The free trade agreement (FTA) between Panama and Mexico, which came into effect on Wednesday, will contribute to increase trade and investment between both countries and the progress of regional integration, experts said at a forum about the agreement.
Representatives from the Mexican Government and of the Secretariat of Economy of Mexico, as well as from the Ministry of Trade of the Panamanian government, analyzed the advantages and benefits of the trade agreement at a forum organized by the Chamber of Commerce, Agriculture, Industries and Agriculture of Panama (CCIAP).
The participants reviewed various aspects of the agreement and agreed that this agreement opened a window of opportunity for merchants, manufacturers and exporters of Panama and Mexico.
Intellectual property, rules of origin, dispute settlement, market access, sanitary and phytosanitary measures, e-commerce, financial services, temporary entry and stay of business people, investment, and border trade, were among the topics discussed.
The FTA signed by the governments of Panama and Mexico on April 3, 2014 has 21 chapters and includes some 4,000 tariffs, and the Mexican Congress ratified it on March 12 and the Unicameral National Assembly of Panama ratified it on October 8, 2014.
Total trade between Mexico and Panama in 2014 amounted to 1,009 million dollars, with a 968.8 million dollars surplus trade balance for Mexico, according to data from the Ministry of Economy of that country.
Imports of Panamanian products to Mexico were valued at $ 20.3 million.
The president of the CCIAP, Carlos Fernandez, said this agreement would "lay the groundwork for increasing trade ties between both countries, which will allow them to consolidate as privileged platforms of production and distribution of goods and services in the continent."
Mexico's ambassador in Panama, José Ignacio Piña, said the agreement came into force tomorrow and that there was no turning back from this.
The diplomat stressed that the FTA offered commercial and investment benefits for both countries, clear rules and legal protection for investments, but above all, it was a step in regional integration.
Piña said it was a step in regional integration because of "the prospects it opened to the eventual incorporation of Panama to the Pacific Alliance", composed of Mexico, Colombia, Chile and Peru.
The Pacific Alliance was founded in 2012 and Panama has already signed an FTA with all of its members, which is an indispensable requirement to belong to the organization.
The trade agreement signed between Panama and Colombia in September 2013 has not yet been submitted to the Panamanian Parliament for ratification.
Piña indicated that the entry into force of the agreement was an important step for both countries and that it would "immediately allow 50% of the tariffs to be fully liberalized, meaning half of the tariffs would disappear."
Then, gradually, over the next 5, 10, and 15 years, the rest of the products will be exempt from tariffs.
The tariff exemption will be slower for the most sensitive sector of the Panamanian economy, agriculture (between 5-15 years), in order to protect these agricultural products, some of which, according to the diplomat, won't be part of the treaty.
Samuel Moreno, director of Negotiation Legal Affairs of the Panamanian Ministry of Trade and Industry (MITI), said that, in the case of Panama, several products had been excluded through long periods of relief.
Among others, these products include chicken, pork, dairy, coffee and instant coffee, rice, some edible oils, wheat flour, pasta and tomato sauce, fresh potatoes, sugar and some products high in sugar, fruit drinks and soft drinks.
Moreno stated that the main result of the treaty was in the access of goods with export potential, in periods between 0 and 5 years, which included products such as flowers, watermelons, melons, cocoa, palm oil, sugar cane rum and spirits, meat offal beef, processed chicken, chicken sausages, and seafood.
There will also be new opportunities for access in the medium and long term for goods that Panama currently doesn't export to Mexico, such as pineapples, papayas, peppers, fresh peppers, fish flour and dried fish, electrolyte drinks, beers, and industrial products such as paper towels and toilet paper.
The president of International Trade of Goods of the Ministry of Economy of Mexico, Cesar Guerra, who was a negotiator for his country in the chapter on market access, said that the agreement gave immediate and short-term (five years) relief to 72% of the products taxed once it entered into force.
Meanwhile, Mexico gives Panama immediate and short-term (5 years) relief to 81% of the products taxed once the treaty enters into force.
Guerra told Efe that since Panama didn't have an FTA with his country, it competed with other countries that had an FTA with Mexico, but that Panama could now compete with those countries under the same conditions.
Source: elperiodicodemexico.com