WASHINGTON, D.C. – U.S.
Trade Representative Susan C. Schwab and Panamanian Minister of Commerce and
Industry Alejandro Ferrer today signed the United
States – Panama Trade Promotion Agreement, a comprehensive
trade agreement that will eliminate tariffs and other barriers to the trade in
goods and services between the United
States and Panama.
“Today’s signing marks the beginning of a new era in the
long-standing, yet still evolving commercial partnership between the
United States and
Panama. This is an historic
agreement between two countries that for over a century have been joined by
bonds of shared values, community, and friendship,” said Ambassador
Schwab. “This agreement includes important commitments on market access as
well as ground-breaking labor and environment provisions, a result of the
bipartisan agreement between the Bush Administration and Congressional
leadership. This agreement will promote increased economic growth and
prosperity for both of our nations and will generate significant economic
opportunities for U.S.
workers, consumers, manufacturers, farmers and ranchers by leveling the playing
field for U.S. exports to
Panama. In turn, the agreement
will serve as a catalyst to further develop and diversify Panama’s economy
and promote investment between the two countries.”
Minister Ferrer stated, “This agreement reinforces the
shared vision of both countries that trade can become a major tool for economic
and social growth.” He continued by saying, “This is really a partnership
for growth and we are confident it will create significant opportunities, and
new jobs, especially for small and medium Panamanian companies and in our rural
areas; as well as promote entrepreneurship, innovation, and competition
necessary to succeed in the 21st century economy.”
“This agreement with Panama is
instrumental in our strategy to advance democracy, the rule of law, security,
and market-based development within our hemisphere,” Ambassador Schwab
continued. “Panama is a
valued partner of the United
States on many fronts – from counternarcotics to
antiterrorism – and we will work with Panama to enhance its role as a
commercial and financial crossroads in today’s global economy. We look
forward to continuing to build bipartisan support for the United States –
Panama Trade Promotion Agreement in the U.S. Congress in order to quickly
approve this agreement.”
Background
The United
States and Panama launched negotiations on a
free trade agreement in April 2004 and have incorporated amendments derived from
the bipartisan trade agreement between the Bush Administration and Congressional
leadership. The United
States had a goods trade surplus with Panama of $2.3 billion in 2006, and is
Panama’s largest trading
partner. Total goods trade between the United States and Panama was $3.1
billion in 2006. Panama
is a growing market for U.S. products.
U.S. goods exports to
Panama increased 25 percent from 2005
to 2006.
Panama is predominantly a
services-based economy, with services accounting for about 80 percent of
economic activity. The Panama Canal is the focal point of
Panama’s economy, with much of the
country’s economic activity tied to the canal’s infrastructure and to the
logistics and financing of international shipping. The trade agreement
will provide U.S. exporters significant opportunities to participate in the
$5.25 billion expansion plan for the Panama Canal, which is due to begin in 2008
and is expected to be completed by 2014.
Like many other developing countries, Panama already enjoys broad duty-free access to
the U.S. market through various trade
preference programs designed to promote economic development, such as the
Caribbean Basin Initiative (CBI) and the Generalized System of Preferences
(GSP). In 2006, 96 percent of U.S. goods imports from Panama entered the U.S. duty-free
under current preference programs and our most-favored nation duty-free
rates. Meanwhile, only 25 percent of U.S. industrial exports and 34 percent of
U.S. agricultural exports
entered Panama duty-free. The trade
agreement will eliminate tariffs on U.S. exports to Panama and secure permanent duty-free access for
exports from Panama to the
United
States. In addition, the agreement
will help support democratic and economic reforms undertaken by
Panama’s leaders and spur
additional reforms of Panama’s domestic legal and business
environment that are important to encourage investment, enhance regulatory
transparency, and strengthen protections for workers and the environment.
