U.S. potato industry leaders estimate a free trade agreement with Panama that takes effect Oct. 31 should boost frozen fry exports to the Central American nation by at least $10 million, once fully implemented.
The agreement phases out a 20 percent tariff on frozen fries and a 15 percent tariff on dehydrated products from the U.S. over the course of five years.
According to the U.S. Department of Commerce, the value of frozen U.S. potato exports to Panama jumped 77.86 percent in 2010 from the prior year to $5.254 million and rose by another 16.5 percent in 2011 to $6.121 million.
U.S. dehydrated exports to Panama were valued at $547,000 in 2011.
The outlook is also much improved for U.S. fresh exports to Panama, valued at $459,000 in 2011.
Under the new trade agreement, fresh potatoes will have a 750 metric ton duty-free quota, with an 83 percent tariff imposed on any excess volume. The quota will be expanded 2 percent per year, compounded in perpetuity.
SOURCE: John O'Connell, Capital Press