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Panama Foreign Trade Policy

By Juan Carlos Martinez

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Panama is taking very aggressive steps to attract foreign investment into Panama.  In mid-January the Vice-President and Chancellor, Mr. Juan Carlos Varela, flew to Tokyo to the IV Meeting of Chancellors within the East Asia - Latin America Cooperation Forum (in Spanish FOCALAE) where he will seek to attract foreign investment specifically in the areas of technology and infrastructure.  This meeting took place from January 13 to January 19.  The Chancellor planned a very tight schedule for this trip and one of the most important meetings to be held is the one with the representatives of member countries of the Asia Pacific Cooperation Forum (APEC) in order to garner support for Panama´s admittance to this organization which includes twenty-one of the strongest economies in the world.

This trip is very important for both Panama and Japan.  Japan is currently the world´s second biggest economy and the fourth biggest client of the Panama Canal as well as an important trade partner for Panama.  Panama wants the investment dollars and Japan would like to participate in the contracts for some of Panama´s major infrastructure projects scheduled for the next five years.  The Chancellor has indicated that Japan is interested in projects such as the Panama Bay sanitation effort, the Canal expansion, the final leg of the Panama-Colon highway and financing the first line of the Panama Metro system.  

During the recent trip the Panamanian Chancellor met with the Minister of Foreign Affairs of Japan, Mr. Katsuya Okada, who confirmed the interest of his country in financing and offering technical cooperation in the public transportation project Panama is engaging in.  In return Panama has expressed its interest in discussing and signing trade association agreements, visa suppression and double taxation agreements with the Japanese government.  

In furthering its Foreign Trade Policy Panama will also be present in thirteen international trade fairs with delegations from the Ministry of Commerce and  Industry.  This decision was made after consulting with the private sector so as to synergize efforts to maximize exports in certain target markets.  Some of the fairs in which Panama will showcase the products it has for export are:   International Boston Seafood, la Alimentaria in Barcelona (Food Fair in Barcelona, Spain), Specialty Coffee Association of America, European Seafood Show,  Salón Internacional de la Logística, Expocarga de México (Logistics and Cargo Expo in Mexico), Food Taipei and others in America, Europe and Asia.  

Panama is also negotiating to join Central America in an association agreement with the European Union under the formula SIECA +1 which is hoped will be signed in May of this year.  On a larger scale and a longer time frame for completion it is also complying with the requests of the Organization for Cooperation and Economic Development (in Spanish OCDE) to sign the corresponding agreements with the member countries in regards to the double taxation treaties so that Panama is no longer considered a tax have and can be removed from the OCDE´s gray list. Panama has already closed negotiations for double taxation agreements with Mexico, Belgium and Italy, there are nine more agreements on the table which are in discussion stages with no date yet for the initiation of formal negotiations.  The countries who are closer to the formal negotiation stage are Spain and Chile.  The negotiations with Spain are being speed tracked as much as possible because several Spanish companies such as FCC and Sacyr Vallehermoso have won the tenders for the biggest projects in the Canal Expansion and it is hoped that by the end of January a date is set for formal negotiations with Spain.  

It becomes evident that Panama is currently engaged in a multi-pronged strategy to solidify its international standing at all levels and the government seems to be working with the private sector in order to pursue an integral country strategy that will benefit Panama and all its people.

 

 


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