U.S. and Panama governments exchanged letters October 22 confirming that all steps necessary to implement the joint free trade agreement (FTA) have now been taken. As a result, the U.S.-Panama FTA will take effect October 31.

As of that date, Panama will immediately eliminate its import tariffs on more than 86 percent of U.S. consumer and industrial products, including information technology equipment; agricultural and construction equipment; aircraft and parts; medical and scientific equipment; environmental products; and pharmaceuticals and fertilizers. Nearly half of U.S. exports of agricultural commodities to Panama will immediately become duty-free as well, including wheat, barley, soybeans, high-quality beef, bacon, and almost all fruit and vegetable products, and most of the remaining tariffs will be eliminated within 15 years.

Agriculture Secretary Tom Vilsack said in a press release on Wednesday that “in 2011, the United States exported more than $504 million of agricultural products to Panama, one of the fastest growing economies in Latin America.  Next week, nearly half of current U.S. farm exports to Panama will become duty free immediately and most of the remaining tariffs will be eliminated within 15 years. ” “Since the time when the President signed the Panama, Colombia, and Korea agreements into law, USDA has also acted to remove hundreds of unfair barriers to trade for American companies and provide businesses with the resources they need to reach new market,” Vilsack said.

The FTA will also provide significant new access to Panama’s $22 billion services market and “includes important disciplines relating to customs administration and trade facilitation; technical barriers to trade; government procurement; investment; telecommunications; electronic commerce; intellectual property rights; and labor and environmental protection,” the Office of the U.S. Trade Representatives reported.