On July 11 Panama's National Assembly voted 58-3 with one abstention to ratify a "free trade" accord (TLC, the initials in Spanish) which the government signed with the US in Washington, DC, just two weeks earlier, on June 28. The administration of Republican president George W. Bush is expected to have little trouble getting approval from the US Congress, which is controlled by the opposition Democratic Party. The administration and congressional leaders announced a deal on May 10 which gave Democratic support to accords the government had negotiated with Peru and Panama.

"It's the best trade accord that has been signed in the continent," said legislator Pedro Miguel Gonzalez of the ruling center-left Democratic Revolutionary Party (PRD). But soon after the legislature's vote, some 800 protesters rallied near the National Assembly building to oppose the vote. Labor unions and part of the agricultural sector oppose the agreement, which the groups say will leave Panama unable to compete with US firms. Enrique Athanasiadis, director of the National Agricultural Organization, called the TLC "a disaster for producers; it benefits the oligarchy."

The accord will take 10 years to end all tariffs on industrial and consumer goods that the US exports to Panama, but some 88% of the tariffs will be lifted as soon as the TLC goes into effect; another 4% will be eliminated over the next five years and the rest in the remaining five years. According to US government figures, total trade between the US and Panama in 2006 was valued at $3.1 billion; the US had a trade surplus of $2.3 billion. The accord gives Panama's farmers more access to the US sugar market; drops tariffs on melons, pineapples and some other fruits; and guarantees Panama's construction firms at least 10% of the contracts in the planned $5.25 billion expansion of the Panama Canal, while giving US firms preferred access. The US formally ceded control of the canal to Panama at the end of 1999. (El Nuevo Herald, July 11 from AP; Boston Globe, July 11 from Reuters)

From Weekly News Update on the Americas, July 15

See our last post on Panama.