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PANAMA TRADE PACT KEY TO U.S. RECAPTURING THE HEMISPHERE.

Article Excerpt
Panama and the US concluded a free-trade agreement (FTA) in December that must now be ratified by each country's congress. This "triumph of optimism and hope in the future," as President Martin Torrijos called it, should have smooth sailing through Torrijos' majority congress, but the Democratic majority in the US could scuttle the deal. Panama was able to get concessions from the US that the rest of the isthmus, in negotiating the Central America Free Trade Agreement (CAFTA), could never have dreamed of. But the other countries did not have the multibillion-dollar rebuilding of a transoceanic waterway to bargain with.

Wary of the Democratic Congress' penchants, US Trade Representative (USTR) Susan Schwab was careful to mention the deal "is still subjected to additional talks regarding labor rights."

Labor rights was one of the sticking points that came close to dooming CAFTA when Republicans ruled the legislature (see NotiCen, 2005-08-04). Schwab extolled the "significant opportunities" US companies would be in line for when the Panama Canal expansion starts next year (see NotiCen, 2006-04-20 and 2006-10-26). Democrats tend to emphasize labor and environmental issues, whereas Republicans favor the free flow of capital and job creation.

The provisions on the bidding for the canal work provide an example of the clout that comes with the US$5.25 billion project. Panama presented a proposal by which the Panama Canal Authority (Autoridad del Canal de Panama, ACP) would reserve bids of up to US$10 million for construction and US$500,000 for services. By contrast, CAFTA countries were able to reserve only US$57,000 in government purchases for their national companies.

Panama's Minister of Trade...

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