The Proposed U.S.-Panama Free Trade Agreement

On April 26, 2004, the United States began negotiating a bilateral free trade agreement FTA with Panama. By building on the U.S.-Dominican Republic- Central America Free Trade Agreement DR-CAFTA text, the negotiations have moved quickly and many chapters are nearly completed. A fifth round is scheduled for October 18-22, 2004, after the inauguration of president-elect Martin Torrijos on Sept. 1, 2004. As with all free trade agreements, the FTA cannot enter into force until Congress passes implementing legislation and the President signs it into law. Panamas economy is based largely on mantime and related service industries that developed around its transisthmian canal, once managed by the United States, but returned to Panama in 1999. Canal operations account for 7 of Panamas GDP, with the largest and fastest growing traffic volume generated along the U.S. East Coast-to-Asia trade route especially U.S.-China. The canals total economic impact, however, is far greater, supporting income and jobs in various services industries including warehousing, ship registry and repair, salvage operations, insurance, banking, and tourism.