The United States is highly competitive in services trade – providing information and communications technology services, wholesale and retail distribution, express delivery services, energy and environmental services, professional services (such as legal, accounting, architecture, and engineering services), and financial services to customers all over the world. As a result, America is consistently able to export more services than we import every year – despite sometimes significant trade barriers abroad. The United States already has very few barriers to the import of services – so when we strike trade agreements, a huge benefit comes from requiring our trading partners to provide Americans with equivalent access to their services markets. In fact, the U.S. trade surplus in services is 25 percent higher with trade agreement partners than other countries.
Panama has a large and growing services market. Services account for roughly 77 percent of Panama’s $27 billion economy. Leading sectors include banking and insurance, health care, logistics and transportation services.
KEY ELEMENTS:
• The Agreement requires Panama to match the level of openness provided by the United States in a host of sectors, ranging from energy and environmental services to financial services and distribution. Panama agreed to exceed commitments made in the WTO, lift restrictions on investment in retail trade, ensure access to contracts related to the Panama Canal, and provide new access in professional services that previously had been reserved exclusively to Panamanian nationals. The Agreement also guarantees continued access for international and domestic express delivery services.
• The Agreement’s provisions on cross-border services, telecommunications, and electronic commerce offer particular benefits to the information and communications technology service sector – an area where the United States excels – by working together to ease the flow of trade in services and products delivered over telecommunications networks. These provisions benefit the many U.S. small and medium-sized enterprises that are on the forefront of innovation, but do not have the resources to establish an office in every market they serve.
• The Agreement guarantees U.S. service suppliers the right to compete with Panamanian services providers on a level playing field, by prohibiting discriminatory treatment of U.S. suppliers in the legal or regulatory arenas. As with all U.S. trade agreements, the Agreement also respects the right of both the American and Panamanian governments to regulate and introduce new regulations, with protections for situations where regulators may need to take actions to protect key domestic interests such as financial stability or the environment, or to comply with other key domestic laws.
• The Agreement provides comprehensive coverage of Panama’s services market, addresses all modes of supply – whether services are delivered cross-border or through a direct commercial presence in Panama – and will apply to new and innovative services that may develop as markets evolve. Any limitations on market access in services are clearly defined, which provides legal certainty for U.S. firms seeking to supply services to the Panamanian market.
