully implemented, US pork will have unlimited duty-free access to the Panamanian market.

Meat inspection system
In addition to the favourable market access provisions, the agreement resolves significant sanitary and technical issues. Panama, for example, will recognise the meat inspection system of the United States as equivalent to its meat inspection system.

According to Iowa State University economist Dermot Hayes, 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.

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