The Government of Mexico, through the Secretariat of Economy, reports that the Senate of the Republic recently ratified the Free Trade Agreement between Mexico and the Republic of Panama (TLC, by its initials in Spanish).
In response to the mandate of the Presidents of Mexico and Panama on 23 May, 2013, the Secretariat of Economy of the Mexican United States and the Ministry of Commerce and Industry of the Republic of Panama announced the start of the international trade negotiations with the purpose to strengthen the bilateral relations, diversify the exports, encourage the mutual trade and multiply the investments, increasing the economic growth and the prosperity of both nations.
In November 2014, Panama issued in its Official Gazette the approval of the Free Trade Agreement between Mexico-Panama by its National Assembly. In October of the same year, Mexico provided that Agreement to the Senate of the Republic, which was recently approved.
This Agreement shall enter into force after Mexico and Panama have exchanged their communications of completion of their internal legal procedures. Once this exchange is completed, the Agreement will be published in the Official Journal of the Federation (DOF) through a promulgation decree. Also, the Secretariat of Economy of Mexico will publish in the same information media the Agreement whereby the tariff preferences agreed between both countries, in the framework of such instrument, must be internally implement.
Derived from the negotiation of the Agreement, by the Secretariat of Economy, Mexico will have immediate and a short-term access (5 years) to 72% of the agreed tariff universe of goods, in products such as copper and aluminum, steel, automobiles, auto parts, paints, cosmetics and perfumery, avocado, raspberry, semolina, gum, tequila, mezcal and orange juice. The rest of the agreed tariff universe will be liberalized gradually.
This Agreement takes on special meaning in view of the importance of Panama, one of the most dynamic economy in the region over the past decade (9.1% of GDP is its average annual growth); its geopolitical significance as the most important logistical and commercial center of Latin America; and due to the recent strengthening of friendship, the understanding and cooperation between both countries following the celebration, in 2014, of the 110th anniversary of bilateral relations.
The Mexico-Panama Free Trade Agreement will lay the foundation for a major commercial corridor in the continent and will consolidate the position of both countries as privileged platforms of production and distribution of goods and services for both the Americas, as global markets.
In the past 10 years, the trade between Mexico and Panama nearly doubled, adding 1.009 million dollars in 2014, placing the country as the fourth trading partner of Mexico in Central America and twelfth in Latin America and the Caribbean. Also, Panama is the second largest Latin American investor in Mexico, after Brazil, with a total of 1.035 million dollars between 1999 and 2014.