Panamanian Corruption Concealed Amidst Free Trade Negotiations

Panamanian Corruption Concealed Amidst Free Trade Negotiations
Saturday 30 April 2011
by: Eric Jackson, Council on Hemispheric Affairs

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From April 27 to April 29, Martinelli and 11 other Panamanian officials are meeting in Washington D.C. to discuss free trade, regional security, and bilateral cooperation with various U.S. departments and organizations. Today at the White House, President Barack Obama met with Panamanian President Ricardo Martinelli to discuss, among other issues, the pending free trade agreement between Panama and the United States. The meeting with Obama marks the halfway point of Martinelli’s three-day work trip to Washington D.C. and brings the U.S. one step closer towards closing the agreement with Panama.

Free Trade with Panama
The free trade agreement (FTA) was first drafted during the Bush administration, resembling the trade deal that Washington signed with Peru. The agreement was signed by the United States and Panama on June 28, 2007 and was then ratified by the Panamanian National Assembly less than 2 weeks later. As of now, the free trade agreement continues to await congressional approval in the United States. However, on April 18, 2011, U.S. Trade Representative Ron Kirk announced that the last obstacles to U.S. ratification had been met after Panama ratified a tax information sharing agreement with Washington. As the Obama administration prepares to present Congress with the free trade agreements with Columbia, Panama, and South Korea, Democrats remain reluctant to support such agreements while Republicans continue to push for action on all three deals by July.

U.S. policy toward Panama, in light of the country’s realities, reflects a desire to move forward with a free trade agreement. With both countries urgently pursuing an agreement, Washington invented a Panama that has never existed. Rather than a compelling democracy led by a veritable Boy Scout Master, Panama is one of the most corrupt, drug-sodden and scheming societies in Latin America.

Panama offers a relatively boutique market that relies primarily on its service sector and very little on its manufacturing industry. The agreement is likely to increase U.S. agricultural exports to Panama, hoping to create a few hundred jobs in the United States and devastating Panamanian producers, who in most cases are ill-prepared to compete with the subsidized exports of mechanized U.S. agribusiness giants.

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