Panama’s recently published quotas for powdered milk, rice and corn include a three and a half month ban on all imports of U.S. corn between January 1 and April 15, 2014. The ban exercises a loophole in the Panama-U.S. Trade Promotion Agreement.
The U.S. Grains Council (USGC) is working with the U.S. Trade Representative (USTR), USDA's Foreign Agricultural Service (FAS) in Panama, the Panamanian government and the Panamanian poultry industry to find a resolution. The U.S. government shutdown and subsequent furloughs of key personnel at FAS and the USTR is substantially slowing work on the issue.
The Panamanian market for corn imports often closes between January and April to protect its local corn producers. In 2013, however, the market remained open. "This time period coincides with the harvest of the local corn crop and is an obvious effort to subvert the FTA in order to protect local corn producers and force the Panamanian feed industry to buy local corn," Floyd Gaibler, USGC director of trade policy and biotechnology, says.
"Not only does this regulation go against the spirit of the FTA, which is intended to open markets and reduce barriers to trade, but it also creates a tremendous burden on the local livestock industry,” Gaibler says. “The FTA was intended to simplify trade, but the Panamanian government has set up several technical barriers which make the situation worse for the feed industry, increasing the cost of importing U.S. corn and actually making U.S. corn less competitive."
The USGC says Panama produces approximately 85,000 metric tons (3.3 million bushels) of corn annually, and imports more than 350,000 tons (13.8 million bushels). The U.S. grows approximately 313 million metric tons of corn annually. In 2011, it exported 45.7 million metric tons of corn.