WT/REG334/1/Rev.1  
29 April 2014  
(14-2623)  Page: 1/52  
Committee on Regional Trade Agreements   
 
  FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETW EEN CANADA AND PANAMA 
(GOODS AND SERVICES) 
Report by the Secretariat 
Revision 
This report, prepared for the considerat ion of the Free Trade Agreement between 
Canada and Panama has been drawn up by the WTO Secretariat on its own responsibility and in full consultation with the Parties. The report has been drawn up in accordance with the rules and procedures contained in the Decision for a 
Transparency Mechanism for Regional Trade Agreements (WT/L/671). 
Any technical questions arising from this report may be addressed to Jean-Daniel Rey 
(tel: +41 22 739 5264). Any statistical questions arising from this report may be 
addressed to Ms. Alejandra Barajas (tel: +41 22 739 6425). 
 
 
 WT/REG334/1/Rev.1 
 
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  TABLE OF CONTENTS 
 
Page 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Overview .................................................................................................................. 4  
1.2   Merchand ise trade ..................................................................................................... 4  
1.3   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 8  
2.1   Background  Information ............................................................................................. 8  
2.2   Structure of the Agreement ......................................................................................... 8  
3   PROVISIONS ON TRADE IN GOODS ............................................................................. 9  
3.1   Import duties and charges, and quantitative restrictions ................................................. 9  
3.1.1   General provisions .................................................................................................. 9  
3.1.2   Liberalization of  trade and ta riff lines ........................................................................ 10 
3.1.3   Liberali zation schedule............................................................................................ 10 
3.1.3.1   Canada .............................................................................................................. 10 
3.1.3.2   Panama ............................................................................................................. 12 
3.1.4   Tariff rate quotas (TRQ) .......................................................................................... 14 
3.2   Rules of origin .......................................................................................................... 15 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 16 
3.4   Regulatory provisions on trade in goods ....................................................................... 16 
3.4.1   Standards ............................................................................................................. 16 
3.4.1.1   Sanitary and phytosanitary measures .................................................................... 16 
3.4.1.2   Technical barriers to trade .................................................................................... 16 
3.4.2   Safeguard mechanisms ........................................................................................... 17 
3.4.2.1   Global safeguards ............................................................................................... 17 
3.4.2.2   Bilateral safeguards ............................................................................................. 17 
3.4.2.3   Special safeguards .............................................................................................. 18 
3.4.2.4   Relation with the Special Safeguard mechanism established by Article 5 of the 
WTO Agreement on  Agriculture .......................................................................................... 18 
3.4.3   Anti-dumping and countervailing measures ............................................................... 18 
3.4.4   Subsidie s and State-aid .......................................................................................... 18 
3.4.5   Customs-re lated procedures .................................................................................... 19 
3.5   Sector-specific provis ions on trad e in goods ................................................................. 20 
3.5.1   Dist illed Spir its ..................................................................................................... . 20 
4   PROVISIONS ON TRADE IN SERVICES ....................................................................... 20  
4.1   Scope and definitions ................................................................................................ 20 
4.2   Denial of benefits ..................................................................................................... 20 
4.3   General provisions on trade in services ........................................................................ 21 
4.3.1   Mark et acce ss ....................................................................................................... 21 
4.3.2   National treatment and MFN .................................................................................... 21 WT/REG334/1/Rev.1 
 
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  4.3.3   Commercial presence ............................................................................................. 21 
4.3.4   Movement of  natural persons .................................................................................. 22 
4.3.5   Performanc e Requirements ..................................................................................... 22 
4.3.6   Senior Managers and Board of Directors .................................................................... 23 
4.4   Liberalization commitments ........................................................................................ 23 
4.4.1   Canada ................................................................................................................  24 
4.4.1.1   Canada's sector specific commitments on trade in services ........................................ 25 
4.4.2   Panama ................................................................................................................ 28 
4.4.2.1   Panama's sector specific commitments on trad e in services ....................................... 29 
4.5   Sector specific provisions in trade in services ................................................................ 32 
4.5.1   Telecommuni cation services .................................................................................... 32 
4.5.2   Financial services ................................................................................................... 33 
4.5.3   Maritime transport ................................................................................................. 35 
4.6   Regulatory provisions ................................................................................................ 35 
4.6.1   Domestic regulation ............................................................................................... 35 
4.6.2   Recognition ........................................................................................................... 35 
4.6.3   Subsidies .............................................................................................................. 36 
4.6.4   Tran sparen cy ........................................................................................................ 36 
4.6.5   Safeguards ........................................................................................................... 36 
4.6.6   Other ................................................................................................................. .. 36 
4.6.6.1   In vestment ........................................................................................................ 36 
4.6.6.2   Transfer  and Payments ........................................................................................ 37 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 37  
5.1   Tran sparency ........................................................................................................... 37 
5.2   Current payments and capital movements .................................................................... 37 
5.3   Exceptions ............................................................................................................... 37 
5.4   Accession and Withdrawal .......................................................................................... 39 
5.5   Government  procurement .......................................................................................... 39 
5.6   Intellectual property rights ......................................................................................... 40 
5.7   Ot hers .................................................................................................................. .. 40 
5.7.1   Competition .......................................................................................................... 40 
5.7.2   En vironment ......................................................................................................... 41 
5.7.3   Labour ................................................................................................................ . 41 
5.7.4   Electronic Commerce .............................................................................................. 41 
5.7.5   Trade-rela ted cooper ation ....................................................................................... 42 
5.8   Disput e settlement ................................................................................................... 42 
5.9   Institutio nal framework ............................................................................................. 43 
5.10   Relationship with other agr eements concluded by the Parties ........................................ 45 
ANNEX 1 ....................................................................................................................... . 47 
ANNEX 2 ....................................................................................................................... . 51 WT/REG334/1/Rev.1 
 
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Key Facts 
 
Parties to the Agreement: Canada and Panama.  
 
Date of Signature:   14 May 2010 
 
Date of Entry into Force: 1 April 2013 
 
Date of Notification:  10 April 2013 
 
Full implementation:  1 January 2031  
 
 
1  TRADE ENVIRONMENT 
1.1  Overview1 
1.1.  The Free Trade Agreement between Canada and Panama (hereinafter referred to as the 
Agreement) is Canada's 9th and Panama's 12th RTA.2 
1.2.  In 2012, with a population  of 34.8 million, Canada's GDP was estimated at US$1,821 billion, 
while that of Panama, with a population of 3.8 million, was estimated at US$36 billion. Both Canada and Panama mainly traded manufactured goods (representing respectively 46% of 
Canada's and 93% of Panama's exports and 74% of Canada's and 91% of Panama's imports). 
Averaged over the period 2010-2012, Canada's trade (goods and services) to GDP ratio (61.3) is substantially lower than Panama's (154.2). 
1.2  Merchandise trade 
1.3.  In 2012, Canada's shares in total world exports and imports were 2.47% and 2.55% 
respectively, while Panama's shares were 0.09% for exports and 0.13% for imports. With total 
merchandise exports of US$455 billion and imports of US$475 billion, Canada ranked 8
th in the 
world both as exporter and importer compared to Panama's rankings at 54th for exports and 
50th for imports (with global exports and imports of US$16 billion and US$23 billion). 
1.4.  In 20113, Canada was Panama's 24th largest source of imports and 19th destination for 
export, accounting for respectively 0.4% of its total imports and 0.9% of its total exports.4 For 
Canada, in 2012, Panama represented 0.03% of its total imports, making Panama Canada's 63
rd largest source of imports - while it was also Canada's 64th largest destination for exports, 
accounting for 0.02% of Canada's total exports.5 
1.5.  Developments in global and intra-Party trade are presented in Chart 1.1.6 According to UNSD 
Comtrade (Chart 1.1.A), statistics show a surplus for Canada in a growing volume of trade since 
2002. A similar evolution can be observed in relation to bilateral trade with Panama, though 
figures for 2003 show a trade deficit for Canada caused by a sharp increase of its imports from 
                                               
1 Source for this section: WTO Trade Profiles 2013 (2012 data). Export figures are calculated f.o.b. and 
import figures are calculated c.i.f. Ranking in world trade excluding intra-EU trade. For bilateral trade, the figures are based on UNSD Comtrade, IMF DOTS and INEC. 
2 Agreements in goods and services counted as one an d only agreements in force, notified to the WTO, 
counted. Agreements concluded by Panama with each Central American State counted separately. 
3 According to the WTO Trade Profiles 2013, breakdowns by destination /origin refer to 2011 data for 
Panama. 
4 In 2011, the five top sources of imports for Panama were: China (26.2%), the U.S. (18.6%), 
Singapore (15.7%), the EU(27) (9%), and Mexico (3.9%). The five top destinations of exports from Panama were: the U.S. (26.3%), Venezuela (17.7%), Colombia (12.8%), Costa Rica (4.4%), and Ecuador (4%). 
5 In 2012, the five top sources of imports for Canada  were: the U.S. (50.6%), China (11%), the EU27 
(10.9%), Mexico (5.5%), and Japan (3.3%). The five to p destinations of exports from Canada were: the U.S. 
(74.5%), the EU(27) (8.5%), China (4.3%), Japan (2.3%), and Mexico (1.2%). 
6 The Charts are constructed on data extracted from UNSD, Comtrade database, for Canada, and IMF 
DOTS and INEC, for Panama. WT/REG334/1/Rev.1 
 
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  Panama. In 2009, as a result of the financial crisis, the trade volume dropped both with the world 
and bilaterally and then recovered, though the volume of Canada's exports to the world were 
overall matched by Canada's imports from the wo rld. Regarding bilateral trade between Canada 
and Panama, while Canada was running a trade surp lus for most of the period 2000-2010, during 
the last two reported years, Canada runs a trade de ficit, with stabilized volumes of imports, at a 
record level, while Canadian exports to Panama have dropped during the last three successive years. As pictured in Chart 1.1.B, the statistics provided by Panama illustrate a relatively similar 
evolution of Panama's trade with the world, though  showing a trade deficit in the case of Panama 
and a much slower recovery for the Panamanian ex port sector after the financial crisis. Figures 
reported by Panama in relation to its bilateral trade with Canada differ from UNSD Comtrade statistics as they show a trade surplus for Panama during most of the period and a shift in 2010 
and 2011 with Panama's imports from Canada exceeding its exports to Canada. This discrepancy 
with the figures used as a basis for Chart 1.1.A is likely due to the fact that Panama's data on trade excludes trade flows from special extraction zones as well as trade flows between the Colon 
export zone and the rest of the world, including Canada. 
Chart 1.1 Canada and Panama: bilatera l and total merchandise trade, 2000-2012 
0.000.050.100.150.200.250.30
0100200300400500600
2000 2002 2004 2006 2008 2010 2012A. Canada 2000-2012
(US$ Billions)
Imports from Panama (Right Axis)
Exports to Panama (Right Axis)
Total Imports
Total Exports
0.000.040.080.120.160.200.24
0.03.06.09.012.015.018.0
2000 2002 2004 2006 2008 2010 2012B. Panama 2000-2012 
(US$ Billions)
Imports from Canada (Right Axis)
Exports to Canada (Right Axis)
Total Imports
Total Exports
 
 
Note: Data from Panama on trade with world and with Canada excludes trade from special extraction 
zones and Colon's exporting zone. 
 Source: UNSD Comtrade, IMF-Department  o f  T r a d e  S t a t i s t i c s ,  a n d ,  i n  t h e  c a s e  o f  C h a r t  1 . 1 . B ,  I n s t i t u t o  
Nacional de Estadística y Censos (INEC).  
 
1.6.  The commodity structure of trade among the Pa rties, as well as with the world, in the period 
2010-2012, is shown in Chart 1.2, on the basis of Harmonized System (HS) Sections. Canada's 
imports from Panama are essentially constituted by precious stones and products from mining (89% of Canada's imports from Panama). While this sector only represents 3% of Canada's global 
imports it constitutes Panama's fourth largest export sector (10% of Panama's global exports). 
Panama's imports from Canada are more diversified with machinery, animal products, vegetables, and vehicles representing 59% of Panama's imports from Canada. While Panama also imports 
large volumes of machinery and vehicles globally, the other two sectors (animal products and 
vegetables) represent a much smaller percentage of Panama's imports from the world.  WT/REG334/1/Rev.1 
 
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  Chart 1.2 Canada and Panama: product co mposition of merchandise trade, annual 
average (2010-2012)* 
22
19
10 987543339Panama's Global Imports(%)33
23111010337Panama's Global Exports (%)
24
17
1287543333226Canada's Global Imports (%)
Total: US$110 million Total: US$435 billion
Total: US$ 11 billion Total: US$ 430 billionTotal:  US$ 1.0 billion
Total:  US$ 69 million27
15
118754442228Canada's Global Exports(%)
Animal 
products
Vegetables
Prepared 
FoodsChemicals
Plastics, 
rubberWood Articles
Wood pulp
MachineryVehiclesOptical
MiscellaneousMinerals Base metals Stone articles
TextilesPrecious 
stonesOther18
16
1411865444333Panama's imports from Canada (%)89325Canada's imports from Panama (%) 
 
 
* except Panama's exports to world which includes data from 2009-2011. Note:  Data from Panama on trade with world and with Canada excludes trade from special extraction 
zones and Colon's exporting zone. 
 Source:  UNSD Comtrade and Instituto Nacional de Nacional de Estadí stica y Censos (INEC). 
 
1.3  Trade in services and investment 
1.7.  In 2012, Canada's shares of total commerci al services exports and imports were 1.78% and 
2.53% respectively. Panama's shares represented respectively 0.20% and 0.09% of world exports and imports. With total commercial services exports of US$78 billion, and imports of 
US$105 billion, Canada was the world 10
th largest exporter and 8th largest importer, compared to 
Panama's ranking as 39th largest exporter and 57th largest importer (with commercial services 
exports of US$ 8.8 billion an d imports of US$3.8 billion). 
1.8.  Tables 1.1A and 1.1.B below show the breakdown of trade in commercial services and 
investment for Canada and Panama based on data for the period 2008-2012. Trade in commercial services data over the period shows, for Canada , a growth trend of the value of total trade in 
services (both exports and imports). Data also depict Canada's overall trade in services deficit. In 
the case of Panama, the statistics also show an ov erall growth during the period for both exports 
and imports of services with the world, though th e post-financial crisis recovery seems to have 
taken more time and at a slower pace than in the Canadian case. It is also worth noting that, on 
average, Panama's exports of services are ten ti mes smaller than Canadian's overall exports of 
services, while the differential for imports is almost thirtyfold. On investment, FDI stocks and flows have regularly increased for both Parties throughout the period, though with a slow recovery after 
the 2008 crisis in both cases. WT/REG334/1/Rev.1 
 
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  Table 1.1 Trade in commercial services  and investment with world, 2008-2012 
A. Canada 
Unit: in million US$ 
Services Exports  Imports 
2008 2009 2010  2011  2012  2008  2009  2010 2011 2012  
Total Services 68,359 65,186 73,577  79,802  79,181  88,791  81,822  96,353 105,653 106,384  
Transportation services 11,500 9,237 11,417  13,266  13,192  20,538  16,830  20,766 23,369 23,167  
Travel 15,668 13,600 15,759  16,800  17,364  27,210  24,096  29,573 33,323 35,223  
Communications services 2,489 2,470 2,716  3,156  .. 1,910  1,928  2,418 2,359 .. 
Construction 231 327 381  430 223 311 306 295 439 360  
Insurance services 4,179 1,270 1,894  1,980  1,848  6,134  2,980  4,375 4,728 4,400  
Financial services 3,076 2,798 3,292  3,747  3,767  3,944  4,018  4,536 4,432 4,330  
Computer and information 
services 5,007 5,724 6,718  6,993  .. 2,662  2,887  2,897 3,184 .. 
Royalties and licence fees 3,599 3,596 2,814  2,911  3,583  8,648  8,892  9,731 10,352 10,563  
Other business services 18,792 22,462 24,783  26,461  24,978  14,087  16,749  18,444 19,974 19,096  
Personal, cultural and 
recreational services 2,184 2,119 2,184  2,474  2,409  2,160  2,181  2,123 2,200 2,460  
Government services n.i.e. 1,633 1,581 1,620  1,585  1,650  1,186  954 1,194 1,293 1,233  
Investment Outward  Inward 
2008 2009 2010  2011  2012  2008  2009  2010 2011 2012  
Total FDI stocks  524,187 602,731 636,712  660,746  715,053  449,566  548,348  591,873 586,999 636,972  
Total FDI flows 79,277 39,601 34,723  49,849  53,939  61,553  22,700  29,086 41,386 45,375  
 
.. Not available 
 Source: Canadian Authorities, UnctadStat.   
Table 1.1 Trade in commercial services  and investment with world, 2008-2012 
B. Panama 
Unit: in million US$  
Services Exports  Imports 
2008  2009  2010  2011  2012  2008  2009 2010 2011 2012  
Total Services 5,788  5,525  6,220  7,261  8,918  2,633  2,199 2,730 3,383  3,860  
Transportation services 3,112  3,130  3,372  3,935  4,685  1,543  1,208 1,541 1,741  1,935  
Travel 1,408  1,484  1,676  1,926  2,262  366 338 398 462  505 
Communications services 223 239 302 313 486 76 45 46 46 48 
Construction 3  2 2 2 4 .. .. .. ..  .. 
Insurance services 91 95 123 140 136 86 146 161 209 212 
Financial services 434  312 452 658 943 317 170 319 574  884 
Computer and information services 30 26 25 25 34 - 2 3 5 8 
Royalties and licence fees ..  .. 8 8 12 59 63 46 38  42 
Other business services 417 200 187 159 239 114 156 135 228 144 
Personal, cultural and recreational 
services .. .. 10 11 18 - - 0 2  5 
Government services n.i.e. 70 38 63 86 99 71 73 79 79 79 
Investment Outward  Inward 
2008  2009  2010  2011  2012  2008  2009 2010 2011 2012  
Total FDI stocks  32,744  34,163  34,614  36,278  37,747  19,524  20,466 22,661 25,884  28,903  
Total FDI flows 2,108  1,419  451 1,664  1,469  2,196  1,259 2,363 2,755  3,020  
 
..  Not available.  Source: Panamanian Authorities, UnctadStat.  
 WT/REG334/1/Rev.1 
 
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  2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The Agreement was signed on 14 May 2010 and entered into force on 1 April 2013. The 
Parties notified the goods and services aspects of the Agreement to the WTO on 10 April 2013, in 
document WT/REC334/N/1 - S/C/N/691. The notifica tion was made pursuant to Article XXIV:7(a) 
of GATT 1994 for goods, and to Article V:7(a) of GATS for services. The text of the Agreement, 
together with its Annexes, is availabl e on the Parties' official websites: 
Canada : http://www.international.gc.ca/trade- agreements-accords-commerciaux/agr-
acc/panama/panama-toc-panama-tdm.aspx?lang=eng&view=d  
 
Panama :  http://www.mici.gob.pa/detalle.php ?cid=15&sid=57&clid=186&id=4035  
 
2.2.  According to its Article 1.03, the Agreement establishes a free trade area consistent with Article XXIV of the GATT 1994 and Article V of the GATS. 
2.2  Structure of the Agreement 
2.3.  The Agreement is composed of twenty-f our Chapters. It includes a number of Annexes 
related to specific Chapters of the Agreement and is complemented by the Parties' Tariff 
Liberalization Schedules applicable to trade in goods between them. The Agreement also refers to 
four main Annexes, including the Parties' reservations related to their commitments to liberalize trade in services, specific disciplines on trade in financial services and on international maritime services.  
Box 2.1 Structure of the Agreement 
Chapters, Annexes, 
and Appendixes Title/description 
Preamble  
Chapter 1 Initial provisions and General Definitions 
Chapter 2 National Treatment and Market Access for Goods 
Chapter 3 Rules of Origin 
Chapter 4 Customs Procedures 
Chapter 5 Trade Facilitation 
Chapter 6 Sanitary and Phytosanitary measures 
Chapter 7 Technical Barriers to Trade 
Chapter 8 Emergency Action 
Chapter 9 Investment 
Chapter 10 Cross Border Trade in Services 
Chapter 11 Telecommunications 
Chapter 12 Financial Services 
Chapter 13 Temporary Entry for Business Persons 
Chapter 14 Competition policy, Monopoli es and States Enterprises 
Chapter 15 Electronic Commerce 
Chapter 16 Government Procurement 
Chapter 17 Environment 
Chapter 18 Labour 
Chapter 19 Trade-Related Co-operation WT/REG334/1/Rev.1 
 
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  Chapters, Annexes, 
and Appendixes Title/description 
Chapter 20 Transparency 
Chapter 21 Administration of the Agreement 
Chapter 22 Dispute Settlement 
Chapter 23 Exceptions 
Chapter 24 Final Provisions 
  
Annex I Parties' Reservations for Existing  Measures (trade in services) 
Annex II Parties' Reservations for Future  Measures (trade in services) 
Annex III Parties' Reservations on Financial Services 
Annex IV International Maritime Sector 
 
Source: WTO Secretariat based on the Agreement. 
 
3  PROVISIONS ON TRADE IN GOODS 
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 
3.1.  The Parties agree to apply national treatmen t to imports of each other's goods in accordance 
with Article III of the GATT 1994, which is inco rporated into and made part of the Agreement 
(Article 2.03). However, national treatment may not need to be granted by a Party in relation to 
import restrictions and prohibitions, which are specified in Annex 2.03 to the Agreement.  
3.2.  The Parties tariff elimination commitments are scheduled in Annex 2.04. They agree not to 
increase any customs duty existing at the entry into force of the Agreement, or adopt any new customs duty, on an originating good. They also agree that, during the tariff elimination process, 
each Party shall apply to originating goods trad e between them, the lesser of the customs duties 
resulting from a comparison between the rate established in the Party's Schedule and the existing rate under Article II of GATT 1994 (WTO bound rates). Against this background, either Party may: 
(i) modify a tariff outside the Agreement on a good for which no tariff preference is claimed under 
the Agreement; (ii) raise a customs duty to the level established in its Schedule to Annex 2.04 following a unilateral reduction; or (iii) maintain or increase a customs duty as authorized by the 
Dispute Settlement Body under the WTO. The Parties agreed to discuss, on the request of a Party, 
accelerating the elimination of customs duties set out in their respective Schedules or incorporating into them a good that is not yet subject to elimination. 
3.3.  Articles 2.05 through 2.07 contain special disciplines applicable to temporary admission of 
goods, duty-free entry of certain commercial samples and printed advertising material, and goods 
re-entered after repair or alteration.  
3.4.  The rights and obligations of the Parties in respect of import prohibitions or restrictions are 
governed by Article XI of the GATT 1994, which is incorporated into and made part of the 
Agreement (Article 2.08). The Parties understand that this, inter alia, prohibits import price requirements, except as permitted in enforcemen t of countervailing and antidumping orders and 
undertakings. Also, in the event that a Party adopts or maintains a prohibition or restriction on the 
import from a third party of a good, the Agreement does not prevent the Party from limiting or prohibiting the import from the territory of the othe r Party a good of that third party. Moreover, in 
the event that such a measure is taken, a Party, on request of the other Party, shall discuss with a 
v i e w  t o  a v o i d i n g  u n d u e  i n t e r f e r e n c e  w i t h  o r  d i s t o r t i o n  o f  p r i c i n g ,  m a r k e t i n g  a n d  d i s t r i b u t i o n  
arrangements in the other Party. 
3.5.  The prohibition on import restrictions does not apply to measures in Annex 2.03 to the 
Agreement. For Canada, this concerns in particular the measures it may take in relation to the WT/REG334/1/Rev.1 
 
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  import of certain goods prohibited by law in Ca nada (HS 9897 to 9899), the imposition of excise 
duties on certain alcohols, and certain measures related to the internal sale and distribution of 
wine and distilled spirits. For Panama, the measures concerned cover the import of officially circulated lottery tickets, import controls on used vehicles, a measure regulating the import of 
used motor vehicles, as well as certain import controls on video and other games classified under 
HS 9504.  
3.6.  In addition actions that either Party may take as authorized by the WTO Dispute Settlement 
Body are reserved. 
3.1.2  Liberalization of trade and tariff lines 3.7.  The tariff elimination programme agreed by the Parties is described in Article 2.04. The 
progressive elimination of customs duties on originating goods shall take place in accordance with 
each Party's Schedule attached to Annex 2.04 to the Agreement. Panama lists, in its Tariff 
Schedule, each tariff line, on an HS eight-di git basis, with the corresponding elimination 
programme, as defined in Annex 2.04. Canada adopts a negative list approach, whereby all goods 
from HS Chapters 1 through 97 that are not listed in its Schedule together with the corresponding 
tariff elimination programme, became duty free on the on the date of entry into force of the Agreement.  
3.1.3  Liberalization schedule 
3.8.  Annex 2.04 to the Agreement establishes sixteen  staging categories constitutive of the tariff 
elimination programme.  
3.9.  While the first tariff reduction took place on 1 April 2013, when the Agreement entered into 
force, each following reduction will take place on 1 January of the relevant year. The base rate of 
customs duty, from which tariff reductions are applied shall be the MFN customs duty rate applied on 1 January 2009, as indicated in the Parties' Schedules attached to Annex 2.04. 
3.10.  The sections below present the liberalization programme applicable to the Parties and also 
include Tables summarizing the main features of the programme. 
3.1.3.1  Canada 
3.11.  Canada's Schedule defines five staging categories for the tariff elimination applicable to 
products originating in Panama. For goods covered by  ten tariff lines (at the HS eight-digit level in 
Category B) customs duties shall be removed in 3 equal annual stages and completely eliminated on 1 January 2015. Eighty-four tariff lines correspond to goods in Category C for which duties shall 
be removed in 5 equal annual stages and thus eliminated on 1 January 2017. Six tariff lines cover 
goods, classified in Category K, for which the tariff remains shall remain at base rates during years 1 through 5, and shall then be reduced in 10 equal annual stages to be eliminated on 1 January 
2027. One hundred and thirty-three tariff lines cover goods in category E, and are excluded from 
tariff elimination. All the other tariff lines became duty-free for products originating in Panama immediately at the entry into force of the Agreement (1 April 2013).  
3.12.  Canada's applied tariff in 2013 consisted of 7,251 lines at the HS eight-digit level 
(HS 2012), 96% of which had ad valorem  rates and 289 lines non- ad valorem  tariffs, essentially 
mixed tariffs. 4,838 lines were duty free on an MFN basis, representing 66.7% of Canada's tariff, 
and corresponding to 99.2% of its imports from  Panama during 2010-2012. Table 3.1 shows the 
scheduled duty elimination in terms of tariff lines and trade, as applied by Canada to imports from 
Panama. Following the entry into force of the Ag reement, an additional 2,242 lines (30.9% of 
Canada's tariff) became duty-free for imports from  Panama. As a result, 97.6% of Canada's tariff 
was duty free for imports from Panama in 2013, corresponding to 99.6% of its imports from 
Panama. In 2027, by the end of Canada's implemen tation period, 7,118 tariff lines, or 98.2% of 
Canada's tariff, will be duty free for imports from Panama, corresponding to close to 100% of its 
imports from Panama. 133 tariff lines, corresponding to 1.8% of its tariff and a marginal part of 
Canada's imports from Panama (less than 0.1%) will remain dutiable. WT/REG334/1/Rev.1 
 
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  Table 3.1 Tariff elimination commitments under the Agreement and corresponding 
average trade 
A. Canada 
Duty phase-out 
period Number of lines % of total lines in 
Canada's tariff 
schedule Value of Canada's 
imports from Panama 
(2010-2012) in million 
US$ % of Canada's total 
imports from Panama 
(2010-2012) 
MFN Duty Free 
(2013) 4,838 66.7  109.1  99.2 
2013 2,242 30.9 0.4 0.4 
2015 10 0.1 0.0 0.0 
2017 22 0.3 0.5 0.4 
2027 6 0.1 0.0 0.0 
Remain dutiable 133 1.8 0.0 0.0 
Total 7,251 100.0 110.0 100.0 
 
Note: For the calculation of averages, specific duties are excluded and the ad valorem  parts of alternate 
rates are included.  
 Based on the HS 2012 nomenclature.  Source: WTO estimates based on data prov ided by Canada and WTO-IDB Database.  
 
3.13.  Table 3.2 shows Canada's tariff elimination, by HS section. The 133 lines that will remain 
subject to duties once implementation is completed are found in sections I (animal products), III (animal or vegetable fats and oils), IV (prepared foodstuffs) and VI (chemicals), with final average 
tariffs at 199.4%, equal to the MFN applied rate. 
Table 3.2 Canada: Tariff elimination under the Agreement, by HS section 
HS 
Section MFN 
average 
% Total No. 
of lines MFN 
 duty-free 
(2013) Number of duty-free lines under the 
agreement No. of lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable)  
% 2013  2015  2017  2027  
I 37.9 408 278 49  7  74 214.9 
II 3.9 467 278 189       
III 8.0 68 25 42    1 218.0 
IV 17.1 539 160 294 10 15 6 54 171.8 
V 0.4 158 150 8       
VI 1.3 876 727 145    4 138.3 
VII 1.7 302 218 84       
VIII 3.1 98 67 31       
IX 2.3 133 75 58       
X 0.0 141 141 0       
XI 5.3 1,246 669 577       
XII 9.7 100 33 67       
XIII 2.1 168 110 58       
XIV 1.7 60 45 15       
XV 1.3 669 533 136       
XVI 0.8 1,056 914 142       
XVII 5.4 238 101 137       
XVIII 1.7 289 201 88       
XIX 3.8 29 7 22       
XX 4.4 197 99 98       
XXI 1.4 9 7 2       
Total 5.6 7,251 4,838 2,242 10 22 6 133 199.4 
 
Note: For the calculation of averages, specific duties are excluded and the ad valorem  parts of alternate 
rates are included.  
 Based on the HS 2012 nomenclature.  Source: WTO estimates based on data prov ided by Canada and WTO-IDB Database. 
 
3.14.  Chart 3.1 shows the average of dutiab le rates for Canada once the Agreement is 
implemented by HS Chapter. The 133 lines that re main subject to duties are distributed between WT/REG334/1/Rev.1 
 
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  12 chapters all corresponding, with one exception, to agricultural products. The average remaining 
dutiable rates are identical to the corresponding average MFN applied rates showing no additional 
preferential tariff liberalization in these Chapte rs. The average preferential rates range from 254% 
in HS 19 (preparation of cereals), to 7% for HS17 (sugar and sugar confectionery). For all the 
other concerned HS Chapters, the average rates are above 100%. 
Chart 3.1 Canada: Average of dutiable rates, by HS Chapter 
050100150200250300
01 02 04 15 16 17 18 19 21 22 23 35HS 01-97
MFN
Preferential
 
Note: For the calculation of averages, specific duties are excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS 2012 nomenclature.  Source: WTO Estimates based on data provided by Canada and WTO-IDB. 
 
3.1.3.2  Panama 
3.15.  Panama's Schedule defines fifteen staging categories, including the immediate duty-free and 
the excluded product categories, for the tariff elimination applicable to products originating in Canada. Category A covers products for which tariff elimination takes place immediately at the entry into force of the Agreement. The majority of the tariff lines fall under this category. A 
relatively large amount of the remaining tariff lines fall under Categories C and D, for which 
customs duties are removed in, respectively, 5 and 10 equal annual stages, thus meaning duty free treatment on, respectively, 1 January 2017 and 2022. For a few tariff lines (essentially ham 
products, in Category F), the progressive reduction is taking place in 10 annual stages and is to be 
completed by 2022. For other tariff lines (essentially some fruits in Category G), the progressive reduction is taking place in 5 annual stages starting on year 6 and is also to be completed by 
2022. The customs duties of goods in Category H are to be removed in 12 equal annual stages, 
with duty free treatment granted on 1 January 2024.  The tariffs in Category I will be reduced in 
7 equal annual stages starting on year 6 and will be completely removed by 2024. The tariffs for goods in Categories J will be removed by 1 January 2027 after 15 equal annual stages of tariff 
elimination. Tariffs in category K will also be removed by 1 January 2027 after 10 equal annual 
stages of tariff elimination starting on year 6. Four  other categories (Categories L, M, N and O) will 
have their tariff eliminated respectively by ye ar 14, 16, 17 and 19, with duty-free treatment 
granted respectively on 1 January 2026, 2028, 2029, and 2031. The goods in these four categories 
are exempt from tariff elimination for initial periods which are all linked to the entry into force of the "Trade Promotion Agreement" (TPA) concluded by Panama and the United States of America. 
Category P (some bovine meat products), foresee th e elimination of tariffs over a five-stage period 
for specified quantities and is related to the tariff-rate quota commitments contained in Article 2.16 (see the following section). Finally, Category E contains products that are excluded from tariff elimination.  
3.16.  Panama's applied tariff in 2013 consisted of 8,943 lines at the HS eight-digit level 
(HS 2007). 99.9% of the tariffs were ad valorem  and 10 lines corresponded to non- ad valorem  WT/REG334/1/Rev.1 
 
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  tariffs (essentially specific duties). 3,160 lines were duty free on an MFN basis, representing 
35.3% of Panama's total tariff, and corresponding to 48.3% of its imports from Canada during 
2010-2012. Table 3.3 shows the scheduled duty elimination in terms of tariff lines and trade, as applied by Panama to imports from Canada. Following the entry into force of the Agreement, an 
additional 3,614 lines (40.4% of Panama's tariff) became duty-free for imports from Canada. As a 
result, 75.7% of Panama's tariffs were duty free for imports from Canada in 2013, corresponding to 89.4% of imports from Canada. After ten years (in 2023), 8,667 tariff lines, or 96.9% of 
Panama's tariff, representing 94.7% of its imports from Canada, will be duty free. By the end of 
the implementation period applicable to Panama (2031), 8,831 tariff lines, or 98.7% of Panama's tariff, will be duty free for imports from Canada, corresponding to 97.7% of its imports from Canada. 112 tariff lines (corresponding to 1.3% of Panama's tariff) will remain dutiable, 
representing 2.3% of its imports from Canada. 
Table 3.3 Tariff elimination commitments under the Agreement and corresponding 
average trade 
B. Panama 
Duty phase-out 
period Number of lines % of total lines in 
Panama's tariff 
schedule Value of Panama's 
imports from Canada 
(2010-2012) in million 
US$ % of Panama's total 
imports from Canada 
(2010-2012) 
 MFN Duty Free 
(2013) 3,160 35.3  33.27  48.3 
2013 3,614 40.4 28.3 41.1 
2017 1,019 11.4 1.7 2.5 
2022 874 9.8 1.97 2.9 
2024 23 0.3 0 0.0 
2027 130 1.5 0.43 0.6 
2028 2 0.0 0.4 0.6 
2029 6 0.1 0.04 0.1 
2031 3 0.0 1.17 1.7 
Remain dutiable 112 1.3 1.59 2.3 
Total 8,943 100.0 68.9 100.0 
 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of averag es, specific duties are excluded and the ad valorem  parts of 
alternate rates are included. 
 Source: WTO estimates based on data prov ided by Panama and WTO-IDB Database.  
 
3.17.  Table 3.4 shows Panama's tariff eliminatio n, by HS section. The 112 lines that will remain 
subject to duties once implementation is completed are found in sections I (live animals and animal products), II (vegetables), and IV (prepare d foodstuffs), with final average tariffs at 52%, 
equal to the MFN applied rate. 
Table 3.4 Panama: Tariff elimination und er the Agreement, by HS section HS 
Section MFN 
average 
% Total 
No. of 
lines MFN 
duty-
free 
(2013) Number of duty-free lines under the agreement  
 No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable)  
% 2013 2017  2022  2024  2027  2028  2029  2031 
I 23.2 421 35 234 21 23 4 15 2 6 3 78 55.7 
II 10.9 429 148 108 114 21 8 12    18 57.8 
III 8.5 70 20 15 3 6  26      
IV 12.1 567 82 155 146 86 11 71    16 26.9 
V 7.1 195 80 95 11 4  5      
VI 2.5 1255 813 326 70 46        
VII 3.9 459 256 115 44 44        
VIII 12.0 116 3 57 12 44        
IX 6.7 193 78 74 27 14        
X 7.2 495 216 157 63 58  1      
XI 7.1 1,220 445 752 19 4        
XII 10.5 157 4 106 2 45        WT/REG334/1/Rev.1 
 
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HS 
Section MFN 
average 
% Total 
No. of 
lines MFN 
duty-
free 
(2013) Number of duty-free lines under the agreement  
 No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable)  
% 2013 2017  2022  2024  2027  2028  2029  2031 
XIII 9.4 294 41 32 138 83        
XIV 7.2 66 24 11 20 11        
XV 7.2 916 340 204 212 160        
XVI 4.9 1,032 252 684 56 40        
XVII 4.6 456 281 105 24 46        
XVIII 9.1 285 35 194 19 37        
XIX 14.6 26  14  12        
XX 11.3 282 3 174 18 87        
XXI 7.2 9 4 2  3        
Total 7.6 8,943 3,160 3,614 1,019  874 23 130 2 6 3 112 52.0 
 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of averag es, specific duties are excluded and the ad valorem  parts of 
alternate rates are included. 
 Based on the HS 2007 nomenclature.  Source: WTO estimates based on data prov ided by Panama and WTO-IDB Database. 
 
3.18.  Chart 3.2 shows the average of dutiable rates for Panama by HS Chapter once it has 
implemented the Agreement. The 112 lines that rema in subject to duties once implementation is 
completed are distributed between 8 chapters, al l corresponding to agricultural products. The 
average remaining dutiable rates are identical to the corresponding average MFN applied rates 
showing no additional preferential liberalization in these Chapters. The average preferential rates 
range from 97% in HS02 (meat), to 12.5% for HS22 (beverages).  
Chart 3.2 Panama: Average of du tiable rates, by HS Chapter 
020406080100120
02 04 07 10 16 19 21 22HS 01-97
MFN
Preferential
 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations; for the calculation of averag es, specific duties are excluded and the ad valorem  parts of 
alternate rates are included. 
 Source: WTO Estimates based on data provided by Panama. 
 
3.1.4  Tariff rate quotas (TRQ) 
3.19.  According to Article 2.16, Panama grants Canada preferential tariff rate quotas for certain 
pork and beef products. Table A2.1, contained in Annex 2 to this factual presentation, summarizes 
the tariff rate quota commitments.  WT/REG334/1/Rev.1 
 
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  3.20.  The Agreement foresees a 2% increase per year for eighteen tariff lines, out of the 
fifty lines concerned by tariff rate quota commitments, and tariffs will be phased out. For these 
tariff lines, for which the in-quota tariff quantities are set at 200 metric tonnes (MT), the customs duty will be removed when the tariff reduction program is fully implemented. Consequently, these 
tariff lines will receive duty-free treatment. 
3.21.  For the remaining tariff lines for which tariff rate quotas are granted by Panama, Canada's 
products receive duty-free treatment within the limits set as part of Panama's WTO tariff rate 
quota commitments. The customs duty applicable to Canadian products falling outside of Panama's 
WTO TRQ commitments (450 MT) is set at 3% if the product is used as feedstock and at 15% if the product is used as finished product.  
3.22.  Article 2.17 sets up disciplines on the admi nistration and implementation by Panama of the 
tariff-rate quotas (TRQs). At Canada's request, Panama shall discuss its administration of TRQs. 
3.2  Rules of origin 3.23.  Disciplines regarding rules of origin are set out in Chapter 3 of the Agreement.
7 Annex 3.02 
to the Agreement contains the specific rules of origin applicable for the administration of the 
Agreement. 
3.24.  According to Article 3.02, a good is considered as originating when: 
a. it is wholly obtained or produced entirely in the territory of one or both of the Parties; 
b. it is produced entirely in the territory of one or both of the Parties exclusively from 
originating materials;  
c. each of the non-originating materials used in the production of the good undergoes an 
applicable change in tariff classification (CTC) as set out in Annex 3.02 when the good is 
produced entirely in the territory of one or both of the Parties. 
3.25.  While the CTC constitutes the main criteria used to determine origin in cases of substantial 
transformation of goods, the value of a non-originating material used in the production of a good 
can be used as an alternative criterion when th at value does not exceed 65% of the transaction 
value of the good. The use of the added-value criteria is however applicable only for the goods not 
covered by the specific rules (in Annex 3.02). Moreover, it is not useable for a good of HS heading 
39.01 through 39.14 or for textiles and textiles articles8 (HS Chapters 50 through 63). 
3.26.  The specific rules contained in Annex 3.02 detail, for most tariff lines covered, how the 
change of tariff classification is applicable to confer origin to non-original material. In certain 
cases, it also registers manufacturing or processing operation9, as well as alternative 
value-added10 criterion (setting maximum conferring value content ranging between 35% and 
70%) that have to be met to confer origin. Articl e 3.04 clarifies how to perform a value test when 
this is required to qualify under the added-value criteria. 
                                               
7 Article 3.01 defines the terms used in Chapter 3. 
8 In addition to the specific rules established for textiles and textile articles and contained in 
Annex 3.02, Article 3.03 states that "Mola", or textile or  apparel goods that incorporate "mola", that are both 
cut or knit to shape, and sewn or otherwise assembled in the territory of one or both of the Parties originate in 
the territory of a Party. 
9 Conferring manufacturing or processing operations are listed in particular for certain dairy products, 
certain prepared foodstuffs, certain beverages, some prepared animal fodder, pr oducts requiring chemical 
reactions, specific man-made staple fibres, some textiles and textile articles, as well as a number of articles of 
base metal.  
10 Specific conferring added value limits are listed in particular for some products of the chemical or 
allied industries as well as plastics (set limits ranging between 35% and 70%); certain footwear (50%); some 
a r t i c l e s  o f  b a s e  m e t a l  ( r a n g i n g  b e t w e e n  5 0 %  a n d  6 5 % ); certain products of the machinery, transport 
equipment, optical, precision, or medical equipment in dustries; and other miscellaneous manufactured articles 
(ranging between 35% and 65%).     WT/REG334/1/Rev.1 
 
- 16 - 
 
 
  3.27.  Accumulation is regulated by Article 3.05. Inter alia , it states that where each Party has a 
trade agreement that establishes or leads to the establishment of a free trade area with the same 
non-party, as contemplated by WTO rules, the territory of that non-party is deemed to form part of the territory of the free trade area estab lished by the Agreement, for the purpose of 
determining whether a good is an or iginating good under the Agreement. 
3.28.  Additional disciplines are contained in Articles 3.06 to 3.14 and cover the following aspects: 
de minimis level
11 under which non originating materials not complying with rules conferring origin 
may still be determined as originating for the purposes of the Agreement; fungible materials and 
goods; sets or assortments of goods, accessories, spare parts and tools; indirect materials; intermediate materials used in production; packaging materials and containers for retail sale; as well as for shipment; and transit and transhipment.  
3.3  Export duties and charges,  and quantitative restrictions 
3.29.  The rights and obligations of the Parties in respect of export prohibitions or restrictions or 
on the prohibition or restriction applicable on a sale for export of a good destined for the territory 
of the other Party are governed by Article XI of the GATT 1994, which is incorporated into and 
made part of the Agreement (Article 2.08). The Parties understand that this, inter alia, prohibits an export price requirement in a circumstance in which another form of restriction is prohibited. Also, 
in the event that a Party adopts or maintains a prohibition or restriction on the export to a third 
party of a good, the Agreement does not prevent the Party from requiring, as a condition of export 
of a good of the Party to the territory of the othe r Party, that the good not be re-exported to the 
third party, directly or indirectly, without being consumed in the territory of the other Party.  
3.30.  The prohibition on export restrictions does not apply to measures specifically identified in 
Annex 2.03 to the Agreement. For Canada, this concerns in particular the measures it may take in relation to the export of logs of all species, the export of unprocessed fish pursuant to applicable 
provincial legislation, or the use of ships in the coasting trade of Canada. For Panama, the 
measures concerned cover the export of wood from national forests.  
3.31.  In addition actions that either Party may take as authorized by the WTO Dispute Settlement 
Body are reserved. 
3.32.  A Party may not adopt or maintain a duty, tax or other charge on the export of a good to 
the territory of the other Party unless the duty, tax or charge is adopted or maintained on the good when destined for domestic consumption (Article 2.10). 
3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 3.4.1.1  Sanitary and phytosanitary measures 
3.33.  Under Chapter 6 of the Agreement, the Parties establish that the WTO SPS Agreement 
governs their rights and obligations in respect of sanitary or phytosanitary measures. To avoid or resolve SPS issues, the Parties commit to undertake the necessary technical discussions, including 
an assessment of the scientific basis of the measures at issue. SPS Coordinators, designated by 
the Parties, shall facilitate communication on SPS matters between the Parties. In the event that 
the Parties are unable to resolve an SPS issue ex peditiously, the SPS Coordinators, upon request 
of a Party, shall report promptly to the Joint Commission.
12 
3.4.1.2  Technical barriers to trade 
3.34.  Chapter 7 of the Agreement covers TBT matters. The Parties affirm with respect to each 
other their existing rights and obligations under  the WTO TBT Agreement. They also commit to 
strengthen their joint co-operation in the areas of  standards, technical regulations, accreditation, 
                                               
11 The de minimis level is set at 10% of the transact ion value of the good. It however does not apply for 
agricultural products (HS Chapters 1 to 22), and textiles (HS Chapter 50  to 60) under certain conditions. 
12 See Section 5.9 below. WT/REG334/1/Rev.1 
 
- 17 - 
 
 
  conformity assessment procedures and metrology in order to facilitate trade between them. In 
using international standards, guides and recommendations as a basis for their technical 
regulations and conformity assessment procedures, the Parties commit to consider the principles 
set out in the Decisions and Recommendations adopted by the WTO TBT Committee13 since 
1 January 1995. Supplementary to the obligations set out in chapter 20 (Transparency), a number 
of transparency provisions are contained in Article 7.06. 
3.35.  Annex 7.07 of the Agreement lists the Contact Points14, designated by the Parties, which are 
responsible for communications related to TBT matters. 
3.4.2  Safeguard mechanisms 3.36.  The Agreement contains Safeguard measures-related provisions in Chapter 8 and in 
Chapter 2, in relation to a special safeguard mechanism established for frozen pork. Article 8.04 
establishes notification obligations with regard to initiating emergency action proceedings; making 
a finding of serious injury, or threat thereof; and applying an emergency action. It also foresees that, in such events, a Party shall invite for discussions the other Party. 
3.37.  An emergency action shall be initiated no later than 1 year after the date the proceeding is 
instituted. A Party may not maintain an emergency action for a period exceeding 3 years, including any extension; or beyond the expiration of the transition period.
15 Moreover, a party may not 
apply an emergency action against a good more than once. On the termination of an emergency 
action, a Party shall set the rate of duty at the rate that would have been in effect but for the action according to the Party's Schedule for the stages elimination of the tariff. 
3.38.  Each Party shall ensure the consistent, impartial and reasonable administration of its laws, 
regulations, decisions and rulings governing emergency action proceedings. A Party shall apply an 
emergency action only following an investigation by the party's competent investigating authority in accordance with the WTO Agreement on Safeguards. To this end, Articles 3 and 4.2 of the WTO 
Agreement on Safeguards are incorporated in to and made part of the Agreement. 
3.4.2.1  Global safeguards 3.39.  Each Party retains its rights and obligations under Article XIX of GATT 1994 and the WTO 
Agreement on Safeguards, which shall exclusively govern global safeguard actions, including the 
resolution of a dispute in respect thereof. The Agreement does not confer additional rights or 
obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, except that a Party taking a global safeguard measure may 
exclude imports of an originating good of the other Party if the competent investigating authority 
of that Party concludes that those imports are not a substantial cause of serious injury or threat thereof. Moreover, a Party may not adopt or maintain with respect of the same good at the same 
time an emergency action (subject to Chapter 8)  and a measure pursuant to Article XIX of GATT 
1994 and the WTO Agreement on Safeguards. 
3.4.2.2  Bilateral safeguards 
3.40.  During the transition period
16, and if consistent with the condition set in Article 8.03, a Party 
may, to facilitate adjustment, suspend the further reduction of a rate of duty provided for under 
the Agreement, or increase the rate of duty on the good to a level not exceeding the lesser of the 
MFN rate of duty applied in effect at the time the emergency action is taken, and the base rate of 
duty as provided in the Parties' tariff elimination Schedules. 
                                               
13 See WTO document G/TBT/1/Rev.9, 8 September 2008, Annex B, or a successor document issued by 
the TBT Committee. 
14 Contact points for Canada: the Department of Fo reign Affairs and International Trade; for Panama: 
the Ministry of Trade and Industry.  
15 For the purpose of Chapter 8 of the Agreement, the transition period means the 10-year period 
beginning on the entry into force of the Agreement (from 2013 to 2023), except where the tariff elimination for 
the good against which the action is taken occurs over a longer period of time, in which case the transition 
period is the period of the staged tariff elimination for that good. 
16 Ibid. WT/REG334/1/Rev.1 
 
- 18 - 
 
 
  3.41.  A Party may take a bilateral emergency action after the expiration of the transition period to 
deal with cases of serious injury, or threat thereof, to a domestic industry arising from the 
operation of this Agreement only with the consent of the other Party.  
3.42.  A Party taking a bilateral emergency action shall provide to the exporting Party mutually 
accepted trade liberalizing compensation in the form of concessions with substantially equivalent 
trade effects or equivalent to the value of the additional duties expected to result from the action. In the absence of an agreed compensation, the Party whose goods are subject to the action may 
take tariff action with trade effects substantially equivalent to the emergency action. The tariff 
action shall be applied only for the minimum period necessary to achieve the substantially equivalent effects and, in any event, only while the emergency action is in effect. 
3.4.2.3  Special safeguards 
3.43.  The Agreement establishes a special agricultural safeguard mechanism for frozen pork, 
under Article 2.18. This special safeguard mechanism is only applicable by Panama, and is limited to frozen pork (HS 0203.22.10 and 0203.29.10), hams and shoulders thereof (HS 0203.22.90 and 
0203.29.20), and frozen pork other than hams  and shoulders thereof (HS 0203.29.90). The 
safeguard takes the form of an additional cust oms duty. The total customs duty, including the 
safeguard measure, may not exceed the lesser of the applied MFN rate of duty at the time the 
measure is adopted, or the base rate set out in Panama's Schedule. The safeguard measure for 
frozen pork is moreover applicable provided the conditions contained in Article 2.18 are fulfilled 
and the trigger levels contained in Annex 2.18 are exceeded.
17 Panama may not adopt or maintain 
an agricultural safeguard measure and, at the same time, adopt or maintain, with respect to the 
same good, (i) an emergency (safeguard) action purs uant to Chapter 8 of the Agreement; or (ii) a 
global safeguard measure pursuant to Article XIX of the GATT and the WTO Agreement on Safeguards. In case Panama intends to apply an agricultural safeguard measures for frozen pork, 
notification to and consultation with Canada shall take place. Such measure shall not be 
maintained beyond the end of a calendar year. Furthermore, it may only be applied during transitions periods stipulated in Article 2.18 and in no way after the expiration of the tariff 
elimination period set out in Panama's Schedule. Panama may not adopt or maintain an 
agricultural safeguard measure on an originating g ood that increases the duty on an in-quota good 
subject to a TRQ. 
3.4.2.4  Relation with the Special Safeguard mechanism established by Article 5 of the 
WTO Agreement on Agriculture  
3.44.  Both Parties are committed not to adopt a special safeguard pursuant to Article 5 of the 
WTO Agreement on Agriculture to goods subjec t to tariff elimination under the Agreement 
(Paragraph 9 of Article 2.18). 
3.4.3  Anti-dumping and countervailing measures 3.45.  The WTO Agreement exclusively governs the rights and obligations of the Parties regarding 
the application of antidumping and countervailing measures, including the settlement of any 
disputes about this matter (Paragraph 3 of Article 1.04). However, in relation with the WTO disciplines on agricultural export subsidies, if a Party adopts or maintain an export subsidy on an agricultural good that is exported to the other Party, the Party applying the measure, at the 
request of the other Party, shall discuss with view to agreeing on specific measures that either 
party may adopt to counter the effect of the export subsidy, including an increase of the rate of duty on such imports up to the applied M FN tariff rate (Paragraph 3 of Article 2.13). 
3.4.4  Subsidies and State-aid 
3.46.  The WTO Agreement exclusively governs the rights and obligations of the Parties regarding 
subsidies, including the settlement of any disputes about this matter (Paragraph 3 of Article 1.04). 
However, in relation with the WTO disciplines on agricultural export subsidies, Canada 
acknowledges Panama's rights and obligations under Article 27.4 of the WTO Agreement on 
                                               
17 The trigger level is set at 585MT cumulated for HS 0203.22.10, 0203.22.90, and 0203.29.20; and 
585MT cumulated for HS 0203.29.10 and 0203.29.90. WT/REG334/1/Rev.1 
 
- 19 - 
 
 
  Subsidies and Countervailing Measures (SCM Agreement) and notes the Decision of the General 
Council of the WTO on this Article of the SCM Agreement.18 In that regard, if Panama enters or has 
entered into an agreement with a third party, in which it undertakes to eliminate exports subsidies on agricultural products, Panama shall also eliminate such export subsidies as they apply to goods 
manufactured in Panama and exported to Canada (Paragraph 5 of Article 2.04).  
3.47.  Moreover, in relation to agricultural export  subsidies, the Parties share the objective of the 
multilateral elimination of agricultural export subsidies and commit to work together toward an 
agreement in the WTO to eliminate such subsidies and avoid their reintroduction in any form. The 
Parties shall not adopt or maintain agricultural export subsidies in their bilateral trade (Paragraphs 1 and 2 of Article 2.13).  
3.48.  On domestic support measures for agricult ural products, the Parties agree to cooperate in 
the WTO agricultural negotiations to achieve a substantial reduction of production and trade-
distorting support measures. They also agree to co nsult, at the request of a Party, if the other 
Party adopts or maintains a domestic support measure that the Party considers to distort bilateral 
trade covered by the Agreement. 
3.49.  With respect to State Trading Enterprises, according to Article 2.15, the rights and 
obligations of the Parties shall be governed  by Article XVII of the GATT 1994 and the 
corresponding Understanding, which are both incorporated into and made part of the Agreement. 
The provisions contained in Article 14.04 (on competition policy, monopolies and state enterprises) are reserved. Moreover, the Parties agree to cooperate in the WTO negotiations to ensure transparency regarding the operation and ma intenance of state trading enterprises. 
3.4.5  Customs-related procedures 
3.50.  Chapter 4 of the Agreement covers customs procedures. It contains disciplines specifically 
related to the implementation of rules of origin disciplines in its Section I (Certification of origin
19), 
Section II (Administration and enforcement20), Section III (Advance Rulings), and Section IV 
(Review and Appeal of Determinations of Origin and Advance Rulings). In addition, Chapter four also contains disciplines on uniform regulations (Section V) and Co-operation in customs-related 
matters (Section VI).  
3.51.  While Chapter 4 essentially refers to the administration of rules of origin, Chapter 5 of the 
Agreement covers Trade Facilitation. The Parties affirm their rights and obligations under Articles VIII (Fees and Formalities connected with importation and exportation) and X (Publication 
and Administration of Trade Regulations) of GATT 1994. They also commit to the prompt release of 
unrestricted, uncontrolled or non-regulated goods,  while recognizing the submission of extensive 
information in certain cases. Each Party shall facilitate and simplify its procedures for the release 
of low-risk goods, and shall improve procedures on the release of high-risk goods. The clearance 
of express consignments shall be based, to  the extent possible, on the World Customs 
Organization's Guideline for the Immediate Release of Consignments by Customs. The Parties took 
a best endeavour commitment to achieve common procedures and to simplify the information 
necessary for the release of goods, applying, when  appropriate, existing international standards. 
Each Party shall afford the opportunity to see administrative actions or official decision taken in respect of the import or export of a good reviewed promptly by a judicial, arbitral or administrative 
tribunal or through administrative procedures. 
3.52.  The Parties agree to develop a technical cooperation programme on customs-related 
matters on the basis of mutually decided terms relating to issues such as the scope, timing and 
cost of cooperative measures (Article 5.03). More over, with the objective of developing further 
steps to facilitate trade under the Agreement, the Parties have established a work programme (Article 5.04). 
                                               
18 See the Decision of the General Council adopted on 27 July 2007 (document WT/L/691, dated 31 July 
2007). 
19 Covering disciplines on Certificate of Origin; obligations regarding importations, including an 
exception to the requirement to provide a Certificate of Origin when imports values do not exceed US$1,000.- 
(de minimis value); and obliga tions regarding exportations. 
20 Covering origin verifications; confidentiality; and penalties. WT/REG334/1/Rev.1 
 
- 20 - 
 
 
  3.53.  In addition to the provisions contained in Chapters four and five, the Agreement also 
addresses customs-related procedures elsewhere in the text. For instance, it is mentioned that the 
WTO Customs Valuation Agreement governs the customs valuation rules applied by the Parties to their reciprocal trade (Article 2.12). 
3.5  Sector-specific provisions on trade in goods 
3.5.1  Distilled Spirits 3.54.  A Party may not adopt or maintain measures requiring that distilled spirits imported from 
the territory of the other Party for bottling be blended with distilled spirits of the Party 
(Article 2.09). 
4  PROVISIONS ON TRADE IN SERVICES 4.1  Scope and definitions 
4.1.  Rules governing cross-border trade in services
21 are found in Chapter 10. Specific disciplines 
on telecommunications are contained in Chapter 11. Chapter 12 contains specific rules applicable to financial services and Chapter 13 covers temporary entry for business persons. Investment, 
encompassing GATS mode 3 but not limited to se rvices-related investments, is dealt with in 
Chapter 9. Chapter 10 does not apply to financial services, as defined in chapter 12; and air services or related services in support of air services, other than aircraft repair and maintenance 
service, the selling or marketing of air transport services, or computer reservations system (CRS) 
services; procurement by a Party or a State enterprise; or a subsidy or grant provided by a Party or a State enterprise, including a Government-supported loan, guarantee or insurance. 
4.2.  Chapter 10 applies to measures adopted or maintained by a Party affecting cross-border 
trade in services by a service provider of the other Party, including a measure that affects 
producing, distributing, marketing, selling and deli vering of a service; purchasing, using or paying 
for a service; accessing and using a distribution, transport or telecommunications network and 
service in connection with providing a service; the presence in its territory of a service provider of 
the other Party; or requirement of a bond or other form of financial security as a condition for providing a service. Chapter 10 does not impose an obligation on a Party with respect to a national 
of the other Party seeking access to its employment  market, or employed on a permanent basis in 
its territory, or confer any right on that national with respect to that access or employment. 
4.3.  In addition to the provisions in Chapte r 10 of the Agreement on trade in services, the 
Agreement establishes specific disciplines for telecommunication services (Chapter 11) and 
financial services (Chapter 12). Moreover, in Annex IV to the Agreement, the Parties affirm and 
complement the obligations of the Agreement applyi ng to the international maritime sector. These 
sector specific provisions are summarized below under sections 4.5.2, 4.5.3, and 4.5.4. 
4.2  Denial of benefits 
4.4.  Under Article 10.10, a Party may deny the benefits of Chapter 10 to a service provider of the 
other Party if the service provider is an enterprise  owned or controlled by a person of a third-party 
that has no substantial business activities in the territory of the other Party. Moreover, the benefits 
of Chapter 10 shall be denied to a service provider of the other Party where the Party establishes that the service is being provided by an enterpri se owned or controlled by a national of a third-
party, and the denying Party adopts or maintains a measure with respect to the third-party that 
prohibits transactions with the enterprise or that would be violated or circumvented if the benefits 
                                               
21 The term "cross-border trade in services" means providing a service: (i) from the territory of one 
Party into the territory of the other Part y (mode 1); (ii) in the territory of on e Party by a person of that Party to 
a person of the other Party (mode 2); or (iii) by a national  of a Party in the territory of the other Party (in part, 
mode 4). "Cross-border trade in services" does not includ e providing a service in the territory of a Party by a 
covered investment (in part, mode 3 ); the term "covered investment" meaning, with respect to a Party, an 
investment in its territory of an investor of the other party existing on the date of entry into force of the 
Agreement, or investments ma de or acquired thereafter. WT/REG334/1/Rev.1 
 
- 21 - 
 
 
  of Chapter 10 were accorded to the enterprise. The denial of bene fits related to investment is 
covered by Article 9.15 (See below under section 4.6.6.1). 
4.3  General provisions on trade in services 4.3.1  Market access 
4.5.   A Party may not adopt or maintain a measure that impose limitations on the number of 
service providers, the total value of service tran sactions or assets, the total number of service 
operations or the total quantity of service output, or the total number of natural persons that may 
be employed in a particular service sector. Alternatively, a Party may not adopt or maintain a 
measure that restricts or require a specific type of legal entity or joint venture through which a service provider may provide a service (Article 10.05).  
4.6.  The Parties' reservations on non-confor ming measures related to market access are 
contained in Annexes I and II of the Agreement. 
4.3.2  National treatment and MFN 4.7.  Under Article 10.03 on national treatment, each  Party shall accord to a service provider of the 
other Party treatment no less favourable than that it accords in like circumstances to its own 
service providers. 
4.8.  Under Article 10.04 on MFN treatment, each Party shall accord to a service provider of the 
other party treatment no less favourable than that it accords in like circumstances to services 
providers of a third-party. 
4.9.  The Parties' reservations on non-conf orming measures related to national and MFN 
treatments are contained in Annexes I and II of the Agreement. 
4.3.3  Commercial presence 
4.10.  Under Chapter 10 (on cross-border trade), Party may not require as a condition for the 
cross-border provision of a service that a service provider of the other Party establish or maintain 
a representative office or an enterprise in its territory; or be resident in its territory. 
4.11.  Under Chapter 9 (on investment), national treatment and MFN clauses are applicable to the 
Parties investors with respect to the establishmen t, acquisition, expansion, management, conduct, 
operation and sale or other disposition of an investment in a Party's territory (Articles 9.04 and 
9.05).  
4.12.  Each Party shall accord to a covered investment treatment in accordance with the 
customary international law minimum standard of treatment of aliens, including fair and equitable 
treatment and full protection and security (Article 9.06). 
4.13.  Special modalities related to commercial presence apply for financial services. They are 
presented below under Section 4.5.2. 
4.14.  The provisions on national treatment, MFN treatment, and commercial presence do not 
apply to existing non-conforming measures, the continuation, prompt renewal of or the amendment to non-conforming measures, to the extent that the amendment does not decrease 
the conformity of the measures, as it existed im mediately before the amendment and as listed in 
Annex I to the Agreement. Moreover, these provisions do not apply to a measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II attached to the Agreement. The Parties' reservations made in connection to Chapter 9 
have been summarized below together with those made by the Parties in reference to the 
provisions covering cross-border trade. WT/REG334/1/Rev.1 
 
- 22 - 
 
 
  4.3.4  Movement of natural persons 
4.15.  Chapter 13 of the Agreement contains commitments and disciplines applicable to the 
temporary entry for business persons.22 It reflects the preferential trading relationship between 
the Parties, the desirability of facilitating tempor ary entry on a reciprocal basis and of establishing 
transparent criteria and procedures for temporary entry and the need to ensure border security 
and to protect the domestic labour force and perm anent employment in their respective territories. 
Each Party shall apply its respective measures related to temporary entry of business persons 
expeditiously so as to avoid unduly impairing or delaying trade in goods or services or investment 
activities under the Agreement (Articles 13.02 and 13.03).  
4.16.  A Party shall grant temporary entry to a business person who complies with existing 
immigration measures applicable to temporary entry under Chapter 13, including Annex 13.04. It 
may, however, refuse to issue a work permit or authorization to a business person where the 
temporary entry of that person might adversely affect the settlement of any existing labour dispute at the place or intended place of employment; or the employment of any person who is 
involved in that dispute. Moreover, the fees for processing applications for temporary entry of a 
business person shall be limited to the approximate cost of services rendered (Article 13.04). 
4.17.  Annex 13.04 establishes the main conditions of entry and commitments made in that regard 
by the Parties for Business Visitors
23, Traders and Investors, Intra-Company Transferees; Persons 
engaged in Speciality Occupation24, and Spouses. Annex 13.04 details the requirements to be 
fulfilled by applicants as well as measures the Parties may or may not impose on granting 
temporary entry and providing a work permit or a work authorization to a business person.  
4.18.  Articles 13.05 and 13.06 contain transparency  requirements in addition to those in Chapter 
20 and establish contact points to exchange information and to consider matters pertaining to Chapter 13. The contact points shall also meet wi thin three years of the entry into force of the 
Agreement to consider further liberalization to enhance the temporary entry of business persons. 
4.19.  A Party may not initiate proceedings under Chapter 22 (Dispute Settlement) regarding the 
refusal to grant temporary entry under Chapter 13 unless the matter involves a pattern of 
practice; and the business person who has been refused temporary entry has exhausted the 
applicable administrative remedies, which do not include judicial remedies.  
4.20.  The Agreement does not impose an obligation on a Party regarding its immigration 
measures, except as specifically provided in Chapter 13 or Chapter 20 (Transparency). 
4.3.5  Performance Requirements 
4.21.  Disciplines on performance requirements are contained in Chapter 9 relating to investment. 
A Party may not impose or enforce a number of requirements contained and qualified in 
Article 9.07, or enforce a commitment or undertaking, in connection with the establishment, 
acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or a non-Party in its territory. 
4.22.  Special modalities related to performance requirements apply for financial services. They 
are presented below under Section 4.5.2. 
4.23.  The provisions on performance requirem ent do not apply to existing non-conforming 
measures, the continuation, prompt renewal of or the amendment to non-conforming measures, to 
the extent that the amendment does not decrease the conformity of the measures, as it existed 
immediately before the amendment and as listed in Annex I to the Agreement. Moreover, these 
                                               
22 The term "business person" means a national of a Party engaged in trading goods, providing services 
or conducting investment activities. 
23 Covering Research and Design ; Cultivation, Manufacture and Production; Marketing; Sales; 
Distribution; After-Sales or After-Lease Services; Mana gement and Supervisory; Financial Services; Public 
Relations and Advertising; Tourism; and Translation / Interpretation. A detailed description of these activities is 
provided in Appendix 13.04-A to the Agreement. 
24 The list of Specialty Occupations is provided in Appendix 13.04-D to the Agreement. WT/REG334/1/Rev.1 
 
- 23 - 
 
 
  provisions do not apply to a measure that a Party adopts or maintains with respect to sectors, 
subsectors or activities, as set out in its Schedule to Annex II attached to the Agreement. The 
Parties' reservations made in connection to Chapter 9 are summarized below together with those made by the Parties in reference to the provisions covering cross-border trade. 
4.3.6  Senior Managers and Board of Directors 
4.24.  According to Chapter 9 on investment, a Pa rty may not require that an enterprise of that 
Party that is a covered investment appoint individuals of any particular nationality to senior 
management positions. A Party may, however, require that a majority of the board of directors, or 
a committee thereof, of an enterprise that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment (Article 9.08). 
4.25.  Special modalities related to senior managers and boards of directors apply for financial 
services. They are presented below under Section 4.5.2. 
4.26.  The provisions on senior management and boards of directors do not apply to existing 
non-conforming measures, the continuation, prompt renewal of or the amendment to 
non-conforming measures, to the extent that the amendment does not decrease the conformity of 
the measures, as it existed immediately before the amendment and as listed in Annex I to the 
Agreement. Moreover, these provisions do not apply to a measure that a Party adopts or maintains 
with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II attached to the Agreement. The Parties' reservations made in connection to Chapter 9 have been summarized below together with those made by the Parties in reference to the provisions covering cross-border 
trade. 
4.4  Liberalization commitments 4.27.  Liberalization modalities for Chapters 10 (cross-border trade in services, including 
telecommunication services), 12 (financial services ), and 9 (investment) follow a "negative list" 
approach which assumes that all sectors or sub-sectors covered by this chapter are liberalized unless otherwise provided in the Parties' non-conforming measures in Annexes I and II for cross-
border trade in services (in relation to national treatment, MFN, local presence and market access) 
and investment (in relation to national treatment, MFN, performance requirements and senior management and boards of directors), and in Annex III, for financial services (in relation to national treatment, MFN, right of establishment, senior management and boards of directors, and 
cross-border trade in financial services). Moreover, with respect to cross-border trade and to 
investment, existing non-conforming measures maintained by a Party at the sub-national Government level are excluded from the commitments made by the Parties (sub-paragraph 1.a.ii 
of Articles 10.07 and 9.09). This is particularly important to keep in mind in the case of Canada 
that had, under its GATS commitments, listed a num ber of reservations related to measures taken 
at the provincial level. 
4.28.  The sub-sections below present the Parties' liberalization commitments under the 
Agreement as compared to their GATS commitments. Structural differences between the GATS and the trade in services provisions of the Agreement have however to be taken into account when considering this part of the factual presentation. After summarizing MFN exemptions as well as 
horizontal limitations registered in the Agreemen t by each Party, Tables 4.1 and 4.2 summarize 
the specific commitments made by the Parties under the Agreement, by main sectors and subsectors, and compare them with the Parties' GATS  Schedules. The Tables also indicate in which 
sector or subsector Parties have made reservations. Improvements in existing GATS commitments 
are either a reduction in the limitations applicable to national treatment, additional sub-sectors in which commitments are made, and/or new commitments. It should be however underlined that 
horizontal limitations in the GATS Schedules of Specific Commitments and reservations covering all 
sectors in Annex I and II of the Agreement, as well as MFN reservations or exemptions, are not included in the Tables. Mode 4 commitments are also excluded. The summaries of MFN and horizontal limitations in the text complement the summary Tables.  WT/REG334/1/Rev.1 
 
- 24 - 
 
 
  4.4.1  Canada 
4.29.  In its GATS schedule, Canada has made commitments in 105 out of 155 services sectors25, 
leaving in particular some business services, postal services, audio-visual services, educational services, health related services, some tourism and recreational-related services, some maritime 
transport services, internal waterways transport, most air transport services, some rail and road 
transport services, and pipeline transport unbound. Under the Agreement, as a negative list approach is chosen, all services sectors are deemed to be liberalized unless a reservation is 
registered in Annexes I, II or III. As indicated ab ove, with respect to cross-border trade and to 
investment, existing non-conforming measures maintained by Canada at the sub-national government level are excluded from the commitments made by the Parties (sub-paragraph 1.a.ii of Articles 10.07 and 9.09). Moreover, in one of its reservations related to future measures, 
Canada reserves the right to adopt or maintain a measure for providing public law enforcement 
and correctional services, as well as certain servic es to the extent that they are social services 
established or maintained for a public purpose. The listed sectors cover income security or 
insurance, social security or insurance, social welfare, public education, public training, health care 
and child care. The notion of "public purpose" is not further defined in Canada's list of reservations. Though this may not amount automatically to a complete exclusion of these sectors 
from liberalization, one may also consider that some of the listed sector may only marginally 
benefit from the preferential liberali zation resulting from the Agreement. 
4.30.  Canada's GATS MFN exemptions cover certain measures, in all sectors, aimed at promoting 
and protecting foreign investment, through acceptance of compulsory arbitration of investor / 
state investment disputes brought by or in respect of service suppliers of countries with which 
Canada may have agreements providing for such a procedure. Additional exceptions are also 
registered for some measures related to film, video and TV programming co-production and 
distribution, some fishing-related services, a number of activities related to insurance and financial 
services, some air and maritime transport-related measures, as well as temporary entry of natural 
persons supplying certain services, including services incidental to agriculture. Under the 
Agreement, Canada registers 11 MFN reservations (out of a total of 44). For all sectors, MFN 
exemptions are applicable to measures (i) preservi ng rights or providing preferences for aboriginal 
peoples; (ii) providing public law enforcement and correctional services as well as social services established or maintained for a public purpose; (iii) that accord differential treatment to countries 
under a bilateral or multilateral international agreement in force or signed prior to the date of 
entry into force of the Agreement, as well as under an existing or future bilateral or multilateral agreement relating to aviation, fisheries, or maritime matters including salvage; and (iv) that is 
not inconsistent with Canada's obligations under Article XVI of the GATS. Moreover, Canada also 
introduces sectoral MFN reservations for some existing measures related to services incidental to mining (investment); some professional serv ices in the banking and insurance sectors 
(cross-border trade); and some maritime and inte rnal waterways transport services (cross-border 
trade). 
4.31.  Under the GATS, Canada's horizontal limitations cover mainly national treatment for certain 
measures relating to the provision of services through modes 1 and 2 (reservations for tax 
measures and national preferences for service suppliers in certain provinces). In relation to 
commercial presence (mode 3), Canada's GATS horizontal limitations cover the acquisition of control of a Canadian business by a non-Canadi an; some form of subsidies; federal and sub-
central tax measures, including certain tax exemptions; national treatment limitations in 
subsectors such as insurance, social welfare, public education, training, health, and child care; preferential treatment for aboriginal persons or organisations; restrictions on acquiring land; as 
well as nationality and/or residence requirements for some senior directors and boards of 
directors. A limitation is registered in relation to entry and temporary stay of a natural person, reflected under Chapter 13. Under the Agreemen t, while some of the above-mentioned MFN 
reservations are horizontal and apply to all sectors (such as the ones for aboriginal affairs and the 
reservation for existing or future bilateral or multilateral agreements concluded in certain sectors), 
Canada also introduces horizontal limitations, with respect to investment and/or cross-border trade, related to, inter alia , acquisition of real estate in certain areas; the granting of privileges to 
socially or economically disadvantages minorities; limitations on the ownership of equity interests 
or assets of a government enterprise or on the transfer and ownership of shares in a federally 
                                               
25 Source: WTO country profile, 2013. WT/REG334/1/Rev.1 
 
- 25 - 
 
 
  incorporated corporation; and residency requirements with respect to senior management and 
boards of directors and the legal form of certain enterprises.   
4.4.1.1  Canada's sector specific commitments on trade in services 
4.32.  The following section identifies some of the main differences, by sector, between Canada's 
GATS schedule and its sector-specific commitments und er the Agreement. It should also be read in 
conjunction with the Canada's lists of non-confor ming measures contained in Annexes I, II and III 
of the Agreement. 
Table 4.1 Canada: comparison between the GATS and Agreement specific commitments 
in trade in services  
Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared 
to the GATS  Existing  
non-conforming 
measure(s) Reservation(s) 
for future 
measures 
  Invest-
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
1. Business services       
A. Professional Services Partial Improved     
B. Computer and Related Services  Partial Improved     
C. Research and Development Services  Partial Improved     
D. Real Estate Services  Partial Improved     
E. Rental/Leasing Services without Operators  Partial Improved     
F. Other Business Services  Partial Limited     
2. Communication services        
A. Postal services --- New     
B. Courier services Partial Improved     
C. Telecommunication services  Partial Improved     
D. Audiovisual services --- New     
3. Construction and related engineering 
services        
A. General construction work for buildings Partial Improved     
B. General construction work for civil Engineering  Partial Improved     
C. Installation and assembly work  Full Similar     
D. Building completion and finishing work  Full Similar     
E. Other Partial Improved     
4. Distribution services       
A. Commission agents' services Partial Improved     
B. Wholesale trade services Partial Improved     
C. Retailing services Partial Improved     
D. Franchising Partial Improved     
5. Education services       
A. Primary education services --- New     
B. Secondary education services  --- New     
C. Higher education services  --- New     
D. Adult education --- New     
E. Other education services  --- New     
6. Environmental services       
A. Sewage services Full Similar     
B. Refuse disposal services Full Similar     
C. Sanitation and similar services  Full Similar     
D. Other Full Similar     
7. Financial services       
A. All insurance and insurance-related services  Partial Improved     
B. Banking and other financial services Partial Improved     
8. Health related and social services       
A. Hospital services --- New     
B. Other Human Health Services --- New     
C. Social Services --- New     
D. Other --- New     
9. Tourism and travel related services        
A. Hotels and restaurants (including catering) Partial Improved     
B. Travel agencies and tour operators services Partial Improved     
C. Tourist guides services --- New     
10. Recreational and cultural and sporting 
services       
A. Entertainment services --- New     WT/REG334/1/Rev.1 
 
- 26 - 
 
 
  Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared 
to the GATS  Existing  
non-conforming 
measure(s) Reservation(s) 
for future 
measures 
  Invest-
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
B. News agency services --- New     
C. Libraries, archives, museums and other 
cultural services --- Improved     
D. Sporting and other recreation al services  --- New     
11. Transport services        
A. Maritime Transport Services --- Improved     
B. Internal Waterways Transport --- Improved     
C. Air Transport Services Partial Similar     
D. Space Transport  --- New     
E. Rail Transport Services Partial Improved     
F. Road Transport Services Partial Similar     
G. Pipeline Transport  --- New     
H. Services auxiliary to all modes of transport  Partial Similar     
I. Other Transport Services  --- New     
 
General  MFN and Horizontal limitations, as well as Mode 4 commitments / limitations not considered in the Note: Table.  Partial:  GATS commitments subject to some limitation (s) under market access or national treatment, under 
any of the three modes. 
Full: GATS commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes. 
---: No commitments under GATS. New: New commitments made under the Agreement (Full or partial, with or without limitations). "New" 
can, in most cases, be seen as "improved". 
Improved: Overall improved commitments made under th e Agreement as compared to those under the GATS. 
Similar: Similar commitments (Agreement vs. GATS); though possibly, in specific individual cases, with 
limited improvements and/or li mited additional reservations. 
Limited: Some additional limitations (as compared to GATS commitments) : Reservation listed in Annex I, II or III to th e Agreement (existing or future non-conforming 
measures; services reservations). 
 Source:  Draft Consolidated GATS Schedule of Specific Commitments (S/DCS/W/CAN), prepared by the 
Secretariat (in 2003) and Canada's Schedules annexed to the Agreement.  
 
4.4.1.1.1  Business services 
4.33.  To a large extent, Canada mirrors its GATS commitments, though expanding the coverage 
to all sub-sectors. By excluding Provincial meas ures from the coverage of its commitments under 
the Agreement, it replicates implicitly the reservations contained in its GATS Schedule. While some specific existing non-conforming measures are listed for some legal services, a number of reservations referring to measures differing fr om those covered under GATS limitations, are 
registered under "other business services" (both relating to existing and future measures).  
4.4.1.1.2  Communication services
26 
4.34.  Under the Agreement, Canada commits to liberalize and open postal and courier services 
without restriction, in both cases an improvement as compared to GATS commitments. It 
liberalizes most services related to basic telecommunications but maintains a reservation for future measures (both relating to investment and cross-bo rder trade). It is understood that most of the 
audio-visual services are, de facto, excluded fr om liberalization commitments through the general 
carve-out on cultural industries.  
                                               
26 Specific conditions applicable to telecommunications services are contained in Chapter 11 of the 
Agreement (See below Section 4.5.1). WT/REG334/1/Rev.1 
 
- 27 - 
 
 
  4.4.1.1.3  Constructions and related engineering services 
4.35.  Canada expands sectoral coverage without registering limitations in construction work for 
buildings and civil engineering as well as other related construction services, which are only partially bound under the GATS.  
4.4.1.1.4  Distribution services 
4.36.  Under the Agreement, Canada registers only one existing non-conforming measure with 
respect to the operation of duty-free shops. It can be noted that, under GATS and in connection 
with the structural differences in modalities used  in GATS (positive list) and in the Agreement 
(negative list), Canada had dealt with this differently in GATS through product and services exclusions under commission agents, wholesale trade services and retailing services. For all the other sub-sectors, Canada fully opens the distribu tion sector without restrictions, an improvement 
over its GATS commitments. 
4.4.1.1.5  Educational services 4.37.  Under the GATS, the entire sector was unbound. Under the Agreement, education is covered 
by the liberalization obligations of both the services and investment chapters. However, a broad 
reservation on public education and public training is made in that they are social services established or maintained for a public purpose. This broad carve-out covers both investment and 
cross-border trade and Canada reserves the right to adopt or maintain any measure related to 
such services. It can nevertheless be noted that "private education" is not part of the exclusion. Canada's reservation, in Annex II under "social services", explicitly only refers to "public education". 
4.4.1.1.6  Environmental services 
4.38.  Under the Agreement, Canada continues to  fully open environmental services, which were 
bound without any limitation under GATS. 
4.4.1.1.7  Financial services
27 
4.39.  Under the Agreement, Canada's commitments combine a negative- and a positive-list 
approach. In relation to cross-border trade co mmitments (broadly corresponding to GATS modes 
1, 2 and 4) Canada permit a Panamanian service supplier to supply a limited number of financial 
services (Article 12.06). For the insurance subsector: some non-life insurance (insurance of risks relating to maritime shipping, commercial aviation and space launching and freight); reinsurance and retrocession; some service auxiliary to insurance; and insurance intermediation, such as 
brokerage and agency) are covered. For banking,  Canada's commitments cover the provision and 
transfer of financial information and financial data processing and related software by a supplier of another financial service; and some advisory and other auxiliary financial services.
28 Canada 
nevertheless reserves, in Annex III to the Agreem ent, the possibility to maintain one of the 
limitations in its GATS schedule, limiting the purc hase, by a Canadian insurer from a non-resident 
reinsurer, of the risks undertaken by the insurer purchasing the reinsurance to25%. In relation to 
the right of establishment (broadly corresponding to GATS mode 3) Canada's commitment follow a 
negative list approach. The prohibition of a particular financial service or activity is however reserved in relation to the adoption of a pr udential measure. Moreover, in Annex III to the 
Agreement Canada reserves its right to adopt or maintain certain measures related to the 
establishment by a foreign bank of a subsidiary or of a branch, or any measures relating to 
cross-border trade in securities services. Canada also makes specific commitments regarding portfolio management
29, which are also applicable to certain provinces, while the other 
                                               
27 Specific conditions applicable to financial services are contained in Chapter 12 of the Agreement (See 
below Section 4.5.2). 
28 The commitment applies only if neither the foreign ba nk nor one of its affiliates (if subject to the Bank 
Act) maintains a financial establishment in Canada. 
29 These commitments come into force only on en try into force of the UA-Panama trade promotion 
agreement (TPA). WT/REG334/1/Rev.1 
 
- 28 - 
 
 
  commitments under Chapter 12 of the Agreement do not cover sub-national government of 
Canada (Provinces). 
4.4.1.1.8  Health relate d and social services 
4.40.  As is the case for education services, under the GATS, the entire health related and social 
services sector was unbound. Under the Agreement, it is covered by the liberalization obligations 
of both the services and investment chapters. Ho wever, the broad reservation on social services 
also applies to social security and insurance, soci al welfare, health to the extent that they are 
social services established or maintained for a public purpose. The carve-out covers both 
investment and cross-border trade. Canada reserves the right to adopt or maintain any measure related to such services. As in the case of education, it can be noted that Canada's reservation, in Annex II under "social services", excludes "health". Canada's reservation covers the private and 
public sectors.  
4.4.1.1.9  Tourism and travel related services 4.41.  Canada fully covers and does not have a reservation for the sector, an improvement over its 
GATS commitments, which guarantee partial covera ge for hotels, restaurants and travel agencies, 
and which leave tourist guide services unbound. 
4.4.1.1.10  Recreational, cult ural and sporting services 
4.42.  The entire sector was unbound under the GATS. Under the Agreement, Canada only 
registers one reservation with respect to expert ex aminer of cultural property. The "cultural carve-
out" does not apply to the recreational, cultural and sporting services (other than audiovisual services). 
4.4.1.1.11  Transport services
30 
4.43.  For this sector, which was only partially covered by GATS commitments, Canada expands its 
commitments but maintains a number of reservations for existing and future measures. It does so 
particularly for maritime transport services (also covered by Annex IV to the Agreement) and 
internal waterways transport, as well as for some aspects of air transport services, cabotage applied to road transport, as well as some exiting services auxiliary to all modes of transport.  
4.4.2  Panama 
4.44.  In its GATS schedule, Panama has made commitments in 63 out of 155 services sectors, 
leaving in particular some business services, postal and courier services and a number of telecommunication services, a limited number of audio-visual services, some distribution and 
educational services, most environmental services, some financial services, most health related 
services as well as tourism and recreational-related services, and most transport services unbound. Under the Agreement, as a negative list approach is chosen, all services sectors are 
deemed to be liberalized unless a reservatio n is registered in Annexes I, II or III. 
4.45.  Panama's GATS MFN exemptions cover meas ures in all sectors, legal instruments signed 
with Central American countries granting preferences for trade in services. Preferential treatment 
granted to services providers under the bilateral agreement with the US on the functioning of the 
Panama Canal is also included in Panama's GATS list of MFN exemptions. Additional exemptions are also registered for some measures related to business services based on reciprocity requirements and, in the case of Central American countries in the audiovisual sector. Under the 
Agreement, Panama has 8 MFN reservations (out of a total of 47). For all sectors, MFN exemptions 
are applicable to measures (i) preserving rights or providing preferences to aboriginal peoples and minorities; (ii) providing public law enforcement and correctional services as well as social services 
established or maintained for a public purpose; (iii) that accord differential treatment to countries 
under a bilateral or multilateral international agreement in force or signed prior to the date of entry into force of the Agreement, as well as under an existing or future bilateral or multilateral 
                                               
30 Specific conditions applicable to maritime servic es are contained in Annex IV to the Agreement (See 
below Section 4.5.3). WT/REG334/1/Rev.1 
 
- 29 - 
 
 
  agreement relating to aviation, fisheries, or maritime matters including salvage; and (iv) affecting 
the provision of a service provided in the exercise of governmental authority. Moreover, Panama 
also introduces sectoral MFN reservations for some existing measures for services of transmission of radio and television programmes; a number of professional services for which Panamanian 
nationality is required or on the basis of recipr ocity (in the case of engineers and architects). 
Panama also registered sectors or subsectors (such as services incidental to fishing) in which MFN inconsistent measures may be introduced in the future. 
4.46.  Under the GATS, Panama's horizontal limi tations are placed on acquisition of land by 
non-Panamanians in certain areas. It also has GATS horizontal limitations, mainly on market access, in relation to modes 3 and 4, requiring a certain number of local workers be employed in companies registered in Panama. A limitation is also registered in the GATS for the entry and 
temporary stay of a natural person, covered und er the Agreement under Chapter 13. Under the 
Agreement, while some of the above-mentioned MFN reservations are horizontal and apply to all sectors (such as for aboriginal affairs and the reservation for existing or future bilateral or 
multilateral agreements concluded in certain sectors), Panama also introduces horizontal 
limitations, with respect to investment and/or cross-border trade, related to, inter alia , acquisition 
of real estate in certain areas; the ownership of the majority of the capital of a private enterprise 
engaged in public utilities that operate in Panama; and residency requirements for senior 
management and boards of directors and the legal form of certain enterprises (such as the Panama Canal Authority).  
4.4.2.1  Panama's sector specific commitments on trade in services 
 
4.47.  The following section identifies some of the main differences, by sector, between Panama's GATS schedule and its sector-specific commitments under the Agreement. It should be read in 
conjunction with Panama's lists of non-conforming measures in Annexes I, II and III of the 
Agreement. 
Table 4.2 Panama: comparison between the GATS and Agreement specific commitments 
in trade in services 
Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared to 
the GATS Existing  
non-
conforming 
measure(s) Reservation(s) 
for future 
measures 
Invest
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
1. Business services       
A. Professional Services Partial Improved     
B. Computer and Related Services  Full Similar     
C. Research and Development Services  --- New     
D. Real Estate Services  --- New     
E. Rental/Leasing Servic es without Operators  Partial Improved     
F. Other Business Servic es Partial Improved     
2. Communication services        
A. Postal services --- Similar     
B. Courier services --- New     
C. Telecommunication services  Partial Improved     
D. Audiovisual services Partial Similar     
3. Construction and related engineering 
services        
A. General construction work for buildings Partial Similar     
B. 
General construction work for civil Engineering Partial Similar     
C. Installation and assembly work  Partial Similar     
D. Building completion and finishing work  Partial Similar     
E. Other --- New     
4. Distribution services       
A. Commission ag ents' services Full Similar     
B. Wholesale trade services Full Limited     
C. Retailing services --- New     WT/REG334/1/Rev.1 
 
- 30 - 
 
 
  Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments Compared to 
the GATS Existing  
non-
conforming 
measure(s) Reservation(s) 
for future 
measures 
Invest
ment Cross-
border 
trade Invest-
ment Cross-
border 
trade 
D. Franchising Full Similar     
5. Education services       
A. Primary education services Partial Similar     
B. Secondary education services  Partial Similar     
C. Higher education services  Full Limited     
D. Adult education --- New     
E. Other education services  --- New     
6. Environmental services       
A. Sewage services --- New     
B. Refuse disposal services --- New     
C. Sanitation and similar services  --- New     
D. Other Partial Improved     
7. Financial services       
A. All insurance and insu rance-related services  Partial Improved     
B. Banking and other financial services Partial Improved     
8. Health related and social services       
A. Hospital services Partial Improved     
B. Other Human Health Services --- New     
C. Social Services --- New     
D. Other --- New     
9. Tourism and travel related services        
A. Hotels and restaurants (including catering) Partial Similar     
B. Travel agencies and tour op erators services Partial Similar     
C. Tourist guides services --- New     
10. Recreational and cultural and sporting 
services       
A. Entertainment services Partial Improved     
B. News agency services --- New     
C. Libraries, archives, museums and other 
cultural services --- New     
D. Sporting and other recreational services  --- New     
11. Transport services        
A. Maritime Transport Services --- New     
B. Internal Waterways Transport --- New     
C. Air Transport Services Partial Similar     
D. Space Transport  --- New     
E. Rail Transport Services --- New     
F. Road Transport Services --- New     
G. Pipeline Transport  --- New     
H. Services auxiliary to all modes of transport  --- New     
I. Other Transport Serv ices  --- New     
 
General  MFN and Horizontal limitations, as well as Mode 4 commitments / limitations not considered in the Note: Table.  Partial:  GATS commitments subject to some limitation (s) under market access or national treatment, under 
any of the three modes. 
Full: GATS commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes. 
---: No commitments under GATS. 
New: New commitments made under the Agreement (Full or partial, with or without limitations). "New" 
can, in most cases, be seen as "improved". 
Improved: Overall improved commitments made under th e Agreement as compared to those under the GATS. 
Similar: Similar commitments (Agreement vs. GATS); though possibly, in specific individual cases, with 
limited improvements and/or li mited additional reservations. 
Limited: Some additional limitations (as compared to GATS commitments) : Reservation listed in Annex I, II or III to th e Agreement (existing or future non-conforming 
measures; services reservations). 
 Source:  Draft Consol i d a t e d  G A T S  S c h e d u l e  o f  S p e c i f i c  C o m m i t m e n t s  ( S / D C S / W / P A N ) ,  p r e p a r e d  b y  t h e  
Secretariat (in 2003) and Panama's Schedules annexed to the Agreement.  WT/REG334/1/Rev.1 
 
- 31 - 
 
 
  4.4.2.1.1  Business services 
4.48.  Panama improves its commitment on busine ss services over those in the GATS. It expands 
coverage to all sub-sectors, though with existing non-conforming measures for some professional services, research and development services, real  estate services, as well as a number of other 
business services, for which reservations are also made for future measures.  
4.4.2.1.2  Communication services
31 
4.49.  Though postal services are theoretically op ened for Canadian service providers by virtue of 
the negative list approach, a specific reservation is entered, de facto reserving the subsector for 
Panamanian service providers. Courier services are however bound and liberalized. Though the coverage is expanded as compared to the GATS, existing non-conforming measures are listed for 
telecommunication services and audio-visual services. For the latter, a broad cultural carve-out 
applies, as in the case of Canada. 
4.4.2.1.3  Constructions and related engineering services 
4.50.  Under the GATS, the entire sector was unbound. Under the Agreement, construction and 
related engineering services are covered by the liberalization obligations of both the services and 
investment chapters. However, a br oad reservation on construction services is introduced. Panama 
reserves the right to adopt or maintain residency, registration or other local presence 
requirements, or to require a financial guarantee provided that it is necessary to ensure 
compliance with Panamanian law and private contractual obligations. 
4.4.2.1.4  Distribution services 4.51.  While Panama makes full commitments in all sub-sectors for distribution services, except for 
retailing services, under the Agreement, it mi rrors most of these commitments, except for 
registering some wholesale trade services relating to the selling of shrimps or other marine species. Panama's commitments however cover retailing services, though with some limitations. 
4.4.2.1.5  Educational services 
4.52.  The sector is fully covered by Panama's commitments under the Agreement, an 
improvement over its GATS commitments. Existing non-conforming measures are however 
registered under the Agreement for the sector across the board. This includes, at least 
theoretically, a new limitation for higher educ ation services, which are fully covered without 
limitations under the GATS. 
4.4.2.1.6  Environmental services 
4.53.  The whole sector is fully covered by the Agreement, without any limitation,  unlike under 
Panama's GATS commitments. 
4.4.2.1.7  Financial services
32 
4.54.  The commitments made under the Agreement by Panama essentially follow the same 
approach as and mirror those by Canada under  Chapter 12 of the Agreement (See above in 
section 4.4.1.1.7). The non-conforming measur es listed by Panama under Annex III to the 
Agreement for banking relate to restrictions maintained for branches of foreign banks; nationality 
or residency requirements for senior management of the Savings Bank or the Panama National Bank. Some non-conforming measures relating to in surance are also listed with regard to national 
treatment and senior management and boards of directors. As in the case of Canada, Panama has 
                                               
31 Specific conditions applicable to telecommunications services are contained in Chapter 11 of the 
Agreement (See below Section 4.5.1). 
32 Specific conditions applicable to financial services are contained in Chapter 12 of the Agreement (See 
below Section 4.5.2). WT/REG334/1/Rev.1 
 
- 32 - 
 
 
  specific commitments regarding portfolio management.33 Moreover, within 3 years after the entry 
into force of these specific commitments regarding portfolio management, the Financial Services 
Committee34 shall consider the liberalization of cross-border trade in portfolio management 
services, further to that set out in Section III of Panama's Schedule on financial services 
(Annex III to the Agreement). 
4.4.2.1.8  Health relate d and social services 
4.55.  While only hospital services are covered, partially, under Panama's GATS commitments, the 
whole sector is liberalized under the Agreement, with only some limitations applicable to social 
services. 
4.4.2.1.9  Tourism and travel related services 4.56.  Under the Agreement, Panama's GATS commitments on hotels and restaurants, as well as 
on travel agencies and tour operator services are essentially replicated, with some limitations for 
existing measures. Under the Agreement, the coverage is however expanded to cover also tourist guides services, without limitations.  
4.4.2.1.10  Recreational, cult ural and sporting services 
4.57.  While only entertainment services are covered, partially, under Panama's GATS 
commitments, the whole sector is liberalized under the Agreement, with only some limitations 
applicable to gambling. 
4.4.2.1.11  Transport services
35 
4.58.  For this sector, which is largely unbound under its GATS commitments, Panama expands its 
commitments, under the Agreement, to the whole sector but with a number of reservations for 
existing and future measures. It does so particularly for maritime transport services (also covered 
by Annex IV to the Agreement) and especially for internal waterways transport with respect to all 
activities related to the management, administration, operation, maintenance, conservation, 
modernization, exploitation, development or ow nership of the Panama Canal and the reverted 
areas that restrict the rights of foreign investors and services providers. Non-conforming measures are also registered and reservations made for air transport services, some road transport services 
and some services auxiliary to all modes of transport.  
4.5  Sector specific provisions in trade in services 4.5.1  Telecommunication services 4.59.  Chapter 11 of the Agreement covers Telecommunications. It applies to measures adopted or 
maintained by a Party for accessing and using a public telecommunications transport network or 
service and in relation to an obligation of a supplier of a public telecommunications transport network or services, as well as to any other measures relating to a public telecommunications 
transport network or services and to the supply of a value-added service. Chapter 11 does not 
apply to a measure of a Party affecting the transmission by electromagnetic means, including broadcast and cable distribution, of radio or television programming intended for reception by the 
public. Moreover, it does not require a Party to authorize a service supplier of the other Party to 
establish, construct, acquire, lease, operate or  supply a telecommunications transport network or 
service, other than as specifically provided in  the Agreement. In addition, Chapter 11 does not 
require a Party, or compel a service supplier, to establish, construct, acquire, lease, operate or 
supply a telecommunications transport network or service not offered to the public generally 
(Article 11.02). Chapter 11 covers topics such as  access to and use of public telecommunications 
transport networks or services (Article 11.03); procedures for licences or concessions 
                                               
33 These commitments come into force only on en try into force of the UA-Panama trade promotion 
agreement (TPA). 
34 Established by Article 12.15. 
35 Specific conditions applicable to maritime servic es are contained in Annex IV to the Agreement (See 
below Section 4.5.3). WT/REG334/1/Rev.1 
 
- 33 - 
 
 
  (Article 11.04); conduct of major suppliers, including competitive safeguards and interconnection 
(Article 11.05); universal service (Article 11.06); allocation and use of scarce resources 
(Article 11.07); regulatory body (Article 11.08); enforcement (Article 11.09); resolution of domestic telecommunication disputes, including recourse to regulatory bodies and reconsideration 
(Article 11.10); transparency (Article 11.11); and forbearance (Article 11.12). The disciplines of 
Chapter 11 replicate some of the WTO rules contained in the Annex on telecommunications. 
4.60.  The Parties recognize the importance of international standards for global compatibility and 
interoperability of telecommunications networks or services and undertake to promote those 
standards through the work of relevant international bodies, including the International Telecommunication Union and the International Organization for Standardization (Article 11.14). 
4.61.  In the event of inconsistency between Ch apter 11 and another Chapter of the Agreement, 
Chapter 11 prevails to the extent of the inconsistency (Article 11.13).  
4.5.2  Financial services 4.62.  Chapter 12 of the Agreement covers financial services and applies to a measure adopted or 
maintained by a Party regarding a financial institution of the other Party; an investor of the other 
Party or an investment of that investor, in a financial institution in the Party's territory; and cross-border trade in financial services. In that cont ext, Chapter 9 (investment) and 10 (cross-border 
trade in services) apply to such measures only to the extent that those Chapters are incorporated 
into Chapter 12 as indicated in Table 4.3 below. 
Table 4.3 Provisions of Chapters 9 and 10 incorporated into Chapter 12 
Legal provision of other 
Chapters Title / coverage Remark 
Chapter 9  (Investment)   
Article 9.10 Transfers  
Article 9.11 Expropriation  
Article 9.15 Denial of Benefits  
Article 9.16 Health, Safety and Environmental 
Measures  
Article 9.18 Special Formalities and 
Information Requirements  
Section C  Settlement of Dispute between an 
Investor and the Host Party Solely for claims that a Party has 
breached Articles 9.10, 9.11, or 9.15 or claims pursuant to Article 9.20(c), or 9.21(1)(c). 
Chapter 10  (Cross-border trade 
in services)   
Article 10.10 Denial of Benefits  
Article 10.11 Transfers and Payments To the extent that cross-border 
trade in financial services is 
subject to obligations pursuant to 
Article 12.06 (Financial services - 
cross-border trade) 
 
4.63.  Chapter 12 does not prevent a Party from excl usively conducting or providing in its territory 
activities or services forming part of a public reti rement plan or statutory system of social security; 
or activities or services for the account or with the guarantee or using the financial resources of the Party or its public entities (Article 12.02). 
4.64.  Under Article 12.03, each Party shall accord national treatment to an investor, a financial 
institution or an investment of an investor of the other Party in a financial institution, in relation to establishment, acquisition, expansion, manage ment, conduct, operation, and sale or other 
disposition of financial institutions and investments. In relation to cross-border trade in services, 
national treatment shall be granted for the supply of financial services. 
4.65.  Under Article 12.04, MFN treatment shall be granted to an investor, a financial institution, 
an investment of an investor of the other Party in a financial institution and a cross-border 
financial service supplier of the other Party. A Party may recognize unilaterally, through 
harmonization or based upon an agreement, a prudential measure of a third-party in the WT/REG334/1/Rev.1 
 
- 34 - 
 
 
  application of a measure covered by Chapter 12. Adequate opportunity shall be provided for the 
other Party to be offered comparable recognition if it is demonstrated that comparable 
circumstance exists for it. 
4.66.  Right of establishment in a Party shall be permitted for the other Party's investor in a 
financial institution subject to the conditions contained in Article 12.05. 
4.67.  Each Party shall permit, under terms and cond itions that accord national treatment, a cross-
border financial service supplier of the other Party to supply a financial service as specified by each 
Party in Annex 12.06. Access to financial services through mode 2 is liberalized between the 
Parties. 
4.68.  A Party shall permit a financial institution of the other party to supply a new financial service 
that the first Party would permit its own financial institution, in like circumstances, to supply under 
its domestic law. Nevertheless, a party may require the financial institution to request permission 
or notify the relevant regulator in order to obtain that permission. Moreover it may refuse to grant permission if the introduction of the financial service would require the Party to adopt or amend 
statutes. A Party may also, in relation to new services, establish requirements related to the 
juridical form though which the new financial service may be supplied. It may also require authorization for the supply of such service (Article 12.07).  
4.69.  In relation to the treatment of certain in formation, Chapter 12 does not require a Party to 
furnish or allow access to information related to the financial affairs and accounts of an individual customer of a financial institution or a cross-border financial service supplier; or confidential information. 
4.70.  A Party may not require a financial institution of the other party to engage natural persons 
of any particular nationality as senior managerial or other essential personnel. Moreover, a Party may not require that more than a simple majority of the board of directors of a financial institution 
of the other Party be composed of nationals of the Party or natural persons residing in the territory 
of the Party (Article 12.09). 
4.71.  The Parties' reservations on existing (Section I) and possible future (Section II) 
non-conforming measures related to national and MFN treatments, right of establishment and 
senior managers and boards of management are contained in Annex III of the Agreement. The same principle is applicable for the reservations listing non-conforming measures impacting cross-border trade in financial services. Moreover, Section III of each Party's Schedule to Annex III 
sets out specific commitments by that Party. Th ese commitments are subject to a Party's right to 
apply a non-conforming measures adopted or maintained in accordance with Section II of its Schedule to Annex III. Furthermore, where a Party has set out a reservation to national treatment 
or MFN treatment in its Schedule to Annexes I or II, the reservation also constitutes a reservation 
to national treatment to the extent that the measure, sector, subsector or activity set out in the reservation is covered by Chapter 12. 
4.72.  Article 12.11 authorizes the Parties to adopt or maintain a measure for prudential reasons. 
This exception applies for Chapters 9 (investment), 10 (cross-border trade in services), 11 (telecommunications), 12 (financial services ), 13 (temporary entry for business persons), 
14 (competition policy, monopolies and state enterprises), or 15 (electronic commerce). Similarly, 
the disciplines contained in these Chapters do not apply to non-discriminatory measures of general 
application taken by any public entity in pursuit of monetary and related credit policies or exchange rate policies. Moreover, notwithstanding provisions on transfers and payments, a Party 
may prevent or limit transfers by a financial institution or cross-border financial service supplier to, 
or for the benefit of, an affiliate of or person related to such institution or supplier, through the equitable, non-discriminatory and good-faith application of measures relating to maintenance of 
the safety, soundness, integrity or financial responsibility of financial institutions or cross-border 
financial service suppliers. Furthermore, a Party may adopt or enforce a measure necessary to secure compliance with its laws or regulations that is not inconsistent with Chapter 12, including a measure relating to the prevention of deceptive and fraudulent practices or to deal with the effects 
of a default on financial services contracts. A Party may not apply that measure in a manner that 
would constitute a means of arbitrary or unjustifiable discrimination between countries where like WT/REG334/1/Rev.1 
 
- 35 - 
 
 
  conditions prevail, or a disguised restriction on investment in a financial institution or on a cross-
border trade in financial services. 
4.73.  Each Party commits to promoting regulatory transparency in financial services. Article 12.12 
amends some provisions of Chapter 20 (transparency) and specifies transparency obligations 
applicable to financial services. 
4.74.  If a Party requires a financial institution or a cross-border financial service supplier of the 
other Party to be a member of, participate in, or have access to, a self-regulatory organization to 
provide a financial service in or into the territory of that Party then it shall ensure that the self-
regulatory organization observes the obligations of Chapter 12 (Article 12.13). 
4.75.  In accordance with the provision of national  treatment, each Party shall grant to a financial 
institution of the other Party established in its territory access to payment and clearing systems 
operated by an entity exercising governmental au thority delegated to it by a Party as well as 
access to official funding and refinancing facilities available in the normal course of ordinary business (Article 12.14). 
4.76.  The general provisions on consultations and dispute settlement, under Chapter 22, are 
modified by Article 12.16 and 12.17 with regard to matters arising under the Agreement that affect a financial service. In addition, a specific procedure is applicable for investment disputes in 
financial services, as contained in Article 12.18. 
4.5.3  Maritime transport 4.77.  In Annex IV, the Parties affirm that Chapter 10 (cross-border trade in services) applies, 
among others, to international maritime transport services, including the access to and use of 
maritime auxiliary services, port services and onward transport services.  
4.78.  Regardless of origin, each Party shall accord MFN treatment to goods imported temporarily 
from the territory of the other Party, which may include maritime services goods. 
4.79.  Annex IV to the Agreement contains a best endeavour commitment by the Parties to 
cooperate on a number of issues related to intern ational maritime transport, maritime auxiliary 
services, and other maritime transport-related aspects, including exchange of information and 
technology, training, cooperation in international fora, effective flag state management, or any 
other areas of maritime cooperation on which they may decide. 
4.6  Regulatory provisions  4.6.1  Domestic regulation 
4.80.  Under Article 10.08, the Parties note their mutual obligations related to domestic regulation 
in Article VI: 4 of the GATS and affirm their commitment to develop necessary disciplines under the GATS. If any of those disciplines are adop ted by the WTO Members, the Parties will, as 
appropriate, jointly review them to determine whether Article 10.08 needs to be supplemented. 
4.6.2  Recognition 4.81.  Under Article 10.09, the Agreement mirrors the provisions in paragraphs 1 through 3 of 
Article VII of the GATS. It also states that the Parties shall encourage their relevant professional 
service bodies to exchange information on existing standards and criteria for the authorization, licensing and certification of professional service providers; and consider the use of the standards 
and criteria applicable to professional standards in Annex 10.09 of the Agreement
36 in discussions 
for a potential agreement or arrangement referred to in paragraph 1 of Article 10.09. 
                                               
36 Annex 10.09 also contains a commitment to encourag e the relevant bodies to develop procedures for 
the temporary licensing of a professional service provider of the other Party. WT/REG334/1/Rev.1 
 
- 36 - 
 
 
  4.6.3  Subsidies 
4.82.  The Agreement does not contain any specific disciplines on subsidies in trade in services. 
Moreover, neither Chapter 10 (cross-border trade in services) nor Chapter 9 (investment) apply to a subsidy or grant provided by a Party or a St ate enterprise, including a Government-supported 
loan, guarantee or insurance. 
4.6.4  Transparency 4.83.  The Agreement does not contain any transparency provisions specific to trade in services. 
The rules contained in Chapter 20 apply however also to trade in services matters. 
4.6.5  Safeguards 4.84.  The Agreement does not contain any provision specific to safeguards in relation to trade in 
services. 
4.6.6  Other 
4.6.6.1  Investment 4.85.  Chapter 9 of the Agreement covers Investment
37. It applies to measures adopted or 
maintained by a Party relating to an investor of the other Party38; a covered investment39; and an 
investment in its territory.40 Articles 10.05 (Cross-border trade in services - Market Access) and 
10.08 (Cross-border trade in services - domestic regulations) are incorporated into and made a 
part of Chapter 9 and apply to a measure adopted or maintained by a Party when that measure 
affects the supply of a service in its territory by a covered investment. In that context, a reservation made by a party under Article 10.07 (C ross-border trade in services - reservations) 
against Article 10.05 (Cross-border trade in services - market access) applies to a measure of that 
Party. 
4.86.  Investments covered by Chapter 9 do not only refer to services-related matters. Chapter 9 
therefore covers a broader field than trade in services-related aspects. In the event of an 
inconsistency between Chapter 9 and another Chapter of the Agreement, the other Chapter 
prevails. Chapter 9 does not apply to a measure adopted or maintained by a party to the extent that the measure is covered by Chapter 12 of the Agreement (Financial Services). 
4.87.  Chapter 9 contains national treatment and MFN clauses applicable to the Parties investors 
with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in a Party's territory (Articles 9.04 and 9.05).  
4.88.  Rules applicable to commercial presence, performance requirements, and senior managers 
and boards of directors are also contained in Chapte r 9 of the Agreement, as they are applicable to 
investment (See below Section 4.3.4; 4.3.6 and 4.3.7). 
                                               
37 The term "investment" refers to: an enterprise; a share, stock and other form of equity participation 
in an enterprise; a bond, debenture, and other debt instrument of an enterprise; a loan to an enterprise; an interest in an enterprise that entitles the owner to a share in income or profit of the enterprise; an interest in an enterprise that entitles the owner to a share in the assets of that enterprise on dissolution; interests arising from the commitment of capital or othe r resources in the territory of a Pa rty to economic activity in that 
territory; intellectual property rights ; any other tangible or intangible, movable or immovable, property and 
related property right acquired in th e expectation or used for the purpose of economic benefit or other business 
purpose. 
38 The term "investor of a Party" me ans a party or state enterprise, or a national or an enterprise of a 
Party, that seeks to make, is making, or has made, an investment. 
39 The term "covered investment" means, with respect to a Party, an investment in its territory of an 
investor of the other Party existing on the date of entr y into force of the Agreemen t, or investments made or 
acquired thereafter. 
40 Coverage is understood in relation to performa nce requirement; health, safety and environmental 
measures; and corporate social responsibility. WT/REG334/1/Rev.1 
 
- 37 - 
 
 
  4.89.  The provisions on national treatment, M FN treatment, performance requirement, and senior 
management and boards of directors do not apply to existing non-conforming measures, the 
continuation, prompt renewal of or the amendment to non-conforming measures to the extent that 
the amendment does not decrease the conformity  of the measures, as it existed immediately 
before the amendment and as listed in Annex I to  the Agreement. Moreover, these provisions do 
not apply to a measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II attached to the Agreement. The Parties' 
reservations made in connection to Chapter 9 have been summarized in a previous section of this 
factual presentation together with those made by the Parties in reference to the provisions 
covering cross-border trade. 
4.90.  The disciplines of Chapter 9 relating to national treatment, MFN, and senior management 
and boards of directors do not apply either to procurement by a Party of a state enterprise; or a 
subsidy or grant provided by a Party or a state enterprise, including a government-supported loan, 
guarantee or insurance. 
4.91.  Under Article 9.10 through 9.18, Chapter 9 also contains specific disciplines on transfers; 
expropriation
41; compensation for losses; transparency; subrogation; denial of benefits; health, 
safety and environmental measures; corporate social responsibility; and special formalities and 
information requirements.  
4.6.6.2  Transfer and Payments 4.92.  Article 10.11 contains rules and disciplines  applying to transfers and payment related to 
cross-border provisions of services. In relation to investment, Article 9.10 contains similar but 
adjusted rules and disciplines applicable to th e transfers relating to a covered investment. 
5  GENERAL PROVISIONS OF THE AGREEMENT 5.1  Transparency 
5.1.  In addition to the provisions on transparen cy in specific parts of the Agreement, Chapter 20 
covers general transparency disciplines. Arti cles 20.02 to 20.06 contain requirements on 
publication, notification and administration of law, while Articles 20.07 to 20.10 cover 
anti-corruption transparency-related matters. 
5.2  Current payments and capital movements 5.2.  The Agreement does not contain specific disciplines related to current payments and capital 
movements. 
5.3  Exceptions 
5.3.  According to Article 23.02, and for the purposes of Chapters 2 through 8 and Chapter 15 
(National Treatment and Market Access for Goods, Rules of Origin, Customs Procedures, Trade 
Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Emergency Action 
and Electronic Commerce) and Annex IV (International Maritime Section) to the Agreement, Article XX of GATT 1994 is incorporated into and made part of the Agreement. The Parties 
understand that the measures referred to in GATT 1994 Article XX (b) include environmental 
measures necessary to protect human, animal or plant life or health. The Parties further understand that GATT 1994 Article XX (g) applies to  measures for the conservation of living and 
non-living exhaustible natural resources. For the purposes of Chapters 10, 11, 13 and 15 
(Cross-Border Trade in Services, Telecommunicati ons, Temporary Entry for Business Persons, and 
Electronic Commerce), Article XIV (a), (b), and (c) of GATS is incorporated into the Agreement. The Parties understand that the measures referred to in GATS Article XIV (b) include 
environmental measures necessary to protect human , animal or plant life or health. Moreover, for 
the purposes of Chapter 9 (Investment), a Party may adopt or enforce a measure necessary: (i) to protect human, animal or plant life or health, which the Parties understand to include 
environmental measures necessary to protect human, animal or plant life or health; (ii) to ensure 
                                               
41 A Parties' understanding on rules on ex propriation is contained in Annex 9.11. WT/REG334/1/Rev.1 
 
- 38 - 
 
 
  compliance with a law or regulation that are not inconsistent with the Agreement, or (iii) for the 
conservation of living or non-living exhaustible natural resources, provided that the measure is not 
applied in a manner that constitutes arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment. 
5.4.  Article 23.03 is similar to security exceptions under Article XXI of GATT 1994 and 
Article XIV bis of the GATS, which constitutes a national security provision applicable to all areas 
covered by the Agreement. 
5.5.  Article 23.04 contains exceptions on ta xation, which essentially establishes that the 
Agreement does not apply to a taxation measure. It nevertheless states that Article 2.03 (national 
treatment and market access for goods - national treatment) and the provisions of the Agreement 
necessary to give effect to that article apply to a taxation measure to the same extent as Article 
III of GATT 1994. Similarly, Article 2.10 (Nationa l Treatment and Market Access for Goods - Export 
Taxes) also applies to a taxation measure. Moreover, Article 10.03 (Cross-Border Trade in Services - National Treatment) and Article 12.03 (Financial Services- National Treatment) apply to a 
taxation measures on income, capital gains or on the taxable capital of corporations that relate to 
the purchase or consumption of particular serv ices. In the same vein, Articles 9.04 and 9.05 
(Investment - National Treatment and Most-Favou red-Nation Treatment), Articles 10.03 and 10.04 
(Cross-Border Trade in Services - National Trea tment and Most-Favoured-Nation Treatment) and 
Articles 12.03 and 12.04 (Financial Services - National Treatment and Most-Favoured-nation 
Treatment) apply to a taxation measure, other than one on income, capital gains or on the taxable capital of corporations. In that regard, the Agreement clarifies that, inter alia, this does not impose 
a most-favoured-nation obligation with respect to an advantage accorded by a Party pursuant to a 
tax convention. In addition, this does not impose on a Party an obligation making the receipt, or continued receipt, of an advantage relating to: th e contributions to; income of, pension trusts or 
pension plans conditional on a requirement that the Party maintain continuous jurisdiction over the 
pension trust or pension plan; or the purchase or consumption of a particular service conditional on a requirement that the service be provided in its territory. Non-conforming provisions of an 
existing taxation measure listed in the Parties' Schedules are also reserved. Article 9.07 
(Investment - Performance Requirements) applies to a taxation measures subject to paragraphs 2 and 3 of Article 23.04, and without prejudice to the rights and obligations of the Parties under 
paragraph 4. The Agreement establishes detailed procedures relating to the possibility for an 
investor to make a claim on its own behalf or on behalf of an enterprise. The procedure is also laid 
down for cases where an issue would arise as to whether a measure of a Party is a taxation measure in a dispute between the Parties and how to address it.  
5.6.  The Agreement does not require a Party to furnish or allow access to information, which if 
disclosed would impede law enforcement, or would be contrary to the Party's law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet 
level, personal privacy or the financial affairs and accounts of individual customers of financial 
institutions. In the course of a dispute settlement procedure under the Agreement: a Party is not required to furnish or allow access to information protected under its competition laws; a competition authority of a Party is not required to furnish or allow access to information that is 
privileged or otherwise protected from disclosure (Article 23.05). 
5.7.  The Agreement does not apply to a measure adopted or maintained by a party with respect 
to a cultural industry
42 except as specifically provided in  Article 2.04 (National Treatment and 
market Access for Goods - Tariff Elimination). 
                                               
42 Under the Agreement, the term "cultural indust ry" means a person engage d in the publication, 
distribution or sale of books, magazines, periodicals or  newspapers in print or ma chine readable form but not 
including the sole activity of printing or typesetting any of the foregoing; the production, distribution, sale or exhibition of film or video recordings; the production, di stribution, sale or exhibiti on of audio or video music 
recordings; the publication, distribution or sale of music in print or machine-readable form; or radio 
communications in which the transmis sions are intended for direct recept ion by the general public, and all 
radio, television and cable broadcas ting undertakings and all satellit e programming and broadcast network 
services. WT/REG334/1/Rev.1 
 
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  5.4  Accession and Withdrawal 
5.8.  A State or a regional economic organization may accede to the Agreement upon terms and 
conditions to be set out in an Agreement on Accession between the Parties and the acceding State (Article 24.06). 
5.9.  The Agreement may be terminated by either Party by giving notice in writing. It shall cease 
to be in force 6 months after the date of receipt of that notice (Article 24.05). 
5.5  Government procurement 
5.10.  Government procurement is covered in Chap ter 16 of the Agreement, which applies to trade 
in goods and services. The procuring entities covere d by the disciplines of the Agreement are listed 
in the annexes to the Parties' Schedules in Chapter 16. Each Schedule lists the goods and services that are not covered by the Parties commitments. The applicable thresholds, which may be 
different for goods, services, and construction se rvices, are indicated for the Parties, by covered 
entities, in Annexes 1 and 2 of their respective Government Procurement Schedules, while other thresholds are specified for procurement by the Panama Canal Authority in Annex 3 to Panama's 
Schedule. The method applicable to adjust periodically the thresholds is described in Annex 8 to 
their respective Schedules. Disciplines on estimating the value of procurement to ascertain if it is covered by Chapter 16 are in paragraph 5 of Article 16.02. Annex 9 to the Parties' Schedules 
establishes a transition period of 3 years from th e date of entry into force of the Agreement, for 
the procurement of certain goods and services. A domestic currency adjustment is defined in 
relation to the transition threshold. At the end of this transition period, Panama may adopt the thresholds defined in Annex 1 to its Schedule or, if it is not able to do so, the Parties shall adopt a 
new threshold.  
5.11.  A number of general principles, such as, inter alia , national treatment and non-
discrimination, and impartiality in the conduct of procurements, are established by Article 16.04. 
Rules on publication of procurement information and publication of notices of intended and planned 
procurements are contained in Articles 16.05 and 16.06. Security and General Exceptions are applicable to government procurement (Article 16.03). Chapter 16 also contained provisions on 
the conditions for participation in a procurement (Article 16.07); technical specifications and 
tender documentation (Article 16.08); time limits for the submission of tenders (Article 16.09); limiting tendering (Article 16.10); treatment of te nders and awarding of contracts (Article 16.11); 
disclosure of information (Article 16.12); and domestic review procedures (Article 16.13). 
5.12.  A Party may modify an Annex to Chapter 16 and shall notify the other Party and propose an 
appropriate compensatory adjustment to maintain a level of coverage comparable to that existing prior to the modification. In certain cases, a Party need not provide compensatory adjustments. In 
cases of objections a Party may have in case of modification to coverage, recourse to the 
Agreement-specific dispute settlement mechanism is possible (Article 16.14). 
5.13.  If a Party enters into another international agreement containing different procurement 
procedures and practices, including the introduction of shorter bid periods, a Party shall, if the 
other party so requests, enter into negotiations to harmonize Chapter 16 with that international agreement. If, after the entry into force of the Agreement, a Party enters into another international agreement providing greater access to its procurement market than is provided 
under Chapter 16, on the request of either Party, the Parties may decide to enter into negotiations 
with a view to achieving a level of market access under Chapter 16 equivalent to that of the other international agreement (Article 16.16). 
5.14.  Canada is a party to the WTO Agreement on Government Procurement (GPA) negotiated 
under the auspices of the WTO. Under the Agreement, it builds on its commitments under the GPA, by lowering the thresholds for central gove rnment entities and crown corporations. Under the 
Agreement, Canada limits the coverage to central government entities and crown corporations. 
Panama is not bound by the GPA, th ough it is an observer to it. WT/REG334/1/Rev.1 
 
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  5.6  Intellectual property rights 
5.15.  The Agreement does not contain a specific  chapter containing provision on trade-related 
intellectual property rights. It however refers to  intellectual property rights in certain of its 
sections. 
5.16.  For instance, in the context of the provisions relating to investment (Chapter 9), a Party 
may derogate from Articles 9.04 (National treatment), 9.05 (MFN treatment) and 9.07(1)(f) (prohibition to impose or enforce a requirement to transfer technology, a production process or 
other proprietary knowledge to a person in a Party's territory) in a manner that is consistent with 
the TRIPS Agreement and waivers to the TRIPS Ag reement adopted under Article IX of the WTO 
Agreement (paragraph 4 of Article 9.09). 
5.7  Others 
5.7.1  Competition 
5.17.  Under Article 14.02 of the Agreement, each Party shall adopt or maintain measures to 
proscribe anti-competitive business conduct and to take appropriate action. While each Party shall 
maintain its independence in developing and enforcing its competition law, the Parties shall discuss 
from time to time the effectiveness of measures undertaken by each Party. The Parties shall cooperate on matters relating to the enforcement of competition laws and policies in the free trade 
area. In this regard, the Parties, through their respective competition authorities, shall negotiate a 
co-operation instrument that may address, among other matters, notification, consultation, positive and negative comity, technical assistance  and exchange of information. A Party may not 
have recourse to dispute settlement under Chapter 22 (dispute settlement)
43 for a matter arising 
under Chapter 14 (competition policy, monopolies and State enterprise), except for those matters 
arising under Articles 14.03 and 14.04. 
5.18.  In relation to monopolies, the Agreement does not prevent a Party from designating a 
monopoly44 (Article 14.03). However, where a Party intends to designate a monopoly and the 
designation may affect the interests of a person of the other Party, the designating Party shall, wherever possible, provide prior written notificati on of the designation to the other Party. Each 
Party shall also ensure that its designated monopolies (i) act in an manner that is not inconsistent 
with the Party's obligations under the Agreement; (ii) acts solely in accordance with commercial considerations, (iii) provides non-discriminatory treatment to covered investments
45, to goods of 
the other Party, and to service suppliers of the other party in its purchase or sale of the monopoly 
good or service in the relevant market; and (iv)  does not use its monopoly position to engage 
directly or indirectly, including through its dealings with its parent, its subsidiaries or other enterprises with common ownership, in anticompetitive practices in a non-monopolized market in 
its territory that adversely affect a covered investment. However, the disciplines contained in the 
Agreement related to designated monopolies do not apply to procurement by a government of a g o o d  o r  s e r vi c e s  f o r  g o v e r n m e n t a l  p u r p o s e s  a s  l o n g  a s  t h e  g o od  o r  s e r v i c e  i s  n o t  i n t e n d e d  f o r  
commercial sale or resale, or use in the production or supply of a good or service for commercial 
sale or resale. 
5.19.  With regard to State Enterprises, the Agr eement does not prevent a Party from establishing 
or maintaining a state enterprise
46 (Article 14.04). Each Party shall however ensure that a state 
                                               
43 See Section 5.8 of the present factual presentation. 
44 Under the Agreement, the term "monopoly" means an entity, including a consortium or government 
agency that in a relevant market in the territory of a Pa rty is designated as the sole provider or purchaser of a 
good or service, but does not include an entity that ha s been granted an exclusive intellectual property right 
solely by reason of such grant. 
45 Under the Agreement, the term "covered investment" means, with respect to a Party, an investment 
in its territory of an investor of the other party existing  on the date of entry into force of the Agreement, or 
investments made or acquired thereafter.  
46 Under the Agreement, the term "state enterprise" means an enterprise owned or controlled through 
ownership interests by a party, except as set out in Annex 14.04 to the Agreement, which states that" the 
terms "state enterprise" means, with respect to Canada, a "Crown corporation" within the meaning of the 
Financial Administration Act (R.S.C. 1985, c. F-11), a Cr own corporation within the meaning of any comparable 
provisional law or equivalent entity that is incorporated under other applicable provincial law. WT/REG334/1/Rev.1 
 
- 41 - 
 
 
  enterprise acts in a manner consistent with the Party's obligations under Chapters 9 (Investment) 
and 12 (Financial Services) of the Agreement when ever that enterprise exercises a regulatory, 
administrative, or other governmental authority delegated to it by the Party". 
5.7.2  Environment 
5.20.  In the event of an inconsistency between an obligation in the Agreement and an obligation 
of a Party under one of the Multilateral Environmental Agreements (MEA) identified in Annex 1.06 to the Agreement
47, the latter obligation shall prevail provided that the measure taken is 
necessary to comply with that obligation, and is not applied in a manner that would constitute, 
where the same conditions prevail, arbitrary or unjustifiable discrimination or a disguised restriction on international trade. 
5.21.  Moreover, Chapter 17 of the Agreement recalls that the Parties have set out their mutual 
obligations in the Agreement on the Environment between Canada and the Republic of Panama  
(the Canada–Panama Environment Agreement), signed on 14 May 2010 and that entered into 
force on 1 April 2013. The Canada–Panama Environment Agreement commits both Parties to 
encourage high levels of domestic environmental protection, to foster good environmental 
governance and to promote transparency and public  participation. It also creates a framework for 
undertaking environmental cooperative activities.  
5.7.3  Labour 
5.22.  In Chapter 18 of the Agreement, the Parties affirm their obligations as members of the 
International Labour Organization (ILO) and their commitments to the ILO Declaration on 
Fundamental Principles and Rights at Work (1998) and its follow-up as well as their continuing 
respect for each other's Constitution and laws. The Agreement also recalls that the Parties have 
set out their mutual obligations in the Agreement on the Labour Co-operation between Canada and 
the Republic of Panama , signed on 14 May 2010
48, which also include a list of areas of possible 
co-operation between the Parties.  
5.7.4  Electronic Commerce 5.23.  Chapter 15 of the Agreement applies to Electronic Commerce. The Parties confirm that the 
Agreement, including Chapters 2 (national Treatment and Market Access for Goods), 
9 (Investment), 10 (Cross-Border Trade in Services), 11 (Telecommunications)
49, 12 (Financial 
Services), 16 (Government Procurement), and 23 (E xceptions) applies to electronic commerce. 
5.24.  Nothing in Chapter 15 imposes an obligation on a Party to allow a product to be delivered 
electronically, except in accordance with the oblig ations of that Party under another Chapter of the 
Agreement. The Parties' reservations set out in their respective Lists of Reservations50 attached to 
their Services Commitments apply to electronic commerce.  
5.25.  The Parties recognize both the economic gr owth and opportunities provided by electronic 
commerce and the applicability of WTO rules to electronic commerce, and the importance of 
avoiding unnecessary barriers to electronic co mmerce. They commit not to apply a customs duty, 
fee or change on a digital product51 delivered electronically. The Agreement however does not 
prevent a Party from imposing an internal tax or other internal charge not prohibited by the Agreement on digital product delivered electronically (Article 15.04). 
                                               
47 The MEA identified in Annex 1.06 are: (i) the Convention on International Trade in Endangered 
Species of Wild Fauna and Flora (1973 - amended in 1979); (ii) the Montreal Protocol on Substances that Deplete the Ozone Layer (1987 - amended in 1990, 1992, 1997, and 1999); (iii) the Basel Convention on the 
control of Transboundary Movements of Hazardous Wast es and their Disposal (1989); and (iv) the Stockholm 
Convention on Persistent Organic Pollutants (2001). 
48 The Agreement on the Labour cooperation between Canada and the Republic of Panama entered into 
force, as the Agreement, on 1 April 2013. 
49 The Parties recognize in particular the importan ce of Article 11.03 (Telecommunications - access to 
and use of public telecommunications transport networ ks or services) in enabling electronic commerce. 
50 Reference is made to the Parties Schedules cont ained in Annexes I, II, and III to the Agreement. 
51 Under the Agreement, the term "digital product" means a computer program, text, video, image, 
sound recording or other product that is digitally encoded. WT/REG334/1/Rev.1 
 
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  5.26.  In the event of an inconsistency between Chapter 15 and another Chapter of the 
Agreement, the other Chapter prevails. 
5.7.5  Trade-related cooperation 5.27.  Chapter 19 of the Agreement applies to Trade-related Cooperation. The Parties agree to 
promote trade-related co-operation and establish Contact Points
52 to facilitate communication 
concerning the interpretation and implementation of Chapter 19. Inter alia , they shall coordinate 
with other contact points and committees established under the Agreement, as required, on trade-
related co-operation. The Contact Points shall also be responsible for ensuring communication with 
the relevant national institution, as necessary. 
5.8  Dispute settlement 5.28.  Chapter 22 sets out the procedures and institutional arrangements that apply in cases of 
disputes between the Parties regarding questions of interpretation or application of the Agreement. 
It is however not applicable to matters arising under Chapters 17 (Environment) and 18 (Labour). Cases of nullification or impairment are a ddressed in Annex 22.03 of the Agreement. 
5.29.  The Parties shall endeavour to agree on the interpretation and application of the Agreement, 
and shall attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of a matter that might affect its operation (Article 22.02). 
5.30.  At any time, the Parties may decide to undertake an alternative method of dispute 
resolution, such as good offices, conciliation or mediation. Proceedings involving good offices, conciliation or mediation are confidential and without prejudice to the rights of the Parties in other proceedings (Article 22.06).  
5.31.  Article 22.04 contains "forum shopping" as well as "forum exclusion" clauses for matters 
falling under the Agreement and the WTO Agreement or any other free trade agreement to which both Parties are party. Accordingly, a Party shall be considered to have selected a forum when it 
has requested the establishment of a dispute se ttlement panel in one of the above-mentioned 
instances. Nevertheless, if a Party complains against claims that a measure is subject to Article 1.06 (Initial Provisions and General Definitions - Relation to Environmental and 
Conservation Agreements) and requests in writing that the matter be considered under the 
Agreement, the complaining Party may resort only to the dispute settlement procedures in the Agreement.  
5.32.  Chapter 22 provides for detailed steps in the process for dispute settlement, the salient 
features of which are described in Chart 5.1 below. If the Parties fail to resolve a dispute through 
consultations (Article 22.05), they may refer the matter to a dispute settlement panel established under Article 22.07. A dispute settlement panel may not be established to review a proposed 
measure. Articles 22.08 to 22.10 and in Annex 22.10 contain disciplines on the panel selection, the 
qualifications of panellists, and the panel's rules of procedure
53. The reports issued by the panel 
shall be based on the provisions of the Agreemen t applied and interpreted in accordance with the 
rules of interpretation of public international law, the submissions and arguments of the Parties 
and information and technical advice before the panel. A confidential initial report to the Parties shall be issued for comments within 120 days of the selection of the last panellist. The final report shall be issued within 30 days of presentation of the initial report. Unless the Parties decide 
otherwise, the final report of the panel may be published by either Party 15 days after it is 
presented to the Parties (Article 22.11). On receipt of the final report of a panel, the Parties shall 
decide on the resolution of the dispute. Unless th e Parties decide otherwise, the resolution shall 
conform to a determination or recommendation made by the panel.  
                                               
52 The Contact Points are, for Panama: the Ministry of Trade and Industry, national Directorate for the 
Administration of International Trade Treaties and Trad e Defence; and, for Canada: the Department of Foreign 
Affairs and International Trade Regional Trade Policy - Americas. 
53 Annex 22.10 contains rules of procedures on writ ten submissions and other documents; burden of 
proof; written submission by a non-governmental person ; role of experts; operation of panels; hearings; 
ex parte contacts; and remuneration and payment of expenses. WT/REG334/1/Rev.1 
 
- 43 - 
 
 
  5.33.  If the Parties are unable to reach a resoluti on within 30 days of pr esentation of the final 
report, or such other period as the Parties ma y decide, the Party complained against, if so 
requested by the complaining Party, shall enter into negotiations with a view to determining compensation (Article 22.12). The complaining Party may suspend the application to the other 
Party of benefits of equivalent effect in cases of nullification or impairment, or if the Parties have 
not been able to resolve the dispute to their mutual satisfaction or if the Parties fail to decide on compensation (Article 22.13). A Party may only suspend benefits temporarily. A panel may be 
reconvened to review compliance or the level of benefits suspended (Article 22.14). 
5.34.  If an issue of interpretation or application of the Agreement arises in  a domestic, judicial or 
administrative proceeding of a Party that either Party considers would merit its intervention, or if a court or administrative body solicits the views of a party, that Party shall notify the other Party. 
The Commission, established under Article 21.01, shall endeavour to determine an appropriate 
response as expeditiously as possible. If the Commi ssion is unable to decide on the interpretation, 
each Party may submit its own views to the court or administrative body in accordance with the 
rules of that forum (Article 22.15).  
5.35.  A Party may not provide a right of action under its domestic law against the other Party on 
the ground that an act or omission of that Party is inconsistent with the Agreement (Article 22.16). 
Each Party shall nevertheless encourage and facilitate the use of arbitration and other means of 
alternative dispute resolution to the extent possible in order to settle international commercial disputes between private parties in the free trade area (Article 22.17). 
Chart 5.1 Specific Dispute Settlement Me chanism established by the Agreement 
 
 
 
5.36.  Moreover, Section C of Chapter 9 on investment (comprising Articles 9.19 through 9.38, including Annexes 9.31 and 9.37) covers the settlement of disputes between an investor and the host Party. As a consequence of the entry into force of the Agreement, the 1996 Treaty between 
the Government of Canada and the Government of the Republic of Panama for the Promotion and 
Protection of Investment (FIPA) is suspended until such time as it is no longer in force. The FIPA remains however operative for a period of 15 years after the entry into force of the Agreement for 
the purpose of any breach of the FIPA obligations that occurred before the entry into force of the 
Agreement (Article 9.38). 
5.9  Institutional framework 
5.37.  The Agreement establishes a Joint Commission to supervise the implementation of the 
Agreement, review its general functioning, oversees  its further elaboration, supervises the work of Consultations (Art. 22.05) 
Establishment of a Panel  
(Art. 22.07) 
Proceedings (Art. 22.10 and 
Annex 22.10) 
Final Report of the Panel  
(Art. 22.11) Initial Report to the Parties  
(Art. 22.11) 
Implementation (Temporary) suspension of 
benefits  
(Art. 22.13) 
Review of compliance  
(Art. 22.14) Non-Implementation 
Review of compliance and 
suspension of benefits       
(Art. 22.14) WT/REG334/1/Rev.1 
 
- 44 - 
 
 
  all bodies established under the Agreement referred to in the Annex 21.01 and considers any other 
matter that may affect its operation (Article 21.1). The Joint Commission may also adopt 
interpretative decisions concerning the Agreement, binding on panels established under Article 22.07 (Dispute Settlement; establishment of a Panel) and Tribunals established under 
Section C of Chapter 9 (Investment; Settlement of  disputes between an investor and the host 
Party). 
5.38.  According to Article 2.19, the Parties establish a Committee on Trade in Goods and Rules of 
Origin to ensure the effective implementation  and administration of Chapters 2 (National 
Treatment and Market Access for trade in Goods), 3 (Rules of Origin), 4 (Customs Procedures), 5 (Trade Facilitation), 8 (Emergency Action), or any Uniform Regulations. Matters which are referred to the Committee on Trade in Goods and Rules of Origin and which cannot be resolved by 
it may be transferred to the Joint Commission. 
5.39.  At the request of a Party, the Committee will establish a Sub-Committee on Agriculture 
under Paragraph 4 of Article 2.19, reporting to the Committee on Trade in Goods and Rules of 
Origin.  
5.40.  Article 4.14 establishes a Customs Procedure Sub-Committee, which also reports to the 
Committee on Trade in Goods and Rules of Origin.  
5.41.  The Parties establish a Financial Services Committee. The principal representative of each 
Party shall be an official of the Party's authority responsible for financial services set out in Annex 12.15 to the Agreement. The Committee shall, inter alia , supervise the implementation of 
Chapter 12 and its further elaboration; consider issues regarding financial services that are 
referred to it by a Party; and participate in dispute settlement procedures under Article 12.17. In 
addition, the Committee shall meet annually, or as it otherwise decides, to assess the function of the Agreement as it applies to financial services. The Committee shall inform the Joint Commission 
of the results of each meeting (Article 12.15). 
5.42.  Annex 21.01 lists the Committees and Sub-Committees established by the Agreement and 
which are summarized by Chart 5.2 below. 
Chart 5.2 Institutional Framework  established by the Agreement 
 
Source: WTO Secretariat based on the Agreement.  Joint Commission (Art.  21.01)  Panel(s)  
(Art. 22.07) 
Committee on Trade in Goods and Rules of Origin 
(Article 3.16) 
Sub-Committee on A griculture (Art. 2.19 (4)) 
Customs Procedures Sub-Committee 
(Art. 4.14) 
Committee on Procurement (Art. 16.15)  SPS Coordinators  
(Art. 6.03) 
Committee on Financial Services (Art. 12.15) Contact Points: 
 for temporary entry 
for business persons   (Art. 13.06) 
 for trade-related 
co-operation  
(Art. 19.02) WT/REG334/1/Rev.1 
 
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  5.10  Relationship with other agreements concluded by the Parties 
5.43.  The Parties affirm the rights and obligations with respect to each other under the WTO 
agreement and other agreements to which they are a party. In the event of inconsistency between 
the Agreement and the agreements referred to in paragraph 1 of Article 1.04, the Agreement shall 
prevail, except as otherwise provided in it (Article 1.04). 
5.44.  The tariff elimination commitments made by  Panama in the Agreement specifically make a 
reference to the "Trade Promotion Agreement" (T PA) concluded by Panama and the United States 
of America. In particular, the starting date for four staging categories (L, M, N and O) of goods 
originating in Canada was linked to the entry into force of the TPA.54 
5.45.  Table 5.1 below shows the Parties' in RTAs, notified and non-notified, other than the 
Agreement. 
Table 5.1 Canada and Panama: Participation in  other RTAs (notified and non-notified, in 
force), as of 10 December 2013* 
Trading partner or 
Agreement Date of 
entry into 
force Type of 
Agreement Notification of the GATT or WTO 
Year WTO provision 
CANADA  
Jordan 01.10.12 Goods 2013 GATT Art. XXIV 
Colombia 15.08.11 Goods & 
Services 2011 GATT Art. XXIV & GATS Art. V 
Peru 01.08.09 Goods & 
Services 2009 GATT Art. XXIV & GATS Art. V 
EFTA 01.07.09 Goods 2009 GATT Art. XXIV 
Costa Rica 01.11.02 Goods 2003 GATT Art. XXIV 
Chile 05.07.97 Goods & 
Services 1997 GATT Art. XXIV & GATS Art. V 
Israel 01.01.97 Goods 1997 GATT Art. XXIV 
NAFTA 01.01.94 Goods 
Services 1993 
1995 GATT Art. XXIV 
GATS Art. V 
PANAMA  
EU – Central America a 01.08.13 Goods & 
Services 2013 GATT Art. XXIV & GATS Art. V 
United States 31.10.12 Goods & 
Services 2012 GATT Art. XXIV & GATS Art. V 
Peru 01.05.12 Goods & 
Services 2012 GATT Art. XXIV & GATS Art. V 
Nicaragua (Panama-Central 
America) 21.11.09 Goods & 
Services 2013 GATT Art. XXIV & GATS Art. V 
Guatemala (Panama-
Central America) 20.06.09 Goods & 
Services 2013 GATT Art. XXIV & GATS Art. V 
Honduras (Panama-Central 
America) 09.01.09 Goods & 
Services 2009 GATT Art. XXIV & GATS Art. V 
Costa Rica (Panama-Central 
America) 23.11.08 Goods & 
Services 2009 GATT Art. XXIV & GATS Art. V 
Chile 07.03.08 Goods & 
Services 2008 GATT Art. XXIV & GATS Art. V 
Singapore 24.07.06 Goods & 
Services 2007 GATT Art. XXIV & GATS Art. V 
Chinese Taipei 01.01.04 Goods & 
Services 2009 GATT Art. XXIV & GATS Art. V 
El Salvador  
(Panama-Central America) 11.04.03 Goods & 
Services 2005 GATT Art. XXIV & GATS Art. V 
CACM, Accession of Panama 06.05.13 Goods Not notified 
LAIA – Accession of Panama 03.05.12 Goods Not notified 
Colombia  
[LAIA, AAP.A25TM No. 29] 01.01.95 Goods Not notified 
Dominican Republic 24.04.86 b Goods Not notified 
                                               
54 The TPA entered into force on 31 October 2012. WT/REG334/1/Rev.1 
 
- 46 - 
 
 
  Trading partner or 
Agreement Date of 
entry into 
force Type of 
Agreement Notification of the GATT or WTO 
Year WTO provision 
Mexico  
[LAIA, AAP.A25TM No. 14] 01.05.83 Goods Not notified 
Cuba (partial agreement) 20.08.09 Goods Not notified 
a The notifications made in February 2013 (s ee WT/REG332/N/1 and S/C/N/680) states that: 
"Provisional application of the Agreement by all si gnatory parties is expected  in the course of the 
second quarter 2013". Further notifications confirm th e specific date of entry into force between the 
EU and Panama and other Central American countries are awaited. 
b Other sources indicate that the entr y into force took place on 08.06.87. 
EFTA: European Free Trade Association NAFTA: North American Free Trade Agreement LAIA: Latin American In tegration Association 
CACM: Central American Common Market *
  For those agreements negotiated under the LAIA framework, the LAIA reference is included in brackets. Details of these agreements can be found at: http://www.aladi.org .  
 "Partial scope" agreements are those RTAs not pr oviding for the establishment of a free-trade area 
and/or providing for a limited coverage. 
 Source: WTO Secretariat.  WT/REG334/1/Rev.1 
 
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  ANNEX 1 
INDICATORS OF TRADE LIBERALIZATION UNDER THE AGREEMENT 
The Canadian Market 
1. Annex Table A1.1 provides a comparison between preferential tariff rates as part of the 
scheduled programme of elimination of tariffs by Canada for imports from Panama and its MFN 
rates at the entry into force of the Agreement. Canada's average applied MFN rate in 2013 was 5.6% (for all products). MFN duty-free tariff lines accounted for 66.7% of all tariff lines. At the 
date of entry into force of the Agreement (1  April 2013), Panamanian exporters enjoyed an 
absolute margin of preference of 2.6% vis-à-vis  the prevailing MFN tariff; 4% for agricultural 
goods and 2.5% for non-agricultural products. The share of duty free lines applicable to imports from Panama was 97.6% overall, 86.9% for agricultural products and 100% for non-agricultural 
products. At the end of the implementation period in 2031, Panamanian exporters will face zero 
duties for 98.2% of Canada's tariff (89.8% for agricultural products and 100% for non-agricultural products). 
Table A1.1. Canada: Indicators of MFN tari ff rates and preferential rates for imports 
from Panama 
Origin 
of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products  
Average applied 
tariff Share 
of duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2013 5.6 17.4 66.7  21.1 42.6 46.8 2.5 8.7 71.1  
Panama 2013 3.0 156.9 97.6 17.1 156.9  86.9 0.0 0.0 100.0  
  2014 3.0 156.4 97.6  17.0 156.4  86.9 0.0 0.0 100.0  
  2015 3.0 161.7 97.8 16.9 161.7  87.6 0.0 0.0 100.0  
  2016 3.0 161.2 97.8  16.8 161.2  87.6 0.0 0.0 100.0  
  2017 3.0 192.6 98.1 16.8 192.6  89.3 0.0 0.0 100.0  
  2018 3.0 192.6 98.1  16.8 192.6  89.3 0.0 0.0 100.0  
  2019 3.0 192.5 98.1 16.8 192.5  89.3 0.0 0.0 100.0  
  2020 3.0 192.5 98.1  16.8 192.5  89.3 0.0 0.0 100.0  
  2021 3.0 192.5 98.1 16.8 192.5  89.3 0.0 0.0 100.0  
  2022 3.0 192.4 98.1  16.8 192.4  89.3 0.0 0.0 100.0  
  2023 3.0 192.4 98.1 16.8 192.4  89.3 0.0 0.0 100.0  
  2024 3.0 192.3 98.1  16.8 192.3  89.3 0.0 0.0 100.0  
  2025 3.0 192.3 98.1 16.8 192.3  89.3 0.0 0.0 100.0  
  2026 3.0 192.3 98.1  16.8 192.3  89.3 0.0 0.0 100.0  
  2027 3.0 199.4 98.2 16.7 199.4  89.8 0.0 0.0 100.0  
  2028 3.0 199.4 98.2  16.7 199.4  89.8 0.0 0.0 100.0  
  2029 3.0 199.4 98.2 16.7 199.4  89.8 0.0 0.0 100.0  
  2030 3.0 199.4 98.2  16.7 199.4  89.8 0.0 0.0 100.0  
  2031 3.0 199.4 98.2 16.7 199.4  89.8 0.0 0.0 100.0  
 
a  WTO Definition. Note: For the calculation of averages , specific duties are excluded and the ad valorem  parts of alternate 
rates are included. Based on the HS 2012 nomenclature. 
 Source: WTO estimates based on data provided by Canada and WTO-IDB. 
 WT/REG334/1/Rev.1 
 
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  2. Annex Table A1.2 gives an indication of additional market access resulting from the entry 
into force of the Agreement for Panama's top 25 global exports. During 2010-2012, Panama's top 
25 exports accounted for 53.7% of its global exports; these corresponded to 55 lines at the HS eight-digit level. Before the entry into force of the Agreement 20 of these tariff lines were duty 
free on an MFN basis. At the entry into force of  the Agreement, in April 2013, the 35 remaining 
dutiable lines became duty free.  
Table A1.2. Canada: Market access opportuniti es under the agreement for Panama's top 
25 exports 
Panama's top export products in 2010-2012 Access Conditions to Canada's 
import markets 
MFN (2013) 
Duty-free in 2013  
HS number and description of the product Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) No. of tariff 
lines Duty-free  
Dutiable 
294190 - othe r 19.8  0.0 1   
300439 -- othe r 4.6 0.0 1   
300490 - othe r 3.9  0.0 1   
330300 Perfumes and toilet waters. 3.2 6.5  1 1 
640299 -- othe r 2.7  17.5  2  2 
852872 -- other, colou r 2.1 3.7 4 11 11 
300420 - containing other antibiotics 1.3  0.0 1   
611090 - of other textile materials 1.3 18.0  1 1 
540710 - woven fabrics obtained from high tenacity yarn of nylon or 
other polyamides or of polyesters 1.2 1.2 2 1  1 
640319 -- othe r 1.2 12.0 1 2 2 
220830 - whiskies 1.0  0.0 1   
620462 -- of cotton 0.9 17.0  1 1 
620469 -- of other textile materials 0.9  17.0  1  1 
852580 - television cameras, digital cameras and video camera 
recorders 0.9 0.0 1   
611020 - of cotton 0.9  18.0  1  1 
294110 - penicillin and their derivatives with a penicillanic acid 
structure; salts thereof 0.9 0.0 1   
620342 -- of cotton 0.9  17.0  1  1 
852190 - othe r 0.9 3.0 1 1 1 
640291 -- covering the ankle  0.8 17.5  2  2 
620349 -- of other textile materials 0.8 18.0  1 1 
620690 - of other textile materials 0.8  17.0  1  1 
870899 -- othe r 0.8 3.3 4 5 5 
910219 -- othe r 0.7  5.0  1  1 
841510 - window or wall types, self-contained or split-system  0.7 0.0 1   
711319 -- of other precious metal, whether or not plated or clad with 
precious metal 0.7 5.8  2  2 
Total of above 53.7   20 35 35 
 
Note: Based on HS 2012 nomenclature.  Source: WTO estimates based on data provided  by Canada and UNSD, Comtrade database. 
 WT/REG334/1/Rev.1 
 
- 49 - 
 
 
  The Panamanian Market 
3. Annex Table A1.3 provides a comparison between preferential tariff rates as part of the 
scheduled programme of elimination of tariffs by Panama for imports from Canada and its MFN rates at the entry into force of the Agreement. Panama's average applied MFN rate in 2013 was 
7.6% overall (14.4% for agricultural products and 6.3% for non-agricultural products). MFN 
duty-free tariff lines accounted for 35.3% of all tariff  lines. At the date of entry into force of the 
Agreement (1 April 2013), Canadian exporters enjoye d an absolute margin of preference of 4.2% 
vis-à-vis  the prevailing MFN tariff; 3.9% for agricultural goods and 4.2% for non-agricultural 
products. The share of duty free lines applicable to imports from Canada increased to 75.7% overall, 47.5% for agriculture and 81% for non-ag riculture. At the end of the implementation 
period in 2031, Canadian exporters will face zero duties on 98.7% of Panama's tariff lines (92% 
for agricultural products and 100% for non-agricultural products). 
Table A1.3. Panama: Indicators of MFN tariff  rates and preferential rates for imports 
from Canada 
Origin 
of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2013 7.6 11.8 35.3  14.4 18.6 22.1 6.3 10.2 37.8  
Canada 2013 3.4 14.0 75.7 10.5 20.0 47.5 2.1 10.9 81.0 
  2014 3.0 12.4 75.7  9.8 18.6 47.5 1.7 9.2 81.0  
  2015 2.6 10.8 75.7 9.0 17.2 47.5 1.4 7.5 81.0 
  2016 2.2 9.1 75.7  8.3 15.7 47.5 1.1 5.7 81.0  
  2017 1.8 14.0 87.1 7.5 25.2 70.4 0.7 7.7 90.2 
  2018 1.6 12.8 87.1  7.2 24.4 70.4 0.6 6.2 90.2  
  2019 1.5 11.4 87.1 6.9 23.3 70.4 0.5 4.7 90.2 
  2020 1.3 10.0 87.1  6.5 22.0 70.4 0.3 3.2 90.2  
  2021 1.1 8.5 87.1 6.1 20.6 70.4 0.2 1.7 90.2 
  2022 0.9 29.2 96.9  5.7 29.4 80.7 0.0 18.1 99.9  
  2023 0.9 27.7 96.9 5.4 28.0 80.7 0.0 14.5 99.9 
  2024 0.8 28.6 97.2  5.1 29.0 82.4 0.0 10.9 99.9  
  2025 0.8 26.9 97.2 4.8 27.4 82.4 0.0 7.2 99.9 
  2026 0.7 25.3 97.2  4.6 25.8 82.4 0.0 3.6 99.9  
  2027 0.7 48.6 98.6 4.3 48.6 91.2 0.0 0.0 100.0  
  2028 0.7 48.9 98.6  4.2 48.9 91.4 0.0 0.0 100.0  
  2029 0.7 51.1 98.7 4.2 51.1 91.8 0.0 0.0 100.0  
  2030 0.7 50.9 98.7  4.2 50.9 91.8 0.0 0.0 100.0  
  2031 0.7 52.0 98.7 4.2 52.0 92.0 0.0 0.0 100.0  
 
a  WTO Definition. 
Note: For tariff lines subject to TRQs, only the out- of-quota duty is included in the tariff-related 
calculations; for the calculation of averages, specific duties are excl uded and the ad valorem parts of 
alternate rates are included. Based on the HS 2007 nomenclature. 
 Source: WTO estimates based on data provided by Panama and WTO-IDB. 
 
4. Annex Table A1.4 gives an indication of additional market access resulting from the entry 
into force of the Agreement for Canada's top 25 global exports. During 2010-2012 Canada's top 
25 exports accounted for 51.4% of its global exports, corresponding to 108 lines at the 
HS eight-digit level, 87 of which were duty free.  At the entry into force of the Agreement, in 
April 2013, the 21 remaining dutiable lines became duty free.   
 WT/REG334/1/Rev.1 
 
- 50 - 
 
 
  Table A1.4 – Panama: Market access opport unities under the agreement for Canada's 
top 25 exports 
Canada's top export products in 2010-2012 Access Conditions to 
Panama's import 
markets 
MFN (2013) 
Duty-free in 2013 HS number and description of the product Share in 
global exports 
(%) Average 
MFN 
applied 
rate 
(%) No. of 
tariff 
lines Duty-free  
Dutiable 
270900 Petroleum oils and oils obtained  from bituminous minerals, crude.  15.5 0.0 1     
870324 -- of a cylinder capacity exceeding 3,000 cc  6.4 0.0 26     
710812 -- other unwrought forms 3.6  0.0 1     
870323 -- of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 
cc 3.3 0.0 27     
271121 -- natural gas 3.0 0.0 1     
271019 -- othe r 2.6 8.8 4 8 8 
270112 -- bituminous coal 1.6  0.0 1     
271011 -- light oils and preparations 1.6 0.3 9 1 1 
310420 - potassium chloride  1.4 0.0 1     
440710 - coniferous 1.3 3.8 2 2 2 
100190 - othe r 1.1 0.0 1     
120510 - low erucic acid rape or colza seeds 1.1 15.0 0 1 1 
470321 -- coniferous 1.0 0.0 1     
880240 - aeroplanes and other aircraft, of an unladen weight exceeding 
15,000 kg 1.0 10.0   2 2 
300490 - othe r 0.8 0.0 5     
760110 - aluminium, not alloyed 0.8 0.0 1     
870829 -- othe r 0.7 2.5 1 1  1 
760120 - aluminium alloys 0.7 0.0 1     
260300 Copper ores and concentrates. 0.7  10.0   1  1 
840734 -- of a cylinder capacity exceeding 1,000 cc  0.6 5.0   1 1 
480100 Newsprint, in rolls or sheets. 0.6  1.7 2 1  1 
870899 -- othe r 0.6 2.5 1 1 1 
750210 - nickel, not alloyed 0.6  10.0   1 1 
260112 -- agglomerated 0.6 10.0   1 1 
710691 -- unwrought 0.5 0.0 1     
Total of above 51.4   87 21 21 
 
Note: Based on HS 2007 nomenclature. 
 Source: WTO estimates based on data provided  by Panama and UNSD, Comtrade database.  
 
  
  WT/REG334/1 /Rev.1  
 
- 51 - 
 ANNEX 2 
Table A2.1 Summary of TRQ commitments undertake n by Panama for certain imports from Canada 
Description of products (HS) Tariff 
Code 
 In-quota 
Tariff 
Quantities  
(in Metric 
Tonnes) 
 In-quota Tariff 
applicable 
immediately to 
Canadian imports Base rate applicable for 
the progressive elimination 
of tariff according to 
Panama's Tariff Schedule 
(equal to MFN rate) Out-of-quota Tariff 
elimination programme 
applicable to Canadian 
imports, according to 
Panama's Tariff Schedule 
(See Annex 2.04 of the 
Agreement) 
Meat of swine (pork), fresh, chilled or frozen 
Meat & ed offal salted, dried etc. & flour & 
meal      Prepared or preserved meat, meat offal & blood nesoi 0203.11.10 
0203.11.20 0203.12.10 0203.12.90 0203.19.10 0203.19.20 
0203.19.90 
0203.21.10 0203.21.20 0210.11.11 0210.11.19 0210.11.90 0210.19.10 0210.19.21 0210.19.29 1602.49.13 1602.49.14 1602.49.19 1602.49.90 200
(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) 
200(i) Duty-free 
Duty-free Duty-free Duty-free Duty-free Duty-free 
Duty-free 
Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free Duty-free 60% 
60% 70% 70% 70% 70% 
70% 
70% 70% 15% 70% 70% 70% 15% 70% 70% 30% 70% 30% Category L  
Category L  Category L  Category L Category L  Category L  
Category L  
Category L  Category L  Category L  Category L  Category L  Category L  Category L  Category L  Category L  Category L  Category L  Category L  
Meat of swine (pork), fresh, chilled or frozen 
 0203.11.10 
0203.11.20 
0203.12.10 
0203.12.90 
0203.19.10 
0203.19.20 
0203.19.90 
0203.21.10 
0203.21.20 
0203.22.10 
0203.22.90 
0203.29.10 
0203.29.20 450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 60% 
60% 
70% 
70% 
70% 
70% 
70% 
70% 
70% 
70% 
70% 
70% 
70% Category L  
Category L  
Category L  
Category L  
Category L  
Category L  
Category L  
Category L  
Category O  
Category O  
Category M  
Category O  
Category L   
  WT/REG334/1 /Rev.1  
 
- 52 - 
 Description of products (HS) Tariff 
Code 
 In-quota 
Tariff 
Quantities  
(in Metric 
Tonnes) 
 In-quota Tariff 
applicable 
immediately to 
Canadian imports Base rate applicable for 
the progressive elimination 
of tariff according to 
Panama's Tariff Schedule 
(equal to MFN rate) Out-of-quota Tariff 
elimination programme 
applicable to Canadian 
imports, according to 
Panama's Tariff Schedule 
(See Annex 2.04 of the 
Agreement) 
 
Meat & ed offal salted, dried etc. & flour & 
meal 
 
 
 
 
 
Prepared or preserved meat, meat offal & 
blood nesoi 0203.29.90 
0210.11.11 
0210.11.19 
0210.11.90 
0210.19.10 
0210.19.21 
0210.19.29 
0210.19.90 
1602.41.11 
1602.41.19 
1602.42.10 
1602.42.90 
1602.49.13 
1602.49.19 450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* 
450* Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free  
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 
Duty-free 70% 
15% 
70% 
70% 
70% 
15% 
70% 
70% 
70% 
70% 
70% 
70% 
70% 
70% Category M  
Category L  
Category L  
Category L  
Category L  
Category L  
Category L  
Category A 
Category E  
Category E 
Category E  
Category E  
Category L  
Category L  
Meat of bovine animals, fresh or chilled 0201.20.00a 
0201.30.00a 0202.20.00a 0202.30.00a 200 
200 200 200 Duty-free 
Duty-free Duty-free Duty-free 30% 
30% 30% 25% Category P  
Category P  Category P  Category P  
 
(i) quantity subject to a 2% increase per year. 
* quantity as part of the WTO in-quota quantity.  Note: - Under staging Category L, tariffs on  over quota products will be  reduced in 9 equal stages after year 7 of the TPA ente ring into force (i.e. 2018), and fully 
eliminated by year 15 of the TPA (i.e. duty-free at year 20 26), therefore, all tariffs and TRQs will no longer apply. 
 - Under staging Category O, tariffs on over  quota products will be redu ced in 7 equal stages after year 13 of the Agreement en tering into force (i.e. 2025), 
and fully eliminated by year 19 (i.e. duty-free at year 2031) , therefore, all tariffs and TRQs will no longer apply. 
 - Under staging Category M, tariffs on over  quota products will be redu ced in 9 equal stages after year 8 of the Agreement ent ering into force (i.e. 2020), 
and fully eliminated by year 16 (i.e. duty-free at year 2028) , therefore, all tariffs and TRQs will no longer apply. 
 - Under staging Category E, products  are exempt from tariff elimination. 
 - Under staging Category P, over quota ta riffs will be removed in 5 equal stages be ginning on the day Agreement enters into fo rce (i.e. 2013), and duty-free 
by year 5 of the Agreement entering into force (i.e. 2017), therefore, all tariffs and TRQs will no longer apply. 
 Source: Prepared by the WTO Secretariat, based on the Agreement (Article 2.16 and Panama's Tariff Schedule). 
 
__________