RESTRICTED  
  
WT/TPR/G/421  
13 December 2021  
(21-9289) Page: 1/38 
Trade Policy Review Body  Original: Spanish  
 
  
TRADE POLICY REVIEW  
REPORT OF  
PANAMA  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Panama 
is attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Panama.  WT/TPR/G/421 • Panama  
 
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  Contents  
1 INTRODUCTION  ................................ ................................ ................................ ...........  3 
2 RECENT ECONOMIC ENVIRONMENT AND OUTLOOK  ................................ ......................  4 
2.1 Overview  ................................ ................................ ................................ .....................  4 
2.2 Economic performance by sector  ................................ ................................ ....................  5 
2.2.1 Primary sector  ................................ ................................ ................................ ...........  5 
2.2.2 Secondary sector  ................................ ................................ ................................ ....... 7 
2.2.3 Services sector  ................................ ................................ ................................ ..........  9 
2.3 Balance of payments  ................................ ................................ ................................ ... 11 
2.4 Inflation  ................................ ................................ ................................ ....................  15 
2.5 Fiscal situation  ................................ ................................ ................................ ...........  16 
2.5.1 Central government revenue  ................................ ................................ .....................  16 
2.5.2 Central government expenditure  ................................ ................................ ...............  17 
2.5.3 Central government current savings  ................................ ................................ ...........  18 
2.6 Challenges posed by COVID -19 ................................ ................................ ....................  19 
2.6.1 The 2020 financial strategy  ................................ ................................ .......................  19 
2.6.2 Health strategy  ................................ ................................ ................................ ....... 20 
3 RECENT TRADE POLICY DEVELOPMENTS  ................................ ................................ .... 21 
3.1 Multilateral trading system  ................................ ................................ ..........................  21 
3.2 Dispute settlement mechanism  ................................ ................................ ....................  23 
3.3 Trade agreements  ................................ ................................ ................................ ...... 23 
4 TRADE POLICY INSTRUMENTS  ................................ ................................ ...................  25 
4.1   Tariffs  ................................ ................................ ................................ .....................  25 
4.2   Customs procedures  ................................ ................................ ................................ . 25 
4.3 Trade facilitation  ................................ ................................ ................................ ........  25 
4.4 Competition policy  ................................ ................................ ................................ ...... 26 
4.5 Technical standards  ................................ ................................ ................................ .... 26 
4.6 Investment policies  ................................ ................................ ................................ ..... 27 
4.6.1 Regime for the establishment and operation of multinational business headquarters  ........  27 
4.6.2 Regime for the establishment and operation of multinational companies providing 
manufacturing -related services  ................................ ................................ ..........................  28 
4.7 Intellectual property  ................................ ................................ ................................ ... 28 
5 MODERNIZATION OF THE STATE  ................................ ................................ ................  33 
5.1 Regulations ................................ ................................ ................................ ................  33 
5.2 The AIG's specific objectives in terms of technology infrastructure include: ........................  33 
5.3 The 2021 Digital Agenda  ................................ ................................ .............................  34 
5.3.1 Implementation of the integration platform for state payments  ................................ ..... 36 
5.3.2 Other Digital Agenda projects  ................................ ................................ ....................  36 
5.3.3 Innovative, interoperable and unified governance  ................................ ........................  37 
6 CONCLUSIONS AND OUTLOOK  ................................ ................................ ....................  38  WT/TPR/G/421 • Panama  
 
- 3 - 
 
 1 INTRODUCTION  
1.1. The Republic of Panama actively promotes a sustainable trade policy that is designed to dr ive 
development  and has  the capacity to foster economic growth and reduce poverty and inequality. 
This, coupled with the advances made in industrial policy, will lead us as a country towards a 
development model based on innovation and competitiveness.  
1.2. For more than a decade  before the COVID -19 crisis , Panama experienced high economic growth 
– among the highest rates in Latin America and the Caribbean. Despite the impact of the crisis, the 
World Bank forecast 9.9% real gross domestic product (GDP) growt h in 2021, followed by 
convergence at a potential growth rate of approximately 5%.  
1.3. The strengths of the Panamanian economy are related to its privileged geographical position 
which, with the Panama Canal, creates favourable conditions for the logistic s sector, encourages 
openness in the Panamanian market and fosters economic diversification. As a result, the country 
has attained a high level of competitiveness in sectors with a large exposure to international markets, 
which requires a trade policy fram ework that ensures predictability and stability.  
1.4. Considering the impact that regional trade negotiations can have on the proposed development 
model, Panama has, in the seven years since its last Trade Policy Review (TPR) in 2014, signed five 
free trad e agreements and one partial scope agreement with the aim of extending our foreign trade 
platform and increasing our participation in international trade.  
1.5. At the multilateral level, Panama accepted the Protocol of Amendment to insert the WTO Trade 
Facilitation Agreement into Annex 1A of the WTO Agreement on 17 November 2015 and is an active 
participant in the negotiations under way on a number of issues such as fisheries subsidies, new 
accessions and e -commerce.  
1.6. This report is comprised of four p arts: recent economic environment and outlook, recent trade 
policy developments, trade policy instruments and modernization of the State.  
 
 
 
 
 
 
 
 
 
 
 
 
 WT/TPR/G/421 • Panama  
 
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  2 RECENT ECONOMIC ENVIRONMENT AND OUTLOOK  
2.1 Overview  
2.1. Panama's real GDP or GDP at constant prices rose at an annual average of 4.7% over the period 
from 2014 to 2019, posting the highest rates in 2015 (5.7%) and 2017 (5.6%). This exceeded 
growth in Latin America and the Caribbean, which averaged 0.6%. The activities that drove national 
economic growth were: mining and quarrying; construction; electricity, gas and water supply; 
transport, storage and communications; financial intermediation; social and private health services; 
and other non -market output – general government. On the expenditure si de, the highest growth 
components were final consumption of general government and households, and gross fixed capital 
formation.  
2.2. In 2020, the economy contracted by 17.9% – the sharpest decline in history – as a result of 
the effects of the COVID -19 pandemic on health, the economy and society, not only in Panama but 
around the world. The situation at the regional level was also difficult. According to the International 
Monetary Fund, in 2020 the Latin American and Caribbean region faced the largest eco nomic 
contraction on record.  
Chart 2. 1 Percentage change in gross domestic product, at constant 2007 prices, 2014 -
2020  
 
Source:  National Institute of Statistics and Censuses and the International Monetary Fund.  
2.3. The Pana manian economy started to recover in 2021. In the first half of the year, it recorded 
10.0% growth in GDP compared to the same period of 2020, and the projections of the major 
international bodies suggest that there will be an annual increase of between 9. 9% and 12.0%.1 
2.4. The country continued implementing economic policies to attract foreign investment, resulting 
in the establishment of a large number of multinational corporations under various regimes, such as 
the multinational business headquarters regime, free zone s, the Panama -Pacific Area and the Colón 
Free Zone. Physical investment in construction increased over much of the period. Public investments 
included the extension of the Panama Canal (completed in 2016), construction of line 2 of the 
Panama Metro (comple ted in 2019) and planned extensions to lines 1 and 2. Furthermore, 
construction and extension work was carried out on airports, schools, hospitals and the highway, 
sanitation, power transmission and aqueduct networks. Private investment included the constr uction 
 
1 9.9% is the World Bank's growth forecast from June 2021. 12.0% is the International Monetary Fund's 
forecast from April 2021 and the forecast of the Economic Commission for Latin America and the Caribbean 
(ECLAC) from August 2021.  
5,15,75,05,6
3,63,0
-17,91,3
0,4-0,61,3 1,2
0,2
-7,0
2014 2015 2016 2017 2018 2019 2020
Panamá América Latina y el CaribeWT/TPR/G/421 • Panama  
 
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 of copper mining infrastructure and power stations, and residential and commercial developments. 
From 2018, commercial development slowed due to a high inventory level.  
2.5. Foreign trade recorded current account deficits for the entire period from 2014 to 2019, and 
these were funded with surpluses on the financial account, mainly from foreign direct investment. 
In 2019 and 2020, exports of goods of domestic origin were boosted by exports of copper ores and 
concentrates, and services exports grew mos tly as a result of revenue from the Panama Canal, ports 
and air transport. There was an overall drop in the trade, services and income balance in 2020 due 
to the pandemic.  
2.2 Economic performance by sector  
2.2.1 Primary sector  
Agriculture, livestock, hunting and forestry  
2.6. Agriculture, livestock, hunting and forestry activity declined in 2014 because coffee production 
was hit by fungi and pests, and livestock was affected by weather conditions. From 2015, the sector 
posted positive rates,  especially during the 2016 -2019 period. It experienced 9.9% growth in 2019, 
driven by the increase in area of rice planted and harvested and by banana exports, which increased 
when the company Banapiña, S.A. (a subsidiary of Del Monte) began operations, m aking bananas 
one of the main exportable supply products.  
Chart 2. 2 Percentage change in the real gross domestic product of agriculture, livestock, 
hunting and forestry, 2014 -2020  
Source:  National Institute of Statistics an d Censuses.  
2.7. In spite of the pandemic, the sector continued to grow in 2020, boosted by purchases of protein, 
fruit, vegetables and other items for distribution among the population as part of the " Panamá 
Solidario " (Panama Solidarity) government progr amme. It was also due to the fact that activity did 
not shut down as it was essential for food supply.  
Fisheries  
2.8. Over the period 2014 -2020, the fisheries sector grew by -1.3% on average, though year -on-
year performance was relatively variable. Of the  years of decline, the largest drop occurred in 2019 
(21.0%), influenced by lower exports of prawns, fish and fish fillets and other marine products, both 
in terms of value ( -34.0%, -20.4% and -8.9%, respectively) and weight exported ( -31.1%, -4.4% 
and -59.1%, respectively).  
2.9. There were also increases in several years, especially 2014 (14.8%), when exports of these 
three items rose in terms of value (6.0%, 26.0% and 163.2%) and weight (25.1%, 25.8% and 
113.1%). There was also an increase the activity's  GDP (12.2%) in 2020 as the quantity exported 
-0,80,83,6
1,23,69,9
3,0
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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  – especially of fish and fish fillets (23.7%) – increased. On the other hand, the value exported 
dropped as the increase in fish and fish fillets was offset by the drop in other categories.  
Chart 2. 3 Percentage change in the real gross domestic product of fisheries, 2014 -2020  
Source:  National Institute of Statistics and Censuses.  
Mining and quarrying  
2.10. Mining and quarrying accounted for 2.2% of GDP between 2014 and 2020, grow ing by an 
average of 16.2%. It was driven by strong growth in 2019 and 2020 due to copper extraction. 
Historically, the sector accounted for around 1.9% of total GDP, owing in large part to the non -
metallic component, including stone quarrying and sand ext raction, as a result of demand for raw 
materials from the construction industry.  
Chart 2. 4 Percentage change in the real gross domestic product of mining and quarrying, 
2014 -2020  
 
Source:  National Institute of Statistics and Censuses.  
2.11. In 2020, mining and quarrying activity's share of GDP increased to 4.0% as the Cobre Panama 
mine began copper extraction operations in mid -2019. Despite the economic effects of the COVID -
19 pandemic and the suspension of the copper mine's operations in April, May and June as part of 
the health measures, the activity's GDP in 2020 was PAB 1,400.2 million, up 34.1% on 2019. This 
was due to an upturn in demand for copper on the international markets and the resulting increase 
in the price of its ore.  
14,8
-2,7
-11,10,6
-2,2
-21,012,2
2014 2015 2016 2017 2018 2019 2020
8,910,0
8,1 8,1
2,841,3
34,1
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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 2.2.2 Secondary sector  
Manufacturing  
2.12. The growth rate of manufacturing decreased gradually over the period 2014 -2020, with the 
exception of 2017, and the sector contracted in 2019 and 2020.  
2.13. In 2014, the activity's growth ra te was 3.5% and GDP stood at PAB 1,992.3 million. In the 
following year it was slightly lower (3.4%), and lower still in 2016 (1.1%). The lower growth rate in 
2016 was mostly due to the downturn in the production of inputs for use in construction following  
the completion of major infrastructure projects. In 2017, the industry recovered with growth of 
2.6%, influenced by the approval of Law No. 25 which broadened incentives for the industrial sector 
and boosted both exports and domestic production.  
Chart 2. 5 Percentage change in the real gross domestic product of manufacturing, 2014 -
2020  
 
Source:  National Institute of Statistics and Censuses.  
2.14. In 2018, manufacturing was one of the least dynamic sectors of the economy, grow ing by 
1.0%. In 2019, it contracted by 1.1% as industrial activity was restricted by the drought in the 
country, caused by the El Niño phenomenon. This reduced  the level of rivers and their tributaries 
and led to a decrease in drinking water production, an  important input in this activity's production 
process. In 2020, the negative impact of the COVID -19 pandemic on the economy caused the 
industry to contract by 22.0%, with GDP standing at PAB 1,667.38 million.  
2.15. In 2014, the value added of electricity,  gas and water supply rose by 11.5% as solar (1.5 
GWh) and wind (113.2 GWh) generation was added to the electricity mix. In 2015, economic growth 
stood at 10.3% due to increased hydroelectric (1,224.8 GWh) and wind (299.0 GWh) generation. 
Moreover, the dro p in the price of petroleum products (bunker C: 44.6% and light diesel: 38.3%) 
and coal (17.8%) lowered production costs for thermal power stations.  
3,5 3,4
1,12,6
1,0
-1,1
-22,0
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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  Chart 2. 6 Percentage change in the real gross domestic product of electricit y, gas and 
water supply, 2014 -2020  
 
Source:  National Institute of Statistics and Censuses.  
2.16. In 2016, the sector contributed 10.1% growth to the economy. There were two key factors in 
the increase in value added of electricity supply: the decrease in oil prices, which reduced the 
marginal costs of electricity generation by 33.7%, and the rise in electricity production from 
renewable sources (67.2% of the total generated).  
2.17. In 2017, GDP grew by 7.3%, mostly due to more moderate electricity consumpt ion. In 2018, 
when the first liquefied natural gas plant was opened and the third transmission line became 
operational, GDP rose by 2.1%.  
2.18. In 2019, the sector expanded by 4.6%. Turnover from the large customers category went up 
by 70.9% (especially in  the last quarter), driving the increase in generation.  
2.19. In 2020, GDP fell by 5.8% owing to lower electricity turnover, mostly from the industrial and 
commercial sectors, despite the increase in turnover from the residential sector as a result of the 
COVID -19 situation. The State introduced an extraordinary electricity subsidy to mitigate the 
economic impact of COVID -19, consisting of a 50% monthly tariff reduction for customers with a 
consumption of up to 300 KWh and 30% for those consuming up to 1,00 0 KWh. This entailed 
expenditure of PAB 111.1 million in the course of the year.  
Construction  
2.20. Construction is one of the main economic activities and both its market and own final use 
components account for an average of 15.1% of total GDP. It recor ded an average growth rate of 
7.7% between 2014 and 2019.  
11,5
10,3 10,2
7,3
2,14,6
-5,8
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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 Chart 2. 7 Percentage change in the real gross domestic product of construction, 2014 -
2020  
 
Source:  National Institute of Statistics and Censuses.  
2.21. The construction of residential and non -residential projects and public infrastructure was the 
driver behind th e activity's positive performance up to 2019. Following the completion of major 
public infrastructure projects (such as the Panama Canal Expansion, which began in 2012 and 
finished in June 2016, and line 2 of the Metro, which began in 2015, with services s tarting in April 
2019) and the moderate performance of private investment due to an excess inventory of unplaced 
residential and commercial properties, growth was lower in 2019 than over the period 2014 -2019.  
2.22. Nevertheless, the biosecurity measures ad opted in 2020 to mitigate the spread of the virus, 
including the suspension of non -essential activities such as construction, led to a 51.8% drop in the 
industry's GDP. Before the declaration of the state of emergency at the end of March 2020, the 
industry  had positive growth prospects due to an expected increase in real estate activity.  
2.2.3 Services sector  
Wholesale and retail trade  
2.23. Wholesale and retail trade has the largest share of total GDP – 18.1% on average between 
2014 and 2019 – but with a s low-down trend as a result of the completion of some infrastructure 
projects, which had stimulated growth in employment and hence consumption at commercial 
establishments. In 2019 it accounted for 17.5% of the total. The average growth rate for the period 
was 3.0%. The fastest growing sectors were repair of vehicles and household appliances (6.3%) and 
wholesale trade (5.8%); the performance of retail trade was more moderate (4.7%) and the Colón 
Free Zone saw a downward trend ( -6.2%).  
13,2 13,0
8,1 8,3
3,2
0,1
-51,8
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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  Chart 2. 8 Percentage change in the real gross domestic product of wholesale and retail 
trade, 2014 -2020  
 
Source:  National Institute of Statistics and Censuses.  
2.24. In 2020, the sector declined by 19.4% as a result of the closure of on -site busi nesses selling 
non-essential goods (until 28 September 2020), movement restriction measures to halt the spread 
of COVID -19 and the loss of labour income for a proportion of the population. However, businesses 
selling food and medicine were able to operate and, later, online sales of hardware and automobile 
accessories were permitted and repair shops were allowed to open.  
Transport, storage and communications  
2.25. Transport, storage and communications accounted for 14.5% of GDP on average. This 
significant contribution is mostly due to the expansion of the Panama Canal with a new set of locks, 
and to port -related activities, which boosted maritime services and, in the last decade, air transport 
services with connections via the Hub of the Americas.  
Chart 2. 9 Percentage change in the real gross domestic product of transport, storage 
and communications, 2014 -2020  
 
Source:  National Institute of Statistics and Censuses.  
2.26. On 26 June 2016, a new set of locks were opened to allow  the passage of Neopanamax ships 
(container ships, iron ore and other bulk carriers, and now ships carrying liquefied natural gas 
produced in the United States) with a maximum of 13,000/14,000 twenty -foot equivalent units 
(TEU). In 2017, toll revenues rose  by 17.6% as a result of the Canal's expansion, the return of 
maritime services that were lost due to the limited capacity of the old locks, and the passage of new 
1,13,04,03,6 3,9
2,1
-19,4
2014 2015 2016 2017 2018 2019 2020
1,92,7
1,811,4
5,66,3
-6,2
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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 liquefied petroleum gas and liquefied natural gas carriers. Furthermore, tonnage increased b y an 
average of 5.9% from 2014 to 2020, with higher rates after 2017.  
2.27. In 2020, the performance of canal activity was encouraging, despite the effects of the 
pandemic, due to the consolidation of cargo in the container ship segment, which increased th e 
volume of cargo by 2.1%; the slight recovery in the maritime industry; and  the increased demand 
for petroleum and petroleum products, as a result of the market conditions and the reopening of 
economies.  
2.28. More than 7 million TEU of goods pass through  Panamanian ports every year, demonstrating 
their potential within the logistics sector. They play a critical role in the functioning of the local and 
international supply chain. The international importance of this sector places Panama high among 
the top 10 countries contributing the most to the total volume of cargo handled at the regional level, 
according to ECLAC.  
2.29. Air transport saw dynamic  growth in activities at Tocumen International Airport. Before the 
pandemic, 15 million passengers, including traffic and transit, travelled through the airport every 
year. With the opening of terminal 2, the airport will have capacity for 25 million passe ngers per 
year. 
Financial intermediation  
2.30.  Financial intermediation sustained stable growth over the years  and, over the last six, its 
share of GDP averaged 7.5%. High growth rates of 7.6% and 7.3% were recorded in 2015 and 2016, 
respectively, and in 2020 there was a 1.5% decrease as a result of the drop in both local and external 
financing due to the impact of the COVID -19 health crisis. Although loans were less buoyant, the 
banking system remained active in providing its services . Measures were implemented to strengthen 
the system and there were increases in domestic and foreign deposits, reflecting consumer 
confidence.  
Chart 2. 10 Percentage change in the real gross domestic product of financial 
intermediation, 2014 -2020  
 
Source:  National Institute of Statistics and Censuses.  
2.3 Balance of payments  
2.31. The balance of payments showed deficits in the current account  between 2014 and 2019. 
They represented an annual average of 8.1% of nominal GDP, wi th the highest share in 2014 (-
13.4% of GDP) and the lowest in 2019 (-5.0% of GDP). However, the balance was in surplus (PAB 
1,233.1 million) in 2020 due to the effects of the implementation of national and international health 
protocols to contain the pan demic. These protocols resulted in a significant decrease in imports of 
goods and services and the income paid on the investments of non -residents in the country. In the 
years where the current account balance was negative, this was largely the result of t he deficit in 
4,07,67,3
4,5
3,5
2,8
-1,5
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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  the goods and income balances. Meanwhile, the services balance always maintained a surplus, driven 
by transport exports.  
Table 2. 1 Summary of the balance of payments of the Republic of Panama, 2014 -2020  
(PAB million) 
Item  2014  2015  2016  2017  2018  2019  2020  
CURRENT 
ACCOUNT  -6,679.3  -4,848.3  -4,505.0  -3,681.9  -4,966.9  -3,332.5  1,233.1  
GOODS  -10,823.0  -9,786.4  -9,012.4  -9,821.5  -10,613.7  -9,047.4  -4,107.1  
Exports  14,971.5  12,764.0  11,687.1  12,469.6  13,352.7  13,213.9  10,240.0  
Imports  25,794.5  22,550.4  20,699.6  22,291.2  23,966.4  22,261.3  14,347.1  
SERVICES  7,847.4  7,857.5  8,081.9  9,307.1  9,553.1  9,550.7  6,396.4  
Exports  12,717.8  12,615.0  12,773.4  13,910.6  14,461.0  14,663.2  9,376.7  
Imports  4,870.4  4,757.5  4,691.5  4,603.6  4,908.0  5,112.6  2,980.3  
INCOME  -3,825.9  -2,813.4  -3,470.4  -3,043.0  -3,836.0  -3,804.4  -1,187.5  
Exports  2,166.6  2,081.0  2,260.0  2,489.6  2,551.5  2,444.6  1,608.4  
Imports  5,992.5  4,894.4  5,730.3  5,532.6  6,387.5  6,249.0  2,795.9  
TRANSFERS  122.2  -106.0  -104.1  -124.4  -70.2 -31.3 131.2  
Received  1,027.8  921.4  905.9  903.2  918.6  975.7  749.0  
Made  905.6  1,027.4  1,010.0  1,027.6  988.8  1,007.0  617.8  
CAPITAL AND 
FINANCIAL 
ACCOUNT  5,019.7  6,506.6  7,706.1  5,851.5  6,152.0  4,736.0  -896.7  
Capital  24.2 26.9 24.0 25.2 22.7 22.1 11.1 
Financial  4,995.5  6,479.7  7,682.0  5,826.3  6,129.4  4,713.9  -907.8  
ERRORS AND 
OMISSIONS  1,659.6  -1,658.3  -3,201.1  -2,169.6  -1,185.1  -1,403.5  -336.3  
Source:  National Institute of Statistics and Censuses.  
2.32.  The balance of goods  was in deficit during the review period since imports were higher than 
exports, although the value of foreign purchases in several years decreased compared to the 
previous year ( -12.6% in 2015, 8.2% in 2 016, -7.1% in 2019 and -35.6% in 2020). The performance 
of imports of goods for domestic use ( c.i.f.) was similar to the total. They rose only in 2014 (5.2%), 
2017 (8.8%) and 2018 (4.0%), mainly due to the growth in imports of consumer and intermediate 
goods.  
2.33. The trend in consumer goods imports is explained in large part by the performance of fuels 
and lubricants and the variations in their international prices. Imports of intermediate goods as a 
whole followed a similar trend to construction materia ls imports, given the sector's weight in the 
country's economic structure. Imports of capital goods saw growth in only two years, 2014 (1.8%) 
and 2017 (6.1%), mainly due to imports for use in construction.  
2.34. Imports into the Colón Free Zone fell throughout almost the entire review period. They rose 
only in 2018 (6.2%). These goods come mainly from China; Hong Kong, China; Mexico; Singapore; 
the United  States; and Viet Nam.  
2.35. Exports of goods of domestic origin fell between 2014 and 2016, mostl y as a result of fishery 
products and fruit exports. They then grew at a modest pace until the spike in 2019 (PAB 1,504.3 
million, up 124.6% compared to 2018), when exports of copper ores and concentrates began. By 
adding these exports, worth PAB 1,065.6 m illion or 61.8% of the total, domestic exports reached 
PAB 1,725.5 million in 2020, a historical record high. Bananas were another product that performed 
strongly in some years, especially in 2019 (up 29.9% compared to 2018), owing to increased 
production as exports from the western Pacific region of the country restarted. The main destinations 
for goods exports, excluding metal mining, were China, Costa Rica, India, the Netherlands and the 
United States. Most of the copper ores and concentrates sold in 202 0 went to China, Germany, the 
Republic of Korea and Spain.  WT/TPR/G/421 • Panama  
 
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 Table 2. 2 Summary of the balance of goods of the Republic of Panama, 2014 -2020  
(PAB million)  
Item  2014  2015  2016  2017  2018  2019  2020  
Balance  -10,823.0  -9,786.4  -9,012.4  -9,821.5  -10,613.7  -9,047.4  -4,107.1  
Net exports  14,971.5  12,764.0  11,687.1  12,469.6  13,352.7  13,213.9  10,240.0  
Exports of goods  14,273.5  12,584.7  11,654.6  11,676.0  12,085.6  11,904.1  10,168.8  
National exports  817.2  695.1  634.8  659.9  669.7  1,504.3  1,725.5  
National re -
exports  208.5  217.8  138.9  154.8  146.2  156.5  174.2  
Re-exports from 
the Colón Free 
Zone 12,959.9  11,347.9  10,402.9  10,431.6  10,807.8  9,814.0  7,757.0  
Export processing 
zones  287.9  323.9  478.0  429.6  461.9  429.3  512.1  
Adjustments  -1,502.3  -1,241.5  -1,192.0  -1,139.3  -1,140.9  -1,186.5  -818.7  
Repair of goods  16.7 16.7 15.0 16.1 16.4 16.4 14.5 
Goods procured in 
ports 2,183.6  1,404.1  1,209.5  1,916.8  2,391.5  2,480.0  875.3  
Net imports  25,794.5  22,550.4  20,699.6  22,291.2  23,966.4  22,261.3  14,347.1  
Imports of goods  23,858.4  21,942.7  20,560.4  21,411.4  22,557.7  21,070.3  14,711.5  
National exports  12,434.7  11,076.8  10,716.1  11,640.5  12,112.9  11,751.2  7,367.1  
Colón Free Zone  11,065.8  10,374.5  9,237.7  9,202.3  9,771.5  8,655.3  6,662.7  
Export processing 
zones  357.9  491.4  606.6  568.6  673.3  663.8  681.6  
Adjustments  -753.6  -1,071.5  -1,499.4  -1,476.1  -1,573.1  -1,768.0  -1,304.5  
Repair of goods  11.4 8.6 5.8 5.1 5.4 6.6 4.5 
Goods procured in 
ports 2,678.3  1,670.6  1,632.7  2,350.8  2,976.4  2,952.4  935.6  
Source:  National Institute of Statistics and Censuses.  
2.36. Re -exports from the Colón Free Zone posted an overall decline. They fell year on year, with 
the exception of 2017 (0.3%) and 2018 (3.6%), fr om a sales peak in 2012 (PAB 15,944.8 million), 
to PAB 7,757.0 million in 2020. The drop of 21.0% from 2019 to 2020 was due to the effects of 
reduced demand as a result of the health and economic situation caused by COVID -19 in the region 
of Latin America and the Caribbean, and the 51.4% decline between 2012 and 2020 was because of 
lower demand for products as a result of the economic situation in several countries in the region 
and because trade with other countries was affected by trade disputes. Changes in product purchase 
methods also had an impact as, in recent years, demand countries made more direct purchases from 
manufacturers in Asia and cut out intermediaries , which included  the Free Zone. The main 
destinations for re -exports were Colombia, Costa R ica, the Dominican Republic, Ecuador, Puerto 
Rico, the United States and Venezuela. The leading re -export items include chemicals for use in 
medicines, pharmaceutical products, machinery and electrical appliances for reproduction and 
sound, textiles and te xtile manufactures and footwear.  
2.37. The balance of services  was positive throughout the period from 2014 to 2020. Exports grew 
by an average of 2.9% between 2015 and 2019. The largest increase occurred in 2017 (8.9%) as a 
result of the rise in revenue f rom the Panama Canal (17.0%), which in turn was due to the 
completion of the waterway's expansion at the end of June 2016, thereby increasing installed 
capacity and allowing transit of post -Panamax ships. Ports also saw significant growth. It is worth 
noting that maritime transport exports averaged 30.4% of the total between 2014 and 2020.  
Table 2. 3 Services exports from the Republic of Panama, 2014 -2020  
(PAB million)  
Item  2014  2015  2016  2017  2018  2019  2020  
TOTAL  12,717.8  12,615.0  12,773.4  13,910.6  14,461.0  14,663.2  9,376.7  
Transport  5,375.7  5,356.1  5,515.9  6,369.7  6,724.9  6,965.8  5,400.9  
Maritime  3,206.8  3,417.2  3,352.0  3,856.1  4,071.1  4,292.5  4,589.7  
Other  3,206.8  3,417.2  3,352.0  3,856.1  4,071.1  4,292.5  4,589.7  
Panama Canal  2,341.0  2,444.4  2,389.4  2,796.5  2,994.0  3,173.9  3,430.8  
Ports 865.8  972.8  962.6  1,059.6  1,077.1  1,118.5  1,158.9  WT/TPR/G/421 • Panama  
 
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  Item  2014  2015  2016  2017  2018  2019  2020  
Air 2,168.9  1,938.9  2,164.0  2,513.6  2,653.8  2,673.4  811.1  
Travel  3,729.4  3,948.2  4,234.3  4,422.0  4,617.2  4,521.1  1,117.2  
Communications  339.0  337.5  358.4  347.2  353.6  359.9  343.7  
Insurance  120.2  225.7  226.7  262.8  230.4  264.9  205.4  
Financial  400.3  549.3  520.3  449.1  392.0  380.2  483.8  
Information 
technology and 
information  57.1 32.2 30.9 36.2 34.6 34.3 40.7 
Royalties and 
licence duties  8.3 5.9 3.7 14.1 35.4 12.7 2.7 
Other business 
services  2,549.8  2,008.0  1,765.2  1,878.6  1,948.8  2,000.8  1,725.1  
Personal, cultural 
and recreational 
services  35.6 44.6 5.1 7.1 6.1 7.4 4.1 
Government 
services  102.4  107.5  112.9  123.8  117.9  116.1  53.1 
Source:  National Institute of Statistics and Censuses.  
2.38. Air transport had a 17.3% share of the total in the pre -pandemic period (2014 -2019) owing 
to the expansion of the capacity of local airlines, a broader range of dest inations and sustained 
passenger demand. However, in 2020, it dropped by 69.7% compared to 2019 because the country 
halted international commercial air travel from 22 March to 12 October 2020, as part of the COVID -
19 containment measures implemented nation ally and internationally.  
2.39. The travel sector's contribution to total exports peaked in 2016 (33.1%) and its income was 
highest in 2018 (PAB 4,617.2 million). Nevertheless, income fell to PAB 1,117.2 million in 2020 
(down 75.3% compared to 2019) due to  the pandemic. The other business services sector also had 
a significant share (15.5% on average from 2014 to 2020), and the most notable of these services 
was the buying and selling of goods.  
2.40. Services imports reached their highest value, PAB 5,112. 6 million, in 2019. Maritime transport 
(freight), travel, other business services and air transport had the highest share throughout the 
review period.  
2.41. The balance of factor income  was in deficit for the entire 2014 -2020 period as a result of 
returns on foreign direct investment in reinvested profits, dividends and retained earnings, and 
portfolio and other investment. Most of the income came from the other investment category, 
especially interest collected by banks with general and international licences.  
2.42. The net balance of current transfers  was negative between 2015 and 2019, and was positive 
only in 2014 and 2020. The transfers received were mostly workers' remittances, which averaged 
PAB 477.5 million over the review period. The value of outgoing transfers peaked in 2017 (PAB 
1,027.6 milli on) and the largest category on average was remittances by workers to non -residents 
(82.6% of the total). Before the pandemic (2014 to 2019), an average of PAB 820.6 million were 
transferred every year, owing to the large number of migrant workers. The mai n destinations of the 
remittances included China, Colombia, the Dominican Republic, Nicaragua and the United States. In 
2020, they totalled PAB 509.7 million, a drop of 37.9% compared to the previous year as a result of 
the measures implemented to tackle t he health crisis, such as the suspension of economic activities 
and lockdowns.  
2.43. The capital and financial account  showed a positive balance for the period 2014 -2019, 
financing the current account deficit. The main account entry was foreign direct inve stment. The 
financial account had a negative balance (PAB -907.8 million) in 2020 alone, as a result of the 
pandemic.  
2.44. Foreign direct investment (FDI)  averaged PAB 4,556.2 million between 2014 and 2019, 
accounting for 7.8% of GDP and making Panama one  of the leading countries in the region in terms 
of attracting investment. In 2020, FDI totalled only PAB 588.7 million, a drop of 86.4% or PAB 
3,731.7 million as a result of the general collapse of FDI flows around the world and in Latin America 
especiall y. WT/TPR/G/421 • Panama  
 
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 Chart 2. 11 Foreign direct investment in the Republic of Panama, 2014 -2020  
 
Source:  National Institute of Statistics and Censuses.  
2.45. By item type, reinvestment of profits was the largest component of FDI (averaging 5 0.6% of 
the total) before the pandemic (2014 -2019). It was followed by other investment (42.8%) and 
shares and other equity (6.6%). In 2020, FDI was concentrated in the other investment component, 
i.e. financing or loans from parent companies to subsidiari es in the national territory, which totalled 
PAB 1,478.4 million. The remaining components recorded divestment.  
2.46. The sectors that attracted the largest flows of investment between 2014 and 2019 (the last 
year with data disaggregated by sector) were wh olesale and retail trade; mining and quarrying; 
financial and insurance activities; transport, storage and postal services; and manufacturing. FDI 
mostly came from Canada, Colombia, Ecuador and the United States.  
2.4 Inflation  
2.47. The urban national pric e level, measured using the cumulative variation in the consumer price 
index (CPI), has shown a downward trend in recent years. The average variation for the period was 
0.46%.  
4.458,74.555,84.745,4
4.176,65.080,4
4.320,4
588,7
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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  Chart 2. 12 Percentage change in the urban nationa l price level, 2014 -2020  
(%) 
 
Source:  National Institute of Statistics and Censuses.  
2.48. After a posting an increase of 2.6% in 2014, the rate did not exceed 1.0% between 2015 and 
2018. In 2019, it fell by 0.4% compared to 2018. This was the first time that such a trend had been 
observed since the National Institute of Statistics and Cen suses began recording this indicator. In 
2020, it experienced an even larger downturn of 1.6% against the backdrop of restrictions on the 
movement of people, the shutdown of economic activities at the national and international level, 
international trade r estrictions and changes in commodity prices, all caused by COVID -19, which 
was detected in the country in March 2020. All of this generated uncertainty and disquiet among the 
population, affecting the supply and demand of goods and services, and hence pric es.  
2.5 Fiscal situation  
2.5.1 Central government revenue  
2.49. Central government revenue grew by an average of 5.8% over the period 2014 -2018. Tax 
revenue increased by 4.1% on average, driven mostly by the rise in direct taxes (averaging 4.9%). 
Meanwhil e, non -tax revenue was up by an average of 10.5%, reaching its highest level in 2017 
(38.9%) owing to contributions from the Panama Canal following its expansion. In 2019, on the 
other hand, revenue dropped by 5.6% and fell below the amount budgeted at the  start of the year, 
partly due to the elections.  
2,6
0,20,70,9
0,8
-0,4
-1,6
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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 Chart 2. 13 Central government revenue, by type 2014 -2020  
(PAB million)  
 
 Source:  Ministry of the Economy and Finance.  
2.50. In 2020, the measures applied to control the spread of COVID -19 in Panama and the rest of 
world resulted in physical isolation and quarantines, affecting the economy, employment and tax 
collection. Furthermore, the State offered deferrals on tax paym ents to support taxpayers. In 2020, 
PAB 6,627.1 million was received, PAB 1,869.5 million or 22.0% less than the previous year. Less 
tax (27.7%) and non -tax (11.7%) revenue was collected.  
2.5.2 Central government expenditure  
2.51. Central government expen diture grew by an average of 5.2% over the 2014 -2018 period. 
Growth slowed to 1.6% in 2019 as a result of government measures to control spending, including 
a measure referred to as "austerity through efficiency".  
2.52. In 2020, the State implemented a cou ntercyclical policy that involved retaining the initial 
budget but redirecting resources to the health and economic support sector to assist those affected 
by the pandemic. Expenditure was PAB 11,513.4 million, up PAB 255.2 million or 2.3%. Current 
expendi ture increased by 5.6%, while capital expenditure fell by 4.6%.  
4.999 5.0725.599 5.7365.9185.499
3.9752.0432.1352.0942.9073.073
2.988
2.6375662393720
10
15
2014 2015 2016 2017 2018 2019 2020
Tributarios No tributarios Ingresos de capital y donacionesWT/TPR/G/421 • Panama  
 
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  Chart 2. 14 Central government expenditure, by type 2014 -2020  
(PAB million)  
 
Source:   Ministry of the Economy and Finance.  
2.5.3 Central government current savin gs 
2.53. There were reductions in current savings of the central Government in 2018 and 2019. As a 
result of the pandemic in 2020, the difference between current revenue and expenditure was PAB -
1,379.9 million, suggesting that insufficient income was gene rated to cover investment in this area 
and financing was required to pay for all investments and part of operations.  
Chart 2. 15 Central government current savings, 2014 -2020  
(PAB million)  
 
Source:  Ministry of the Economy and Finance.  
5.6845.993 6.1886.8037.2667.5667.9923.3583.2843.7463.8193.8163.6923.522
2014 2015 2016 2017 2018 2019 2020
Gastos Corrientes Gasto de Capital
1.3581.2131.5041.8401.725
920
-1.380
2014 2015 2016 2017 2018 2019 2020WT/TPR/G/421 • Panama  
 
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 2.6 Challenges posed by COVID -19 
2.6.1 The 2020 financial strategy  
2.54. In early 2020, the Government had a financial strategy that allocated the resources necessary 
to finance the General State Budget under the ceiling established in  the Fiscal Social Responsibility 
Law (LRSF) . A second strategy was needed in the light of the pandemic , which  involved restructuring 
the national budget initially planned and bringing in external funds.  
2.55. First, as part of a dynamic restructuring of t he budget , PAB 2 billion were redirected to 
the public institutions tackling the health crisis, specifically the health sector and the Panama 
Solidarity Plan. The purpose of the Plan is to cover the basic needs of the Panamanian population 
affected by the pandemic.  
Chart 2. 16 Financial strategies devised in 2020 and their outcomes  
 
Source:  Ministry of the Economy and Finance.  
2.56. Second, negotiations were carried out with multilateral financing agencies and financial 
markets in order to:  
• Provide support during the budget year and help finance the government deficit  
resulting from the drop in current revenues. The initial budget was almost covered by the 
bond issue in April, with less than PAB 300 million outstanding. However, there was a wide 
gap between actual and budgeted revenue due to the pandemic. Loans allowed  the original 
budget to be kept, which gave rise to the countercyclical policy, as the disbursement of 
social transfers, subsidies and salaries, and payment for some services, continued in order 
to counteract the fall in spending and not exacerbate the dro p in GDP . 
• Enhance the banking system's capacity  to make loans and help strengthen payment 
chains in the economy. This included PAB 1.3 billion, of which PAB 800 million was 
managed by the Ministry of the Economy and Finance and PAB 500 million by the Nat ional 
Bank of Panama (BNP).  
Before COVID -19 After COVID -19
Initial strategy Second strategy Outcomes
In early 2020, the 
Government had a financial 
strategy to obtain the funds 
necessary to finance the 
General State Budget.
The strategy required PAB
2,213.7 million to cover 
the year’s fiscal deficit, 
and PAB 1,730.0 million 
to cover repayments.
This strategy would allow 
the fiscal debt/GDP ratio 
established in the LRSF to 
be achieved.From March, PAB 2 billion of the budget was retained to 
cover the needs of the health system and transfer funding 
to the most vulnerable population, following the economic 
reactivation strategy.
The financial strategy to combat COVID -19 required two 
simultaneous sets of negotiations with multilateral 
financing agencies and financial markets.
1. Negotiations to finance the budget deficit as a result 
of the drop in current revenue and maintain the original 
budget.
2. Negotiations and other steps to bring fresh money for 
financing programmes for micro, small and medium -
sized enterprises, finance the reopening of the economy 
and maintain the liquidity of the Panamanian banking 
system.
Adjust the LRSF ceilings from 3.5% to 9%, i.e. 10.5% of 
GDP or PAB 2,442 million in 2020, in the light of the 
expected fall in GDP.A dynamic restructuring of the budget was carried out 
An anticyclical policy was implemented to bring in external 
funds  
Subsidy programmes for persons, households and the 
Social Security Fund (CSS) were maintained at PAB 
1,651.1 million
Additional resources were transferred to MINSA and the 
CSS to cover costs related to the pandemic
Families or persons affected by the pandemic were 
allocated funds via the Panamá Solidario programme
The level of expenditure on the economy was maintained 
so as not to exacerbate the drop in GDP
The new ceiling under the LRSF was achievedWT/TPR/G/421 • Panama  
 
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  Table 2. 4 Financing allocated to enhance the banking system's capacity  
Institution that managed  
the fund  Amount  Source  
Ministry of the Economy and Finance  PAB 300 million  Inter-American Development Bank (IDB)  
PAB 500 million  International Monetary Fund (IMF)  
National Bank of Panama  PAB 500 million  World Bank's Multilateral Investment Guarantee 
Agency (MIGA)  
Source: Ministry of the Economy and Finance.  
2.57. The Ministry arranged:  
i. IDB loans of PAB 300 million to provide credit to micro, small and medium -sized 
enterprises (MSMEs) and the agricultural sector via the Comprehensive Credit 
Programme for the Defence of the Production Sector and Employment, a trust fu nd 
administered by the BNP.  
ii. A fast disbursing facility with the IMF for PAB 500 million , to offer liquidity to banks 
and act as a second -tier bank via the Special Stimulus Fund for the Banking System 
of Panama, another trust fund administered by the BN P. 
2.58. The BNP obtained  PAB 500 million from the World Bank's Multilateral Investment Guarantee 
Agency (MIGA). These funds were paid into the Special Stimulus Fund for the Banking System of 
Panama.  
2.59. Furthermore, the ceilings under the Fiscal Social Responsibility Law required adjustment, as 
they did not allow room for the Government's action to tackle the pandemic. In 2020, the non -
financial public sector deficit ceiling was set at between 9.0% and 10.5% of GDP, which was achieved 
at the end o f the year. In subsequent years, the ceilings will be gradually reduced to 1.5% from 
2025.  
2.6.2 Health strategy  
The Ministry of Health  (MINSA)  and management of the COVID -19 pandemic  
2.60. From 11 March 2020, when the World Health Organization (WHO) decl ared the COVID -19 
outbreak to be a pandemic, the national Government of the Republic of Panama, in line with the 
national standards issued by the leading health authority, the Ministry of Health, developed and 
implemented a comprehensive and integrated res ponse as part of its contingency strategy. It 
included a raft of measures to protect the population, reduce risk exposure and keep the supply of 
services safe and reliable.  
2.61. In order to control and mitigate the effects of the global COVID -19 pandemic  in Panama, the 
national Government implemented a series of measures through the Ministry of Health. The most 
important of these involved changing the disease -centred management model, with emphasis on 
repairing the damage, to a preventive people -centred o ne that traced the virus at the community 
level, by identifying cases, isolating them and breaking the chain of transmission.  
2.62. Alongside the change of model, a health strategy was developed based on seven pillars: (i) 
prevention and health awareness and promotion; (ii) traceability; (iii) treatment; (iv) isolation and 
physical distancing; (v) installed capacity; (vi) gradual and asymmetrical return to normality; and 
(vii) social care.  
2.63. In the implementation of the response, the first pillar faci litated the coordination of 36 public 
and private institutions in preventing the transmission of the virus, in partnerships with the Council 
of Rectors, the Faculty of Medicine of the University of Panama, civic clubs, faith communities and 
the Association  of Municipalities, among others. Effective awareness -raising with the distribution of 
information materials among communities (leaflets, flyers, posters, stickers and pamphlets) was 
also a key component. Around 765,450 were distributed in 2020 and 137,100  in 2021.  WT/TPR/G/421 • Panama  
 
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 2.64.  Three advisory support groups, the Advisory Council, the Council of Former Health Ministers 
and specialized medical companies, were also involved in decision -making. In parallel with this, the 
PANAVAC -19 strategy was implemented and, as of  October 2021, had reached 78% of the eligible 
population as part of its continuous vaccination schedule, based on the use of technology and 
artificial intelligence.  
2.65. The second pillar, traceability, was crucial since it prevented transmission and re duced the 
number of new cases of COVID -19 through detection, location and isolation, together with rapid 
testing for diagnosis and sweep sampling to identify asymptomatic people with the virus. To this 
end, 304 unified traceability teams and 298 epidemiolo gical monitoring response teams were created 
and checks are carried out at the country's entry and exit points. Efforts were reinforced with the 
establishment of the Network of Community Traceability and Control Centres, comprising 1 national, 
15 regional,  61 district -level, 103 local and 2,093 community centres, and with the involvement of 
the Joint Task Force, community -based organizations, local governments and civil society 
organizations, among other key actors.  
2.66. The third pillar, regarding treatm ent, proved vital in bolstering these actions. At the primary 
care level, it enabled 115,000 home visits to be carried out and 71,892 and 167,498 " Protégete 
Panama " (Panama, Protect Yourself) kits to be distributed in 2020 and 2021, respectively. At the 
second and third levels of care, updated hospital guides on COVID -19 care were provided. Under 
the same pillar, the Ministry of Health sought to mitigate the long -term effects on community mental 
health by providing telephone assistance through the National Institute of Mental Health's 169 
hotline, among many other measures. Around 45,000 calls were received.  
2.67. In order to protect the population's health under the fourth pillar  – isolation and physical 
distancing  – the Ministry provided 28 hostels with 2 ,071 beds (currently 1 hostel with 36 beds), 
receiving 2,597 admissions, and 11 hospital hotels with 1,217 beds (currently 3 hotels with 405 
beds), receiving 17,848 admissions. Meanwhile, 7,462 operations were carried out with the Joint 
Task Force, establi shing 5 checkpoints and 7 health cordons at strategic locations in order to control 
movement and comply with biosecurity measures.  
2.68. To safeguard the health of the infected population under the fifth pillar, the installed capacity 
of hospitals was incr eased, going from 305 to 747 beds in intensive, semi -intensive and respiratory 
care units, a 245% rise, and from 4,561 to 5,768 beds in wards, a 26% increase, between January 
2020 and September 2021. Human resources (doctors and nurses) providing support i n priority 
areas of indigenous regions in the provinces of Darién, Bocas del Toro, Colón and Panamá Oeste 
were increased by 35% following the hiring of staff to tackle COVID -19. 
2.69. As part of preparations for a new reality in a COVID -19 endemic scenario , the sixth pillar has 
allowed a gradual and asymmetric return to normality. It started with the opening of economic 
sectors, together with training on, and monitoring of, compliance with biosecurity measures and 
health regulations, followed by the introdu ction of domestic flights and epidemiological surveillance 
at ports, the establishment  of the medical emergency regulation centre for coordination between 
hospitals, and the use of telephone triage to reduce congestion in emergency rooms and crowding 
at consulting rooms.  
2.70. Furthermore, a telehealth programme was launched at 30 health centres in 11 health regions, 
with a total of 10,157 patients, 7,585 consultations with social workers in relation to mental health 
issues at hotel hospitals throughout th e country and 18,215 digital prescriptions processed.  
2.71. The seventh pillar is geared towards social care and the central Government's social and 
economic health strategy, and comprises public policies aimed at reducing poverty and inequality.  
3 RECENT  TRADE POLICY DEVELOPMENTS  
3.1 Multilateral trading system  
3.1. As a full Member of the WTO, Panama is committed to the multilateral trading system. It follows 
up on the general agreements concluded by the Organization in a number of areas to allow fair 
trade, while respecting different levels of development and s afeguarding special and differential 
treatment.  WT/TPR/G/421 • Panama  
 
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  3.2. The WTO was established as a global forum where the Members hold discussions and lay down 
general guidelines for standardizing world trade, and provides a platform for the settlement of 
disputes affecti ng trade between Members. Panama is a developing country but is highly dependent 
on international trade and has a services -based economy.  
Participation in ongoing negotiations  
3.3. Since 2014, the WTO has fostered a series of negotiations in which Panama shares objectives 
and interests. The country has participated in the development of proposals to create instruments 
in line with its legislation that facilitate fluid and transp arent exchanges with its trading partners.  
3.4. Accordingly, following the mandate established during the Buenos Aires Ministerial Conference 
in 2017, Panama has played a key role in the negotiations to curb fisheries subsidies by submitting 
a draft agree ment for negotiation by the Members. The draft contains our position in line with that 
of the group of six Latin American countries (Argentina, Colombia, Costa Rica, Panama, Peru and 
Uruguay). This is one of the documents proposed for negotiation as there is no base text for the 
agreement and the proposals are being discussed topic by topic. It is hoped that results will be 
achieved during the Twelfth Ministerial Conference.  
3.5. Within the WTO framework, a set of initiatives has been put forward in order t o make progress 
in certain areas, given the view that the length of time passed is tantamount to stagnation. 
Furthermore, as a measure to move the agreements forward, some Members have presented 
proposals that on occasion have been supported by a significa nt critical mass. Panama has therefore 
had to participate in order to protect its interests. In this connection, it is worth mentioning the 
negotiations to reach a Trade in Services Agreement (TiSA), a plurilateral initiative to improve and 
expand trade in  services. The negotiations covered sectors such as financial services, information 
and communication technology (ICT) services (including telecommunications and e -commerce), 
maritime transport, air transport, competitive delivery services, energy, profess ional services, 
temporary entry of business persons and government procurement. The 23 parties that were 
originally negotiating the TiSA accounted for 70% of the global trade in services . These parties were : 
Australia, Canada, Chile, Chinese Taipei, Colomb ia, Costa Rica, the European Union (representing 
its 28 member States), Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, 
Norway, Pakistan, Panama, Paraguay, Peru, Republic of Korea, Switzerland, Turkey and the United 
States. In the en d, China and Uruguay wished to join the discussions. Formal negotiations on the 
TiSA began in early 2013 but have been suspended since 2016 because the participants failed to 
reach consensus in highly sensitive areas.  
3.6. Panama has signed declarations ba sed on joint initiatives seeking to establish the importance 
for the WTO to make decisions on topics that can have a direct or indirect impact on trade, such as:  
• the informal group for the negotiation of an Agreement on Investment Facilitation for 
Develo pment: Panama has now withdrawn from these negotiations because it believes 
that group's objectives have deviated from the original mandate.  
• the Informal Working Group on Micro, Small and Medium -sized Enterprises (MSMEs): 
Panama has now withdrawn from th ese negotiations because the country believes that its 
objectives have strayed from the original mandate.  
• Informal Working Group on E -commerce: Panama is an observer.  
• the Informal Working Group on Domestic Regulation in Services : Panama has now 
withdra wn from these negotiations because the country believes that its objectives have 
strayed from the original mandate.  
• the Informal Working Group on Trade and Gender: Panama is a full member.  
3.7. It is important to point out that , on 12 August 2020, Panama 's notification in which the country 
declared its intention to withdraw quotas of liquid milk, condensed milk and evaporated milk was 
circulated by the WTO to all Member States. As of that date, Members with initial negotiating or 
principal supplier rights , or a substantial interest, had 90 days in which to request consultations 
and/or negotiations with Panama.  WT/TPR/G/421 • Panama  
 
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 3.8. During this period, Costa Rica, the European Union and Mexico showed interest. However, the 
negotiation process with the European Union and Mex ico did not formally begin until early 2021, and 
no agreement has yet been reached.  
3.9. The negotiations are currently at a standstill, as the parties are carrying out the required 
consultations to agree on compensation that is fair to all parties.  
3.2 D ispute settlement mechanism  
3.10. Panama has found the WTO dispute settlement mechanism to be an ideal and impartial system 
for airing concerns and resolving trade disputes with other Members, with the guarantee that the 
primary objectives of the opinions issued within the mechanism are to provide legal certainty in 
trade relations and ensure the fulfilment of the commitments made by Member States.  
3.11. During the review period, Panama has respectfully fulfilled its obligations according to the rules 
adopt ed under the Agreements governing the WTO, and participates in good faith in its active dispute 
settlement procedures over the period – two as a complainant, one as a respondent and three as a 
third party.  
3.12. Panama co -sponsors and supports the statemen ts made by Members regarding possible 
dispute settlement mechanism reforms intended to strengthen this essential pillar of the WTO, and 
sees putting forward solutions to revive the Appellate Body as a matter of priority.  
3.3 Trade agreements  
Agreements in force  
3.13. Since the last trade policy review, Panama has implemented five free trade agreements with 
the European Free Trade Association, the United Mexican States, the State of Israel, the United 
Kingdom of Great Britain and Northern Ireland and the Rep ublic of Korea, and a partial scope 
agreement with Trinidad and Tobago.  
3.14. Panama's bilateral and regional trade agenda is a vitally important complement to the country's 
world trade integration strategy, and consolidates, expands and deepens the trade  benefits deriving 
from the WTO multilateral trade negotiations.  
• Free Trade Agreement between Central America and the European Free Trade 
Association (EFTA) : This Agreement entered into force on 29 August 2014 via Law  No. 4 
of 7 April 2014. It supplements the national policy of rapprochement with the  European 
Union with a view to expanding and diversifying Panama's goods and  services  exports.  
• Free Trade Ag reement between Panama and the United Mexican States : This 
Agreement entered into force on 1 July 2015 via Law No. 33 of 17 November 2014 and 
lays down legal provisions that will pave for the way for investments and the provision of 
services, and will also  boost trade in goods.  
• Partial Scope Agreement between Panama and Trinidad and Tobago : This 
Agreement entered into force on 4 July 2016 via Law No. 7 of 20 March 2015 and has 
deepened our country's relations with the Caribbean Community, which is of grea t interest 
to Panama's private sector.  
• Free Trade Agreement between Panama and the State of Israel : This Agreement 
entered into force on 1 January 2020 via Law No. 105 of 31 October 2019. It expands the 
trading potential for our traditional products in the Middle East by granting immediate 
preferential access for a range of traditional agricultural and  agro-industrial products.  
• Association Agreement between Central America and the United Kingdom of 
Great Britain and Northern Ireland : This Agreement entered into force on 1 January 
2021 via Law No. 103 of 31 October 2019. It was the result of the Unite d Kingdom's 
withdrawal from the European Union, commonly abbreviated as Brexit, and is technically 
a replica of our association agreement with the European Union, with some necessary WT/TPR/G/421 • Panama  
 
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  adjustments. Some interesting opportunities were created in the trade in services, with 
Panamanian service providers being allowed greater access, particularly in the financial, 
telecommunications, distribution and tourism sectors.  
• Free Trade Agreement between Central America and the Republic of Korea : This 
Agreement entered  into force on 1 March 2021 via Law No. 182 of 19 November 2020. 
Panama's interest in this agreement was partly to expand the exportable supply of 
agricultural, agro -processed and marine products; create benefits in services, especially 
in the financial, l ogistics and maritime sectors; attract investment; and establish 
cooperation mechanisms.  
  WT/TPR/G/421 • Panama  
 
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 4 TRADE POLICY INSTRUMENTS  
4.1  Tariffs  
4.1. Panama grants most -favoured -nation (MFN) treatment to all its trading partners. The country 
has also bound all tariff lin es, thus making its trade regime more predictable.  
4.2. Under Law No. 26 of 17 April 2013, the Government implemented a structural reform of its 
national import tariff in order to progressively integrate its economy with that of the rest of Central 
America ; secure the expansion of its market; encourage investment, production and exchange of 
goods and services; raise living standards and employment; and generally foster the development 
and economic unity of the Central American region.  
4.3. In 2021, Panama's  national import tariff contained 9,374 ten -digit tariff subheadings. All  import 
tariffs are levied at ad valorem  rates and applied to the c.i.f. value of the imported goods. The 
number of tariff lines has increased since Panama's last trade policy review because of changes to 
the Harmonized System of Tariff Classification.  
4.4. Panama's average tariff varied greatly over this period. The vast majority of the tariff 
subheadings are in the range of 0%, which account for 45.5% of the national import tariff. O f the 
tariffs applied, 9.8% have customs duties within the 1% to 5% range, 22.1% are in  the 5% to 10% 
range, and 20.2% have customs duties of 15%. A customs duty of more than 20% is applied on 
2.1% of the tariff subheadings, and 0.3% of the subheadings are  specific.  
4.2   Customs procedures  
4.5. In the last quarter of 2020, an interactive tool for the national import tariff was developed and 
implemented. It allows quick consultation of different variables applicable to more than 9,000 tariff 
subheadings, includi ng preferential tariffs negotiated with each trading partner, permits and licences 
of the competent State bodies, and rulings and decisions regarding products.  
4.6. All import information is available in the first phase, and the second phase will contain e xport 
variables. The National Customs Authority will provide the contact point for the institution's Process 
Group for consultations regarding procedures, and Resolution No. 114 of March 2020 contains all 
the email addresses and telephone numbers for infor mation on the various customs procedures.  
4.7. The customs computer system was modified to be able to process predeclaration applications 
for approval by Customs and other State agencies with advance clearance and, provided that no 
sensitive information is  changed, the authorizations remain valid for normal clearance and the data 
are loaded from the transport document. Work is continuing on the implementation of the advance 
declaration as required by regional regulations.  
4.8. The National Customs Authority  introduced digital permit forms for the urgent prior withdrawal 
of goods, including digital signature, for non -governmental organizations (NGOs) and imports by the 
State and diplomatic missions. Changes are also being made to the module for clearance agai nst 
guarantee of payment in order to facilitate and digitize the administrative process. The module is 
expected to be introduced by 2022.  
4.3 Trade facilitation  
4.9. Panama adopted the Protocol Amending the Marrakesh Agreement Establishing the World Trade 
Organization and the Annex to the Protocol concerning the Trade Facilitation Agreement (TFA) via 
Law No. 55 of 9 September 2015 . 
4.10. Subsequently, the appropriate Category A, B and C notifications of the commitments 
established under the TFA were submitted. The notifications set out the original and definitive dates 
of the commitments that are the hardest to meet.  
4.11. The National Customs Authority is developing a logistical customs integration project to 
modernize procedures at the border by inc orporating technology, infrastructure and fiscal and 
parafiscal control units. Under the programme, Panama and Costa Rica will deploy efforts to establish WT/TPR/G/421 • Panama  
 
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  a customs and migration single window to facilitate entry of visitors to both countries, within the 
framework of the commitments established under the Central American Strategy for Trade 
Facilitation and Competitiveness with an emphasis on Coordinated Border Management.  
4.12. Panama's strengths in trade facilitation include the right to appeal, periodic r eview of fees and 
charges, limitation on document requirements and formalities, use of international standards, 
elimination of consular fees and paperwork, emphasis on the principle of non -discrimination, 
possibility of returning rejected goods, pre -arriva l clearance, the accelerated procedure for urgent 
shipments, elimination of pre -shipment inspection and objective criteria for tariff classification.  
GATT 1994 provisions on trade facilitation and freedom of transit (Article V):  
4.13. Article V of the Gen eral Agreement on Tariffs and Trade (GATT), adopted through Law No. 23 
of 15 July 1997, concerns Panama's commitments regarding traffic in transit  and freedom of transit.  
4.14. Title II of Cabinet Decree No. 12 of 29 March 2016 regulates the entry and exi t of goods and 
means of transport, which in turn controls the transit of goods that have not undergone customs 
clearance, maintaining traceability of domestic transit and land transhipment. It also provided for 
the creation of a dry canal by rail or road a s an alternative to the Panama Canal.  
4.15. Except in cases of failure to comply with the law or in order to manage risk, traffic in transit 
must not be subject to any unnecessary delays or restrictions and is exempt from customs duties 
and transit duties or other charges, except the following:  
• transportation charges payable by the carrier;  
• administrative customs charges: PAB 5.00 for use of the computer system and the Central 
American Single Declaration for overland transit (DUCA -T) form, and PAB 5.00 for the 
customs security seal; and  
• cost of scanning and digitizing the information for carriers' unions or other authorized 
persons.  
4.4 Competition policy  
4.16. As pertains to its policy of free competition, Panama amended its legislation by enacting 
Law No. 34 of 2 August 2016, amending and adding provisions on suppliers' obligations and price 
information to Law No. 45 of 2007 on consumer protection and the defence of competition.  
4.17. Furthermore, via Law No. 14 of 20 February 2018, articles on cons umer rights, suppliers' 
obligations to guarantee motor vehicles (up to PAB 30,000), withdrawal of goods , and the specific 
functions of the National Consumer Protection Directorate and municipal courts were amended and 
added to Law No. 45 of 2007. This regu latory update underpins a policy aimed at ensuring free 
competition not only at the domestic level but also with our international trading partners.  
4.5 Technical standards  
4.18. Since joining the Central American Economic Integration Subsystem, Panama, t hrough the 
Directorate -General of Standards and Industrial Technology, has adopted 11 Central American 
technical regulations. On adoption, these became national technical regulations for the 
hydrocarbons, food and medicines sectors.  
4.19. In 2014, 2015 an d 2016, six International Organization for Standardization (ISO) standards 
were adopted as part of the standardization plan. In line with Panama's commitments as an ISO 
member country, national mirror committees for the environment and quality management a uditing 
were set up. In 2016, the geographic information – methodology for feature cataloguing standard, 
required for the application of Panama's geospatial data, was prepared for the country's 
infrastructure.  
4.20. The adoption of ISO standards continued in 2017, and standards in the energy efficiency sector 
were approved as a counterpart to Law No. 69 of 12 October 2012 establishing the general guidelines WT/TPR/G/421 • Panama  
 
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 of the national policy for the rational use of energy in the national territory. This involves creati ng 
initial policies aimed at rationalizing energy consumption throughout the country, promoting the use 
of efficient and less polluting equipment , and establishing a line of financing for energy efficiency 
projects.  
4.21. In 2018, 10 ISO standards were ado pted, including road vehicle requirements – vehicle 
identification number (VIN) – content and structure, to which the relevant Panamanian authorities 
attach great importance; the environment; occupational health and safety management systems; 
guidelines fo r auditing management systems; and conformity assessment – general requirements 
for bodies operating certification of persons. The approval of the standard on gender equality in 
private organizations and companies has also had a significant impact in Panam a. Its purpose is to 
establish the requirements that an organization must meet in order to set up a gender equality 
management system that establishes, implements, promotes and fosters gender equality in 
organizations.  
4.22. In 2019, in accordance with th e country's strategic plan, the Directorate -General of Standards 
and Industrial Technology developed the Technical Standard for Building, Construction Materials and 
Hydraulic Cement; the Technical Regulation on Conformity Assessment for the marketing and 
importation of cement, the purpose of which is to establish a conformity assessment procedure to 
inspect and verify the quality of hydraulic cement produced, imported, used and/or marketed in the 
Republic of Panama; and a regulation on the environment, heal th protection, water safety and 
quality, and the discharge of liquid effluents into marine and inland water bodies.  
4.23. In 2020, Standard 515 -2020 on the characteristics and technical specifications of premix for 
the fortification of pounded rice was dev eloped as part of Panama's rice fortification programme. It 
involves fortifying white rice packaged in the country with folic acid, vitamins B1, B6 and B12, niacin, 
iron and zinc to improve the nutrition of the Panamanian people.  
4.24. Food technology sect or standards for edible oils and fats, flour and cereals have been revised 
and updated to conform to international requirements.  
4.6 Investment policies  
4.6.1 Regime for the establishment and operation of multinational business headquarters  
4.25. This regime was created under Law No. 41 of 24 August 2007. It has been amended by Law 
No. 57 of 24 October 2018, among others. Such amendments included a change to the corporate 
tax regime, going from zero income tax to a 5% rate on net taxable income. In line  with these 
reforms and the international recommendations that Panama has adopted since 31 October 2016, 
when it implemented Action 5 of the Inclusive Framework on base erosion and profit shifting (BEPS) 
of the Organisation for Economic Co -operation and De velopment (OECD), and with transparency and 
substance in mind, the following legal instruments were approved:  
• Executive Decree No. 241 of 16 September 2020 , known as the "Substance 
Regulation"; and  
• Resolution No. 023 -20 of 17 September 2020 , entitled the "Guide for the Application 
of Substance Requirements".  
4.26. These instruments set out the standards applicable to the activities of companies established 
in Panamanian territory with a multinational business headquarters licence, and they ser ve as a 
guide for the application of substance requirements as a condition for benefiting from the reduced 
5% rate. To this end, as from the tax year 2019, companies must comply with the substance 
requirements and submit an annual report, referred to as a "sworn statement", within six months of 
the end of their tax year. The Technical Secretariat of the Multinational Business Headquarters 
Commission is responsible for the review, oversight and declaration of compliance of these reports 
in line with the rele vant procedure established under Decree No. 241 of 16 September 2020, which 
has been implemented.  
4.27. Multinational business headquarters have submitted their reports and the Technical Secretariat 
has conducted the appropriate reviews and audits to monit or regulatory compliance, and has found WT/TPR/G/421 • Panama  
 
- 28 - 
 
  that the companies subject to the regime have fulfilled the substance requirements. Furthermore, it 
is worth noting that the multinational business headquarters regime is subject to monitoring by the 
OECD Forum on Ha rmful Tax Practices (FHTP) and was declared "not harmful".  
4.6.2 Regime for the establishment and operation of multinational companies providing 
manufacturing -related services  
4.28. The special regime for the establishment and operation of multinational co mpanies providing 
manufacturing -related services was created via Law No. 159 of 31 August 2020, and its 
implementing regulation was approved via Executive Decree No. 33 of 4 February 2021, which also 
lays down substance requirements for the companies subje ct to the regime. In September 2021, 
the Technical Secretariat granted the first licence to a manufacturing company in the maritime 
sector.  
4.7 Intellectual property  
Implementing regulation of the Industrial Property Law  
4.29. On 4 July 2017, Executive De cree No. 85, implementing Law No. 35 of 10 May 1996, as 
amended by Law No. 62 of 5 October 2012, establishing industrial property provisions, was enacted 
to protect inventions, utility models, industrial designs, industrial and commercial secrets, product 
and service marks, collective and guarantee marks, geographical indications, indications of 
provenance, designations of origin, trade names and advertising slogans and signs. Executive Decree 
No. 85 of 17 July 2017 is intended to protect industrial propert y rights.  
4.30. The Intellectual Property Directorate of the Ministry of Trade and Industry implemented a 
project to migrate, design and implement the Industrial Property Automation System (IPAS) and 
develop a web platform for the Directorate -General for I ndustrial Property Registration (DIGERPI).  
4.31. The web platform was developed using a group of World Intellectual Property Organization 
(WIPO) software applications that intellectual property (IP) offices can use to support the processing 
of applications  for intellectual property rights by establishing an e -registry, controlling workflow 
processes and business rules, and providing online services to local and international users. The 
overall objective is to deliver operational efficiencies and improve qua lity of service. The suite is 
made up of three complementary systems: WIPO File, WIPO IPAS and WIPO Publish, supported by 
a central services component that provides for efficient and reliable data exchange to interconnect 
IP offices with WIPO Global IP sys tems and data. A web platform will also be set up to allow 
applicants to submit and track their applications and other procedures carried out with DIGERPI.  
4.32. In order to strengthen and revitalize DIGERPI, the Ministry of Trade and Industry has decided 
to upgrade the software currently in use. The new platform will:  
• reduce the time required for examination and registration of trademark applications;  
• increase transparency of registration procedures;  
• be more user -friendly;  
• allow us to save on opera ting costs, because only IPAS will be needed instead of three 
separate tools, thereby lowering maintenance costs.  
4.33. DIGERPI's team is currently testing the new platform, which should become operational in the 
first quarter of 2022.  
4.34. The Ministry o f Trade and Industry is also working on a technology transfer project in 
cooperation with WIPO and the National Secretariat of Science, Technology and Innovation with the 
aim of establishing a suitable legislative framework and institutional policies for i ntellectual property 
that would allow universities – especially public ones – to solve the problems they face and to carry 
out knowledge transfer activities successfully. This would allow us to stimulate innovation, foster 
collaboration between universitie s, boost academia -business links, turn research outcomes into 
products and ensure the effective protection of these products through the intellectual property WT/TPR/G/421 • Panama  
 
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 system. With this project, DIGERPI intends to strengthen links between academia, business and the  
State; promote the credibility of the country's researchers; develop new research projects in line 
with Panama's national science, technology and innovation policy; and more effectively foster a 
culture of patenting research outcomes in our universities a nd research centres, especially the 
outcomes achieved using public funds.  
Statistics on registration of trademarks and patents  
Table 4. 1 Applications filed for trademarks and other distinctive signs  
  CO DE DO EX GA PR PS SE TOTAL    
RESIDENTS  35 2,180  1 650 9 11,066  2,759  6,977  23,677  37.44%  
NON-RESIDENTS  1 382 2 534 0 27,005  5,782  5,856  39,560  62.56%  
TOTAL  36 2,562  3 1,184  9 38,071  8,541  12,833  63,239   
Note:  CO, collective marks; DE, trade names; DO, designations of origin; EX, advertising slogans or 
signs; GA, guarantee marks; PR, product marks; PS, products and services; SE, service marks.  
Chart 4. 1 Applications filed for trademarks and other distinctive signs  
 
Source:  Directorate -General for Industrial Property Registration (DIGERPI).  
 
 05 00010 00015 00020 00025 00030 000
CO DE DO EX GA PR PS SE352 180
1650
911 066
2 7596 977
13822534
027 005
5 782 5 856
Residents Non-residentsWT/TPR/G/421 • Panama  
 
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  Table 4. 2 Registrations granted for trademarks and other distinctive signs  
Registrations granted  
 CO DE DO EX GA PR PS SE Total   
Residents  35 1,855  0 550 4 9,000  2,499  5,741  19,684  33.93%  
Non-residents  2 353 2 515 0 25,960  5,813  5,679  38,324  66.07%  
TOTAL  37 2,208  2 1,065  4 34,960  8,312  11,420  58,008   
Note:  CO, collective marks; DE, trade names; DO, designations of origin; EX, advertising slogans or 
signs; GA, guarantee marks; PR, product marks; PS, products and services; SE, service marks.  
Chart 4. 2 Registrations granted for trademarks and other distinctive signs  
 
Source:   Directorate -General for Industrial Property Registration (DIGERPI).  
Table 4. 3 Applications filed for patents, utility models and industrial designs and models  
APPLICATIONS  
  Industrial 
designs  Industrial 
models  Utility 
models  Patents  PCT 
applications  TOTAL  
NATIONAL  8 72 29 331 40 480 
FOREIGN  40 456 23 2,631  0 3,150  
 48 528 52 2,962  40 3,630  
Source:  Directorate -General for Industrial Property Registration (DIGERPI).  
 05 00010 00015 00020 00025 00030 000
CO DE DO EX GA PR PS SE351 855
05…
49 000
2 4995 741
2353 2515025 960
5 813 5 679
Residents Non-residentsWT/TPR/G/421 • Panama  
 
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 Chart 4. 3 Applications filed for patents, utility models and industrial designs and models  
 
Source:   Directorate -General for Industrial Property Registration (DIGERPI).  
Table 4. 4 Grants of patents, utility models and industrial designs and models  
  Industrial 
designs  Industrial 
models  Utility models  Patents  
GRANTS  63 615 28 1,157  
Source:  Directorate -General for Industrial Property Registration (DIGERPI).  
 0 5001 0001 5002 0002 5003 000
INDUSTRIAL 
DESIGNSINDUSTRIAL 
MODELSUTILITY MODELS PATENTS PCT 
APPLICATIONS872 29331…
40 40456
232 631
0
National ForeignWT/TPR/G/421 • Panama  
 
- 32 - 
 
  Chart 4. 4 Grants of patents, utility models and industrial designs and models  
 
Source:  Directorate -General for Industrial Property Registration (DIGERPI).  
  
 0 200 400 600 8001 0001 200
INDUSTRIAL DESIGNS INDUSTRIAL MODELS UTILITY MODELS PATENTS63615
281 157
GrantedWT/TPR/G/421 • Panama  
 
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 5 MODERNIZATION OF THE STATE  
5.1 Regulations  
5.1. The Government's objectives include the continuation and improvement of the modernization 
process of public administration using ICT. To this end, the Government Innovation Authority (AIG) 
was established via Law No. 65 of 30 October 2010, regulated by Executive Decree No. 205 of 9 
March 2010. It has legal statu s, its own capital and internal autonomy.  
5.2. The AIG is the competent Panamanian State entity for planning, coordinating, issuing guidelines, 
monitoring, ensuring cooperation for, supporting and promoting the optimal use of ICT in the 
government sector so as to modernize public administration; it also recommends the adoption of 
strategic national policies, plans and actions in this realm. The technological standards and criteria 
set by the AIG need to be followed to ensure that the process of digitizing government procedures 
is implemented in a standardized manner across all public bodies and that the State modernization 
strategy runs smoothly.  
5.3. Law No. 144 of 2020 amends and adds articles to Law No. 83 of 9 November 2012 on the use 
of electronic medi a for government procedures.  
5.4. The AIG is currently running its flagship project entitled " Panamá Digital " (Digital Panama), 
which is undeniably one of the most important projects for the Government in terms of decreasing 
state bureaucracy and simplifying procedures for citizens, thereby making the procedures quicker 
and more transparent.  
5.5. The greatest benefits of this projects include:  
• reduced waiting time for processing;  
• no or shorter queues at government agencies;  
• increased productivity;  
• lower operating costs;  
• better quality of service for users;  
• government services available for citizens 24/7.  
5.6. The AIG has arranged for public officials to access online training courses and strategies at the 
Technology and  Innovation Institute to enable them to understand government innovation, citizen 
services, quality of service and faster procedures over the Internet.  
5.2 The AIG's specific objectives in terms of technology infrastructure include:  
Connectivity and improv ed technological infrastructure  
5.7. Panama is one of the first countries in the world to regard access to the Internet and telephony 
as a new human right. It is enshrined in Law No. 59 of 2008, which requires the State to offer equal 
access to information  and telecommunications services by creating the appropriate financial 
mechanisms. This ideological  and legal basis offers the country a platform with broad scope to 
promote true universal access for all Panamanian people.  
5.8. Innovative, interoperable an d unified governance : A common complaint from citizens concerns 
the need to gather information from several government agencies for one administrative procedure. 
The purpose of this objective is to harness technology's potential to facilitate the exchange of data 
between entities and present citizens with a united government whose institutions communicate 
with each other, and to provide single access and consultation points where procedures can be 
carried out in their entirety without requiring citizens to  physically  travel.  WT/TPR/G/421 • Panama  
 
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  5.3 The 2021 Digital Agenda  
5.9. The AIG's main objectives regarding the 2021 Digital Agenda include the mass deployment of 
a strategy to adapt government formalities to the digital environment, which requires the joint effort 
of all pub lic bodies. In this context, the projects of the 2021 Digital Agenda and its future updates 
include:  
a. E-government platform (Telegob):  This involves the creation of a document flow of 
standard correspondence , with five processes at the various state inst itutions:  
• incoming correspondence;  
• outgoing correspondence;  
• internal correspondence;  
• flow of approval; and  
• electronic signature flow  
b. Single Portal for Citizens  (www.panamadigital.gob.pa ), which involves:  
• migration of existing data from the AIG's old portals (PEL and Panamá Tramita ) to the 
new one;  
• implementation of a new single portal for the State;  
• assurances that the services and functionalities provide speed, ease of browsing, 
simple administration and greater capacity for interaction with the wider community;  
• creating an efficient structure and developing the set of functionalities required;  
• training technical department staff and users on web portal maintenance;  
• enabling integration of the workflow management platform, document manager and 
notification management platform services operated by the AIG;  
• putting administrative procedures onli ne as part of the Government's Digital Agenda;  
• integration with the AIG's workflow processes platform and document manager, 
allowing the creation, modification , cancellation and notification of procedures and/or 
any direct information necessary using the  AIG's current formalities platform and 
document manager; and  
• integration of the platform with the AIG's notifications platform, allowing the 
notification of procedures, and notification of modification  and cancellation of 
procedures, and/or any direct n otification necessary using the AIG's current formalities 
platform and document manager. It should also allow notification of issues with the 
portal.  
c. Launch of the Panamanian Tourism Authority (ATP) platform , which includes:  
• the Panamanian Tourism Por tal: experiences and a front -end portal for national and 
resident tourists;  
• online marketplace;  
• creation of a chatbot;  
• integration with Panamá Digital , the secure token service and the payment gateway;  WT/TPR/G/421 • Panama  
 
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 • apps for tour agents (guides and agencies) tha t generate QR codes for the services 
hired by residents and nationals.  
d. Development of digital procedures for back -end platform processes  (for public 
officials):  
• registration of tour operators;  
• registration of tourist guides;  
• registration for discounted tourist packages;  
• validation and publication;  
• tour operator management portal;  
• discount voucher management system;  
• self-assessment with integrated payment gateway;  
• ATP activity management dashboard.  
e. Single Business Register : This involves the development, implementation and 
integration of a computer platform to facilitate the formal business registration process for 
companies in Panama. It integrates the institutions involved in the company registration 
process , allowing them to share information from the central repository using the 
Enterprise Bus. This efficient method of using and updating information:  
• allows rapid business registration through a dynamic, efficient and user -friendly 
computer system;  
• facilitates interaction between related institutions;  
• eliminates or reduces the need for face -to-face interaction with users at institutions 
during the business registration process;  
• unifies the requirements of all institutions involved;  
• reduces requ irements imposed on users for online approval;  
• standardizes important processes and databases for the primary process;  
• merges the registration code and the Single Register of Taxpayers  (RUC)  number; and  
• creates a single, centralized register and ident ifies key stakeholders.  
f. Institutions to be integrated into the Single Business Register : 
• the AIG  (www.panamadigital.gob.pa ); 
• the Public Register;  
• the Ministry of Trade and Industry;  
• the Directorate -General of Revenue;  
• the Panamanian Authority for Micro, Small and Medium -Sized Enterprises;  
• the Directorate -General of Government Procurement;  WT/TPR/G/421 • Panama  
 
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  • the Municipality of Panama; and  
• notaries.  
g. Live video platform : this involves the developm ent of a virtual assistant integrated into 
Panamá Digital , which allows video calls to be scheduled for sensitive recorded procedures.  
5.3.1 Implementation of the integration platform for state payments  
5.10. The current situation in the country and the need to prevent crowding to halt the spread of 
the COVID -19 virus have required the implementation, within a short time frame, of technology that 
enables citizen services to be processed digitally. Such te chnology includes payment of economic 
assistance to citizens affected by the pandemic through their personal identity cards.  
5.11. These transfers are made via the " Vale Digital " (Digital Voucher) programme, which has a 
platform allowing payment strategies  and allocation of funds to be managed for use in various 
government assistance programmes, including COVID -19 relief.  
5.12. The primary objective of the social assistance programme was to help the population subsist 
and ensure social peace throughout nati onal territory.  
Vaccination  
5.13. The AIG has played a very important role in collaborating with the Ministry of Health, as its 
system provides data intelligence for planning appointments to vaccinate the public and control the 
pandemic. The system also re cords vaccinations and issues digital COVID -19 vaccination certificates.  
5.14. Panama is the only country in the region to bring its vaccination record system into line with 
the European Union regulation on COVID -19 certificates.  
5.3.2 Other Digital Agenda  projects  
5.15. Following the creation of the AIG, other projects launched to pursue the objectives set out in 
the Strategic Digital Agenda on an ongoing basis include:  
Connectivity and improved technological infrastructure  
• National Multiservice Network : This is a network designed to deal with the complexity of 
the information handled by the State for citizen services  and to meet high expectations . 
It allows interoperability between institutions, with security arrangements to preserve the 
integrity of th e information. The network uses a redundancy system that offers the 
institutions a reliable structure and ensures the continuity of their services in the event of 
a failure.  
• MyUC for government: This provides institutions with voice, fax and video callin g services 
with all the advantages and savings of IP technology on a robust platform that offers 
conferencing, messaging and call centre functionalities.  
• Help Desk and Network Operation Centre/Security Operation Centre (NOC/SOC):  This 
offers government entities centralized support and continuous monitoring of services 
associated with the National Multiservice Network for the timely detection of faults, 
coordination of maintenance tasks, implementation of security policies and dedicated 
assista nce to cover the entities' support needs.  
• Cloud Computing Service : IT services and resources are offered and used as Internet or 
Intranet services, without users having any knowledge of the infrastructure behind them.  
• Panama Computer Security Incident s Response Team (CSIRT): This team responds to 
information security incidents in the country. Its objectives include the prevention, 
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 systems that form part of the cou ntry's critical infrastructure, while ensuring Panamanian 
citizens' access to information. Its purpose is also to coordinate, collaborate on and 
propose standards intended to enhance the security of the ICT -related resources and 
systems of the government b odies.  
• National Internet Network: This service allows citizens free wireless Internet access using 
technologies based on commonly available standards on personal computers, laptops and 
other mobile devices.  
• Development of broadband for competitiveness and integration: This project seeks to chart 
the way forward in increasing penetration of broadband connections to boost productivity 
and enhance regional and global integration. The aim is to lay the groundwork for national 
broadband plans (a regional pub lic good) in conjunction with the authorities responsible 
for the development of telecommunications in El Salvador, Guatemala, Honduras and 
Panama.  
5.3.3 Innovative, interoperable and unified governance  
• Citizen Help Centre – 311: This project provides al l citizens with a single line of 
communication offering effective assistance and quality services, incorporating 62 
government entities. This centre has improved the public's experience when interacting 
with government services and helped project governmen t responsibility, accountability 
and transparency as policies for good governance.  
• Financial accounting system and enterprise resource planning (ERP): This is a public 
finances system whereby the entire Government adopts the same rules on accounting and  
financial records. It grants the state monitoring and oversight bodies access to accurate 
information in a timely manner.  
• Adversarial criminal justice system: This in volved  designing, developing and implementing 
a comprehensive computer management syste m that covers everything from the receipt 
of cases to final enforcement of the ruling; supplying the second and fourth judicial districts 
with the hardware required to deal with expected caseloads; equipping courtrooms in the 
second and fourth judicial dis tricts for hearings via videoconference according to the 
system's conditions and requirements; servicing the judicial data centre by ensuring 
connectivity, providing backup, contingency and security infrastructure and performing 
updates to ensure the solut ion's reliability; developing and approving the virtual training 
system for public officials involved in the system; and supplying high -tech mobile units to 
conduct training, dissemination and awareness -raising activities.  
• Modernization of local governme nts (MuNet): This is part of the local e -government 
initiative, whose aim is to strengthen the technological structure of municipalities to enable 
them to handle municipal finances, manage public services online and promote their 
communities' tourism resou rces. The following municipalities benefited: Bocas del Toro, 
Changuinola, Antón, la Pintada, Aguadulce, Penonomé, Colón, Portobelo, Chitré, Pesé, 
Ocú, Las Minas, Los Santos, Tonosí, Santiago, Atalaya, Soná, Mariato, La Chorrera, 
Arraiján, Chepo, Taboga, B arú, Boquete, Bugaba, Dolega, Boquerón and Gualaca.  
• Application Assessment and Approval System: The AIG's responsibilities include the 
approval of technical specifications for technology procurement by government 
institutions. This system was developed t o expedite the process.  
• Government Finance and Administration System: This is an ERP tool intended for use by 
the Government with the aim of optimizing the cross -cutting processes of the state 
institutions by allowing reliable, direct and timely access t o all information, with the 
possibility of sharing information with the organization's units, and eliminating data 
duplicates and unnecessary operations in order to ensure quick response times to users' 
information requests, with efficient handling to enab le timely decision -making and reduce 
operating costs.  
  WT/TPR/G/421 • Panama  
 
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  6 CONCLUSIONS AND OUTLOOK  
6.1. The Republic of Panama is pleased to have carried out this third Trade Policy Review together 
with the WTO Secretariat, thereby upholding the nation's commitment to transparency, a principle 
that this mechanism promotes in the formulation and implementation of trade policies by the 
Organization's Members.  
6.2. In this third periodic review, carried out under unique conditions, Panama, as the country with  
the best maritime and air connections in Latin America and the Caribbean, shows how it is 
endeavouring to build a sustainable future through its trade policies. To that end, even in the midst 
of a pandemic that posed monumental challenges for countries across the globe, it remained open 
to international trade and ensured the transit of goods as a logistical , but also humanitarian , hub.  
6.3. The national Government adjusted its priorities by implementing a state policy to stimulate 
diverse sectors of the e conomy, while safeguarding public health through a lockdown -based health 
strategy to reduce risk exposure and keeping the supply of services secure and reliable.  
6.4. Panama will continue to participate in the ongoing multilateral and regional negotiations , in the 
belief that they are the best way of developing external trade and foreign direct investment as the 
mainstays of economic growth, and in order to create more and better jobs, ensure access to 
technologies and pioneering innovation processes, and e xpand consumer choice.  
6.5. During the review period, Panama took major strides forward in terms of public infrastructure, 
mostly as a result of the Panama Canal expansion, which is undeniably an asset not only to the 
country but to the world, offering more and better connections to international markets and thereby 
enhancing the competitiveness of the logistics sector.  
6.6. Panama will continue to adopt and implement trade policies geared towards the achievement 
of the sustainable development g oals so that the benefits can be enjoyed by all its citizens.  
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