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US-Panama Free Trade Agreement's chances improve

by Eric Jackson

Set aside, for a moment, a Washington political deal's mythological underlying premises --- at least, that's the well precedented procedure upon which George W. Bush and Nancy Pelosi seem to have agreed with respect to future free trade agreements.

In the face of opposition within the US House of Representatives to the current batch of proposed free trade pacts and the renewal of authority to negotiate new ones, the White House and the Democratic leadership on Capitol Hill agreed that with respect to proposed trade agreements with Colombia, South Korea, Peru and Panama the United States will require that these other countries comply with international labor and environmental standards. The Republicans had initially balked at these demands, advanced by the Democrats, because on the one hand US labor laws fall short of international standards in many respects and on the other the Bush administration has been solidly committed to a reduction in environmental protections, both by refusing to adhere to international conventions and by weakening laws or enforcement mechanisms within the United States.

Despite this agreement, it seems that the trade pacts with Colombia and South Korea can't be saved. In Colombia government-allied and corporate-funded death squads routinely murder labor activists, and even if Democrats and Republicans have for years certified fictions about human rights conditions in Colombia as the truth in order to continue Plan Colombia funding, there's a new majority in the House of Representatives that regardless of any similar assurances just isn't likely to approve an economic integration with notorious Colombia. In South Korea the main problem is the entrenched monopolistic power of a small group of powerful industrial combines, a situation that most Democrats and some Republicans say negates any meaningful concept of free trade.

However, ever more observers are now predicting that two other proposed free trade pacts, those between the United States on the one hand and Panama and Peru respectively, are likely to pass. It is expected that sometime in June the United States and Panama will sign final versions of a free trade agreement that include the new stipulations about labor and environmental issues and that these will likely be passed by both houses of Congress. The Senate has never been considered an obstacle to passage, but the House of Representatives has been and still may be.

However, US opponents of these pacts are emphasizing corruption issues in their continuing attempts to block passage. The basic argument is that it's a futile gesture to certify anything about Panama's labor or environmental laws when corrupt practices routinely trump the rule of law here. Really, that's also the gist of the arguments against Colombia and South Korea that are likely to carry the day, as well as the objection to Alan García's administration in Peru.

The Torrijos administration is doing its best not to leave anything to chance. It has sent Vice President and Foreign Minister Samuel Lewis Navarro, the first lady's preferred 2009 PRD presidential standard bearer to Washington to lobby Congress. And it seems that nobody in Washington is so boorish or honest as to make an issue of the "Banistmo Law," a special capital gains tax cut that was passed last year especially to give a tiny group of the very wealthiest Panamanians --- a group that can be counted on both hands with fingers left over --- a windfall in the hundreds of millions of dollars in the sale of Banistmo to HSBC. One of the beneficiaries, apparently the tune of an eight-figure sum --- due to Panama's corporate security laws and the Torrijos administration's policy of not revealing the financial statements of top government officials it's difficult to be precise, but other public records render ballpark figures --- is none other than Vice President and Foreign Minister Samuel Lewis Navarro.

One theory of why Lewis Navarro has had such a polite reception in Washington is that the congressional Democrats, who are on a collision course with the White House on Iraq and many other issues, would for 2008 electoral reasons like to demonstrate that they are willing to cooperate with Republicans. In the grand scheme of things US-Panama trade is of slight importance to the American economy and thus would be an easy point to concede in such a political chess game.

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