USTR Explains Delay To Panama FTA

by Mike Godfrey, Tax-News.com, Washington

01 April 2011

At a recent hearing of the Subcommittee on Trade of the House of Representatives’ Committee on Ways and Means, the Deputy United States Trade Representative Miriam Sapiro confirmed that the Administration continues to work to advance the pending free trade agreement (FTA) with Panama.

She said that the Administration is aware of the importance of the FTA with Panama, both in terms of exports and jobs. She pointed particularly to a “greater reciprocal access to Panama’s growing market, including nearly USD10bn in new infrastructure projects and an USD18bn services market.”

However, she added, “President Obama has made it clear that any trade agreement we present to Congress must be consistent with our key values and in the clear interests of Americans. The Administration has therefore been working hard with Congress and stakeholders since it came into office to identify specific steps that Panama could take to improve its protection of internationally recognized labour rights.”

She confirmed that Panama has taken several steps to address those concerns with respect to enforcement of its labour laws, and has also strived to improve its tax transparency practices.

In particular, Sapiro disclosed that “we have worked with its government to address impediments in its domestic law that had prevented the conclusion of a tax information exchange agreement (TIEA) with the US. Such an agreement was signed in November and is consistent with internationally agreed standards. … We expect that Panama will ratify the TIEA in the near future.”

“Once all of the outstanding issues are addressed,” she concluded, “the Administration will be ready to prepare the agreement for Congressional consideration.”

On his part, the House of Representative’s Ways and Means Committee Chairman, Dave Camp, has continually requested that the Administration should quickly advance all three of the pending trade agreements with South Korea, Panama and Colombia, to allow for their consideration by Congress by July 1, 2011.

While the preparatory work on the FTA with South Korea to Congress has been completed, and the relevant documents are ready for Congress, it is feared that its review and approval could be delayed until the agreements with Panama and Colombia are also readied.

With respect to the latter agreement, Sapiro confirmed that the Administration is working “intensively with Colombia to address outstanding concerns regarding the protection of internationally recognized labour rights, the prevention of violence against labour leaders, and impunity from prosecution.”

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