CRS Reports Concerns on Congressional Approval of Pending U.S.-Panama FTA
The Congressional Research Service has issued a report (RL32540) entitled, "The Proposed U.S.-Panama Free Trade Agreement."
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Proposed U.S.-Panama FTA Would Not Have Major Impact on U.S. Economy
In the report, CRS notes that Panama trades little with the U.S., even by Latin American standards, and so although particular industries may be affected to some degree, and U.S. investment is relatively important in Panama, the proposed U.S.-Panama FTA cannot have a major effect on the U.S. economy as a whole.
FTA Covers Labor, Environment, Generic Drug Issues Sought by Congress
The final text of the proposed U.S.-Panama FTA incorporates specific amendments on key issues based on congressional input. The most significant were adoption of enforceable labor standards, compulsory adherence to select multilateral environmental agreements (MEAs), and an easing of restrictions on developing country access to generic drugs.
But Concerns Remain over Panama Union Laws and Tax Transparency
CRS states that there are still lingering concerns over Panamanian labor statutes, which some members of Congress would like to see amended so that the minimum number of workers required to start a union would be reduced from 40 to 20.
CRS notes that there is little interest in making this change in Panama, even among labor groups, but Panama is updating the labor code to standardize language nationally, particularly clarifying collective bargaining and right to strike language covering export processing zones.
The second concern relates to questions raised over tax transparency issues, which may have been defused by the November 30, 2010 signing of a Tax Information and Exchange Agreement (TIEA) by Panama and the U.S.
Changes to Date May Not be Enough for Approval by Congress
CRS notes that it is unclear if these changes will be sufficient for the FTA to be approved by a majority in Congress.
(See ITT's Online Archives or 01/26/11 news, 11012633, for BP summary of the House Ways and Means Committee hearing on pending FTA with Panama, etc.)