Chemicals Sector

An Expert's View about Chemicals in Panama

Posted on: 26 May 2012

The chemicals sector accounted for $254 million in U.S. exports to Panama over 2008-10 (average) or 11 percent of total U.S. industrial exports to Panama.

The U.S.-Panama Trade Promotion Agreement Opportunities for the U.S. Chemicals Sector The U.S.-Panama Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • The chemicals sector accounted for $254 million in U.S. exports to Panama over 2008-10 (average) or 11 percent of total U.S. industrial exports to Panama. • Estimated duties paid on exports of U.S. chemical products to Panama from 2008 to 2010 were over $34 million. • Almost 80 percent of U.S. exports of chemical products to Panama would receive duty-free treatment immediately upon implementation of the U.S.-Panama Trade Promotion Agreement. Chemicals Sector Overview U.S. Chemicals Exports to Panama • The chemicals sector accounted for $254 million in U.S. exports to Panama over 2008-10 (average) or 11 percent of total U.S. Averaged $254 Million 1 industrial exports to Panama. • Top U.S. chemicals exports to Panama include polyethylene, $280 plastics, tires, fertilizer and cosmetics. $270 • The U.S. chemicals sector, which is highly integrated into the $260 world economy and global supply chains, accounted for 18 2 percent of U.S. manufacturing production in 2009. $250 • The U.S. chemicals sector employed over 1.4 million workers in $240 3 the United States in 2009. $230 $220 Improved Market Access for U.S. Chemicals Exporters 2008 2009 2010 to Panama • Panama’s chemical taris average 3 percent, ranging from 0 to 15 percent. 4 • Almost 80 percent of U.S. chemicals exports to Panama would receive duty-free treatment immediately upon implementation of Almost ? ? ? o? U.S. Chemicals Exports this Agreement. to Panama ? o?l d ? e D?t ? ? ? ree • Taris on the remaining 20 percent would be eliminated in 5 to 10 years. ? mmediatel? Selected Sub-Sectors: • Pharmaceuticals: Panama will eliminate taris on 99 percent of 12.86% Immediate U.S. pharmaceutical exports immediately upon implementation 7.63% of the Agreement and the remaining less than one percent will be eliminated over ten years. 5 Years • Cosmetics: Panama will eliminate taris on 77 percent of U.S. cosmetics exports immediately upon implementation of the 10 Years Agreement, and 13.3 percent within ve years. Duties on the remaining 9.8 percent of exports will be eliminated over ten years. 79.52% • Fertilizer & Agro-Chemicals: Panama will eliminate taris on 100 percent of fertilizer and agro-chemical exports immediately upon implementation of the Agreement. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Panama. The denition for chemical used in this report, unless otherwise cited, is based on HS chapters 28 to 40. 2 U.S. Department of Commerce, U.S. Census Bureau, NAICS 325 and 326. Shipments used as best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, NAICS 325 and 326 (based on non-seasonally adjusted). 4 Data based on three-year average for 2008 to 2010. in Millions USD • Plastics: Panama will eliminate taris on 79.5 percent of resin and manufactured plastic exports immediately upon implementation of the Agreement. Taris on another 8.5 percent of exports will be eliminated over ve years, and taris on 12 percent will be eliminated over ten years. • Rubber: Panama will eliminate taris on 51 percent of rubber and rubber product exports immediately upon implementation of the Agreement. Taris on another 20.7 percent of exports will be eliminated over ve years and taris on the remaining 28.1 percent will be eliminated over ten years. Key States Exporting to Panama • Top U.S. states exporting chemicals to Panama include: Florida, Georgia, Maryland, Minnesota, Texas, North Carolina, Illinois, Ohio California, Michigan, South Carolina, Tennessee, North Carolina, Missouri, Texas, Virginia, Puerto Rico, and Pennsylvania. Foreign Competition in Panama’s Market EU Chemicals Exporters Could • Since the conclusion of negotiations with the United States, Panama has concluded separate negotiations with Canada and Immediately Get an almost 1 the EU. The EU-Central America Association Agreement which Percentage Point Advantage in includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua Panama and Panama successfully completed negotiations in May 2010. 3.5% This agreement will provide the EU with increased regional 3.0% opportunities in Central America through lower taris, increased 2.5% government procurement market access and elimination of 2.0% certain non-tari barriers. Panama also concluded free trade 1.5% agreement negotiations with Canada in May 2010. As part of 1.0% 0.5% this agreement, Panama will eliminate taris immediately on 90 0.0% percent of Canada’s exports. • EU chemicals exporters will immediately enjoy an average tari of 2 percent upon implementation of the EU-Central America EU MFN - If U.S.-Panama Agreement is not enacted Association Agreement, while U.S. exporters will face an average MFN tari of 3 percent until implementation of the U.S.-Panama Trade Promotion Agreement. Other Key Commitments by Panama for the Chemicals Sector 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. 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. Intellectual Property Rights: The U.S.-Panama TPA requires high levels of intellectual property protection, consistent with U.S. standards of protection, and will support the growth of trade in digital and other intellectual property-based products. This Agreement provides protection for copyrighted works, stronger protection for patents and trade secrets and the high level of enforcement required provides tough penalties for piracy and counterfeiting. 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