Free Trade Agreement Will Not Be Implemented On 1 October 2012 As Expected
Thursday, September 13 2012 @ 10:48 AM EDT
Contributed by: Don Winner
The Panamanian National Assembly has to modify five laws before the FTA can come into force, which is not possible because the Deputies are locked in tense debates on electoral reforms. The laws have to do with copyright, intellectual property, government procurement and international conventions. The United States "is aware of what is happening in Panama, and that right now it is really in the hands of the National Assembly (Congress)," said Quijano, who said this delay will "negatively impact the Panamanian (citizens)" because the FTA would allow the entry of cheaper food before the end of the year. "This agreement is good for the country, it is not for any political sector, and this (that the National Assembly has not discussed the laws that have to be amended) is preventing us from implementing the agreement," Quijano said.
The United States and Panama on 10 November 2011 formally began the implementation process of the FTA, after the U.S. Congress ratified it in October 2011, after five years of waiting. The agreement will gradually allow the entry of U.S. goods to Panama without tariffs, items such as rice, tomatoes, cabbage, potatoes, and sugar cane, which are competition for local Panamanian producers. For the United States, Panama is a great attraction due to its geographical location and the current expansion of the Panama Canal, through which two-thirds of its foreign trade passes.
Washington believes the agreement will increase exports to Panama by more than $12 billion dollars. In 2010, the US exported more than $6 billion to Panama and imported just $379 million dollars worth of goods. Panamanian unions fear that U.S. products will flood local market, and the subsidies they enjoy will injure domestic producers of rice, tomatoes, cabbage, potatoes, sugar cane, melons and other crops. (Estrella)
Editor's Comment: The government of Panama wants the FTA implemented as soon as possible because they know it will result in a substantial lowering of basic food costs for all Panamanians, across the board. It's not so much about subsidies as it is about efficiency and economies of scale. No local Panamanian rice farmer can compete with the large scale industrial rice producers in the United States. The end result is that all Panamanians will be able to buy much cheaper rice, and Panamanian rice growers will have to switch to other products where they can compete. Like melons or pineapples (or weed). So, as soon as they get done screwing around with the electoral reforms, I suspect these reforms needed to implement the FTA will be the next order of business. It's a priority, but it's not more important than the 2014 elections.