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Montevideo, March 28th 2024 - 19:46 UTC

 

 

US Free trade agreement, top priority of Panama’s president-elect

Wednesday, May 6th 2009 - 04:10 UTC
Full article

Panama's president-elect Ricardo Martinelli has said finalising a free trade deal with the United States is a priority. Martinelli, a supermarket tycoon, beat the governing centre-left party's candidate by more than 20 points in Sunday's presidential election.

The trade deal was signed in 2007 but has been held up in the US Congress amid concerns that the Central American nation is an off-shore tax haven.

A member of Mr Martinelli's team said such worries were unfounded.

“The perception that Panama is a tax haven is totally false” Frank De Lima, Mr Martinelli's top economic adviser is quoted by Reuters.

Panamanian officials like to recall that the current Panamanian constitution is virtually a copy of that from the state of Delaware, where many US corporations have their financial headquarters for fiscal reasons.

Members of the US Congress have also cited concerns over labour rights in Panama.

Mr Lima said that Panama respected workers' rights and collective bargaining.

The Obama administration said in March that it would work to win Congressional approval of the deal with Panama. The US is Panama's biggest trading partner and bilateral trade in 2008 was around 5.5 billion US dollars.

Mr Martinelli, the candidate of a centre-right alliance led by his Democratic Change (CD) party, is due to take office on 1 July.

Correspondents say a clear challenge for him will be overseeing the 5.5 billion US dollars expansion of the Panama Canal.

Panama has enjoyed buoyant economic growth in recent years, averaging some 8.5%, but this is forecast to slow considerably this year as the global downturn affects the crucial trade link of the Panama Canal.

Panama receives a little under one-third of its tax revenues from the canal, but through traffic has been declining significantly.

The expansion program, scheduled to be competed in 2014, aims to increase the canal's capacity, making it big enough for super-tankers and the largest container ships.

Categories: Politics, Latin America.

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