Panama Looks To Align With South America On Free Trade Issues

by Mike Godfrey, Tax-News.com, Washington

13 August 2004

Panama’s President-Elect Martin Torrijos has signalled a potential change in course for the country’s trade policy with the announcement that the leadership is interested in aligning itself with the South American free trade bloc, Mercosur.

The President’s comments, made on a recent trip to the Argentine capital Buenos Aires, is an acknowledgement of growing support in Latin America for a regional alternative to the US-led NAFTA (North American Free Trade Area) approach.

The move would also be something of a reversal from the policy of the Moscoso administration which has seemingly distanced itself from South America in favor of aligning Panama more with the Central American republics.

Mercosur was created by Argentina, Brazil, Paraguay and Uruguay in March 1991 with the signing of the Treaty of Asuncion. It originally was set up with the intent of creating a common market and customs union between the participating countries on the basis of various forms of economic co-operation that had been taking place between Argentina and Brazil since 1986.

In a separate development, Moscoso’s attempt to seal a free trade deal with Singapore before leaving office now looks unlikely to succeed. Whilst the Panamanian negotiating team has reported that 95% of the agreement is settled, there remain some outstanding issues to be resolved.

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