Panama -US FTA stumbling
The U.S.-Panama trade pact was signed in June 2007, but the deal has been stalled along with separate bilateral trade pacts with Colombi...
The U.S.-Panama trade pact was signed in June 2007, but the deal has been stalled along with separate bilateral trade pacts with Colombia and South Korea.
The latter two trade deals are ensnared in controversial human rights and market access disputes.
But the House said earlier this year in a "trade policy agenda" document that it hoped to send the Panama deal to Congress for consideration "relatively quickly."
Democratic lawmakers and Obama administration officials now say Panama must take steps to increase transparency and information exchange with U.S. authorities on tax issues, before the free trade agreement can advance.
"I would say with respect to Panama that there are also some important issues that need to be worked through having to do with cooperation in resisting tax evasion," House National Economic Council Director Larry Summers said at an April 18 press conference at the Summit of the Americas.
The Treasury Dept. launched talks with Panama towards a tax information exchange agreement in 2002, but the talks have made little progress.
U.S. business lobbyists who back the U.S.-Panama trade deal have been pushing for a vote prior to Congress' August recess.
The demands from the Obama administration on tax transparency seem to make that timetable unlikely.
Panama holds presidential and parliamentary elections May 3,
It is doubtful whether the Treasury Dept. would be able to conclude a tax information exchange agreement with the lame-duck administration of outgoing President Martin Torrijos.
The Organization for Economic Cooperation and Development on April 2 listed Panama as one of 30 tax haven jurisdictions that have committed to international standards on bank secrecy, but have "not yet substantially implemented" those standards.
Panama is also mentioned in legislation introduced by Sen. Carl Levin, D-Mich., with sanctions for tax haven jurisdictions.
Meanwhile, negotiations for a Free Trade Agreement between Canada and Panama are continuing and people close to the talks believe they will be concluded soon.