Though a small country, Panama is critically important for trade prospects for American businesses and workers.  The pending US-Panama Free Trade Agreement (FTA) will allow for increased trade between Panama and American companies.  With a $5 billion expansion of the Panama Canal, Panama’s role as a shipping gateway will greatly increase, providing more opportunities for American trade flows and investment in fast-growing Latin America.  Currently, about two-thirds of the Canal’s shipments go to or come from U.S. ports.  At the same time, Panama is one of the fastest growing economies in Latin America with annual growth in the next four years projected around 7 percent.

A small but growing auto trade market, American motor vehicle parts suppliers are eager to do more business in Panama where 96 percent of U.S. auto parts will receive duty-free treatment immediately upon implementation of the FTA and 78 percent of motor vehicle imports will be duty free immediately.  This is particularly beneficial to the U.S. as 100 percent of vehicles in Panama are imported.  In addition, auto-part import companies in Panama not only serve the domestic market but also serve as a hub for exports to Central and South America, thereby giving American manufacturers greater access to one of the world’s fastest growing regions.

Competition is heating up in Panama where, in addition to a number of existing FTAs with other Latin countries, Panama recently has signed FTAs with Canada and the EU that await ratification in the near future.  MEMA’s members are eager to do business with Panama and help grow the American economy.  They are just waiting for Congress to pass this important FTA along with pending FTAs with Colombia and Korea.