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Apr 21, 2008 Panama FTA: Uncertain Fate
Apr 14, 2008 India Boosts Latin Trade
Apr 12, 2008 Pratibha Patil leaves for Latin America

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Panama FTA: Uncertain Fate

Date: 2008-21-04
www.latinbusinesschronicle.com

It is unclear when the U.S. Congress will vote on the Panama free trade agreement, but the country continues to boost its trade.

The delay in holding a U.S. congressional vote on the Colombia free trade agreement has also delayed the Panama free trade agreement, experts say.

"It's unlikely...that the Panama agreement would be moved ahead of the Colombia agreement," says Eric Farnsworth, vice president of the Council of the Americas. "The fate of the Panama agreement is now tied to the Colombia agreement, though there is nothing that says the two cannot move forward together."

Panama is a much smaller trading partner for the United States than Colombia, but the country has become a trade champion in its own right. U.S. trade with Panama reached $4.1 billion last year, an increase of 33.3 percent from 2006, according to a Latin Business Chronicle analysis of U.S. Census Bureau data. That means U.S.-Panama trade is roughly four times smaller than U.S.-Colombia trade. However, U.S. exports to Panama are growing faster than with Colombia. U.S. exports to Panama reached $3.7 billion last year, a 38.5 percent increase from 2006. By comparison, U.S. exports to Colombia grew 27.6 percent last year.

However, Panama has become Latin America's leading trading nation measured in comparison to its GDP (Mexico is the leader in real terms). Panama has also become the third-largest destination in Latin America for exports from China, only lagging behind economic giants like Brazil and Mexico. And Chinese companies now account for the largest group at the Panama Merchandise Mart. Meanwhile, Panama is the top destination in Latin America for exports from Singapore - a country it often is compared with.

Panama has the highest ratio of exports and imports per GDP in Latin America, according to a Latin Business Chronicle analysis. Its exports account for 73.4 percent of GDP, while imports are the equivalent of 71.1 percent of its GDP. By comparison, Paraguay - its nearest rival - boasts export levels that are 50.1 percent of GDP and import levels that are 67.2 percent of its economy.

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