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Sunday, April 21 2019 @ 08:30 PM UTC

Ambassador Farrar Remarks during Amcham Panama Day in Washington

Panama News It’s a pleasure to be here at this event, organized by the American Chamber of Commerce of Panama. The Amcham for years has been promoting greater trade and economic links between the United States and Panama. Building just such links is also part of my job description, which has made the Amcham a natural and valued partner.

Today’s panels have focused on doing business in Panama, and there certainly are many magnificent opportunities. In the time given to me today, I’d like to take a little bit longer-term and broader view of our bilateral relationship. Here are ten reasons why the Trade Promotion Agreement is important for relations between the United States and Panama.

A Free Trade Agreement is a “Sign of Approval” for a long-term strategic relationship between our two countries. It is a long-term guarantee that the day-to-day fluctuations in our relations and exchanges will not alter our long-term commitment to one another as countries and as peoples. (more)

It must be said that not all of the conditions for this long-term commitment to a strategic relationship, economically and politically, are fulfilled completely today in Panama. The good news, however, is that the Trade Promotion Agreement provides the guideposts and mechanisms to help get there, and both sides are 100% committed to doing so.

The World Economic Forum’s 2012 report ranks Panama 132nd out of 144 countries in terms of the independence of its judiciary and 94th out of 144 countries in terms of the strength of investor protection. For these reasons, the Agreement includes standards for the fair treatment of investors and a neutral and transparent mechanism for the settlement of investment disputes through access to binding international arbitration. Also for these reasons, the United States is assisting Panama in its multi-year transition to the accusatory legal system, whereby cases will be heard in public rather than being decided by reviewing stacks of legal documents behind closed doors.

In the 2012 Yale University Environmental Performance Index, Panama ranks relatively high, 39th in the world in terms of the quality of environmental protection, but faces significant threats to its forests, biodiversity, mangroves and water resources. Under the TPA, our two governments will establish an environmental council, with participation from officials of both countries who will meet with the public to work through issues of environmental protection that affect our bilateral economic relationship. In addition, the United States and Panama signed an environmental cooperation agreement under the Trade Promotion Agreement to protect the environment in Panama. We have some amazing assets in Panama, such as the Smithsonian Tropical Research Institute, to encourage scientific research-based protection of the environment in Panama. The TPA provides additional tools to help do so.

Under the Trade Promotion Agreement, our two countries pledge to “protect, enhance, and enforce basic workers’ rights and strengthen their cooperation on labor matters.” At the same time, the World Economic Forum’s 2012 report ranks Panama 122nd out of 144 countries in terms of pay and productivity of the work force. Under the TPA, our two governments commit to establish a labor council to work through issues important to workers in both countries and to the long-term competitiveness of both economies. The Council will meet regularly with workers. This is an important step forward on many fronts, and will advance the relationships between government and civil society.

Panama’s decision to sign our bilateral Tax Information Exchange Agreement prior to ratification of the FTA reflects its determination to build a world-class economy and financial system that is part of the worldwide effort to control money laundering and tax evasion. The TIEA already is being used successfully by authorities of both countries. We now can build upon that success.

Under the Trade Promotion Agreement, both governments commit to “promote transparency and eliminate bribery and corruption in international trade and investment.” The World Economic Forum’s 2012 report ranks Panama 103rd in the world in terms of favoritism in decisions of government officials, an improvement from its ranking of 120th in 2011. The TPA provides clear rules and procedures for open government procurement. It is incumbent upon us, both U.S. government and private sector, to use these new procedures to the fullest to secure a level playing field for our exporters and investors in Panama. In addition, greater transparency will create conditions for the relevant institutions to better serve their citizens and to work to eradicate corruption.

The Free Trade Agreement will open markets for U.S. exporters, but also carries with it the commitment to work with our Panamanian partners so they meet the sanitary and phytosanitary standards to enter U.S. markets. This is only fair: free trade and free markets must be a two way street. Indeed, the Agreement makes trade openings reciprocal, creating a two-way street that will benefit both countries.

The FTA complements our Open Skies Agreement, and will come into force as Panama completes the ongoing expansion of the Panama Canal. Open skies, open markets, and the opening of a new Canal: all this is a harbinger of growing economic ties between the United States and Panama. This means more jobs for Americans and for Panamanians.

Trade is about more than just the exchange of goods and services. It is also about exchanging ideas and best practices. This Trade Promotion Agreement is no different. In Panama’s case, best practices introduced by foreign investors, including those from the U.S., have been important advances. The TPA’s protections for intellectual property will improve the climate for such investment and the transition to a more innovative economy.

Based on experience elsewhere, we believe that the agreement will promote economic growth in both countries. Economic growth and job creation cannot be an effective engine for expanding economic opportunities, however, unless the benefits are distributed equitably through all levels of society. Many in Panama have already been lifted out of poverty and into the middle class. However, there are still many groups left behind, in particular persons from indigenous communities, communities which also are the most challenging in terms of reducing child labor. With that in mind, the United States and partners throughout the region have joined in Pathways to Prosperity, a hemispheric initiative to share best practices for spreading the benefits of economic growth more broadly. Panama has been a strong partner in Pathways, and the TPA will strengthen that partnership. Along these lines, I also want to commend the many U.S. and Panamanian businesses that are committed to Corporate Social Responsibility, through fostering exemplary business practices on human and labor rights, environmental protection, transparency, and combating corruption, as a way to promote these outcomes.

Finally, I am extremely optimistic as to the future course of relations between the United States and Panama. I have faith in the Panamanian people, in their hard-won commitment to democracy and human rights, and in their commitment to the ties between our two countries and peoples. About six weeks ago, I was with a team of U.S. military doctors, dentists, and nurses in the Guna Yala, on the island of Cartí. There they were working with a team from Panama’s Ministry of Health to provide services to hundreds of patients from the Guna indigenous community, patients who had come from all around for the week-long clinic. It was a sweltering day, with temperatures in triple digits and humidity to match. Inside the clinic, I met four women, Panamanian wives of retired U.S. military men, who were working as volunteer interpreters between the Guna and our military team. I asked one of them why she was there, and she said simply, “I want to help the United States to help my people.”

With committed friends such as she and her colleagues, how can we fail to strengthen the ties that bind our two countries? Thank you.

(US Embassy Panama Press Release)

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