USAgNet - 12/21/2006

Dairy Groups Pleased with U.S./Panama FTA Negotiations

The National Milk Producers Federation and the U.S. Dairy Export Council expressed support for the recentlynegotiated Free Trade Agreement between the United States and Panama. The negotiations, which concluded Tuesday, will help the U.S. build on its export presence in Panama, once the agreement is approved by Congress.

"This is a great opportunity to expand U.S. dairy exports and improve the U.S. trade balance for dairy products," says Jaime Castaneda, NMPF senior vice president and USDEC senior policy advisor. He noted that Panama imports nearly half of its dairy products, and the U.S. stands to become a larger supplier once the FTA is finalized.

The terms of the FTA are expected to provide new exports for all categories of U.S. dairy products, including cheese, milk proteins and ice cream, among many others. Equally important to the preferential market access provisions contained in the agreement are portions of the FTA dealing with sanitary and phytosanitary (SPS) issues and the administration of new quotas. The FTA must effectively address these important non-tariff issues in order to allow for smoother market operations.

In 2004, Panama imported 167 million pounds, milk equivalent, of dairy products—the equivalent to 42 percent of Panama’s milk production. In 2005, the U.S. exported $3.5 million worth of dairy products to Panama.