Balbina's brother blows EU duty preferences for Panama

Are his papers in order? Pablo Garrido Araúz (right), whose qualifications are that his sister is PRD party president and 2009 presidential candidate Balbina Herrera Araúz, presents his credentials as Panama's ambassador to the European Union to EU President José Manuel Barroso. Photo by the EU

Balbina's brother blows Panama's trade preferences with Europe
by Eric Jackson, from other media

Are his papers in order? Nein! Take him away!

Panama doesn't export many goods. Ours is primarily a service economy. But to the extent that we export tangible things to other countries, those things tend to be edible. Traditionally, they're bananas, coffee, sugar or seafood.

For decades Panama has tried to diversify its agricultural exports, with mixed results. We send some cuts of meat abroad, particularly to the wealthier parts of Asia. We raise shrimp and export a lot of them. Long ago we had a palm oil business, but people became wary of the cholesterol and that died, although it may be reborn as a raw material for biodiesel fuels. Our cacao production was marginalized years ago by blights, and industrial production of tomatoes for processing into paste and sauces rose and fell with market forces beyond Panama's control.

One of the bright spots in the "non-traditional exports" strategy has been melons, especially but not only watermelons. The Europeans have gobbled them up by the container --- lots of containers every year in recent times. Our farmers --- some of them European investors who have come here to grow things for export --- have been helped along by an agreement by which Panamanian melons get a break on Europe's usual import duties. (We also export melons to the United States and Canada, but with the economic crisis gripping the USA our exports to the North American market are contracting.)

Because Panama has Mediterranean fruitflies, many potential markets are closed to fresh fruit from here. But Europe has recognized that properly processed juices don't pose a risk of insect pest invasions, and the EU's trade preferences were encouraging a small but growing Panamanian business of exporting fruit juices to France.

So what did we need to do in order to keep the European duty preferences?

Our ambassador to the European Union, Pablo Garrido Araúz, was supposed to file this piece of paper with the EU, asking for the agreement's extension, by October 31. That piece of paper filed, the lower duties provided for under the Generalized Preferences System would have been automatically extended.

Araúz missed that deadline. It was only as the December 15 end of the preference loomed that he even seemed to notice.

His sister is Balbina Herrera, so even if we had an administration where there was any sort of concept of accountability --- there isn't --- he can't be blamed because of who he is. Thus there have been little anonymous leaks to some of the mainstream media, shifting the blame to the Ministry of Commerce & Industry. The ministry isn't buying it and heads aren't rolling there, either. But given who's involved, the new round of whispers is that it was the Ministry of Agricultural Development that's responsible for Balbina's brother not filing the paper that he should have.

Now it's time for damage control, and one option that seems not to be available is to get the Europeans to fudge their deadline. But hey! --- if the Torrijos administration can find money to put all of those PRD hacks on the payroll to hang out on the streets in Transito vests --- surely it has the money to reimburse our agricultural exporters for the extra European duties they will have to pay. That, as these words were written, is the plan.

Let us set aside the problem that the taxpayers would be paying dearly for a politician's relative's negligence. That sort of thing is hardly unusual in Panama.

However, former Vice Minister of Foreign Commerce Roberto Henríquez --- a key member of opposition candidate Ricardo Martinelli's political inner circle --- warned in La Prensa that the subsidy idea has a big drawback. It's illegal under World Trade Organization rules, and would likely embroil Panama in a series of secondary trade disputes, or would be cited in ongoing international trade problems that this country has.