Taking Advantage of the New Trade Promotion Agreement with Panama
Wednesday, March 20, 2013
Time: 1:00 - 2:00 p.m. EST and Panama Time
- Jonathan D. Farrar, U.S. Ambassador to Panama
- Alejandra Y. Castillo, National Deputy Director, Minority Business Development Agency U.S. Department of Commerce
- Michael Masserman, Executive Director for Export Policy, Promotion & Strategy International Trade Association, U.S. Department of Commerce
Overview: The scheduled speakers will discuss the realities and benefits of the U.S. trade promotion agreement with Panama. In this webinar you will understand the intricacies of doing business in the Panamanian market, taking advantage of the new opportunities available as a result of the lower tariffs. If you are interested in or are already exporting U.S.-made goods to Panama, the TPA is big news for you. Learn how to make the most of it.
For more information and to register, please go to:
Doing Business in Panama
Panama has historically served as the crossroads of trade for the Americas. Its strategic location as a bridge between two oceans and the meeting of two continents has made Panama not only a maritime and air transport hub, but also an international trading, banking, and services center. Panama’s global and regional prominence is being enhanced by recent trade liberalization and privatization, and it is participating actively in the hemispheric movement toward free trade agreements. Panama's dollar-based economy offers low inflation in comparison with neighboring countries and zero foreign exchange risk. Its government is stable and democratic and actively seeks foreign investment in all sectors, especially services, tourism and retirement properties.
Panama's economy is based primarily on a well-developed services sector, accounting for about 75% of GDP. Services include the Panama Canal, banking, the Colon Free Zone, insurance, container ports, and flagship registry. Panama is currently engaged in the Panama Canal expansion project. This project, in conjunction with the expansion of the capacities of its ports on both the Atlantic and Pacific coasts, will solidify Panama’s global logistical advantage in the Western Hemisphere.
This logistical platform has aided the success of the Colon Free Zone (CFZ), the second largest in the world after Hong Kong, which has become a vital trading and transshipment center serving the region and the world. CFZ imports – a broad array of luxury goods, electronic products, clothing, and other consumer products - arrive from all over the world to be resold, repackaged, and reshipped, primarily to regional markets. Because of this product mix, U.S. brand market share is significant, even if most of those products are made in Asia. Hong Kong is the CFZ's biggest supplier, while Colombia and Ecuador are the two largest destinations for exports from the CFZ.
The U.S. is Panama's most important trading partner and U.S. products enjoy a high degree of acceptance in Panama. In 2011, U.S. exports to Panama grew 36% to $8.25 billion – in no small part due to the fact that Panama’s economy grew 10.5%. U.S. goods and services enjoy a reputation for high quality and are highly competitive.
International indexes generally rate Panama as one of the best countries in Latin America for business and investment. At the same time, however, U.S. investors have voiced concerns about corruption and inconsistent treatment. For these reasons we encourage U.S. companies interested in investing in Panama to read our report on Investing in Panama thoroughly and to contact us for more information. We also recommend that Americans interested in purchasing property in Panama review the U.S. Citizens Services note here.
Panama is currently working to implement a Trade Promotion Agreement (TPA) with the U.S. that will result in tariffs immediately dropping to zero for approximately 87% of U.S. exports, with the remainder phased out over time. For more information on how the TPA will help U.S. businesses, please click here.
Due to its open economy, Panama has few market access problems. One of the more common market entry options is to appoint an agent or distributor. Another option is to find a local partner who can provide market knowledge and contacts. Other businesses have been successful via licenses or franchises.
The U.S. Embassy’s Commercial Service offers U.S. companies market entry assistance through a variety of services, any of which can be tailored to suit your needs. We also will work to defend your business interests in Panama if the need arises. We measure ourselves on our ability to help you do more business in Panama. If you would like to explore business opportunities in Panama, we suggest the following:
- Read through our Doing Business in Panama Guide (also known as the Country Commercial Guide):
- Talk with your local U.S. Export Assistance Center (USEAC). Part of the U.S. Department of Commerce, there are over 100 USEACs throughout the U.S. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. Even if Panama is not the right priority market for you, your USEAC can help you identify other promising export markets.
- Contact us at the U.S. Embassy in Panama to discuss next steps.
- BusinessUSA.gov is the U.S. Government's official web portal to support business start-ups, growth, financing, and exporting.