U.S.-Panama Developmental Agreement in the Works

This week, Reuters reported that the new President-elect of Panama, Ricardo Martinelli, is hoping to push a Free-Trade Act (FTA) with the United States as soon as possible.

Calling the FTA “our No. 1 priority”, Martinelli is anxious to put a trade agreement into place. Panama exported $377 million to the U.S. in 2008. Panama only taxes dollars that have been earned within the country, and as a result often faces critics accusing the country of providing an “offshore tax haven for wealthy foreigners”.

Martinelli, a wealthy supermarket tycoon, won the election by a staggering 60% of votes on Sunday. His administration rejects all complaints that U.S. citizens use the country of Panama as a tax haven. Frank De Lima, the head economic advisor to Martinelli’s administration has stated: “The perception that Panama is a tax haven is totally false…new government will be open to sharing information with U.S. authorities and plans to work to pass the agreement as soon as possible”.

A U.S.-Panama trade pact was signed by former Panamanian President, Martin Torrijos, in June 2007, but is currently being held up by U.S. Congress. President Obama’s administration has stated that it is hopeful to develop an agreement with Panama relatively soon.

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