PANAMA AND MEXICO TO RE-START FTA TALKS; MEXICO

UNCLAS PANAMA 000204 SIPDIS SIPDIS FOR STATE WHA/CEN - TELLO FOR COMMERCE - PANAMA DESK OFFICER GAISFORD FRO TREASURY - CENTRAL AMERICA DESK OFFICER SARA GARY FOR USTR E.O. 12958: N/A TAGS: ECON CVIS EFTA ETRD FAS PM SUBJECT: PANAMA AND MEXICO TO RE-START FTA TALKS; MEXICO DROPS VISA REQUIREMENTS FOR PANAMANIANS ¶1. (U) SUMMARY. On March 5, 2008, during the inaugural speech for Expocomer 2008 Trade Convention in Panama City, Mexican President Felipe Calderon announced that he would seek a free trade agreement with Panama and that the GOM would eliminate the visa requirement for Panamanians traveling to Mexico. END SUMMARY. -------------- Possible Panama-Mexico Free Trade Agreement -------------- ¶2. (U) During his speech to open Expocomer, Calderon announced that the GOM will seek to begin talks on a free trade agreement with the GOP. The GOP's Minister of Commerce and Industry, Alejandro Ferrer, said he and the GOM's Secretary of Economy have begun to establish a calendar for SIPDIS the talks. In 1999, the GOP and GOM suspended free trade talks after failure to reach agreement and the topic had not been discussed since. The GOP has finalized seven free trade agreements during the Torrijos Administration. A full description of the agreements can be found at www.mici.gob.pa/TLC nueva.php. ¶3. (U) A sticking point in prior free trade negotiations, and current relations, has been Mexico's black list designation of Panama as a tax haven and the resulting impediments to financial transactions between the two countries. During ExpoComer, Domingo Latorraca, President of the Panamanian Chamber of Commerce called for taking Panama off Mexico's black list before beginning free trade talks. ¶4. (U) According to Calderon, Mexican foreign direct in Panama during 2007 was $1.5 billion, which generated 4,000 jobs. According to preliminary figures from the GOP's Comptroller General's Office, during 2007, Panama's exports to Mexico approached $9.1 million, a 15% increase from 2006. Mexico is Panama's 17th largest export market. Panama's principal exports to Mexico were beef and fish. During 2007, Panama's imports from Mexico were $212 million; an increase of 22.5% from 2006. Mexico is Panama's sixth largest source of imports . Panama imports a wide variety of mostly food products from Mexico; the largest being milk ($6.6 million in 2007). -------------- Elimination of Mexican Visa Requirement -------------- ¶4. (U) Also during his speech, Calderon announced that as of March 6, 2008, Panamanian citizens will not need a visa to travel to Mexico. According to the GOM's Undersecretary for Latin America and the Caribbean, Geronmino Gutierrez, during 2007, approximately 15,000 Panamanians traveled to Panama. The GOP requires Mexican visitors to obtain a $5.00/90 day validity tourist visa to enter Panama. There are no indications to date that the GOP will eliminate this requirement. EATON