Opportunities for the U.S. Aerospace Sector

An Expert's View about Aerospace in Panama

Posted on: 24 May 2012

The aerospace sector accounted for $7.4 million in U.S.exports to Panama over 2008-10 (average).

The U.S.-Panama Trade Promotion Agreement Opportunities for the U.S. Aerospace Sector The U.S.-Panama Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • The aerospace sector accounted for $7.4 million in U.S. exports to Panama over 2008-10 (average). • Estimated duties paid on exports of U.S. aerospace products to Panama from 2008 to 2010 were over $2.3 million. • Over 90 percent of U.S. aerospace exports to Panama would receive duty-free treatment immediately upon implementation of the U.S.-Panama Trade Promotion Agreement. Aerospace Sector Overview • The aerospace sector accounted for $7.4 million in U.S. U.S. Aerospace Exports to Panama 1 exports to Panama over 2008-10 (average). Averaged $7.4 Million • Top U.S. aerospace exports to Panama include parts of airplanes and helicopters, parts of civilian turbojets, and $12.0 parts of turbo propeller engines. $10.0 • In 2009, U.S. production of aerospace products was over 2 $172 billion. $8.0 • The U.S. aerospace sector employed approximately 492,800 $6.0 3 workers in 2009. $4.0 $2.0 $0.0 2008 2009 2010 Improved Market Access for U.S. Aerospace Exporters to Panama • Panama’s aerospace taris average 10.3 percent, ranging from 0 to 15 percent. ? ver ? ? ? o? U.S. Aerospace Exports to 4 • Over 90 percent of U.S. aerospace exports to Panama would Panama ? o?l d ? e D?t ? ? ? ree receive duty-free treatment immediately upon implementation of this trade Agreement. ? mmediatel? • Taris on the remaining 10 percent would be eliminated in 5 to 10 9.02% years. Immediate 5 Years Key States Exporting to Panama 90.94% • Top U.S. states exporting aerospace products to Panama include: New York, New Jersey, Florida, California, Georgia, and South Carolina. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Panama. The denition of aerospace, unless otherwise cited, is based on the product coverage under the WTO Civil Aircraft Agreement and includes products with HS 84, 85, 88 and 90. 2 U.S. Department of Commerce, U.S. Census Bureau, NAICS 33641. Shipments used as best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, NAICS 33641 (non-seasonally adjusted data). 4 Data based on three-year average for 2008 to 2010. in Millions USD Foreign Competition in Panama’s Market EU Aerospace 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 Tari Advantage in Panama includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua 12% and Panama successfully completed negotiations in May 2010. 10% This agreement will provide the EU with increased regional opportunities in Central Amer 8%ica through lower taris, increased government procurement market access and elimination of 6% certain non-tari barriers. Panama also concluded free trade 4% agreement negotiations with Canada in May 2010. As part of this agreement, Panama will eliminate taris immediately on 90 2% percent of Canada’s exports. 0% Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 • EU aerospace exporters will immediately enjoy an average tari EU MFN - If US-Panama Agreement is not enacted of 4.2 percent upon implementation of the EU-Central America Association Agreement, while U.S. exporters will face an average MFN tari of 10.3 percent until implementation of the U.S.-Panama Trade Promotion Agreement. Other Key Commitments by Panama for the Aerospace 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. 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: 24 May 2012