Panama Ratifies Canadian FTA

by Mike Godfrey, Tax-News.com, Washington

20 August 2010

The Panamanian government has announced that the Cabinet Council on August 17 ratified the draft Law on the Free Trade Agreement (FTA) between Panama and Canada, as well as bilateral cooperation agreements on labor and the environment.

The ratification of the agreement follows its signing earlier this year, on May 14, between Canadian Minister of International Trade, Peter Van Loan and Panamanian Minister of Commerce and Industry, Roberto Henríquez.

According to the government, the free trade pact was approved unanimously, and it will now pass to the National Assembly for final approval.

Introducing the bill prior to the vote, Henriquez said that "the country is in a process of ongoing international trade integration that began with its accession to the World Trade Organization in 1997. This agreement with a major economic power will strengthen our trade ties globally, strengthening and expanding [Panama’s] potential to export its goods and services.”

Panama has existing free trade arrangements with El Salvador, Taiwan, Singapore, Chile, Costa Rica, Honduras, Guatemala, Cuba, Nicaragua, and the Dominican Republic.

Once the FTA with Canada is implemented it will reduce tariffs and remove other trade barriers. For Canada, there will be a broad range of benefits across many sectors, including for the Canadian construction, manufacturing and agricultural sectors.

Bilateral trade has increased markedly in the last five years, for example, Canadian exports have increased 52% since 2005, most recently totaling CAD91.4m (USD85m) in 2009.

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