Panama And Singapore Sign Free Trade Pact

by Mike Godfrey, Tax-News.com, Washington

08 March 2006

Bilateral ties between Panama and Singapore were further strengthened last week after the signing of the Panama-Singapore Free Trade Agreement (PSFTA).

The PSFTA is a broad-based and comprehensive agreement, covering issues such as trade in goods and services, customs procedures, financial services, investment, telecommunications, e-commerce, competition policy and government procurement. It also provides for collaboration between Panama and Singapore in areas such as investment promotion and science and technology.

The PSFTA will provide Panamanian and Singaporean companies with enhanced access to each other’s markets, and will boost the growing trade and investment links between Singapore and Panama, according to a statement from the government of Singapore.

Under the Trade in Goods chapter, tariffs on 98% of Singapore’s domestic exports (by value in 2004) will be eliminated upon entry into force of the agreement. Key exports that will benefit include orchids, beer, processed foods, refined oil, chemicals, paints and varnishes, auto parts, engines and electronics. For its part, Singapore has committed to providing duty-free access to all Panamanian goods immediately upon the entry into force of the FTA.

Under the Cross Border Trade in Services chapter, service suppliers from Panama and Singapore are guaranteed non-discriminatory access to each other’s markets. Singapore companies in sectors such as computer & related services, real estate services and distribution services are among the key beneficiaries of this chapter. The chapter also contains an annex on maritime transport services which grants Singaporean vessels the same treatment as Panamanian vessels in Panamanian ports and vice versa.

The Investment chapter grants investors from Panama and Singapore greater certainty over their investments in each other’s markets with safeguards against unreasonable expropriation, and provisions for non-discriminatory treatment and dispute settlement.

Panama is already Singapore’s largest trading partner in Latin America, with trade in 2005 valued at US$1.96 billion. Meanwhile, Singapore was Panama’s 6th largest trading partner in 2004.

“The PSFTA will enable Singapore and Panama to leverage on each other’s strengths to enhance their access to the Latin American and Asian markets respectively," observed Singapore’s Minister of State for Trade & Industry, and Education Mr Chan Soo Sen, a co-signatory to the pact.

"There is great scope for Singapore and Panama to enhance collaboration in a variety of fields such as maritime logistics, infrastructure development and knowledge industries," he went on to note.

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