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Free Trade Agreement Panama

The United States and Panama exchange notes for the agreement to enter into force on October 31, 2012. Panama is closely linked to the United States as a dominant trading partner and is one of the few Latin American countries with which the United States has a trade surplus. Although small compared to all U.S. trade, it is by far the largest in the region. Panama also has a large trade deficit with Latin America. Latin America`s main trading partners are Costa Rica, Mexico and Colombia. Panama also imports significant amounts of oil from Trinidad and Tobago. Trade with Asia follows the rapid pattern of raw material exports to many Latin American countries, with relatively modest growth in Panamanian imports from the region. The United States has a small but positive agricultural trade record with Panama. Agriculture accounts for a small portion of all U.S. merchandise exports to Panama, but the United States captures about 51% of panama`s agricultural import market.

While the average tariff on U.S. agricultural products is 15%, tariffs on chicken-leg quarters can reach 260%.39 Given that both countries had products they wanted to protect, access to the agricultural market was one of the most difficult problems to solve. The compromise reached in the free trade agreement provides duty-free treatment for more than half of U.S. agricultural exports to Panama, including high-quality beef, poultry products, soybeans, most fresh fruit and a number of processed products. The remaining tariffs will expire between years 7 and 17 of the free trade agreement. Tariffs on rice, which protect one of Panama`s most sensitive products, will remain in effect until the 20th year of the free trade agreement. U.S. exports of rice and other products benefit from increased quotas under the pan-Panama tariff quota system. The United States agreed to give Panama the first year, under a three-tiered TRQ system, which will increase by 1% per year, for an additional 7,000 tonnes of sugar imports42. And the Panama Free Trade Agreement will make this situation worse. Each year, our country`s wealthiest people and corporations will reduce about $100 billion in U.S.

taxes through abusive and illegal offshore tax havens in Panama and other countries. So, after Citizens for Tax Justice — and I quote — “A tax haven… has one of three characteristics: it has no income tax or very low income tax; it has laws on bank secrecy; and it has a history of non-cooperation with other countries in the exchange of information on tax issues.

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