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Panama Has Allies Lobbying For Treaty
With European Community

By Juan Carlos Martinez

The European Union is looking for trade partners and Latin America, including Panama, waits for the signature of trade agreements beneficial to their economies.  Spain is the current Chair of the European Union and has submitted to the European Union a very ambitious initiative: the signing of agreements with Mercosur (Southern Cone Markets), Central America and Panama during an upcoming meeting of European and Latinamerican leaders to be held in Madrid on May 18th and 19th.  


Panama is currently not part of these negotiations but has already requested Brussels to include it in the negotiations. For these negotiations the recent agreement on the export of bananas from Latin America is a very strong precedent which bodes well for these negotiations in favor of Latin America.  Spain clearly lobbies in favor of Panama mentioning that the inclusion of Panama would bring great added value to these negotiations on the political and economic aspect.  

Holland or Netherlands is also strongly lobbying in favor of Panama for the inclusion of this country in the negotiations for an association agreement with the European Union.  

The negotiations are being conducted by an entity made up of countries associated in the Secretary's Office for the Economic Integration of Central American (in Spanish the acronym is SIECA).  Panama is not currently part of this entity so it is proposing in Brussels that it be included under the formula of SIECA + 1 (the plus one being Panama). The SIECA negotiations date from October 2007 but have stalled absolutely due to the political crisis in Honduras.  

The European Union is indicating that to be included Panama must join SIECA, however Panama indicates that it would be a very complex process due to Panama's fiscal and commercial characteristics which is why Panama is suggesting SIECA+1.  Under SIECA+1 Panama commits to accepting all the provisions that have been already negotiated with Central America and even accepting Central America's tariff code.  

To approve this proposal all countries in the European Union must be in unanimous agreement.  Spain and Holland are already on board and the Minister of Industry and Commerce, Mr. Roberto Henriquez, will be travelling to Brussels at the end of January to express to the European Union member countries why Panama's proposal SIECA+1 will not represent a setback in negotiations.  

In order to add more weight to Panama's negotiations with the European Union it is also necessary that Panama and Holland start working on an agreement to prevent double taxation.  Panama expects to sign twelve of these agreements with different countries by the end of this year which will remove it from the grey list of fiscal paradise created by the Organization for Cooperation and Development (OCDE in Spanish).


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