Speeches 2005

May 19, 2005

INAUGURAL REMARKS BY AMBASSADOR LINDA WATT
BUSINESS FORUM
PANAMA DAY IN TEXAS

I am honored and delighted to welcome all of you to Panama Day in Texas, an event that has been organized with great teamwork and enthusiasm.

I consider myself not just the Ambassador of the United States Government to the Government of the Republic of Panama, I am the Ambassador of the people of the United States to the people of Panama. Just to be sure I am clear, because I think there are some Aggies in the audience today, when I say the United States I am also including the people of the Republic of Texas, too.

I am grateful to the U.S. /Panama Business Council (USPA), which has a long and impressive record of trade and investment promotion in the United States and around the world, for organizing this event. I also want to thank the many important organizations in Panama and Houston that pulled together in a spirit of cooperation with USPA to make this conference possible. Special recognition should go to Greater Houston Partnership and the U.S. Commercial Service office in Houston for their important contribution to the success of this event.

I am very enthusiastic about this opportunity to enhance and expand the already strong ties between Texas and Panama.

I have two purposes in participating in this program, each of which reinforces the other. First, I want Panamanians to get to know Houston and to appreciate it the way I do. I want them to see this great city and great state as their gateway into the United States for business, tourism and education. And, on the other side of the coin, I want to acquaint all Texans with Panama. I want you to understand how Panama can be a trusted partner for business and investment and an enjoyable destination for travel.

Panama Day in Texas is an excellent opportunity to strengthen commercial and cultural relations between Panama and Texas. The Lone Star State has led the nation in recent years in number of employees, value of shipments, and capital investment in the chemical industry. Similarly, Texas held second place in the computer and electronics industry in these same categories. Texas universities and research institutions are leaders in electronics, medical, biotechnology, aerospace, advanced materials and energy-related research. Texas ports and airports are among the best in the world.

In 2004, for the third year in a row, Texas was ranked as the number one state for export revenue. Texas exports for 2004 totaled $117.2 billion, an 18.6 percent increase over 2003. There are more than 250,000 Hispanic-owned firms in Texas, and together these enterprises recorded sales of more than $40 billion. Impressive statistics!

Major cities here in Texas offer the hospitality and convention infrastructure necessary to support the global business community including an impressive number of hotel rooms, restaurants and state-of-the-art meeting and trade show facilities. All these assets, the strength of Texas as a global business center and its diverse and fast growing Latin American and international community, make it the most effective and strategic trade partner for Panama.
Houston and Texas have strong ties to Panama. The President of Panama, Martin Torrijos, is a proud alumnus of Texas A&M. I had the honor two years ago to accompany the administrator of the Panama Canal, Alberto Aleman Zubieta, to College Station to receive A&M’s Distinguished International Alumnus Award. Dr. Adan Rios, AIDS specialist and researcher at Twelve Oaks Hospital, is a link between our two countries, promoting innovative programs in tropical medicine and virtual medicine and remote diagnosis.

Many Texas companies have major investments in Panama: Dell, El Paso Energy, and Exxon. Continental flies out of Panama city and COPA airlines, Panama’s flag carrier, is owned 49 percent by Continental.

Now let me talk about Panama.

First, a little history: 2003 marked the Centennial year of Panama’s independence. It has also been 100 years since a bilateral treaty gave the U.S. the right to build and run a canal, completed in 1914. This sometimes-controversial relationship, was changed by mutual agreement with the 1977 Panama Canal Treaties. The U.S. passed management of the Canal to Panama and closed the last military base in the country on December 31, 1999.

The Panama Canal Authority is lauded worldwide, and rightfully so, for its efficient and profitable management of the Canal. The Panamanian safety record is superior to that under U.S. management, transit times are down, revenues are up and the Canal is operating near full capacity. The planned Canal expansion represents both a significant challenge and a monumental opportunity for Panama. If approved in a referendum by the people of Panama, the expansion will also be an opportunity for U.S. firms to compete for contracts and to make investments.

Today, we are building a new, dynamic and wide-ranging relationship with Panama. As you may know, the United States and Panama are currently negotiating a Free Trade Agreement, which will enhance trade and investment between our two countries. This agreement will be beneficial for both countries: lowering tariffs and providing market access and also strengthening investment rules. Increased U.S. direct investment will mean jobs and increased opportunities for Panama.

The Torrijos administration is pro-business and pro-investment. The ministry of commerce is advancing on plans to make business registration easier via “one-stop shopping.” But the government is not only working on the easy stuff. President Torrijos has taken on the difficult task of fiscal reform and improved tax collection. Social security reform is now on the agenda. He and his team are committed to improving the business climate because they see investment and increased commercial activity as the key to Panama’s success, economically and in social policy. An important public discussion is underway regarding the need to modernize and clean up the justice system. Progress in that area will go a long way toward making Panama the regional business and investment center of choice that it deserves to be.

In real estate, the three important factors are location, location, and location. Panama, from the time of the conquistadors, has served as the crossroads of trade for the Americas. Today, Panama is an international trading, banking, and services center. Panama's dollar-based economy offers low inflation and zero foreign exchange risk. Panama's Government actively seeks foreign investment and has no controls on the flow of capital.

Because Panama is a service economy (almost 80 percent of GDP), the country imports a lot of foreign goods. Last year, Panama bought $1.8 billion in merchandise from the U.S. Panama is one of the few countries in the world with which we have a trade surplus.

Although not wealthy, Panamanians are at the top in terms of per capita income, over $4,000 a year.

The United States is Panama's most important trading partner. The U.S. has a 40% share of the import market and buys 45% of Panama’s exports. U.S. products enjoy a high degree of acceptance in Panama. In fact, Panamanians love U.S. products. In Panama City you can have dinner at Bennigans, drink a Budweiser or a root beer, see the latest U.S. blockbuster, and stop by Dunkin Doughnuts to pick up breakfast for the next day. Consumer attitudes and many brand preferences are similar to the U.S. American television, radio and U.S. magazines are all available and popular in Panama. Panamanians frequently travel to the U.S. for vacations, medical treatment, study, and business. Their buying patterns and tastes are similar to ours.

For those of you interested in investment, Panama shows excellent growth prospects in the areas of electric power generation, health care services, ports, land development, road construction, water distribution and purification, telecommunications, and tourism.

Now, my job is not to sell Panama to you. I’ll leave that to my Panamanian colleagues. I am bullish on Panama, though, and think U.S. firms interested in new markets and new investment opportunities should give Panama a good look.

My congratulations again to all the Panamanian and Texan business, scientific and academic organizations that have been responsible for putting together this timely event.

Thank you very much.