Construction Equipment Sector

An Expert's View about Mining, Quarrying and Construction Machinery in Panama

Posted on: 26 May 2012

The construction equipment sector accounted for $64 million in U.S. exports to Panama over 2008-10 (average) or 3 percent of total U.S. industrial exports to Panama.

The U.S.-Panama Trade Promotion Agreement Opportunities for the U.S. Construction Equipment Sector The U.S.-Panama Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • The construction equipment sector accounted for $64 million in U.S. exports to Panama over 2008-10 (average) or 3 percent of total U.S. industrial exports to Panama. • Estimated duties paid on exports of U.S. construction equipment to Panama from 2008 to 2010 were over $10 million. • All U.S. exports of construction equipment to Panama would receive duty-free treatment immediately upon implementation of the U.S.-Panama Trade Promotion Agreement. Construction Equipment Sector Overview • The construction equipment sector accounted for $64 million in U.S. Construction Equipment Exports to U.S. exports to Panama over 2008-10 (average) or 3 percent of Panama Averaged $64 Million 1 total U.S. industrial exports to Panama. • Top U.S. construction equipment exports to Panama include cranes, track laying equipment, front loaders, and mechanical $80 shovels. • In 2009, U.S. production of construction equipment products was $60 2 about $40 billion. $40 • The U.S. construction equipment sector employed over 130,000 3 workers in the United States in 2009. $20 $0 2008 2009 2010 Improved Market Access for U.S. Construction Equipment Exporters to Panama • Panama’s construction equipment taris average 6.5 percent, ranging from 0 to 10 percent. All Construction Equipment Exports to 4 • All U.S. construction equipment exports to Panama will receive duty-free treatment immediately upon implementation of this Panama Would be Duty-Free trade Agreement. Immediately Key States Exporting to Panama 100.00% Immediate • Top U.S. states exporting construction equipment to Panama include: Florida, Georgia, Illinois, California, North Carolina, Pennsylvania, South Carolina, Washington, Iowa, Louisiana, Michigan and Minnesota. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Panama. The denition for construction equipment used in this report, unless otherwise cited, includes selected products within HS chapters 84 and 87. 2 U.S. Department of Commerce, U.S. Census Bureau, NAICS 333120, 333131, 333923 and 333924. Shipments used as best proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, NAICS 33312 and 33392 (non-seasonally adjusted). 4 Data based on three-year average for 2008 to 2010. in Millions USD Foreign Competition in Panama’s Market EU Construction Equipment • Since the conclusion of negotiations with the United States, Exporters Could Immediately Get Panama has concluded separate negotiations with Canada and the EU. The EU-Central America Association Agreement which a 6 Percentage Point Tari includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua Advantage in Panama and Panama successfully completed negotiations in May 2010. ? % This agreement will provide the EU with increased regional 6% opportunities in Central America through lower taris, increased ? % 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 1% percent of Canada’s exports. 0% ? ? ? ? e? t ? ea? ?1 ? ea? ?2 ? ea? ?? ? ea? ?4 ? ea? ?? • EU construction equipment exporters will immediately enjoy ? ? ? ? ? ?? I? ? .? .? ? a? ama?? ? ? eeme? t?i? ?? ? t?e? a? ted an average tari of less than one percent upon implementation of the EU-Central America Association Agreement, while U.S. exporters will face an average MFN tari of 6.5 percent until implementation of the U.S.-Panama Trade Promotion Agreement. Other Key Commitments by Panama for the Construction Equipment Sector 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. Remanufactured Goods: Currently, remanufactured equipment could be treated as a “used good” and face possible import prohibitions and restrictions in Panama. Upon entry into force of the Agreement, U.S. remanufacturers of many products, such as engines, radiators, and alternators for construction equipment and transportation machinery, will gain access to export their remanufactured products to Panama without being unjustied prohibitions and restrictions. 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. 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, or 011-507-317-5000, or by visiting our website • You can also locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting For more information on the U.S.-Panama Trade Promotion Agreement, please visit and For more information on industry-specific issues, please visit
Posted: 26 May 2012