The Panamanian government has announced that it will close its doors to US corn imports for 3 months (January –April 15, 2014) – taking advantage of a loophole in the Panama-US trade agreement.
Historically, the Panamanian government closed the market each year to imports from January to April to protect local corn producers. However it was thought that under the Free Trade Agree (FTA), this pattern of closing the market would no longer be acceptable. In fact, in 2013 the market was not closed.
"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," said Floyd Gaibler, US Grains Council (USGC) director of trade policy and biotechnology.
"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. 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 US corn and actually making US corn less competitive."
Panama produces approximately 85,000 metric tons (3.3 million bushels) of corn annually with annual imports totalling more than 350,000 tons (13.8 million bushels).
The USGC is working with the US Trade Representative, USDA's Foreign Agricultural Service in Panama, the Panamanian government, and the Panamanian poultry industry to find resolution. While the FTA outlines dispute settlement procedures, everyone is hopeful to find resolution to the issue informally. Unfortunately, due to government furloughs, key employees of the USTR and FAS-Panama are unable to do their job in keeping markets open for US products. Plus the partial shut-down of the US government also adds a complication to the negotiations.
To comment, login here
Or register to be able to comment.