Information and Communications Technologies (ICT) Sector

An Expert's View about IT and Telecommunications in Panama

Posted on: 26 May 2012

Information and communications technologies (ICT) products accounted for $502 million in U.S. exports to Panama over 2008-10 (average), or over 22 percent of total U.S. industrial exports to Panama.

The U.S.-Panama Trade Promotion Agreement Opportunities for the U.S. Information and Communications Technologies (ICT) Sector The U.S.-Panama Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • Information and communications technologies (ICT) products accounted for $502 million in U.S. exports to Panama over 2008-10 (average), or over 22 percent of total U.S. industrial exports to Panama. • Estimated duties paid on exports of U.S. ICT products to Panama from 2008 to 2010 were over $85 million. • Almost all of U.S. exports of ICT products to Panama would receive duty-free treatment immediately upon implementation of the U.S.-Panama Trade Promotion Agreement. ICT Sector Overview U.S. ICT Exports to Panama • ICT products accounted for $502 million in U.S. exports to Panama over 2008-10 (average), or over 22 percent of total U.S. industrial Averaged $502 Million 1 exports to Panama. • Top U.S. ICT exports to Panama include computers, portable $560 computers, telecommunications equipment, and radio and $540 television parts. 2 $520 • In 2009, U.S. production of ICT products was over $218 billion. $500 • The United States leads in many of the more advanced computer $480 hardware product segments (such as high performance $460 computers and servers), is a major vendor of PCs, disk drives and hardcopy peripheral equipment, and has a strong hold on the $440 global markets for software and IT services. $420 3 • The U.S. ICT sector employed over 763,000 workers in 2009. 2008 2009 2010 Improved Market Access for U.S ICT Exporters to More than 98% of U.S. ICT Equipment Panama • Panama’s ICT taris average 7.5 percent, ranging from 0 to 15 Exports to Panama Would be Duty- percent. Free Immediately 4 1.31% 0.60% • Over 98 percent of U.S. ICT exports to Panama would receive duty-free treatment immediately upon implementation of this Agreement. • Taris on the remaining 2 percent would be eliminated in 5 to 10 Immediate years. 5 Years 10 Years Key States Exporting to Panama • Top U.S. states exporting information and communications 98.19% technologies to Panama include: Florida, California, Illinois, Massachusetts, Maryland, Ohio, Pennsylvania, Virginia, Wisconsin, Indiana, New York, North Carolina, Tennessee and Texas. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Panama. The denition of ICT used in this report, unless otherwise cited, is based on products with HS chapters 84, 85 and 90. 2 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 333, 334, and 33592. Shipments used as best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 333 and 334 (non-seasonally adjusted) 4 Data based on three-year average for 2008 to 2010. in Millions USD Foreign Competition in Panama’s Market EU ICT Exporters Could • Since the conclusion of negotiations with the United States, Immediately Get a 6 Percentage Panama has concluded separate negotiations with Canada and the EU. The EU-Central America Association Agreement which Point Advantage in Panama includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua 8% and Panama successfully completed negotiations in May 2010. 7% This agreement will provide the EU with increased regional 6% opportunities in Central Amer 5%ica through lower taris, increased 4% government procurement market access and elimination of 3% certain non-tari barriers. Panama also concluded free trade 2% agreement negotiations with Canada in May 2010. As part of 1% this agreement, Panama will eliminate taris immediately on 90 0% percent of Canada’s exports. • EU ICT exporters will immediately enjoy an average tari of EU MFN- If U.S.-Panama Agreement is not enacted 1.5 percent upon implementation of the EU-Central America Association Agreement, while U.S. exporters will face an average MFN tari of 7.5 percent until implementation of the U.S.-Panama Trade Promotion Agreement. Other Key Commitments by Panama for the ICT Sector 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. 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. 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. 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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