Building Products Sector

An Expert's View about Building Products and Construction in Panama

Posted on: 26 May 2012

The building products sector accounted for $100 million in U.S. exports to Panama over 2008-10 (average) or 4 percent of total U.S. industrial exports to Panama.

The U.S.-Panama Trade Promotion Agreement Opportunities for the U.S. Building Products Sector The U.S.-Panama Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • The building products sector accounted for $100 million in U.S. exports to Panama over 2008-10 (average) or 4 percent of total U.S. industrial exports to Panama. • Estimated duties paid on exports of U.S. building products to Panama from 2008 to 2010 were over $21 million. • Over 68 percent of U.S. exports of building products to Panama would receive duty-free treatment immediately upon implementation of the U.S.-Panama Trade Promotion Agreement. Building Products Sector Overview U.S. Building Product Exports to • The building products sector accounted for $100 million in U.S. exports to Panama over 2008-10 (average) or 4 percent of total Panama Averaged $100 Million 1 U.S. industrial exports to Panama. • Top U.S. building products exports to Panama include $140 prefabricated buildings, building and construction parts of steel, $120 cement, and ventilation equipment. $100 • In 2009, U.S. production of building products was about $53 2 $80 billion. $60 • The U.S. building products sector employed over 315,000 workers 3 in the United States in 2009. $40 $20 $0 2008 2009 2010 Improved Market Access for U.S. Building Products Exporters to Panama • Panama’s building products taris average 9 percent, ranging from 0 to 15 percent. Almost 80% of U.S. Building Products 4 • Over 68 percent of U.S. building products exports to Panama Exports to Panama Would be Duty-Free would receive duty-free treatment immediately upon Within Five Years implementation of this Agreement. • Taris on the remaining 33 percent would be eliminated in 5 to 10 22.67% years. Immediate 5 Years 9.16% 68 10 Years.17% Key States Exporting to Panama • Top U.S. states exporting building products to Panama include: Florida, Georgia, Maryland, Minnesota, Texas, North Carolina, Illinois and Ohio. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Panama. The denition for building products in this report, unless otherwise cited, is based on portions of HS chapters 25, 68, 69, 70, 90, and 94. This report includes all non-metal, mineral based building products including ceramics and glass. 2 U.S. Department of Commerce, U.S. Census Bureau, within 327. Shipments used as best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, within 327 (non-seasonally adjusted). 4 Data based on three-year average for 2008 to 2010. in Millions USD Foreign Competition in Panama’s Market EU Building Products Exporters • Since the conclusion of negotiations with the United States, Could Immediately Get a 3 Panama has concluded separate negotiations with Canada and the EU. The EU-Central America Association Agreement which Percentage Point Tari includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua Advantage in Panama and Panama successfully completed negotiations in May 2010. 10% This agreement will provide the EU with increased regional 8% opportunities in Central America through lower taris, increased 6% government procurement market access and elimination of 4% certain non-tari barriers. Panama also concluded free trade agreement negotiations with Canada in May 2010. As part of 2% this agreement, Panama will eliminate taris immediately on 90 0% percent of Canada’s exports. • EU building product exporters will immediately enjoy an average EU MFN- If U.S.- Panama Agreement is not enacted tari of 6.3 percent upon implementation of the EU-Central America Association Agreement, while U.S. exporters will face an average most favored nation (MFN) tari of 9 percent until implementation of the U.S.-Panama Trade Promotion Agreement. Other Key Commitments by Panama for the Building Products Sector Investment: The U.S.-Panama TPA establishes a strong and predictable legal framework for U.S. investors for all forms of investment. Under the Agreement, Panama will provide U.S. investors substantive protections and due process rights that are consistent with U.S. legal principles and practice. The Agreement establishes an impartial dispute settlement mechanism for investors to pursue damages for breaches of these protections. Government Procurement: The U.S.-Panama TPA government procurement provisions guarantee non-discriminatory access for U.S. goods, services, and suppliers to a broad range of public sector entities in Panama. The Agreement covers purchases of Panamanian central government entities, including all key ministries, and signicant government enterprises. In addition to the $5.25 billion Panama Canal expansion project, the Government of Panama has identied almost $10 billion in other signicant infrastructure projects. The U.S.-Panama TPA also claries that build-operate-transfer contracts (BOTs) are within the scope of the government procurement obligations in the Agreement. Customs Administration: The U.S.-Panama TPA requires measures designed to increase transparency and eciency in administering customs procedures. The Agreement will allow exporters to obtain advance rulings on tari classication, origin of goods, and other customs matters. The Agreement addresses industry’s demand for express delivery services by requiring that, within one year after the date the Agreement takes eect, Panama must provide a separate, expedited customs procedure for express shipments. Rules of Origin: The U.S. Panama TPA rules of origin allow only U.S. and Panamanian originating goods to receive preferential tari treatment under the Agreement. The trade agreement rules of origin provide clear requirements for a good to be considered originating, including that a good must be wholly obtained or produced entirely in the territory of the United States or Panama, as well as requirements for materials that are used in the production of the good. Average Tari May 2011 The International Trade Administration - Your Global Business Partner The International Trade Administration (ITA) – a division of the U.S. Department of Commerce – strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of our trade laws and agreements. ITA also utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. For more information on exporting to Panama, please contact: • The ITA office of the U.S. Embassy in Panama at enrique.tellez@trade.gov, or 011-507-317-5000, or by visiting our website http://www.export.gov/panama. • You can also locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. For more information on the U.S.-Panama Trade Promotion Agreement, please visit www.export.gov/fta/panama and www.trade.gov/fta/panama. For more information on industry-specific issues, please visit http://trade.gov/mas/index.asp.
Posted: 26 May 2012

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