Panama Restricts Agricultural Exports via Tariff Quotas and Subsidy Measures

Panama has introduced new tariff quotas and export subsidy restrictions on key agricultural products including bananas, coffee, and sugar, citing market access concerns and trade fairness.

Compliance Analysis: Panama’s Tariff Quotas and Export Subsidy Restrictions on Agricultural Products

Direct Answer

Panama has implemented tariff-rate quotas (TRQs) on certain agricultural products, including dairy, meat, and other key commodities, as part of its market access commitments under the WTO Agreement on Agriculture. However, the provided sources do not explicitly confirm new tariff quotas or export subsidy restrictions specifically targeting bananas, coffee, or sugar in 2024–2025. Instead, the documents focus on:

1. Tariff quotas for products like swine meat, poultry, dairy, potatoes, beans, rice, and tomatoes¹.
2. Export subsidy commitments, with Panama reporting zero export subsidies granted in 2024².
3. Sanitary and phytosanitary (SPS) measures affecting imports from Costa Rica, including temporary suspensions of bananas, plantains, and strawberries, which Panama is appealing under WTO dispute settlement rules³.

Regulation Analysis

1. Tariff Quotas (TRQs) in Panama (2024)

Panama’s TRQs are governed by its WTO Schedule of Concessions and notified under Article 18.2 of the Agreement on Agriculture. The 2024 notifications¹ list quotas for the following products, with varying fill rates:

Key Observations:

• No TRQs for bananas, coffee, or sugar are listed in the 2024 notifications¹. The user’s question may refer to SPS-related restrictions (see Section 3 below) rather than tariff quotas.
• Fill rates vary significantly: Dairy and rice quotas were nearly or fully utilized, while poultry, beans, and liquid milk quotas remained unfilled¹.
• "None" in the table indicates quotas were opened but not allocated due to lack of buyers/sellers¹.

2. Export Subsidy Restrictions

Panama’s 2024 notification under Article 10 and 18.2 of the Agreement on Agriculture² states: > "In accordance with the provisions of Articles 10 and 18.2 of the Agreement on Agriculture, no export subsidies were granted to agricultural products in 2024."

Implications:

• Panama has not introduced new export subsidy restrictions but is complying with its WTO commitment to eliminate export subsidies².
• The user’s reference to "export subsidy restrictions" may be a misinterpretation of Panama’s zero-subsidy policy rather than new measures.

3. SPS Measures Affecting Agricultural Imports (Costa Rica Dispute)

Panama’s temporary suspensions of imports from Costa Rica (bananas, plantains, strawberries, dairy, and meat) are the subject of a WTO dispute (DS599)³. Key points from Panama’s appeal:

A. Bananas and Plantains

• Measure: Temporary suspension of imports from Costa Rica.
• Panama’s Justification: Allegedly to prevent the entry of Fusarium oxysporum TR4 (Foc TR4), a banana disease³.
• WTO Panel Findings (Disputed by Panama):
  • The measure’s objective was not specific to Foc TR4 but addressed "unspecified phytosanitary risks"³.
  • The measure did not qualify as a provisional measure under Article 5.7 of the SPS Agreement because there was no insufficient scientific evidence for the risks cited³.
  • The measure was inconsistent with Articles 2.2, 5.1, 5.2, 5.3, and 5.6 of the SPS Agreement (e.g., more trade-restrictive than required)³.
• Panama’s Appeal Arguments:
  • The Panel misinterpreted the measure’s objective and applied Article 5.7 incorrectly³.
  • The measure was necessary to achieve Panama’s appropriate level of protection (ALOP)³.

B. Strawberries

• Measure: Temporary restriction on Costa Rican strawberries.
• WTO Panel Findings (Disputed by Panama):
  • The measure did not qualify under Article 5.7 of the SPS Agreement because it was not based on "pertinent information" (e.g., general data not specific to the risk)³.
• Panama’s Appeal Arguments:
  • The Panel erred in defining "pertinent information" and misapplied Article 5.7³.

C. Dairy and Meat Establishment Approvals

• Measure: Approval procedures for Costa Rican dairy/meat establishments.
• WTO Panel Findings (Disputed by Panama):
  • The procedures arbitrarily discriminated against Costa Rican establishments compared to those in Peru and New Zealand (inconsistent with Article 2.3 of the SPS Agreement)³.
  • The procedures were more trade-restrictive than required (inconsistent with Articles 2.2 and 5.6 of the SPS Agreement)³.
• Panama’s Appeal Arguments:
  • The Panel misapplied Article 2.3 by considering irrelevant conditions (e.g., unrelated to sanitary risks)³.
  • The Panel erred in assessing trade restrictiveness and ignored Panama’s ALOP³.

Summary Answer

Panama’s 2024 tariff quotas apply to products like swine meat, dairy, rice, and tomatoes but do not explicitly include bananas, coffee, or sugar¹. Export subsidies were not granted in 2024, consistent with Panama’s WTO commitments². However, Panama has temporarily suspended imports of Costa Rican bananas, plantains, and strawberries under SPS measures, which are currently under WTO dispute (DS599)³. These suspensions are justified by Panama as phytosanitary protections but have been ruled inconsistent with the SPS Agreement by a WTO Panel, a decision Panama is appealing³. The user’s reference to "new tariff quotas and export subsidy restrictions" may conflate TRQs (for other products), SPS measures (for bananas), and Panama’s zero-subsidy policy. For definitive updates on bananas, coffee, or sugar, further notifications from Panama’s Ministry of Agricultural Development (MIDA) or WTO Committee on Agriculture should be monitored.

Sources

1. ↩ Committee on Agriculture – Notification – Panama – Tariff quotas – Table MA:2 – Calendar year 2024 https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/AG/NPAN74.pdf&Open=True
2. ↩ Committee on Agriculture – Notification – Panama – Export subsidy – Table ES:1 – Calendar year 2024 https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/AG/NPAN72.pdf&Open=True
3. ↩ Panama – Measures Concerning the Importation of Certain Products from Costa Rica – Notification of an appeal by Panama under article 16.4 and article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1) of the working procedures for appellate review https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/DS/599-9.pdf&Open=True