Latin American Neighbours Panama and Colombia Concluded Negotiations for a FTA

Last week, Latin American neighbours Panama and Colombia concluded negotiations for a free trade agreement (FTA), after seven rounds of negotiations, which began in 2010.
 
The negotiations concluded after the Colombian Government made it clear that its recent imposition of five dollars per kilo fee on imports of textiles and clothing is only a temporary measure and not a permanent one. The Colombian tax has affected apparel traders of the Free Trade Zone of Colon in Panama.
 
Apparels are among the major items that Colombia import from Panama at present, and hence the FTA, once it comes into force, is likely to boost Panama’s clothing exports.
 
Colombia’s Minister of Trade, Industry, and Tourism, Sergio Diaz-Granados, said the FTA will give priority to customs cooperation and preferential access for Colombia's export supply.
 
The Minister said Panama has one of the highest economic growth rates in the Latin American region and the FTA will serve to strengthen the channels and flows of information between customs authorities, which will help to improve control mechanisms, both for goods originating in the Parties, as well as those in transit through Panama to Colombia.
 
Panama registered a growth rate of 10 percent in 2012 and it has GDP per capita income of US$ 15,265, which is 50 percent more than the per capita in Colombia.
 
As per the FTA, Panama will allow duty free access for most of Colombia's current export supply, with immediate relief being agreed for 72 percent of the current industrial exports.
 
On the other hand, 49 percent of the tariff lines comprising Panamanian industrial goods will get duty-free entry in Colombia with the entry into force of the FTA, while 50 percent of other goods will receive tariff relief over a 3 to 12 year period.
 
In 2012, Colombia’s exports to Panama were valued at US$ 2.857 billion, with crude oil accounting for about 80 percent of the same. Colombia’s imports from Panama were far less at US$ 72 million, largely consisting of apparel and footwear.