On April 26 negotiations aimed at a free trade agreement between Panama and the United States began. A 54-member American delegation visited various Panamanian groups that support the general concept of a free trade deal and was taken on tours of Casco Viejo streets that had previously been cleared of labor and leftist propaganda opposing the proposition, the Colon Free Zone, Manzanillo International Terminal and the Panama Canal. Between the sightseeing and meetings with selected dignitaries, the US negotiators sat down at the Gamboa Rainforest Resort with a 102-member Panamanian delegation for five days of business meetings.
The first order of business was to set an agenda, and immediately Panama gave ground on the agricultural issue. The Panamanians, following the lead of most other Latin American countries with respect to the stalled World Trade Organization and Free Trade Area of the Americas talks, wanted agriculture off the agenda. However, the US insisted that agriculture remain on the table: the talks will address Panamanian phytosanitary regulations that have been invoked to ban US beef imports in the face of a mad cow scare, but apparently not the US agricultural subsidies that farmers here consider to be unfair competition. Also on the negotiating table are intellectual property issues, customs procedures, electronic commerce, telecommunications, guarantees for foreign investment, the banking and finance sectors, government contracting rules, environmental and labor standards and the matter of transparency.
No specific agreements on any of the substantive issues were announced, but a next round of meetings, from June 7 through 11 in Los Angeles, was announced.
Two days after this first round of talks ended, the current administration was handed a stinging defeat by Panamanian voters. Although many of Mireya Moscoso’s acts and statements since the election seem to indicate that she’s unaware of the magnitude of the popular demand for change within the electorate and inside her own party, she did quickly recognize that the final word on a free trade deal will not be hers, and thus agreed to include a team from the incoming Torrijos government at the trade talks during the transition between administrations. First Vice-president-elect Samuel Lewis Navarro, one of this country’s richest men and a sophisticated player on global agricultural and financial markets, is likely to play a key role for the next government in these negotiations.
Mireya had earlier expressed hopes that free trade would be negotiated and ratified before she leaves office at the end of August, but that seems unlikely. Here, such a move would be seen by many people as one last betrayal of the public trust by an unpopular outgoing president. In the United States the Moscoso administration’s reputation for corruption would also be played upon by free trade opponents. Thus it seems that though the talks may conclude before the change of administrations, ratification would be left to the next Legislative Assembly.
Panama’s labor movement, which acts as bargaining agents for only about 10 percent of the national work force and is divided and politically weak, is nearly unanimous in opposing a free trade deal. The US labor movement has just a bit more unity and political clout than its Panamanian counterpart and also opposes a free trade deal. To the extent that organized labor might block an agreement, it would be American workers who would do it. CAFTA, a free trade pact between the United States and the Central American countries, has prompted demonstrations and riots in Central America but the right-wing governments in that region have been quick to ratify the deal. In Washington, however, the Bush Administration is not expected to submit CAFTA to the Congress until after the November elections because Republicans fear that labor agitation against the deal during a high-profile debate could cost them control of the federal government.
Hemispheric economic integration will be debated in the US election, and the Bush administration’s Under Secretary of Treasury for International Affairs John B. Taylor recently characterized it in a meeting with the Fitch bond rating service as a matter of “US efforts to reinforce the region's economic recovery and help the countries of Latin America lay the foundation for sustained growth.” But even spokespeople for the pro-free trade US Chamber of Commerce admit that there are not presently sufficient votes in Congress to approve CAFTA.
The main sticking point in Washington is Democrats’ insistence that CAFTA be modified to include the International Labor Organization’s “core principles” --- workers’ rights to form unions and bargain collectively, the elimination of forced labor and an end to discriminatory employment practices --- which the Bush administration opposes. Were CAFTA to come front and center in US political discourse during a presidential campaign, a potent Democratic message would be that the Republicans and their big business backers want to export high-wage American jobs to low-wage sweatshops in countries where death squads kill union organizers with impunity.
Labor isn’t CAFTA’s only adversary in the US. For example the sugar industry --- both Sun Belt cane sugar producers and northern sugar beet growers --- fears that it would be ruined by the increased sugar quotas allowed to Central America in that pact.
Similarly, the first Panamanian press conference to protest against the results of the first round of US-RP trade talks was held by some of this country’s cattle ranchers, who fear devastation by increased imports of US beef.
In any event, like CAFTA a United States-Panama free trade deal will almost surely not get before Congress prior to the US elections, and if thereafter the CAFTA agreement fails it would be very unlikely that a Panamanian-American deal would have a chance. On the other hand, if after the pressures of an election congressional support can be mobilized for hemispheric free trade, the lame duck weeks of November and December would be busy indeed, because the Bush administration’s congressional authorization to negotiate such deals expires next January 1.
Also in this section:
Business & Economy briefs
US-RP trade talks underway
Anatomy of a scam, part 3 of 4
Mayday: unions oppose Seguro privatization, FTAA
