The Office of the Comptroller General has estimated that Panamanian exports will decrease by 8% this year, when compared to 2015. This decrease is mainly due to the low export of tropical fruits, which has decreased by 45% since 2009.
According to a report, pineapple exports, the country's flagship product, fell by 36% this year, while melon exports decreased by 18%, and banana exports went down by 4%, among others. Gourmet coffee exports increased by 225%.
According to estimates, this year, exports of domestically produced goods will only amount to 600 million dollars, while imports will amount to nearly 9 billion dollars, which would result in a 93% deficit in the country's trade balance.
This inequality is a major economic weakness for the country, even though the service, trade, and tourism sectors are its strengths.
The distortion is mainly due to to the free trade agreements (FTAs) that have been negotiated and signed with many countries.
"The FTA with the United States, our largest business partner, only works so that we buy their products, as the US applies all of the non-tariff mechanisms, and imposes capricious sanitary and phytosanitary measures on the products we sell them".
"For example, the US impedes Panamanian poultry meat exports to its territory even though it meets first world specifications because, according to them, despite not having the dreaded Newcastle avian disease virus, the country doesn't have the Animal health surveillance that they have. As a result, and as part of the treaty, the United States sends lower quality poultry meat cuts to our market and have never bought a breast from us, even though it is the most consumed part in that market.
Something similar happens with mangoes, citrus, papayas, and avocados, where the US won't accept fresh fruit imports of these products from certain areas. such as Chiriqui and Azuero, despite them being certified as free of fruit fly.
After having signed an FTA with Panama, the United States and the European Union objected to the existing agricultural development certificates that promoted exports because it was seen as a direct subsidy for the exporters, which is banned in such treaties. However, we all know that the US and Europe subsidize their exporters disguising it as different incentive formulas.
For that reason, and taking advantage of the clear intention of President-elect Donald Trump, our country and all the countries in the region should request a review of the FTA, so that the different parties are treated fairly and equitably; just like he expresses regarding other treaties that affect the US national interests.
Many renowned economists say that, after having expanded the Canal, the country's core business, Panama must start paying more attention to the production sector, to start producing and exporting food to different latitudes taking advantage of being the region's largest logistics center.
One way to boost agricultural exports is to legislate to provide tax incentives to individuals and corporations, so that they invest in agricultural exports and, in turn, achieve the food production volumes, quality, and prices that benefit the national consumers."