When the economy of the United States and those in the rest of the world were booming, free trade agreements offered an immediate benefit in increased business transactions benefiting from the tariff preferences established in them.
Today, free trade agreements have proliferated, the globalization of the economy has increased considerably, and the same has occurred with the competition for access to markets.
In his analysis of the issue, Andrés Oppenheimer reveals that Osvaldo Rosales, director of international trade office of the Economic Commission for Latin America and the Caribbean (ECLAC), commented that "A free trade agreement is no more than a ticket to tax-free preferential access to the huge U.S. market, but that in itself does not ensure that there will be a demand from that market demand for Colombian or Panamanian products."
As an example of the remaining tasks that Latin American countries such as Panama have, and to aspire to take advantage of the opportunity given by the FTA with the U.S., Oppenheimer points out South Korea, just 50 years ago, had a per capita income that was three times less than Panama’s. Today the per capita GDP of South Korea is more than twice that of Panama.
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Both houses of the U.S. Congress ratified the Treaty of Trade Promotion with Panama and other countries.
A press release from the Presidency of the Republic of Panama reads:
Panama’s growing economy growth saw years of effort pay off, especially under the current government administration, after both houses of the U.S. Congress ratified the Trade Promotion Agreement (TPA) with Panama and other countries.
Along with free trade agreements with South Korea and Colombia, Panama’s agreement with the USA will be approved this evening in the U.S. Senate.
These trade agreements were negotiated and signed during the administration of President George Bush, but lacked, until now, the support needed for approval in Congress.
The FTA jumped the first hurdle in the U.S. Congress, having been approved by the committee in the first round with 32 votes in favor and only 2 against.
The Committee on Ways and Means of the House of Representatives yesterday approved the U.S. Free Trade Agreements (FTAs) with Colombia, Panama and South Korea, with 24 votes in favor and 12 against in the case of the South American country, 31 against 5 in the case of the Asians, and 32-2 for the Central American country.
Its entry into force, scheduled for October 2012, will mean a drop from 7% to 0% on the tariffs of 87% of U.S. products exported to the canal country.
The general expectation in the capital of United States is that the FTA with Panama will come into force around October 2012, after almost 10 years of paperwork.