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U.S.–Panama Free Trade Agreement Coming into Force—Five Years Later
Posted By Mark Lamborn On October 31, 2012 @ 10:00 am In Enterprise and Free Markets | No Comments
Five years ago, there was no iPad, the unemployment rate was under 5 percent, and the Tea Party was still an 18th century historical event. Five years ago was also when the U.S. and Panama finalized the U.S.–Panama Trade Promotion Agreement, which removes most barriers to trade between the U.S. and Panama and will greatly benefit American consumers and manufacturers alike.
This agreement has many tangible economic, political, and security benefits  for both the U.S. and Panama. So why did it take five years after negotiations were completed for it to take effect? The agreement was finalized in 2006, signed by both nations in June 2007, and ratified by Panama’s National Assembly the following month. Then the agreement sat on the shelf for four years, blocked first by the Democratic majority in Congress  and then by the Obama Administration.
Finally, in October 2011, President Obama submitted the agreement to Congress, where it was quickly passed.
The U.S. is Panama’s largest trading partner, and many U.S. corporations have been anxious to boost their exports into the strategically located Central American nation. This agreement immediately removes hundreds of tariffs  and will undoubtedly increase trade between the two countries.
As one example, Caterpillar will likely see an increase in sales for large projects, such as the Panama Canal expansion. Its exports increased fivefold to Mexico and threefold to Colombia  after free trade agreements with each went into effect.
The U.S. government should be doing everything in its power to support the American economy and encourage growth. Free trade agreements have proven to do both, yet no new trade agreements have been originated or signed by President Obama, and our trade policy remains in limbo.
Mark Lamborn is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit http://www.heritage.org/about/departments/ylp.cfm .
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2012/10/31/u-s-panama-free-trade-agreement-coming-into-force-five-years-later/
URLs in this post:
 Panama : http://www.heritage.org/index/country/panama
 entering into force: http://waysandmeans.house.gov/news/documentsingle.aspx?DocumentID=311288
 economic, political, and security benefits: http://www.heritage.org/research/reports/2009/10/the-us-panama-free-trade-agreement-a-good-deal-for-america
 Democratic majority in Congress: http://www.nytimes.com/2011/10/13/business/trade-bills-near-final-chapter.html?pagewanted=all&_r=0
 hundreds of tariffs: http://www.reuters.com/article/2012/10/22/us-usa-panama-trade-idUSBRE89L12C20121022
 fivefold to Mexico and threefold to Colombia: http://www.uk.cat.com/cda/files/3101412/7/10212011%20FTA%20Passage.pdf
 http://www.heritage.org/about/departments/ylp.cfm: http://www.heritage.org/about/departments/ylp.cfm
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