Machinery Sector

An Expert's View about Machinery and Robotics in Panama

Posted on: 26 May 2012

The machinery sector accounted for over $227 million in U.S. exports to Panama over 2008-10 (average) or 10 percent of total U.S. industrial exports to Panama.

The U.S.-Panama Trade Promotion Agreement Opportunities for the U.S. Machinery Sector The U.S.-Panama Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • The machinery sector accounted for over $227 million in U.S. exports to Panama over 2008-10 (average) or 10 percent of total U.S. industrial exports to Panama. • Estimated duties paid on exports of U.S. machinery to Panama from 2008 to 2010 were over $29 million. • Over 96 percent of U.S. machinery exports to Panama would receive duty-free treatment immediately upon implementation of the U.S.-Panama Trade Promotion Agreement. Machinery Sector Overview • The machinery sector accounted for over $227 million in U.S. U.S. Machinery Exports to Panama exports to Panama over 2008-10 (average) or 10 percent of total Averaged $ 227Million 1 U.S. industrial exports to Panama. • Top U.S. machinery exports to Panama include pumps, $235 compressors, valves, piston engines and engine parts, and marine engines and machinery parts. $230 • In 2009, U.S. production of machinery products was over $293 2 billion. $225 • The U.S. machinery sector employed over 500,000 workers in 3 2009. $220 Improved Market Access for U.S. Machinery $215 2008 2009 2010 Exporters to Panama • Panama’s machinery taris average 4.7 percent, ranging from 0 to 15 percent. 4 • Over 96 percent of U.S. machinery exports to Panama would receive duty-free treatment immediately upon implementation of this Agreement. More than 96% of U.S. Machinery • Taris on the remaining 4 percent would be eliminated in 5 to 10 Exports to Panama Would be Duty- years. Free Immediately 1.31% 2.41% Selected Sub-sectors: • Energy Equipment: Panama will eliminate taris on 98.2 percent of U.S. energy equipment exports immediately upon implementation of the Agreement. Taris on another less than Immediate one percent will be eliminated over ve years. Duties on the 5 Years remaining 1.2 percent will be eliminated over ten years. • Hand and Power Tools: Panama will eliminate taris on 92 percent 10 Years of U.S. tool exports immediately upon implementation of the Agreement. Taris on another 2.5 percent of U.S. exports will be eliminated over ve years. Duties on the remaining 5 percent of 96.27% U.S. exports will be eliminated over ten years. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Panama. The denition for machinery used in this report, unless otherwise cited, is based on products within HS chapters 73, 83 to 85, 87 and 89 to 91. 2 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 331 to 335. Shipments used as best proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 331 to 335 (non-seasonally adjusted). 4 Data based on three-year average for 2008 to 2010. in Millions USD Key States Exporting to Panama • Top U.S. states exporting machinery to Panama include: Florida, California, Georgia, Washington, Tennessee, South Carolina, Missouri, Minnesota, Michigan, Iowa, Wisconsin, Louisiana, New York, New Jersey, Texas, Pennsylvania, Ohio and North Carolina. Foreign Competition in Panama’s Market EU Machinery Exporters Could • Since the conclusion of negotiations with the United States, Immediately Get an almost 4 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. 5% This agreement will provide the EU with increased regional 4% opportunities in Central America through lower taris, increased 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 machinery exporters will immediately enjoy an average tari of one percen EU MFN-If U.S.-Panama Agreement is not enactedt upon implementation of the EU-Central America Association Agreement, while U.S. exporters will face an average MFN tari of 4.7 percent until implementation of the U.S.-Panama Trade Promotion Agreement. Other Key Commitments by Panama for the Machinery Sector 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. 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. 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 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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