LOADING

Type to search

U.S.-Panama Trade: A Step Forward

Share
It's time to get the US-Panama free trade agreement approved by Congress.

BY JOHN MURPHY

Three years and a half years ago, the United States and Panama signed a bilateral trade agreement that promises jobs and opportunities for American workers and farmers. Unfortunately, the accord has been gathering dust ever since, and those jobs and opportunities have gone to other countries.

Happily, one of the supposed reasons not to move forward with the agreement is today being swept away. Searching high and low for any possible reason to reject this mutually beneficial trade agreement, anti-trade activists have charged that Panama is a tax haven and thus an unsuitable partner for a trade accord.

Demolishing the idea that Panama is a tax haven, the United States and Panama on November 30, 2010 signed a Tax Information Exchange Agreement (TIEA), guaranteeing close cooperation between U.S. and Panamanian tax authorities and a world-class level of transparency in Panama's system of taxation.

In other words, the time has come to seek Congressional approval of the U.S.-Panama Trade Promotion Agreement, whose virtues are as clear as ever. It will level the playing field for American workers, farmers and companies by eliminating almost all of Panama's tariffs on American goods.

TWO-WAY STREET

Those Panamanian tariffs often soar into the double digits, while nearly all U.S. tariffs on imports from Panama were eliminated years ago. The agreement will turn the U.S.-Panama trade relationship into a two-way street that benefits both countries.

There's real money at stake in the Panamanian market:

Case study 1: Panama-based Copa Airlines just announced an order for up to 32 Boeing 737-800s, including 10 options. Valued at $2.6 billion, the order "represents one of the largest commercial transactions ever between private sector companies in the United States and the Republic of Panama," according to Boeing.

Case Study 2: The Panama Canal Authority is undertaking an expansion of the canal at a cost of more than $5.25 billion. This is one of the largest public works projects in the world since the construction of China's Three Gorges Dam.

If approved, the trade agreement will grant U.S. companies duty-free access to the Panamanian market and the chance to compete in selling everything from heavy equipment to engineering services in a market that has reached annual growth rates near 10 percent in recent years.

LABOR PROGRESS

The Obama administration has already found that there is no trading partner perfect enough to satisfy every trade critic. However, Panama has already ratified all eight International Labor Organization conventions on core labor standards, and Panama's National Council of Organized Workers, the umbrella group for all of Panama's trade unions, endorsed the agreement in June 2007.

U.S. and Korean trade officials will meet this week, and hopes are high that differences can be bridged and a path opened for approval of the U.S.-Korea trade accord.

To this hope we add a question: what possible benefit can there be in opposing this trade accord — or the agreement with Colombia? To delay their approval only means that American workers and farmers will continue to face steep tariffs in these growing markets — taxes, in fact, paid into foreign treasuries.

Trade is the best way to boost the U.S. economy and create the jobs that Americans need so badly need right now. We've stood on the sidelines for too long. It's time to get back in the game.

John G. Murphy is vice president of International Affairs at the U.S. Chamber of Commerce. Since joining the Chamber in 1999, Murphy directed its successful campaigns to win congressional passage of trade agreements with Peru (2007), Central America and the Dominican Republic (2005), and Chile (2003).

 

To read this post, you must purchase a Latin Trade Business Intelligence Subscription.
Scroll to top of page