Roberto Henriquez, Panama’s Minister of Commerce and Industry, together with the Honorable Peter Van Loan, Canada’s Minister of International Trade, recently signed the Canada-Panama Free Trade Agreement. At the same time, both Ministers also signed a parallel agreement on Labor Cooperation and the Environment.
Canada’s Prime Minister Stephen Harper who witnessed the signing of the agreement said that he had the pleasure of marking the conclusion of the negotiation between the two countries on the historic free trade deal with Panama’s President Ricardo Martinelli.
Prime Minister Harper said that, “This agreement is another step toward building stronger ties with our partners in the Americas, as we work together to generate more jobs and greater prosperity in Canada and in the hemisphere.”
Panama is an established market for Canada and the bilateral trade and investment relationship would have a strong potential for long-term growth with the signing of the Free Trade Agreement. In 2009, bilateral merchandise trade between Canada and Panama totaled $132.1 million, with the Canadian export amounting to more than $91.4 million and imports totaling $40.7 million.
In 2008, Panama had one of the highest real gross domestic product (GDP) growth rates in the Americas at 10.7 per cent. Despite the global economic downturn, Panama posted growth in 2009 at 2.4 per cent, and they expect real GDP to rise further in 2010.
The South American country also occupies a unique place in the international trading system. Panama is home to the one of the world’s largest canals that plays a vital role in the flow of goods around the world. Canada is currently the 11th most important user of the Canal. The expansion of the Panama Canal is currently underway and is the expected completion is on 2014 at a projected cost of US $5.3 billion.
The two countries expect the expansion would generate greater opportunities for both Panama and Canada in areas such as infrastructure and construction, environmental and heavy engineering, consultant services, capital projects and human capital development.
Meanwhile, once the two countries’ legislative body ratifies the agreement, the Treaty would benefit Canadian and Panamanian exporters in many sectors of industry.
A broad range of sectors and industries would benefit from the Treaty including the agriculture and agri-food; pharmaceuticals; wood, pulp and paper products; electrical and industrial machinery; vehicles and auto parts; information and communication technology; aerospace; plastic products; fish and seafood; and iron and steel products.
The Labor Cooperation Agreement on the other hand commits Canada and Panama to respect the core labor standards set out by the International Labor Organization. The Agreement on the Environment meanwhile, requires both parties to ensure a high level of environmental protection together with an effective enforcement of domestic environmental laws. The enforcement of these measures however is not meant to discourage but to encourage trade and investment, according to the Agreement.
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