Agricultural Status of Panama Miss. Arlene Villalaz USDA / Foreign Agricultural Service

1. Foreign Agricultural Service Agricultural Status of Panama Miss. Arlene Villalaz USDA / Foreign Agricultural Service Agricultural Specialist for Panama Arlene.Villalaz@fas.usda.gov

2. Foreign Agricultural Service in Panama FAS Panama office provides assistance and informs on the Panamanian Agricultural Situation, Consumer Trends, and Import regulations to USG officials and to many of our US Agricultural Exporters who have shown great interest in entering the Panamanian market. Including, our coordination of trade missions in Panama for USDA’s Cooperators. Support the implementation of the U.S. -Panamanian SPS/TBT Agreement, all in the spirit of resolving trade issues. Maintain and expand U.S. Agricultural Exports, which represents 65% of the market share in Panama. FAS/Panama office advises, promotes and monitors developments with the GOP, in the issuing of a science - based biotech regulation in Panama

3. Foreign Agricultural Service in Panama FAS Panama office also provides support for and coordinates other USDA activities in country, such as monitoring distribution of Certificates of Quota Eligibility for Raw Sugar, promoting the Export Credit Guarantee Program, managing technical exchanges, facilitating inspection visits of the Food Safety Inspection Service. Oversees outreach efforts regarding U.S. regulations and inspection requirements of the Food and Drug Administration, among others

4. Panama at a glance… Government Type: Constitutional democracy. Area: 75,420 sq. km Population (May 2010): 3,322,576. Annual population growth rate: 1.5%. Unemployment (2010): 4.7%. Dollarized economy since 1904 GDP (2010): U.S.$27.2 billion GDP Annual growth rate: 7.3% Per capita GDP: $12,700

5. Panama is generally in compliance with its agricultural commitments under the WTO, and starting in January 2007, has applied good science to SPS measures, facilitating trade in agricultural products. The Panamanian Food Safety Authority (AUPSA), created in 2006, has simplified procedures and the issuance of special regulations that apply to imports of food products from the United States (due to the SPS agreement) recognizing the high standards of the U.S. sanitary inspection system, and also the good experience of decades of importing and consuming those products.

6. A. Market Access Tariffs: All tariffs applied by Panama are below the WTO ceilings. The last time Panama raised tariffs was in 1999, for a number of agricultural products, but even then levels remained below the WTO ceilings. Since then, there have been some Cabinet Decrees modifying the import tariff, but for reducing some tariffs that Panama established at the WTO Adhesion at 15% now are at 10% for example for juices and other food preparations, and for the condensed milk that used to have a 155% tariff, now has a 30% tariff.

7. B. Major U.S. Agricultural Exports to Panama: Corn…………………………$70,399,438 Soybean Meal…………………$48,477,000 Wheat…………………………..$20,522,000 Snacks and Processed food…$66,419,000 * U.S. Food products represents 65% of the Market share of food products sold in Panama (2010)

8. C. Major Agricultural Products of Panama (Exports to the U.S.) Fishery Products (Tuna, Mahi Mahi) Shrimps Raw Sugar Cane Unroasted Coffee Fresh Tropical Fruits (melons, watermelons, Papaya, squash)

9. Tariff Rate Quotas (TRQ) The following are TRQ’s as per Panama’s WTO commitments for year 2009:

10. D. Export Subsidies: Panama is in compliance with WTO Agreement on Agriculture, regarding Export Subsidies, In late December 2009, Panama’s National Assembly passed Law 82 of 2009, which creates a Certificate of Promotion of Agricultural Exports (CEFA) program. The CEFA program will give incentives to agricultural exporters to reduce packing and transportation costs for specified agricultural products, to be more competitive. The CEFA replaces the CAT program, as a result of Panama’s commitment under WTO agreement.

11. E. Domestic Support The new Government of Panama (GOP) by President Ricardo Martinelli, has published on the Official Gazette No. 26,445-A, the Government’s Strategic Plan for 2010 – 2014. The five year plan identifies $9.6 billion of infrastructure investment, of which $3.8 billion is in social investment (e.g. schools, hospitals, housing, aqueducts and irrigation, jails, and a metro system) and $5.8 billion in economic investment (e.g. cold chain, tourism, road infrastructure, and regional airports). The majority of the investment is divided into four sectors which Panama has a competitive advantage in which to target investment in order to achieve an estimate 6-9% GDP growth per year and generate approximately 500,000 new jobs by 2020. The four sectors are: Logistics (with Value Added Services), Luxury Tourism, Agriculture and Financial Services.

12. GOP Strategic Plan for 2010 – 2014 on Agriculture: Changing the focus to high-margin production for export diverting land use of unsustainable protected crops (e.g. onions, tomatoes) for high value added exports (e.g. tropical fruits). Improving production yields and reducing waste, by better access to pesticides, pest reduction techniques and irrigation as well as the ability to rotate the land use and reduce crops, and the conversion of residual waste through value-added products. Developing a world class Cold Chain System, the goal is that significant investments in a world-class cold chain system, road infrastructure at production sites and irrigation system will facilitate the transition to high value agriculture. Establishing a reliable mechanism for the promotion and commercialization of Panamanian agricultural products abroad by creating a Promotion for Exports and Foreign Investment Agency.

13. Trade Promotion Agreement with the United States: The negotiation of a U.S./Panama Trade Promotion Agreement (TPA) concluded in December 2006. Many Panamanians consider the agreement a political accomplishment for the Government of Panama because of the long terms obtained for politically sensitive products such as rice, potatoes and onions. On the other hand, by recognizing the U.S. sanitary inspection system, Panama initiates a new era of science based decisions that eliminates previous discretionary measures, opening the market to U.S. meats and other products. The TPA is still pending for its U.S.Congressional and U.S.Senate approval.

14. U.S. Non-party Agreements, already entered into force: 1- Bilateral Treaty with Colombia, for trading on a specific list of products 2- FTA with Costa Rica 3- FTA with El Salvador. 4- FTA with Taiwan 5- FTA with Singapore 6- FTA with Guatemala 7- FTA with Chile 8- FTA with Nicaragua 9- FTA with Honduras Other Agreements pending Ratification procedure: 1- FTA with Canada 2- FTA with European Union and Central America countries

15. Foreign Agricultural Service Thanks for your attention! Miss. Arlene Villalaz USDA / Foreign Agricultural Service Agricultural Specialist for Panama Arlene.Villalaz@fas.usda.gov