In April, a surge of pork exports to Panama triggered a safeguard measure in the U.S.-Panama Trade Promotion Agreement.
Due to export volume already exceeding 130% of the tariff rate quota (TRQ) included in the agreement, the U.S. Meat Export Federation reports higher tariff rates on U.S. pork were applied April 1 and will remain in effect through the end of this year.
Panama's 2019 out-of-quota tariff rate for most U.S. pork products is 54.4%, but when the safeguard was triggered, this rate increased to 70%. Lower rates apply to some products and the tariff rate on U.S. pork variety meat remains at zero.
While this higher tariff rate will have negative impact on exports to Panama, says Gerardo Rodriguez, USMEF regional marketing director for Mexico, Central America and the Dominican Republic, there is still reasons to be optimistic.
“The safeguard trigger is obviously not good,” he explains, “But this is a result of people looking more and more for the product—more interest in finding U.S. pork in Panama.”
While he says the volume of U.S. pork sales might decrease, interest remains high for U.S. premium products.
“We work with a certain niche of people that value what the product is about. And they will keep buying the product. This is not just a commodity market. We're working to develop the markets that we can provide solutions for value added products,” he adds.
The news of the Panama tariff, while important, have been overshadowed by continuing trade disputes with China and Japan through April and May. The pork industry remains focused to push for free market access to these large markets for U.S. pork.
"Panama’s tariff increase is part of an established trade agreement,” says Rachel Gantz, NPPC director of communications. “While we hope to improve access to what is our 15th largest export market in volume and value, NPPC remains focused on these trade priorities: elimination of metal tariffs that have prompted trade retaliation by two of our largest markets, completion of a trade agreement with Japan and ratification of the USMCA.”