WT/REG324/1  
18 July 2016  
(16-3846)  Page: 1/48  
Committee on Regional Trade Agreements   
 
FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETWEEN PA NAMA AND THE UNITED STATES 
(GOODS AND SERVICES) 
Report by the Secretariat 
This report, prepared for the consideration of the Trade Promotion Agreement 
between Panama and the United States has been drawn up by the WTO Secretariat on 
its own responsibility and in full consultation with the Parties. The factual presentation 
reproduces as closely as possible the terminology used in the Agreement and in the comments provided and does not imply offi cial endorsement or acceptance by the 
Secretariat of such terminology. The report has been drawn up in accordance with the 
rules and procedures contained in the Decision for a Transparency Mechanism for 
Regional Trade Agreements (WT/L/671) and thus does not imply any value judgement by the Secretariat regarding the contents of the Agreement. 
Any technical questions arising from this report may be addressed to Ms Denby Probst 
(tel: +41 22 739 5847). Any statistical questions arising from this report may be addressed to Ms Rowena Cabos (tel: +41 22 739 5185). WT/REG324/1 
 
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  TABLE OF CONTENTS 
 
Page 
 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Overview .................................................................................................................. 4  
1.2   Merchand ise trade ..................................................................................................... 4  
1.3   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 8  
2.1   Background  Information ............................................................................................. 8  
3   PROVISIONS ON TRADE IN GOODS ............................................................................. 9  
3.1   National  Treatment .................................................................................................... 9  
3.2   Import duties and charges,  and quantitative  restrict ions ................................................ 10 
3.2.1   Tariff elimination ................................................................................................. 10  
3.2.2   Non-tari ff measures ............................................................................................ 14  
3.2.3   Special provisions ............................................................................................... 14  
3.3   Rules of origin .......................................................................................................... 15 
3.4   Export duties and charges,  and quantitative  restrictions ................................................. 16 
3.4.1   Duties  and taxes ................................................................................................. 16  
3.4.2   Fees and char ges ................................................................................................ 16  
3.4.3   Export restrictions .............................................................................................. 16  
3.5   Regulatory provisions on trade in goods ....................................................................... 16 
3.5.1   Standards ............................................................................................................ 16  
3.5.2   Safeguar d mechanisms ....................................................................................... 17  
3.5.3   Anti-dumping and countervailing me asures  ........................................................ 20  
3.5.4   Customs-rela ted procedures ............................................................................... 21  
3.6   Sector-specific provis ions on trad e in goods ................................................................. 21 
3.6.1   Agriculture .......................................................................................................... 21 
3.6.2   Textiles  and Apparel ........................................................................................... 23  
4   PROVISIONS ON TRADE IN SERVICES ....................................................................... 23  
4.1   Scope and definitions ................................................................................................ 23 
4.2   Denial of benefits ..................................................................................................... 24 
4.3   General provisions on trade in services and investment .................................................. 24 
4.3.1   Mark et acce ss ..................................................................................................... 24  
4.3.2   National tr eatment an d MFN ............................................................................... 25  
4.3.3   Local presence  .................................................................................................... 25  
4.3.4   Movement of natural persons .............................................................................. 25  
4.3.5   Other provisio ns on investment .......................................................................... 25  
4.4   Liberalization commitments ........................................................................................ 26 
4.4.1   United  States ...................................................................................................... 26  
4.4.2   Panama ............................................................................................................... 28 WT/REG324/1 
 
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  4.5   Regulatory provisions ................................................................................................ 30 
4.5.1   Domestic  regulation ............................................................................................ 30  
4.5.2   Reco gnition ......................................................................................................... 3 0 
4.5.3   Subsidies ............................................................................................................. 30  
4.5.4   Safe guards .......................................................................................................... 3 0 
4.6   Sector specific provis ions on trade in services ............................................................... 31 
4.6.1   Express De livery Serv ices ................................................................................... 31  
4.6.2   Profession al Services .......................................................................................... 31  
4.6.3   Financ ial Services................................................................................................ 31  
4.6.4   Non-confor ming measures .................................................................................. 32  
4.6.5   Teleco mmunications ........................................................................................... 34  
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 35  
5.1   Transparency and Anti-co rruption ............................................................................... 35 
5.2   Exceptions ............................................................................................................... 35 
5.3   Accession and Withdrawal .......................................................................................... 35 
5.4   Institutio nal framework ............................................................................................. 35 
5.5   Disput e settlement ................................................................................................... 35 
5.6   Relationship with other agr eements concluded by the Parties .......................................... 36 
5.7   Government  procurement .......................................................................................... 38 
5.8   Intellectual property rights ......................................................................................... 39 
5.9   Other ...................................................................................................................... 39 
5.9.1   Electronic Commerce ........................................................................................... 39  
5.9.2   Labour ................................................................................................................. 39  
5.9.3   Environment ........................................................................................................ 40  
ANNEX 1 ....................................................................................................................... . 41 
ANNEX 2 ....................................................................................................................... . 46 
 WT/REG324/1 
 
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  Key Facts 
 
Parties to the Agreement:  Panama and the United States 
 
Date of Signature:  28 June 2007 
 
Date of Entry into Force:  31 October 2012 
 
Date of Notification:   29 October 20121 
 
Full implementation :  1 January 2031  
 
1  TRADE ENVIRONMENT 
1.1  Overview 
1.1.  The United States-Panama Trade Promotion Agreement (henceforth the Agreement) is the 8th 
free trade agreement entered into by Panama and the 14th entered into by the United States and 
covers the trade of goods and services.1 In terms of US-Panama trade relations, it supersedes the 
longstanding unilateral US preferential regimes offered to Panamanian products entering the United States pursuant to the Generalized System of Preferences (GSP), Caribbean Basin Economic Recovery Act (CBERA), and the Caribbean Basin Trade Partnership Act (CBTPA). The Agreement 
creates a permanent, comprehensive, reciprocal  two-way trading relationship between the two 
parties. The Agreement also solidifies the long and strong economic ties the two countries have shared since their early 20
th century relationship concerning the Panama Canal. 
1.2.  The Parties to the Agreement are quite differe nt in the size of their economies and their role 
in world trade. The United States is Panama's leading merchandise trade partner (imports and exports) and Panama is a relatively small supplier of goods and services to the US market. In 
2015, according to US statistics, Panama was the 92
rd largest supplier of imports to the United 
States, and the GDP of Panama was US$52.1 billion while that of the United States was many times larger, at US$17.9 trillion.
2 The United States ranks first in world services trade and 
merchandise trade imports (second in exports), while Panama ranks 51st in world merchandise 
trade imports (57th in exports) and 55th in services imports (37th in exports).3  
1.2  Merchandise trade 1.3.  Trade trends between the Parties of the Agr eement, and in relation to world trade are shown 
in Chart 1.1. Panama-US trade is in general very small, but the United States accounts for 
approximately 25% of Panama's imports, whereas Panama accounts for less than one-hundredth of 1% of total U.S. imports. Both Parties have seen gradual increases in world imports in recent 
years with the exception of the 2009 economic do wnturn when both imports and exports declined. 
Panama's trade has been characterised by falling exports to the world since 2009, and this trend 
was similar with respect to exports to the United States. For the United States, exports have generally been rising except more recently in 2015, and in particular to Panama where exports 
have more than doubled since 2009, although they also declined in 2015. Thus, the United States 
has overall had a growing merchandise trade surplus with Panama, and Panama a growing 
merchandise trade deficit with the United States. 
                                               
1 As notified to the WTO. 
2 U.S. Census and Department of Commerce, BEA statistics. 
3 WTO Statistics Database. WT/REG324/1 
 
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  Chart 1.1. United States and Panama: bilateral and total merchandise trade  
05101520
05101520
2000
20012002200320042005200620072008200920102011201220132014B. Panama 2000-2014
(USD Billions)
Imports from US (Right Axis)
Exports to US (Right Axis)
Total Imports
Total Exports
04812162024
05001,0001,5002,0002,5003,000
2000
20012002200320042005200620072008
2009
201020112012201320142015A. United States 2000-2015
(USD Billions) 
Imports from Panama (Right Axis)
Exports to Panama (Right Axis)
Total Imports
Total Exports
 
*  Preliminary figures. 
Note:  Data from Panama on trade with world and wi th the United States excludes trade from special 
extraction zones and Colon's expo rting zone, while U.S. trade data includes trade with all these 
entities. 
Source: UNSD Comtrade database, WTO-IDB and Instituto Nacional de  Estadística y Censos (INEC).  
1.4.  Panama's exports, both globally and to the United States, are dominated by agricultural 
products, i.e. animal products and vegetables (Chart 1.2). There was also significant trade of products exported from the United States to Panama, and then re-imported or returned under special provisions after not having been improved or processed, i.e. goods sent for repair or 
returned goods.
4 The United States' exports are more diversified compared to Panama; however 
exports of machinery dominate both to the world and more significantly to Panama. Both Panama and the United States have a large percent of imports (20% and 19% respectively) concentrated 
in the minerals sector, i.e. crude petroleum. 
1.5.  As the United States has a diverse export base, no one particular product accounts for more 
than 3% of total exports. However, vehicles, machinery, and petroleum products are among the 
top categories of exported products, most of which face no or low MFN tariffs into Panama 
(Table A1.1). Panama's main exports to the world are agricultural products, fish and shellfish, and 
certain metal products, some of which already ha ve MFN duty-free status in the United States 
(Table A1.2). 
                                               
4 Special classification provisions of chapter 98 of the HTSUS. These products accounted for 
approximately one-third of United States imports from Panama during 2009-11. WT/REG324/1 
 
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  Chart  1.2. Panama and the United States: Prod uct composition of merchandise trade, 
annual average (2009-2011) 
20
19
10 987443339Panama's Global Imports(%)26
19
108554333211USA's Global Imports (%)
33
23111010337Panama's Global Exports (%)
26
15
128655543211USA's Global Exports(%)
31
9
987664433323Panama's imports from USA (%)23
16
99222334USA's imports from Panama(%) 
Total: US$ 377 million Total: US$ 1,944 billion
Total: US$ 9.4 billion Total: US$ 1,271 billionTotal:  US$ 778 million
Total:  US$ 2.5 billion
 
Note:  Data from Panama on trade with world and wi th the United States excludes trade from special 
extraction zones and Co lon's exporting zone. 
Source:  UNSD Comtrade Database and Institut o Nacional de Estadística y Censo (INEC).  
1.3  Trade in services and investment 
1.6.  Trade in services is a significant contributor to the economies of both countries, and both run 
significant trade surpluses in services which helps offset their significant trade deficits in merchandise trade. In the United States, services constitute the backbone of the US economy, 
contributing to nearly 80% of GDP and employment. In Panama, the services sector accounts for 
approximately 74% of GDP and over 60% of employment. 
1.7.  The United States is a dominant world play er in services, ranking first in terms of both 
imports and exports, with a widening trade surplus. In 2011, exports amounted to US$ 606 billion, 
while imports were US$427 billion (Table 1.1). Trade in transportation, travel, and insurance services dominate US services trade. 
1.8.  Panama's world services trade is very small compared to the United States, yet services play 
an important role in Panama's economy. Panamanian services exports typically are more than twice that of imports, contributing to a large su rplus for the balance of payments. In 2011, exports 
of services amounted to US$7 billion, and impo rts of US$3 billion. Transportation services 
dominate, accounting for approximately half of both services' imports and exports (Table 1.1). WT/REG324/1 
 
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  1.9.  No data is available on bilateral commerci al services transactions between Panama and the 
United States. 
1.10.  In terms of investment, total FDI stocks for Panama, both inward and outward have 
gradually increased during the period 2009-11, while that of the United States has remained 
relatively stagnant or decreased slightly (Table 1.1). This reflects the global trend of a general 
slowdown in FDI in major developed countries, while that of developing countries continues to rise. 
Table 1.1 Trade in commercial services and investment with world, 2009-2013  
A. United States 
Services 
(US$ million) Exports  Imports 2009 
2010 
2011 
2012 
2013 
2009 
2010 
2011 
2012 
2013 
Total services 509,212 553,603 605,961  651,492  683,472  382,608  403,216 427,428 444,674  456,869  
Transportation services NA NA NA 82,826  86,467  NA NA NA 89,657  95,694  
Travel 94,187 103,481  103,4
81 160,733  172,577  74,132  74,132 75,510 91,918  95,914  
Communications services NA NA NA 14,398  14,813  NA NA NA 8,449  8,585  
Construction NA NA NA  3,335  NA NA NA NA 3,276  NA 
Insurance services NA NA NA 16,067  15,639  NA NA NA 52,564  49,849  
Financial services NA NA NA  76,418  83,862  NA NA NA 16,952  18,657  
Computer and 
information services NA NA NA 17,340  18,198  NA NA NA 25,657  26,279  
Royalties and licence 
fees 98,406 107,165  120,8
36 124,182  127,830  31,297  33,434 36,620 39,889  39,399  
Other business services NA NA NA 134,225  138,242  NA NA NA 87,621  93,001  
Personal, cultural and 
recreational services NA NA NA  760 NA NA NA NA 830  NA 
Transfers under U.S. 
military agency sales 
contracts (exports); U.S. 
miscellaneous services 
(exports and imports); 
and direct defense 
expenditures (imports) 17,082 15,864 19,12
2   34,889  35,172 34,364   
Investment 
(US$ billion) Outward  Inward 2009 
2010 
2011 
2012 
2013 
2009 
2010 
2011 
2012 
2013 
Total FDI stocks  6,523 5,562 5,692  5,196  6,275  1,101  952 1,098 3,929  4,986  
Total FDI flows 778 -814 -130 311 328 144 -554 100 170 231 
Note:  "Total services" includes transfers under US  military agency sales contracts, direct defense 
expenditures, and US government miscellaneous services. "NA" is used in instances where the US State Department does not report data. 
Source:  United States authorities, WTO Statistics Database (2012-2013 Services) and UNCTAD (2012-2013 
FDI). WT/REG324/1 
 
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  B. Panama 
Unit: in million US$ 
Services Exports  Imports 2009 
2010 
2011 
2012 
2013 
2009 
2010 
2011 
2012 
2013 
Commercial Services 
(excluding government services) 5,487 6,007 7,065
 9,249  9,624  2,199  2,569  3,257 4,105 4,642  
Transportation services 3,130 3,341 3,935  4,723  4,802  1,208  1,541  1,741 2,275 2,188  
Travel 1,484 1,676 1,926  3,067  3,316  338 398 462 505 830  
Communications services 239 249 261 326 327 45 46 46 70 62 
Construction 2 2 2  4 4 .. .. .. .. ..  
Insurance services 95 90 106 154 276 146 161 152 212 192 
Financial services 312 438 653  676 566 170 237 589 637 608  
Computer and 
information services 26 25 21 34 39 2 3 5 8 9 
Royalties and licence fees .. .. ..  12 13 63 46 38 42 81  
Other business services 200 187 161 253 235 156 136 225 351 649 
Personal, cultural and 
recreational services .. .. ..  .. 46 .. .. .. 5 22  
Investment Outward  Inward 2009 
2010 
2011 
2012 
2013 
2009 
2010 
2011 
2012 
2013 
Total FDI stocks  34,163 34,614 36,278  3,275  3,556  20,466  22,661  25,884 27,527 32,073  
Total FDI flows 1,419 451 1,664  -274 281 1,259  2,363  2,755 2,980 4,654  
..  Not available. 
Source: Panamanian Authorities, Ca nada-Panama FP (WT/REG334/1/Rev.1, Table 1.1, p.7, data for 2009), 
WTO Statistics Database (2012-2013 Services) and UNCTAD (2012-2013 FDI). 
 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The United States-Panama Trade Promotion Agreement (the Agreement) was signed by the 
United States and Panama on 28 June 2007 and it entered into force on 31 October 2012. Panama's National Assembly approved the Agreem ent on 11 July 2007. Although not part of the 
Agreement, the Parties continued to hold discussions on certain topics such as labour and tax 
transparency issues during the period after signature and before passage by the United States Congress.
5 
2.2.  The Parties notified the goods and serv ices aspects of the Agreement to the WTO on 
29 October 2012 as an agreement forming a free tr ade area under Article XXIV:7(a) of GATT 1994 
and the Understanding on the Interpretation of Article XXIV of GATT 1994, and under GATS Article V:7(a) as an agreement liberalising trade in services.
6 The Agreement is comprised of 
22 Chapters and three Annexes.7 It also includes a number of side letters relating to various 
Chapters. The provisions of Article 22.1 state that the Annexes, Appendices, and footnotes constitute an integral part of the Agreement.  Many parts of the Agreement mirror WTO GATT, 
GATS, and TRIPs disciplines, and some provisions  go beyond WTO obligations. In addition the 
                                               
5 "The United States-Panama Trade Promotion Agreement", J.F. Hornbeck, CRS Report RL32540. 
6 WT/REG324/N/1. 
7 The texts of the Agreement can be  found on the following websites: http://www.ustr .gov/trade-
agreements/free-trade-agreem ents/panama-tpa/final-text  and 
http://www.mici.gob.pa/detalle.php?cid=15&sid=57&clid=173&id=3815 . WT/REG324/1 
 
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  Agreement covers issues beyond the current multilateral framework, such as labour and 
environment. The main provisions governing goods are in Chapters 3 through 8; services aspects 
(including investment aspects, GATS mode 3) are mainly covered in Chapters 10 through 13. The Agreement also covers government procurement, electronic commerce, intellectual property 
rights, labour, environment, dispute settlement,  transparency, and trade capacity building. 
(Table 2.1)  
Table 2.1 Chapters, annexes and side letters of the Agreement  
Chapters and annexes Title/Description 
Preamble  
Chapter 1 Initial Provisions  
Chapter 2 General Definitions  
Chapter 3  National Treatment and Market Access for Goods 
Chapter 4 Rules of Origin and Origin Procedures 
Chapter 5 Customs Administration and Trade Facilitation 
Chapter 6 Sanitary and Phytosanitary Measures 
Chapter 7 Technical Barriers to Trade 
Chapter 8 Trade Remedies 
Chapter 9 Government Procurement 
Chapter 10 Investment 
Chapter 11 Cross-Border Trade in Services 
Chapter 12 Financ ial Services 
Chapter 13 Telecommunications 
Chapter 14 Electronic Commerce 
Chapter 15 Intellectual Property Rights 
Chapter 16 Labor 
Chapter 17 Environment 
Chapter 18 Transparency 
Chapter 19 Administration of the Agreement and Trade Capacity 
Building 
Chapter 20 Dispute Settlement 
Chapter 21 Exceptions 
Chapter 22 Final provisions 
Annex I Non-conforming measures fo r services an d investment  
Annex II Non-conforming measures fo r services an d investment  
Annex III Non-conforming measures for financial services 
  
Side letters  Twelve side-letters on autos, ship repairs, ITA, Panama free  
 zones, Article 9.15, investment in specified sectors, retail sales, 
 cross-border financial services, insurance, pensions, traditional 
 knowledge, and taxation 
Source:  Trade Promotion Agreement between the United States and Panama. 
3  PROVISIONS ON TRADE IN GOODS 
3.1  National Treatment 
3.1.  Article 3.2 provides for national treatm ent on goods as per Article III of GATT 1994 by 
incorporation of Article III and its interpretive notes as an integral part of the Agreement. The provisions go further to clarify that national treatment at a regional level of government means 
treatment no less favourable than the most favourable treatment that regional level of government 
accords to any like, directly competitive, or subs titutable goods of the Party of which it forms a 
part. 
3.2.  Annex 3.2 provides specific exceptions to national treatment provisions. In the case of 
Panama, exceptions exist for importation of lottery tickets, controls on the importation of used vehicles, of video and other games providing cash prizes, export of wood from national forests, WT/REG324/1 
 
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  and actions authorised by the WTO Dispute Settl ement Body. For the United States, exemptions 
exist for measures, renewals, and amendments to the Merchant Marine Act of 1920, the Passenger Vessel Act, and 46 U.S.C. 12108; controls on the export of logs; and actions authorised by the 
WTO Dispute Settlement Body. 
3.2  Import duties and charges,  and quantitative restrictions 
3.2.1  Tariff elimination 3.3.  Article 3.3 and its Annex provide for the gradual elimination of nearly all tariffs in the 
respective tariff schedules of the Parties. According to the schedules listed in Annex 3.3 and the 
General Notes to the Schedules, there are 12 different possible staging categories for the United States and 21 for Panama. In addition to the categories of already duty-free and immediately duty-free upon implementation, many of the duties will be removed in equal annual 
reductions over a period of years, and some othe r duties will be subject to non-linear phase outs 
and maintained at a certain level for a period of time before being reduced or eliminated. The first tariff reduction or elimination occurred upon the entry into force of the Agreement on 
31 October 2012, and subsequent tariff reductions will occur on 1 January of each successive year. 
The provisions of Article 3.3 also allow for acceleration of the elimination of duties after notification, consultation and agreement. A tariff can be raised to the level in the schedule 
following a unilateral reduction or as authorised by the WTO Dispute Settlement Body. 
3.4.  The Agreement provides that duties on nearly  all products will be eliminated upon entry into 
force of the Agreement or reduced over a maximum period of 17 years for the United States and a maximum period of 20 years for Panama. Tables 3.1A and B show tariff elimination under the 
Agreement by the United States and Panama respectively. At the entry into force of the 
Agreement in 2012, the United States eliminated tariffs on 6,408 lines for imports from Panama, in addition to those already duty free on an MFN basis (3,865 lines).
8 Following ten years of 
implementation by 2021, an additional 50 lines ar e to become duty free for imports from Panama, 
and by 2028, nearly all products will have duty-free status from Panama. The United States will not eliminate all tariffs by the end of implementa tion, as out-of-quota tariffs on sugar and sugar-
containing products will remain in place. There are three tariff rate quotas for sugar and sugar-
containing products U.S. Appendix I, paragraph 6, subparagraphs (a), (e), and (h). The first TRQ grows annually at 5 metric tons continually, the second grows annually by 60 metric tons until year 10 (2012) and then remains at 6,600 metric tons, and the third remains at 500 metric tons 
annually. While 61% of Panamanian exports achieved duty-free status upon entry into force 
(excluding those lines that are MFN duty free), it is noted that the majority of Panamanian exports benefitted from U.S. unilateral preference programmes before the Agreement came into force and 
the Agreement strengthened that treatment. Panama provided MFN duty-free treatment for 
2,971 lines prior to the Agreement entered into force in 2012.
9 Upon entry into force of the 
Agreement, it increased duty-free treatment for th e United States by 3,800 lines. Following ten 
years of implementation by 2021, an additional 1,808 lines are to become duty free for imports 
from the United States, and by 2031, nearly al l products will have duty-free status from the 
United States. Panama will not eliminate all tariffs  by the end of implementation, as out-of-quota 
tariffs on fresh and chilled onions and fresh and chil led potatoes will remain in place. Both of these 
tariff rate quotas' in-quota volumes will grow by a set annual amount until year 15 and then the 
in-quota quantities will increase by 2 percent of th e previous year's in-quota quantity continually. 
Panama will also not eliminate the duties on imports of different types of salt in bags of more than 
five pounds. 
3.5.  Forty-eight U.S. tariff lines that do not achiev e full duty or quota elimination are all subject to 
the sugar and sugar-containing products TRQs. (see section 3.6.1.1 below on TRQs). In essence, if 
the quota levels are not exceeded, the product enters  duty-free. However, if the quota quantity is 
exceeded, the MFN rates are applicable. The sugar and sugar containing TRQs, unlike all the other 
U.S. TRQs, are never eliminated after a period of time. Chart 3.1 below therefore shows only the out-of-quota duty rates applicable to sugar and sugar-containing product imports from Panama 
                                               
8 The United States' MFN applied tariff at the HS 8-digit level contains 10,513 lines of which 89% are 
ad valorem  rates of duty. Of the remainder 693 have specific duties, 349 compound and 7 are mixed. 
9 Panama's MFN applied tariff at the HS 8-digit level contains 8,798 lines of which 99.7% are 
ad valorem . 28 lines have specific rates of duty. WT/REG324/1 
 
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  which are equivalent to the MFN duty and to which Panamanian products above the quota to the 
United States would be subject. The same princi ple and treatment applies to the two Panamanian 
tariff lines included in the fresh and chilled onions (HS07031000) and fresh and chilled potatoes (HS0719000) TRQs, and the five tariff lines for types of salt (HS25010010; HS25010020; 
HS25010030; HS25010091; HS25010099) where the phase out of the duty only applies to bags of 
five pounds or less. 
Table 3.1 Tariff elimination commitments under the Agreement and corresponding 
average trade 
A. United States  
Duty phase-out 
period Number of 
lines % of total lines in 
United States' 
tariff schedule Value of the United 
States' imports from 
Panama (2009-2011) 
in million USD % of the United 
States' total 
imports from 
Panama (2009-
2011) 
MFN Duty Free 
(2012) 3,865 36.8 184.5 88.5 
2012 6,408 61.0 23.9 11.5 
2016 6 0.1 0.0 0.0 
2021 45 0.4 0.0 0.0 
2026 88 0.8 0.0 0.0 
2028 51 0.5 0.0 0.0 
Remain dutiable 50 0.5 0.0 0.0 
Total 10,513 100.0 208.5 100.0 
Note:  For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculatio n of averages, specific rates are excluded and only the ad valorem  
components of alternate rates are included. 
 Based on HS 2012 nomenclature.  
Source: WTO estimates based on data provided by the United States.  
B. Panama 
Duty phase-out 
period Number of 
lines % of total lines in 
Panama's tariff 
schedule Value of Panama's 
imports from the 
United States (2009-
2011) in million USD % of Panama's total 
imports from the 
United States 
(2009-2011) 
MFN Duty Free 
(2012) 2,971 33.8 1,171.1 46.2 
2012 3,800 43.2 874.2 34.5 
2016 709 8.1 125.7 5.0 
2019 20 0.2 2.0 0.1 
2021 1,079 12.3 186.1 7.3 
2022 6 0.1 4.0 0.2 
2023 35 0.4 20.9 0.8 
2026 132 1.5 106.4 4.2 
2027 12 0.1 6.1 0.2 
2028 12 0.1 12.4 0.5 
2029 4 0.0 0.4 0.0 
2031 10 0.1 23.3 0.9 
Remain dutiable 8 0.1 1.6 0.1 
Total 8,798 100.0 2,534.1 100.0 
Note:  For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of av erages, specific rates are excluded.  
 Based on HS 2012 nomenclature.  
Source: WTO estimates based on data provided by Panama.  
3.6.  In addition to the tariff elimination prov ided for in Chapter 3 for products of the United 
States, Panama has agreed to further MFN tariff elimination pursuant to the provisions of a side 
letter from June 2007. The letter contains a commitment from Panama to become a full participant to the WTO Information Technology Agreement (ITA) prior to entry into force of the Agreement, WT/REG324/1 
 
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  thus agreeing to eliminate tariffs on certain IT products in the WTO on an MFN basis. Panama 
passed Cabinet Decree No. 15 of 22 May 2012 (Official Gazette 27042) implementing the ITA. 
3.7.  Before the entry into force of the Agreemen t, the United States had an average MFN tariff 
rate of 4.8%, and that of Panama was 7.8%. While most tariffs will be fully liberalised at the end 
of the implementation period, both Parties will maintain tariffs on certain products, mostly 
agricultural products. For Panama, certain vegetables (II) and mineral products (V), and for the United States, prepared foodstuffs (IV) and textiles (XI), which typically face longer staging as 
well. In the United States, the highest MFN tariffs are in the footwear (XII) and prepared foodstuffs 
sectors (IV), and for Panama in animals (I) and arms and ammunitions (XIX) (Tables 3.2 and 3.3). 
Table 3.2 United States: Tariff eliminat ion under the Agreement, by HS section 
HS 
Section MFN 
average 
% Total No. 
of lines MFN duty-
free 
(2012) Number of duty-free lines 
Remain 
dutiable Avg. Final 
Tariff 
Dutiable 
% 2012  2016  2021  2026  2028  
I 8.4 569 251 234   34 50   
II 3.9 558 150 404  1 3    
III 3.6 69 17 51   1    
IV 11.2 677 152 419 4 7 44 1 50 7.2 
V 0.6 204 151 53       
VI 3.5 1,714 530 1184       
VII 3.7 375 86 289       
VIII 4.3 220 42 178       
IX 2.4 240 138 102       
X 0.0 275 275        
XI 9.0 1,592 211 1,355  2 18 6    
XII 13.4 195 35 141  19     
XIII 5.2 298 99 199       
XIV 3.0 105 48 57       
XV 1.9 988 536 452       
XVI 1.7 1,348 698 650       
XVII 2.4 252 131 121       
XVIII 2.9 512 170 342       
XIX 1.9 33 18 15       
XX 3.6 282 120 162       
XXI 0.0 7 7        
Total 4.8 10,513 3,865 6,408  6 45 88 51 50 7.2 
Note:  For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculatio n of averages, specific rates are excluded and only the ad valorem  
components of alternate rates are included. 
 Based on HS 2012 nomenclature.  
Source: WTO estimates based on data provided by the United States.  
Table 3.3 Panama: Tariff elimination und er the Agreement, by HS section HS Section 
MFN 
average*  
Total No. 
of lines 
MFN duty-
free 
(2012) Number of duty-free lines 
Remain 
dutiable 
Avg. Final 
Tariff 
Dutiable* 2012 
2016 
2019 
2021 
2022 
2023 
2026 
2027 
2028 
2029 
2031 
I 21.4 507 39 319 25   34 1  4 59 10 12 4       
II 10.1 447 153 218 25 6 13 1 11 7       10 3 57.0 
III 8.5 71 21 20 2   6     22             
IV 12.1 594 91 292 64 14 63 4 20 44 2           
V 7.0 195 81 90 11   8               5 20.7 
VI 2.5 1,244 810 325 43   66                   
VII 3.8 452 259 89 29   75                   
VIII 12.0 115 3 67 5   40                   WT/REG324/1 
 
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HS Section 
MFN 
average*  
Total No. 
of lines 
MFN duty-
free 
(2012) Number of duty-free lines 
Remain 
dutiable 
Avg. Final 
Tariff 
Dutiable* 2012 
2016 
2019 
2021 
2022 
2023 
2026 
2027 
2028 
2029 
2031 
IX 7.7 171 55 51 16   49                   
X 8.0 376 134 131 49   62                   
XI 7.1 1205 443 755     7                   
XII 10.3 152 5 94 1   52                   
XIII 9.3 289 42 27 98   122                   
XIV 7.2 66 24 10 21   11                   
XV 7.4 897 323 181 199   194                   
XVI 4.8 1,059 274 680 57   48                   
XVII 5.7 346 169 103 18   56                   
XVIII 9.0 286 38 188 19   41                   
XIX 14.6 24   12     12                   
XX 11.2 293 3 146 27   117                   
XXI 7.2 9 4 2     3                   
Total 7.8 8,798 2,971 3,800 709 20 1,079 6 35 132 12 12 4 10 8 34.3 
* Duty rates in percentages  
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of av erages, specific rates are excluded.  
 Based on HS 2012 nomenclature.  
Source: WTO estimates based on data provided by Panama.  
3.8.  Table 3.4 and Chart 3.1 show the average of duties by HS Chapter for the Parties. For 
Panama, there are only 2 chapters (07 and 25) with 8 dutiable lines at the end of the 
implementation period (Table 3.4). While the aver age MFN and preferential rates for Chapter 7 are 
the same, the average preferential rate is around half that of the MFN rate for Chapter 25. In the 
case of the United States, most of the tariff lines  not achieving full duty or quota elimination are 
subject to one or more of the three sugar and sugar containing products TRQs. (See 
section 3.6.1.1 on TRQs) In all the Chapters th e average preferential rates are lower than the 
average MFN rates (Chart 3.1).  
Table 3.4 Panama: Average of dutiable rates, by HS Chapter 
Remain dutiable lines (PANAMA) 
Chapter Avg.  
MFN Rate (%)  Avg. Preferential Rate (%) 
07 57.0 57.0 
25 41.4 20.7 
Source: WTO estimates based on data provided by Panama.  WT/REG324/1 
 
- 14 - 
  Chart 3.1 United States: Average of  dutiable rates, by HS Chapter 
051015202530
17 18 19 21 22HS 01-97
MFN
Preferential
 
 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of averages, specific rates are excluded and only the ad-valorem  
components of alternate rates are included.  
 Based on HS 2012 nomenclature. 
Source: WTO estimates based on data provided by the United States.  
 
3.2.2  Non-tariff measures 
3.9.  Articles 3.8, 3.9, and 3.10 provide commitments for the Parties on import restrictions, import 
licensing, and administrative fees and formalities. These provisions follow and reinforce the WTO and GATT provisions on these subjects, i.e. Arti cles VIII and XI of GATT 1994 and the WTO Import 
Licensing Agreement. Article 3.8 directly incorpor ates Article XI of GATT 1994 into the Agreement 
and provides further understanding on the prohibition of import price requirements and import licensing conditioned on the fulfilment of a pe rformance requirement. Article 3.9 on import 
licensing reinforces the Parties' commitments under the Import Licensing Agreement and contains 
a provision on notifying existing and new import licensing procedures to the other Party. The 
provisions on administrative fees and formalities (Article 3.10) mirror the provisions of GATT Article VIII:1(a). In addition, there is a provision that no Party may require consular transactions, 
including related fees and charges, and each Party shall publish on the internet a current list of 
fees and charges it imposes on imports. The United States also undertakes a commitment to eliminate its Merchandise Processing Fee for originating goods of Panama. 
3.10.  The Annex 3.2 National Treatment exemptions (see para. 3.2 above) also apply as 
exceptions to the import prohibitions and restrictions, i.e. Article 3.8.1-3.8.4. 
3.2.3  Special provisions 3.11.  In addition to provisions on tariffs and non-tariff measures, Chapter 3 also provides for 
other commitments on temporary admission of good s, waiver of customs duties, goods re-entered 
after repair or alteration, and duty-free entry of commercial samples of negligible value and printed advertising materials. Article 3.4 prohibits a Party from waiving customs duties when the 
waiver is conditioned on the fulfilment of a performance requirement. For the temporary admission 
of goods, goods re-entered after repair or altera tion, and duty-free entry of commercial samples of 
negligible value and printed advertising materials, the Agreement provides that these shall be 
granted duty-free entry provided they  meet the criteria outlines in Articles 3.5, 3.6, or 3.7, as 
appropriate. 
3.12.  In addition, Article 3.12 provides for recognition of certain products as "distinctive 
products". This provision requires Panama to recognize Bourbon Whiskey and Tennessee Whiskey 
as distinctive products of the United States. Thus, Panama shall not permit the sale of any product WT/REG324/1 
 
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  as Bourbon Whiskey or Tennessee Whiskey unless it has been manufactured in the United States 
in accordance with the relevant U.S. laws and regulations. Article 3.12 also allows for consideration of designation of other distinctive products upon the request of a Party. 
3.3  Rules of origin 
3.13.  Rules of origin are outlined in Chapter 4 of the Agreement for most products, however 
specific exceptions to the general rules of origin, for textile and apparel, are contained in Article 3.25 of Chapter 3. The Agreement provides  for four main methods to confer origin: a) 
wholly obtained criteria, b) specific rules through change in tariff classification, c) regional value 
content methodology, and d) produced entirely in the territory of one or the other party exclusively from originating materials. The goods can be originating goods if they qualify through any one of the above four methods. 
3.14.  Annex 4.1 provides for the specific rules of origin that are applicable through the change in 
tariff classification method (tariff shift method) or for the regional value content method. The specific rules are delineated by HS section, chapter, heading, or sub-heading.  
3.15.  The regional value content methodology is described in Article 4.2 and provides two 
alternative methods to calculate regional value content (RVC): a) method based on value of non-originating materials, also known as the "bui ld-down method", and b) method based on value 
of originating materials, also known as the "b uild-up method". However, for automotive goods
10, a 
third method is used, known as the "net cost method". All three formulas for calculating the regional value content are defined in Article 4.2. 
3.16.  The other articles in the Rules of Origin chapter set out rules for valuing materials for 
determining RVC, accumulation, transit and transhipment, and de minimis . The rules for valuing 
the materials use three different methods depe nding on whether the material was imported, 
acquired by the producer in the territory where good is produced, or for materials that are self-
produced. The rules for de minimis  provide for a non-originating good to be originating if the value 
of all non-originating materials does not exceed 10% of the adjusted value of the good. A different de minimis rule applies to textile and apparel goods--that the non-originating textile or apparel 
product will be considered originating if the total weight of all fibre or yarns in the component is 
not more than 10% of the total weight of that co mponent. A list of certain exceptions to the de 
minimis rule is provided in Annex 4.6, which concerns only certain agricultural goods. 
3.17.  Specific rules or exceptions are also set ou t for certain types of good s, i.e., fungible goods 
and materials; sets of goods; accessories, spare parts, and tools; packaging materials and 
containers for retail sale; indirect materials used in production; and packing materials and containers for shipment. Section B of Chapter 4 sets out procedural aspects, i.e. claims for 
preferential treatment, exceptions, record keepin g requirements, verification, obligations relating 
to importations, obligations relating to exportations, common guidelines, and implementation. The provisions of Article 4.22 give Panama the right to delay application of certain provisions of 
Article 4.15.1 relating to electronic certification and importers knowledge of origination for claim of 
preferential tariff treatment, for a period no long er than three years after the entry into force of 
the Agreement. The chapter also has provisions for consultation and modification (Article 4.14) to 
ensure that the rules of origin are administer ed effectively, uniformly, and consistently. 
3.18.  Article 3.25.7 provides specific de minimis provisions for certain textile and apparel 
products. The rules comprise exceptions for de mi nimis, treatment of sets, and the treatment of 
nylon filament yarn. In addition, the rules allow for the use of certain non-originating goods listed 
in the Short-Supply List Annex 3.25 when it has b een determined that the items are not available 
in commercial quantities in a timely manner. The list currently has 43 textile items or categories of items, and the provisions of Article 3.25.4 allow for items to be added to the list.  
3.19.  Article 3.31 establishes a Committee on Trade in Goods comprising representatives of each 
Party and to administer matters arising from the im plementation of Chapters 3, 4, and 5, on trade 
                                               
10 HS headings and sub-headings: 8407.31 through 8407.34 (engines), 8408.20 (diesel engines for 
vehicles), 84.09 (parts of engines), 87.01 through 87.05 (motor vehicles), 87.06 (chassis), 87.07 (bodies), and 87.08 (motor vehicle parts). WT/REG324/1 
 
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  in goods, rules of origin and origin procedures, and customs administration and trade facilitation, 
respectively, that is to meet at the request of a Party or the Commission. Its functions shall be to promote trade in goods between the Parties, including through consultations on accelerating tariff elimination under the Agreement and any other matters as appropriate, addressing barriers to 
trade in goods between the Parties, especially no n-tariff measures, and if appropriate, referring 
such matters to the Free Trade Commission (FTC) for action, and providing the Committee on Trade Capacity Building advice and recommendat ions on technical assistance needs regarding 
matters relating to any of the three chapters under its authority. 
3.4  Export duties and charges,  and quantitative restrictions 
3.4.1  Duties and taxes 3.20.  The provisions of Article 3.11 prohibit any duties, taxes, or other charges on the export of 
any product to the territory of the other Party unless similar such charges are also applied for 
goods destined for domestic consumption.  
3.4.2  Fees and charges 
3.21.  The provisions of Article 3.10 require each  Party to make available through the internet a 
current list of fees and charges it imposes with respect to exportation. Furthermore, this Article requires each Party, in accordance with Article VIII:1(a) of GATT 1994, to ensure that fees or 
charges imposed on or in connection with exportation are limited in amount to the approximate 
cost of services rendered and do not constitute an indirect protection or taxation for fiscal purposes. 
3.4.3  Export restrictions 
3.22.  Article 3.8 incorporates rules on export restrictions. It incorporates Article XI of GATT 1994 
a s  a n  i n t e g r a l  p a r t  o f  t h e  A g r e e m e n t ,  t h u s  n o  P a r t y  m a y  a d o p t  o r  m a i n t a i n  a n y  p r o h i b i t i o n  o r  restriction on the exportation or sale for export of any good destined for the territory of the other 
Party. Article 3.8.2 goes further to proscribe that it is the Parties' understanding that the 
provisions of Article XI of GATT 1994 prohibit them from adopting or maintaining export price requirements, except as permitted in count ervailing and antidumping duty orders and 
undertakings, and voluntary export restraints inconsistent with Article VI of GATT 1994, as 
implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement. In the 
case of a Party maintaining an export restriction on goods exported to a non-Party, the provisions of Article
 3.8.3 allow conditions to be put in place to prevent re-exportation to a non-Party. 
3.23.  Annex 3.2 provides exceptions for both Parties with respect to the export restrictions, 
including, for the United States, controls on the export of logs of all species, and for Panama, certain measures relating to the export of  wood from national forests in Panama.  
3.5  Regulatory provisions on trade in goods 
3.5.1  Standards 3.5.1.1  Sanitary and phytosanitary measures 
3.24.  The provisions on SPS are in Chapter 6 of  the Agreement and contain three main elements: 
reaffirmation of the Party's rights and obligations under the WTO SPS Agreement, no recourse to dispute settlement under the Agreement for SPS matters, and the establishment of a Committee 
on Sanitary and Phytosanitary Matters.
11 The objectives of the Committee are to enhance each 
Party's implementation of the WTO SPS Agreement; assist each Party to protect human, animal, or 
plant life or health; enhance consultation and co-operation between the Parties on SPS matters; and facilitate trade between the Parties. It is ex pected to meet at least once a year unless the 
Parties otherwise agree otherwise and its decisi ons to be taken by mutual agreement of the 
Parties. It may also establish ad hoc working groups in accordance with its terms of reference. The 
                                               
11 Annex 6.3 indicates its composition. WT/REG324/1 
 
- 17 - 
 
  Agreement also contains a side letter on certain SPS matters, i.e. it provides additional details for 
certain meat and meat products including equiva lency aspects of the two parties' regulatory 
systems.  
3.5.1.2  Technical barriers to trade 
3.25.  Similar to the provisions on SPS, Chapter 7, concerning TBT matters contains the Parties' 
reaffirmation of their rights and obligations under the TBT Agreement and establishes a Committee on Technical Barriers to Trade. However, the TB T provisions go further and establish rules on 
conformity assessment, technical regulations, trade facilitation, transparency, and information 
exchange. The Chapter on TBT provisions does not apply to SPS measures nor to technical specifications prepared by government bodies for their own production or consumption requirements. 
3.26.  The provisions on TBT trade facilitation en vision initiatives on co-operation on regulatory 
issues, such as convergence, alignment with international standards, reliance on a supplier's declaration of conformity, recognition and acce ptance of results of conformity assessment 
procedures, and the use of accreditation to qualify conformity assessment bodies.  
3.27.  On the issue of conformity assessment, the Parties recognize that a range of mechanisms 
exist to facilitate the acceptance of the results of conformity assessment procedures in the 
territory of the other Party and they agree to intensify their exchange of information on these and 
other similar mechanisms. When a Party accredits, approves, licences, or otherwise recognises conformity assessment bodies in the territory of the other Party, it will do so on terms no less favourable than those it accords to those bodies on its own territory. 
3.28.  The transparency provisions allow for persons in each Party to participate in the 
development of its standards, technical regulati ons, and conformity assessment procedures on 
terms no less favourable than those accorded its own persons. Furthermore, in order to enhance 
awareness and transparency, when the Parties make a notification under Articles 2.9 or 5.6 of the 
WTO TBT Agreement, they will include additional information on the objective and rationale for the 
measure and simultaneously inform the other Part y of its notification. The Committee on Technical 
Barriers to Trade established by the Agreement shall, inter alia , monitor the implementation and 
administration of the Chapter, promptly address any issue raised by a Party on the development, 
adoption, application, or enforcement of standard s, technical regulations or conformity assessment 
procedures,  and hold consultations at the request of either Party, on matters concerning the 
Chapter or the WTO TBT Agreement.
12 The Committee shall meet at least once a year or as 
otherwise agreed by the Parties. 
3.5.2  Safeguard mechanisms 
3.5.2.1  Global safeguards 
3.29.  The Agreement, in Article 8.6, provides that each Party retains its rights and obligations 
under Article XIX of GATT 1994 and under the WTO Safeguards Agreement. No other rights or 
obligations are conferred on the Parties except that a Party invoking a safeguard measure may 
exclude imports of the other Party if such imports are not a substantial cause of serious injury or threat thereof. Furthermore, a Party cannot simultaneously apply a global safeguard measure and a bilateral safeguard measure under the Agreement on the same good. 
3.5.2.2  Bilateral safeguards 
3.30.  Chapter 8 of the Agreement provides for safeguard measures, and in particular a bilateral 
safeguard mechanism. The safeguard measure can only be applied during the transition period
13, 
to a good that is being imported into the Party' s territory in such increased quantities and under 
such conditions as to constitute a substantial cause of serious injury, or threat thereof. There are 
                                               
12 Its composition is given in Annex 7.8. 
13 The transition period is the 10-year period beginning on the date of entry into force of the 
Agreement; except for any good outlined in the Schedule to Annex 3.3 that has a transition period to eliminate its tariff that is more than 10 years, then th e longer tariff elimination period would apply. WT/REG324/1 
 
- 18 - 
  two options for the type of safeguard remedy: a) suspension of the further rate reduction for the 
duty provided in the Agreement, or b) increase th e rate of duty to a level not to exceed the lesser 
of the either the MFN applied rate of duty in effect at the time the measure is applied or in effect on the day preceding the entry into force of the Agreement. There are certain rules or procedures 
to follow if a Party proceeds with the imposition of a safeguard measure. There is the requirement 
to notify and consult if a party initiates a safeguard proceeding, makes a finding of injury, or takes a decision to apply or extend a safeguard measure. The investigation for a safeguard measure 
must take place by the Party's competent authorities and in accordance with Articles 3 and 4.2(c) 
of the WTO Safeguards Agreement.
14 The safeguard measure is also time limited. It may not be 
maintained beyond four years, including any extensions, and in no instance shall it go beyond the transition period. And finally, a Party that applies a safeguard measure must provide mutually 
agreed trade liberalizing compensation in the form  of concessions having substantially equivalent 
trade effects. 
3.5.2.3  Agricultural safeguards 
3.31.  Article 3.17 provides for safeguard mechanism for certain agricultural products as listed for 
each Party in Annex 3.17. The safeguard can be applied during any calendar year when imports exceed a certain trigger level which is described as a per cent of the TRQ level. (Tables 3.5 and 
3.6). The measure can only be applied during the tr ansition period, i.e., the tariff phase out period 
for the product, under the Agreement.  
3.32.  When a safeguard is applied, certain provisions apply. First, certain limits cannot be 
exceeded. The sum of the additional safeguard du ty and any other customs duty shall not exceed 
the lesser of: a) the base tariff provided in the schedule, b) the MFN rate in effect on the day 
preceding the Agreement's entry into force, or c) the prevailing MFN rate. Second, an agricultural 
safeguard cannot be applied at the same time as a global or bilateral safeguard. And finally, an 
agricultural safeguard can only be applied until the end of the calendar year in which it is imposed. 
Certain procedural aspects apply with respect to the agricultural safeguards as well, including transparency requirements. 
Table 3.5 Agricultural safeguards for Panama : products and trigger levels, and maximum 
duration of tariff increase
 
Product  Tariff line Trigger 
Level Increase by max 
100%   75%   50% 
of the difference of applicable rates MFN 
rate 
2012 
Beef, other than 
Prime and Choice Beef  02012000b, 
02013000b, 02022000b, 02023000b  330 mt  2012-2017  2018-2025 28.8% 
Pork  02031110, 
02031120, 
02031210, 
02031290, 
02031910, 
02031920, 
02031990, 
02032110, 
02032120, 
02032210, 
02032290, 
02032910, 
02032920, 
02032990, 
02101119, 
02101190, 
02101910, 
02101929, 
02101990, 
16024111, 
16024210, 
16024290, 16024919  130% of TRQ  2012-2020 2021-2023 2024-2025 66.5% 
                                               
14 Articles 3 and 4.2(a) of the WT O Safeguards Agreement are incorpor ated into and made an integral 
part of the Agreement, mutatis mutandis . WT/REG324/1 
 
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  Product  Tariff line Trigger 
Level Increase by max 
100%   75%   50% 
of the difference of applicable rates MFN 
rate 
2012 
Chicken leg 
quarters (bone in) 02071319c, 
02071419c  130% of TRQ  2012-2024 2025-2026 2027-2028 260% 
Fluid Milk 04011000, 
04012010, 
04012020,  
04012090, 
04013010, 04013021  110% of TRQ 2012-22  2023-25 53.3% 
Nonfat Dry Milk 04021091, 
04021092, 04021099, 04039022 
 110% of TRQ 2012-2024  2025-2027 35% 
Whole Milk Powder 04022191, 
04022199, 
04022991, 
04022999, 04039023  110% of TRQ 2012-2023  2024-2026 26% 
Yogurt  04031010, 
04031021, 04031022, 04031031, 04031032, 04031091, 04031099 
 110% of TRQ 2012-22  2023-25 16.4% 
Butter 
 04051000, 
04052010, 
04052090, 04059090  110% of TRQ 2012-22  2023-25 10% 
Cheddar Cheese  04039013, 
04069011, 04069019 
 110% of TRQ 2012-2023  2024-2026 30% 
Other Cheese 
 04061010, 
04061090, 
04062010, 
04062090, 
04063000, 
04064000, 
04069020, 04069090  110% of TRQ 2012-2024  2025-2027 21.3% 
Ice Cream  21050010, 
21050091, 21050099 
 110% of TRQ 2012-2023  2024-2026 15% 
Other Dairy 
Products 
 19011019, 
19019023, 
22029011, 22029019  110% of TRQ 2012-22  2023-25 15% 
Rough Rice  10061090  130% of TRQ 2012-2025 2026-2028 2029-2030 90% 
Milled Rice 
 10062000, 
10063000, 10064000  130% of TRQ 2012-2025 2026-2028 2029-2030 47.8% 
Certain Vegetable 
Oils 15079000, 
15121900, 15162090, 15179010, 15179090 
 4,500 mt 2012-2017  2018-2025 11% 
Refined Corn Oil  15152900  150% of TRQ  2012-2017  2018-2020 10% 
Processed Tomatoes 20029011, 
20029012, 20029019, 20029021, 20029029 
 150% of TRQ  2012-2017  2018-2025 34% 
Source: United States Panama Trade Promotion Agreement and information provided by the authorities.  
Table 3.6 Agricultural safeguards by the Unit ed States: products and trigger levels, and 
maximum duration of tariff increase 
Product  Tariff line Trigger 
Level Increase by max MFN rate 
2012 100%  
75% 50% 
of the difference of applicable 
rates 
Beef 02011050, 02012080, 
02013080, 02021050, 02022080, 02023080   330 mt  2012-2017  2018-2025 26.4% WT/REG324/1 
 
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  Product  Tariff line Trigger 
Level Increase by max MFN rate 
2012 100%  
75% 50% 
of the difference of applicable 
rates 
Condensed 
and 
evaporated 
Milk 04029170, 04029190, 
04029945, 04029955  
 115% of 
TRQ 2012-2024  2025-2027 40.5 cents/kg 
Select 
cheeses 04061018, 04061028, 
04061038, 04061048, 04061058, 04061068, 04061078, 04062028, 04062033, 04062039, 04062048, 04062053, 04062063, 04062067, 
04062071, 04062075, 
04062079, 04062083, 04062087, 04063018, 04063028, 04063038, 04063048, 04063053, 04063063, 04063067, 04063071, 04063075, 04063079, 04063083, 04063087, 04064070, 04069012, 04069018, 04069032, 04069037, 
04069042, 04069048, 
04069054, 04069068, 04069074, 04069078, 04069084, 04069088, 04069092, 04069094, 19019036  115% of 
TRQ 2012-2024  2025-2027 $1.619/kg 
Other 
cheeses 04061008, 04061088, 
04062091, 04063091, 
04069097  115% of 
TRQ 2012-2022  2023-2025 $1.509/kg 
Ice Cream 21050020  115% of 
TRQ 2012-2022  2023-2025 50.2 cents/kg 
+ 17% 
Source: United States Panama Trade Promotion Agreement and information provided by the authorities. 
 
3.5.2.4  Textile safeguards 
3.33.  As with the other safeguard clauses, the textile safeguard mechanism (Article 3.24) allows 
for a safeguard to be put in place only during the transition period and only if the good is being 
imported into the territory in such increased quantities to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good. The safeguard to be 
applied is the lesser of the MFN applied duty in effect at the time the measure is applied, or the 
MFN applied rate in effect on the date of entry into force of the Agreement. Certain procedural aspects also apply, such as the investigation by a competent authority, providing written notice, 
and the possibility of a consultation period of no longer than 60 days from the date of receipt of 
the request. A Party applying a safeguard measure may do so only for two years with a possible extension of one year, a safeguard measure can only be applied once to the same good. 
Furthermore, the Party must also provide compen sation in the form of concessions offering 
substantially equivalent trade effects. 
3.5.3  Anti-dumping and countervailing measures 3.34.  Article 8.8 in Chapter 8 on trade remedies, covers antidumping and countervailing 
measures. These provisions provide that each Party retains its rights and obligations under the 
WTO Agreement, and no provision of the Agreement, including the chapter on Dispute Settlement, shall be construed as imposing any rights or obligations on the Parties with respect to antidumping 
or countervailing duty measures. In addition, Panama retains certain rights under US law with 
respect to being designated as a "beneficiary country" under the Caribbean Basin Economic 
Recovery Act  for the purposes of the exception to cumulation for determining material injury. WT/REG324/1 
 
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  3.5.4  Customs-related procedures 
3.35.  Chapter 5 of the Agreement covers customs administration and trade facilitation. Some of 
the provisions of the chapter expand upon Articl es V, VIII, and X of GATT 1994, some of which is 
now contained in the WTO Trade Facilitation Agreement. Article 5.1 covers publication, especially 
publication on the internet of customs laws, re gulations, and procedures. Articles 5.2 and 5.3 
cover the expedited release of goods through the use of automation or information technology. It is foreseen that the Parties would provide for the release of goods within a period no greater than 
that required to ensure compliance with its cust oms laws, and to the extent possible release goods 
within 48 hours of arrival. The expedition of cu stoms procedures is further strengthened through 
Article 5.7 which provides special procedures for express shipments. 
3.36.  The Chapter also provides for the establishment of risk management systems for customs 
clearance, advance rulings, and cooperation. The cooperation provisions are aimed at enhancing 
compliance, improving the operation of the Agreem ent, and facilitating trade. Procedural aspects 
of customs are included with provisions for review and appeal, confidentiality, and penalties.  
3.37.  Certain provisions of this Chapter may be gradually implemented for Panama. There is a 
one-year delayed implementation period for prov isions on express shipments (Article 5.7); a 
two-year delayed implementation period for advance rulings (5.10), publishing laws and 
regulations on the internet (Article 5.1.1), and designating inquiry points and procedures 
(Article 5.1.2); and a three-year delayed implementation period for automation (Article 5.3) and risk management (Article 5.40).
15  
3.38.  The provisions of Article 5.11 pertain specifically to the Panamanian Free Zone Monitoring 
Program. This commits Panama to maintain its exis ting monitoring of imports, exports, processing, 
and manipulation of goods in Panamanian free zones. Further, the United States may make a request to Panama to investigate, visit, or provide information when it has a reasonable suspicion 
with respect to certain claims for preferential tariff treatment. 
3.6  Sector-specific provisions on trade in goods 3.6.1   Agriculture 
3.39.  Chapter 3, Section F contains provisions spec ific to agricultural products, as defined by the 
WTO Agreement on Agriculture, and additional provisions are also found in each Party's Appendix I. The provisions on agriculture include TRQ administration, export subsides, export state trading enterprises, agricultural safeguard meas ures (discussed above in section 3.5.2.3) and a 
sugar compensation mechanism.  
3.40.  The Agreement also establishes an agriculture review commission, and a committee on 
agricultural trade. The Agriculture Review Commission shall be established in the 14
th year 
following the entry into force of the Agreement to  review the implementation and operation of the 
Agreement as it relates to trade in agricultural  goods. It shall evaluate the effects of trade 
liberalization under the Agreement, the operation of Article 3.17 on agricultural safeguards, and 
possible extension of agricultural safeguards under that Article, progress towards agricultural trade 
reform in the WTO, and developments in global agricultural markets. The Commission shall report its findings to the Free Trade Commission established by the Agreement. 
3.41.  The Committee on Agricultural Trade shall be established not later than 90 days following 
the entry into force of the Agreement. It will monitor and promote cooperation on the 
implementation and administration of the provisions of Section F, facilitate trade in agricultural goods between the Parties, enable consultations between the Parties on matters relating to 
Section F in coordination with other committees, sub-committees, working groups or other bodies 
formed by the Agreement, address barriers to tr ade in agricultural goods, and undertake any 
additional work the Commission might assign. The Committee shall meet at least once a year 
unless it decides otherwise and all its decisions shall be by mutual consent.  
                                               
15 Date as from date of entry into force of the Agreement. WT/REG324/1 
 
- 22 - 
  3.6.1.1  Tariff Rate Quotas (TRQs) 
3.42.  Each Party has specified its agricultural TRQ provisions in its Appendix I to the Schedules in 
Annex 3.3. For the United States, there are five quota categories (select cheeses, other cheeses, condensed and evaporated milk, ice cream, and suga r) and for Panama there are 22 (pork, pig fat, 
certain processed pork products, chicken leg quarters (bone-in), fluid milk, nonfat dry milk, whole 
milk powder, yogurt, butter, cheddar cheese, other cheese, ice cream, other dairy products, fresh or chilled potatoes, fresh or chilled onions, drie d kidney beans, corn, rough rice, milled rice, 
refined corn oil, processed tomatoes, and frozen french fries. Any quantity of goods imported 
under a TRQ under the Agreement will not be counted toward the in-quota amount of any TRQ provided elsewhere in its national tariff schedule.  Appendix I for each party sets out the rates of 
duty and quantity limits by year. Annex 2, Tables  A2.1 and A2.2, of this factual presentation 
contain additional details on TRQs. Appendix I co ntains specific provisions and requirements for 
two of the allowed TRQ administration methodologies, i.e., an auction system, which is allowed for certain Panamanian TRQs (nonfat dry milk, whole milk powder, corn, rough rice, and milled rice) 
and a licensing system, which is allowed for certain other Panamanian TRQs (cheddar cheese, 
other cheese, and frozen french fries). 
3.43.  Article 3.14 of the Agreement covers TRQ administration and implementation. It reinforces 
applicable WTO provisions on this matter, in pa rticular Article XIII of GATT 1994 and the Import 
Licensing Agreement. Furthermore, the Parties sha ll ensure that their procedures for administering 
TRQs are transparent, made available to the public, timely, non-discriminatory, responsive to market conditions, and minimally burdensome to trade. Certain aspects shall not be undertaken by 
the Parties with respect to TRQ administration: allocating any portion to a producer group, 
conditioning access on purchase of domestic production, limiting access only to processors, including food aid or non-commercial shipments in the TRQ quantity, and conditioning application 
for a TRQ on the re-export of an agricultural pr oduct. Furthermore, only government authorities 
are allowed to administer TRQs and each party shall make every effort to administer TRQs in a manner that allows importers to fully utilise them. 
3.6.1.2  Sugar mechanism 
3.44.  A special provision on sugar products is provided for in Article 3.18 which gives the 
United States the option to compensate Panama's  sugar exporters in lieu of providing duty-free 
treatment pursuant to the provisions of Appendix I. The compensation shall be equivalent to the 
estimated economic rents the exporters would have obtained on the exports. The United States 
shall make a notification at least 90 days before it exercises this option and shall enter into consultations if requested by Panama.  
3.6.1.3  Export subsidies 
3.45.  The provisions of Article 3.15 on export subsidies express the Parties' objective for the 
multilateral elimination of export subsidies, for agricultural products, under the WTO. Furthermore, 
export subsidies on agricultural goods destined for the territory of the other Party are prohibited 
under Article 3.15.2. An exception is provided in Article 3.15.3 in cases where a non-Party exports goods with the benefit of export subsidies to a Party, and that importing Party does not adopt agreed-on measures to counter the effect of such subsidized imports. In such a case, the 
exporting Party may apply an export subsidy on its exports of the good to the importing Party to 
the extent necessary to counter the trade-distorting  effect of subsidized exports of the good from 
the non-Party to the importing Party. 
3.6.1.4  Export state trading enterprises 
3.46.  With respect to export state trading enterprises, the Parties agree to work toward an 
agreement on export state trading enterprises in th e WTO that eliminates restrictions on the right 
to export, eliminates special financing granted to state trading enterprises that export a significant 
share of their country's total exports of an agri cultural good, and ensures greater transparency 
regarding the operation and maintenance of export state trading enterprises. WT/REG324/1 
 
- 23 - 
 
  3.6.2  Textiles and Apparel 
3.47.  Chapter 3 provides special provisions for textile and apparel articles. For the purposes of 
this Chapter, textiles and apparel are define d as those covered under the WTO Agreement on 
Textiles and Clothing, with the exception of those listed in Annex 3-30.16 The main provisions of 
Chapter 3 with regard to textiles and apparel are: customs cooperation, monitoring, the textile 
safeguard measure, rules of origin and relate d matters, and MFN and duty-free treatment for 
certain goods. The textile safeguard measures are discussion in section 3.5.2.4, and the textile 
rules of origin are discussed in section 3.3.  
3.48.  Article 3.21 provides for cooperation between the Parties on enforcement, circumvention, 
and ensuring the accuracy of claims of origin. For the purposes of cooperation, a Party may request the exporting Party to conduct a verification to determine the accuracy of a particular 
claim of origin, or that an exporter or producer is complying with applicable customs laws or 
regulations. Articles 3.27-3.29 provide for duty-free treatment for certain hand-loomed fabrics, certain hand-made goods made of such fabrics, traditional folklore handicrafts, certain 
guayabera-style dresses and shirts, and certain socks.  
4  PROVISIONS ON TRADE IN SERVICES 4.1  Scope and definitions 
4.1.  The provisions for trade in services are mainly covered in Chapter 11, cross-border trade in 
services, however separate chapters exist for financial services (Chapter 12) and telecommunications (Chapter 13). Chapter 10 covers investment provisions, including investor-state dispute settlement (see section 4.3.5). For purp oses of the Agreement, cross-border trade in 
services covers the supply of a service: 
a. From the territory of one Party into the territory of another Party; 
b. In the territory of one Party by a person of that Party to a person of another Party; or 
c. By a national of a Party in the territory of another Party. 
4.2.  Furthermore, Article 11.1 clarifies that it covers the production, distribution, marketing, sale 
and delivery of a service; the purchase or  use of, or payment for a service; the  access to and use 
of distribution, transport, or telecommunications networks and services in connection with the 
supply of a service; the presence in its territory  of a service supplier of another Party; and the 
provision of a bond or other form of financial se curity as a condition for the supply of a service. 
4.3.  The provisions of Chapter 11 on cross-border trade in services do not apply to financial 
services, except as provided in Article 11.1.4(a); government procurement; air services, except for 
specialty air services and aircraft repair and maintenance services when an aircraft is withdrawn from service; and subsidies or grants. With respec t to subsides and grants, this exclusion does not 
exist in the GATS. While Chapter 11 covers cross-border trade, there is comparability with the 
GATS, but on the other hand certain sectors are not directly comparable due to differences in scope. 
4.4.  The provisions on cross-border trade in services cover measures adopted or maintained by 
central, regional, or local governments or authorities. It also covers non-governmental bodies if they have been delegated power from the gove rnment. The commitments on trade in services 
follows a "negative list" approach, in which certain sectors or measures are indicated in Annex I or 
II for each party as non-conforming, otherwise sectors or sub-sectors are presumed to be open to 
supply from persons of the other Party. 
                                               
16 Annex 3-30 lists 15 6-digit HS categories of products , including some footwear, hat, straps, and belts. WT/REG324/1 
 
- 24 - 
  4.2  Denial of benefits 
4.5.  Article 11.11 (services) and Article 10.12 (investment) cover denial of benefits. The 
provisions of denial of benefits for services and investments contain nearly identical text except that for investments, the denial of benefits covers not only the enterprise in question but also to 
its investments. A Party may deny benefits to an enterprise that is owned or controlled by persons 
of a non-Party, if the denying Party a) does not maintain diplomatic relations with the non-Party, or b) adopts or maintains measures with respect to the non-Party (including a person of a 
non-Party) that prohibit transactions or that would be violated or circumvented if the benefits were 
accorded. Furthermore, subject to the consultation  provisions of Article 20.4 and the notification 
provisions of Article 18.3, denial of benefits is also possible when an enterprise has no substantial business activities in the territory of the other Party and the enterprise is owned or controlled by a 
non-Party or of the denying Party. 
4.3  General provisions on trade in services and investment 4.6.  General provisions on trade in services are in Chapter 11. However, unlike GATS, which 
applies to government procurement except for national treatment, market access, and MFN 
provisions, the cross-border services trade Chap ter excludes completely government procurement 
from its scope. Article 11.7 provides transparency commitments that go beyond the general 
transparency provisions of Chapter 18 of the Ag reement and Article III of the GATS, for example, 
by requiring the Parties to establish mechanisms to respond to enquiries from any interested persons. 
4.7.  Chapter 10 on investment covers, in Section A, investment matters including MFN, national 
treatment, and non-conforming measure provisions, and in Section B, investor-state dispute 
settlement, and in Section C, additional provisions  and definitions. Chapter 10 provisions apply to 
measures adopted or maintained by a Party relati ng to investors of another Party, and covered 
investments.
17 An investment is defined as every asset that an investor owns or controls, which 
has the characteristics of an investment, including characteristics such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that 
an investment may take include an enterprise; sh ares, stock, and other forms of equity; bonds, 
debentures, and other debt; futures, options, and other derivatives; turnkey, construction, 
management, production, concession and revenue-sharing contracts; intellectual property rights; licenses, authorizations, permits, and similar rights; and other tangible or intangible, movable or 
immovable property and related property rights such as leases, mortgages, liens, and pledges. The 
provisions of the investment Chapter pertain to GATS mode 3 services. In case of inconsistency between Chapter 10 and any other Chapter, the other Chapter will prevail (Article 10.2).  
4.8.  Non-conforming measures have been under taken for services and investment, pursuant to 
the provisions of Article 10.13 for investment, and Article 11.6 for cross-border services. For investment, non-conforming measures may appl y for national treatment, MFN, performance 
requirements, and senior management and board of directors; and for services, national 
treatment, MFN, market access, and local presence. The Parties have listed their non-conforming measures in their respective parts of Annex I, for existing non-conforming measures subject to 
standstill provisions, or Annex II, for sectors, subsectors, or activities for which the Parties wish to 
maintain existing non-conforming measures, or adopt new or more restrictive non-conforming 
measures. 
4.3.1  Market access 
4.9.  Under Article 11.4, market access provisions provide that no Party may adopt or maintain 
certain limitations or measures on the supply of a service. The five limitations in the Agreement 
are the same as the first five outlined in GATS Article XVI:2, however the last market access 
provision in the GATS, i.e. limitations on the participation of foreign capital, is not part of 
Article 11.4. However, foreign equity participation, GATS Art. XVI.2(f), is achieved by Article 10.3 on national treatment in the investment chapter. 
                                               
17 With respect to Articles 10.9 and 10.11, the Chapter also applies to all investments in the territory of 
the Party. WT/REG324/1 
 
- 25 - 
 
  4.3.2  National treatment and MFN 
4.10.  The provisions of national treatment for se rvices are outlined in Article 11.2 and state that 
each Party shall provide the service suppliers of the other Party treatment no less favorable than it accords, in like circumstances, to its own service suppliers. This is unlike the GATS, which refers to 
like services and like services suppliers. Furt hermore, with respect to regional levels of 
government, a similar text is provided in which the treatment provided by a regional level of government shall be no less favorable than the most favorable treatment accorded, in like 
circumstances, by that regional level of government to service suppliers of the Party of which it 
forms a part. 
4.11.  Most-favored-nation treatment is provided for in Article 11.3 and states that each Party 
shall accord to service suppliers of the other Party treatment no less favorable than it accords, in 
like circumstances, to service suppliers of any other Party or any non-Party. 
4.12.  With regard to investment, Articles 10.3 and 10.4 cover national treatment and MFN 
treatment, respectively. National treatment prov isions provide that each Party shall accord 
investors/covered investments of the other Party treatment no less favorable than it accords its 
own investors/investments with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory. 
Furthermore with respect to a regional level of government, treatment no less favorable than the 
most favorable treatment accorded, in like circumstances, by the regional level of government to investors/investments of the Party of which it forms a part. 
4.13.  Article 10.4 on MFN treatment provides that each Party shall accord investors/covered 
investments treatment no less favorable than that it accords, in like circumstance, to 
investors/investments of any other Party or non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of 
investments. 
4.3.3  Local presence 4.14.  Article 11.5 covers local presence, whereby no Party may require a service supplier of 
another Party to establish or maintain a representative office or any form of enterprise, or to be 
resident, in its territory as a condition of cross-border supply. 
4.3.4  Movement of natural persons 4.15.  There are no specific articles on the movement of natural persons. However, Article 11.1:5, 
notes that Chapter 11 does not impose any obligation on the other Party with respect to a national 
of the other Party seeking access to its employment  market or employed on a permanent basis in 
its territory. There are no rights conferred on nationals with respect to access or employment. 
Article 11.1:7 states that no provision of the Agreement shall be construed to impose any 
obligation on a Party regarding its immigration measures, including admission or conditions of admission for temporary entry.  
4.3.5  Other provisions on investment 
4.16.  Other provisions in Section A concern rules on minimum standard of treatment, treatment 
in case of strife, expropriation and compensation, transfers, investment and environment, denial of benefits, performance requirements, senior management and board of directors, and special 
formalities and information requirements. 
4.17.  Section B on investor-state dispute settlement allows for consultation and negotiation in 
cases of an investment dispute. In the event that  a dispute cannot be settled through consultation 
and negotiation, the section provides procedures for arbitration of the dispute. Arbitration can be 
instituted when there has been a claim of brea ch of obligation under Section A, breach of 
investment authorization, or breach of an investment agreement, and a loss or damage has 
occurred by reason of the breach. The provisio ns on arbitration allow for three alternative 
routes-ICSID Convention and ICSID Rules of Procedures for Arbitration Proceedings, ICSID Additional Facility Rules, UNCITRAL Arbitration Rules, or under any other agreed arbitration WT/REG324/1 
 
- 26 - 
  rules or institution. However, recourse to ICSID is conditional on the partie(s) having a relationship 
with those conventions. Much of Section B is dedi cated to the specific procedural aspects of the 
arbitration such as submission, conduct, and transparency of arbitration processes. 
4.4  Liberalization commitments 
4.4.1  United States 
4.18.  Under the Agreement, the United States lists 11 reservations (at the national level) for 
existing measures, of which two are horizontal (Annex I). It also includes one horizontal 
reservation at the sub-federal level, under which it schedules an exception for all existing 
non-conforming measures of all states, the District of Colombia and Puerto Rico. The United States also lists seven reservations for sectors or activities in which current or future non-confirming measures may be maintained or adopted: two horizontal, four sector-specific (for communications, 
social services and maritime transportation services) and one non-sector specific reservation for 
minority affairs (Annex II).  
4.19.  As concerns horizontal measures, the United States has removed its GATS horizontal 
restriction (modes 1-3) concerning the imposition of differential treatment of excise taxes at the 
federal level under the Agreement. The United States retains an MFN exemption (as in the GATS) on the use of small business registration forms under the Agreement (except for Canadian 
issuers). It also reserves the right to adopt or maintain any measure (with respect to cross-border 
services and investment) that grants differential treatment to countries under an existing international agreement in force or signed prior to the date of entry into force of the Agreement, as well as under any future agreement involving aviation, fisheries or maritime matters, including 
salvage.  
4.20.  Compared to its GATS schedule, the United States' sector-specific commitments are broader 
and deeper. For instance, commitments in business services, communication services, 
environmental services, financial services, health related and social services, tourism and travel 
related services, and transport services are broa der under the Agreement. Table 4.1 compares the 
degree of liberalization by sector in the Agreement with that in the United States GATS schedule.
18 
Reservations at the sub-federal level that are included in the U.S. GATS Schedule are indicated in 
the Table. In the case of the Agreement, this  is not possible as sub-federal non-conforming 
measures are not listed (as noted above, the United States reserved the right to maintain all existing non-conforming measures of all states, the District of Colombia and Puerto Rico).  
4.21.  For business services, which are subject to  few restrictions in its GATS schedule, the 
United States expands sectoral coverage, including in delivery services. Under communication services, postal services, uncommitted in the GATS, have been fully liberalized. The United States 
retains its ownership restrictions on radio licences. The United States has scheduled an Annex II 
reservation with respect to MFN in the communication sector. Education and environmental services are fully liberalized under the Agreement,  as are the tourism and travel, and recreational, 
cultural, and sporting service sectors. Transport services are generally improved in the Agreement 
compared to the GATS, with improvements seen in maritime, air, space, rail, road, pipeline and other auxiliary transport services. In particular, aircraft repair and maintenance services are improved, and space, rail, road, and other transp ort services have full commitments under the 
Agreement. Improvements are also seen for postal  services, professional services, and insurance 
services. 
                                               
18 Bearing in mind the inherent difficulties in comparing commitments scheduled using a positive versus 
negative list approach. WT/REG324/1 
 
- 27 - 
 
  Table 4.1 United States: Sector-specific liberalization under the Agreement at the 
national level, excluding mode 4  
Sectors (W/120 Classification) GATS FTA 
Sectoral 
commitments 
(except as indicated 
in the horizontal 
commitments) Compared to 
the GATS, 
sectoral 
commitments  
(except as 
indicated in the 
FTA horizontal 
reservations): Sector-specific 
reservations (or 
provisions) 
specified in: 
1. Business services  Partial Improved Annex I 
A. Professional Services  Partial * Improved  
B. Computer and Related Services     Full Same  
C. Research and Development Services     No commitments Full  
D. Real Estate Services      Partial * Same  
E. Rental/Leasing Services without Operators    Partial Full  
F. Other Business Services  Partial * Improved  
2. Communication services  Partial Improved Annex I and II 
A. Postal services       No commitments Full  
B. Courier services       Partial Improved  
C. Telecommunication services  Partial Same a  
D. Audiovisual services Partial Same  
E. Other  No commitments Full  
3. Construction and related engineering services  Full Same --- 
A. General construction work for buildings    Full Same  
B. General construction work for civil engineering   Full Same  
C. Installation and assembly work     Full Same  
D. Building completion and finishing work    Full Same  
E. Other        Full Same  
4. Distribution services  Partial Improved --- 
A. Commission agents' services     Full Same  
B. Wholesale trade services      Partial Full  
C. Retailing services            Partial Full  
D. Franchising             Full Same  
E. Other  No commitments Full  
5. Education services  Partial Full --- 
A. Primary education services     No commitments Full  
B. Secondary education services     No commitments Full  
C. Higher education services      No commitments Full  
D. Adult education       Partial * Full  
E. Other education services      Partial * Full  
6. Environmental services  Partial Full --- 
A. Sewage services       Partial Full  
B. Refuse disposal services      Partial Full  
C. Sanitation and similar services     Partial Full  
D. Other Partial Full  
7. Financial services Partial Improved Annex III 
A. All insurance and insurance-related services   Partial * Improved  
B. Banking and other financial services Partial * Improved b  
C. Other  No commitments Full  
8. Health related and social services Partial Full --- 
A. Hospital services Partial * Full  
B. Other Human Health Services     No commitments Full  
C. Social Services       No commitments Full  
D. Other No commitments Full  
9. Tourism and travel related services  Partial Full --- 
A. Hotels and restaurants (incl. catering)    Full Same  
B. Travel agencies and tour operators services   Partial Full  
C. Tourist guides services      Partial Full  
D. Other   Full Same  
10. Recreational and cultural and sporting services  Partial Full --- 
A. Entertainment services  Full Same  
B. News agency services      Full Same  
C. Libraries, archives, museums and other cultural 
services Full Same  
D. Sporting and other recreational services    Partial Full   
E. Other  No commitments Full  
11. Transport services  Partial Improved Annex I and II 
A. Maritime Transport Services  No commitments Improved  WT/REG324/1 
 
- 28 - 
  Sectors (W/120 Classification) GATS FTA 
Sectoral 
commitments 
(except as indicated 
in the horizontal 
commitments) Compared to 
the GATS, 
sectoral 
commitments  
(except as 
indicated in the 
FTA horizontal 
reservations): Sector-specific 
reservations (or 
provisions) 
specified in: 
B. Internal Waterways Transport  No commitments Improved   
C. Air Transport Services  Partial Improved c  
D. Space Transport       No commitments Full  
E. Rail Transport Services  Partial * Full  
F. Road Transport Services Partial * Full  
G. Pipeline Transport  No commitments Improved  
H. Services auxiliary to all modes of transport  Partial  Improved  
I. Other Transport Services No commitments Full  
12. Other services not included elsewhere  No commitments Full --- 
* Sub-federal level commitments under the GATS are not taken in consideration for this comparison. 
a It is noted that the reservation pertaining to sa tellite transmission of direct-to-home and direct 
broadcasting satellite television services and digital audio services ar e generally covered as 
audiovisual services under the GATS. However, as the Parties have indicated these as communications services, they are thus covered as such for the purposes of this table. 
b Due to the differences in approach, i.e. negative versus positive list, an exact comparison is not 
possible. 
c The improvement in air transport services is in  aircraft repair and maintenance services. Other 
aspects of air transport services cannot be compar ed due to differences in scope between the GATS 
and the Agreement. 
4.4.2  Panama 
4.22.  Panama has listed 31 non-conforming measures in its Annex I, one of these relate to all 
sectors while 30 concern a variety of specific sectors. Eight different measures are listed by 
Panama in its Annex II, including two involving all sectors or cross-sectoral issues, and six relating to sector specific reservations (social services, native populations and minorities, activities related to the Panama Canal, construction, fisheries and serv ices incidental to fishing, and public supply of 
potable water).  
4.23.  Panama has generally improved liberalization under the FTA compared to its GATS 
commitments. Panama has the right to maintain or adopt MFN cross-border and investment 
restrictions on aviation, fisheries, and maritime matters. Restrictions also exist for many Panama 
Canal operations. 
4.24.  Table 4.2 provides an overview of the liberalization by sector, as compared to Panama's 
GATS commitments. In general, many sectors sh ow improvements over the GATS commitments, 
i.e. business, communication, distribution, environmental, financial, health, recreational and cultural, and transport services. There are still some restrictions with respect to construction and some tourism services. For construction, Panama maintains residency, registration, and local 
presence requirements. And for the Panama Canal, certain preferences are granted for 
Panamanian nationals over foreign nationals, an d requirements for enterprise operating there. 
Improvements are seen for environmental series and distribution services in which there are 
limited GATS commitments but nearly full comm itments under the Agreement, and significant 
improvements are seen in the communications sector. WT/REG324/1 
 
- 29 - 
 
  Table 4.2 Panama: Sector-specific liberalizat ion under the Agreement at the national 
level, excluding mode 4 
Sectors (W/120 Classification) GATS FTA 
Sectoral 
commitments 
(except as 
indicated in the 
horizontal 
commitments) Compared to the GATS, 
sectoral commitments  
(except as indicated in 
the FTA horizontal 
reservations): Sector-
specific 
reservations 
(or 
provisions) 
specified in: 
1. Business services  Partial Improved  
A. Professional Services  Partial Improved Annex I 
B. Computer and Related Services     Partial Full  
C. Research and Development Services     No commitments Full  
D. Real Estate Services      No commitments Full Annex I 
E. Rental/Leasing Services without Operators    Partial Full  
F. Other Business Services  Partial Improved Annex I 
2. Communication services     
A. Postal services       No commitments Full  
B. Courier services       No commitments Full  
C. Telecommunication services  Partiala  Improved Annex I 
D. Audiovisual services No commitments Improved Annex I 
E. Other  No commitments Full  
3. Construction and related engineering 
services    
  
 
A. General construction work for buildings    Partial Improvedb  Annex II 
B. General construction work for civil engineering  Partial Minus Annex II 
C. Installation and assembly work     Partial Minus Annex II 
D. Building completion and finishing work    Partial Minus Annex II 
E. Other        No commitments Improved Annex II 
4. Distribution services     
A. Commission agents' services     Full Full  
B. Wholesale trade services      Full Full  
C. Retailing services            No commitments Improved Annex I 
D. Franchising             Partial Full  
E. Other  No commitments Full  
5. Education services     
A. Primary education services     Partial Minus Annex I 
B. Secondary education services     Partial Minus Annex I 
C. Higher education services      Partial Improvedc  Annex I  
D. Adult education       No commitments Improved Annex I 
E. Other education services      No commitments Improved Annex I 
6. Environmental services     
A. Sewage services       No commitments Full  
B. Refuse disposal services      No commitments Full  
C. Sanitation and similar services     No commitments Full  
D. Other Partial Full  
7. Financial services    
A. All insurance and insurance-related services   Partial Improved Annex III 
B. Banking and other financial services Partial Improved Annex III 
C. Other    Annex III 
8. Health related and social services    
A. Hospital services Partial Full  
B. Other Human Health Services     No commitments Full  
C. Social Services       No commitments Full  
D. Other No commitments Full  
9. Tourism and travel related services     
A. Hotels and restaurants (incl. catering)    Partial Minus Annex I 
B. Travel agencies and tour operators services   Partial Improvedd  Annex I 
C. Tourist guides services      No commitments Full  
D. Other   No commitments Full  
10. Recreational and cultural and sporting 
services    
A. Entertainment services  Partial Improved  
B. News agency services No commitments Improved  
C. Libraries, archives, museums and other 
cultural services No commitments Improved  
D. Sporting and other recreational services    No commitments Same Annex I 
E. Other  No commitments Full  
11. Transport services     
A. Maritime Transport Services  No commitments Improved Annex I and II 
B. Internal Waterways Transport  No commitments Full  
C. Air Transport Services  Partial Improved Annex I 
D. Space Transport       No commitments Full  WT/REG324/1 
 
- 30 - 
  Sectors (W/120 Classification) GATS FTA 
Sectoral 
commitments 
(except as 
indicated in the 
horizontal 
commitments) Compared to the GATS, 
sectoral commitments  
(except as indicated in 
the FTA horizontal 
reservations): Sector-
specific 
reservations 
(or 
provisions) 
specified in: 
E. Rail Transport Services  No commitments Full  
F. Road Transport Services No commitments Improved Annex I 
G. Pipeline Transport  No commitments Full   
H. Services auxiliary to all modes of transport  No commitments Improved Annex I 
I. Other Transport Services No commitments Full  
12. Other services not included elsewhere  No commitments  Full  
a Value-added 
b Similar or some improvement 
c  Some improvement 
d  Some improvement 
4.5  Regulatory provisions  
4.5.1  Domestic regulation 4.25.  Article 11.8 is concerned with domestic regu lation. The provisions on this subject are similar 
to the GATS provisions (Article VI:3) and prov ide that the Party's competent authorities shall 
consider authorization for the supply of a service within a reasonable time and provide information 
concerning the status of the application. The meas ures on domestic regulation are not applicable 
to the non-conforming measures listed in the Annex II schedules. The Agreement makes provision 
for its future amendment should the negotiations on Article VI:4 of the GATS enter into effect, as 
well as any similar results undertaken in any other multilateral fora.  
4.26.  The domestic regulation provisions also recognize that qualifications and other requirements 
should not constitute unnecessary barriers to trade, as per GATS Article VI:4, and shall endeavor 
to ensure that the measures are based on objective and transparent criteria, not more burdensome than necessary, and, in the case of  licensing procedures, are not in themselves a 
restriction of the supply of the service. 
4.5.2  Recognition 
4.27.  The provisions on recognition in Article 11.9 largely mirror the GATS provisions as contained 
in GATS Article VII:1-3. Article 11.9:1 concerns itself with recognition (education, experience, 
requirements, licenses, or certifications) which may be achieved through harmonization or 
otherwise, and based on agreement, arrangement,  or accorded autonomously. Article 11.9:3 is 
concerned with providing adequate opportunity for the other Party to also enter into such a 
recognition agreement, arrangement, or autonomous recognition process. The provisions of 
Article 11.9:4 prevent discrimination or disguised restrictions in recognition, i.e. recognition should not be accorded in a manner that would constitute discrimination between countries in the application of its standards or criteria for the authorization, licensing, or certification of services 
suppliers. Additionally, Article 11.9:2 does not allow MFN application of recognition when a Party 
has accorded such recognition to a non-Party (see section on professional services for additional 
commitments regarding recognition). 
4.5.3  Subsidies 
4.28.  Under paragraph 4(d) of Article 11.1, provisions on cross border trade in services do not 
apply to subsidies or grants provided by a Party including government supported loans, guarantees 
and insurance. 
4.5.4  Safeguards 4.29.  There are no provisions on safeguards in trade in services in the Agreement. WT/REG324/1 
 
- 31 - 
 
  4.6  Sector specific provisions on trade in services 
4.30.  The following services sectors appear as separate Chapters or Annexes to Chapters and 
provide additional obligations that go beyond the general services provisions of the Agreement. In 
addition, they may also be subject to non-conforming measures, although financial services has its 
own list of non-conforming measures (see Financial services, non-conforming measures below). 
4.6.1  Express Delivery Services 4.31.  Article 11.12 contains specific commitments on express delivery services. It provides that 
express delivery services are subject to the Agreem ent. The parties seek to maintain at least the 
level of market openness that existed on the date  of signing of the Agreement, and Panama may 
not adopt or maintain any restriction not in existence on the date of signature. Other provisions include the prevention of abuse on monopoly suppliers and special provisions for Panama with 
respect to imposed fees or minimum prices. 
4.6.2  Professional Services 4.32.  Annex 11.9 to Chapter 11 provides for specific provisions on professional services. It 
contains two main provisions—development of prof essional standards and temporary licensing. It 
encourages the relevant bodies of the parties to develop mutually acceptable standards for licensing and certification of professional service suppliers with respect to the following matters: 
education, examinations, experience, conduct and ethics, professional development and re-
certification, scope of practice, local knowledge, and consumer protection. With respect to temporary licensing, it encourages the relevant bodies of each party to develop procedures for the temporary licensing of professional service suppliers. 
4.6.3   Financial Services 
4.33.  Chapter 12 on financial services specifically covers financial institutions, investors and 
investments in financial institutions, and cross-border trade in financial services. Because of the 
overlap with services and investment, certain aspects of those chapters (Chapters 10 and 11) are 
incorporated directly into the financial services chapter, or partially incorporated dependent upon certain conditions being met. The provisions of Chapter 12 cover core obligations of the GATS, 
i.e. national treatment, market access, MFN; and contain both positive and negative list 
approaches to specific sectors or sub-sectors. In addition, the Chapter covers commitments on transparency and administration, self-regulatory organizations, payment and clearing systems, [new financial services,] expedited availability of insurance services, and certain exceptions. A 
financial services committee is also established pursuant to Article 12.16. Articles 12.17, 12.18, 
and 12.19 are concerned with consultation and dispute settlement, including investment disputes. These provisions outline the relationship to other Chapters, in particular Chapter 20 (Dispute 
Settlement) and Chapter 10 (Investment), and the spec ific provisions or procedures that apply in 
the case of financial services when a dispute is invoked. The Chapter does not apply to measures adopted or maintained by a Party with respect to activities or services forming part of a public 
retirement plan or statutory system of social se curity. Annex 12.1.3(a) further elaborates on the 
understanding of the Parties with respect to public retirement plan/social security. 
4.6.3.1  Cross-border trade in financial services 4.34.  Article 12.5 and its Annex 12.5.1 provide commitments to permit persons located in its 
territory, and its nationals wherever located, to purchase financial services from cross-border 
financial service suppliers of the other Party located in the territory of the other Party, and also to permit, under terms and conditions that accord national treatment, cross-border financial service 
suppliers of the other Party to supply certain services. These services are specified in 
Annex 12.5.1.  
4.35.  For insurance and insurance-related services for Panama, cross-border supply includes 
insurance of risks relating to maritime shipping, commercial aviation, space launching and freight, 
and goods in international transit; reinsurance and retrocession; insurance intermediation; and services auxiliary to insurance. Panama's commitments to insurance of risk relating to commercial aviation shall be effective two years afte r the entry into force of the Agreement. WT/REG324/1 
 
- 32 - 
  4.36.  For banking and other non-insurance financial services, the commitments cover the transfer 
of financial information, financial data processing and related software, and advisory and other auxiliary financial services, excluding intermediation.  
4.6.3.2  Specific Financ ial Services Commitments 
4.37.  Article 12.9 and its Annex 12.9.2 provide for additional specific commitments on financial 
services. For both parties, specific commitments are undertaken with respect to portfolio management. A financial institution outside its territory is allowed to provide investment advice 
and portfolio management services to a collective investment scheme located in its territory. 
Exemptions exist for custodial services, trustee services, and execution services. 
4.6.4  Non-conforming measures  4.38.  As with the other service sectors, the Agreement provides for the exclusion of certain 
sectors or sub-sectors of financial services for each Party in Annex III. Certain restrictions on 
national treatment, MFN, market access, cross-bo rder trade, or senior management and board of 
directors may apply to certain financial sectors at the central, regional, or local levels of 
government. The provisions on non-conforming measures apply to any existing non-conforming 
measure that is maintained by a Party; the continuation or prompt renewal of an existing non-conforming measure; and an amendment of an existing non-conforming measure. 
4.39.  The United States has fourteen such non-conforming measures listed for banking and other 
financial services and four for insurance (Table 4.2); and Panama has one non-conforming measures for banking and other financial services , two for insurance (including reinsurance), and 
one for insurance and banking services (Table 4.3). 
Table 4.3 Non-conforming measures with re gard to financial services listed by the 
United States in Annex III 
Sub-Sector Obligations Description 
Banking and other 
financial services 
(excluding insurance) S M B D  A l l  d i r e c t o r s  o f  a  n a t i o n a l  b a n k  m u s t  b e  U S  c i t i z e n s ,  e x c e p t  t h a t  t h e  
Comptroller of the Currency may waiv e the citizenship requirement for not 
more than a minority of the total number of directors. 
Banking and other 
financial services 
(excluding insurance) NT/MA Foreign ownership of Edge corporations is limited to foreign banks and US 
subsidiaries of foreign banks, while domestic non-bank firms may own 
such corporations. 
Banking and other 
financial services (excluding insurance) NT/MA Federal and state laws do not permit a credit union, savings bank, or 
savings association (both of the latter two entities may also be called thrift institutions) in the United States to be established through branches of corporations organized under a foreign country's law. 
Banking and other 
financial services 
(excluding insurance) NT/MA In order to accept or maintain domestic retail deposits of less than 
$100,000, a foreign bank must establish an insured banking subsidiary. 
This requirement does not apply to  a foreign bank branch that was 
engaged in insured deposit-taking activities on December 19, 1991. 
Banking and other 
financial services (excluding insurance) NT Foreign banks are required to register as investment advisers under the 
Investment Advisers Act of 1940 to engage in securities advisory and investment management services in the United States, while domestic banks (or a separately identifiable department or division of the bank) do not have to register unless they advise registered investment companies. The registration requirement involves record maintenance, inspections, submission of reports and payment of a fee. 
Banking and other 
financial services 
(excluding insurance) NT Foreign banks cannot be members of the Federal Reserve System, and 
thus may not vote for directors of a Federal Reserve Bank. Foreign-owned 
bank subsidiaries are not subject to this measure. 
Banking and other 
financial services 
(excluding insurance) MA The United States undertakes no commitment with respect to 
Article 12.4(b) in relation to the expansion, via the establishment of a 
branch or the acquisition of one or more branches of a bank without acquisition of the entire bank, by a foreign bank into another state from its "home state," as that term is defined under applicable law. Except as provided elsewhere in this Schedule, such expansion shall be accorded on a national treatment basis in accordance with headnote 2(a). WT/REG324/1 
 
- 33 - 
 
  Sub-Sector Obligations Description 
Banking and other 
financial services 
(excluding insurance) MA Interstate expansion by a foreign bank through the establishment of 
branches by merger with a bank located outside the "home state," as that 
term is defined under applicable law, of a foreign bank shall be accorded 
on a national treatment basis in accordance with headnote 2(a), except as 
provided elsewhere in this Schedule. 
Banking and other 
financial services (excluding insurance) NT/MA Establishment of a federal branch or agency by a foreign bank is not 
available in the following states that may prohibit establishment of a branch or agency by a foreign bank: a) Branches and agencies may be prohibited in Alabama, Kansas, Maryland, North Dakota, and Wyoming; b) Branches, but not agencies, may be prohibited in Delaware, Florida, Georgia, Idaho, Louisiana, Mississippi, Missouri, Oklahoma, Texas, and West Virginia. Certain restrictions on fiduciary powers apply to federal agencies. 
Banking and other 
financial services 
(excluding insurance) MFN/MA The authority to act as a sole trustee of an indenture for a bond offering 
in the United States is subject to a reciprocity test. 
Banking and other financial services (excluding insurance) MFN/MA Designation as a primary dealer in US government de bt securities is 
conditioned on reciprocity. 
Banking and other 
financial services 
(excluding insurance) MFN A broker-dealer registered under US. law that has its principal place of 
business in Canada may maintain its required reserves in a bank in 
Canada subject to the supervision of Canada. 
Banking and other financial services (excluding insurance) NT The United States may grant advant ages, including but not limited to the 
f o l l o w i n g ,  t o  o n e  o r  m o r e  o f  t h e Government-Sponsored Enterprises 
(GSEs) listed above: a) capital, reserves, and income of the GSE are exempt from certain 
taxation; b) securities issued by the GSE are exempt from registration 
and periodic reporting requirements und er federal securities laws; c) the 
US Treasury may, in its discretion, purchase obligations issued by the GSE. 
Banking and other 
financial services 
(excluding insurance) NT/MFN/MA/
SMBD All existing non-conforming measures of all states, the District of 
Columbia, and Puerto Rico. 
Insurance CB/NT Branches of foreign insurance companies are not permitted to provide 
surety bonds for US Government contracts. 
Insurance CB/NT When more than 50 % of the value of a maritime vessel whose hull was 
built under federally guaranteed mortgage funds is insured by a non-US 
insurer, the insured must demonstrate that the risk was substantially first 
offered in the US market. 
Insurance NT/MFN/CB/
SMBD All existing non-conforming measures of all states, the District of 
Columbia, and Puerto Rico. 
Insurance MA The United States reserves the right to adopt or maintain any measure 
that is not inconsistent with the United States' obligations under 
Article XVI of the GATS. 
Note: CB: Cross-border trade restriction; MA: Mark et access for financial in stitutions restriction; 
MFN: Restriction to MFN treatment; NT: National treatment restriction; SMBD: Restrictions affecting senior management and boards of directors. 
Source: The Free Trade Agreement between th e United States and Panama, Annex III. 
Table 4.4 Non-conforming measures with rega rd to financial services listed by Panama 
in Annex III 
Sector Obligations Description 
Banking and other 
financial services (excluding insurance) NT Panamanian branches of foreign banks must designate at least two general 
proxies, both of whom must be individuals who are residents of Panama. One of the two proxies must also be a Panamanian national. 
Insurance companies,  
Administrators of 
insurance 
enterprises,  
Insurance brokers or 
adjustors NT/CB/SMBD All property and persons in the territory of Panama, if insured, must be 
insured by insurance companies authorized to operate in Panama. A waiver 
of this requirement is available from the Insurance and Reinsurance 
Supervisory Board in the event insurance cannot be obtained in the 
Panamanian market. Panama agrees that, on entry into force of this 
Agreement, nationals and enterprises of the United States may supply 
financial services described in Annex 12.5.1 (Cross-Border Trade). For 
greater certainty, paragraph 1(c) of that Annex applies only with respect to 
the services indicated in paragraph 1(a) and (b) of the Annex that are 
supplied outside the territory of Panama. Independent loss adjuster services 
covered by paragraph 1(d) of Annex 12.5.1 may be provided on a 
cross-border basis only for the services indicated in paragraph 1(a) and (b) 
of that Annex that are supplied outside the territory of Panama.  WT/REG324/1 
 
- 34 - 
  Sector Obligations Description 
  Only an individual described in the entry at I-PA-1 in Panama's Schedule to 
Annex I may be licensed as an insurance broker in Panama. At least 49% of 
the shares of a legal person operating as an insurance brokerage enterprise 
in Panama must be owned by Panamanian nationals licensed as insurance 
brokers in Panama. The legal representative of such an enterprise must be a 
Panamanian national licensed as an insurance broker in Panama. 
Reinsurance or 
Underwriting Entities, Administrators of Reinsurance,  Reinsurance Brokers SMBD Companies authorized to engage in the reinsurance business must designate 
at least two general proxies, both of whom must be individuals who are residents of Panama. One of the two proxies must also be a national of Panama. 
Insurance and 
Banking CB Only insurance companies and banks established in Panama that are in good 
standing with the Superintendency of Insurance or the Superintendency of 
Banks, as the case may be, may provide surety bonds or banking 
guarantees, respectively, that are associated with government procurement 
bids or contracts.  
Note: CB: Cross-border trade restriction; MA: Mark et access for financial in stitutions restriction; 
MFN: Restriction to MFN treatment; NT: National treatment restriction; SMBD: Restrictions affecting senior management and boards of directors. 
Source: The Free Trade Agreement between th e United States and Panama, Annex III. 
4.6.5   Telecommunications 
4.40.  Chapter 13 on telecommunications services applies to measures relating to access to and 
use of public communication services; measure relating to obligations of suppliers of public 
telecommunications services; other measures relati ng to public telecommunications networks or 
services; and measures relating to the supply of information services. Main provisions of the Chapter concern access to and use of public communication services, obligations relating to 
suppliers of public telecommunications services, and additional obligations for major suppliers of 
public telecommunications services. Major suppliers of public telecommunication services are defined as a supplier that has the ability to materially affect the terms of participation in the 
relevant market as a result of control over essentia l facilities or use of its position in the market. 
4.41.  The Party's shall ensure that enterprises of the other Party have access to and use of any 
public telecommunications service, including leased circuits, offered in its territory or across its 
borders, on reasonable and non-discriminatory terms and conditions. This provision of access is 
further clarified to ensure certain permitted access in certain areas, allow for security and confidentiality measures, and for the protection of privacy.  
4.42.  Obligations on all suppliers of public telecommunication services include provisions on 
interconnection, resale, and dialing parity. Additional obligations for major suppliers
19 include 
competitive safeguards, unbundling of network elements, co-location, provisioning and pricing of leased circuits services, access to poles, ducts, conduits, and rights-of-way, and additional 
commitments on resale and interconnection.  
4.43.  Additional telecommunications provisions of Chapter 13 include commitments on submarine 
cable systems, conditions of supply of informat ion services, independent regularly bodies and 
government-owned telecommunications suppliers, universal service, licenses and other 
authorizations, allocation and use of scarce resources, enforcement, resolution of telecommunications disputes, transparency, forbearance, and flexibility in the choice of technologies. 
4.44.  The Chapter does not apply to measures that a Party adopts or maintains with respect to 
broadcast or cable distribution of radio or television programming, except to ensure that they have continued access to public telecommunications services. Furthermore, the provisions of 
Annex 13.3 allow for the exemption of rural telephone suppliers in the United States.  
                                               
19 Certain provisions of Article 13. 4 for major suppliers do not apply to major suppliers of commercial 
mobile services. WT/REG324/1 
 
- 35 - 
 
  5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency and Anti-corruption 5.1.  The main transparency provisions are provid ed for in Chapter 18 of the Agreement, although 
many other chapters contain transparency or disclosure provisions in respect of specific trade 
issues. Chapter 18, Section A, on transparency provides for contact points to facilitate 
communication between the Parties; requires publication of laws, regulation, procedures, and administrative ruling on any matter covered by the Agreement; provides for notification and 
provision of information; outlines criteria with respect to administrative procedures; and 
establishes administrative or judicial tribunals for the review or appeal of matters covered under the Agreement. Section B, on anti-corruption matters, provides for the commitment to prevent and combat corruption, including bribery, in international trade and investment. The Parties agree 
to cooperate in international fora to combat corruption.  
5.2  Exceptions 5.2.  For the Chapters relating to trade in goods (Chapters 3 through 7) the WTO provisions of 
Article XX of GATT 1994 and its interpretive notes are made an integral part of the Agreement. A 
parallel situation exists for Chapters relating to services (Chapters 11, 13, and 14), in that Article XIV of the GATS is incorporated and made an integral part of the Agreement. Chapter 21, 
on exceptions, also provides exceptions for essent ial security, taxation measures, and disclosure of 
certain confidential business information. 
5.3  Accession and Withdrawal 5.3.  Chapter 22 does not provide any provisions for accession, but does provide for termination or 
withdrawal. The Agreement may be terminated by either party by written notification 
(Article 22.5), and the termination would become effective 180 days after the date of notification. 
5.4  Institutional framework 
5.4.  Chapter 19 of the Agreement covers admini stration of the Agreement and trade capacity 
building. The main institutional arrangement is the establishment of a Free Trade Commission, comprising cabinet-level representatives of the Parties or their designees. The Commission has 
general oversight and supervision of the Agreem ent and committees, councils and working groups, 
as well as having a role in solving disputes and establishing rules and procedures for dispute settlement. Article 19.2 establishes a free trade agreement coordinator for each Party to work jointly to develop agendas and make other preparations for Commission meetings and decisions. 
There are also Committees or working groups established under various chapters that form part of 
the overall institutional framework. 
5.5.  Section B of Chapter 19 establishes a Committee on Trade Capacity Building to seek the 
prioritization of trade capacity building projects, invite appropriate outside entities in the 
development and implementation of trade capaci ty building projects, work with committees or 
working groups in support of the development and implementation of trade capacity building 
projects, monitor and assess progress, and to report annually to the Commission. Further, in 
Section C, the parties recognise their commitment to a secure trading environment to promote trade security. 
5.5  Dispute settlement 
5.6.  Chapter 20 of the Agreement concerns the procedures, scope, forum, and institutional 
arrangements for the settlement of disputes. The Parties shall make every attempt through co-operation, consultation, and other means to arrive at a mutually satisfactory resolution to agree 
on the interpretation and application of the Ag reement. The provisions apply wherever a Party 
considers that an actual or proposed measure is or would be inconsistent with the Agreement, another Party has otherwise failed to carry out their obligations under the Agreement, or a benefit 
the Party could have reasonably expected to accrue to it under Chapters 3, 4, 5, 7, 9, 11, or 15 is WT/REG324/1 
 
- 36 - 
  being nullified or impaired.20 Article 20.3 gives the Parties the choice of forum for the dispute; they 
can use the provisions of the Agreement, the WTO Agreement, or under another free trade agreement in which the disputing Parties are party to. Most of Chapter 20 is devoted to the procedures to be followed in case of a dispute, which is summarised in Chart 5.1. Section B of 
Chapter 20 concerns domestic proceedings and private commercial dispute settlement. 
Chart 5.1 Synopsis of the Agreement's dispute settlement provisions
 
 
 
5.6  Relationship with other agreements concluded by the Parties 
5.7.  Under Article 1.3 of the Agreement, the Parties affirm their existing rights and obligations 
with respect to each other under the WTO Agreement and other agreements to which they are 
party. Articles VII and VIII of the Treaty betw een the United States and Panama Concerning the 
Treatment and Protection of Investments, with Annex and Agreed Minutes, signed on 27 October 
1982 shall be suspended upon entry into force of the Agreement, except for investments covered 
by the Treaty as of the date of entry into force of the Agreement, and disputes that arose prior to 
                                               
20 Does not apply to a benefit under Chapter 11 or 15  if subject to an exception under Article 21.1. 
(Art. 1802)
(Art. 1809.4)-
If no notice of implementation or no  
satisfactory solution (Art. 1811)
-4)Consultations  (Art. 20.4 ) 
Referral to the Commission (Art. 20.5 ) 
Panel selection (Art. 20.9) 
Rules of procedure  (Art. 20.10 ) 
Panel examination  (Art. 20.12 ) 
Panel final re port (Art. 20.13 ) 60 or 15 days (perishable 
goods)  
Request for Arbitral Panel 
(Art. 20.6 ) 60 or 30 da ys (perishable goods) 
Max 36 days for composition 
Panel initial report to be sent to 
the Parties  (Art. 20.12 ) 120 days 
30 da ys 
Report becomes public  (Art. 20.13 ) 15 da ys from Parties' release Implementation  
In agreement by the Parties (Art.  20.14)  
Non-implementation   
Negotiations on mutually acceptable 
compensation (Art. 20.15) 45 days from receipt of final 
report failure to reach 
Suspension of benefits  
(Art. 20.15) 
Compliance Review 
upon request from losing party   
(Art. 20.16 ) 30 days from notice to 
suspend benefits 
Five- year Review (Art. 20.17 ) 90 days from panel reconvention 
Monetary assessment  
(Art. 20.15) upon notice from the 
losing Party within: 
 30 days from notice of suspension; 
or 20 days from panel 
determination No sus pension 
Failure to pay monetary 
assessment WT/REG324/1 
 
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  the entry into force of the Agreement, for which these provisions shall remain in force for 
10 years. In addition Article VII of the Treaty sha ll not be suspended for disputes that arose on or 
after the entry into force of the Agreement for an investment agreement that was in effect before 
the entry into force of the Agreement.  
5.8.  Table 5.1 lists other notified and non-notified RTAs in force to which the United States and 
Panama are parties. 
Table 5.1 United States and Panama: Part icipation in other RTAs (notified and 
non-notified in force), as of 24 June 2016 
RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
UNITED STATES 
US - Colombia  15-May-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Republic of Korea - US 15-Mar-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
US - Peru 01-Feb-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
US - Oman 01-Jan-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
US - Bahrain 01-Aug-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Dominican Republic - Central 
America - United States Free Trade Agreement (CAFTA-DR) 01-Mar-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
US - Morocco 01-Jan-06 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
US - Australia 01-Jan-05 Goods & Services  2004 GATT Art. XXIV & GATS Art. V 
US - Singapore 01-Jan-04 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
US - Chile 01-Jan-04 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
US - Jordan 17-Dec-01 Goods & Services 2002 GATT Art. XXIV & GATS Art. V 
North American Free Trade 
Agreement (NAFTA) 01-Jan-94 Goods & Services 1993(G)  
1995(S) GATT Art. XXIV & GATS Art. V 
US - Israel 19-Aug-85 Goods 1985 GATT Art. XXIV 
PANAMA 
Mexico - Panama 01-Jul-15 Goods & Services 2016 GATT Art. XXIV & GATS Art. V 
EFTA - Central America  
(Costa Rica and Panama) 19-Aug-14* Goods & Services 2014 GATT Art. XXIV & GATS Art. V 
EU - Central America 01-Aug-13** Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Canada - Panama 01-Apr-13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Panama - Peru 01-May-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Panama - Nicaragua 
(Panama - Central America) 21-Nov-09 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Panama - Guatemala 
(Panama - Central America) 20-Jun-09 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Panama - Honduras 
(Panama - Central America ) 09-Jan-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Panama - Costa Rica 
(Panama - Central America) 23-Nov-08 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Panama - Chile 07-Mar-08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Panama - Singapore 24-Jul-06 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Panama - Chinese Taipei 01-Jan-04 Goods & Se rvices 2009 GATT Art. XXIV & GATS Art. V 
Panama - El Salvador 
(Panama - Central America) 11-Apr-03 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
Panama - Dominican Republic 08-Jun-87 Goods 2016 Enabling Clause 
CACM - Accession of Panama 06-May-13 Goods Not notified 
LAIA - Accession of Panama 03-May-12 Goods Not notified 
Panama - Cuba 
[LAIA, AAP.CE N°71] 20-Aug-09 Goods Not notified 
Colombia - Panama 
[LAIA, AAP.A25TM N°29] 01-Jan-95 Goods Not notified 
* Dates of entry into force: For Costa Rica, Pana ma and Norway: 19-Aug-14; For Costa Rica, Panama, 
Liechtenstein and Switzerland: 29-Aug-14; For Costa Rica, Panama and Iceland: 5-Sept-14. 
** The notifications made in February 2013 (see WT/R EG332/N/1 and S/C/N/680) stated that: "Provisional 
application of the Agreement by all si gnatory parties is expected in the course of the second quarter 2013"; WT/REG324/1 
 
- 38 - 
  Further notifications to confirm the dates of entry into force between the EU and Central American countries 
are awaited. 
Source: WTO Secretariat. 
5.7  Government procurement 
5.9.  Government procurement provisions are co ntained in Chapter 9 of the Agreement and apply 
to any measure of a Party regarding a covered proc urement; i.e. procurement of goods, services, 
or both: 
a. by any contractual means, including purchase, rental, or lease, with or without an option 
to buy, build-operate-transfer contracts, and public works concession contracts;  
b. for which the value, as estimated in accordance with paragraph 1 of Section I of 
Annex 9.1, equals or exceeds the relevant thresholds in Annex 9.1;  
c. that is conducted by a procuring entity; and  
d. that is not excluded from coverage. 
Certain provisions are specifically excluded from coverage, as outlined in Box 5.1. 
Box 5.1 Government procurement exclusions  
Items specifically excluded 
Non-contractual agreements or any form of assistance th at a Party, including a government enterprise, provides, 
including grants, loans, equity infusions, fiscal incentives, subsidies, guarantees, cooperative agreements, 
government provision of goods and services to persons or to state, regional, or local governments, and purchases 
for the direct purpose of providing foreign assistance 
Purchases funded by loans or grants made to a Party 
Acquisition of fiscal agency or depository services, liq uidation, and management serv ices for government debt 
Hiring of government employees and related employment measures 
A good or service component of any contract in wh ich the procuring entity is not listed in Annex 9.1 
Purchases made under exceptionally advantageous conditions that only arise in the very short term 
Source:  Chapter 9 of the United States-Panama Trade Promotion Agreement. 
5.10.  The Chapter contains the key principles of national treatment and non-discrimination, and 
also provisions on rules of origin, tendering procedures, publication and offsets. There are detailed 
rules for tendering, including the use of selective tendering, limited tendering, and the use of multi-use lists. 
5.11.  The United States is party to the WTO Government Procurement Agreement (GPA), while 
Panama has been an observer since September 1997. Annex 9.1 sets out the specific the coverage of government entities, thresholds that are applied, and exclusions. The United States' 
commitments are similar to its GPA commitments in the list of covered entities and notes to the 
schedule. The thresholds for sub-central levels of government are also similar, although a direct 
comparison is difficult given the units are not directly comparable.
21 The coverage of sub-central 
levels of government, i.e. US states, is significantly less in the Agreement compared to the GPA; 
there are commitments for eight states plus Puerto  Rico in the Agreement, and 37 in the schedule 
to the revised GPA. For Panama, the commitments in the Annex cover 16 entities at the federal level of government, 76 at the sub-central level, and 30 other covered entities. Each party 
excludes certain services sectors from coverage , as elaborated in Annex 9.1, Section F. For 
Panama, certain service sub-sectors in transport, postal, electric and water distribution, research and development, health and education, gambling, and telecommunications are not covered by the 
procurement provisions. The United States excludes certain services sub-sectors in research and 
development; maintenance, repair, modification, rebuilding and installation of goods/equipment; 
information processing and related telecommunications services (except for enhanced or value-
                                               
21 The thresholds are reported in SDRs in the GPA and USD in the Agreement. WT/REG324/1 
 
- 39 - 
 
  added services); operation of government-owned facilities; utilities; and transportation, travel, and 
relocation services. 
5.8  Intellectual property rights 5.12.  Article 15.1 of Chapter 15 commits the Parties to ratify or accede to a number of 
international agreements, these are: Convention Relating to the Distribution of 
Programme-Carrying Signals Transmitted by Satell ite, Budapest Treaty on the International 
Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure, WIPO 
Copyright Treaty, WIPO Performances and Phon ograms Treaty, Patent Cooperation Treaty, 
Trademark Law Treaty, and International Convention for the Protection of New Varieties of Plants. 
In addition, the Parties should make reasonable efforts to ratify and accede to: Patent Law Treaty, Hague Agreement Concerning the International Registration of Industrial Designs, and Protocol 
Relating to the Madrid Agreement Concerning the International Registration of Marks. Article 15.1 
also covers general provisions, national treatment and transparency. 
5.13.  The remaining 12 Articles consist of detailed provisions on subjects including trademarks, 
copyright and related rights, patents, geographical indications, domain names, and understandings 
regarding public health measures; often going beyond WTO rules and commitments. The provisions on enforcement are extensive, providing guidelines on civil and administrative 
procedures and remedies, border measures, crimin al procedures and remedies, and limitations on 
liabilities for service providers. 
5.14.  As concerns public health measures, Article 15.12 re-affirms the Parties' commitment to the 
Declaration on the TRIPS Agreement and Public Health.  
5.9  Other  
5.9.1  Electronic Commerce 5.15.  Chapter 14 covers provisions on electronic commerce, which includes trade in digital 
products.
22 The provisions of the chapter re-enforce the WTO moratorium on E-commerce in that 
no Party may apply customs duties, fees or othe r charges on the importation or exportation of 
digital products. However, the Agreement allows the Parties to impose internal taxes on domestic 
sales of digital products. The supply of services delivered electronically falls within the scope of 
those respective Chapters.23 Article 14.3 provides for the non- discriminatory treatment of digital 
products, both in terms of discrimination against ot her like digital products and vis-à-vis the other 
Party or non-Parties to the Agreement. This provision is subject to the reservations taken under 
non-conforming measures of Chapters 10, 11, an d 12. The Chapter also contains provisions on 
transparency and cooperation. 
5.9.2  Labour 
5.16.  The main provisions of Chapter 16 on Labor are the Parties reaffirmation of their obligations 
as members of the ILO; commitment to adopt and maintain in statutes and regulations and practices thereunder the fundamental labor rights as stated in the ILO Declaration on Fundamental 
Principles and Rights at Work and its Follow -Up (1998) (ILO Declaration); commitment to not 
waive or otherwise derogate from their labor laws; and commitment not to fail to effectively enforce their labor laws. With respect to enforcement of domestic labor laws, Article 16.4 provides for fair, equitable, and transparent proceedings before tribunals.  
5.17.  Chapter 16 also provides for the creation of a Labor Affairs Council to oversee the 
implementation of the provisions of the Ch apter and the Capacity Building Mechanism 
(Article 16.6), review progress, develop guidelines, prepare reports, and perform other functions 
as necessary. While the provisions on labour remain subject to the Agreement's dispute settlement 
procedures, the Parties must first follow the provisions of Article 16.7 on cooperative labour 
                                               
22 Digital products means comput er programs, text, video, images, sound recordings, and other 
products that are digitally encoded; but do not includ e digitized representations of financial instruments. 
23 Chapter 10 (Investment), Chapter 11 (Cross-Border Trade in Services), and Chapter 12 (Financial 
Services). WT/REG324/1 
 
- 40 - 
  consultations which require consultations followed by an option to call a meeting of the Council 
before invoking the provisions of Chapter 20. 
5.9.3  Environment 5.18.  Chapter 17 on the environment commits the Parties to adopt, maintain, and implement 
laws, regulations, and other measures to adhere to their obligations under the multilateral 
environmental agreements (MEAs).
24 The list of covered multilateral agreements may be modified 
to include other agreements. The Chapter contains a number of provisions on procedural matters 
and enforcement mechanisms.  
5.19.  The Parties agree to strengthen their co-ope ration on environmental issues and establish an 
Environmental Affairs Council to oversee the impl ementation of the provisions of the Chapter. 
There are also provisions to promote public participation and public awareness of environmental 
laws and the Parties also recognize the importan ce of strengthening capacity to protect the 
environment and to promote sustainable developm ent in concert with strengthening trade and 
investment relations.  
                                               
24 The MEAs are as follows: Convention on Internatio nal Trade in Endangered Species of Wild Fauna and 
Flora, Montreal Protocol on Substances that Deplet e the Ozone Layer, Protocol of 1978 Relating to the 
International Convention for the Prevention of Pollution from Ships, Convention on Wetlands of International 
Importance Especially as Waterfowl Habitat, Convention on the Conservation of Antarctic Marine Living Resources, International Convention for the Regulation of  Whaling, and Convention for the Establishment of an 
Inter-American Tropical Tuna Commission. WT/REG324/1 
 
- 41 - 
 
  ANNEX 1 
1. Tables A1.1 and A1.2 show a comparison between the scheduled elimination of tariffs 
applied to the Parties' mutual imports and MFN duti es, by total, agricultural and non-agricultural 
products, respectively for Panama and the United States. Table A1.1 shows that in 2012 when the 
Agreement entered into force, Panama's average applied MFN tariff was 7.8% of which 14.1% for 
agricultural products and 6.5% for non-agricultur al products. Around 33.8% of the tariff was duty 
free (22.5% for agricultural and 36% for non-agricu ltural products). Upon entry into force of the 
Agreement, exporters from the United States enjo yed a relative margin of preference of 60.3% 
overall, 48.2% and 64.6% for agricultural and non-ag ricultural products and the share of duty free 
tariff lines for imports from the United States increased to 77% overall, of which 67.6% and 78.8% respectively for agricultural and non-agricultural products. Following ten years of 
implementation, by 2021, the share of duty free tari ff lines for imports from the United States is 
expected to increase to 97.5% overall, 85.2% for agricultural products and 99.9% for non-agricultural products. At the end of implemen tation in 2031 (20 years from entry into force of 
the Agreement) 99.9% of the tariff overall is expe cted to be duty free for imports from the United 
States of which 99.8% for agricultural produc ts and 99.9% for non-agricultural products. 
Table A1.1 Panama: Indicators of MFN tariff  rates and preferential rates for imports 
from the United States. 
Origin 
of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Share of 
duty-free 
tariff 
lines (%)  Average applied 
tariff Share of 
duty-free 
tariff 
lines (%)  Average applied 
tariff Share of 
duty-free 
tariff 
lines (%)  Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2012 7.8  11.7  33.8  14.1  18.2  22.5  6.5  10.2  36.0  
United 
States 2012 3.1  13.6  77.0  7.3  22.6  67.6  2.3  11.0  78.8  
  2013 2.8  12.1  77.0  6.8  21.0  67.6  2.0  9.5  78.8  
  2014 2.4  10.5  77.0  6.3  19.5  67.6  1.7  7.9  78.8  
  2015 2.1  8.9  77.0  5.8  17.9  67.6  1.3  6.3  78.8  
  2016 1.7  11.2  85.0  5.3  21.6  75.6  1.0  7.5  86.9  
  2017 1.5  9.9  85.0  4.9  20.2  75.6  0.8  6.2  86.9  
  2018 1.2  8.3  85.0  4.5  18.3  75.6  0.6  4.7  86.9  
  2019 1.0  6.8  85.2  4.0  17.4  77.0  0.4  3.2  86.9  
  2020 0.7  5.1  85.2  3.5  15.1  77.0  0.2  1.6  86.9  
  2021 0.5  19.7  97.5  2.9  19.6  85.1  0.0  20.7  99.9  
  2022 0.4  16.9  97.6  2.4  16.8  85.5  0.0  20.7  99.9  
  2023 0.3  16.2  98.0  1.9  16.1  87.9  0.0  20.7  99.9  
  2024 0.3  12.5  98.0  1.5  12.3  87.9  0.0  20.7  99.9  
  2025 0.2  8.8  98.0  1.0  8.5  87.9  0.0  20.7  99.9  
  2026 0.1  20.1  99.5  0.6  20.0  97.1  0.0  20.7  99.9  
  2027 0.1  20.5  99.6  0.4  20.5  98.0  0.0  20.7  99.9  
  2028 0.1  23.5  99.7  0.3  24.3  98.8  0.0  20.7  99.9  
  2029 0.0  21.0  99.8  0.2  21.2  99.1  0.0  20.7  99.9  
  2030 0.0  18.1  99.8  0.2  17.2  99.1  0.0  20.7  99.9  
  2031 0.0  34.3  99.9  0.1  57.0  99.8  0.0  20.7  99.9  
a WTO Definition. 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of av erages, specific rates are excluded.  
 Based on HS 2012 nomenclature.  Source: WTO estimates based on data provided by Panama.  WT/REG324/1 
 
- 42 - 
  2. Table A1.2 shows that in 2012 when the Agreement entered into force, the United States' 
average applied MFN tariff was 4.8% overall, 8.7% for agricultural products and 4% for non-agricultural products. The share of duty fr ee lines for all imports was respectively 36.8% 
overall, 22.8% for agricultural products and 39.4% for non-agriculture. Upon entry into force of 
the Agreement, Panamanian exporters benefited fr om a relative margin of preference of 91.7% 
overall (70.1% and almost 100% respectively for agricultural and non-agricultural exports). The 
share of the duty free tariff increased to 97.7% overall and 87.9% and 99.6% for agricultural and 
non-agricultural products respectively. Followin g ten years of implementation, in 2021, the share 
of duty free lines is expected to rise to 98.2% overall, 88.8% for agricultural products and 100% 
for non-agricultural products. At the end of impl ementation in 2029 (18 years after entry into force 
of the Agreement) 99.5% of the United States' tari ff is expected to be duty free for imports from 
Panama, with 97% and 100% respectively of agricultural and non-agricultural products becoming 
duty free. 
Table A1.2 United States: Indicators of MF N tariff rates and preferential rates for 
imports from Panama. 
Origin 
of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Share of 
duty-free 
tariff 
lines (%)  Average applied 
tariff Share of 
duty-free 
tariff 
lines (%)  Average applied 
tariff Share of 
duty-free 
tariff 
lines (%)  Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2012 4.8 7.5 36.8 8.7 11.2 22.8 4.0 6.6 39.4 
Panama 2012 0.4 29.9 97.7 2.6 38.7 87.9 0.0 3.8 99.6 
  2013 0.4 29.7 97.7 2.6 38.4 87.9 0.0 3.8 99.6 
  2014 0.4 29.4 97.7 2.5 38.2 87.9 0.0 3.8 99.6 
  2015 0.4 29.2 97.7 2.5 37.9 87.9 0.0 3.7 99.6 
  2016 0.4 29.4 97.8 2.5 38.3 88.3 0.0 3.6 99.6 
  2017 0.4 26.7 97.8 2.3 34.9 88.3 0.0 3.0 99.6 
  2018 0.3 23.8 97.8 2.0 31.3 88.3 0.0 2.3 99.6 
  2019 0.3 21.0 97.8 1.8 27.8 88.3 0.0 1.5 99.6 
  2020 0.2 18.2 97.8 1.6 24.3 88.3 0.0 0.7 99.6 
  2021 0.2 22.5 98.2 1.4 22.5 88.8 0.0 0.0 100.0 
  2022 0.2 18.8 98.2 1.1 18.8 88.8 0.0 0.0 100.0 
  2023 0.1 15.0 98.2 0.9 15.0 88.8 0.0 0.0 100.0 
  2024 0.1 11.3 98.2 0.7 11.3 88.8 0.0 0.0 100.0 
  2025 0.1 7.5 98.2 0.5 7.5 88.8 0.0 0.0 100.0 
  2026 0.0 7.2 99.0 0.2 7.2 94.0 0.0 0.0 100.0 
  2027 0.0 7.2 99.0 0.2 7.2 94.0 0.0 0.0 100.0 
  2028 0.0 7.2 99.5 0.2 7.2 97.0 0.0 0.0 100.0 
  2029 0.0 7.2 99.5 0.2 7.2 97.0 0.0 0.0 100.0 
a WTO Definition. 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of averages, specific rates are excluded and only the ad-valorem  
components of alternate rates are included.  
 Based on HS 2012 nomenclature. 
Source: WTO estimates based on data provided by the United States.  WT/REG324/1 
 
- 43 - 
 
  3. Table A1.3 shows market access opportunities for the top 25 exports from the United States 
globally during 2009-11. These products accounted for 25.7% of the United States' global exports 
and covered 82 tariff lines at the HS six-digit level. Before the Agreement entered into force 65 of these tariff lines were already duty free on an MFN basis. The remaining 17 lines become duty free 
gradually in 2013 (10 lines), 2018 (5 lines), and one line each in 2020 and 2023. 
Table A1.3. Panama: Market access opportun ities under the agreement for the United 
States' top 25 exports 
United States' top export products in 2009-2011 Access Conditions to Panama's 
import markets 
MFN (2012) 
Duty-free in 
HS number and description of the product Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate (%) No. of 
tariff lines 
Duty-free  
Dutiable 
2012 
2016 
2021 
2026 
271020 - petroleum oils and oils obtained from bituminous 
minerals (other than crude) and preparations not elsewhere specified or included, containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, containing biodiesel, other than waste oils 2.6 5.0   1 1       
271019 Petroleum oils and oils obtained from bituminous 
minerals (other than crude) and preparations not 
elsewhere specified or included, containing by weight 
70% or more of petroleum oils or of oils obtained 
from bituminous minerals, these oils being the basic 
constituents of the preparations, other than waste oils 
and light oils and preparations 1.9 8.8 4 8 4 3 1   
300490 Medicaments (excluding goods of heading 
30.02/30.05/30.06/3004.10-3004.50) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale 1.7 0.0 5           
870323 -- of a cylinder capacity exceeding 1,500 cc but not 
exceeding 3,000 cc 1.6 0.0 12           
710812 -- other unwrought forms 1.5 0.0 1           
854231 -- processors and controllers, whether or not 
combined with memories, converters, logic circuits, 
amplifiers, clock and timing circuits, or other circuits 1.4 0.0 1           
870324 -- of a cylinder capacity exceeding 3,000 cc 1.2 0.0 12           
710239 Diamonds, non-industrial other than unworked or 
simply sawn or cleaved or bruted 1.2 10.0   1   1     
847330 - parts and accessories of the machines of heading 
84.71 1.1 0.0 1           
851762 -- machines for the reception, conversion and 
transmission or regeneration of voice, images or other 
data, including switching and routing apparatus 1.0 0.0 2           
100590 Maize (corn), other than seed 0.9 25.0   2 1     1 
270112 -- bituminous coal 0.9 0.0 1           
901890 - other instruments and appliances 0.8 3.3 2 1 1       
854239 Other Electronic integrated circuits, other than 
Amplifiers or Memories or Processors and controllers 0.8 0.0 1           
120110 - seed 0.8 0.0 1           
120190 - other 0.8 0.0 1           
870899 Other parts and accessories for the motor vehicles of 
HS Headings 87.01 to 87.05, excluding HS Subheadings 8708.91 or 8708.92 or 8708.93 or 8708.94 or 8708.95. 0.7 2.5 1 1 1       
271012 -- light oils and preparations 0.7 0.0 10           
870829 Parts and accessories of bodies (including cabs) of the 
motor vehicles of HS Headings 87.01 to 87.05, n.e.s. in HS heading 87.08 0.6 2.5 1 1 1       WT/REG324/1 
 
- 44 - 
  United States' top export products in 2009-2011 Access Conditions to Panama's 
import markets 
MFN (2012) 
Duty-free in 
HS number and description of the product Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate (%) No. of 
tariff lines 
Duty-free  
Dutiable 
2012 
2016 
2021 
2026 
300210 - antisera, other blood fractions and immunological 
products, whether or not modified or obtained by 
means of biotechnological processes 0.6 0.0 5           
843143 -- parts for boring or sinking machinery of subheading 
8430.41 or 8430.49 0.6 5.0   1 1       
720449 Ferrous waste and scrap (excluding HS Subheadings 
7204.10 to7204.41) 0.6 10.0   1   1     
870431 Motor vehicles for the transport of goods (excluding 
HS Subheading 8704.10), with spark-ignition internal 
combustion piston engine, g.v.w. not greater than 5 tonnes. 0.6 0.0 2           
854232 Electronic integrated circuits, memories 0.6 0.0 1           
520100 Cotton, not carded or combed. 0.5 0.0 1           
Total of above 25.7  65 17 10 5 1 1 
Note: Based on HS 2012 nomenclature.  
Source:  WTO estimates based on data provided  by Panama and UNSD Comtrade database.  
4. Table A1.4 shows that before the Agreement entered into force Panama's top 25 exports 
accounted for 69.3% of its global exports and were covered by 52 tariff lines at the HS six-digit 
level. Of these lines 22 were already duty free on an MFN basis. A further 27 lines became duty 
free in 2013 and one line is expected to be libera lized in 2026. At the end of implementation two 
lines (both sugar products) whose applied MFN duty in 2012 was 11.3% and 13.8%, are expected 
to remain subject to duty for imports from the United States. 
Table A1.4. United States: Market acce ss opportunities under the agreement for 
Panama's top 25 exports 
Panama's top export products in 2009-2011 Access Conditions to the United States' 
import markets 
MFN (2012) Duty-free in  
Remain 
Dutiable HS number and description of the product 
Share in 
global 
exports 
(%) 
Average 
MFN 
applied 
rate (%) No. of tariff 
lines Duty-free  
Dutiable 
2013 
2026 
710812 -- other unwrought forms 8.7 2.1 1 1 1   
030219 Salmonidae (excluding of 0302.11 and 
0302.12; excluding fillets and other fish meat 
of 03.04 or livers and roes), fresh or chilled 7.9 0.0 1     
0803 Bananas, including plantains, fresh or dried        
080310 - plantains 4.6 0.7 1 1 1   
080390 - other 4.6 0.0 1     
080711 -- watermelons 4.2 13.0  2 2   
080430 - pineapples 4.1 0.7  3 3   
720410 - waste and scrap of cast iron 3.6 0.0 1     
030342 -- yellowfin tunas (thunnus albacares) 3.3 0.0 1     
030616 -- cold-water shrimps and prawns (pandalus 
spp., crangon crangon) 2.5 0.0 1     
030617 -- other shrimps and prawns 2.5 0.0 1     
080719 Melons (excluding watermelons), fresh 2.4 14.0  6 6   WT/REG324/1 
 
- 45 - 
 
  Panama's top export products in 2009-2011 Access Conditions to the United States' 
import markets 
MFN (2012) Duty-free in  
Remain 
Dutiable HS number and description of the product 
Share in 
global 
exports 
(%) 
Average 
MFN 
applied 
rate (%) No. of tariff 
lines Duty-free  
Dutiable 
2013 
2026 
300490 Medicaments (excluding goods of HS headings 
30.02 or 30.05 or 30.06 or HS Subheadings 
3004.10 to 3004.50) consisting of mixed or 
unmixed products for therapeutic or 
prophylactic uses, put up in measured doses 
(including those in the form of transdermal 
administration systems) or in forms or 
packings for retail sale 2.3 0.0 2     
740400 Copper waste and scrap. 2.3 0.0 2     
220840 - rum and other spirits obtained by distilling 
fermented sugar-cane products 1.8 12.1 2 2 2   
020230 - boneless 1.8 10.2  4 3 1  
760200 Aluminium waste and scrap. 1.5 0.0 1     
170113 -- cane sugar specified in subheading note 2 
to this chapter 1.5 11.3  3 2  1 
170114 -- other cane sugar 1.5 13.8  3 2  1 
230120 - flours, meals and pellets, of fish or of 
crustaceans, molluscs or other aquatic invertebrates 1.5 0.0 1     
090111 -- not decaffeinated 1.4 0.0 1     
711291 -- of gold, including metal clad with gold but 
excluding sweepings containing other precious metals 1.2 0.0 1     
720449 Ferrous waste and scrap (excluding HS 
Subheadings 7204.10 to 7204.41) 1.0 0.0 1     
410419 Tanned or crust hides and skins of bovine 
(including buffalo)or equine animals, without hair on, in the wet state (including wet-blue), whether or not split but not further prepared (excluding HS Subheading 4104.11) 1.0 2.6 1 4 4   
761290 Aluminium casks, drums, cans, boxes and 
similar containers, including rigid tubular 
containers but excluding collapsible tubular 
containers, for any material(other than 
compressed or liquefied gas),of a capacity not 
>300 l, whether/not line/heat-insulated, but 
not fitted 1.0 2.9 1 1 1   
151110 - crude oil 0.9 0.0 1     
Total of above 69.3  22 30 27 1 2 
Note: Based on HS 2012 nomenclature.  
Source:  WTO estimates based on data provided by the United States and Instituto Nacional de Estadística y 
Censos (INEC).  
 WT/REG324/1 
 
- 46 - 
  ANNEX 2 
Table A2.1 United States tariff-rate quotas in favour of Panamanian suppliers under the 
Agreement, agricultural products 
HS tariff line code 
(description) Base rate (Average) Duty-free in-
quota quantity 
(metric tons) In-quota 
duty Date Duty Free 
Select Cheeses: 
0406.10.18, 0406.10.28, 
0406.10.38, 0406.10.48, 
0406.10.58, 0406.10.68, 
0406.10.78, 0406.20.28, 
0406.20.33, 0406.20.39, 
0406.20.48, 0406.20.53, 
0406.20.63, 0406.20.67, 
0406.20.71, 0406.20.75, 
0406.20.79, 0406.20.83, 
0406.20.87, 0406.30.18, 
0406.30.28, 0406.30.38, 
0406.30.48, 0406.30.53, 
0406.30.63, 0406.30.67, 
0406.30.71, 0406.30.75, 
0406.30.79, 0406.30.83, 
0406.30.87, 0406.40.70, 
0406.90.12, 0406.90.18, 
0406.90.32, 0406.90.37, 
0406.90.42, 0406.90.48, 
0406.90.54, 0406.90.68, 
0406.90.74, 0406.90.78, 
0406.90.84, 0406.90.88, 
0406.90.92, 0406.90.94, 
1901.90.36 $1.619/kg 525 rising to 1,091 
in year 16,  
thereafter 
unlimited 0 2028 
Other Cheeses: 
0406.10.08, 0406.10.88, 
0406.20.91, 0406.30.91, 
0406.90.97 $1.509/kg 318 rising to 678 in 
year 14,  
thereafter 
unlimited 0 2026 
Condensed and 
evaporated milk: 
0402.91.70, 0402.91.90, 
0402.99.45, 0402.99.55 $0.40/kg 2,120 rising to 
5,081 in year 16, 
thereafter 
unlimited 0 2028 
Ice Cream:  
2105.00.20  $0.50/kg + 17.0% 1,590 rising to 
3,391 in year 14,  thereafter unlimited 0 2026 
Sugar:  
TRQ #1 (para 6(a) U.S. 
appendix I) 
1702.20.28, 1702.30.28, 
1702.40.28, 1702.60.28, 
1702.90.58, 
 
 
1701.11.50, 1701.12.50, 
1701.91.30,  
1701.99.50,  
1702.90.20, 1806.10.15, 
1806.10.28, 1806.10.38, 
1806.10.55, 1806.10.75,  
2106.90.46,  
 
1701.91.48, 1701.91.58, 
1702.90.68, 1704.90.68, 
1704.90.78, 1806.20.73, 
1806.20.77, 1806.20.94,  
 
$0.27/kg of total sugars+ 
5.1% 
  
 
 
 
 
 
$0.34/kg  
 
 
 
 
 
 
 
 
  
 
505 rising to 575 in 
year 15,  
thereafter growing 
at 5 per year 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
0a 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 WT/REG324/1 
 
- 47 - 
 
  HS tariff line code 
(description) Base rate (Average) Duty-free in-
quota quantity 
(metric tons) In-quota 
duty Date Duty Free 
1806.20.98, 1806.90.39, 
1806.90.49, 1806.90.59, 
1901.20.25, 1901.20.35, 
1901.20.60, 1901.20.70, 
1901.90.54, 1901.90.58, 
2101.12.38, 2101.12.48, 
2101.12.58, 2101.20.38, 
2101.20.48, 2101.20.58, 
2103.90.78, 2106.90.72, 
2106.90.76, 2106.90.80, 
2106.90.91, 2106.90.94, 
2106.90.97 
 
 
 
TRQ #2 (para 6(e) U.S. 
appendix I) 
1701.11.50 
 
 
TRQ #3 (para 6(h) U.S. 
appendix I) 
1701.11.10, 1701.12.10, 
1701.91.10, 1701.99.10 
 
 
 
 
 
1702.90.10, 2106.90.44   
 
$0.37 + 8.0% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$0.3387/kg 
 
 
 
 
$ 0.0311/kg less  
$ 0.000207/kg for each 
degree under 100 degrees 
(and fractions of a degree in 
proportion) but not less than 
$ 0.0259/kg 
 
$ 0.036606/kg of total sugars  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,060 rising to 
6,600 in year 10, 
Remaining at 6,600 
thereafter 
 
 
500 per year  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
0 
a The duty free tariff treatment for products of Panama  included in sugar TRQ #1 shall be accorded to 
the lesser of (i) the aggregate quantity set out for the given year, or (ii) a quantity equal to the amount by which Panama's exports to all destinations exceeds its imports from all sources ("trade surplus") for goods classified under the followi ng subheadings: HS1701.11, HS1701.12, HS1701.91, 
HS1701.99, HS1702.40, and HS1702.60, except that Panama's exports to the United States of goods classified under subheadings HS1701. 11, HS1701.12, HS1701.91, and HS1701.99 and its 
imports of originating goods of the United States classified under HS1702.40 and HS1702.60 shall not be included in the calculation of its trade su rplus. Panama's trade surplus shall be calculated 
using the most recent annual data available. 
.. Not available  Source: WTO estimates, based on data provided by National Authorities.  
T a b l e  A 2 . 2  T a r i f f - r a t e  q u o t a s  m a i n t a i n e d  b y  P a n a m a  o n  U S  i m p o r t s  o f  a g r i c u l t u r a l  
products under the Agreement 
HS tariff line code 
(description) Base Rate 
(Average) Duty-free in-quota  quantity  
(metric tons) In-quota 
duty Date duty free  
Pork: 
02031110, 02031120, 02031210, 02031290, 02031910, 02031920, 02031990, 02032110, 
02032120, 02032210, 
02032290, 02032910, 02032920, 02032990, 02101119, 02101190, 02101910, 02101929, 
02101990, 16024111, 
16024210, 16024290, 16024919  66.5% 1,600
 rising to 4,055  in year 14, 
thereafter unlimited 0 2026 WT/REG324/1 
 
- 48 - 
  HS tariff line code 
(description) Base Rate 
(Average) Duty-free in-quota  quantity  
(metric tons) In-quota 
duty Date duty free  
Pig Fat:  
02090011, 02090012, 
02090019, 02090021, 
02101111, 02101921  15.0% 636 rising to 1,357  in year 14, 
thereafter unlimited 0 2026 
Certain Processed Pork 
Products:   
16024914, 16024915, 16024990  25.0% 318
 rising to 678  in year 14, 
thereafter unlimited 0 2026 
Chicken Leg Quarters 
(bone in):  
0207.13.19c, 0207.14.19c  260.0% 660 rising to 3,033 in year 17, 
thereafter unlimited 0 
 2029 
Fluid Milk 
04011000, 04012010, 04012020, 04012090, 04013010, 04013021 48.3% 11 rising to 20 in year 14, 
thereafter unlimited 0
 2026 
Nonfat Dry Milk 
04021091, 04021092, 
04021099, 04039022 50.0% 2,625 rising to 5,457 in year 16, 
thereafter unlimited 0 2028 
Whole Milk Powder:  
04022191, 04022199, 
04022991, 04022999, 04039023  50.0% 53
 rising to 104  in year 15, 
thereafter unlimited 0 2027 
Yogurt:  
04031010, 04031021, 
04031022, 04031031, 
04031032, 04031091, 
04031099  16.4% 53 rising to 99  in year 14, 
thereafter unlimited 0 2026 
Butter:  
04051000, 04052010, 
04052090, 04059090  13.8% 116  rising to 218  in year 14, 
thereafter unlimited 0 2026 
Cheddar Cheese:  
04039013, 04069011, 
04069019  30.0% 364 rising to 630  in year 15, 
thereafter unlimited 0 2027 
Other Cheese 
04061010, 04061090, 
04062010, 04062090, 
04063000, 04064000, 04069020, 04069090 25.0% 364 rising to 656 in year 16, 
thereafter unlimited 0
 2028 
Ice Cream:  
21050010, 21050091, 
21050099  15.0% 263 rising to 520  in year 15, 
thereafter unlimited 0 2027 
Other Dairy Products:  
19011019, 19019023, 22029011, 22029019  20.0% 137
 rising to 257  in year 14, 
thereafter unlimited 0 2026 
Fresh or Chilled Potatoes:  
07019000  81.0% 765 rising to 1,010  in year 15, 
thereafter increasing by 2 
percent of the previous year's 
in-quota quantity 0 MFN 
Fresh or Chilled Onions:  
07031000  72.0% 816  rising to 1,077  in year 15, 
thereafter increasing by 2 
percent of the previous year's in-quota quantity 0
 MFN 
Dried Kidney Beans:  
07133330  15.0% 795 rising to 1,245  in year 11, 
thereafter unlimited 0 2023 
Corn: 
10059090, 11042320, 
11042390  40.0% 298,700  rising to 438,651  in 
year 14, thereafter unlimited 0 2026 
Rough Rice: 
10061090  90.0% 7,950  rising to 22,692 in year 
19, thereafter unlimited 0 2031 
Milled Rice: 
10062000, 10063000, 
10064000  90.0% 4,240  rising to 12,102  in year 
19, thereafter unlimited 0 2031 
Refined Corn Oil:  
15152900  30.0% 368 rising  to 543  in year 9, 
thereafter unlimited 0 2021 
Processed Tomatoes: 
20029011, 20029012, 
20029019, 20029021, 
20029029  58.6% 798  rising to 1,172  in year 14, 
thereafter unlimited 0 2026 
Frozen French Fries:  
20041020  20.0% 3,640 rising to 4,095  in year 4, 
thereafter unlimited 0 2016 
Source: WTO estimates, based on data provided by National Authorities. 
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