WT/TPR/M/301  
15 October 2014  
(14-5878)  Page: 1/40  
Trade Policy Review Body 
23 and 25 July 2014   
 
  TRADE POLICY REVIEW 
PANAMA  
MINUTES OF MEETING 
Chairperson: H.E. Mrs Mariam MD Salleh 
CONTENTS 
 
1  INTRODUCTORY REMARKS BY THE CHAI RPERSON ....................................................... 2  
2  OPENING STATEMENT BY THE REPRESENTATIVE OF PANAMA 
(H.E. MR MELITON ARROCHA) .......................................................................................... 4  
3  STATEMENT BY THE DISCUSSANT ................................................................................ 7  
4  STATEMENTS BY MEMBERS ........................................................................................ 11  
5  REPLIES BY THE REPRESENTATIVE OF PANAMA AND OTHER COMMENTS ................... 35  
6  CONCLUDING REMARKS BY THE CHAI RPERSON ......................................................... 39  
 
 
Note: Advance written questions by WTO Members and the replies provided by Panama are 
reproduced in document WT/TPR/M/301/Add.1 and will be available online at: 
http://www.wto.org/english/trat op_ e/tpr_e/tp _rep_e.htm. WT/TPR/M/301 • Panama 
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  1  INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1.1.  The second Trade Policy Review of Panama was held on 23 and 25 July 2014. 
The Chairperson H.E. Mrs Mariam MD Salleh (Malaysia) welcomed the delegation of Panama headed by H.E. Mr Melitón Arrocha, Minister of Trade and Industries; H.E. Mr Alfredo Suescum, 
Permanent Representative of Panama to the WTO; the rest of the delegation from Panama; other 
colleagues from the mission in Geneva; and the discussant, H.E. Mr Dacio Castillo (Honduras). 
1.2.  The Chairperson recalled the purpose of th e Trade Policy Reviews and the main elements of 
the procedures for the meeting. The report by Panama was contained in document WT/TPR/G/301 
and that of the WTO Secretariat in WT/TPR/S/301. 
1.3.  Questions by the following delegations had been submitted in writing at least two weeks in 
advance and had been transmitted to the delegation of Panama: Hong Kong, China; Canada; 
Iceland; Singapore; Australia; Chile; Argentina; the United States; the European Union; China; 
Paraguay; Peru; Brazil; Mexico; and Indonesia. The following delegations submitted written questions after the two-week deadline: Dominican Republic, Colombia, Chinese Taipei, Costa Rica, 
Pakistan, Trinidad and Tobago, Thailand, and Ecuador. 
1.4.  Since its last review, despite a difficult gl obal economic environment, Panama had achieved 
impressive economic growth rates, which were am ong the highest in Latin America. At the same 
time, Panama had maintained a fairly open trade and investment regime and had stepped up 
efforts to deepen its integration into the global economy, mainly as a competitive exporter of international services. In fact, both the Secretariat and the Government reports pointed out that Panama had continued to open up its foreign trade and investment regime, mainly by taking part 
in international trade agreements, and by implementing policies to attract foreign direct 
investment and improve the business climate. In addition, large-scale investments in infrastructure, including the expansion of the Panama Canal, had helped improve the country's 
connectivity and consolidate its position as a regional logistics hub. Other reforms undertaken by 
Panama to foster trade included modernizing its customs procedures; simplifying the tariff structure; strengthening the legal frameworks for competition, government procurement, and 
intellectual property; amending the Free Zone Regime to remove export subsidies; and opening up 
the mobile telephony market. The need for reforms in some of these areas had been raised in the 
last review, so the Chairperson was sure that Members would want to learn more about these reforms and assess their implication on trade. 
1.5.  At the same time, judging from Members' advance questions, it was clear that challenges 
remained for Panama. The Chairperson drew attention to some areas where Members were interested in having more clarity as to the way forward. These included, inter alia , Panama's plans 
to rectify the fact that applied ta riffs on a number of products appe ared to exceed the bound rates. 
Members would also like to know the rationale for tax discrepancies between national and imported goods regarding fuels mixed with ethanol and motor vehicles, and any plans to remedy 
this situation. 
1.6.  In the TBT and SPS areas, a number of ques tions had been raised regarding Panama's plans 
to submit updated notifications and improve its notification mechanisms. Also, there was interest in learning more about Panama's plans to enhance its SPS system and facilitate access to 
information on current and proposed sanitary an d phytosanitary requirements and regulations. 
1.7.  In the services sector, while generally speaking the trade and investment regime was fairly 
open, Members were keen to know about Panama 's intentions to remove limits on foreign 
investment in maritime auxiliary services, and to further open retail trade. Also, it had been 
recalled that, because Panama had liberalized its services sector through both domestic reforms and trade agreements, a large gap existed between  its WTO commitments and its applied regime. 
1.8.  Finally, in the macroeconomic area, the consolidation of public finances remained a key 
challenge, particularly in the face of costly pu blic works projects and the absence of monetary 
policy instruments. It was also interesting to know what steps were being considered to distribute more broadly the benefits of economic growth and reduce social inequalities. WT/TPR/M/301 • Panama 
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  1.9.  Members would wish to raise many other issues as well. Overall, considering Panama's strong 
economic performance and its by-and-large successful strategy to consolidate its role in international trade, this review could offer useful insights on how other developing countries could seek to better integrate into global trade flows of goods and services. 
1.10.  The Chairperson closed her introductory  remarks by wishing Panama a very successful 
second Trade Policy Review. She looked forwar d to its active engagement in this TPR. WT/TPR/M/301 • Panama 
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  2  OPENING STATEMENT BY THE REPRESENTATIVE OF Panama 
(H.E. MR MELITON ARROCHA) 
2.1.  On the occasion of the second Trade Policy Review of Panama, we warmly greet the 
Ambassador of Malaysia, Mariam MD Salleh, Chai rperson of this Trade Policy Review Body, the 
Ambassador of Honduras, Dacio Castillo, whom we thank for agreeing to act as discussant for this 
review, all Members participating in this session and the team of the Trade Policy Review Division for the hard work they have effected together with our authorities over the course of a year. 
2.2.  We should note that since its first Trade Policy Review, the Republic of Panama has pressed 
ahead with its process of trade liberalization, st rengthening its strategy for participation in the 
international economy, on the one hand by deepening its market-oriented economic policies to favour trade expansion and attract foreign direct investment, and on the other, through its 
continued active participation in multilateral, regional and bilateral trade negotiations. 
2.3.  The Panamanian economy continues to be  solid, dynamic and in expansion, led by key 
sectors linked mainly to international trade and promoted by sound economic and social reforms. 
This economic success is based on the development of coherent, market-oriented economic 
policies that have been instrumental in attracting foreign investment. 
2.4.  As a small nation that is highly integrated into the world economy, Panama has implemented 
a set of stable and transparent rules that ensure  and provide stability for trade with Members. 
2.5.  Between 2007 and 2013, the Panamanian economy recorded annual gross domestic product 
(GDP) growth averaging 8.1%, one of the highest growth rates in Latin America, thanks to the 
strong boost provided by public and private invest m e n t  a s  w e l l  a s  t h e  r i s e  i n  s e r v i c e s  e x p o r t s . 
Also driving growth has been the buoyancy of construction, transport, storage and 
communications, financial intermediation, wholesale and retail trade as well as activities closely linked to tourism. 
2.6.  Let me state as regards transport that st orage and communications accounted for an average 
18% of GDP and that their dynamism derives from the operations of the Panama Canal and related activities, port movement and telecommunications,  which have been favoured by the opening up 
to competition and by technological progress in mo bile telephony and the accessibility and scope of 
the Internet. 
2.7.  Investment in infrastructure has increased significantly. Public investments went mainly to 
the expansion of the Panama Canal, line 1 of the Me tro, the building and expansion of airports as 
well as the highway network and hospitals. The increased private investment went mainly to 
residential and non-residential construction, the latter category mainly by shopping centres and hotels. This has enhanced business competitiveness and improved the quality of life of the 
population. 
2.8.  As indicated in the report by the Secretariat,  the services sector plays a dominant role in the 
Panamanian economy and the country has therefore made significant endeavours to consolidate its 
international position as a services exporting country. This has been possible thanks to extensive 
opening up to the participation of foreign providers. The openness and competition offered by the country has fuelled dynamic development in sectors such as telecommunications, air transport, maritime and logistical services, as well as tourism. 
2.9.  As pertains to trade facilitation, Panama has adopted a strategy to optimize and reduce the 
transaction costs associated with trade-related customs and administrative procedures, it has modernized its customs system and introduced trade facilitation measures such as authorized 
economic operator schemes, a single export window, advance rulings, post-clearance audits and 
flexible procedures for goods in transit, and ha s made significant changes to its customs tariffs. 
In this connection, Panama values the aims of the Trade Facilitation Agreement and is committed 
to its observance and implementation. 
2.10.  Panama has bound all its tariff lines and maintains a predictable system of imports. 
It applies a low level of tariffs, the simple average of which is 7.6% and as such it grants most-favoured-nation (MFN) and non-discriminatory treatment to all its trading partners. WT/TPR/M/301 • Panama 
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  2.11.  Some 40% of Panama's import tariff headings currently reflect an MFN duty below 4% and 
only 1.3% maintain import duties above 20%. A 0% tariff is applied to a number of products covered by the information technology agreement (ITA), to automobiles, pharmaceuticals, fertilizers, cotton and cotton fabrics, knitted fabrics and to most products considered as inputs for 
national industry, all of which demonstrates a very significant level of trade opening. 
2.12.  Panama has also carried out reforms that underpin a policy of free competition, thereby 
creating a level playing field for market access by all trading partners. It has made major changes 
to its laws on competition and consumer protection by introducing an economic efficiency criterion, 
classifying the cornering of the market as a rela tive monopolistic practice and has toughened the 
penalties for engaging in anti-competitive practices. 
2.13.  Priority has also been given to developi ng processes to upgrade governance, by promoting 
the optimal use of information and communication technologies in the government sector and 
introducing efficient e-government tools. 
2.14.  Regulatory adjustment designed to protect and modernize intellectual property rights and 
ensure our country's fulfilment of its international commitments has been an ongoing task, thanks 
to which we now have an extensive system of protection for all the rights envisaged under the TRIPS Agreement, including flexible and transparent formalities and rules on observance and 
penalties for non-compliance. In addition to these regulatory improvements, the institutions 
responsible for ensuring the observance of these rights have also been strengthened. Panama updated its commitments in 2012 vis-a-vis  the International Union for the Protection of 
New Plant Varieties (UPOV) and acceded to the Patent Cooperation Treaty, the Trademark Law 
Treaty and the Budapest Treaty. 
2.15.  In parallel, since its last Trade Policy Review Panama has carried out an intensive 
programme of bilateral and regional trade negotiations, which represents a vitally important 
complement to its strategy of integration in international trade by consolidating, broadening and 
deepening the benefits derived from the multilateral trade negotiations taking place in this Organization. 
2.16.  Between 2007 and 2013, Panama entered 13 trade agreements into force, the most recent 
of which include the Trade Promotion Agreement with the United States, the Association Agreement with the European Union, free trad e agreements with Peru and Canada, and its 
incorporation into the Central American Economic Integration Subsystem and the Latin American 
Integration Association (LAIA). All these instruments have improved interaction with these trading 
partners by expanding the foreign trade platform and boosting their participation in trade with various regions of the world. 
2.17.  Our Government has given priority to the Second Trade Policy Review of Panama taking 
place today by participating at the highest level, and we are also grateful for its presence, which is proof of its interest in this exercise. The question s are a reflection of the growing interest in our 
country, its economic sectors and the trade policies it applies, in particular those relating to 
financial and logistical services and to the regulatory framework governing investments. 
2.18.  I wish to confirm in this connection that we have delivered written answers, within the 
specified time frame, to the advance questions we received from Members, this being in line with 
our intention to clarify the various concerns ex pressed, based on the opinion of our competent 
authorities, and which will make up a significant part of our discussions at this meeting. 
2.19.  We wish to underscore that the Republic of Panama reaffirms its commitment to the 
principles and values espoused by this Organiza tion regarding an open, predictable, fair and 
rules-based trading system, and attributes special importance to this review mechanism, which makes for transparency in the trade policies of all Members. We are pleased to undergo this 
second review. 
2.20.  Panama values the institutional framewor k provided by the multilateral trading system, 
which is an efficient platform for promoting its economic relations and safeguarding its trading rights. We are committed to strengthening the multilateral system and we support the early WT/TPR/M/301 • Panama 
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  conclusion of the Doha Round, such that it is adapted to the new needs of trade and promotes full 
participation by all WTO Members in the multilateral system. 
2.21.  We shall continue to step up our relation s with the rest of the world by strengthening our 
economic, social and trade policies to enhance the growth of our economy and we trust that this 
will increase opportunities and the prosperity of our population. 
2.22.  The vision of the President of the Repub lic of Panama, Juan Carlos Varela, which I share 
with you today, is that trade policies must reflect the interest in promoting fair and free trade 
amongst all our countries. They should also clearly constitute a public policy tool that enables the 
population to meet their basic needs and in particular entertain the hope that it is possible to realize their expectations of living in a more just society where the guiding principle is the quality of life of people. This means – and this is how we understand it in Panama – that trade policy 
should not be viewed or developed separately from social policy. We call for new linkages between 
these policies, which, whilst promoting the greatest possible trade integration of our countries and the fulfilment of our international commitments, create conditions for economic and social 
advancement for our peoples that make for long-term sustainability in the pursuit of greater 
openness. WT/TPR/M/301 • Panama 
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  3  STATEMENT BY THE DISCUSSANT 
3.1.  I am honoured to be the discussant for this second Trade Policy Review of Panama, and all 
the more so as this is a sister country in the Central American region. 
3.2.  I wish to begin my statement by welcoming Minister Melitón Arrocha, who is leading the 
delegation of Panama on this occasion, as well as the delegation accompanying him from his 
capital; I should also like to welcome Ambassador Alfredo Suescum, who has done his country proud through his work and his tireless efforts to promote the multilateral trading system as Chair 
of various key Council meetings in this Organization. I also welcome his team at the Mission and 
commend them on their work to safeguard Panama's rights and fulfil its obligations vis-a-vis  the 
WTO in order to further their country's integration into the multilateral trading system. 
3.3.  I should also like to thank the Secretariat, in particular, Sylvia Ávila and Martha Lara, as 
co-authors of the document before us. In this re gard I must underscore that there are virtually no 
discrepancies between the content of the Government  report and that prepared by the Secretariat. 
3.4.  Today, Panama is submitting its second Trade Policy Review for the 2007-2013 period. 
Given the time available and the interest shown, I shall try to focus on some elements based on 
the sections established for this review. I shall begin with the economic environment. 
The economic environment 
3.5.  It is worth noting that Panama has achieved impressive economic growth at an annual 
average rate of 8%, which is attributable mainly to the dynamism of public and private investment, and more specifically expansion work on the Panama Canal and other large-scale infrastructure projects, as well as buoyant private consumption. 
3.6.  Panama weathered the world financial crisis without major consequences thanks to the 
solidity of its banking system. As we all know, the services sector is the driver of its economy and accounts for 70% of GDP. This strong economic growth led to the near doubling of nominal per 
capita GDP over the period of this review to US$11,075, making it possible to introduce a range of 
social support programmes and reduce unemployment and poverty. 
3.7.  The use of the United States dollar as legal tender has spared Panama the risks of fluctuation 
and speculative attacks on its currency since it has no monetary policy instruments. It has also 
promoted its positioning as an international financial centre. 
3.8.  Fiscal policy in contrast plays a very impo rtant role as a macroeconomic tool, and bearing in 
mind Panama's privileged geographical position, has made Panama into a major exporter of 
services such as financial services, tourism, port  services, transport, storage and transit services 
through the Panama Canal and the Colón Free Zone, which is the world's second-largest free zone. 
3.9.  Panama's traditionally balanced public finances nevertheless generated a deficit as of 2009 
owing to rising expenditure, mainly capital expenditure. There is a cap on public finances 
established by law, but several legislative changes were made during the period of this review in 
order to respect that limit. The main fiscal policy challenge today is still to increase revenues and 
achieve a more comfortable fiscal position. 
3.10.  The public debt to GDP ratio declined marked ly over the period of this review, owing to the 
creation of the Panama Savings Fund, which will be financed from the additional income generated by the expansion of the Panama Canal. 
3.11.  Panama continued to show a current account deficit in the balance of payments over the 
period 2007-2013, mainly as a result of the disequilibrium in the balance of trade in goods. The deficit was financed from the surplus on the capital and financial accounts generated by the 
increasing flows of foreign direct investme nt, which accounted for 7.6% of GDP in 2012. 
3.12.  The international goods and services trade is of paramount importance to Panama's 
economy and was equivalent to 166% of GDP in 2012. Agricultural and food products are still 
Panama's main exports (56% of the total, not including re-exports), and this reflects the relatively WT/TPR/M/301 • Panama 
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  modest size of the manufacturing sector. On the import side, manufactures and fuels make up 
88% of the total. 
3.13.   The United States continues to be the main destination for Panama's exports and the 
principal source of its imports. During the period under review, however, exports to the 
United States and the European Union declined, which also meant a continued decline in their 
importance as export markets for Panama. Panama has grown its exports to other markets in the Americas such as Canada, which absorbed 14.6% of total exports, and the countries of the Central 
American Common Market, where the increase was 12%. In Asia as a whole, Panamanian exports 
increased by 18.3%, the main market being Ch inese Taipei, followed by Korea and India. 
3.14.  As regards imports, the share of Brazil, Japan, Korea and the United States declined, while 
those of the Central American Common Market held steady and those of China, Colombia, the 
European Union and Mexico increased. 
The trade policy and investment framework 3.15.  Panama expects the preferential trade agreements the country has concluded in recent 
years to help diversify foreign trade even further and attract greater foreign direct investment 
flows. 
3.16.  It is interesting to observe Panama's nati onal trade strategy goals and their outcomes over 
time. The period from 2004 to 2009, for exampl e, saw the conclusion of international trade 
agreements, export promotion, the promotion of internal changes to improve domestic production, an active role for the private sector in strategies to improve the business climate, and the formation of conglomerates in priority sectors. From 2009 to 2014, investors received assistance 
through the easing of investment-related proc edures and projects were promoted to boost 
Panamanian investments in new markets through the Investment and Export Promotion Agency PROINVEX, involving work programmes to attract investment such as Panama INVIERTE and 
Panama EXPORTA. 
3.17.  Panama seeks to attract high value-added investment that promotes training of its human 
resources and the transfer of technology to important sectors such as financial services, logistics, 
tourism and agriculture. Panama's goal is to position itself as one of Latin America's leading 
destinations for foreign direct investment and the best place to do business, by simplifying the business start-up procedure through electronically handled company start-up notifications. 
3.18.  Panama grants national treatment to co mpanies and investors, there is no exchange 
control, and they are free to repatriate their ca pital, dividends, interest and profits on their 
investment. 
3.19.  The Constitution provides for the possibility of expropriation for reasons of public utility or 
social interest. Panama has signed six new bilateral investment protection and promotion 
agreements, bringing the total to 24. Panama has also signed double taxation agreements and agreements on the exchange of tax information in line with the OECD principles on transparency 
and the effective exchange of information in tax matters. By 2014 it had signed 16 agreements on 
the avoidance of double taxation and nine tax information exchange agreements. 
Panama and the WTO 3.20.  Panama has been a Member of the Organization since 1997. Its late entry meant that it had 
not taken part in the negotiations on topics of great interest to the country, such as the financial 
services and telecommunications sectors under the General Agreement on Trade in Services. Its representation in Geneva has nonetheless demonstrated leadership in the negotiations on 
TISA, the Trade in Services Agreement. 
3.21.  Panama regards the WTO as the main forum for discussion with its trading partners and one 
that provides an institutional legal framework through which to combat protectionism and promote 
further market opening. The country has been involved as a complainant in four dispute 
settlement cases and has been a third party in five cases. Panama has never been a defendant in the WTO framework. WT/TPR/M/301 • Panama 
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  3.22.  Panama further considers that strengthening the rules of the multilateral system is 
important for improving interaction among Members as regional or bilateral trading relations are forged that help promote exports and investments. 
3.23.  In the negotiations on agriculture under the Doha Round Development Agenda, Panama 
favours the elimination of export subsidies and the reduction of tariff protection as well as 
domestic support. As the services sector is one of its most dynamic, Panama supports greater opening in the trade in services. 
3.24.  Panama made regular notifications to the WTO during the period under review, in line with 
its obligations. There are notifications outstanding, however, in the realms of intellectual property, 
agriculture, trade protection and countervailing measures. 
3.25.  Panama has signed trade agreements with 13 partners, namely: Canada, Central America, 
Chile, Chinese Taipei, Costa Rica, El Salvador, the European Union, Guatemala, Honduras, 
Nicaragua, Peru, Singapore and the United States. Nine of these have taken effect since 2007. Other agreements with Panamanian participation involved the Central American Economic 
Integration Subsystem and the free trade agreement between Panama and Central America; 
accession to the LAIA, the Cuba-LAIA, Colombia-L AIA, Mexico-LAIA partial-scope agreements and 
an agreement with the Dominican Republic. Most of these new free trade agreements signed by 
Panama have voided free trade and preferential trade agreements. Panama has not notified six of 
the aforementioned trade agreements. 
3.26.  Between January and November 2013, the trade covered by these agreements accounted 
for almost 9.7% of the value of Panama's exports and 10.4% of its imports. Panama has no 
non-preferential rules of origin. 
3.27.  Panama is currently negotiating free trade agreements with CARICOM, and is seeking 
rapprochement with Aruba, Barbados, Curaçao and the Republic of Korea in this regard. 
Furthermore, together with 20 other countries, it is involved in the negotiations on the plurilateral 
agreement on trade in services and has continued to benefit under the Generalized System of Preferences of Austria, the Russi an Federation, Japan and Turkey. 
3.28.  As regards trade policy by measure and sector, I wish to point out that Panama has 
upgraded its customs regime by enacting a new law, adopting a new computer system and by 
setting up the National Customs Authority (ANA). Trade facilitation measures included the introduction of advance rulings, the single wind ow based on the SIGA though covering exports 
only, and the Inter-Institutional Commission which is working on introducing a Single Window for 
Foreign Trade (VUCE) which will also handle import s and transit traffic and will be operated by the 
Ministry of Trade and Industry (MICI). 
3.29.  On becoming a member of the Central American Economic Integration Subsystem, Panama 
adopted the Central American import tariff, with the following exceptions: the Central American Uniform Customs Code (CAUCA), and its implementing regulations (RECAUCA). 
3.30.  Tariffs are the main trade policy instrument . The report by the Secretariat states that they 
are almost all ad valorem. According to the report by the Government, they are all ad valorem . 
Furthermore, Panama accords MFN treatment to all its partners and applies neither seasonal, temporary nor variable duties. 
3.31.  Panama does not require pre-shipment inspection or any similar procedure. 
3.32.  There is an administrative charge for customs services on imports as well as a fee for using 
the computer system, both based on a specific amount. In addition, imports are subject to the Tax 
on the Transfer of Movable Property and the Prov ision of Services (ITBMS) and, where applicable, 
to the Selective Consumption Tax (ISC) and the Consumption Tax on Petroleum-Derived Fuels (ICCDP). In the case of certain products (electronics, motor vehicles), the elimination 
of tariffs has been offset by an increase in th e ISC. Panama accords imports national treatment 
when applying domestic taxes, except in the case of fuel mixed with ethanol from abroad, to which a higher rate of ICCDP applies than for fuels mixed with domestic ethanol, and imported motor WT/TPR/M/301 • Panama 
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  vehicles (new and used), which are subject to a minimum ISC rate that varies according to the age 
of the vehicle. 
3.33.  During the period under review, Panama endeavoured to bolster its institutional and 
technical capacity in respect of sanitary and phytosanitary measures. It does, however, need to 
make further improvements in areas such as risk analysis, human resource training, the 
establishment of the national SPS committee,  accreditation and notification procedures. 
3.34.  Panama notified eight sanitary and phytosanitary measures to the WTO, of which five were 
emergency measures. Of 88 technical regulations cove ring food products, it has notified only six. 
3.35.  Panama notified three export subsidy programmes to the WTO and obtained an extension 
until 31 December 2015. Preparations have clearly been under way to meet the deadline to which Panama has committed itself. 
3.36.  During the review period, Panama adopted the law on competition and consumer protection, 
reformed several laws such as that on government procurement, overhauled its legislation on intellectual property to modernize it on a horizontal  basis by bringing it into line with the country's 
commitments under international agreements. 
3.37.  The sectoral structure of the Panamanian ec onomy continues to be distinctly dualistic, with 
the existence side by side, of a dynamic and competitive services sector that has chiefly developed 
around the activities of the Panama Canal and the ZLC, and the less productive agricultural 
manufacturing sectors, whose share in the economy is much more modest and has been declining in spite of State support. 
3.38.  The Tocumen airport is the busiest in Ce ntral America and activity increased over the 
period. 
3.39.  The national maritime strategy is designed to make the country into an integrated centre of 
excellence for competitive maritime and logistical services. 
3.40.  The Panama Canal is a nerve centre of global maritime transport. During the review period 
the Authority altered its toll policy to bring tolls in to line with the value offered by the route. It is 
hoped that the new structures relating to its expansion will be completed by December 2015. 
3.41.  Tourism is one of the main foreign exchange earners and accounted for a 12% share of 
GDP; restrictions were lifted on foreign participat ion in tour operator and travel agency businesses. 
3.42.  The Panamanian Constitution reserves the right to engage in retail trade for Panamanians 
by birth and naturalized foreigners, three years after having received their final papers. 
3.43.  I shall now conclude my statement. My intention has been to underline some positive 
elements and some of Panama's efforts over the years, as well as some areas in which more work is needed. WT/TPR/M/301 • Panama 
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  4  STATEMENTS BY MEMBERS 
HONG  KONG,  CHINA 
4.1.  First of all, we would like to congratulate Panama on its impressive economic performance 
during the review period. Panama has one of the be st port and airport networks in the world, and 
has been ranked as the most competitive economy in Central America since 2010 in the Global 
Competitiveness Index published by the World Economic Forum. Panama's booming transportation and logistics services sectors, along with its am bitious infrastructural development projects, have 
enabled it to become the second-largest and fastest-growing economy in Central America. 
4.2.  Panama is no doubt a valued trading partner of Hong Kong, China. In 2012, it was our top 
partner for trade in services in Latin America. For trade in goods, it was our ninth largest partner in the region last year. Much of this is a result of the remarkable efforts made by the Panamanian 
authorities to attract foreign direct investment (FDI) and promote trade. 
4.3.  As the name of its Investment and Export Promotion Agency (PROINVEX PANAMA) suggests, 
Panama's economic policies are truly pro-investment. Investors now have a single window to 
provide them with all the information they n eed, and an electronically processed start-up 
notification system for setting up new companies. Panama maintains several incentive schemes to attract FDI, a good example of which is the Co lón Free Zone. Home to 3,000 companies, the Zone 
is now the second largest duty-free area in the world, and Hong Kong is proud to be one of its 
largest suppliers. We hope Panama will continue with its good work in liberalizing its investment regime. 
4.4.  Services continue to grow at a remarkable  rate of 7.4% a year and stay robust as the 
dominant sector of Panama's economy. The Government has undertaken various measures, 
such as amending legislations, establishing new regulatory authorities, and providing tax incentives, to further liberalize trade in services. This is certainly a move in the right direction 
given that services are making a very significant contribution to the country's economy in both 
GDP (some 70%) and employment (about two thirds of total employment) terms. 
4.5.  We are pleased to note that Panama has modernized its customs regime and implemented 
various trade facilitation measures including the introduction of advance rulings and the creation of 
an authorized economic operator programme. The si ngle window, however, is currently for exports 
only. We hope it will cover imports soon. 
4.6.  We also appreciate the importance Panama attaches to the Agreement on Trade Facilitation. 
We look forward to seeing the timely notification of its Category A commitments. 
4.7.  Regarding tariff, Panama has continued to pursue linear reductions in the bound rates 
between 2007 and 2011, and has reduced its applied MFN tariff from 8.5% in 2007 to 7.6% 
in 2013. There were also improvements in the perc entage of duty-free tariff lines and tariff lines 
subject to international tariff peaks. However, there are still 59 tariff lines for which the applied rate exceeds the bound rate. The average tariff on agricultural products was also more than 
double that on other products. We encourage Panama to further improve its tariff regime. 
4.8.  In the use of contingency measures, Panama has exercised considerable restraint, which we 
fully appreciate. Nonetheless, we would urge its authorities to submit up-to-date notifications to the Committee on Anti-Dumping Practices and the Committee on Subsidies and Countervailing 
Measures to enhance the transparency of its trade remedy measures. 
4.9.  Finally, I would like to commend the contributions made by Ambassador Alfredo Suescum to 
the work of the WTO, especially in his recent ro le as a Friend of the Chair of the Preparatory 
Committee on Trade Facilitation to help finalize the Spanish translation of the Agreement. We also 
thank Panama for the prompt replies it provided to our questions, and I wish Panama a very successful trade policy review. WT/TPR/M/301 • Panama 
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  CANADA 
4.10.  Canada congratulates the Government of Panama on the strong performance of its economy 
since the last Trade Policy Review in 2007. Conti nued political and economic  stability will ensure 
that Panama continues to post above-average grow th rates, while helping to decrease economic 
inequality. Much of Panama's recent economic performance can be attributed to the favourable 
policy environment put in place by the Government, particularly by recent Governments in the face 
of a difficult international context. I will focus my  remarks on three interrelated dimensions of this 
policy environment: the macroeconomic framework, strengthening public institutions, and the 
business climate. 
4.11.  Canada hopes that Panama's new Government will continue to focus on sound 
macroeconomic policies and responsible stewardship of the country's finances. Canada notes that 
Panama, although it needs to address serious structural problems, chiefly in rural areas where 
extreme poverty remains a challenge, is an upper-income country with a relatively high Human Development Index ranking. Its high economic growth rates are predicated on its highly 
specialized economy founded on services, which account for three quarters of the country's GDP, 
and in which the Panama Canal and the shipping register figure prominently. Canada welcomes the continued progress on the expansion of the Panama Canal, which in addition to existing revenues 
from the Canal, the logistics, container ports, tourism and financial services industries, will be 
critical to Panama's positive balance of payments  position, and will further reinforce the country's 
importance as a regional logistics hub. Against this positive backdrop, Canada encourages Panama to guard against fiscal indebtedness that has been rising in recent years, and is pleased to note 
that President Varela intends to monitor this closely. 
4.12.  With respect to strengthening public institutions, Canada recognizes that the new 
Government has already announced several policy initiatives including a commitment to provide 
safe water to all Panamanians, as well as improvements in the education and public health 
systems. We also welcome President Varela's ple dge to ensue zero tolerance for corruption in 
government contracting processes. 
4.13.  Canada is pleased by reports that the construction and other sectors are likely to receive a 
boost from several large public infrastructure projects including increases in social housing, expansion of the Metro system, and the construction of new hospitals and health centres. In this regard, we encourage Panama to consider the public-private partnerships model to support 
infrastructure development by engaging the expert ise and innovation of the private sector and the 
discipline and incentives of capital markets to deliver public infrastructure projects. 
4.14.  Turning to the business climate, on a yearly basis, Panama is the largest recipient of foreign 
direct investment (FDI) in Central America. Acco rding to UNCTAD, Panama accounted for 35.1% of 
the total stock of FDI in that region by the end of 2012. This performance was a contributing factor to the ranking by the World Economic Forum of Panama's economy as Central America's most 
competitive in 2014. Also, the World Bank's Ease of Doing Business  report ranked Panama as the 
top performer in Central America. Part of this success can be attributed to improvements made by the Panamanian authorities in expediting and facilitating new business start-ups, registering property, protecting investors and paying taxes. 
4.15.  On the other hand, Canada notes a legacy of  corruption, which is reflected in the country's 
comparatively low ranking in Transparency International's Corruption Perceptions Index, which places Panama at 102
nd out of 177 countries. A key factor in this regard is the inability of the 
country's legal system to enforce contracts between companies, an area in which the country has 
lost ground since 2013. Canada, nevertheless, welcomes efforts on the part of the Panamanian Government to promote a more favo urable business climate through measures aimed 
at increasing transparency and accountability. Canada notes that justice sector reform and 
modernization are a priority for Panama, and we encourage continuation of the 2005 "Pact for Justice" proposals to reform the administration of ju stice in five years, including: access to justice; 
reform of the criminal courts, structural reform of the judiciary; judicial reforms; and transparent 
accounting. WT/TPR/M/301 • Panama 
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  4.16.  Canada also looks forward to working with Panama in its efforts to develop a sustainable 
and responsible mining industry that is in line with international standards, noting that a stable and predictable regulatory framewor k will allow mining and mining industry-related activities to 
bring significant benefits to the most impoverished of Panamanians, in terms of jobs, skills training 
and ancillary economic activity. 
4.17.  Trade between our two countries is modest by global standards, but Canada is nevertheless 
Panama's second-largest export market after the United States. Our trade and investment 
relationship will continue to be strengthened thanks to the improved market access through the 
recently implemented Canada-Panama FTA and its parallel agreements on the environment and labour. 
4.18.  In conclusion, Canada would like to reiterat e its thanks for being afforded the opportunity to 
put forth its suggestions regarding the current state of Panama's economic, trade and business 
environment. We encourage the Government of Panama to continue implementing measures aimed at ensuring respect for and the use of international institutions and international standards 
of business ethics, good governance and transparency, so that all those in Panama who contribute 
to the development of the country's economy ca n help improve the lives and the well-being of 
Panamanian citizens. 
ICELAND 
4.19.  We should congratulate Panama for tangible progress since its last review: impressive 
economic growth, and maintaining a stable economic environment despite the aftermath of the global financial crisis. More importantly, economic growth has led to an overall reduction in 
poverty and unemployment levels. It appears that the overall strategy to consolidate the country's 
role in the international economy through pragmatic reforms and playing a more active role on the global and regional trading stage is bearing fruit. 
4.20.  The FDI numbers are also laudable, no  doubt fuelled by a combination of numerous 
large-scale infrastructure projects and legislative reforms undertaken in the past few years. We encourage the Government of Panama to maintain a balanced and sustainable course, and to 
ensure that all segments of society have an opportunity to participate in and take advantage of the 
benefits that stem from a more  open and liberal trade regime. 
4.21.  Iceland appreciates the role played by Panama  at the multilateral trading level. Panama is a 
reliable and constructive partner that plays by the agreed rules of the multilateral trading system. 
For our part, we enjoy a very good working relationship with the Mission here in Geneva and 
appreciate the active role they play both in the WTO and other processes, including TISA. 
4.22.  Last year, Iceland along with the other EFTA States signed a comprehensive Free Trade 
Agreement with Panama and Costa Rica. We are happy to announce that Iceland completed its 
ratification process earlier this Spring and deposited the instrument of ratification with the Depository earlier this month. We look forward to the agreement entering into force this 
September. We are convinced that this Agreement w ill help to create and foster the incentives and 
legal conditions for our trade relations to strengthen in the future. Some key sectors where we see potential for strengthening the trade between  Iceland and Panama include fisheries and 
geothermal energy. My delegation has already su bmitted advance questions related to these areas 
and we look forward to studying the response from Panama. 
SINGAPORE 4.23.  Singapore and Panama enjoy strong economic relations, underpinned by the 
Panama-Singapore FTA, which entered into force in July 2006. These relations were further 
strengthened by the conclusion of an Avoidanc e of Double Taxation Agreement in August 2010. 
Our two nations face similar economic challenges and circumstances, both being small economies 
highly integrated into the world economy and dependent on international trade which accounts for 
more than 100% of our GDP. In 2013, our bilatera l trade with Panama stood at US$11.4 billion, 
making Panama Singapore's top trading partner in Latin America, and 20th largest trading partner worldwide. In recent years, Singapore companies have been active in various sectors in Panama 
such as maritime and port operations, aviation and aerospace, consultancy services, information WT/TPR/M/301 • Panama 
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  technology, as well as bioscience. We are confident that these bilateral linkages will continue to 
grow from strength to strength despite our geographical distance. 
4.24.  Panama has been successful in weathering the 2008 global financial crisis, achieving an 
impressive average annual GDP growth of 8.1% ov er the period of review – the highest in Latin 
America. This has largely been due to sound macroeconomic policies by the Panamanian 
Government in maintaining an open economy. The Government's decision to invest in large-scale infrastructure projects will also continue to reap economic dividends for the country in the long 
term. Panama's rapid increase has helped to ma ke significant progress in reducing poverty and 
unemployment, and Singapore hopes that it would co ntinue this growth trajectory in a sustainable 
manner by addressing socio-economic inequality and improving the quality of education. 
4.25.  Singapore commends Panama for the further liberalization of its already open economy and 
its significant efforts in the area of trade facilitation, such as the digitization of customs 
procedures, introduction of a single window for exports, advanced rulings and an authorized economic operator programme. We welcome the reduction of Panama's average MFN tariff rate 
from 8.5% to 7.6% since 2007. However, we note with concern in the Secretariat's report that on 
59 products, the applied rates exceed bound rates. We hope Panama will take steps to bring their applied rates into compliance with their WTO commitments. 
4.26.  Singapore also commends Panama's efforts to update its intellectual property legislation, 
competition and consumer protection law and its initiative to establish Special Economic Zones, such as the Colón Free Zone. In addition, the City of Knowledge in Panama creates a conducive environment for cross-country collaboration in innovation and sustainable development. We hope 
that Panama can resolve the issue of the removal of tax benefits from the tenants at the City of 
Knowledge as soon as possible, in line with Panama's goals of creating a knowledge-based economy. 
4.27.  Panama has been a committed Member of the rules-based Multilateral Trading System 
within the WTO. We are confident that Panama will continue to work closely with other Member States to preserve the Multilateral Trading System. We welcome Panama's accession to the 
Information Technology Agreement in 2012 and hope that they consider participating in the 
negotiations to expand the ITA's coverage. 
AUSTRALIA 4.28.  Australia welcomes the opportunity to participate in this second Trade Policy Review of 
Panama. Australia and Panama enjoy friendly bilateral relations. Panama is a valued like-minded 
partner for Australia on a range of global issues and our economic relationship is growing. Beyond 
trade we share common approaches to internationa l whaling and the effective implementation of 
the Arms Trade Treaty. Australia's trade with Pa nama has historically been modest, but we are 
pleased that bilateral trade more than doubled in  the two years to 2013 to around AUD 60 million 
and we have many interests in Panama. 
4.29.  Australia welcomes Panama's continued commitment to the global trade liberalization 
agenda under its new administration. We note that since its previous trade policy review, Panama has undertaken trade-promoting legislative reforms in areas such as customs and intellectual property. Panama's incentives to attract foreign direct investment, including its special economic 
zones, have been largely successful. Since its last review, Panama has brought into force nine free 
trade agreements and one partial scope agreement, and has joined various regional economic and trade integration processes including working toward s membership of the Pacific Alliance, to which 
Australia is an observer. Australia congratulates Panama on its impressive economic growth since 
its last review, as well as the decrease in poverty and unemployment rates. 
4.30.  We commend Panama's efforts to further open its economy and liberalize trade flows. There 
are some areas where Panama may wish to take further steps. As the current review report notes, 
addressing the skills shortage through educationa l reform would contribute to sustainable growth. 
We also note the existence of barriers to foreign investment in maritime and port services as well as retail services. Australia will watch with interest  the impact of the recent introduction of price 
caps on 22 basic goods, particularly any implications for Panama's international trade obligations. WT/TPR/M/301 • Panama 
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  We understand these price caps will be reviewed periodically and will be removed should they no 
longer be deemed necessary. 
4.31.  Australia welcomes Panama's active engagement in the WTO services negotiations, as well 
as in the Trade in Services Agreement. Australi a is hopeful these negotiations will provide a 
mechanism for Panama to extend improved trade commitments to more WTO Members and 
encourage further liberalization. 
CHILE 
4.32.  Chile and Panama established diplomatic relations 110 years ago, on 1 March 1904. 
4.33.  Throughout this period of over a century,  our links have grown stronger in the political, 
cultural, educational, economic and commercial fields under the 24 agreements and a policy consultation mechanism existing between both countries. 
4.34.  Chile is the world's third-largest user of the Panama Canal, through which a large part of 
our foreign trade passes. 
4.35.  The expansion of the Canal, which we hope  will be concluded on time, will increase our 
trade opportunities and supplies crucial to our development. 
4.36.  Technical cooperation is also a fundamental aspect of our relations. 4.37.  We are highly satisfied with our relations with Panama and we have therefore welcomed its 
candidacy for membership of the Pacific Alliance. 
4.38.  Trade between Panama and Chile expanded  with the signing of the free trade agreement 
(FTA) that became effective in 2008. With this ag reement, Chile consolidated the network of trade 
agreements in the Latin American region, and it is worth noting that this agreement was the first 
signed by Panama with a South American country. 
4.39.  Although the volume of bilateral trade between our countries is still relatively modest, the 
vibrancy of Panama's goods exports to Chile over recent years and of Chile's services exports to 
Panama would indicate that there is considerable room for growth in the immediate future. 
4.40.  Panama is the main recipient of Chilean direct investment in the Central American region, 
and 98.3% of it goes to the services sector, whic h itself accounts for 70% of GDP and two thirds of 
the country's employment, as stated in the report by the Secretariat. 
4.41.  We are highly gratified by Panama's growth  and development over recent years. The recent 
holding of the World Economic Forum on Latin America in Panama City is a sign that the eyes of economic and commercial world are on Panama. Furthermore, the Global Innovation Index 2014, 
published by the World Intellectual Property Organization together with other academic 
organizations, now ranks Panama third in Latin America when it comes to innovation. We are players in Panama's strong economic performance, its efforts to diversify production and in the 
development of its university system, as partners with a strategic vision in the new global realities. 
4.42.  The detailed report by the Secretariat further shows that Panama has continued in recent 
years to comply with its WTO commitments, and focuses on the progress made, inter alia,  in 
customs matters, foreign trade regulations and foreign investment. 
4.43.  Bearing in mind the still outstanding matters mentioned by the Secretariat, we urge our 
partner to continue with this process and we hope to be able to confirm continued progress at the next trade policy review. 
THE
 UNITED  STATES 
4.44.  Panama occupies a unique place in international trade. The Panama Canal connects two 
great oceans and plays a pivotal role in the flow of goods around the world. As Panama 
approaches the 100th anniversary of the opening of the Panama Canal next month (15 August) we WT/TPR/M/301 • Panama 
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  are reminded that a large part of Panama's economy is predicated on the importance of moving 
goods more efficiently and providing related services to support that activity. With the expansion of the Panama Canal, Panama's role in international trade can be expected to become even more important. 
4.45.  In the seven years since Panama's last TPR, Panama has experienced sustained economic 
growth, with an average 8.6% rate of growth over  that period; one of the highest levels of GDP 
growth in Latin America and an annual growth  forecast between 5.8% and 8% through 2019. 
This economic growth reflects a number of the steps that the Government of Panama has taken to 
further integrate its economy into the global trading system. The Secretariat, in its report, points to accomplishments and advances in the areas of customs, intellectual property, and government procurement, among others. 
4.46.  We note that at the time of Panama's last TPR in 2007, the United States-Panama Trade 
Promotion Agreement (US-Panama TPA) had not yet entered into force. This comprehensive 
free trade agreement, which entered into force on 31 October 2012, covers trade in goods and 
services, intellectual property rights, investment, telecommunications, labour, and environment. 
As detailed in the Secretariat's and the Government's reports, Panama undertook a number of reforms to implement the TPA. These are measures that we believe contribute widely to the 
multilateral trading system and the expansion of global trade, and also benefit Panama's other 
trading partners. 
4.47.  As Panama's number one trading partner, the United States has a strong, positive, and 
growing commercial relationship with Panama. According to US trade statistics, our total two-way 
goods trade during 2013 was US$11.2 billion. US goods exports to Panama in 2013 were 
US$10.8 billion and US goods imports totalle d US$449 million. Panama is currently the 
United States' 45
th largest goods trading partner. 
4.48.  As it did in its 2007 TPR, Panama has identified attracting foreign direct investment as a key 
element of its overall economic growth and trad e strategy. We applaud Panama for implementing 
policies that have resulted in sustained inflows of FDI since its last TPR, particularly in the face of 
the global economic downturn in 2008 and 2009, an d encourage Panama to take steps to further 
diversify areas for FDI so as not to see a decrease once the Canal expansion is completed. This inflow is a sign of the confidence that foreign investors have in the economic potential and stability of the Panamanian market, and we note that the IMF expects that the US-Panama TPA (as 
well as the other FTAs Panama has signed) will help maintain high levels of FDI. The United States 
has long been Panama's largest sour ce of foreign direct investment. 
4.49.  As I have noted, Panama changed a number of laws and regulations in order to implement 
the US-Panama TPA. While these changes were signif icant and transformative actions, Panama will 
gain the most benefit from them if Panama also provides a high level of regulatory transparency to facilitate investment and market access. The Secretariat's report noted in several places that 
Panama has made a number of notifications to the WTO. We encourage Panama to increase its 
efforts towards regulatory transparency and to make more extensive and effective use of WTO notification procedures, for example in the area s of sanitary and phytosanitary measures and 
technical barriers to trade. We note that the Secretariat's report identified a number of 
notifications that were lacking in the areas of IP, agriculture, trade protection, and countervailing 
measures. We urge Panama to update its notifications in these areas. Panama should take credit for all the positive steps it has made in many of these areas. 
4.50.  We do have some areas of specific concern that I will briefly highlight. The Secretariat's 
report noted that in June of 2013 through Law No. 41 of that year, Panama limited foreign capital participation in companies offering auxiliary maritime services. This law restricts foreign 
investment in companies or vessels engaged in auxiliary maritime services because it requires that 
Panamanians or Panamanian beneficiaries hold a 75% stake in these entities. In our view, this law reflects a policy that runs counter to Panama's desire to attract foreign investment and become a logistics hub. The Secretariat's report also stated that Panama does not extend national treatment 
when applying domestic taxes in the case of fuel mixed with ethanol from abroad. A higher rate of 
the Consumption Tax on Petroleum-Derived Fuels (ICCDP) applies for fuels mixed with foreign ethanol than applies to fuel mixed with domestic ethanol, and the stated purpose of the measure is 
"to protect domestic production of sugar cane used to produce bioethanol". We urge Panama to 
reconsider its policies in these areas in the context of its WTO obligations as well as its related FTA WT/TPR/M/301 • Panama 
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  obligations, and we hope to hear more in this review about Panama's plans to address 
these issues. 
4.51.  We have submitted a short list of questions about specific issues in Panama's trade regime. 
We look forward to reviewing and discussing Panama's responses. 
4.52.  The United States is committed to building on our current strong trade and economic 
partnership with Panama and supports Panama's progress along the path of global economic integration that it has so strongly pursued. We commend Panama on its active participation in the 
WTO, for its commitment to the multilateral trading system, and for showing ambition in the 
pursuit of trade liberalization through the Info rmation Technology Agreement and the Trade in 
Services Agreement negotiations. We particularly appreciate the active and constructive leadership of Ambassador Alfredo Suescum here in Geneva. We look forward to continued work with Panama, 
both bilaterally and within the WTO. We especi a l l y  h o p e  t o  w o r k  c l o s e l y  w i t h  P a n a m a  i n  
implementing the WTO Trade Facilitation Agreement, recognizing the positive role Panama has taken in those negotiations, and knowing the considerable benefits that will accrue to countries 
like Panama. 
4.53.  We remain committed to continued close cooperation with Panama, to deepen our 
relationship bilaterally as well as in the WTO. 
EUROPEAN
 UNION 
4.54.  This is the second Review for Panama. During the years under review, Panama's economic 
growth has been impressive, thanks mainly to its dynamic investment and a stable macroeconomic environment. 
4.55.  A word on the EU's bilateral relationship with Panama. The EU is a major trading partner for 
Panama. It is the second partner for Panamanian exports and the third partner for the Panamanian imports. 
4.56.  The bilateral trade relations with Panama will certainly be further strengthened by the 
effective implementation of the Association Agreement between Central America and the European Union that entered into force on 1 August 2013 and that allows Panama to fully access a 
market of more than 500 million people, which is unprecedented. The Agreement covers trade in 
goods and services, investment, and also issues such as public procurement, intellectual property rights and technical barriers to trade. It consolid ates and broadens the preferences granted by the 
EU under the GSP/GSP Plus. Furthermore, the Agreement also includes two more pillars providing 
for political dialogue and cooperation. 
4.57.  Regarding Panama's economy, as acknowledged by the Secretariat report, it is based on a 
fairly open trade and investment regime that cont inued to open up during the period under review, 
chiefly through Panama's participation in preferential trade agreements. 
4.58.  This allowed Panama to grow, between 2007 and 2013, at an average annual rate of 8%, 
one of the highest in Latin America. The Panama  Canal remains the backbone of the country's 
economy and represents the linchpin for its foreign relations and its socio-political development. 
Therefore, it is not surprising that, as noted by the Secretariat report, the services sector accounts for some 70% of GDP, allowing Panama to consolidate its position as a major exporter of financial, port, logistical and tourism services. 
4.59.  While the EU will continue supporting Panama in strengthening its pivotal role within the 
region as a hub for trade, the EU also encourages Panama to remain committed to open trade policies, in particular on services, and to continue focusing on FDIs and expo rts as an engine for its 
economic growth. This would certainly allow Panama to continue being the main recipient of 
European investments at regional level and also the EU as a key source of investment for Panama - the EU FDI accounts for 35% of the total FDI in the country. 
4.60.  The EU takes note of Panama's steps in advancing bilateral and regional integration through 
the negotiation and the implementation of severa l trade and investment agreements which served WT/TPR/M/301 • Panama 
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  as a catalyst for legislative reforms in areas such as customs, intellectual property, government 
procurement and other trade-related areas. 
4.61.  As stated in several fora, the EU can only agree with Panama that strengthening the rules of 
the multilateral system is important in improving interaction among Members, as well as in 
establishing stable regional or bilateral trading relations that contribute to the expansion of trade 
and investment flows. 
4.62.  Turning to the hot topic of the moment, the EU commends the trade facilitation efforts done 
by Panama during the period under review aiming at simplifying and modernizing its customs 
regime. The EU understands that Panama has already created the National Customs Authority, introduced advance rulings, the single window for exports, and is launching an authorized economic operator programme. 
4.63.  Considering these achievements as well as Panama's declaration to attach special 
importance to implementing the trade facilitation commitments arising from the Bali Conference, the EU expects Panama to proceed speedily with its notification to the WTO of its commitments 
under Category A. 
4.64.  The EU thus acknowledges that during the years under review, Panama has overall 
continued to promote greater openness and reduced obstacles to foreign trade. Having said this, a 
few concerns still remain. 
4.65.  Firstly, the main priority for the EU is to clarify the trade barriers imposed by the 
Law No. 41 adopted in 2013 that requires that Panamanian nationals must own at least 75% of companies or vessels engaged in auxiliary maritime services. This law represents a serious 
concern for the EU industry and it seems to contradict Panama's international commitments. 
We call on Panama to address these concerns. 
4.66.  Secondly, the EU would also like to receive some clarifications on SPS-related issues. 
In particular, on the authorization process for the importation of food for human or animal 
consumption classified as medium or high risk and on the permits required for the import of live animals and products of animal origin. 
4.67.  In conclusion, let me reiterate that the EU acknowledges Panama for the progress it has 
made since the last review. 
PARAGUAY 4.68.  We highly appreciate Panama's participation in this exercise as the country witnesses an 
economic and trade boom and overcomes the ob stacles created by the international crisis. 
4.69.  Despite the financial crisis of 2008 and 2009, Panama's economy has continued to grow at 
levels close to 10%. As always, the buoyant services sector has played a key role in this 
performance, as have economic policies design ed to attract greater and better quality foreign 
direct investment, which has done much to improve even further the good infrastructure existing in this friendly country. 
4.70.  In this positive setting, Panama's most salient achievement has been to maintain a high 
level of growth in the construction sector, which closed 2013 at 30%, as such becoming one of the highest in the region and the world. All this has made Panama a leading player in the regional and 
international trade arena. 
4.71.  The World Bank's Doing Business Index ranks Panama 11
th worldwide and 1st in Latin 
America as regards the trading across borders indicator. This places Panama in the vanguard as concerns the time and cost entailed in completing each official goods import or export procedure 
from the time of the contractual agreement betwee n the two parties until delivery. This fact was 
borne out by Panama's proactive role in the negotiations on the Trade Facilitation Agreement. 
4.72.  I should also like to underscore my country's good relations with Panama, not only 
politically but also at the trade level. During the period under review, two-way trade flows WT/TPR/M/301 • Panama 
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  increased, even though trade still covers only a limited range of products, including cigarettes, 
clothing and spirits. 
4.73.  This situation nevertheless encourages us to continue working together to strengthen our 
relations by expanding and deepening bilateral trade and to continue to seek complementarities 
between our economies. 
4.74.  We have held ad hoc consultations with the delegation of Panama on matters that we deem 
important to highlight, and why not, in order to  learn from that country's experiences. We are 
therefore grateful for the replies we have received, amongst which we wish to highlight the steps 
taken by the Government of Panama to speed up  international goods transit, especially by 
introducing the automated standard procedure fo r the Mesoamerican International Transit (TIM) 
of Goods over land in the region and the adop tion of the Single Transit Declaration (DUT). 
4.75.  Lastly, it is worth highlighting the like-mindedness of Paraguay and Panama when it comes 
to their vision of the future of the multilateral system; we support the early implementation of the 
Bali Package and a future, development-centred work programme. 
PERU 
4.76.  Our delegation endorses the statements made by other Members this morning in 
appreciation of Panama's impressive economic gr owth over the period under study. Its average 
annual growth rate of 8.1% is one of the high est in the region and the world, and can be 
explained, inter alia,  by the growth of private consumptio n and public and private investment, 
and by the major input from the services componen t which is predominant in the structure of the 
Panamanian economy and accounts for 70% of GD P and two thirds of employment. The country 
also has a diverse and competitive financial sector as well as a solid banking system. 
4.77.  It is also worth pointing out that the backbone of Panama's trade policy is increased Foreign 
Direct Investment (FDI) and exports, and the process of opening currently under way in Panama is 
therefore designed for this purpose. The aim is to attract high value-added investment so as to 
foster the training of human resources and the transfer of technology to key economic sectors such as tourism, agriculture, financial services and logistics. In that connection and as a 
complement to that scheme, Peru shares with Pa nama the aim of strengthening the multilateral 
trading system and the successful conclusion of the Doha Round. 
4.78.  Undoubtedly, there is scope for further im provement, for example in streamlining incentive 
schemes to reduce the differences between the more vibrant areas and sectors of the economy 
and the rest of the economy, and in allocating more resources to social programmes, these being 
challenges common to the region of Latin America and the Caribbean. It is also important for Panama to continue to improve in areas such as risk analysis, human resource training and the 
establishment of a national SPS committee, as this would make for better use of trade 
opportunities. 
4.79.  Bilateral relations between Peru and Panama received a boost in 2011 with the signing of 
the free trade agreement between both countries . It took effect on 1 May 2012 and was duly 
examined in the framework of the WTO Committee on Regional Trade Agreements in September 2013. This agreement falls under th e trade strategy to improve market access 
conditions while establishing clear rules and discipl ines to promote the goods and services trade as 
well as investments. On the benefits side, by May 2017 at the latest, some 95% of Peru's exports 
to Panama will be entering at a zero tariff rate. This means that Peru's agricultural exports such as asparagus, artichokes, tangerines, grapes, mangoe s, avocados, paprika, Cusco giant white corn, 
blue corn and lemons, amongst others, will gain immediate access once the relevant provisions 
takes effect. Similarly, Panama's main exports such as medicines, jewellery, books, and laminated steel products, amongst others, will enter Peru under the agreement's tariff reduction programme. 
This will favour domestic industry and end consumers. 
4.80.  This agreement thus becomes a useful tool for encouraging bilateral trade, which it is hoped 
will benefit mainly small and medium-size enterprises (SMEs), which are constantly on the lookout for nearby destinations for their value-added products. WT/TPR/M/301 • Panama 
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  4.81.  Finally, trade between Peru and Panama  surpassed US$740 million in 2013. Peru's exports 
rose from US$270 million in 2008 to US$621 million in  2013. Peruvian exports were led by oil and 
gas and their byproducts, while imports involved mainly raw materials and intermediate goods. Panama is also the origin of 4.2% of the stock of foreign direct investment in Peru. Panamanian 
FDI in Peru for the 1980-2013 period shows invest ment in excess of US$970 million, going mainly 
to the two crucially important areas of industry with US$340 million, and energy with US$240 million approximately. 
4.82.   On this occasion our delegation submitte d some questions on trade policies and practices, 
and we are grateful for the replies, which will be  transmitted to our headquarters for review and 
possible comments. 
PHILIPPINES 
4.83.  Panama's economy is among the strongest in Latin America. Its dollar-based economy rests 
primarily on a well-developed services sector that accounts for three quarters of GDP. Services include operating the Panama Canal, banking, the Colón Free Zone, insurance, container ports, 
flagship registry, and tourism. Panama's economy is less dependent on commodities and 
manufacturing. 
4.84.  During the review period between 2007 and 2013, the Panamanian economy grew at an 
average annual rate of 8%. Economic growth is bolstered by the Panama Canal expansion projects 
that began in 2007 and is scheduled to be comple ted this year. The expansion project will more 
than double the Canal's capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway, and should help to reduce the high unemployment rate. The 
expansion of the Canal will also enable products made in Asia, including the Philippines, to be sent 
directly to the East Coast instead of being unloaded on the West Coast for transfer via train or truck. Panama is also the transportation and logistics hub of the Americas with its regional 
connectivity, strategic location, strong economy and Canal that joins more than 144 trade routes 
across the globe. 
4.85.  It is important to note that for Panama, strengthening the multilateral trading system is 
important in order to improve interaction among Members. Thirteen regional trade agreements 
were nonetheless entered into force between 2007 and 2014. Panama has eliminated most of its non-tariff barriers and the tariff is the main trade policy instrument. And today, the country's average MFN tariffs are the lowest in the Latin American region, at 7.6%, except for those on a 
few agricultural products, and to an overall average of 13.7%. 
4.86.  The Philippines lauds the steps taken by Panama to continue to modernize its customs 
regime, adopting a new law, updating its computer system, and creating the National Customs 
Authority. Other trade facilitation measures include the introduction of advance rulings, the single 
window for exports, and the launching of an authorized economic operator programme. 
4.87.  I would like to personally commend Panama's efforts and commitment particularly at the 
time when we were burning the midnight oil wh ile working on the Trade Facilitation Agreement. 
The Philippines and Panama worked closely on our common interests and concerns, together we 
have coordinated in unifying positions on specific provisions of the TF Agreement that resulted to a language that has generated consensus and at the same time addressed inherent sensitivities and 
red lines. 
4.88.  Let me also personally thank Ambassador Alfredo Suescum for agreeing to be the chair of 
the Friends of the Chair that facilitated the review and finalization of the Spanish version of 
the TFA. 
4.89.  The sectoral structure of the Panamanian economy continues to be distinctly dualistic, 
marked by the coexistence of a dynamic and co mpetitive services sector, alongside the less 
productive agricultural manufacturing sectors. 
4.90.  The Philippines and Panama share longstanding bilateral economic relations although 
volume of trade in goods is somehow modest. As the fourth largest shipbuilder in the world, the Philippines' exports to Panama are mostly tankers and ships. WT/TPR/M/301 • Panama 
- 21 - 
  4.91.  On the other hand, the Philippines and Panama's  relations in trade in services is substantial 
and significant. Panama has the world's largest merchant fleet, with over 8,000 ships registered as of June 2013, while the Philippines is the world's main supplier of seafarers. Over 70,000 Filipino 
seafarers or almost 20% of the total number of Filipino seafarers are working on 
Panama-registered vessels. 
4.92.  The Philippines and Panama are both sign atories of the Maritime Labour Convention 2006, 
the international treaty which seeks to protect the rights of seafarers worldwide. It is the 
Philippines hope that soon Panama will also become a signatory of the UN International 
Convention on the Protection of the Rights of Mi grant Workers and Members of Their Families. It is 
with great interest, nevertheless, that the Philippines notes Panama's National Maritime Strategy that is designed to turn the country into an integrated centre of excellence for competitive 
maritime and logistical services. This developmen t presents various possibilities for cooperation 
between our two countries. 
BRAZIL 
4.93.  Panama has registered an impressive performance in the last few years, with GDP growth 
rates of 8% on average and increased participation in the world trade. Since its last TPR, in 2007, Panama has overcome the current world crisis and kept a steady pace of development. 
4.94.  Besides progress on the economic front, Panama has also enhanced its efforts towards the 
expansion of the Panama Canal. This project, which will be completed by 2016, will improve the 
capacity of the Canal, allowing it to continue to play a central role in the international maritime trade. 
4.95.  As Brazil, Panama is a democratic and multicultural developing country faced with the 
imperative of fighting poverty. In this  regard, we commend the efforts of the 
Panamanian Government to reinforce macroeconomic conditions for continuous growth. 
4.96.  Our bilateral trade stood at US$4.4 billi on in 2013 from US$221 million in 2009. Last year, 
Panama was the 24
th Brazilian trading partner, accounting for around 1% of the Brazilian foreign 
trade. Between 2009 and 2013, bilateral trade with the country grew by 1910.3%. In this context 
of increased bilateral exchange, Brazilian Direct Investment in Panama reached US$4.5 billion in 
five years, from 2006 to 2011. 
4.97.  Our good relations are not confined only to  trade on goods and services. Brazil and Panama 
have a good partnership in capacity building and science and technology in areas such as 
livestock, agriculture, aquiculture, health, social development and culture. 
4.98.  Panama aims at becoming an important financial centre with a growing regional presence in 
credit operations and investment. In this environment, one can never overstate the importance of 
applying relevant international regulations to strengthen bank supervision that ensures proper risk 
management and transparency. 
4.99.  The relations between Panama and Brazil continue to prosper in a constructive and open 
way, as demonstrated by the growing flows of bilateral trade in goods, services and productive 
investments. 
MEXICO 4.100.  The excellent trading relations between Pana ma and Mexico will be strengthened with the 
entry into force of the free trade agreement that was signed this past April and which will be 
submitted to the respective the legislative bodies for approval prior to enactment. This agreement 
will strengthen our trading ties and open up ev en greater opportunities for the exports of both 
countries. 
4.101.  Panama has registered high economic growth rates in recent years. It has recorded the 
highest growth rate in Latin America for the past decade (8.5% between 2004 and 2014). 
This economic growth, combined with sound macroeconomic policy management has lifted a 
substantial part of its people out of poverty. According to a World Bank report, the poverty rate fell WT/TPR/M/301 • Panama 
- 22 - 
  from 48.5% in 2002 to 27.6% in 2011. Despite the unquestionable progress in terms of poverty 
indicators, inequality in income distribution and uneven development between different regions are still the main challenges facing the Panamanian Government in the years ahead. Furthermore, one of the tasks awaiting action is the development of a system of social protection that benefits 
the most vulnerable groups. 
4.102.  Recent public investments in infrastructure have consolidated Panama's export position in 
the financial services, storage, transport and distribution sectors. Panama has improved its 
position in terms of logistics and international co mpetitiveness. According to the World Bank report 
entitled Connecting to Compete 2014: Trade Logistics in the Global Economy,  Panama has one of 
the highest, steadily improving logistics performance indices in Latin America. 
4.103.  Despite the headway made, Panama still faces a series of major challenges which it must 
tackle in order to ensure continued growth and enhanced international competitiveness. One 
example is the electricity shortages facing the business sector. Although steps have already been taken to save energy and provide fiscal incentives for electricity generation, the Panamanian 
Government needs to implement a comprehensive poli cy that will prevent shortages such as those 
experienced in 2013. 
4.104.  As pertains to tariff policy, we recognize that Panama has lowered the average applied 
MFN tariff.
1 Nevertheless, the MFN tariff applied to agri cultural products (13.7%) is twice that 
applied to non-agricultural goods (6.4%) Moreover, there is a high degree of tariff dispersion, ranging from zero to 260%. Besides, the difference vis-a-vis  the average bound tariff is evidence 
of the urgency of completing the Doha Round, a prerequisite of which is the success of the 
Bali programme. 
4.105.  In respect of trade facilitation, the report by the Secretariat states that Panama has a 
single window based on the Integrated Customs Management System (SIGA) but that it handles 
only exports. Work is nevertheless in progress to implement a single window for foreign trade that 
will also cover imports. We would be grateful if Panama could provide more information on its 
implementation and eventual operation. We urge  the authorities to notify their Category A 
commitments as promptly as possible. 
4.106.  As pertains to non-tariff barriers, greater efforts are needed to boost its institutional and 
technical capacity in respect of sanitary and phytosanitary measures. The report points out that efforts should be aimed at bringing about improvements in risk analysis, human resource training, 
the establishment of a national SPS committee and in notification procedures. We would like 
Panama to provide information regarding its efforts to implement these recommendations. 
INDONESIA 
4.107.  We are pleased to be here today to participate in the Trade Policy Review of Panama. Since 
its last review in 2007, Panama has stepped up its strategy to consolidate its role further in the global economy. Indeed, the country now enjoys a robust, dynamic, and growing economy. 
Panama's continuing efforts has helped to consolidate its position as a major exporter of financial, 
port, transport, storage, distribution services, and transit services through the Panama Canal. 
4.108.  Indonesia further commends the strong role of Panama in promoting trade and investment 
liberalization through regional, subregional, and bilateral cooperation. We also appreciate 
Panama's positive contribution in the WTO forum. We believe that Panama has shown its strong 
commitment to a successful Bali Package and Post-Bali Work Programme, both here in Geneva and in the capital. 
4.109.  On the bilateral side, please allow me to share how both Governments have been engaging 
a mutually beneficial trade relationship. Panama is an important trading partner for Indonesia as it is our largest trading partner in Central America.  In fact, between the period of 2009 to 2013, the 
annual increase of Indonesia's export to Panama on average is 21.20%, which is higher than our 
overall average of 11.45% annually. 
                                               
1 The average MFN tariff moved from 8.5% in 2007 to 7.6% in 2013. WT/TPR/M/301 • Panama 
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  4.110.  Nevertheless, despite the positive and strong economic ties between Indonesia and 
Panama, we still have some trade and trade-related concerns that, hopefully, could be addressed at this Trade Policy Review. These concerns relate to, among others, fuel taxes, and technical regulations for food products. Indonesia has submitted specific questions with regard to these 
issues, and we hope that Panama could provide a response to alleviate our concerns. 
DOMINICAN
 REPUBLIC 
4.111.  Together with Panama, we are members of the Central American Economic Integration 
System and we have had a partial scope trad e agreement for many years now. From 2007 
to 2013, despite the global economic and financial crisis, the Panamanian economy grew at an average annual rate of 8%, one of the highest in  Latin America. This week the Ministry of the 
Economy announced that growth for this year is expected to fall between 6.5% and 7.5%, which is 
more than twice the 2.5% average for Latin America and the Caribbean according to the latest 
International Monetary Fund forecasts. 
4.112.  This rapid growth was due mainly to incr eased private consumption and public and private 
investment, the latter being fuelled by robust foreign direct investment inflows representing 8% of 
GDP on average for the period referenced. The bulk of domestic investment went towards 
large-scale infrastructure projects. 
4.113.  As presented in the Secretariat's report, the Panamanian economy continues to display a 
high degree of inequality. On the one hand there is  a dynamic and competitive services sector that 
has developed mainly around the activities of the Panama Canal and the Colón Free Zone, where 
services are at the heart of Panama's economic structure and account for 70% of GDP, two thirds 
of employment and 36% of exports. On the other,  the agricultural and manufacturing sectors are 
less productive and have a much smaller share in the economy and one that has continued to contract in spite of the government assistance it has received. 
4.114.  Public finances have been running a deficit since 2009 owing to rising expenditure, mostly 
capital expenditure. The deficit has been modest and has been held within the annual limits set by law. The main fiscal policy challenge is maintaining discipline in order to consolidate public finances 
and boost confidence, particularly bearing in mind  that Panama cannot use monetary policy to deal 
with economic cycles and any external shocks. 
4.115.  At all events, the public debt-to-GDP ratio, a critical indicator in this case, declined during 
the period of the review to stand at a reasonable  36.8% in 2013 owing to vigorous GDP growth at 
a rate higher than debt. Close attention should however be paid to inflation which, at 4% in 2013, 
was above that of the United States. Wages would have to be deflated or productivity increased so as not to erode competitiveness. This occurs in dollarized economies and in those dependent on 
the euro. 
4.116.  Besides, attention should be paid to the large deficit in the current account of the balance 
of payments, which has been funded by the appreciable influx of foreign investment. Despite the 
impressive economic growth rate, Panama should focus on economic and social measures to 
address the persisting and significant social and regional inequalities as well as the marked shortage of skilled labour. 
4.117.  In this regard, the Secretariat's report rightly recommends that greater resources be 
channelled towards social programmes, including improvements to the quality of education, 
in order to meet the demand for qualified labour  being generated by sustained economic recovery. 
4.118.  Besides, the recurring problems of electricity shortages should be solved through regional 
cooperation, as this would help boost the efficiency and competitiveness of the economy. 
4.119.  During the period  of this review, Panama continued to apply trade facilitation measures 
and to upgrade its customs regime by adopting a new law, introducing a new computer system 
and setting up the National Customs Authority. 
4.120.  Other trade facilitation measures included in the use of advance rulings, the introduction of 
a single window for exports and the launch of an authorized economic operator scheme. Moreover, WT/TPR/M/301 • Panama 
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  the average tariff was reduced from 8.5% to 7.6% . Still, there are 59 products for which the rates 
applied exceed the WTO bound rates and this should be corrected. 
4.121.  Panama has also made headway on the legislative front, and in 2007 adopted a new law 
on competition and consumer protection, as well as a series of laws overhauling and refining its 
legislation on government procurement. In 2012 it also reformed its legislation on intellectual 
property so as to modernize and bring it into line with the country's commitments under international agreements. 
4.122.  We conclude by urging Panama to conti nue its process of reforms designed to maximize 
the benefits deriving from its excellent geographical location through its transport structure, thereby sustaining dynamic growth and gradually ra ising the standard of living of its population. 
COLOMBIA 
Economic performance 
4.123.  As a country with which we share strong historical, economic and social ties, we are 
gratified to see from the report prepared by the Secretariat that the period under review was 
especially positive for the Panamanian economy. This is particularly evident from the high rate of 
growth of real annual GDP, which averaged 8% between 2007 and 2013 (despite the world 
financial crisis during which Panama's banking system demonstrated its solidity). 
4.124.  This also went hand-in-hand with massive  increases in the volume of foreign investment 
and global trade flows. It was possible at the same time to reduce unemployment, which in 2013 stood at 4.1%, and improve poverty indices, alth o u g h  m u c h  r e m a i n s  t o  b e  d o n e  i n  t h i s  a r e a .  
These results were made possible amongst other things by sound policies to attract investment, 
increased private consumption and the implementation of large-scale infrastructure projects, 
combined with prudent macroeconomic management. 
4.125.  For Panama, like few countries, the international goods and services trade is central to its 
economic development, representing 166% of GDP, as stated in the report by the Secretariat. It is 
therefore no surprise that during the period co vered by this review, major efforts went into 
upgrading its trade procedures, and in parallel, an active programme of negotiations to expand its 
market opportunities and attract more investments. 
Modernization 4.126.  As pertains to modernization, the report appropriately underscores the recent legislative 
and institutional changes, including the establishment of the National Customs Authority (ANA), 
which will play a very important role in the proper conduct of Panama's foreign trade. We have 
submitted a series of questions about the Authority in order to better understand how it discharges its functions in the different areas of the goods cl earance and valuation process. We trust that we 
will receive adequate replies that will help clear up our concerns. 
4.127.  We also point to the implementation of  several trade facilitation measures, a matter 
currently of central concern at the WTO. Amongst others, we highlight the launch in early 2013 of 
the pilot plan for an electronic Single Window for Foreign Trade and the introduction of measures 
such as advance rulings, post-clearance audits, au thorized economic operators and the adoption of 
a regional transit system, all of which are me asures envisaged under the Trade Facilitation 
Agreement and which will undoubtedly benefit operators. 
4.128.  In this context, we cannot overlook the substantial role played by the Colón Free Zone 
(ZLC), the world's second largest free zone, which, according to the Secretariat's report, represented 66% of Panama's overall trade in 20 13, or over US$27 billion. Companies established 
in the Colón Free Zone receive extensive benefits , including tax exemptions on their imports, 
re-exports and the manufacture of goods, and th ey also benefit from a special customs regime. 
4.129.  In the case of the ZLC, we also see mo vement on the upgrading of procedures. We draw 
special attention to the introduction in 2009 of the electronic system for the declaration of WT/TPR/M/301 • Panama 
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  commercial activities with a view to speeding up trade formalities for companies in the Free Zone 
through the sharing of information amongst the different bodies involved in those formalities. 
4.130.  The activities of the Colón Free Zone are of great interest to Colombia as an appreciable 
percentage of its trade is destined to our country . We therefore submitted a series of questions in 
order to get to know and understand the mechanisms for follow-up and control for the entry, 
in-transit stay and exit of goods, these being topics that are not addressed in detail in the report prepared by the Secretariat. We will therefore appreciate the replies received. 
4.131.  We are particularly interested in knowing the mechanisms used to forestall and control 
criminal behaviour such as contraband and money laundering, as well as acts of unfair competition, amongst others. Colombia is pleased to see that new computer tools are being used to facilitate trade operations but deems it necessary to ensure all times that those tools also 
represent suitable mechanisms of control, monitoring and transparency. 
4.132.  On the matter of tariffs, Panama endeavoured throughout the review period to reduce and 
simplify the applied rates. The average applied rate in 2013 was 7.6%, or almost one percentage 
point less than in 2007, in particular owing to tariff reductions on the goods covered by the 2007 
Information Technology Agreement, as well as so me vehicles, foodstuffs and items of clothing. 
4.133.  In this connection, we are struck by the fact that the Secretariat's report identifies 
59 products on which the applied rate apparently exceeds the bound rate. We would be grateful 
for the relevant comments in this regard. 
Programme of international negotiations 4.134.  The report provides ample information regarding Panama's programme of negotiations 
during the review period. Not only did Panama join regional integration processes such as SIECA 
and LAIA, but it also finished negotiating and putting into effect nine new trade agreements. A further four are pending entry into force, one of which is the free trade agreement with 
Colombia. 
4.135.  Panama has also stated its interest in joining the Pacific Alliance, which comprises Peru, 
Chile, Mexico and Colombia. 
4.136.  These are all positive steps that will do ubtless enable the country to further expand 
opportunities for growing its foreign trade and attracting new investments. 
4.137.  Finally, I wish to note that on this occasion, we find two paragraphs in the report by the 
Secretariat which we consider to be inaccurate. Paragraph 2.36 of the report states (and I quote) 
that … "Panama and Colombia signed an FTA in 20 13, following a period of over two years when 
talks were suspended owing to differences over protection for sensitive products and the regime applicable to the Colón Free Zone (ZLC). Pursuant  to the agreement, Colombia will withdraw the 
mixed tariffs on imports of textiles, clothing and footwear originating in the Colón Free Zone that 
led Panama to request the WTO Dispute Settlemen t Body to hold consultations." Paragraph 3.174 
in turn states: "In 2013, the ZLC encountered proble ms that led to a slowdown in trade activity, 
owing in part to Colombia's imposition of a compound tariff on Panama's exports of textiles, 
clothing and footwear …". 
4.138.  It should be clarified first and foremost that Colombia has imposed mixed tariffs on 
imports of clothing and footwear, not on textil es as the report states in both paragraphs. 
Furthermore, the aforementioned paragraphs conv ey the impression that this measure applies 
only to Panama and specifically to goods from the ZLC. This is incorrect, as the measure applies to goods of any origin, except for those coming from countries with which there are trade 
agreements in force. We would be grateful if the appropriate correction could be made. 
4.139.  I conclude by stating that Colombia wishes Panama a successful trade policy review, from 
which we hope it will be possible to obtain practicable recommendations and suggestions. 
SEPARATE
 CUSTOMS  TERRITORY  OF TAIWAN,  PENGHU,  KINMEN  AND  MATSU WT/TPR/M/301 • Panama 
- 26 - 
  4.140.  Panama's economic growth since its last review has been very impressive, at an average 
annual rate of 8%. It has also become recognized as one of the world's leading nerve centres for logistics and transport, and a dynamic destination for investment. These achievements are mainly due to Panama's pragmatic approach to economic integration, by signing trade agreements aimed 
at cutting intra-regional tariffs and taking care not to erect new barriers to trade with other 
countries. To its great credit, Panama has adopted a policy of opening-up its markets in order to make deeper-than-ever domestic reforms. As a result, in addition to generally expanding domestic 
demand, substantial progress has been made in many key areas, such as the overhauling of 
out-of-date regulations, boosting the developmen t of the services sector, the upgrading of key 
industries and increasing urban employment. 
4.141.  We appreciate Panama for its strong commitment and active participation in the 
multilateral trading system. 
4.142.  We have submitted our written questions to seek further clarification and we thank 
Panama for its prompt responses. 
4.143.  I will just add a few points of interests. First, Panama is a Party to the WTO Information 
Technology Agreement (ITA). A greater engagement in other related areas from Panama is very much welcomed. We would encourage Panama to reconsider to join the GPA. 
4.144.  Second, we welcome Panama's introduction of the new competition law to construct a 
unified and open market system with orderly competition. We ask if Panama could please elaborate further on its strategy and implementation in this respect. 
4.145.  Third, on the subject of the Colón Free Zone, we would like to know whether and if so, how 
Panama plans to strengthen the link of its spec ial economic zone with the economy as a whole. 
4.146.  Fourth, on the subject of notification obligations, we notice that Panama may not be 
up-to-date with notifying the WTO as required , for example, in the areas of TBT and SPS. 
We would encourage greater transparency with such measures and their conformity with 
WTO rules. 
4.147.  Finally, I would like to touch briefly on our bilateral trade and investment relationship. 
We enjoy very close and long-standing economic ties with Panama. Currently, it is one of our 
largest trading partners in Latin America. Indeed, two-way trade between us is growing steadily over recent years largely due to the bilateral FTA.  We would definitely like to see this positive 
trend to continue in the future. 
COSTA
 RICA 
4.148.  Costa Rica has a special relationship with  Panama and we wish to strengthen it even 
further. Besides a close relationship of friendsh ip and cooperation between our two neighbouring 
countries and the common aims we share in many fields, we have a free trade agreement that 
became effective in November 2013. This agreement has broad coverage and, unlike the 1973 preferential agreement that preceded it, and wh ich was only partial in scope and regulated the 
trade in goods, this is a modern instrument that also encompasses investments, services, 
government procurement, sanitary and phytosan itary measures, and dispute settlement, amongst 
other topics. Even before this agreement took effect, trade between the two countries had been growing steadily over recent decades. At the world level, Panama ranks third amongst the 
countries of destination of our exports and first in the Central American region. At the regional 
level it ranks second as a country of origin of our imports. 
4.149.  As pointed out in the report by the Secretar iat, Panama's economy recorded impressive 
growth of 8% between 2007 and 2013, which was much higher than the average for 
Latin America. The World Bank forecasts that the Panamanian economy will continue to grow between 2014 and 2016 at a rate higher than that of Latin America and the Caribbean. Growth 
rates are expected to surpass 6%, fuelled amongs t other things by the expansion of the Panama WT/TPR/M/301 • Panama 
- 27 - 
  Canal and other large-scale projects.2 The World Bank also states that this vibrant economic 
growth has led to improved social indicators, as poverty declined from 48.5% in 2002 to 27% in 2011, and extreme poverty diminished from 21% to 11% over the same period.
3 We commend 
Panama on these major accomplishments.  
4.150.  The steps taken by Panama to attract more high value-added investment, such as the 
creation of PROINVEX, the single window for investors or the simplification of the business start-up procedure, are all the more important to consolidating these advances when combined with a 
system already in place which, inter alia,  ensures legal certainty for investments and national 
treatment, as well as the free repatriation of capital and dividends. 
4.151.  The services sector continues to play a key role in the Panamanian economy. It is 
therefore no surprise that the country has played an active part in this regard in the Doha Round 
and in the TISA negotiations, in which Costa Rica is also involved. 
4.152.  My delegation would like to underscore the trade facilitation initiatives that Panama has 
been taking, such as upgrading its customs regi me, introducing a single window for exports and 
launching an authorized economic operator scheme. We welcome Panama's commitment to the 
Trade Facilitation Agreement, which is consistent with these measures. We urge them to notify their Category A commitments. 
4.153.  Before concluding, my delegation would like to acknowledge Panama's sterling contribution 
to the Central American Economic Integration Subsystem since its accession, as well as the country's commitment to the WTO multilateral trading system and the conclusion of the Doha Round. We also highlight the invaluable role played by Panama's delegation to the WTO, 
under the leadership of Ambassador Suescum. 
4.154.  We are aware of the tremendous effort depl oyed by Panama in preparing for this exercise. 
We are therefore grateful for the replies they have  provided to our questions, which we will be 
studying most carefully. 
PAKISTAN 4.155.  During the review period, Panama's economy grew at a remarkable annual rate of 8%, 
which is one of the highest both in Latin America and globally. Panama is in its seventh year of 
economic success and recently became the second-richest country in Latin America after Chile. It has the world's second-largest free-trade zone, Latin America's fourth-busiest airport, and numerous free trade agreements. 
4.156.  This rapid growth is based on expansion of private consumption and by public and private 
investment, chiefly in large-scale infrastructure projects, comparative advantage in the tertiary sector, its geographical location, and ability to consolidate its position as a major exporter of 
financial, port, transport, storage, distribution services and transit services through the Panama 
Canal, besides logistics, banking, the Colón Free Zone, insurance, container ports, flagship registry, and tourism. It is said to be on its way to becoming the Singapore of Americas. 
4.157.  Panama has a highly open trade and investment regime. FDI and exports are the pivots of 
Panama's trade policy alongside services that account for 70% of GDP and two thirds of employment. Panama has the world's largest merchant fleet. The Panama Canal and ZLC play a vital role in this respect. ZLC accounts for about 70% of the value of the country's total 
merchandise trade and ZLC firms continue to capture significant FDI flows. The importance of 
trade in Panama's economy is reflected in the fact that it was equivalent to 166% of GDP in 2012. 
                                               
2 6.8% (2014), 6.2% (2015) and 6.4% (2016). May be viewed at: 
http://www.worldbank.org/en/ publication/global-economic-
prospects/data?variable=NYGDPMKTPKDZ&region=LAC . 
3 May be viewed at: http://www.bancomundial.org/e s/country/panama/overviewk ; and 
http://www.worldbank.org/content/dam/Worldbank/d ocument/EAP/Panamá/Panam á_Economic_Update_June2
014.pdf  
(http://www.worldbank.org/content/dam/Worldbank/d ocument/EAP/China/China_ Economic_Update_June2014
.pdf). WT/TPR/M/301 • Panama 
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  4.158.  Panama's trade in services has traditionally been in surplus, and so it remained during the 
2007-2013 period. 
4.159.  Panama is not a prolific user of trade remedies. During the period under review, 
it conducted only one anti-dumping investigation, and a safeguard investigation which led to the 
adoption of safeguard measures for a period of one year. In 2009, Panama adopted regulations 
containing procedural rules for conducting anti -dumping, subsidy and safeguards investigations. 
4.160.  Panama is an active player in the WTO. It  supports the elimination of export subsidies, the 
reduction of tariff protection and domestic support in agriculture, and supports greater openness in 
trade in services because this is the most dynamic sector of its economy. Its participation in PTAs has been conducive in legislative reforms in the areas of customs, intellectual property, government procurement and other trade-related areas. 
4.161.  Amidst a story of star-studded performance, Panama faces several issues that it needs to 
address. For instance, in SPS, improvements are needed in areas such as risk analysis, training of personnel and the establishment of a national SPS committee. 
4.162.  Regarding competition policy, there is a hi gh level of concentration in certain markets, 
particularly in the case of goods. In some markets, only a few businesses are active while in others tariff protection is high (especially agricultural products). 
4.163.  In the context of trade facilitation, more experience is considered necessary in developing 
and detecting risk profiles, as well as technology and equipment to improve their management. Compliance with risk management procedures by  the regional customs needs to be reinforced. 
4.164.  Panama has the second-worst income distribution in Latin America and one fourth of the 
population lives in poverty. It has to address one of the hemisphere's worst cases of economic 
inequality. 
4.165.  Overall, as noted by the Secretariat, and I quote, "the links between the special economic 
zones and the economy as a whole need to be stre ngthened, and the contribution of the former to 
employment and local value-added needs to be impr oved. It would also be wise to reassess and, 
where appropriate, rationalize the incentive schem es in order to narrow the gap between the most 
vigorous economic zones and sectors and the rest of the economy, and to allocate more resources 
to social programmes, including improvements in the quality of education in order to meet the demand for skilled labour on which sustainable economic growth depends. The efficiency and 
competitiveness of the economy would also be improved by solving the recurrent problem of 
electricity shortages". 
4.166.  We earnestly hope that given Panama's recent success track, it would be able to overcome 
these problems successfully. 
TRINIDAD
 AND  TOBAGO 
4.167.  Earlier this year, the World Economic Forum wrote the following of Panama: "Panama, the 
host of this year's World Economic Forum on La tin America, embodies the region's progress and 
potential. The country is a thriving international hub of trade and investment in the Americas and 
has demonstrated impressive economic performance and stable growth rates in recent years". 
4.168.  With this and other positive reviews in mi nd, Trinidad and Tobago wishes to congratulate 
Panama for its impressive macroeconomic performance, which is underpinned by sustained policy 
reforms, strong private demand and the implem entation of an ambitious public investment 
programme, which includes the expansion of the Panama Canal. For the period under review (2007-2013), Panama recorded an average annual growth rate of 8%, one of the highest in 
Latin America. 
4.169.  The soundness of the Panamanian financial sy stem is worthy of special mention; owing to 
the resilience of the system, Panama was in a position to cope with the global financial crisis of 
2008-2009 without major consequences. In this regard, my delegation noted with interest the WT/TPR/M/301 • Panama 
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  creation of its sovereign wealth fund, the Panama Savings Fund, in June 2012. Such a facility will 
no doubt further strengthen the economy's resilience to external shocks. 
4.170.  Panama must be commended for the implementation of its National Trade Strategy that 
focuses on increasing foreign direct investment (FDI) and exports. In keeping with this strategy, 
Panama has signed a number of bilateral and regional trade agreements to complement the 
benefits deriving from the WTO multilateral trade negotiations. For example, since its last Trade Policy Review, Panama has implemented nine free trade agreements and a partial scope 
agreement and has acceded to the Central Americ an Integration System and the Latin American 
Integration Association. We have duly noted that Panama's trade strategy also includes programmes to attract and facilitate investment; programmes to support businesses going abroad, as well as programmes to improve business competitiveness particularly the competitiveness of 
micro, small and medium-sized businesses. 
4.171.  The dynamism and competitiveness of its services sector, which accounts for 70% of GDP 
and two thirds of total employment, cannot go unmentioned. As highlighted in the Secretariat's 
report, over the years, Panama has consolidated its position as a leader in financial, port, logistical 
and tourism services. 
4.172.  My delegation also commends Panama for the reforms of its intellectual property, 
government procurement and customs regimes. 
4.173.  Focusing on its customs regime, Trinidad and Tobago takes special note of Panama's 
efforts in the area of trade facilitation, which included the establishment of a National Customs Authority, as well as the introduction of the Integrated Customs Management System. 
4.174.  However, we do have a few concerns in relation to administrative charges for customs 
services on imports, several tariff quotas and hi gher applied rates of tariff for a large number of 
products. My delegation posed questions which addressed these concerns, among others, and we 
thank the delegation of Panama for its responses to our questions. 
4.175.  We also note and commend the Government of Panama's efforts aimed at using its 
economic growth to contribute to achieving su stainable and inclusive growth, poverty reduction 
and improved living standards and well-being of  its people. However, in spite of significant 
progress, poverty and social inequality remain fa irly high and we encourage continued efforts in 
this regard. 
4.176.  I turn now to our bilateral relationship. Tr inidad and Tobago's diplomatic relationship with 
Panama spans 20 years and over the years our two countries have made efforts to strengthen and 
deepen ties through an active bilateral agenda. Key initiatives in this regard include the signing of a Partial Scope Agreement in October 2013; a Memorandum of Understanding (MOU) on 
Cooperation in Energy; and a bilateral Air Services Agreement. Panama and Trinidad and Tobago 
also enjoy a healthy commercial relationship. Trinidad and Tobago's main exports to Panama include petroleum oils, liquefied propane and iron and steel bars. 
4.177.  In conclusion, my delegation wishes to commend Panama for its commitment to the 
multilateral trading system, which is reflected in the delegation's active and positive engagement 
in the WTO negotiations led by Ambassador Suescum. 
GUATEMALA 
4.178.  Panama is an important trading partner to Guatemala and we congratulate the country on 
its progress in the realm of trade, and more specifically on its accession to the protocol incorporating Panama into the Central American Economic Integration Subsystem (SIECA). We are 
gratified that it is now part of the Central American system. 
4.179.  Panama has achieved a high economic growth rate (8%), thanks mainly to buoyant levels 
of investment and a sound and stable macroeconomic environment, combined with a development 
strategy encompassing the management of transport, storage, distribution and transit through the 
Panama Canal, in addition to creating infrastructure that is making this country into a regional logistics hub. WT/TPR/M/301 • Panama 
- 30 - 
  4.180.  We commend Panama on its incentives programme designed to attract foreign direct 
investment (FDI) and boost exports, including fina ncial services exports, which account for 70% of 
Panama's GDP. In the world trade in services, Panama ranks 39th as an exporter and 57th as an 
importer. 
4.181.  In trade facilitation, Panama has moved ahead in modernizing its customs system by 
adopting a new law, setting up the National Cu stoms Authority (ANA), upgrading its computer 
system, introducing advance rulings and post-clearance audits, a single window for exports, 
developing the framework for an authorized economic operator scheme and adopting a regional 
transit system. 
4.182.  Lastly, we are aware that the basis of Pa nama's foreign trade policy over the years has 
been trade openness and that the country has sign ed trade agreements with 13 partners, of which 
nine have become effective since 2007. One of the most recent has been its accession to the 
Central American system in 2012. 
BARBADOS 
4.183.  The Panamanian economy has recorded strong economic growth over the period 2007 
to 2013. Panama was largely unscathed by the global financial and economic crisis of 2008-2009. In this regard, the country's sound economic performance and resilience has been attributed to the 
expansion of public-private investments in large scale infrastructure projects, private consumption 
and buttressed by a stable macroeconomic enviro nment. Panama is one of the fastest growing 
economies in Latin America, growing by 8% per annum on average over the period being 
reviewed. Barbados commends the Government of  Panama on these impressive achievements. 
4.184.  Despite its robust macroeconomic performance and reduced unemployment rates, Panama 
remains challenged by social inequalities and a high rate of poverty, particularly in rural communities. We therefore urge Panama to actively seek to diversify their economy to include the 
economic participation of those in the rural communities and those below the poverty line. 
4.185.  Panama's trade policy is underpinned by the aggressive implementation of its National 
Foreign Trade Strategy, 2009-2014. The focus of this strategy includes, among other things, 
concluding trade agreements, providing assistance to investors in facilitating investment 
procedures, and nurturing projects to support Panamanian exports to new markets. In its effort to implement this strategy, Panama has become more open through its participation in regional and bilateral agreements with countries where its ex ports of goods, services and high-value-added 
non-traditional products could be afforded preferential access. Panama has increased the number 
of bilateral investment treaties signed over the review period. The Government has also implemented reforms which seek to improve efficien cy in the areas of customs and administrative 
procedures; and investment through the establis hment of the Investment and Export Promotion 
Agency (PROINVEX) and the introduction of an electronically processed start-up notification for companies. 
4.186.  Panama's has utilized its comparative advantage in the tertiary sector and its geographical 
location well, to establish its position as a major exporter of port, logistics, financial and tourism services. Its ability to craft national strategies which support the areas with which the country has a competitive advantage could also be said to play a contributory role in its successes. 
Barbados therefore wishes Panama well in the implementation of its trade and development 
policies. 
4.187.  The Governments of Barbados and the Repu blic of Panama established formal diplomatic 
relations in August 1975. However, Barbados' econ omic, cultural relationship with Panama began 
during the late 19
th to the early 20th century, when approximately 60,000 Barbadians migrated to 
Panama to construct the Panama Canal. The flows of remittances from these migrants back to 
Barbados contributed to the social and economic development of the country. Many of the 
migrants did not return to Barbados, and their resettlement gave birth to a new generation of Panamanians of Barbadian descent. This was a significant milestone in the history of Barbados and so during the course of this year Barbados will join with Panama in commemorating the centennial 
anniversary of the Panama Canal. WT/TPR/M/301 • Panama 
- 31 - 
  4.188.  To date, Barbados and Panama have signed cooperation agreements in the areas of 
culture and tourism and a Double Taxation Agreement (DTA). The Government of Barbados considers that there is significant potential for the further strengthening of relations with Panama, and continues to cooperate bilaterally to develop a closer and more enhanced relationship. 
4.189.  With regard to future prospects, in 2011 the two Governments initialled an air services 
agreement aimed at providing a direct or one-stop air services link between the two countries. It is 
hoped that the agreement can be signed formally in the coming months. Barbados and Panama 
also have initiated talks on expanding our trading relationship possibly leading to include a partial 
scope trade agreement. 
4.190.  Panama has contributed positively to the work of the multilateral trading system. This is 
evident in its participation in the various bodies of the WTO and we look forward to their continued 
constructive engagement. 
4.191.  Barbados looks to further fruitful and mutu ally beneficial engagement with Panama at the 
multilateral, regional and bilateral level. 
EL
 SALVADOR 
4.192.  Our Central American nations established diplomatic relations 104 years ago, coming after 
long-standing historical and cultural ties developed on the basis of respect and cooperation 
between our Governments and peoples and on shared foreign policy objectives such as respect for 
democracy, the consolidation of peace and regional security. 
4.193.  Our diplomatic and trading relations have been strengthened with the establishment 
of a binational commission comprising our respective Ministries of Foreign Affairs. Through 
a 2011 Memorandum of Understanding they brough t about improvements in land and maritime 
transport, strengthened the services and touris m sectors, and introduced a temporary migrant 
workers programme between our countries, amongst other crucially important initiatives. 
4.194.  We maintain very close ties both bilate rally and regionally through the Central American 
integration system. An outstanding historic event was last year's accession to the Central American Integration Subsystem (SIECA), undoubtedly much facilitated by the free trade 
agreement signed between our countries in 2013 and which we had the honour of negotiating, 
together with Minister Arrocha and his team. 
4.195.  It is worth noting last year's entry into force of the Association Agreement between 
Central America and the European Union, the first region-to-region agreement, which we are sure 
will boost our intra-regional and extra-regional relations. 
4.196.  Our bilateral relations are dynamic and are reflected in a rapidly growing trade between 
both countries, including in the investments. Proof of this is that our business people have found in 
Panama the conditions necessary for placing their investments, and Salvadoran capital is now 
present in Panama in areas such as motor vehicle distribution, shopping centres, hotels and banking to name some of the main ones. We are thus able to take advantage of business 
opportunities, which are further enhanced by factors such as geographical proximity, ease of land 
and air transport, a common language and a single currency. All these factors have enabled us to 
bolster our industries and to continue exploring new areas of trade and investment. 
4.197.  In trade, Panama ranks sixth amongst El Salvador's export destinations, surpassed only by 
the United States and other large Members. This demonstrates the commercial importance of the 
Panamanian economy to El Salvador. 
4.198.  Panama is the second-largest source of foreign direct investment (FDI) in El Salvador, 
surpassed only by investments from the United St ates. Since the entry into force of the free trade 
agreement, exports have expanded from US$46.2 million in 2003 US$121.7 million in 2013. From January to May 2013, El Salvador's exports were up 1.6% on the same period in 2012. WT/TPR/M/301 • Panama 
- 32 - 
  4.199.  Panama is a highly important trading partner to El Salvador both bilaterally and in the 
WTO. We are therefore gratified to see evidence of  the important steps Panama has been taking to 
modernize its economic and social structure, including the liberalization of trade and agriculture. 
4.200.  We see, for example, that Panama's trade policy objectives are focused on increasing FDI 
and exports, to which end, work has been in progress to enhance competitiveness and improve the 
business climate and infrastructure. This entailed establishing the Investment and Export Promotion Agency (PROINVEX), which, from the reports, operates as a single window for 
investors. It therefore complements the "National Foreign Trade Strategy 2009-2014", which, 
amongst other things, provides assistance to investors to facilitate investment procedures and foster projects to boost Panamanian exports to new markets. 
4.201.  In the realm of intellectual property, we commend Panama on the policies it has been 
implementing at the highest level, including, fo r example the development of distinctive signs for 
collective use based on the geographical origin of products. This is a strategy for promoting and protecting traditional knowledge and products originating from indigenous communities through 
the intellectual property system. We also we lcome the work of the Directorate-General of 
Industrial Property, one of the first entities in the region to become fully automated and to offer 
online services to its users. On the basis of compared experience, our national intellectual property 
office has received information on the system used and this has proven useful for the purposes of 
implementing registration processes and sub-processes as part of quality certification. 
4.202.  Finally, and no less important, we laud the active part being played by Panama 
multilaterally in the current round of negotiations as well as its active engagement in the ordinary 
work of this Organization under the leadership of our friend and colleague Ambassador Suescum. 
URUGUAY 4.203.  Uruguay welcomes the delegation of Panama to this important forum of the multilateral 
system. The presence here today of a Minister an d a Vice-Minister, together with other delegates 
from the capital, is proof of the importance that Panama attaches to this body. 
4.204.  We congratulate Panama on its high rates of growth over the period of this review and its 
rapid recovery from the global economic crisis than ks to the boost received from public and private 
investment as well as the growth of services exports sustained by a stable macroeconomic environment. 
4.205.  Over the period of this review, Panama opened its economy even further, mainly through 
participation in preferential trade agreements, thereby consolidating reforms in areas such as 
customs, intellectual property, government procurement and other trade-related areas. 
4.206.  In bilateral trade, Uruguay's exports to Panama doubled by comparison with 2011. 
The leading exports are rice, followed by toba cco, plastic products and maritime or river 
navigation. 
4.207.  A sanitary inspection mission led by Panamanian experts visited Uruguay from 
12 to 30 May this year to look at the meat industry and dairy production facilities. A report is now 
pending, and will clear the way for the entry of the relevant Uruguayan products into the Panamanian market. 
4.208.  Uruguay assesses the Panamanian technical mission positively and the aforementioned 
report is being awaited. Based on the work of the inspectors, the findings are expected to be 
positive, and should soon open the way for exports of meat and dairy products. Uruguay is also interested in exporting citrus fruit, for which arrangements are now being made. 
4.209.  Uruguay is an exporter par excellence  of agricultural products. Any significant rollback 
of certain protectionist policies in this sector  will therefore lead to increased trade amongst 
all Members. 
4.210.  Therefore, as stated by the Government of Panama in its report, Uruguay too is committed 
to the successful conclusion of the Doha Round negotiations, in which progress in the agricultural WT/TPR/M/301 • Panama 
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  negotiations is of pivotal importance for integrating the least developed countries into the 
multilateral trading system and eliminating trade-distorting factors. 
4.211.  On a personal note, I wish to express my gratitude for the invaluable work being done at 
the WTO by the entire delegation of Panama under the distinguished leadership of 
Ambassador Alfredo Suescum. 
ECUADOR 4.212.  Ecuador is participating with interest in this Panama's second Trade Policy Review, given 
the common challenges facing the two countries. Our two countries recently became Members of 
this Organization and we both use the dollar as legal tender, which means that we have no monetary policy tool for dealing with economic cycles and external shocks. 
4.213.  In economic terms, Panama has grown at one of the fastest rates in the Latin American 
region, posting an annual average of 8% fuelled by  increasing private consumption and public and 
private investment. Against this backdrop, Panama faces the challenge of ensuring that this growth reduces the persisting social and regional inequalities, this being a challenge common to 
many developing countries. 
4.214.  With specific reference to the composition of the Panamanian economy, the services sector 
plays a key role. It is vibrant and competitive and is driven by activities related to the Canal and 
the Colón Free Zone. The services sector accounts for 70% of GDP, two thirds of employment and 
almost 36% of exports. 
4.215.  The good performance of services brings  out the "duality" of the Panamanian economy. 
The GDP shares of the agricultural and manufacturi ng sectors have declined, in spite of the high 
tariffs applied to agricultural products by comparison with other products, government assistance 
received, and the range of taxes levied on imports.  Moreover, the Secretariat's report states that 
in the case of 59 products, the applied rates exceed WTO bound rates. 
4.216.  As regards trade policies by measure, Ecuador welcomes Panama's efforts to effectively 
dismantle export subsidy programmes, the extended deadline for which runs until 31 December 2015. Ecuador notes with some concern, however, that there are incentive 
programmes existing in the Colón Free Zone whose consistency with the disciplines on export 
subsidies warrant closer study. 
4.217.  Ecuador also welcomes the changes made by Panama to its banking legislation in order to 
undergird the aims of combating tax evasion. In that connection, it believes that the establishment 
of formal channels for the exchange of information between countries would contribute 
significantly to attaining that objective. 
4.218.  Bilateral trade between Ecuador and Panama is appreciable, amounting in 2013 to just 
below US$2 billion in goods alone and with a favourable balance for Panama. Despite the 
encouraging outlook for the continued increase in  trade between the two countries, more work is 
needed on mechanisms to authenticate the origin  of goods. Moreover, because Ecuador is one of 
the main users of the Panama Canal, any increase in tolls has a direct impact on the 
competitiveness of its exports. 
HONDURAS 4.219.  Panama's impressive economic growth is beyond dispute. With average GDP growth above 
8% between 2006 and 2012, it has been one of La tin America's highest growth rates in recent 
years. This performance is attributable mainly to the opening up of its economy, the vibrancy of investments and a stable macroeconomic environment. 
4.220.  According to the report by the Secretariat, Panama continued to open up its economy 
during the period 2007-2013, chiefly through participation in preferential trade agreements which served as a catalyst for legislative reforms in key areas such as customs, intellectual property, 
government procurement and others. Furthermore, as part of its development strategy, 
Panama maintains incentive programmes to attract foreign direct investment (FDI), including the WT/TPR/M/301 • Panama 
- 34 - 
  operation of special economic zones such as the Colón Free Zone (ZLC), the world's second-largest 
free zone. We are also pleased to observe that Panama is taking advantage of its tertiary sector and its geographical location to consolidate its position in the region as a major exporter of financial, port, transport, storage and distribution services, as well as transit services through the 
Panama Canal. 
4.221.  According to World Bank figures, this rapid economic growth has brought with it a surge in 
the nominal GDP per capita (US$11,075 in 2013) and a decrease in the poverty and 
unemployment rates. In combination with the effo rts of the Government of Panama, this strong 
economic growth has generated an improvement in social indicators. The poverty rate fell from 
48.5% in 2002 to 27% in 2011, while extreme poverty diminished by 50% during this period. 
4.222.  Panama's main trade policy objective is to boost FDI as well as exports. We welcome the 
fact that for Panama, the opening up process goes hand-in-hand with these objectives, and it has 
concentrated both on concluding trade agreemen ts and improving competitiveness, the business 
climate and infrastructure. Hence, by setting up the Investment and Export Promotion Agency 
(PROINVEX), the Panamanian Government has been seeking to attract high value-added 
investment that promotes training of human resources and the transfer of technology to key economic sectors such as financial services, logistics, tourism and agriculture. 
4.223.  As the report by the Government shows, trade agreements are a vitally important 
complement to its strategy of integration into international trade. This is borne out by the fact that between 2007 and 2014, 13 regional trade agreements  entered into force. These include Panama's 
accession to the Latin American Integration Association and to the Central American Economic 
Integration Subsystem, which has helped to faci litate trade in the region and, above all, 
to buttress the capacity of the Central American Isthmus to improve its competitiveness versus the rest of the world. 
4.224.  Our bilateral trade relations with Panama ha ve been based on traditional links of fraternity 
and friendship between our two countries, inspired by the need to expand both our markets. The performance of our trading company has fuelle d growth in Panama's transport, export and 
import sectors, and increased production resources for Honduras. Panama ranks 20
th as an export 
market for Honduras and seventh as a place of origin of imports. 
4.225.  Trade between Panama and Honduras increased from US$174.3 million in 2009 to 
US$353.4 million in 2011 under the bilateral free trade agreement that became effective in 2009. 
There is no doubt as to the potential of our relations with Panama, and the Honduran Government 
is keen to strengthen and promote those relations even further. 
4.226.  We conclude by wishing for the success of  this second Trade Policy Review and welcome 
the extraordinary achievements of our Panamanian brethren. WT/TPR/M/301 • Panama 
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  5  REPLIES BY THE REPRESENTATIVE  OF PANAMA AND OTHER COMMENTS 
H.E. MRS.  DIANA  SALAZAR  (VICE-MINISTER  OF INTERNATIONAL  TRADE  NEGOTIATIONS) 
5.1.  A very good morning to H.E. Mariam MD Salleh, Ambassador of Malaysia and Chairperson of 
the Trade Policy Review Body. I take this opportuni ty to thank you, on behalf of my country, for 
chairing this meeting so skilfully. I also thank the Ambassador of Honduras, Dacio Castillo, 
who acted as discussant for this review, all Members participating in this meeting, the team of the Trade Policy Review Division for the hard work they have done together with our authorities over 
the period of a year. I am also grateful for the su pport of the interpreters, whose flexibility in the 
first session made it possible to work beyond the agreed hour and who are serving as a channel of communication at this session. 
5.2.  Our Government wishes to express its appreciation of the positive comments from Members 
of the World Trade Organization during its second Trade Policy Review emphasizing the economic 
strategy we have applied, enabling us to achieve high levels of growth at a time of worldwide 
economic crisis. 
5.3.  We are also grateful for the interest sh own in gaining more in-depth knowledge of the 
economic, social and commercial policies applied by my country, where the Government's vision is that interlinking those policies is the key to achieving growth aimed at equity for 
Panamanian citizens. 
5.4.  Between 2007 and 2013, the Panamanian economy did in fact record very high levels of 
economic growth based on public and privat e investment, services exports and private 
consumption. In addition, we have made solid progress in areas that support trade facilitation, 
such as the authorized economic operator scheme,  the single window for foreign trade, upgrading 
our customs regimes, and advance rulings. 
5.5.  Some significant results were also achieved over the same period. Poverty, for instance, 
decreased from 36.5% to 25.8%, and inequality as measured by the GINI index moved from 0.54 
to 0.50. These outcomes were possible thanks to  the high levels of economic growth, which 
generated a large number of jobs and brought unemployment to its lowest ever in the country's 
history, in conjunction with social programmes that transfer resources to the most vulnerable and 
impoverished households and people. 
5.6.  When it comes to social development, there are still challenges to be met in order to raise 
the population's standards of well-being and redu ce inequalities. The current Administration will 
therefore be stepping up programmes to support  the population so as to provide the most 
vulnerable groups with the resources and tools they need to escape poverty. 
5.7.  The planned measures include increasing transfers to students in public education and 
increasing financial assistance to impoverished adults above 65 years of age who are not receiving 
retirement or pension payments. We will also take steps to deal with structural problems bound up with poverty. Among them are low levels and quality of education, which will be tackled, inter alia , 
by means of a bilingual (Spanish/English) education plan for students attending public schools, by 
expanding the coverage of secondary education to rural areas, as well as implementing new forms 
of technical education. We will also be striving to help satisfy basic health, sanitation and housing needs, and we will make food available at more affordable prices without neglecting our 
multilateral undertakings. 
5.8.  To deal with rural poverty, the Ministry of Agricultural Development of Panama, through its 
Directorate for Agroindustry, has taken concrete action to raise the country's socio-economic level 
by promoting 2,600 small agribusinesses across th e country. Furthermore, the Rural Development 
Directorate of the Ministry of Agricultural Development is promoting equity and poverty alleviation in rural areas by means of rural organization programmes for producers, young people 
and women. WT/TPR/M/301 • Panama 
- 36 - 
  5.9.  Regarding the sustainability of public finances, the Government is determined to respect the 
non-financial public sector deficit ceiling in accordance with the Social and Fiscal Responsibility Law. To this end, the current Administration will ma ke public spending more efficient and prioritize 
public investment. 
5.10.  We are pleased to confirm that the decision to expand the Panama Canal as well as our 
policy of integration in world trade will enable us, on the one hand, to maintain the competitiveness of a sector that contributes hugely the gross domestic product. On the other 
hand, the challenge arises of taking advantage of the series of agreements already negotiated and 
which will form the basis for generating employment  and will positively impact our trade balance. 
5.11.  When it comes to attracting investments, we are committed to maintaining a solid legal 
basis that helps boost interest on the part of our trading partners, both in services and in seizing 
the opportunities offered by the FTAs in force with  over 50 countries throughout the world. In this 
way, we will be able to attract investments to both the services and goods sectors. 
5.12.  We also look forward to the forthcoming entry into force of the FTA between the EFTA 
Member Countries on the one hand, namely Iceland, Lichtenstein, Norway and Switzerland, and 
Costa Rica and Panama on the other, set for August and September of this year. 
5.13.  Although the supply of energy currently exceeds demand, Panama has faced problems of 
electricity generation over the past two years, stemming from the increased demand that comes 
with economic growth. Besides, the effects of clim ate change and the tardiness in investing in the 
large-scale diversification of electricity generation had widened the gap between supply and demand. To tackle these problems, the present Government will be promoting investment in 
efficient energy sources, electrical interconnectio n with neighbouring countries and the building of 
transmission lines. 
5.14.  In respect of sanitary and phytosanitary measures, our country has stepped up the training 
of veterinary and agricultural technical personnel ov er recent years in risk analysis with respect to 
animals and food products. This has been possible thanks to the support of the World Organization 
for Animal Health (OIE), the Regional International Organization for Plant Protection and Animal 
Health (RIOPPAH), the Regional Quality Infrastructure and SPS Systems in Central America 
Programme (PRACAMS), with fund ing from the European Union amongst other organizations. 
We have therefore been able to train personnel in relation to my country's export products as well as the ISO 17025 standard. Another area being a ddressed is the diagnostic assessment of food 
and epidemiological surveillance of transboundary diseases. 
5.15.  This exercise in transparency has brough t to our attention topics such as the concern of 
Members over applied tariffs that exceed bound rate s. Our senior authorities will be dealing with 
this situation is a matter of priority and we trust that we will be able to find solutions even before 
the deadlines indicated in our written replies. 
5.16.  In this current year we will be addressing other concerns raised by Members at this session. 
We are assessing recent legislative amendments that some Members deem to be potentially 
inconsistent with the basic principles of this Organization. 
5.17.  As a Member of this Organization, Panama is pleased to state that in June 2014, 
we concluded our notifications of safeguard measures and domestic support for 2013. 
We concluded our intellectual property notifications this month, in full awareness of the importance 
of fulfilling this commitment. In the same vein, we are aware that when it comes to technical regulations, we must take stock of our situation and, if appropriate, notify any outstanding 
regulations. I am determined to make this effort so that our country can improve on its record 
of notifications. 
5.18.  As part of this Organization and a signatory to the Bali Trade Facilitation Agreement, 
we reaffirm our commitment to supporting the outcome achieved on that occasion. 
5.19.  Our commitment to this Organization is clear from our endeavour to respond to almost all 
the concerns you were kind enough to raise, kn owing that the few questions that could not be WT/TPR/M/301 • Panama 
- 37 - 
  settled at this time will be dealt with in accordan ce with the timeframes envisaged for this exercise 
in transparency. 
5.20.  I conclude this statement by mentioning the vision of our authorities who are launching this 
delicate task, acting in support of the vision of the President of the Republic of Panama, 
His Excellency Juan Carlos Varela, whose intent is to take our country along a path of prosperity, 
with better education and better health, creating a more just society that develops mechanisms for 
linking trade policies with the well-being of the Panamanian people. 
DISCUSSANT 
5.21.  I wish to begin by thanking Members for the dynamism and enthusiasm they have shown at 
this second Trade Policy Review of Panama. 
5.22.  By way of conclusions, I have observed that the Panamanian economy is quite sound, and 
that the authorities have shown wisdom in their search for practical solutions to the challenges 
they face. 
5.23.  They are seeking to attract high-level inve stment and are striving each day to improve the 
different structures that can inspire the confidence of foreign investors. 
5.24.  They have enacted and amended various laws  in order to comply with their international 
obligations. 
5.25.  There have been infrastructure works that have changed Panamanian society and which 
form part of the plans of other nations that are awaiting the conclusion of work on the Panama Canal. 
5.26.  I should like to thank you, Madam Chair, for the confidence you have reposed in me as 
discussant at this second Review of Panama; I thank the delegations for their warm words 
addressed to me, I thank Minister Melitón Arrocha and Vice-Minister Diana Salazar for their opening and closing statements, I thank the Secretariat for its hard work and, of course, 
Ambassador Suescum and his team for the magnificent task they have accomplished. 
RUSSIAN
 FEDERATION 
5.27.  The considerable recent growth of Panama at an average annual rate of 8%, which is one of 
the highest in Latin America, enables us to give a positive overall assessment of the economic 
policies of Panama, including its trade and investment components. 
5.28.  We highly appreciate the current economic reforms in areas such as customs, intellectual 
property, government procurement and other trade-related areas. Panama also maintains 
incentive schemes for FDIs and Russia would apprecia te some additional clarification on Panama's 
trade practices in enhancing transparency with foreign direct investors, in particular, concerning special governmental programmes aimed at giving a special and preferential investment regime on 
Panama's market. 
5.29.  We would like some general information about how to set up a business in Panama. We 
would also like to bring the attention to burdensome requirements applied to non-residents while 
opening offices in Panama, which, in our view, create an obstacle to trade. In this regard, we 
would like to get some possible clarification from Panama on the reasons behind this not quite favourable treatment to non-residents. 
EUROPEAN
 UNION 
5.30.  Let me express our sincere appreciation to the delegation of Panama for the timely replies 
they have provided to our questions and for the comprehensive presentation given last Wednesday 
as well as this morning. WT/TPR/M/301 • Panama 
- 38 - 
  5.31.  The EU is pleased to note that this second Review of Panama has been really helpful for 
better understanding the trade policies undertaken by Panama, as well as the areas in which additional efforts are still needed. 
5.32.  As noted on Wednesday, the services sector is the heart of the country's economic 
structure. Therefore, the EU would like to enco urage Panama to take advantage of the comments 
raised by several WTO Members in order to facilitate the inflows of FDIs, in particular revising the current limitations on foreign capital participation in companies offering auxiliary maritime services 
and the requirement that 90% of the vessels enga ged in such services must be of Panama's 
nationality. 
5.33.  The EU has a few follow-up questions that have been submitted to the WTO Secretariat and 
we look forward to receiving replies in due course. 
5.34.  Finally, let me again express our appreciation to the delegation of Panama for their very 
constructive participation in this important exercise and for the information and replies presented during their second Trade Policy Review. 
CANADA 
5.35.  Canada would like to congratulate Panama  on their Trade Policy Review and also thank the 
delegation for their prompt replies to our initial set of questions. I just wanted to flag that we have 
a very limited number of follow-up questions that ha ve already been sent or will be sent shortly 
electronically to the delegation. 
UNITED
 STATES 
5.36.  I would like to join others in congratulating Panama and its Trade Policy Review and thank 
as well for the prompt responses and active engageme nt in the process. In our view, it has been a 
very useful Trade Policy Review of Panama. We do have a small amount of follow-up questions in the intellectual property area and we look forw ard to the written responses. I thank Panama for 
the commitment expressed today in regards to making advancements in some of the issues that 
have been raised. 
H.E. DIANA
 SALAZAR 
5.37.  It is my pleasure to receive the questions po sed to me this morning. I should like to clarify, 
for the benefit of the delegate from Russia, from whom I do not recall having received written questions, that paragraph 2.50 of subsection 2. 4.2 "Establishing a business" on page 38 of the 
Secretariat's report states: "Pursuant to Law No. 5 of 11 January 2007 and Executive Decree 
No. 26 of 12 July 2007 regulating it, Panama streamlined the procedure for opening a business". 
The overarching aim is for businesses to be able to set up in our country without grappling with 
red tape. Please be informed that the indicators on the ease of starting a business in our country 
are amongst the highest in the Central American region. 
5.38.  Turning to your question on non-residents, I would be grateful if you could develop it 
further so that it can be answer ed definitively and in detail. 
5.39.  We are happy to take note of the concerns raised in other statements by Canada, 
the European Union and the United States, and we w ill forward the replies to them in keeping with 
the rules of this Trade Policy Review. 
5.40.  I thank you all for your participation, as it indicates that our country has a place in this 
Organization. We are a developing country that is small in area, but one with a big heart. WT/TPR/M/301 • Panama 
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  6  CONCLUDING REMARKS BY THE CHAIRPERSON 
6.1.  This second Trade Policy Review of Panama has provided an excellent opportunity to consider 
the evolution of Panama's trade and investment regime since its last review in 2007, and the challenges it now faces. I would like to thank Hi s Excellency Mr Melitón Arro cha, Minister of Trade 
and Industries; Vice-Minister of International Trade Negotiations, Ms Diana Salazar; 
Ambassador Alfredo Suescum; and the rest of th e delegation of Panama, for their active and 
constructive engagement in this review. I would also like to thank Ambassador Dacio Castillo for 
his valuable insights as discussant. Members highly appreciated Panama's written responses to 
most of the 280 questions received, and look forwar d to any additional replies no later than one 
month after this meeting. 
6.2.  First of all, I would like to note that this has been a positive review. Members have praised 
Panama for its success in achieving outstanding economic growth, greater integration in world 
trade, and high levels of foreign direct investment. These achievements have been underpinned by open trade and investment policies, which have enabled Panama to capitalize on its comparative 
advantages and become a major exporter of international services, mostly associated with the 
Panama Canal and the Colón Free Zone's operations. At the same time, Panama has been encouraged to strengthen the linkages betwee n these buoyant sectors and the rest of the 
economy, reduce social disparities and allocate more resources to social programmes, 
including education. 
6.3.  Members welcomed Panama's overall sound and stable macroeconomic policies, but they also 
pointed to the challenges of a rising fiscal deficit and encouraged Panama to consolidate its 
public finances. 
6.4.  Members commended Panama's strong commitment to the multilateral trading system, 
the conclusion of the Doha Round, and ongoing plurilateral initiatives such as the Information 
Technology Agreement. At the same time, Members took note of Panama's active use of regional 
and bilateral trade agreements to deepen its integration into the global economy. 
6.5.  Panama was commended for moving ahead with significant legislative and regulatory 
reforms. These reforms have included strengthening the legal frameworks for competition and 
government procurement; overhauling the intellectual property regime to meet international obligations; amending the Free Zones Regime; and liberalizing mobile telephony. Members also welcomed Panama's measures to facilitate trade, including the modernization of customs 
procedures, the introduction of a Single Window for exports and an authorized economic operator 
scheme, among others. In this respect, they encouraged Panama to also establish a Single Window for imports, and notify its Category A commitments under the Trade Facilitation 
Agreement in a timely manner. 
6.6.  Notwithstanding these reforms and achievements, Panama still faces challenges in a number 
of areas. Panama has addressed most of these issues in its final remarks or written replies. 
I would now like to highlight some areas in which Members consider further improvements could 
be made: 
 Tariffs: While acknowledging Panama's efforts to simplify its tariff structure, 
Members have expressed concern about the fact that applied tariffs on a number of 
products exceed the bound rates. Panama has indicated that it is taking steps in this 
regard, with the view to rectifying this situation by 1 January 2015, at the latest, and that it will notify the WTO in due course. 
 Taxes affecting imports: Members have enquired about Panama's rationale for 
applying different taxes on national and imported fuels mixed with ethanol, and urged Panama to remove discriminatory taxes. Panama informed that it is currently reviewing 
its fuel consumption taxes in light of the objectives of its national policy on biofuels. 
 TBT and SPS measures: Members raised a number of questions regarding the 
elaboration and implementation of technical regulations and sanitary and phytosanitary 
measures, in particular with respect to the importation of food products and live animals, 
and requested Panama to make further effort s to enhance transparency and notifications WT/TPR/M/301 • Panama 
- 40 - 
  in these areas. Panama has replied that it is working on measures to improve its 
SPS system, including the establishment of a national SPS Committee, and to enhance 
its SPS and TBT notification mechanisms. 
 Free trade zones: Members welcomed Panama's amendments to its free trade zones 
legislation and the removal of export subsidies, in order to meet its obligations under the 
Agreement on Subsidies and Countervailing Measures. Members also took note of the key role played by the Colón Free  Zone in regional and international trade. However, 
more information was sought regarding customs controls to monitor the entry, transit 
and exit of goods through the Zone, and about incentives granted in this area. 
 Services: Members acknowledged the fundamental importance of the services sector for 
the Panamanian economy and its generally open trade and investment regime in the 
sector, and exhorted Panama to continue liberalization of services. In the banking 
sector , Members took note of recent financial reforms and called on Panama to continue 
applying relevant international regulations to strengthen banking supervision. 
 Some questions were raised regarding the rationale and effects of foreign investment 
restrictions in some areas: 
o  With respect to maritime auxiliary services , Members expressed concerns about 
caps on FDI and crew nationality requirements under the recent Law No. 41, 
and exhorted Panama to remove such restrictions. Panama replied that it is currently evaluating this situation bearing in mind its international commitments. 
o  Members also sought clarification on Panama's restrictions with regard to retail 
trade  and encouraged it to furt her liberalize this sector. 
6.7.  To sum up, Panama was highly commended for its robust economic performance and rapid 
transformation into a regional trade and logistics hub, which is a good example on how an open 
trade and investment regime can support the inte gration of a small, services-oriented economy 
into the global economy. Members encouraged Panama to pursue further reforms along this path to consolidate these achievements. 
6.8.  Before I close this meeting, I would like to  come back to the opening statement by Panama's 
Head of Delegation about the social dimension of trade. He emphasized that Panama's trade 
policies should promote freer and fairer trade, but at the same time be an instrument to improve 
the expectations and quality of life of its population, in other words, trade policy should not be 
divorced from social policy. 
6.9.  Finally, let me thank again the Panamanian delegation for their hard work and dedication 
to this exercise, and to the other delegations, the discussant and the Secretariat for this 
successful review. 
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