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Free trade negotiations between the United States and Panama are held behind closed doors and are by all accounts very complex. Yet from statements to various media attributed to people on the respective sides, mid-January seventh round of the US-Panamanian free trade negotiations broke up without a deal struck mainly because Panama is reluctant to agree to opening our marketplace to US pork, chicken, rice, potatoes, onions and cooking oil as widely as the Americans want, and the United States doesn’t care to let this country’s farmers sell as much Panamanian sugar or coffee to the US market as the Panamanians would like.

While an impasse went unresolved over agricultural issues, it was also reported that US automakers pressed to get Panama to waive the duty on US-made cars and American bottlers pressed for the elimination of this country’s duties on beer and soft drink imports. Given Panama’s current tax structure, the Torrijos administration would not likely back down on motor vehicle or alcoholic beverage import revenues.

An eighth round of talks, to be held like the previous talks in Washington, will begin on January 31.

From the American side there will be a change in the US Trade Representative’s office, as Robert Zoellick, who held that post in the first Bush administration, is moving over to the number two spot in the State Department, behind Condoleeza Rice. At the negotiating team level, however, there will probably be no great change at this stage of the talks.

The United States is Panama’s biggest trading partner, with nearly half of our imports coming from the USA. In monetary terms the United States exports roughly six times as much to Panama as this country exports to the USA. All told US-Panamanian trade amounts to about $2.1 billion, which is an insignificant percentage of total US foreign trade.

Both the Bush and Torrijos administrations have solid legislative backing and probably wouldn’t have much trouble getting an eventual agreement ratified. Unlike in the United States, however, here there would be some substantial and vocal public opposition to a free trade deal. It would come from farm groups as well as other economic sectors, as well as from the leftists and labor unions who have long maintained a philosophical objection to globalization and free trade as currently conceived.

The Torrijos administration, for its part, may not be so quick to agree as some might have assumed from campaign trail pronouncements. Candidate Torrijos warned of the danger of Panama not reaching a free trade agreement with the Americans while the countries around us did. But US talks with the Andean countries are not progressing very quickly either, and Panama is one of the Latin American countries that recently asked to join the South American Common Market (MERCOSUR), which is at the center of an evolving alternative to the NAFTA-based US model for hemispheric economic integration. Although it’s likely that Torrijos will in the end negotiate a trade deal with the Americans, there are certain things that the Americans want which for domestic political reasons Torrijos wouldn’t be able to deliver.































Also in this section:
Torrijos blinks, but tax hike on track
No deal in 7th round of US-RP free trade talks
Stowaways, ship delays in US waters and RP ISPS implementation
Business & Economy Briefs

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