WT/REG374/1  
11 July 2017  
(17-3740) Page:  1/53 
Committee on Regional Trade Agreements   
 
FACTUAL PRESENTATION  
FREE TRADE AGREEMENT  BETWEEN MEXICO AND PANAMA  
(GOODS AND SERVICES ) 
Report by the Secretariat  
This report, prepared for the consideration of the Free Trade Agreement  between 
Mexico and Panama , has been drawn up by the WTO Secretariat on its own 
responsibility and in full consultation with the Parties. The factual presentation 
reproduces as closely as possible the terminology used in the Agreement and in the 
comments provided and does not imply official endorsement or acceptance by the 
Secretariat of such terminology. 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) and thus does not imply any value judgement 
by the Sec retariat regarding the contents of the Agreement.  
Any technical questions arising from this report may be addressed to Ana Cristina 
Molina (tel: +41 22 739 6060) . Any statistical questions arising from this report may 
be addressed to  Thakur Parajuli (tel: +41 22 739 5473 ). 
 
 WT/REG374/1  
 
- 2 - 
 
   
TABLE O F CONTENTS  
Page 
1   TRADE ENVIRONMENT  ................................ ................................ ................................ . 5 
1.1   Merchandise trade  ................................ ................................ ................................ ....... 5 
1.2   Trade in services and investment  ................................ ................................ ..................  7 
2   CHARACTERISTIC ELEME NTS OF THE AGREEMENT  ................................ ......................  9 
2.1   Background I nformation  ................................ ................................ ...............................  9 
3   PROVISIONS ON TRADE IN GOODS  ................................ ................................ ...........  10 
3.1   Import duties and charges, and quantitative restrictions ................................ .................. 10 
3.1.1    General provisions  ................................ ................................ ................................ ...10 
3.1.2    Liberalization of trade and tariff lines  ................................ ................................ ......... 11 
3.1.3    Liberalization schedule  ................................ ................................ ............................. 11 
3.1.3.1    Mexico  ................................ ................................ ................................ ................. 11 
3.1.3.2    Panama  ................................ ................................ ................................ ............... 13 
3.1.4    Tariff rate quotas  ................................ ................................ ................................ .....15 
3.2   Rules of origin  ................................ ................................ ................................ ............ 15 
3.2.1    Requirements for the determination of origin  ................................ .............................. 15 
3.2.2    Cumulation  ................................ ................................ ................................ ............. 16 
3.2.3    De minimis rule  ................................ ................................ ................................ .......16 
3.2.4    Other fa ctors affecting the originating status of a good  ................................ ................. 16 
3.2.5    Administration of the rules of origin  ................................ ................................ ........... 17 
3.3   Export duties and cha rges, and quantitative restrictions  ................................ .................. 17 
3.4   Regulatory provisions on trade in goods  ................................ ................................ ........ 17 
3.4.1    Standards  ................................ ................................ ................................ ............... 17 
3.4.1.1    Sanitary and phytosanitary measures  ................................ ................................ ......17 
3.4.1.2    Technical barriers to trade  ................................ ................................ ..................... 17 
3.4.2    Safeguard mechanisms  ................................ ................................ ............................ 18 
3.4.2.1    Global safeguards  ................................ ................................ ................................ .18 
3.4.2.2    Bilateral safeguards  ................................ ................................ ............................... 18 
3.4.3    Anti-dumping and countervailing measures  ................................ ................................ .19 
3.4.4    Subsidies and State -aid ................................ ................................ ............................ 19 
3.4.5   Customs -related procedures ................................ ................................ ...................... 19 
3.5   Sector -specific provisions on trade in goods  ................................ ................................ ...20 
4   PROVISIONS ON TRADE IN SERVICES  ................................ ................................ ....... 20 
4.1   Scope and definitions  ................................ ................................ ................................ ..20 
4.2   Denial of benefits  ................................ ................................ ................................ .......21 
4.3   General provisions on trade in services  ................................ ................................ ......... 21 
4.3.1    Market access  ................................ ................................ ................................ ......... 21 
4.3.2    National treatment and MFN  ................................ ................................ ...................... 21 WT/REG374/1  
 
- 3 - 
 
  4.3.3    Commercial presence  ................................ ................................ ............................... 22 
4.3.4    Movement of natural persons  ................................ ................................ .................... 22 
4.3.5    Performance requirements  ................................ ................................ ........................ 23 
4.3.6    Senior Management and boards of directors  ................................ ................................ 23 
4.3.7    Other investment -related provisions ................................ ................................ ........... 24 
4.4   Liberalization commitments  ................................ ................................ ......................... 24 
4.4.1    Mexico ................................ ................................ ................................ .................... 24 
4.4.1.1    Horizontal commitments  ................................ ................................ ........................ 24 
4.4.1.2    Sector -specific commitments  ................................ ................................ .................. 25 
4.4.2    Panama  ................................ ................................ ................................ .................. 30 
4.4.2.1    Horizontal commitments  ................................ ................................ ........................ 30 
4.4.2.2    Sector -specific commitments  ................................ ................................ .................. 31 
4.5   Regulatory provisions  ................................ ................................ ................................ ..36 
4.5.1    Domestic regulation  ................................ ................................ ................................ .36 
4.5.2    Recognition  ................................ ................................ ................................ ............. 36 
4.5.3    Subsid ies ................................ ................................ ................................ ................ 37 
4.5.4    Safeguards  ................................ ................................ ................................ ............. 37 
4.6   Sector specific provisions on trade in services  ................................ ................................ 37 
4.6.1    Financial services  ................................ ................................ ................................ .....37 
4.6.1.1    Cross-border trade  ................................ ................................ ................................ 38 
4.6.1.2    New financial services  ................................ ................................ ........................... 38 
4.6.1.3    Data Processing  ................................ ................................ ................................ ....38 
4.6.1.4    Self-regulatory organizations  ................................ ................................ .................. 38 
4.6.1.5    Transparency  ................................ ................................ ................................ .......38 
4.6.2    Telecommunications  ................................ ................................ ................................ .39 
4.6.2.1    Access to and use of public telecommunications transport netwo rks or services  ............ 39 
4.6.2.2    Conduct of major suppliers of public telecommunications transport networks or 
services  ................................ ................................ ................................ ............................ 39 
4.6.2.3    Transparency  ................................ ................................ ................................ .......39 
5   GENERAL PROVISIONS O F THE AGREEMENT  ................................ .............................  40 
5.1   Transparency  ................................ ................................ ................................ ............. 40 
5.2   Current payments and capital movements  ................................ ................................ .....40 
5.3   Safeguards  ................................ ................................ ................................ ................ 40 
5.4   Exceptions  ................................ ................................ ................................ ................. 40 
5.5   Accession and Withdrawal ................................ ................................ ............................ 40 
5.6   Institutional framework  ................................ ................................ ............................... 41 
5.7   Dispute settl ement  ................................ ................................ ................................ .....41 
5.8   Relationship with other agreements concluded by the Parties  ................................ ........... 43 
5.9   Government procurement  ................................ ................................ ............................ 44 
5.10   Intellectual property rights  ................................ ................................ ......................... 44 
5.10.1    Trademarks and well -known marks  ................................ ................................ .......... 45 WT/REG374/1  
 
- 4 - 
 
  5.10.2    Geographical indications, indication of source, and distinctive products  ......................... 45 
5.10.3    Copyright and related rights  ................................ ................................ .................... 45 
5.10.4   Other IPR provisions  ................................ ................................ ............................... 46 
5.11   Other provisions  ................................ ................................ ................................ .......46 
5.11.1    Electronic commerce  ................................ ................................ .............................. 46 
5.11.2    Environment ................................ ................................ ................................ .......... 46 
ANNEX 1  ................................ ................................ ................................ ........................  47 
 WT/REG374/1  
 
- 5 - 
 
   
Key Facts  
 
Parties to the Agreement:  Mexico and Panama  
 
Date of Signature:    3 June  2014 
 
Date of  Entry into Force:  1 July 2015  
 
Date of Notification:   6 June 2016  
 
Full implementation:   2029 
 
 
 
1  TRADE ENVIRONMENT  
1.1.  The Free Trade Agre ement between Mexico and Panama  (here inafter "the Agreement") is 
Mexico 's 15th and Panama 's 11th1 regional trade a greement (RTA) notified to the WTO Secretariat. 
The Agreement covers goods and services.  
1.2.  Mexico and Panama  differ substantially in the size of their economies and their participation 
in world trade. As of January 2017, Mexico was the second largest economy  in Latin America  and 
Panama the eleventh. In 2015 , when  the Agreement entered into force, Mexico's GDP amounted to 
US$1.1  trillion compared to US$52 billion for Panama . In terms of trade,  Mexico was the eighth  
largest exporter and importer in the world  (US$380.7 billion and US$405.3 billion) (excludi ng 
intra-EU trade) while Panama  ranked 55th (US$11.3  billion) in terms of exports and 52nd 
(US$18.7  billion) for imports.2 With regard to services , Mexico was the 23rd largest  exporter  
(US$22.6 billion)  and 21st largest importer (US$29.5 billion) while Panama ranked respectively 
34th (US$11.2 billion) and 56th (US$4.3  billion) in the world in 2015.  
1.3.  Trade between the Parties is modest  and accounts for a  small share in each Party's trade, 
which is largely concentr ated in a few partners, namely the US, the European Union and China. In 
2015, Mexico accounted for about 2% of Panama's total exports and 5 % of its imports.  Panama  
was an even small er provid er and purchaser  of goods for Mexico . It accounted  for 0.3% of 
Mexico's total ex ports and capture d less than 0.1% of Mexico's total imports  in 2015 .  
1.1  Merchandise trade  
1.4.  Chart 1.1 shows the Parties' global and bilateral merch andise trade for the period 2000 -2015. 
During this period, both Parties registered a trade deficit with the world , which has deepened over 
the years  especially for Panama.  At the bilateral level, Mexico maintained a trade surplus with 
Panama, which reflects  the steady increase of its bilateral exports. This trade surplus reached a 
peak in 2012, totallin g US$1 billion but has slightly narrowed since , amounting  to US$0.9 billion  in 
2015. 
                                                
1 Counting the Agreement between Panama and Central America as one.  
2 WTO Trade Profiles (latest data).  WT/REG374/1  
 
- 6 - 
 
  Chart 1.1 Mexico and Panama : Merchandise bilateral trade and with the world  (2000 -
2015)  
0.000.200.400.600.801.001.20
0246810121416
2000 2002 2004 2006 2008 2010 2012 2014B. Panama 2000 -2015
(US$ billions)
Imports from Mexico (Right Axis)
Export to Mexico (Right Axis)
Total Imports
Total Exports
0.000.200.400.600.801.001.20
050100150200250300350400450
2000 2002 2004 2006 2008 2010 2012 2014A. Mexico 2000 -2015 
(US$ billions)
Imports from Panama (Right Axis)
Export to Panama (Right Axis)
Total Imports
Total Exports
 
Source : UNSD Comtrade database (Mexico); Instituto Nacional de Estadisticas y Cen sos (Panama) . 
 
1.5.  Chart 1.2 exhibits the Parties' trade basket for the three years prior to th e Agreement's entry 
into force.  The data suggest that there are some p roduct complementarities  but mainly involving 
Panama's import s from Mexico . During 2012 -2014, Panama's main imports from Mexico were  
motor vehicles, chemicals, base metals and machinery, which accounted for about 71% of its total 
bilateral imports. Of these, machinery and motor vehicles were Mexico's two largest exports, 
accounting respectively for 35% and 21% of its total exports during  the same period . They were 
followed by minerals products (14%)  and base metals (4%) . On the other hand, Mexico's import  
demand  does not seem to match with Panama's export  supply . During 2012-2014, Mexico's main 
impor t category from Panama  was minerals,  which accounted for 56%  of its total imports . It was 
followed by  animal and vegetables fats and oils . In comparison  Panama's largest export categories 
were animal products, vegetables and prepared food, which together account ed on average for 
about 59 % of Panama 's total exports.   WT/REG374/1  
 
- 7 - 
 
  Chart 1.2 Mexico and Panama: product composition of merchandise trade , annual 
average (2012 -2014)  
19
18
17171144434Panama's imports from Mexico(%)
21
19
10 987544322224Panama's Global Imports(%)
23
22
14139543332Panama's Global Exports(%)35
21144333333324Mexico's Global Exports (%)
56
97643312Mexico's imports from Panama (%) 
38
9
988733322225Mexico's Global Imports (%)
Total: US$ 40 million Total: US$383,979 million
Total: US$ 13,077 million Total: US$ 828 millionTotal:  US$ 382,513 million
Total:  US$ 555 million
 
Source:  UNSD Comtrade database (Mexico); Instituto Nacional de Estadísticas  y Censos (Panama) . 
 
1.2  Trade in services and investment  
1.6.  Charts 1.3 and 1.4 depict the Parties' global trade in  commercial services during 2005 -2015. 
During this period, Mexico recorded a global trade deficit in services while Panama exhibited a 
trade surplus, which has grown in recent years.  Mexico mainly import ed transport, travel , and 
insurance services , which together accounted  in 2015 for more than 90% of its total imports . For 
exports, t ravel services were the most important  category accounting for 77% of its total exports , 
followed by insurance services . For Panama , the main exports and imports  were transport  and 
travel  services , which corresponded respectively to 86% and 63% of its total exports  and imports.  
Financial (11%) and other business (15%) services also accounted  for a significant share in 
Panama's imports.  
1.7.  Data for bilateral trade in services are not available.   WT/REG374/1  
 
- 8 - 
 
  Chart 1.3 Mexico : Trade in commercial services with the world , 2005-2015  
05101520253035
2005 2007 2009 2011 2013 2015A. Mexico's imports from world
2005 -2015
(US$ Billion)
Personal, cultural, and recreational services Other business services
Telecommunications, computer, and information services Charges for the use of intellectual property n.i.e.
Financial services Insurance and pension services
Construction services Travel services
Transport services Maintenance and repair services n.i.e.
Manufacturing services on physical inputs owned by others05101520253035
2005 2007 2009 2011 2013 2015B. Mexico's exports to world
2005 -2015
(US$ Billion)
 
Note:  No trade flows (import s and export s) were  recorded for the following cat egories: Manufacturing 
services on physical inputs owned by others; and Construction services; And no import under the 
categories: Maintenance & repair services n.i.e.; Financial services; and Other business services . 
Source:  WTO Statistics database based on BMP6.  
Chart 1.4 Panama : Trade in commercial services with the world , 2005 -2015  
051015
2005 2007 2009 2011 2013 2015A. Panama's imports from world
2005 -2015
(US$ Billion)
Personal, cultural, and recreational services Other business services
Telecommunications, computer, and information services Charges for the use of intellectual property n.i.e.
Financial services Insurance and pension services
Construction services Travel services
Transport services Maintenance and repair services n.i.e.
Manufacturing services on physical inputs owned by others051015
2005 2007 2009 2011 2013 2015B. Panama's exports to world
2005 -2015
(US$ Billion)
 
Note:  No trade flows (imports and exports) were  recorded for construction services.  
Source:  WTO Statistics database based on BMP6.  
1.8.  Charts 1.5 and 1.6  show the Parties' global foreign direct invest ment stocks and flows . Both 
Mexico  and Panama have  been net recipient s of FDI  flows during 2010 -2015. Data on FDI at the 
bilateral level is not available.  WT/REG374/1  
 
- 9 - 
 
  Chart 1. 5 Mexico : FDI stock and flow with the world, 2010 -2015 
050100150200250300350400450
2010 2011 2012 2013 2014 2015Mexico FDI stock with world
2010 -2015
(US$ Billion ) 
Inward
Outward
05101520253035404550
2010 2011 2012 2013 2014 2015Mexico FDI flow with world
2010 -2015
(US$ Billion) 
Inward
Outward
 
Source:  UNCT AD Stat . 
 
Chart 1. 6 Panama : FDI stock and flow with the world, 201 0-2015 
051015202530354045
2010 2011 2012 2013 2014 2015Panama FDI stock with world
2010 -2015
(US$ Billion ) 
Inward
Outward
-10123456
2010 2011 2012 2013 2014 2015Panama FDI flow with world
2010 -2015
(US$ Billion) 
Inward
Outward
 
Source:  UNCTAD Stat . 
 
2  CHARACTERISTIC ELEME NTS OF THE AGREEMENT  
2.1  Background Information  
2.1.  The Agreement, which covers goods and services, was s igned by the Parties on 3 June 2014 
and en tered into force on 1 July  2015. On 6 June 2016, the Parties notified the Agreement to the 
WTO under Article  XXIV:7(a) of GATT 1994 and Article  V:7(a) of the GATS (WT/REG374/N/1 and 
S/C/N/864 ). The text of the Agreement, along with its schedules and annexe s, is available on the 
website of the Parties' authorities.3 The Agreement contains 20 chapters, of which several  include 
annexes (Box 2.1).  
                                                
3 The text of the agreement can be found i n: 
http://www.siicex.gob.mx/portalSiicex/SICETECA/Tratados/Tratados.htm  (for Mexico); and  
http://www. mici.gob.pa/subcategoria.php?cid=15&sid=57  (Panama).  WT/REG374/1  
 
- 10 - 
 
  Box 2 .1 Structure of the Agreement  
 Preamble  
Chapter 1  Initial Provisions  
Chapter 2  General Definitions  
Chapte r 3 National Treatment and Market Access for Goods  
Chapter 4  Rules of Origin  and Customs Procedures  
Chapter 5  Trade Facilitation and Customs C ooperation  
Chapter 6  Trade Remedies  
Chapter 7  Sanitary and Phytosanitary Measures  
Chapter 8  Technical B arrier s to Trade  
Chapter 9  Cross -Border Trade in Services  
Chapter 10  Investment  
Chapter 11  Financial Services  
Chapter 12  Telecommunications  
Chapter 13  Temporary Entry of Business Persons  
Chapter 14  Electronic Commerce  
Chapter 15  Intellectual Property  
Chapter 16  Transparency  
Chapter 17  Administration of the Agreement  
Chapter 18  Dispute Settlement  
Chapter 19  Exceptions  
Chapter 20  Final Provisions  
Source:  The Agreement.  
3  PROVISIONS ON TRADE IN GOODS  
3.1  Import duties and charges, and quantitative restric tions  
3.1.1   General provisions  
3.1.  Trade in goods between the Parties is go verned by Chapter 3. The Chapter includes 
provisions on national treatment, tariff elimination, customs valuation, special regimes4, export 
taxes , export and import restrictions, as well as  a section on agriculture with provisions on 
domestic support and export subsidies (see section 3.3. and 3.4.4) . Chapter 3 also provides for 
the creation of a Committee on Trade in G oods and for consultations , upon Parties request, to 
improv e the  market acce ss conditions f or the goods covered by the Agreement . The Agreement 
follows the WTO definition for agricultural products  (Article 2 .1). 
3.2.  The Parties agree to grant national treatment to each other's goods in accordance with 
Article  III of GATT 19945, except  for goods listed in Annex 3.3 . For Mexico, the list include s fuels 
and second hand vehicles , while Panama lists measures affecting imports of  lottery tickets, used 
motor vehicl es, videos and games , as well as exports of woods from its national forests . Both 
Parties  list actions authorized by the WTO Dispute Settlement Body . They also agree to eliminate 
                                                
4 This refers to the access conditions for: goods  imported on  a temporary basis , re-entry after rep air, or 
alteration  and for commerc ial samples of negligible value.  
5 Article  III of GATT 1994  is incor porated into the Agreement.  WT/REG374/1  
 
- 11 - 
 
  any non -tariff measure that prohibits or restricts their bilateral imports, except for the measures 
listed in Annex 3.3, or  as provided in Article XI of the  GATT 1994.6 
3.3.  The Parties  commit to elimin ate or  reduce customs duties on originating goods according to 
their respective schedules and to not increase any existing duty, or introduce a new one on an 
originating good, unless otherwise specified. According t o the Agreement, they can: (a) increase a 
custom s duty up to the level established in their tariff schedule following an unilateral reduction; 
and (b) maintain or increase a custom s duty when authorized by the WTO  Dispute Settlement 
Body (Article 3.4 ). The Parties cannot apply any new tariff exemption or expand its application 
contingent upon performance requirements  (Article 3.5 ). They allow duty -free entry for: (a) goods 
imported on a temporary basis7 as long as certain conditions are fulfilled  (Article 3 .6); (b) goods 
that re -enter a Party after rep air or alteration (Article 3.7) and (c ) commercial samples of 
negligible value and printed advertis ing materials (Article 3.6).  
3.4.  The Parties shall  follow the WTO Agreement on import licensing and Customs Valuat ion, 
which are incorporated into the Agreement , and Article VIII of the GATT for t he application of 
trade related fees and other charges other than customs duties  (Articles 3.10, 3.11 and 3.13).  
3.1.2   Liberalization of trade and tariff lines  
3.5.  The Parties ' tariff elimination schedule and staging categories are detailed in Annex 3.4 of the 
Agreement. The MFN rates applied in 2013  were used as the base rate. For both Parties, tariff 
liberalization will take place over a 15 -year transition period, starting  upon the Ag reement's entry 
into force until 2029. The Parties listed seven  different staging categories in their tariff elimination 
schedule s. Both Parties exclude certain products from liberalization:  414 tariff lines by Mexico and 
565 by Panama (at the 8 -digit leve l). Of these lines, three  are already duty-free on an  MFN ba sis 
in the case of Mexico and one  for Panama . In addition, Mexico prohibits the import of products 
under 22 lines.  
3.1.3   Liberalization schedule  
3.1.3.1   Mexico  
3.6.  Table 3.1 shows Mexico's tariff elimination comm itments  under the Agreement .8 Before the 
entry i nto force of the Agreement, more than half (58%) of Mexico 's tariff was  already duty free 
on an MFN basis, corresponding to  73.2% of its imports from Panama during 2012 -2014. In 2015 , 
when the Agreement  enter ed into force , Mexico liberalized another 12 % of its lines , which 
accounted for 3.9% of its imports from Panama . In 2024, a fter ten years of implementation,  
92.2% tariff lines will be duty -free corresponding to 98.9% of imports from Panama.  At the end of 
the implementation period in 2029, this share will reach 96.4% of Mexico's  tariff lines , accounting 
for 99.2% of its imports from Panama . Of the 444  lines that will re main dutiable , only 11 are 
subject  to tariff reductions , the rest are prohibited or exclud ed from liberalization .  
Table 3.1 Mexico: Tariff elimination commitments under the Agreement and 
corresponding average trade  
Duty phase -out 
period  Number of 
lines  % of total lines in 
Mexico's tariff 
schedule  Value of 
Mexico's 
imports from 
Panama  
(2012 -2014)a 
US$ million  % of Mexico's 
total imports 
from  
Panama  
2012 -2014  
2015 (MFN)  7,120  58.0 28.0 73.2 
2015 1,469  12.0 1.5 3.9 
2019 1,197  9.8 4.7 12.2 
2022 3 0.0 0.0 0.0 
                                                
6 Article XI of the GATT 1994  and its re levant provisions under the WTO  are incorporated into the 
Agreement . 
7 Goods tempora lly admitted include professional equipment, goods imported for sports purposes, goods 
intended for disp lay or demonstration , and commercial samples and advertising films.  
8 Of the total number o f Mexico's tariff lines (i.e. 12,270 ), 81 are not subject to ad valorem  duties: 
44 lines are subject to a mixed tariff, 15 to a specific duty and 22 lines are prohib ited. The prohibited lines 
include certain drugs and chemicals.  WT/REG374/1  
 
- 12 - 
 
  Duty phase -out 
period  Number of 
lines  % of total lines in 
Mexico's tariff 
schedule  Value of 
Mexico's 
imports from 
Panama  
(2012 -2014)a 
US$ million  % of Mexico's 
total imports 
from  
Panama  
2012 -2014  
2024 1,516  12.4 3.7 9.6 
2026 5 0.0 0.0 0.0 
2027 2 0.0 0.0 0.0 
2029 514 4.2 0.1 0.3 
Remain dutiable  444b 3.6 0.3 0.8 
Total  12,270  100.0  38.3 100.0  
a Import coverage is from HS chapters 1 -97. 
b Of these lines, 22 are prohibited . Prohibited lines are excluded from the calculation of the ave rage 
tariff rate but are included in the counting.  
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data provided by Mexico . 
 
3.7.  Table 3.2 and Chart 3.1 show Mexico's  tariff elimination, by HS section a nd chapter with 
regard to imports fro m Panama . Most of the lines that will remain dutiable fall in to sections  I-IV - 
agricultural products - (i.e. 82% of 444 lines) . These sections are also those with the highest 
average tariffs with rates ranging  between 17% and 28.8 %. Vegetables (II) (28.8 %) and prepared 
food (IV) (24.8%) exhibit the highest average preferential tariffs. For sections V -XXI, the highest 
average preferential tariff was in  footwear (XII) (26%).  Other HS sections where tariffs will 
continue to apply are: minerals (V), chemicals ( VI), plastics  (VII), wood pulp (X), textiles (XI), 
base metals (XV) and machinery (XVI) . 
Table 3.2 Mexico : Tariff elimination under the Agreement, by HS Section  HS Section  
MFN 
Average  
% 
No. of lines  
Duty -free 
lines under 
the  
MFN 2015  Number of duty -free lines under the 
Agreement  
Remain 
dutiable  
Avg.  
Final Tariff  
(Dutiable)  2015  
2019  
2022  
2024  
2026  
2027  
2029  
I 20.5 439 50 96 17  31  2 32 211* 23.9 
II 12.5 517 110 141 130  62   32 42* 28.8 
III 11.0 72 17 16 19  10   1 9 17.0 
IV 19.5 357 18 130 26 3 66 5  2 107 24.8 
V 0.3 212 204 2 3  3      
VI 1.4 2,865  2,285  292 227  44   1 16* 3.1 
VII 3.8 565 346 138 59  13   5 4 5.8 
VIII 4.8 124 92    31    1* n.a. 
IX 6.7 187 66 2 34  85      
X 2.8 311 182  54  64   2 9* 3.2 
XI 12.2 1,251  159 45 11  596   407 33 17.9 
XII 14.8 102 18 2 10  46   21 5 26.0 
XIII 5.7 310 162 23 34  91      
XIV 3.3 65 47  6  12      
XV 3.8 1,268  861 254 40  102   7 4 8.8 
XVI 2.8 2,484  1,899  110 360  112    3 12.0 
XVII 7.6 402 200 162 32  8      
XVIII 2.7 449 319 7 71  52      
XIX 11.2 33 2 31         
XX 9.3 243 69 18 64  88   4   
XXI 0.0 14 14          
Total  5.7 12,270  7,120  1,469  1,197  3 1,516  5 2 514 444*  22.9 
* includes prohibited li nes. In total there are 22 prohibi ted lines.  
Note:  For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included . 
 Based on the HS 2012 nomenclature.  
n.a. not applicable . 
Source:  WTO estimates based on data  provided by Mexico . WT/REG374/1  
 
- 13 - 
 
  3.8.  At the  HS chapter level, products in 3 9 chapters will remai n subject to duties (Chart 3.1), 
Average preferential tariffs will range between 3% and 63%, with the highest tariffs applying to 
meat and meat offal (63%), sugars (54%) and tobacco (45%). In seven  cases , the average tariff 
could not be computed for the chapter as the related l ines were  prohibited  or subject to a specific 
duty. In eleven of the chapters  subject to duties,  the averag e preferential rate was lower  than the 
average MFN rate.  The chapters show ing the largest difference between the average MFN rate and 
the preferential rate are: plastics (Chapter 39) followed by soap and other washing preparations 
(Chapter  34), and preparations of cereals (Chapter 19).  
Chart 3.1 Mexico: Average of dutiable rates on excluded lines, by HS Chapter  
010203040506070
02
03
04
07
08
09
10
11
12
13
15
16
17
18
19
20
21
22
24
28
29
30
34
39
41
48
49
52
54
56
58
59
60
61
62
63
64
76
85Average Duty Rate
Preferential MFN** *
* Only specific rates              
** Only prohibited lines ****** ** **HS 01 -24 HS 25 -97
 
3.1.3.2   Panama  
3.9.  Table 3.3 shows Panama 's tariff elimination co mmitments under the Agreement .9 Before the 
entry into force of the Agreement,  34.5% of Panama 's tariff lines were alread y duty free on an 
MFN basis, which corresponded to 48.4% of its imports from Mexico  during 2012-2014. Upon the 
Agreement's entry into force,  Panama liberalized  another 16.5 % of lines which accounted  for an 
additional 25.4 % of its imports from Mexico . Furth er tariff elim inations will ta ke place almost every 
two years and  by 2021, after 10  years of implementation, 86% of Panama's tariff lines will be 
duty-free, making up for 94% of its imports from Mexico. At the end of the implementation period 
in 2029, this  percentage will reach 93.5%. Of the 580  lines that will remain dutiable, 16 lines were  
subject to tariff reduction s.  
Table 3.3: Panama: Tariff elimination comm itments under the Agreement and 
corresponding average trade  
Duty phase -out 
period  Number of 
lines % of total lines in Panama's 
tariff schedule  Value of 
Panama's 
imports from 
Mexico  
(2012 -
2014)a 
US$ million  % of 
Panama's 
total imports 
from  
Mexico  
2012 -2014  
2015 (MFN)  3,069  34.5 268.4  48.4 
2015 1,467  16.5 140.7  25.4 
2019 1,926  21.7 82.7 14.9 
2022 25 0.3 0.5 0.1 
2024 1,133  12.8 29.0 5.2 
2026 10 0.1 6.4 1.1 
                                                
9 Of the total number of Panama's tariff lines (i.e. 8,884), 21 are not subject to ad valorem  duties and 
are subject to a specific duty.  WT/REG374/1  
 
- 14 - 
 
  Duty phase -out 
period  Number of 
lines % of total lines in Panama's 
tariff schedule  Value of 
Panama's 
imports from 
Mexico  
(2012 -
2014)a 
US$ million  % of 
Panama's 
total imports 
from  
Mexico  
2012 -2014  
2027 3 0.0 0.0 0.0 
2029 671 7.6 6.4 1.2 
Remain dutiable  580 6.5 20.0 3.6 
Total  8,884  100.0  554.1  100.0  
a Import coverage is from HS chapters 1 -97. 
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data provided by Panama and WTO -IDB. 
 
3.10.   Most of the lines that will remain dutiable  refer to agricultural products  (475 lines) and fall 
into HS sections I to IV , in particular live animals, animal products and prepared food  (Table  3.4). 
The average preferenti al tariffs for these sections will range between 13 .1% and 32.4 %. Other 
HS sections where tariffs will continue to apply are: minerals (V), chemicals (VI), plastics  (VII), 
wood pulp (X), textiles  (XI), footwear  (XII), base meta ls (XV) and machinery  (XVI) . The average 
preferential tariff for these HS  sections will vary between 3.2% (Footwear)  and 40. 5% (Minerals) .  
Table 3.4 Panama : Tariff elimination under the Agreement, by HS Section  HS Section  
MFN 
Average  
% 
No. of lines  Duty -
free 
lines 
under 
the  
MFN 
2015  Number of duty -free lines under the Agreement  
Remain 
dutiable  
Avg. 
Final Tariff  
(Dutiable)  2015  
2019  
2022  
2024  
2026  
2027  
2029  
I 20.1 540 38 95 39  26  3 38 301 26.5 
II 10.0 461 158 58 104  73   32 36 32.4 
III 8.3 73 20 12 14  13   1 13 13.1 
IV 11.9 561 95 168 55 25 78 10  5 125 19.9 
V 6.9 200 86 13 91  5   3 2 40.5 
VI 2.3 1,333  889 135 290  14   1 4 9.0 
VII 4.2 414 219 39 128  7   15 6 11.0 
VIII 11.8 113 4 41 12  56      
IX 7.3 179 63 2 43  71      
X 8.0 378 136 4 122  96   5 15 13.1 
XI 6.9 1,211  463 9 11  155   514 59 9.3 
XII 9.8 154 10  25  71   41 7 3.2 
XIII 9.1 285 44 30 82  129      
XIV 7.2 66 24  20  22      
XV 7.4 898 321 344 124  89   12 8 11.3 
XVI 4.8 1,086  293 316 395  78    4 12.0 
XVII 6.0 340 163 105 65  7      
XVIII 9.0 287 36 32 193  26      
XIX 14.6 24  24         
XX 11.0 273 3 36 113  117   4   
XXI 6.9 8 4 4         
Total  7.6 8,884  3,069  1,467  1,926  25 1,133  10 3 671 580 22.2 
Note:  For the calculation of averages, specific rates are  excluded . 
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data  provided by Panama and WTO -IDB. WT/REG374/1  
 
- 15 - 
 
  3.11.   At the HS c hapter level, Panama will continue to apply duties on 27 Chapters at the end of 
the Agreement's implementation with average prefe rentia l tariffs ranging  between 3% and 70 % 
(Chart 3.2 ). The HS chapter with the highest average preferential tariffs at the end of 
implementation will be meat and meat offal (Chapter 2). In almost half (i.e. 14) of the chapters  
that will remain dutiable th e average preferential rate is lower than the current average MFN rate.  
For the remaining chapters the average MFN and preferential rate are the same. The chapters 
showing the largest difference between the average MFN rate and the preferential rate are: salt 
and other minerals (Chapter  25), cocoa and cocoa preparations (Chapter 18 ) and apparel 
(Chapter  61). 
Chart 3.2 Panama : Average of dutiable lines, by HS chapter  
0102030405060708090
020304070809101112151617181920212225343948616263647685Average Duty Rate
Preferential MFNHS 01 -24 HS 25 -97
 
3.1.4   Tariff rate quotas  
3.12.   The Parties do not apply any tariff -rate quota under the Agreement.  
3.2  Rules of origin  
3.13.   Chapter 4 defines originating goods and specif ies the requirements a good must meet to 
acquire originating status. It also details the procedures for the administration of the rules of origin 
and provides for the creation of a Committee on Rules of Origin , Customs Procedures, Trade 
Facilitation  and Customs Cooperation (Article  4.29). 
3.2.1   Requirements for the determination of origin  
3.14.   A good qualifies as originating if it is:  
 wholly obtained or produced in one or both Part ies; 
 produced in one or bot h Parties, using only originating materials in accordance with 
Chapter 4;  
 produced in one or both Parties using non -originating materials that meet the change in 
tariff classification (CTC); the regional value content (RVC)10; a specific manufacturing 
condi tion, and/or any other specific rul e of origin set out in Annex 4.2 ; as well as  any 
other applicable requirement (Art icle 4.2 ).  
                                                
10 The formula to compute the RVC is se t out in Article  4.4.  WT/REG374/1  
 
- 16 - 
 
  3.15.   All rules specified in Annex 4.2  contain a t least  a CTC requirement. In general for products 
in chapters 1 -24, only a CTC requi rement applies . For products in chapters 25 -97, goods can be  
subject to a RVC  (e.g. machinery and mechanical appliances)  or specific requirement (e.g. textiles) 
in addition to the CTC requirement . When only a CTC requirement applies, it can be replaced in 
certain cases by a RVC requirement .  
3.16.   Any originating good in transit or transhipment via the territory of a non -party will maintain 
its originating status provided that: (a) the transit is technically justified; (b) the  good does not 
undergo any further pr ocessing in the territory of a non -party other than preservation, unloading, 
or reloading, and (c) it is kept under customs surveillance in the territory of a non -party 
(Article  4.17).  
3.17.   Goods originating in free zones located in the territory of one Party s hall maintain their 
originating stat us granted under a trade agreement negotiated between a Party and a non -party 
provided that (a) goods were under customs control; (b) goo ds have not been produced in the free 
zones and have been subject to operations suc h as transhipment, loading, unloading, storage, 
splitting of consignments, making up of sets, packaging, and labelling; and meet any other 
provisions  of the said trade agreement  (Article 4.15) . 
3.2.2   Cumulation  
3.18.   The Agreement allows for bilateral cumulation  (Article 4.8).11  
3.2.3   De minimis rule  
3.19.   The Agreement includes a de minimis  provision  (Article 4.9) , under which a good qualifies 
as originating if the value of all non -originating materials used in its production which do not 
satisfy the CTC requirement set out in  Annex 4.2 do not exceed 10 % of the  FOB value of the good . 
The de minimis  provision does not apply to:  
 textiles and clothing (chapters 50 -63), and 
 non-originating materials used in the production of goods in HS chapters 1 -24, unless 
these materials are clas sified in a different subheading (6 -digit level) than the good for 
which origin is being determined.  
3.20.   For textiles and clothing (chapters 50 -63), another de minimis  threshold applies . To qualify 
as originating,  the weight of non-originating of fibres or ya rns used i n the production of these 
goods which do not satisfy the CTC requirement shall not exceed 7% of the  good's total weight.   
3.2.4   Other factors affecting the originating status of a good  
3.21.   Chapter 4 indicates how to deal with intermediate and indirect materials (Article s 4.7 and 
4.14). Intermediate materials are to be treated entirely as originating goods when computing the 
RVC of a final good. Inputs can be designated  as intermediate materials if they are self -produced 
materials used in the production of a good and qualify as originating goods  in accordance with 
Articles 4.2  (Article  4.7). Indirect materials will also be considered as originating materials 
regardless of where they are produced.12 In addition, Chapter 4 specifies how to determine the 
(origin ) status of fungible goods and materials; accessories, spare parts and tools; packaging 
materials for retail sale; and packing materials and containers for shipment, and sets or 
assortments of goods (Articles 4.10 to 4.13 and 4.16).  
3.22.   Finally, Chapter 4 list s the operations that do not confer originating status to a good. The 
list includes packing or repackaging, cleaning, washing, labelling, as well as operations that 
guarantee the pre servation of goods (Article 4.6 ). 
                                                
11 This implies that a Party can use originating inputs of the other Party in the production of a good as if 
they were their own. The final good will qualified as originating as long as it satisfies the requirements of 
Article 4.2 (Article 4.8).  
12 Indirect materials ar e goods used in the production of a good but that are not physica lly incorporated 
into the good such as fuel and energy, spare parts and materials (Article 4.1) . WT/REG374/1  
 
- 17 - 
 
  3.2.5   Administration of the rules of origin  
3.23.   To claim preferential treatment under the Agreement, importers must present a certificate 
of origin13, except for imports with a value lower than US$1,00014, or goods benefitting from a 
waiver by the impor ting Party . The certificate is valid for one  year from the date of issue and 
applies to a single shipment of one or more goods or to multiple shipmen ts of the same good 
(Article s 4.18, 4.23 and Annex 4.18 ). 
3.24.   The Agreement also foresees procedures to verify the accuracy of the certificate of origin, 
including i nformation requests, questionnaires and verification v isits (Article 4.25 ). Finally, it 
includes provisions on the review and appeal of proceedings relating to the determination of origin 
(Article 4.26), the confidentiality of the information collected (Ar ticle 4 .27), and  the imposition of 
sanctions for the violation of laws or regulations r elating to Chapter 4 (Article 4.28).  
3.3  Export duties and charges, and quantitative restrictions  
3.25.   Under the Agreement, t he Parties prohibit the application of exports taxes , except  for basic 
foodstuffs from Mexico . Mexico's list of basic foodstuffs includes rice, canned tuna, sugar, coffee, 
beer, and milk. Mexico may also apply an export tax on any foodstuff on a temporary basis (i.e. up 
to one year) to relieve shortages of that foodstuff  (Article 3.12 and Annex 3.12) .15 
3.26.   The Agreement also forbids the adoption or maintenance of any measure that prohibits or 
restricts exports to the other Party, except as provided in Annex 3.3  and Article XI of the GATT 
1994 (Article 3.9 ). Following Annex 3.3, Panama can maintain any measure related to the export 
of wood and Mexico can maintain any measure on goods such as fuels, gas, used vehicles, and as 
authorized by the WTO Dispute Settlement Body.  
3.4  Regulatory provisions on trade in goods  
3.4.1   Standards  
3.4.1.1   Sanitary and phytosanitary measures  
3.27.   In Chapter 7 on sanitary and phytosanitary m easures, t he Parties incorporate the WTO SPS 
Agreement  into the Agreement  (Article 7.4) . In addition, the Parties include provisions on 
transparency (Article 7.5), procedures for approval of establishments  (Article  7.6), consultations 
on specific trade concerns (Article 7.7 ), and techni cal cooperation (Article 7.9). The Parties also 
establish a Committee on SPS measures whose functions include monitoring the implementati on of 
this chapter (Article 7.8). The Committee  shall meet at least once a year, unless agreed otherwise 
and for the first time  within  90 days after the Agreement's entry into force .16 
3.4.1.2   Technical barriers to trade  
3.28.   In Chapter 8  on technical barriers to t rade (TBT), the Parties incorporate the WTO TBT 
Agreement  (Article 8.3) and agree to the extent possible to implement the recommendations of 
the WTO TBT Committee (Article 8.4 ). In addition, they include provisions on the use of 
international standards (Article  8.6), transparency (Article 8.9 ), regulatory cooperation (Article 
8.10), technical cooperation and assistance (Article 8.11), technical consultations ( Article 8.13), 
exchange of information ( Article 8.14) as well as on the equivalence of technical regulat ions and 
conformity assessment procedures  (Articles 8.7 and 8.8) . 
                                                
13 Exporters are required to keep the certificate of origin and other docume nts relating to the origin of a 
good for at least five years following the date on which the certificate was signed . Importers are also required 
to keep the certificate of origin and other documents relating to the import for at least five years following the 
date the good was imported (Article 4.22).  
14 Or its equivalent amount in  national currency (Article 4.23).  
15 Mexican authorities indicated that so far Mexico has not applied such measures.  
16 As of June 2017, the Committee had not met.  WT/REG374/1  
 
- 18 - 
 
  3.29.    The Parties also establish a Committee on TBT  measures . The Committee will meet at least 
once a year, unless agreed otherwise and  be responsible inter alia  for monitoring the 
implementation  of this  chapter (Article 8.12).17 
3.30.   The Parties may also negotiate sectoral annexes in the future to complement Chapter 8, in 
accordance with the work programme established by the TBT Committee.  
3.4.2   Safeguard mechanisms  
3.31.   The Agreement allows for the application of global and bilateral safeguards , but they cannot 
be simultaneously  applied to the same good  (Article 6.7).  It also permits the application of 
safeguards measures for balance of payments reasons ( Article 19. 6) (see Section 5.3 ).  
3.4.2.1   Global safeguards  
3.32.   The Pa rties retain their  rights and obligations under Article XIX of the GATT 1994 and the 
Agreement on Safeguards  (hereafter the Safeguards Agreement) , which shall govern the 
application of global safeguards, including any related disputed. The y do not take any  additional 
commitment s under the Agreement  in this area , except that imports from the other Party can be 
excluded from the imposition of global safeguards  if they do not account for a substantial share of 
total imports nor contribute in a significant mann er to the ser ious injury or threat  thereof  
(Article  6.7).  
3.33.   Under the  Agreement, imports of a good do not account for a substantial part of total 
imports , if they do not fall within the top five  main import s of that product during the  three 
previous  years.  Similarly, a Party will not consider the imports from the other Party as a major 
cause of the injury if their growth rate during the period of expansion is substantially lower than 
that of total imports of the similar or competing product during the same p eriod (Article 6.7 ). 
3.4.2.2   Bilateral safeguards  
3.34.   The Parties may apply bilateral safeguards if as a result of the trade liberalization under the 
Agreement the imports of a good cause injury or a threat thereof to sectors in the importing Party 
producing a like or  directly competitive good . The measure can be applied only during a given 
transition period, which varies between 2 and 17  years depending on the product18, and only one 
year after the Agreement  has entered  in force . The measure will consist of a suspensio n of further 
tariff reductions under the Agreement or the increase of tariffs to a level that will not exceed the 
MFN applied tariff in effect at the time the action is taken or the day prior to the Agreement's entry 
into force . The maximum period of appli cation of a bilateral safeguard is three years, includin g an 
extension of one year and the period of application of any provisional measure , which is shorter 
than the eight years  under the Safeguards  Agreement (Article 7).  Moreover, t he measure can be 
applied to the same good  only once , which is also more stringent than under the Safeguards 
Agreement , which allows that a safeguard measure be applied twice to  the same good after a non-
application period of at least two years . Upon termination of the bilatera l safeguard, the applied 
rate shall be that established in the Parties' tariff schedules  (Article 6.2 ).  
3.35.   The Agreement also includes provisions on investigation procedures (Article 6.3) , provisional 
safeguards (Article 6.4), transparency (i.e. notification s and consultations)  (Article 6.5 ) and 
compensation  (Article 6.6 ), all of which are in general more detailed than under the Safeguard 
Agreement, except for those on the application of provisional safeguards  which closely mirror the 
Safeguard Agreement.19 To determine the need for a safeguard , the corresponding authority in the 
Party must carry out an investigation, on its own initiative or following a request from 
                                                
17 As of June 2017 , the Committee had not met.  
18 The "transition period " corresponds to the tariff elimination period associated with a given product 
plus two years (Article 6 .1). 
19 Like in the Safeguards Agreement, the Parties may apply a provisional safeguard under the 
Agreement if a delay in its application would cause damage difficult to repair and if a preliminary investigation 
showed that the increased imports have caused or are threatening to cause serious injury to a domestic 
industry. The provisional safeguard can b e applied for a maximum of 200 days and will take the form of tariff 
increases. The funds resulting from such increases will be refunded if the final investigation concludes that the 
increased imports are not the cause of or do not threaten to cause any se rious injury to a domestic industry . WT/REG374/1  
 
- 19 - 
 
  representatives of the domestic industry, who must account for at least 25% of the production o f 
the like or directly competitive good (Article 6.1) . Compared to the Safeguard s Agreement, this 
definition of "domestic industry" seems less restrictive  since u nder the latter, the "domestic 
industry" is defined as producers accounting for a major propor tion of the total domestic 
production of a similar or directly competitive good (Article 4). The Agreement further describes in 
detail the various stages  of the investigation , including  data requests .  
3.36.   In the area of transparency, each Party commit s to notify the other Party of the initiation of 
an investigation, or the application  (or extension) of a definitive or provisional measure . In 
addition, the  Parties  commit to publish  the corresponding notices, an d invite for consultations the 
other Party  followin g the notification of an investigation . A safeguard measure can be applied only 
after consultations have concluded (Article 6.5). The P arties also commit to compensate the Party 
subject to a bilateral safeguard , by granting  temporarily additional tariff co ncessions  (Article 6.6) .  
3.4.3   Anti-dumping and countervailing measures  
3.37.   The Parties confirm their rights and obligations under WTO Agreements regarding the 
application of antidumping and countervailing measures  and grant exclusive jurisdiction to the 
WTO disput e settlement system over these issues by pro scribing  the use of the  dispute settlement 
mechanism under the Agreement in this area (see section  5.6) (Article 6.8 ).  
3.4.4   Subsidies and State -aid 
3.38.   The Parties prohibit  the application of export subsidies on agricult ural goods  affecting their 
bilateral trade ; and commit to work towards the elimination of export subsidies on agricultural 
products at the multilateral level. Regarding  domestic support, the Parties reaffirm their rights and 
obligations under the WTO Agree ment on Agriculture (Article s 3.15 and 3.16 ).  
3.4.5   Customs -related procedures  
3.39.   Chapter 5 set s out the provisions on trade facilitation and customs co -operation.  The Parties 
commit to make publically available (including online) their respective laws, regulation s, and 
administrative procedures ; and maintain inquiry points concerning customs matters  (Article 5 .2). 
To the extent possible, they also commit to publish any proposed customs related regulations and 
allow time for comments. Each Party shall maintain or a dopt simplified customs procedures to 
facilitate their bilateral trade , including  a 48-hours clearance time (to the extent possible)20, 
expedited customs procedures for express shipments (release in 6 hours)21, a single window , and 
an authorized economic ope rators system  (and related mutual recognition agreements)  
(Articles  5.6-5.8). The Parties shall allow importers  to withdraw goods from customs before and 
without prejudice to the final determination by their customs authorit ies of the applicable customs 
duties and charges (Article 5.3). Each Party shall also endeavour to use information technology 
that expedites procedures for the release of goods  (Article 5.4), as well as risk management 
systems to target high -risk goods and simplify the clearance and move ment of low -risk goods  
(Articles 5.4 and 5.5). Other provisions included in the Chapter deal with the appeal of customs 
proceedings (Article 5.9), imposition of sanctions for violation of customs related laws or 
regulations  (Article  5.10) and advance rulin gs regarding a future shipment (Article 5.11).  
3.40.   Moreover, the Parties recognize the importance of co -operation between their customs 
authorities in facilitating trade and thus commit to promote it. Cooperation activities shall include  
technical assistance a nd the exchange of information . The P arties also commit to provide mutual 
assistance , upon request by a Party, regarding any suspicion of customs infractions. However 
mutual assistance can be denied inter alia  to protect public order, national security or public 
health . Any confidential information provided by a Party under this Chapter shall be kept 
confidential by the other Party (Articles 5.12 - 5.21).  
                                                
20 In this case , the goods should be released, to the extent possible, within 48 hours of arrival . 
21 In this case goods shall be released within 6 hours following the presentation of the relevant 
documents . WT/REG374/1  
 
- 20 - 
 
  3.5  Sector -specific provisions on trade in goods  
3.41.   Besides the provision regarding agricultural export subsi dies and domestic support 
(Articles  3.15-3.16), there are no other sector -specific provisions on trade in goods in the 
Agreement . 
4  PROVISIONS ON TRADE IN SERVICES  
4.1  Scope and definitions  
4.1.  Trade in services is governed by Chapter 9 ( Cross-Border Trade in S ervices) together with 
Chapter 10 on investments, Chapter 11 on financial services, Chapter 12 on telecommunications, 
Chapter 13 on temporary entry for business persons , and Chapter 14 on electronic commerce . 
These Chapters are complemented by Annexes I, II and  III, which contain the Parties' lists of 
reservations. Annexes I and II contain reservations for existing and future measures, and 
Annex  III reservations specific to financial services.  
4.2.  Chapter 9 applies to measures by a Party affecting cross -border trad e in services by service 
suppliers of the other Party (Article 9.1). Cross -border trade in services, as defined in the 
Agreement, covers GATS modes of supply 1, 2  and 4. Mode 3 is treated in Chapter  10 and defined 
as the supply of a service in the territor y of a Party by a covered investment22 or by an investor of 
the other Party. Chapter 9 does not apply to:  
 air services and related supporting services except for aircraft repair and maintenance 
services, selling and marketing of air transport services, specialty air services and 
computer reservation system services;  
 services supplied in the exercise of governmental authority;  
 government procurement;  
 subsidies or grants by a Party, including government -supported loans, guarantees and 
insurances; and  
 financi al services (covered by Chapter 11 ).  
4.3.  In air transport , the Agreement has a broader coverage tha n in the GATS as it also covers  
specialty air services, excluded from  the latter . Regarding subsidies, the GATS does not contain 
any specific rule. As for gover nment procurement, it is not excluded from the GATS (article XIII), 
but exempted from the application of market access, MFN and national treatment provisions.  
4.4.  Chapter 10  on investments applies to measures by a Party affecting (a) the investors of the 
other Party; (b) covered investments; and (c) all investments in the territory of the Party with 
respect to performance requirements and environmental measures (Article 1 0.2). This Chapter 
does not apply t o measures covered by Chapter 11 on financial services,  measures restri cting 
investments of the other P arty aiming at ensuring national security and pu blic order,  and claims or 
disputes prior to the entry into force of the Agreement. In case of any inconsistency between this 
Chapter and another Chapter, the ot her Chapter will prevail to the extent of the inconsistency 
(Article 12.1).  
4.5.  Chapter 11  on financial services applies to (a) financial institutions of the other Party; 
(b) investors of the other Party and their investments in financial institutions in the Party's 
territory; and (c) cross -border trade in financial services ( see Section 4.6.1).23 
                                                
22 The Agreeme nt defines covered investment as an investment in the territory of a Party of an investor 
of the other Party existing on the date of entry into force of this Agreement, as well as investments made or 
acquired thereafter (Article 10.1).  
23 Cross -border trade  in (or cross -border supply of) financial services, as defined in the Agreement,  does 
not include the supply of a financial service in the territory of a Party by an investment in that territory  
(Article  11.1).  WT/REG374/1  
 
- 21 - 
 
  4.6.  Chapter 12  on telecommunications applies to measures relating to (a) the access to and use 
of public telecommunications transport networks or services (b) the commitm ents made by its 
suppliers; and (c) other related measures  (Articl e 12.1). The Chapter does not cover value -added 
telecommunication services; and like the GATS, applies neither to broadcast nor  cable distribution 
of radio and television programming ( see Se ction 4.6.2 ). 
4.7.  Chapter 13  on the temporary entry of business persons aims at facilitating the movement of 
business persons on a reciprocal basis and  at establishing transparent criteria and procedures. It 
does not apply to measures affecting natural persons  seeking access to the labour market of a 
Party and to measures regarding citizenship, nationality, residence or employment on a permanent 
basis (Article s 13.2 and 13.3 ) (see Section 4.3.4).   
4.2  Denial of benefits  
4.8.  Prior to notification, a Party can  deny the b enefits of Chapter 9  to a service supplier of the 
other Party if the supplier is a company owned or controlled by nationals of a non -party, which has 
no substantial business activities in the territory of the other Party. It can also deny these benefits 
if the supplier is a company, owned or controlled by nationals of the denying Party that has no 
substantial business operations in the territory of the other Party (Article  9.10).24  
4.9.  Prior to notification and consultations, a Party can  deny the benefits of Ch apter 10  to a 
company of the other Party, and its investments, if the company is owned or controlled by 
investors of a non -party and is not engaged in substantial business activities in the  Party where it 
is legally established (Article 10.15) . 
4.3  General pro visions on trade in services  
4.3.1   Market access  
4.10.   Unless otherwise specified in their list of commitments, a Party cannot maintain or adopt 
any of the limitations described in Article XVI of GATS, except for limitations on the participation of 
foreign capital  (Article 9.4).25  
4.11.   In financial services , other commitments apply . The Parties allow investors of the other 
Party to establish a financial institution to provide a financial service, without the imposition of 
numerical restrictions or juridical requirements but  reserve the right to impose any condition  on 
the establishment and juridical form of additi onal financial institutions, including the acquisition of 
existing entities . In fact, Mexico does not allow Panamanian  financial institutions to establish a 
branch in Mexico. Additionally, the Parties reserve  the right to prohibit a specific financial activity 
or service. Such a prohibition cannot be applied to all financial services or an entire subsector. 
Under the GATS Understanding, there is no description of the conditions and authorization 
procedures that can be applied to the establishment and expansion of financial institutions 
(Article  11.6).  
4.3.2   National treatment and MFN  
4.12.   The Parties agree to grant MFN and national treatment to:  
 services and service providers  of the other Party (Articles 9.3 and 9.5 ); 
 investors of the other Party and covered investments with respect to the establishment, 
acquisition, expansion, management, conduct, operation and sale or other disposition of 
investmen ts in its territory (Articles  10.3 and 10.4 ). 
 
                                                
24 The Agreement doe s not contain a definition  for "substantial business activities".  
25 Under the Agreement, like under the GATS, the Parties cannot apply measures that : (i) limit the 
number of service suppliers , (ii) the total value of service transactions or assets, (iii) the total number of 
service  operations or the total quantity of services output, (iv) the total number of natural persons that can be 
employed in a particular service sector, or that a service supplier can employ; or that (v) restrict or require 
specific types of legal entities or j oint ventures to supply a service.  WT/REG374/1  
 
- 22 - 
 
  4.13.   For financial services which are covered by Chapter 11, t he Parties agree to grant MFN and 
national treatment to financial institutions of the other Party, investors of the other Party, and 
their investments in financial institutions, wit h respect to the establishment, acquisition, 
expansion, management, conduct, operation and sale or other operations involving investments in 
the Parties ' territory (Articles 11.3 and 11.4).  Cross-border services providers of the other Party  
also benefit fr om MFN treatment  (Article 11.4) , and accor ding to the Parties, from  national 
treatment although t hey are not specifically mentioned in the corresponding list of beneficiaries  
(Article 11.3) . 
4.3.3   Commercial presence  
4.14.   The Parties agree that they will not require a service provider of the other Party to establish 
or maintain a representative office or other form of company, or be resident, in their territory in 
order to supply a service  (Article 9 .6). 
4.3.4   Movement of natural persons  
4.15.   Chapter 13 describes the conditions for the temporary entry of business persons in the 
Parties' territory . It does not apply to measures affecting natural persons seeking access to the 
employment market of a Party and measures regarding nationality, residence or employment on a 
permanent bas is (Article  13.3). Under the Agreement, the definition of natural persons covers only 
the nationals of a Party (Article 2.1) which is in line with the definition used in the GATS.26 
Conditional on compliance with their security and immigration requirements and in accordance 
with Annex 13.5, the Parties commit to authorize the temporary entry of certain: (a) business 
visitors, (b) traders and investors, (c) intra -company transferees and (d) professionals.27 
Tables  4.1 detail the scope of application for each c ategory, the requirements, and the permitted 
length of stay.  Regardless of the type of business persons, these commitments do not apply to 
services whose provision is reserved to nationals of the Parties.   
Table 4.1 Authorized business persons by the Parties  
Authorized categories and 
scope of application  Specific requirements  Length of 
stay in 
Mexico  Length of 
stay in  
Panama  
Business visitors     
Business visitors who seek to 
engage in one of the business 
activities listed in Appendix  1, 
Chapter 13 .5.1a The Parties will grant such 
authorization without requiring any 
work permit or employment 
authorization provided that the 
business visitor fulfils certain 
conditions .  
 180 days 
(non-
renewable)  90 days 
(renewa ble) 
Traders and investors     
Traders and investors who seek to 
(a) carry on substantial trade in 
goods and services principally 
between the Parties or (b) 
establish, develop, administer or 
advise on the administration of  an 
investment to which the busin ess 
person or its company has 
committed, or will commit, a 
significant amount of capital.28 Neither Party can require any work 
certificate or procedure  of similar effect  
as a condition to authorize temporary 
entry to the applicant. Quantitative 
restrictions  are also prohibited.  
 180 days 
(non-
renewable)  90 days  
(renewable)  
                                                
26 Under the GATS, natural persons cover only nationals as neither Party has made any notification 
under GATS Article XXVIII(k) to include residents in the definition of natural persons.  
27 These commitments are broader tha n under  the GATS, which cover only the temporary entry of 
natural persons who are directly responsible for the sale of a service, and executives /directors , managers or 
specialists transferred within the same company for both Mexico and Panama .  
28 The Agree ment does not provide a definition for "significant amount of capital".  WT/REG374/1  
 
- 23 - 
 
  Authorized categories and 
scope of application  Specific requirements  Length of 
stay in 
Mexico  Length of 
stay in  
Panama  
Intra -company transferees     
Intra-company transferees who 
seek to work as an executive, 
manager or a specialist in a 
company or its subsidiaries.  Neither Party can require any work 
certificate or procedure  of similar effect  
as a condition to authorize temporary 
entry to the applicant. Quantitative 
restrictions are also prohibited.  180 days 
(non-
renewable)  180 days 
(renewable)  
Professionals     
Professionals who have a pre -
arranged work  contract in a 
company to  conduct specialized or 
technical work, or provide technical 
assistance.  The Parties will grant an entry 
authorization and issue the necessary 
documents provided that the b usiness 
person presents (a ) proof of nationality 
(b) docume nts demonstrating that the 
business person is seeking to enter the 
other Party to provide pre -arranged 
professional services and that indicate 
the purpose of the entry, and (c)  
documents certifying that the person 
has the minimum academic  records to 
provid e a service in the corresponding 
area.  180 days 
(non-
renewable)  Not 
specified  
a The activities in this Appendix include research  and design, manufacturing  and pro duction , sales, 
after-sales service s, management, financial services, public relations, and tourism . 
Source:  Annex 1 3.5 of the Agreement.  
 
4.3.5   Performance requirements  
4.16.   The Agreement prohibits the application of performance requirements in connection with 
investment activities of an investor of a Party or a non -party in its territory.29 It also prohib its the 
Parties from grant ing an advantage related to an investment in their territor ies of an investor of 
the other  Party or a non -party conditional on certain performance requirements, unless the 
requirement is to locate production, provide a service, tr ain or employ workers, construct or 
expand particular facilities, or carry out research and development in their territor ies.  
4.17.   Some performance requirements are allowed in the case of government procurement, 
export promotion and external support programmes . Performance requirements to achieve 
national content and benefit domestic goods can also be used to determine the origin status of 
products.  
4.3.6   Senior Management and boards of directors  
4.18.   The Parties cannot impose nationality requirements for senior manageme nt positions of a 
company that is a covered investment, but can require that a majority of its board of directors, or 
any committee thereof,  be of a particular nationality, or resident in the territory of the Party, 
provided that the requirement does not i mpair the ability of the investor to exercise control over 
its investment (Article  10.6). 
                                                
29 The performance requirements prohibit ed under Article 10.7  are: (a) to export a given level or 
percentage of goods or services; (b) to achieve a given level or percentage of domestic  content; (c) to 
purchase, use or accord a preference to goods produced in its territory, or to purchase goods from persons in 
its territory; (d) to relate in any way the volume or value of imports to the volume or value of exports or to the 
amount of fore ign exchange inflows associated with such investment; (e) to restrict sales of goods or services 
in its territory that such investment produces or supplies by relating such sales to the volume or value of its 
exports or foreign exchange earnings; (f) to tr ansfer technology, a production process or other proprietary 
knowledge to a person in its territ ory, except in certain cases; and  (g) to supply exclusively from the territory 
of the Party the goods that such investment produces or the services it  exports . WT/REG374/1  
 
- 24 - 
 
  4.3.7   Other investment -related provisions  
4.19.   In addition to the provisions on the denial of benefits, performance requirements, senior 
management and board of directors, MFN and national treatment, Chapter 10  on investments 
includes provisions dealing with investment protection  and non -discriminatory treatment  
(Article  10.5), environmental measures (Article 10.9) , compensation in case of armed  conflict  or 
civil strife  (Article  10.10),  expropriation and compensation (Article 10.11), transfers 
(Article  10.12 ), special formalities and info rmation requirements (Article  10.13), and subrogation 
(Article 10.14 ). It also provides procedures for the settlement of disputes between an inv estor an d 
the host Party (Articles 10.16 -10.29).  
4.4  Liberalization commitments  
4.20.   The liberalization of trade in services and investments follows a "negative list" approach, 
which means that provisions in Chapters 9 (Cross -border Trade in S ervices) and 10 ( Inves tments)  
apply to all sectors, unless otherwise specified in the Parties' lists of reservations. Commitments in 
financial services  (Chapter 11)  are also defined  according to a negative list, except for mode 1 
which is also subject to a positive list (Annex 11.7).  
4.21.   Annexes I and II to the Agreement contain the reservations on existing and futures 
measures with respect to national and MFN treatment, market access, local presence, performance 
requirements , and senior management and board of directors in cross -border trade in services and 
investments. Annex III lists reservations for financial services on existing and future measures 
with respect to national and MFN treatment, right of establishment, cross -border trade and senior 
management and board of directors . Reservations with respect to national and MFN treatment in 
Annexes I and II also apply to financial services, to the extent that the measure  or activity in the 
reservation is covered by Chapter  11 (Article 11.11) . 
4.22.   The following sections refer to the Part ies horizontal and sector -specific commitments for 
modes 1 -3. Commitments (in terms of scope) in Mode 4 are described in section 4.3.4.  
4.4.1    Mexico  
4.23.   Under the Agreement, Mexico  made broader commitments in all the sectors identified in the 
WTO Services Sector Cl assification , except for health related and social services , although it listed 
75 reservations at the federal level,  of which  59 refer to non -conforming existing measures  and 16 
to non -conforming future measures .30 Mexico also listed  101 reservations for n on-conforming 
existing measures at the sub-federal level. The list cover s all 32 Mexic an states and applies mainly 
to retail, legal, architect, engineering and land transport services.  The fo llowing section focuses on 
Mexico's commitments at the federal le vel and compares  them to  its commitments  under the 
GATS .  
4.4.1.1   Horizontal commitments  
4.24.   Mexico  lists 10  horizontal reservations , half of which refer to non-conforming existing 
measures . Reservations affect mainly  investment , and mirror in a few cases the GATS . For 
instance, under both the Agreement and the GATS, Mexico prohibits foreigners from acquiring land 
along the country 's borders  and coasts ; and reserves the positions related to th e functioning of 
ships, aircrafts and trains for Mexican nationals.  Some new reservations  include nationality 
restrictions on the staff of micro -industry enterprises  and cooperative production enterprises. 
Mexico  also lists the criteria  to authorize  foreign investments and  allows without prior auth orization 
foreign investments  up to 49% in a Mexican company oper ating in an unrestricted sector .31 It 
reserves the right to adopt or maintain any measure that grants differential treatment to countries 
under an existing international agreement, as well as to countries under any current  or future 
international agreement for aviation, fisheries and maritime related matters (including salvage).  It 
                                                
30 This Factual Presentation follows the WTO Services Sector Classification list, which is based on the UN  
Central Product Classification (CPC) (WTO document MTN.GNS/W/120). The list comprises 11 sectors and 
155 subsectors . 
31 This complements the GATS, whic h allows foreign investment in activities reserved for 
Mexican  nationals only through neutral shares , which do not confer any voting rights or have limited corporate 
rights.  WT/REG374/1  
 
- 25 - 
 
  also reserves the right to grant  any rights or preferences to socially or economically disadvantaged 
groups , and to adopt or maintain any market -access measure consistent with its obligations under 
GATS Article XVI, except for measures relating to business, communications, distribution, 
entertainment, cultural, sporting, road transport and tourism and travel related services.   
4.4.1.2   Sector -specific  commitme nts 
4.25.   Mexico 's sectoral  commitments under the Agreement are in gener al broader  than in the 
GATS although it maintain s reservations in all sectors, except for environmental services and 
tourism and travel related services.  Sectors with the largest number of r eservations and thus the 
most regulated ones include telecommunications, audio -visual, financial, transport and energy 
related services. No commitments were taken in health related and social services .  
4.26.   Table 4.2  compares Mexico 's sectoral commitments  under the Agreement and under its 
GATS schedule for modes 1 -3. 
Table 4.2 Mexico's sector -specific liberalization under the Agreement at the national 
level, excluding mode 4  
Sectors (CPC Classification)  GATS  RTA 
Sectoral 
commitmentsa 
 Compared to 
the GATS, 
sectoral 
commitmentsb 
in the FTA are:  Reservations  as numbered 
in the RTA  
Existingc  
(Annex I)  Futurec  
(Annex II)  
1. Business services       
A. Professional  Services  Partial  Improved  28, 29, 30   
B. Co mputer  and Related  Services   Partial  Improved  - - 
C. Research  and Development  Services   Partial  Improved  - - 
D. Real  Estate  Services    No commitments  Improved  - - 
E. Rental/Leasing  Services  without  Operators   Partial  Improved  - - 
F. Other  Business  Services  No commitments  Improved  6, 15, 18, 20, 
21, 22, 23, 
24, 26, 27,  6 
2. Communication services       
A. Postal  services    No commitments  same  14 3 
B. Courier  services    Partial  same  14, 45 - 
C. Telecommunication  services  Partial  Improved  12,13,14  3 
D. Audiovisual  services  Partial  Improved  8, 9, 10, 11,  
14, 48 - 
E. Other  No commitments  Improved  14 - 
3. Construction and related engineering 
services      
A. General  construction  work for buildings   Partial  Improved  - - 
B. General  construction  work for civil  
engineering  Partial  Improved  15, 16, 33, 
38, 41, 42  - 
C. Installation  and assembly  work  No commitments  Improved  - - 
D. Building  completion  and finishing  work  Partial  Improved  - - 
E. Other    Partial  Improved  - - 
4. Distribution service s      
A. Commission  agents'  services   No commitments  Improved  - - 
B. Wholesale  trade services    Partial  Improved  - - 
C. Retailing  services     Partial  Improved  7, 17, 19 6 
D. Franchising     No commitments  Improved  - - 
E. Other  No commitments  Improve d - - 
5. Education services      
A. Primary education services   Partial  Improved  25 8 
B. Secondary education services   Partial  Improved  25 8 
C. Higher education services    Partial  Improved  25 8 
D. Adult education    No commitments  Improved  25 8 
E. Other education services    Partial  Improved  - 8 
6. Environmental services      
A. Sewage services    No commitments  Improved  - - WT/REG374/1  
 
- 26 - 
 
  Sectors (CPC Classification)  GATS  RTA 
Sectoral 
commitmentsa 
 Compared to 
the GATS, 
sectoral 
commitmentsb 
in the FTA are:  Reservations  as numbered 
in the RTA  
Existingc  
(Annex I)  Futurec  
(Annex II)  
B. Refuse disposal services    No commitments  Improved  - - 
C. Sanitation and similar services   No commitments  Improved  - - 
D. Other  No commitments  Improved  - - 
7. Financial services      
A. All insurance  and insurance -
related  services  Partial  Improved  2, 3, 4, 8, 10  1, 3 
B. Banking  and other financial  services  Partial  Improved  1,2, 3, 4, 5, 
6, 7, 9, 11  1, 2, 3,  
C. Other  Partial Improved  2, 3, 4  1, 3, 10  
8. Health related and social services      
A. Hospital services  Partial  No commitments  - 8 
B. Other Human Health Services   Partial  No commitments  - 8 
C. Social Services    No commitments  same  - 8 
D. Other  No commitments  same  - 8 
9. Tourism and travel related services      
A. Hotels  and restaurants (incl. catering)   Partial  Improved  - - 
B. 
Travel  agencies  and tour operators  services  Partial  Improved  - - 
C. Tourist  guides  services    Partial  Improved  - - 
D. Other  No commitments  Improved  - - 
10. Recreational and cultural and 
sporting services      
A. Entertainment  services (including theatre, 
live bands and circus services)  No commitments  Improved  - - 
B. News agency services    No commitments  Improved  - - 
C. Librar ies, archives, museums and other 
cultural services  No commitments  Improved  - - 
D. Sporting and other recreational services   No commitments  Improved  - 7 
E. Other  No commitments  Improved  - - 
11. Transport services       
A. Maritime Transport Services  
No commitments  Improved  14, 16 , 36, 
37, 38, 39, 
40 4, 13 
B. Internal Waterways Transport  services   
No commitments  Improved  14, 16 , 36, 
37, 38, 39, 
40,  13 
C. Air  Transport  Services  Partial  Improved  14, 32, 33, 
34, 35 , 5, 13 
D. Space  Transport services   No commitments  Improved  14  
E. Rail  Transport  Services  No commitments  Improved  14, 16 , 42, 
46 4 
F. Road  Transport  Services  Partial  Improved  14, 16 , 43, 
44, 45, 47  4 
G. Pipeline  Transport services  No commitments  Improved  14, 15, 18, 
20, 41 6 
H. Services auxiliary  to all modes  of  
transport  Partial  Improved  44 - 
I. Other  Transport  Services  Partial  Improved  14 - 
12. Other services not included 
elsewhere  Partial   31  
a Except as indicated in the GATS horizontal commitments.  
b Except as indicated in t he Agreement 's horizontal reservations.  
c Except for reservations in financial services, which are listed in Annex III .  
- No reservations apply.  
Source :  WTO Secretariat based on the Agreement.  WT/REG374/1  
 
- 27 - 
 
  4.4.1.2.1   Business services  
4.27.   In business services, Mexico made broader commitments in all sub -sectors while 
maintaining  reservations for professional and other business services. It added  real estate services 
and other business services, excluded from the GATS, to its list of bound activities and expanded 
the sectoral and mod al coverage of the other sub -sectors, all restricted under the GATS.  For 
instance, i t bound mode 1 for rental/leasing services , added data base and software 
implementation services, and removed the limit of 49% on foreign participation in companies 
willing  to provide research and development services.  
4.28.   In professional services, Mexico added to its commitments six new activities out of the 
eleven listed in the WTO Services Sector Classification , namely legal services, taxation services, 
integrated engineerin g services, urban planning and landscape architectural services, veterinary 
services, and medical services. Of these activities, only legal and medical services are subject to a  
specific reservation. For instance, Mexico applies nationality and ownership r estrictions t o doctors, 
notaries and law firms . In another reservation with a broader scope, Mexico allows the provision of 
professional services  by foreign professionals  based on reciprocity and conditional on other criteria 
such as establishment.  
4.29.   In othe r business services,  Mexico added nine sub -sectors (e.g. services incidental to 
fishing, mining and manufacturing) to i ts list of committed activities . It also expanded its 
commitments in the ten other sub-sectors, restricted under the GATS, by removing so me of the 
restrictions while maintaining or introducing others. R eservations  take the form mainly of  foreign 
capital restrictions and apply , in particular, to scientific and technical consulting, fishing, 
manufacturing, mi ning, printing, agriculture, and energy  distribution  activities.  For instance , 
foreign investment is not allowed in companies engaged in the distribution of l iquefied petroleum 
gas. It is permitted up to 49% in Mexican companies performing coastal fishing and  fresh water 
fishing.  Mexico al so maintained the GATS restriction s on investment in the a gricultural sector and 
on the nationality of customs brokers .   
4.4.1.2.2   Construction and related engineering  services  
4.30.   In construction and related engineering services, Mexico undertook commitments in  
instal lation and assembly work, excluded from the GATS, and expanded the sectoral and modal 
coverage in the other remaining subsec tors but maintains  foreign investment  restrictions in 
construction work s for civil engineering , some of which mirror those under the  GATS.  In particular, 
Mexico restricts foreign capital participation in companies engaged in the construction of public 
infrastructure such as  roads, bridges, airports, heliports, pipelines , harbours , and railways.  
4.4.1.2.3   Communication services  
4.31.   In communications services, Mexico expanded its commitments  in telecommunications and 
audio -visual s ervices but listed some  reservations.  In telecommunications , Mexico  expanded 
mainly the sectoral coverage of valued -added services , whic h is very limited under the GATS, but 
maintained  most, if not all , of its GATS reservations  for basic and value -added telecommunications 
services . For instance, only Mexican companies and nationals can provide telecommunications 
services as a commercial agency32, or be granted a concession  to conduct  activities  such as  exploit 
a frequency band , or operate  public telecommunication networks . Foreign capital participation  in 
concessionaire Mexican companies providing telephony services  is limited to 49 %, except for 
cellular telephony services , where foreign capital participation can be higher s ubject to 
authorization.  Finally, the provision of telegraphy and radiotelegraphy services is reserved for the 
Mexican State.  
4.32.   In audio -visual  services , Mexico expand ed sectoral coverage, which was limited unde r the 
GATS to  private production of cinematographic  films and private film -screening services,  and 
removed (fully or partially) some of the GATS reservations while listing some others.  For instance 
it remove d the limitation on foreign participation in the capital of companies will ing to provide film 
screening and production services . It relaxed the reservation on private film -screening services by 
reducing from 30% (under the GATS) to 10% the screen time that  every theatre (on an annual 
                                                
32 Commercial agencies are those which, without owning or possessing transmission m eans, provide 
third parties with telecommunications services through a telecommunications public network concessionaire.  WT/REG374/1  
 
- 28 - 
 
  basis) must reserve  for Mexican movies . On the other hand, it listed  a number of nationality and 
performance requirements affecting mainly radio and television services. For instance, only 
Mexican nationals  or companies are allowed to provide  (through a concession) audio broa dcasting 
and television  services, r egardless of whether they are  paid (cable transmission) or not.  Also only 
Mexican nationals  or companies can obtain a concession to install, operate or exploit public 
telecommunications networks to provide cable televisio n and audio broadcasting services . In the 
case of cable television and audio broadcasting services, i nvestors of the other Party or their 
investments may own  up to 49% of the capital  in a Mexican company  willing to provide these 
services . Mexico also  requires the use of the Spanish language for the broadcast or cable  television  
distribution of radio or television advertising, and programming , unless otherwise authorized . 
Foreign r adio or television announcer s or presenter s must obtain an authorization to pe rform in 
Mexico.   
4.33.   Mexico  made no co mmitments i n postal services, which are reserved for the State, and 
reserves the provision of courier services to Mexican nationals and enterprises.  It also prohibits the 
participation of foreign governments and state ent erprises in the capital of Mexican companies 
providing any communication  services. This reservation also applies to transportation  services.  
4.4.1.2.4   Distribution services  
4.34.   In distribution services, Mexico made full commitments in commission agents' services, 
franch ising and other services which are  excluded from its GATS  Schedule . In wholesale and 
retailing services,  restricted under the GATS,  it made broader commitments by expanding sectoral 
coverage but maintained some reservatio ns. For instance, it limits foreign  capital participation to 
49% for companies established in Mexico willing to trade  arms, cartridges and ammunition s, which 
is excluded under  the GATS. The distribution and sale of gasoline, diesel and lubricants is also 
reserved for Mexican nationals and c ompanies (including petrol stations) , except for companies 
supplying fuel and lubricants to  aircraft , vessels and railway equipment where foreign capital  
participation can be up to 49%. Mexico also reserves the right to adopt any measure regarding 
cross-border supply and investment in the oil and g as sector, including international trade 
activities.  
4.4.1.2.5   Education services  
4.35.   In the area of private education , Mexico relax es the GATS reservation on the ownership of 
educational institution s by allowing , subject to au thorization , foreign capital participation above  
49%, wh ich is the limit under the GATS.  Mexico made no commitm ents regarding public education 
which is cover ed by a broad reservation on social services. Under this reservation, Mexico  can 
adopt or maintain any measure with respect to investment and cross -border trade in social 
services , including correctional services, income security and insurance, social security, social 
welfare, public education, public training, health, and childcare.    
4.4.1.2.6   Financial service s 
4.36.   Mexico's commitments in financial services are broader than in the GATS33 but remain very 
limited as a number of reservations, largely reflecting those under the GATS, apply . For instance, 
in insurance and insurance related services, Mexico took some comm itments for non -life insurance 
services but like in the GATS none were made for mode s 1-2 for life insurance services and related 
auxiliary services. I n non -life insurance services, in particular transportation insurance s, Mexico  
took commitments in mode s 1 and 2, which mirror those under the WTO Understanding on 
Commitments on financial services , but maintain s a broad reservation that prohibits foreign 
companies from selling insurances to persons or companies located in Mexico or subject to 
Mexican legisla tion, unless they cannot be purchased locally. This includes private insurance for 
Mexican nationals and companies, insurance for Mexican vessels  or aircraft , credit insurance,  as 
well as any insurance intended to cover a risk in Mexico. Subject to authori zation, Mexico may 
allow foreign companies to sell international or travel insurance  in its territory . The provision of 
auxiliary services for the activities covered by the reservation is also prohibited. Mexico also 
prohibits equity participation by foreign financial entities in insurance or bonding agencies, and 
                                                
33 This section is based on the commitments agreed during the 1998 Negotiations o n Financial Services, 
(document  GATS/SC/56/Suppl.3) whi ch replace  those in the  1994 GATS schedule.  WT/REG374/1  
 
- 29 - 
 
  mutual insurance companies . Foreign individuals may participate in mutual insurance companies 
as long as they do so individually and not as part of a legal entity .   
4.37.   In banking and other financial  services , Mexico expanded its sectoral coverage by adding to 
its list of committed activities  payment and mo ney transmission services; guarantees and 
commitments; settlements and clearing services for financial assets ; the provision, processing and 
transf er of financial information and data, and trading activities involving derivative products and 
exchange rate and interest rate instruments.  It allows foreign investment in credit unions , 
prohibited under the GATS, up to 15%  of their  capital . However, it al so applies a number of 
restrictions, including nationality , authorization, and establishment requirements . For instance, 
directors and man agers for savings and lendin g institutions  must be Mexican national s. It also 
requires a concession to operate as a st ock market , which may be granted at the discretion of the 
financial authorities . It limits the market share of p ension funds management companies  to 20%, 
and reserves the right to adopt or maintain measures that grant exclusive rights to development 
banks.  
4.38.   Finally, Mexico lists three reservations that apply to the entire financial sector. It  prohibits 
the participation of foreign governments in the capital of Mexican compani es providing financial 
services, and reserves the right to impose limitations with r espect to foreign participation in State 
enterprise s or governmental entities . Mexico also reserves the right to adopt or maintain measures 
that grant advantages or exclusive rights to the national insurance institutions, national bonding 
institutions, a n ational pension fund or national auxiliary organisations of credit (existing or new) . 
Finally, Mexico does not allow Panama's financial institutions to establish a branch in Mexico.  
4.4.1.2.7   Health related and social services  
4.39.   Mexico did not take any further commit ment in h ealth related and social services , which are 
subject under the Agreement to a broad reservation allowing the application of any measure 
affecting investment and cross -border trade in social services such as correctional services, income 
security a nd insurance, social security, social welfare, health (public and private) childcare 
services, as well as measures for providing law enforcement. Under the GATS , commitments in 
health related and social services  are limited to certain activities and modes.34  
4.4.1.2.8   Tourism and travel related services  
4.40.   In tourism  and travel related services, Mexico made broader commitments by not listing any 
reservation under the Agreement and  expanding sectoral and modal coverage  in this area . In 
particular, it removed its GATS limitation  on the participation of foreign capital for restaurants, 
cabarets , and nightclubs ; and bound mode 1 for travel agencies, tour operators , and tourist guide 
services.  
4.4.1.2.9   Recreational , cultural and sporting services  
4.41.   Mexico added recreational, cultural a nd sporting services to its list of commitments , without 
listing any reservation except for  gambling and betting services, for which it reserves the right to 
adopt or maintain any measure affecting their provision (either through  investment or cross -
border  trade).   
4.4.1.2.10   Transport services  
4.42.   In transport services, Mexico expanded its sectoral coverage by addin g to its list of 
committed activities: rail, space, pipelines , maritime  and internal waterways transport services, all  
of which are  excluded from its GATS sch edule , but maintained various reservations affecting the 
entire transport sector. In fact, this is one of the sector s with the  largest number of reservations. 
For instance, i n maritime and internal waterways transport  services , res ervations  include 
restric tions on foreign investment participation in Mexican companies engaged in different  types of 
maritime activities. Such activiti es include port administration , the provision of port services , the 
supply of piloting port services , inland navigation and cabot age. Other activities, such as the  
                                                
34 Under the GATS, Mexico limits foreign capital participation to 49% in private hospital services, clinical 
laboratories and institutions providing selected medical services, and bound only mode 2.  WT/REG374/1  
 
- 30 - 
 
  operation of a shipyard  are also reserved for Mexican nationals or companies.  In rail transport 
services, Mexico applies  nationality requirement s to train crew s and limits foreign participation  in 
Mexican companies engage d in the construction, operation and exploitation of railroads.   
4.43.   In air transportation,  which is restricted under the GATS,  Mexico  maintains some 
reservations but expand ed sectoral coverage by  making commitments in specialty air services , 
which are exclude d from the GATS.  The Agreement also covers  aircraft repair and maintenance 
services, selling and marketing of air transport services, and computer reservation system services  
(like in the GATS) . Reservations include foreign capital restrictions as well as establishment  and 
nationality requirements  which are , in few  cases , less string ent than in the GATS. For instance, 
foreign equity partici pation is limited to 49% , instead of 30% under the GATS, in Mexican 
companies that have been granted a concession to operate airports and heliports . Higher equity 
participation is possible subject to authorization. Foreign investment is also limited to 25% in 
Mexican companies willing to provide commercial air services or specialized air services using a 
Mexican aircraft . Nationality requirements apply to the management staff of such companies  and 
pilots  (also in the GATS) . In another example only Mexican residents can get a permit to operate 
aircraft repair facilities and training centres . 
4.44.   In road transport services, Mexic o expands sectoral coverage, which is limited to vehicle 
maintenance and repair services  under the GATS . Reservations include nationality and local 
presence requirements.  For instance, Mexico reserves the operation of a bus or truck station to 
Mexican nati onals or companies. Inter -city bus services, tourist transportation services or truck 
services for the transportation of goods or passengers to or from Mexico, and within is also 
reserved for Mexican  nationals and companies . In services auxiliary to all mo des of transport, 
Mexico expanded its sectoral coverage but limit s the participation of foreign investors to 49 % in 
Mexican companies supplying fuel and lubricants for aircrafts , ships and railway equipment; and 
reserves the provision of auxiliary services  to federal road transportation to Mexican nationals  and 
companies.  
4.4.2   Panama  
4.45.   Like Mexico, Panama made in general broader commitments in all the sectors identified in 
the WTO Services Sector Classification,  except for health related and social services. It listed 44 
reservations , of which 35 refer to  existing measures  and the rest to future measures.  A few of 
these reservations mirror those in Panama's GATS schedule or are similar to those listed by Mexico 
such as the reservations on social services and native populations and minorities . Panama also 
listed two other mul ti-sector reservations on public utilities and business services.  Under  the 
former , the majority of the capital of private enterprises operating in Panama and engaged in 
public utilities shall b e owned by Panamanian  nationals , unless Panama's legislation specifies 
otherwise. Public utilities include the provision of water35, sewage, electricity, telecommunications, 
radio, television and gas transmission and distribution. Under the other multisecto r reservation, 
certain activities such as economist, customs agent, health professionals, journalists and tour 
guide are restricted to its nationals. These activities fall under  different services categories but in 
general refer to business services.    
4.4.2.1   Horizontal commitments  
4.46.   Panama listed seven  horizontal reservations, of which two refer to non -conforming existing 
measures. S ome of these reservations mirror those in Panama's GATS schedule while others are 
new. For instance, Panama  prohibits  the acquisition by foreigners of land in border areas or 
islands , which reflects the GATS,  but also forbids the acquisition by any foreign government or 
state-owned company to exercise control over any territory in Panama, except their embassies. It 
also reserves the righ t to impose any limitations with respect to foreign participation in State 
enterprise s or governmental entities. Moreover , under the Agreement , Panama may grant 
preferential treatment to its nationals over foreigners for positions in the Panama Canal 
Autho rity.36 It also reserv es the right to adopt or maintain any market -access measure consistent 
with its obligations under GATS Article XVI, except for measures relating to energy distribution, 
                                                
35 The supply o f water is not included in the CPC classification for services, which is why it is not taken 
into account when comparing the commitments under the GATS and the Agreement.  
36 It reserves the right to adopt or main tain any measure related to the  Canal’s funct ioning.  WT/REG374/1  
 
- 31 - 
 
  telecommunications, tourism, entertainment, postal services and po rts and airports.37 Like Mexico, 
it reserves the right to adopt or maintain any measure that grants differential treatment to 
countries under an existing international agreement, as well as to countries under any current  or 
future international agreement in volving aviation, fisheries and maritime matters (including 
salvage).  It also reserves the right to adopt any measure granting any right or preference  to 
socially or economically disadvantaged  groups . Compare d to the GATS, Panama removes the 
nationality re striction applying to compan y employees.   
4.4.2.2   Sector -specific commitments  
4.47.   Panama's commitments under the Agreement are in general broader than in the GATS 
although it maintained reservations in all sectors,  without exception.  It made broader 
commitments for mo des 1 -3 in ten of the eleven sectors identified in the WTO Services Sector 
Classification , in particular in 47 out the  55 subsectors. Panama made no commitments in health 
related and social services.  
4.48.   Table 4. 3 compares Panama's sectoral commitments under t he Agreement and under its 
GATS schedule for modes 1 -3. 
Table 4.3 Panama's sector -specific liberalization under the Agreement at the national 
level, excluding mode 4  
Sectors (CPC Classification)  GATS  RTA 
Sectoral 
commitmentsa 
 Compared to 
the GATS, 
sectoral 
commitmentsb 
in the FTA are:  Reservations  as 
numbered in the RTA  
Existingc  
(Annex I)  Futurec 
(Annex II)  
1. Business services      
A. Professional  Services  partial  same  21, 22, 23 - 
B. Computer  and Related  Services   partial  Improved  - - 
C. Research  and Development  Services   No commitments  Improved  22 - 
D. Real  Estate  Services    No commitments  Improved  22 - 
E. Rental/Leasing  Services  without  Operators   partial  Improved  - - 
F. Other  Business  Services  partial  Improved  9, 10, 11, 
12, 13, 14, 
15, 20, 22 6 
2. Communication services      
A. Postal  services    No commitments  Same  28 - 
B. Courier  services    No commitments  Same  28 - 
C. Telecommunication  services  Partiald Improved  3, 7, 24, 25 - 
D. Audiovisual  services  Partial  Improved  3, 6 - 
E. Other  No commitments  Improved  - - 
3. Construction and related engineering 
services      
A. General  construction  work for buildings   partial  Improved  - 5 
B. General  construction  work for civil  
engineerin g  partial  Improved  - 5 
C. Installation  and assembly  work  partial  Improved  - 5 
D. Building  completion  and finishing  work  partial  Improved  - 5 
E. Other    No commitments  Improved  - 5 
4. Distribution services      
A. Commission  agents'  services   full the same  - - 
B. Wholesale  trade services    full the same  - - 
C. Retailing  services     No commitments  Improved  1 - 
D. Franchising     Partial  Improved  1 - 
E. Other  No commitments  Improved  - - 
                                                
37 These sectors are already subject to a reservation with respect to an existing measure. This 
reservation does not apply to real estate and call centr e services.  WT/REG374/1  
 
- 32 - 
 
  Sectors (CPC Classification)  GATS  RTA 
Sectoral 
commitmentsa 
 Compared to 
the GATS, 
sectoral 
commitmentsb 
in the FTA are:  Reservations  as 
numbered in the RTA  
Existingc  
(Annex I)  Futurec 
(Annex II)  
5. Education services  Partial     
A. Primary education servi ces  Partial  Improved  8 1 
B. Secondary education services   Partial  Improved  8 1 
C. Higher education services    Partial  Improved  8 1 
D. Adult education    No commitments  Improved  8 1 
E. Other education services    No commitments  Improved  8 1 
6. Environme ntal services  partial     
A. Sewage services    No commitments  Improved  3  - 
B. Refuse disposal services    No commitments  Improved  - - 
C. Sanitation and similar services   No commitments  Improved  - - 
D. Other  Partial  Improved  - - 
7. Financial services  Partial     
A. All insurance  and insurance -related  services  Partial  Improved  4, 5, 6   - 
B. Banking  and other financial  services  Partial  Improved  1, 2, 3, 6  - 
C. Other  No commitments  Improved  - - 
8. Health related and social services      
A. Hospital s ervices  Partial  No commitments  - 1 
B. Other Human Health Services   No commitments  Same  - 1 
C. Social Services    No commitments  Same  - 1 
D. Other  No commitments  Same  - 1 
9. Tourism and travel related services      
A. Hotels  and restaurants (incl. cater ing)  Partial  Improved  26 - 
B. Travel  agencies  and tour operators  services  Partial  Improved  - - 
C. Tourist  guides  services    No commitments  Improved  22 - 
D. Other  No commitments  Improved  - - 
10. Recreational and cultural and sporting 
services      
A. Entertainment  services (including theatre, 
live bands and circus services)  Partial  Improved  5, 27 - 
B. News agency services    No commitments  Improved  22 - 
C. Libraries, archives, museums and other 
cultural services  No commitments  Improved  - - 
D. Sport ing and other recreational services   No commitments  Improved  - - 
E. Other  No commitments  Improved  - - 
11. Transport services      
A. Maritime Transport Services  No commitments  Improved  16, 17, 29 - 
B. Internal Waterways Transport  No commitments  Improved - - 
C. Air  Transport  Services  Partial  Improved  18, 19, 29 - 
D. Space  Transport    No commitments  Improved  - - 
E. Rail  Transport  Services  No commitments  Improved  - - 
F. Road  Transport  Services  No commitments  Improved  - 9 
G. Pipeline  Transport  No commitments  Improved  - - 
H. Services  auxiliary  to all modes  of transport  No commitments  Improved  17 - 
I. Other  Transport  Services  No commitments  Improved  - - 
12. Other services not included elsewhere  No commitments  Improved  - - 
a Except as indicated  in the GATS horizontal commitments.  
b  Except as indicated in the Agreement 's horizontal reservations.  
c  Except for reservations in financial services, which are listed in Annex III  
d Full commitments were made in value -added telecommunications services  in 2000 . 
- No reservations apply.  
Source:  WTO Secretariat based on the Agreement.  
 
 
 WT/REG374/1  
 
- 33 - 
 
  4.4.2.2.1   Business services  
4.49.   Compared to the GATS, Panama made broader commitments in almost all the sub-sectors in 
business  services  by expand ing sectoral and/or modal coverage while maintain ing some 
reservations. For instance, it expanded the sectoral and mode coverage in computer and related 
services38, and rental and leasing services, both restricted under the GATS. It also made 
commitments in research, development and real esta te services, all excluded from the GATS, while 
maintaining a nationality restriction for economists, psychologists, sociologists, agricultural science 
professionals, and real estate agents/brokers. Only i n professional services do  commitments seem  
to be th e same  under the GATS and the Agreement . According to Panama , the Agreement reflects 
all the GATS restrictions and so no further  commitments have been made.  For instance,  Panama  
indicated that accoun ting services remain reserved for  its nationals.  It also continues to apply 
nationality restrictions in legal, architectural and engineering services (including integrated 
engineering, urban planning and lan dscape architectural services) ,39 although i n some  cases, an 
authorisation to provide architectural and eng ineering services can be granted to foreign nationals , 
for instance on the basis of reciprocity . Finally, Panama reserves  a wide list of professions and 
activities for its na tionals. The list covers medical, dental, veterinary services, as well as services  
provided by medical personnel, including nurses and physiotherapist s, all absent from the GATS. 
Yet under certain circumstances, Panama may allow foreign professionals such as doctors, nurses, 
nutritioni sts, odonatologist s and veterinaries to practice in Panama .40 
4.50.   In other business services, commitments under the Agreement are also broader than under 
the GATS, which fully or partially bound s ten of 20  services activities  in this subsector . Under the 
Agreement, Panama made commitments in the other ten (exclu ded) activities  while maintain ing 
reservations  for three  of them : services incidental to energy distribution41, security services42 and 
other services .43 In general, these reservations take the form of nationality and establishment 
requirements . For the servi ces categories  that are partially bound under the GATS – in total six - 
Panama  expands  sectoral and modal coverage  but maintain some reservations. For instance, it 
expand s sectoral  coverage in services incidental to ag riculture, hunting and forestry but ma intains 
nationality restrictions on agricultural professionals. In printing and publishing, it expand s modal 
and sectoral coverage while applying nationality  requirements for managers of press companies , 
including newspapers and magazines, requiring that 1 00% of the capital be Panamanian.  In 
advertising services, it removes the GATS restriction under which foreign agencies must be 
associated with national enterprises, but lists new requirements for  advertising announcements for 
television and cinematography . In services incidental to mining, it includes  new activities, but 
applies nationality restrictions for the beneficiaries of concessions and contracts for mining 
extraction and exploitation, as well as to mining workers.  In services incidental to fishing,  it adds 
mode 3 to its schedule and applies mainly nationality requirements for fish sellers and ships. It 
also reserves the right to maintain and adopt any measure on the requirements to acquire and 
operate fishing ships.  
4.4.2.2.2   Communication services  
4.51.   In commun ications services, Panama expands  sectoral coverage in telecommunications 
services,  which under the GATS are limited to value -added telecommunications services44, but 
                                                
38 In Computer and related services, Panama adds retail sale of hardware, excluded fro m the GATS  and 
expands  the sectoral coverage of data processing services and other computer services . 
39 Moreover, companies willing to provide architectural  and engineering services  are subject to 
registration requirements , and can hire foreign architects or engineers subject to authorization. If the work 
contract is for less than 12 months, a Panamanian professional must also be hired to be trained and to replace 
the foreigner at the end of the contract . This condition seems stricter than under the GATS si nce in the latter, 
the condition applies only to contracts of over 12 months.  
40 Taxation services, mostly unbound under the GATS, are not covered by the Agreement (19.5).  
41 Panama lists a reservation on petroleum and natural g as, which indicate inter alia that foreign 
contractor s in this area must be establish ed in Panama to provide their services and are required to hire 
Panamanian nationals in accordance with the law.   
42 The reservation on security agencies indicates inter alia that the owner of a securi ty company must 
be a Panamanian national and only a Panamanian national may hold the position of head of security or security 
guards in the territory of Panama  
43 Under the reservation on other services, public relations specialist and translators must be 
Panamanian nationals.  
44 Panama has not adopted the Fourth Protocol to the GATS (i.e. Agree ment on Basic 
Telecommunications).  WT/REG374/1  
 
- 34 - 
 
  listed four  reservations. It does not allow foreign government participation in companies supplying 
telecommunication services in Panama. It restricts the number of mobile phone operators to four, 
and applies a local presence requirement to supply telecommunication services in its territory. 
Under the multi -sector reservation on public utilitie s, the majority of the capital of private 
enterprises providing telecommunications services must be Panamanian.   
4.52.   In audio -visual services, it expands the sectoral coverage of motion picture projection 
services;  and radio and television services  (including transmission services)  but maintain s a few  
reservations. For instance, it limits foreign capital participation to 35% in companies willing to 
provide radio and television services , and applies restrictions on the nationality of their directors 
and managers . The multi -sector reservation on public utilities also  applies to radio and television 
services.  
4.53.   No commitments were taken in postal and courier services, which are reserved for the 
State.   
4.4.2.2.3   Construction services  
4.54.   In construction services, Panama made broad er commitments in mode 1, which is unbound 
under  the GATS,  but maintains the GATS reservation in  mode 3 , under which engineers and 
architects responsible for  a project must be Panamanian nationals and also reserves the right to 
adopt or maintain any reside ncy or  local presence requirement , or ask for a financial deposit to 
supply these services.  
4.4.2.2.4   Distribution services  
4.55.   In distribution services , Panama added  retailing and other services  to its schedule , but 
applies  nationality  or ownership requirements for individuals or companies willing to provide 
retailing services in Panama. In franchising services, it removed the restriction for mode 1 but in 
accordance with  the reservation on retailing services it continue s to reserve the activities of the 
franchise  (mod e 3) at the retail level for its nationals . 
4.4.2.2.5   Education services  
4.56.   In education  services , Panama expanded its commitments in the area of private education 
but made no commitments regar ding public education, which is  covered , like for Mexico, by a 
broad reserva tion on social services that allows Panama to adopt or maintain any measure in 
public education and training . In the field of private education, Panama removed  an authorization 
requirement for private education al institutions in  primary, secondary and high er education, while 
introducing one restriction. Under the latter, only its nationals can teach certain topics in Panama . 
4.4.2.2.6   Environmental services  
4.57.   In envi ronmental services, Panama added to its schedule refuse disposal services,  sanitation 
services , and sewa ge services, all  unbound under the GATS . Of the se three sub -sectors, only 
sewage services were subject to the  reservation on public utilities. Under this reservation, private 
enterprises engaged in public utilities in Panama shall be majority -domestically owned, unless 
Panama's legislation specifies otherwise. Finally, i n "other" related services, Panama expanded 
sectoral coverage, which under the GATS is limited to certain activities related to nature and 
landscape protection, gas cleaning and noise abatem ent. 
4.4.2.2.7   Financial services  
4.58.   In financial services, Panama45 made broader commitments in insurance, banking and 
related services, but maintains six reservations, one of which ap plies to all financial services. 
Under the latter, only banks and insurance companies  established in Panama can issue bonds or 
banking guarantees re lated to government procurement . In insurance and insurance related 
services, Panama took the same approach as in the GATS and made no commitments in mode 1 
                                                
45 Panama has  not adopt ed the Fifth  Protocol to the GATS on financial services and its annexes 
(i.e. Understanding on Commitments i n Financial Services).  WT/REG374/1  
 
- 35 - 
 
  for life insurance services and rela ted auxiliary services. However, it did ma ke some commitments 
in mode 2, also unbound under the GATS, by allowing , subject to authorization , the purchase of 
insurances policies abroad as long as  they cannot be provided by any company  established in 
Panama.  In non -life insurance services,  in particular transportation insurance , it undertook partial 
commitments in mode 1  and 2, which are restricted and unbound respectively under the GATS and 
expand ed sectoral coverage by adding risk insurance relating to good s in international tr ansit, 
which is excluded from  the GATS . Like for other type of insurance, Panama allows cross -border 
purchase , as well as the purchase of insurance policies abroad, only if these policies cannot be 
provided by companies established in Panama. It also broadened  its commitments in reinsurance 
and retrocession services, by rem oving the GATS restriction on  fire insurance  but applies  a 
restriction on the nationality of the general proxies of reinsurance companies.  Finally,  Panama 
adds servic es auxiliary to non -life insurance to its schedule but maintain s restrictions on 
nationality and ownership for stock agents and broker companies  (and their legal proxies) . 
4.59.    In banking and other financial services, Panama 's commitments under the GATS are 
relatively broad . Panama  included  almost all activities in this category and listed almost no 
restrictions for modes 1 to 3. The Agreement complements these commitments by expand ing 
sectoral coverage . For instance, i t adds settlement and clearing services fo r financial assets  to its 
list of committed activities. These were the only activities  that were entirely excluded  from the 
GATS. It also broaden s the sectoral scope of financial leasing services,  lending services, and 
payments a nd money transmission servi ces, all of which are limited to certain activities in the 
GATS . It also removed the restriction under which only Panamanians could make placements in 
Panama's exchange or over -the-counter market s, but applies some nationality an d establishment 
restriction s to legal representatives of branches of foreign banks and to members of the 
management board (e.g. managers and directors) of State -owned banks, including Panama's 
National Bank.   
4.4.2.2.8   Health related and social services  
4.60.   Panama made no commitments in hea lth re lated and social services, as they are subject to 
a broad  reservation on social services . The reservation allows Panama to adopt any measure 
affecting  investment and cross -border t rade in social services such as correctional services, income 
security and i nsurance, social security, social welfare,  health (public and private)  childcare 
services, as well as measures for providing law enforcement.  
4.4.2.2.9   Tourism and travel related services  
4.61.   In tourism and travel related services, Panama made broader  commitments by ex panding 
sectoral coverage and adding to its schedule services provided by restaurants, tour operators, 
tourist guides and other related services, all of which are unbound under the GATS. It maintains 
only two reservations , one on the establishment of bars and another  on residency conditions for 
tourist guides.  
4.4.2.2.10   Recreational, cultural and sporting services  
4.62.   Panama expanded sectoral and modal coverage  for recreational, cultural and sporting 
services, which under the GATS is limited to  certain entertainment serv ices and mode 2. Panama 
added to its schedule news agency services, libraries, archives, museums, sporting as well as 
other recreational, cultural and related activities, all excluded from the GATS, but appl ies 
registration and licensing requirements for f oreign journalism as well as nationality requirements 
for librarians. In entertainment services , it maintain s a few restrictions under which it reserves the 
supply of games of chance and gambling for the State and allows music shows by foreign artists 
upon the fulfilment of certain conditions .  
4.4.2.2.11   Transport services   
4.63.   Panama expanded the sectoral coverage of transport services , which under the GATS is 
limited to aircraft maintenance and repair services . Under the Agreement, Panama  made 
commitments in all the ot her missing subsectors (eight in total) while maintaining some 
reservations in air, road,  maritime and internal waterway transport services as well as auxiliary 
services  to maritime and waterways transport services . In maritime and internal waterway WT/REG374/1  
 
- 36 - 
 
  transp ort and auxiliary services , Panama reserves for example the right to determine the number 
of concessions for national ports and airports.  It also imposes  restrictions on the ownership of 
vessel s willing to provide certain services , on the nationality of th eir crew, and on the crew of  
placement/manning companies  registered in Panama .  
4.64.   In addition  to this reservation, Panama applies a number of restriction s in air transport 
services . For instance, only Panamanians nationals and enterprises that are majority o wned by 
Panamanian nationals can provide air transport services . Also, only Panamanian nationals may be 
apprentice pilots, and can hold positions as a crew member , including pilots,  or other aeronautical 
technical personnel,  such as persons on land in char ge of the air traffic control, inspection,  
maintenance and repair of aircraft.  In road transport services, Panama reserves the right to adopt 
or maintain any measure that restrict s the provision of services and investment s related to 
passenger transportati on, buses terminal s and the rental of commercial vehicles with operator.  
Cabotage (by land) is reserved for Panamanian nationals.  
4.5  Regulatory provisions  
4.5.1   Domestic regulation  
4.65.   Article 9 .8 on domestic regulation  of the Agreement  mirrors to a large extent Article VI of 
the GATS , in particular paragraphs 1, 3 and 4. Like in the GATS , the Parties shall ensure that all 
measures of general application affecting trade in services are administered in a reasonable, 
objective and impartial manner. They also commit to i nform applicants about the decision 
regarding their request for an authorization to supply a service, and, if requested,  of the status of 
their application. The y also list the GATS criteria that must be used to ensure that qualification 
requirements and pr ocedures, technical standards and licensing requirements do not constitute 
unnecessary barriers to trade . Finally, t he Parties agree to jointly review this article following the 
conclusion of negotiations  in this area in the WTO  with the view to introduc e the changes into the 
Agreement. Article 9.8 does not apply to measures covered by the Parties' reservations.  
4.66.   The Parties also include provisions  on domestic regulation (i.e. exceptions) and the 
recognition of prudential measures specific to financial servi ces. Under the Agreement , provisions 
on domestic regulation are more detailed than those in the GATS Annex on Financial services . Like 
in the GATS Annex, t he Parties can adopt or maintain prudential measures to ensure the stability 
and integrity of the fin ancial system ; or to protect investors, depositors, policy holders or persons 
to whom a fiduciary duty is owed by  a financial service provider . Such measures should not be 
used to circumvent the P arties' obligations. T he Agreement does not apply to non -discriminatory 
measures by any public ent ity related to macro prudential, monetary, credit  related or exchange 
rate policies. Under certain conditions, the Parties can restrict transfers by a financial institution or 
cross-border financial services. Finally, nothing in Chapter 11 shall be construed to prevent a Party 
from adopt ing or enforcing  measure s necessary to secure compliance with  its laws or regulations 
that are consistent  with this Chapter, including measure s dealing with the effects of a default on 
financial services contracts. The Parties shall not apply these  measure s in a discriminatory 
manner, or as a disguised restriction to trade or  investment (Article  11.12).  
4.67.   As for the provisions on the recognition of prudential measures, they mirror to a lar ge 
extent those under the GATS Annex on Financial Services , but in addition require that when a 
Party recognize s the prudential measures of a non -party, regardless of the method (autonomously, 
through harmonization, or based on an agreement or arrangement)  the Party will give the other 
Party the possibility to prove that a similar situation exist s or will exist in its territory 
(Article  11.5).  
4.5.2   Recognition  
4.68.   In Article 9.9  on the recognition of professional qualifications of service suppliers , the 
Parties inc orporate provisions that  mirror those in paragraph s 1 to 3 of GATS Article VII46 but also 
                                                
46 Indeed Article 13.10 allows Parties to recognize autonomously or by agreement, the education or 
experience obtained, requirements met, or licenses or certifications granted by a Party. In case of an 
agreement, the Party must give a n opportu nity to the other Party to join; and w here the Party granted 
recognition autonomously, it should provide the other Party the opportunity to demo nstrate that it also WT/REG374/1  
 
- 37 - 
 
  add some new provisions  on autonomous recognition. The Article clarifies  that when a Party 
recognizes, autonomously or by agreement , the education or experience obtain ed, requirements 
met, or licenses or certifications granted in the territory of a non -party, the Party is not obliged to 
accord the same recognition to the other Party. Moreover, t he Parties shall encourage the relevant 
bodies to develop standards and crit eria to grant licences and certifications to services providers in 
accordance with Annex 9.9 . They  shall also encourage the develop ment of  procedures to grant 
temporary licences to professional services suppliers of the other Party, and to establish a work ing 
programme on temporary licences for engineers and architects. The Parties agree to review the 
implementation of the provisions on the development of standards every three years . 
4.5.3   Subsidies  
4.69.   The Parties reaffirm their obligations under Article XV of the G ATS and their commitment to 
develop disciplines in this area . Following the conclusion of the  negotiations at the multilateral 
level and the  adoption of new disciplines, t he Parties shall review the provisions relating to 
subsidies  with the view to incorpo rating them into the Agreement (Article 9.13) .  
4.70.   Chapter 9  as well a s certain provisions  of Chapter 10  (i.e. MFN and national treatment, and 
senior management and boards of directors) do not  apply to subsidies or grants by a Party.  
4.5.4   Safeguards  
4.71.   The Agreement  permits the Parties to use safeguards fo r balance of payments reasons (s ee 
Section 5.3) .  
4.6  Sector specific provisions on trade in services  
4.6.1   Financial services  
4.72.   The Agreement includes a separate  chapter on f inancial Services  (Chapter 11), which 
applies to mea sures by a Party affecting: (a) financial institutions of the other Party; (b) investors 
of the other Party, and their investments in financial institutions in the Party's territory; and (c) 
cross-border trade in financial services. It does not apply to me asures related to activities or 
services: (a) forming part of a public retirement plan or social security system (public or private) 
or (b) for the account, or with the guarantee of the Party or using its  financial resources  
(Article  11.2). In the event of  any inconsistency between this Chapter and other Chapters in the 
Agreement, this Chapter will prevail .  
4.73.   Chapter 11 details the Parties ' commitments on cross-border trade, which are scheduled 
according to a positive list approach (Article 11.7) and the ir lists of reservations, which apply to 
cross-border trade and investment (Article 11.11 and Annex III). It also  includes provisions on 
MFN and national treatment  (see section 4.3.2) , prudential measures  (see section 4.5.1) , the right 
of establishment  (see se ction 4.3.3) , new financial services, the treatment of financial and 
confidential information, senior management requirements, transparency, self -regulatory 
organizations, access to payment s and clearing systems, consultations, dispute settlement, data 
processing , and exceptions  (see section 4 .5.1). In addition, t he Parties agree to establish a 
Committee on  Financial Services, which will supervise the implementation of Chapter 11  
(Article  11.16). Some of these provisions reflect to a large exten t those unde r the WTO 
Agreements, while others are more detailed or include broader commitments. For instance, the 
provisions on the recognition of prudential measures and the treatment of financial and 
confidential information  mirror to a large extent the GATS Annex on Financial Services.  Provisions 
on payments and clearing systems  also reflect those in the GATS Understanding on Commitments 
in Financial Services (hereafter the GATS Understanding) , which only Mexico has adopted , while 
those on new financial services, right of establishment , and data processing, are more detailed.  
Provisions on cross-border trade and on self -regulatory organizations are also broader under  the 
Agreement.   
                                                                                                                                                  
qualifies  for such recognition. Recognition must not be used as a mean of discrimi nation among Parties or 
restriction to trade in services.  WT/REG374/1  
 
- 38 - 
 
  4.74.   In addition, Chapter 11 incorporates a number of provisions from Chapters 9 (Cross -Border 
Trade in Services) and 10 (Investment).  These provisions are environmental measures 
(Article  10.9), expropriation and indemnification (Article 10.1 1), transfers and payments 
(Article  9.11) and 10.12), denial of benefits (Articles  9.10 and 10.15), and  special formalities and 
information requirements (Article 10.1 3). The provisions for the settlement of disputes between a 
Party and an investor are also incorporated in Chapter 11 and are applicable for disputes regarding 
the articles mentioned above, exc ept for environmental measures. For disputes between the 
Parties, Chapter 18 applies.   
4.75.   The following paragraphs describe the Parties ' main commitments in selected areas.  
4.6.1.1   Cross-border trade  
4.76.   Provisions on cross -border trade are broader under the Agreement th an under the GATS 
Understanding , in particular for Panama wh ich has not yet adopted this instrument . The Parties 
shall pe rmit cross-border service providers of the other Party to supply a list  of financial services 
(Annex 11.7 ). The list, which is the same  for both countries, covers insurance and insurance 
related services  only, and is similar to  that agreed under the GATS Understanding , except for the 
coverage of services auxiliary to insurance and insurance intermediation which seems to be more 
limited th an that in the GATS Understanding.   
4.77.   The Parties also agree to allow  their nationals and any person located in their territory to 
purchase financial services from a provider of the other Party and located in that other Party. 
However this is subject to some  reservations (see section 4.4) . The Parties  are not obliged to 
authorize these suppliers to do business or advertise  in their  territory. The Parties reserve the right 
to require the registration or authorization of cross -border financial service suppliers  of the other 
Party and of financial instruments  (Article 11.7 ). 
4.6.1.2   New financial services  
4.78.   Like in the GATS Understanding, the Parties commit to grant national treatment to financial 
institutions of the other P arty willing to supply a new financial service. However , the Parties 
reserve , under the Agreement, the right to apply authorization conditions and impose the legal 
form of the institution willing to provide such service  (Article 11.8).   
4.6.1.3   Data Processing  
4.79.   Subject to authorization, each Party shall permit a financial service supplier of the other 
Party to transfer information to the other Party for data processing where processing is required 
for the conduct of ordinary business. For personal data or confidential information, its transfer 
would take place in accordance with the Parties ' legislation (Article 11.18).  These provisions are 
more detailed than those in the GATS Understanding . 
4.6.1.4   Self-regulatory organizations  
4.80.   Compared to the GATS Understanding (i.e. national treatment provision) , provisions on self -
regulatory organizations are broader u nder Agreement . The latter  requires that self -regulatory 
organizations of a Party grant  MFN treatment, in addition to national treatment, to services 
suppliers  of the other Party  (Article 11.14 ).  
4.6.1.5   Transparency  
4.81.   The Parties  commit to promote regulatory transparency in financial services, make available 
all the documentation necessary for the application to supply a financial service and to follow the 
procedures regarding such application. They also commit to publish in advan ce (if possible) any 
proposed  regulation and provide the other Party  with the opportunity to comment on the proposals 
(Article 11.13 ). To a large extent , these commitments are  broader  than those under the GATS 
(Article III) . WT/REG374/1  
 
- 39 - 
 
  4.6.2    Telecommunications  
4.82.   The Agreeme nt also includes a separate chapter on t elecommunications (Chapter 12), which 
applies  to any measure relating to public telecommunications transport networks or services 
(including those relating to its access and use) and its providers. It does not apply to measures (a) 
relating to value -added telecommunication services , or (b) affecting broadcast and cable 
distribution of radio or te levision programming (Article 12.2 ). It contains inter alia  provisions on 
access  to and use of public telecommunications tra nsport networks and services, procedures for 
licences or concessions, conduct of major  suppliers, universal service, allocation and use of scarce 
resources , regulatory b ody, standards,  the resolution of domestic telecommunication disputes, and 
transparency . Most of these provisions, except for that on universal services, ar e in general more 
detailed than those under  the GATS Telecommunica tions Annex and Reference Paper , which only 
Mexico has adopted .  
4.83.   In addition , Chapter 12 introduces new provisions  on the provisioning and pricing of leased 
circuit services, interconnection between the Parties ' providers of public telecommunications 
services , resale  conditions of public telecommunications service s, number portability, flexibility on 
the choice of technologi es, dialling  parity, access to network elements for the provision of public 
telecommunications networks or services on an unbundled basis , physical co-location of equipment 
necessary for interconnection or access to unbundled network elements , and access t o poles, 
ducts, conduits, and rights of w ays. In the event of any inconsistency between this Chapter and 
other Chapters in the Agreement, this Chapter will prevail.  
4.84.   The following paragraphs describe the Parties ' main commitments in selected areas.  
4.6.2.1   Access t o and use of public telecommunications transport networks or services  
4.85.   Provisions on the access to and use of public telecommunications  transport networks or 
services under the Agreement reflect to a large extent  those under the GATS Annex on 
Telecommunicat ions, while adding some novelties . For instance, the Agreement allows suppliers to 
conduct switching, signalling, processing  and frequency conversion  functions , in addition to the 
activities listed in the  GATS Annex (Article 12 .3). Another example refers t o the conditions for the 
access and use of these network and services , which  are more detailed under  the Agreement . 
When a Party  require s a licence, concession , permit  or an y other type of  authorization to supply a  
public telecommunic ation service in its t erritory, it  must ensure that t he related procedures are 
publically available (Article 16.3) , which mirror to a large extent the commitments under the GATS 
Reference P aper, except that the provisions under the latter refer only to licenses.  
4.6.2.2   Conduct of maj or suppliers of public telecommunications transport networks or 
services  
4.86.   The definition of "major supplier " under the Agreement, as well as t he provisions on  the 
application of competitive safe guards, interconnection with major supplier s, and transparency 
regarding interconnection agreements (including their negotiation)  mirror  in general those in the 
GATS Reference Paper, although in so me cases they are broader or mor e detailed. For instance , 
under the Agreement the Parties must ensure that major suppliers  in their territories treat no less 
favourably suppliers of public telecommunicatio ns of the other Party than its own subsidiaries, 
affiliates, or any non -affiliated service supplier with respect to the provision of like public 
telecommunications network o r services, and the availability of technical interfaces necessary for 
interconnection . The Parties must also ensure that suppliers of public telecommunications 
networks or services of the other Party can interconnect their facilities and equipment with th ose 
of major suppliers in its territory based on an interconnection agreement  (existing  or new) or 
standard interconnection conditions applied by the major supplier . In addition, major suppliers are 
required to register all its interconnection agreements w ith the corresponding regulatory authority 
(Article 12.5 ).  
4.6.2.3   Transparency  
4.87.   Provisions on t ransparency are  also more detailed than in GATS Annex on 
Telecommuni cations and Reference Paper, and require inter alia  that the Parties  make publically 
available all telecommunications regulatory decisions, includin g the basis for such decisions,  as WT/REG374/1  
 
- 40 - 
 
  well as any measure relating to public telecommunications networks or services, such as rates and 
terms and conditions of service. The Parties must also ensure to the extent  possible that any 
interested person has the opportunit y to comment on any proposed regulation (Article 12.19).   
5  GENERAL PROVISIONS O F THE AGREEMENT  
5.1  Transparency  
5.1.  Under Chapter 16  on transparency, the Parties commit to  designate a contact point to 
facilitat e communications between them , and ensure the prompt publication of any measure , law, 
regulation or procedure related to any matter covered by the Agreement (Articles 16.2 and 16.3) . 
In addition, t hey shall , to the extent possible, notify  to the other Part y any existing or proposed 
measure that may affect the Agreement and provide, upon request, any information regarding a 
measure (Article 16.4).  
5.2.  Moreover, t he Parties shall guarantee that all administrative procedures are in line w ith 
domestic law and that  certain procedural formalities  are respected (e.g. provision of prior notice 
and informa tion, and opportunity for hearings)  (Article s 16.5 and 16.6). The Parties shall establish 
or maintain judicial or administrative procedures to review and correct final  administrative actions 
for matters covered by the Agreement  (Article 16.7). 
5.2  Current payments and capital movements  
5.3.  Under the Agreement, all transfers , including payments  and movements of capital , relating to 
the cross -border supply of services and investm ents covered by the Agreement are to be made 
freely and without any restriction or delay . The Parties can restrict transfers in the case of: 
(a) bankruptcy, insolvency or the protection of the rights of creditors; (b) issuing, trading, or 
dealing in securi ties; (c) financial reporting or record keeping of transfers when necessary to assist 
law enforcement or financial regulatory authorities;  (d) penal offences; or (e)  compliance with 
orders or judgments in judicial or administrative proceedings (Articles 9. 11 and 10.12).  
5.3  Safeguards   
5.4.  In the event of serious difficulties (or threat) related to the balance -of-payments, the Parties 
can maintain or adopt any restrictive measure affecting trade in goods or services in accordance 
with the GATT, GATS and IM F clauses . Such measures must be applied on a temporar y and non -
discriminatory basis (Article 19.6).  
5.4  Exceptions  
5.5.  The Agreement  incorporates  Articles XX of GATT and XIV of GATS on general exceptions 
(including its interpretative notes ) (Article 19.2); and  adds provisions on national security. Under 
the latter, the Parties can adopt any measure they consider necessary to keep peace or protect 
their essential security interests and have no obligation to allow access to any information contrary 
to their security interes ts (Article 19.3). Moreover, t hey have no obligation to provide access to 
information whose disclosure could impede law enforcement , be contrary to their legislation or 
damage  domestic  firms' (public or private) commercial interests  (Article 19.4).  
5.6.  The Agr eement does not apply to taxation measures and does not affect the rights and 
obligations of the Parties under any tax conventio n, except for Articles 3.3 (National T reatment), 
3.12 (Export Taxes), 10.11 (E xpropriation and Compensation) and 10.17 ( Submissi on of an Claim 
to Arbitration ). In the event of any inconsistency between the Agreement and a tax convention, 
the latter will prevail to the extent of the inconsistency (Article  19.5).  
5.5  Accession and Withdrawal  
5.7.  Any country can accede to the Agreement subje ct to the terms and conditions agreed 
between the Parties. Unless the Parties agree otherwise , the Agreement will enter into force 
30 days after the last Party has notified the completion of all its internal requirements 
(Article  20.5).  WT/REG374/1  
 
- 41 - 
 
  5.8.  Any Party can also end the Agreement. The termination will take effect 180 days after the 
notification, except for investment provisions and unless the Parties agree otherwise.  Investment 
provisions will continue to apply for ten more years following the date of termination  (Article 20.6). 
5.6  Institutional framework  
5.9.  The Agreement foresees the creation of an Administrative Commission that comprises 
ministerial -level representatives from each Party (Article 17.1). The Administrative Commission is 
the main institutional body of th e Agreement and is responsible, among others, for sup ervising its 
implementation, assessing its outcomes,  contributing to the resolution of disputes arising from its 
interpretation or impleme ntation, making recommendations,  and considering any other matter  that 
may affect the operation of the Agreement. It shall take all its decisions by consensus and meet at 
least once a year (Article 17.1). Each Party will also designate a coordinator who will inter alia  
follow  up on the decisions taken by the Commission (Article 17.2).  As of June 2017, the 
Commission had  not met. 
5.10.   In addition , the Agreement establishes  Committees on trade in goods; rules of origin, 
customs p rocedures, trade facilitation and customs c ooperation; SPS; TBT;  and on  financial 
services . As of Ju ne 2017, none of these Committees had met.   
5.7  Dispute settlement  
5.11.   The Agreement provides for a mechanism for the settlement of disputes between the Parties 
(Chapter 18) and between a Party and an investor of the other Party (Chapter 10, Section C). 
Unless spe cified otherwise, Chapter 18 applies to any dispute concerning the interpretation and 
application of the Agreement or wherever a Party considers that an actual measure of the other 
Party is inconsistent with its obligations; or nullifies or impairs the ben efits that could have 
resulted from the application of Chapters 3 (National Treatment and Market Access), 4 (Rules of 
Origin and Customs Procedures), 7 (SPS measures), 8 (TBTs) and 9 (Cross -border Trade in 
Services) (Articles 18.3 and Annex 18.3).  
5.12.   For dis putes covered by both the Agreement and WTO Agreement s the complaining Party 
may select the forum for the settlement of the dispute. Once the forum has been selected, it must 
be used to the excl usion of the other (Article 18.4 ). 
5.13.   In case of a dispute, the P arties will endeavour to resolve it through consultations 
(Article  18.6). If they fail they can  request the intervention of the Administrative Commission 
(Article 18.7) . If the problem persists , the complaining Party can request the establishment of a n 
arbitration panel (Article 18.8 ), which will issue an interim report to the Parties within 90 days 
from the date the arbitration panel was established, with its findings and recommendations on the 
issue under analysis (Article 18.14 ). The Parties will receive  the final report 30 days following the 
presentation of the preliminary report. If the Party fails to comply with the panel's ruling  and no 
compensation has been agreed , the complaining Party can suspend the benefits granted under the 
Agreement . The suspen sion of benefits shall apply until the Party complained against has complied 
or until the disput e has been resolved (Article 18.17 ). Chart  5.1 summarizes the procedure s for 
the settlement of a dispute.  
5.14.   Chapter 11  also provides for a mechanism to settle di sputes between a Party and an 
investo r of the other Party (Chapter 10 , Section C ). Under this mechanism, investors (on their own 
behalf or that of an enterprise) can make a claim and seek redress for damages resulting from a 
breach of the host P arty' oblig ations relating to investments (Article 12.17 ). WT/REG374/1  
 
- 42 - 
 
  Chart 5. 1 Dispute Settlement Mechanism under the Agreement  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Source:  Chapter 18 of the Agreement . 
 Consultations (Art. 18.6)  Max. 30 days or 15 days for 
perishable goods  Consultations request (Art. 18.6)  
The issue is resolved  The issue is not resolved  
Request of a meeting of the 
Admin. Commiss ion (Art. 18.7)  
The issue is resolved  
Suspension of the benefits 
by the Complaining Party 
until the report is applied 
or agreement is reached  
(Art.18.16 -18.18)  Non-compliance  Termination  Request for establishment of DS 
Panel (Art. 18.8)  
Compositio n of DS Panel        
(Art. 18.10)  
Panel preliminary report sent  
to the Commission (Art. 18.14)  Max. 90 days or Max. 45 days  
for perishable goods  
Panel final report sent to the 
Commission (Art. 18.15)  Max. 30 days  
Implementation of the report  
(Art. 18.16)  Max. 30 days  The issue is not resolved  WT/REG374/1  
 
- 43 - 
 
  5.8  Relationship with other agreements concluded by the P arties  
5.15.   The Parties affirm their existing rights and obligations with respect to each other under the 
WTO Agreement and other agreements to which they are party . In the event of any inconsistency 
between the se agreement s and the Agreement , the latter will p revail to the extent of th e 
inconsistency (Article 1.3).  
5.16.   Following  the Agreement's entry into force  in 2015 , the Partial Scope Agreement N°14  
between Mexico and Panama under the Latin American Integration Association (LAIA) framework 
became obsolete . Their Agreement on Promotion and Protection of Investment s also ceased  to 
exist except for Chapter 3 on Dispute Settlement, which will continue to apply for ten more years  
(Articles 20.7 and 20.8) .  
5.17.   Table  5.1 lists the notified and non -notified (if any) trade a greem ents that have Mexico or 
Panama  as members (excluding the current Agreement).  
Table 5.1 Mexico and Panama: Participation in other RTAs (notified and non -notified in 
force), as of 9 March 2017  
RTA Name  Date of 
entry into 
force  Coverage  GATT/WTO Notification  
Year WTO P rovision  
Mexico  
Pacific Alliance  01-May-16 Goods & Services  2016 GATT Art. XXIV & GATS Art. V  
Mexico - Central America  01-Sep-12 Goods & Services  2014 GATT Art. XXIV & GATS Art. V  
Peru - Mexico  01-Feb-12 Goods & Services  2012 GATT Art. XXIV & GATS Art. V  
Japan - Mexico  01-Apr-05 Goods & Services  2005 GATT Art. XXIV & GATS Art. V  
Mexico - Uruguay  15-Jul-04 Goods & Services  2013 GATT Art. XXIV & GATS Art. V  
EFTA - Mexico  01-Jul-01 Goods  & Services  2001 GATT Art. XXIV & GATS Art. V  
Israel - Mexico  01-Jul-00 Goods  2001 GATT Art. XXIV  
EU - Mexico  01-Jul-00 
01-Oct-00 Goods  
Services  2000 
2002 GATT Art. XXIV  
GATS Art. V  
Chile - Mexico  01-Aug-99 Goods & Services  2001 GATT Art. XXIV & GATS A rt. V 
Colombia - Mexico  01-Jan-95 Goods & Services  2010 GATT Art. XXIV & GATS Art. V  
North American Free Trade 
Agreement (NAFTA)  01-Jan-94 Goods  
Services  1993 
1995 GATT Art. XXIV  
GATS Art. V  
Global System of Trade 
Preferences among 
Developing Countries 
(GSTP)  19-Apr-89 Goods  1989 Enabling Clause  
Latin American Integration 
Association (LAIA)  18-Mar-81 Goods  1982 Enabling Clause  
Protocol on Trade 
Negotiations (PTN)  11-Feb-73 Goods  1971 Enabling Clause  
LAIA - Accession of Panama  03-May-12 Goods  Not notif ied 
Mexico - Bolivia  
[LAIA, AAP.CE N°66]  07-Jun-10 Goods  Not notified  
Mexico - Brazil  
[LAIA, AAP.CE N°53]  02-May-03 Goods  Not notified  
Mexico - MERCOSUR  
[LAIA, AAP.CE N° 55]  
Argentina, Brasil and 
Uruguay  
Paraguay   
 
01-Jan-03 
 
01-Feb-11  
 
Goods   
 
Not no tified 
Mexico - Cuba  
[LAIA, AAP.CE N°51]  28-Feb-01 Goods  Not notified  
Mexico - Argentina  
[LAIA, AAP.CE N°6]  01-Jan-87 Goods  Not notified  
Mexico - Paraguay  
[LAIA, AAP.R N°38]  01-Jul-84 Goods  Not notified  
Mexico - Ecuador  
[LAIA, AAP.R N°29]  01-May-83 Goods  Not notified  
LAIA - Cultural Goods  
[LAIA AR.CEYC N°7]  09-Aug-90 Goods  Not notified  WT/REG374/1  
 
- 44 - 
 
  RTA Name  Date of 
entry into 
force  Coverage  GATT/WTO Notification  
Year WTO P rovision  
LAIA - Preferences in favour 
of Ecuador [LAIA, AR.AM 
N°2] 26-Mar-84 Goods  Not notified  
LAIA- Preferences in favour 
of Paraguay [LAIA, AR.AM 
N°3] 26-Oct-84 Goods  Not notified  
Panama  
EFTA - Central America 
(Costa Rica and Panama)  19-Aug-14 Goods & Services  2014 GATT Art. XXIV & GATS Art. V  
EU - Central America  01-Aug-13* Goods & Services  2013 GATT Art. XXIV & GATS Art. V  
CACM - Accession of 
Panama  06-May-13 Goods 2017 GATT Art. XXIV  
Canada - Panama  01-Apr-13 Goods & Services  2013 GATT Art. XXIV & GATS Art. V  
United States - Panama  31-Oct-12 Goods & Services  2012 GATT Art. XXIV & GATS Art. V  
Panama - Peru 01-May-12 Goods & Services  2012 GATT Art. XXIV & GATS Ar t. V 
Panama - Nicaragua  
(Panama - Central America)  21-Nov-09 Goods & Services  2013 GATT Art. XXIV & GATS Art. V  
Panama - Guatemala  
(Panama - Central America)  20-Jun-09 Goods & Services  2013 GATT Art. XXIV & GATS Art. V  
Panama - Honduras  
(Panama - Central America)  09-Jan-09 Goods & Services  2009 GATT Art. XXIV & GATS Art. V  
Panama - Costa Rica  
(Panama - Central America)  23-Nov-08 Goods & Services  2009 GATT Art. XXIV & GATS Art. V  
Panama - Chile 07-Mar-08 Goods & Services  2008 GATT Art. XXIV & GATS A rt. V 
Panama - Singapore  24-Jul-06 Goods & Services  2007 GATT Art. XXIV & GATS Art. V  
Panama - Chinese Taipei  01-Jan-04 Goods & Services  2009 GATT Art. XXIV & GATS Art. V  
Panama - El Salvador  
(Panama - Central America)  11-Apr-03 Goods & Services  2005 GATT Art. XXIV & GATS Art. V  
Panama - Dominican 
Republic  08-Jun-87 Goods  2016 Enabling Clause  
LAIA - Accession of Panama  03-May-12 Goods  Not notified  
Panama - Cuba  
[LAIA, AAP.CE N°71]  20-Aug-09 Goods  Not notified  
Colombia - Panama  
[LAIA, AAP.A25TM N°2 9] 01-Jan-95 Goods  Not notified  
* This agreement is being applied on a provisional basis according to the notification made by the 
Parties to the Secretariat in February 2013 (see WT/REG332/N/1 and S/C/N/680). As of March  2017, 
the Secretariat had not rec eived any information regarding the definitive dates of entry into force for 
this agreement.  
Source:  WTO Secretariat.  
 
5.9  Government procurement  
5.18.   Currently the Agreement does not contain any provision on government procurement but 
the Commission may, unless ag reed otherwise by the Parties , decide to initiate  negotiations in this 
area no later than two years after the Agreement's entry into force (Article 20.9) .47 
5.10  Intellectual property rights  
5.19.   In Chapter 15 on intellectual property rights ( IPRs) , the Parties reaff irm their right and 
obligations under the WTO Agreement on Trade -Related Aspects of Intellectual Property Rights 
(TRIPS Agreement),  and under four of the 15 Treaties on IP administered by WIPO, namely the 
Berne Convention for the protection of literary and  artistic w orks; the Paris Convention for the 
protection of industrial p roperty; the Geneva Convention for the protection of producers of 
phonograms  against unauthorized duplication , and the Rome Convention for the protection of 
performers, producers of ph onograms and b roadcasting organizations  (Article 15.3) .  
                                                
47 The Parties indicated that there have been no new developments in this respect.  WT/REG374/1  
 
- 45 - 
 
  5.20.   In accordance with the TRIPS Agreement, the Parties grant national and MFN treatment to 
nationals of the other Party with respect to the protection of intellectual property. Any exception to 
these ob ligations shall be in accordance with Articles 3,  4 and 5 of the TRIPS Agreement. In 
addition, the Parties include provisions on the protection of trademarks, geographical indicators, 
designations of origin, indications of source , distinctive products, copyright  and related rights , and 
plant varieties, which in some cases go beyond those under the TRIPS Agreement .  
5.21.   Regardin g enforcement, the Parties may  develop measures, procedures and remedies in 
their national legislations to enforce IPR s. In particular, they must establish procedures allowing an 
IPR holder to submit complain ts in case he/she suspects counterfeit or pirated goods are being 
imported into the country so that c ustoms authorities can take action. These provisions do not 
create any obligation f or the Parties to implement any judicial system for the enforcement of IPRs 
distinct from that for the general enforcement of laws (Article 15.10) .  
5.22.   The Parties also agree to  deepen their co operation in the area of IPR s through various types 
of activities , including the exchange of information and technical assistance.  
5.10.1   Trademarks and well -known marks  
5.23.   The Parties commit to protect trademarks in accordance wit h the TRIPS A greement  while 
providing  for a longer period of protection under the Agreement, ten  years instead of seven years . 
In both agreements, the registration of a trademark can be renewed indefinitely. For well -known 
marks, the Agreement extends the protection given in Article 6bis of the Paris Convention and 
Article 16.3 of the TRIPS , and grant s, under certain conditions, protection to well -known marks for 
dissimilar goods and services , and to non -registe red well-known marks  provided that  the Parties' 
legislation allows so . TRIPS Article 16.3 applies only to registered well -known marks.  The 
Agreemen t also includes a more detailed definition of well -known marks , which clarifies the criteria 
the Parties must use to determine whether a mark is well -known .  
5.24.   The Parties commit to  establish a system of registration of trademarks in which any refusal 
by the  relevant administration must be duly explained , and ap peals are allowed  in accordance with 
their legislations.  
5.25.   Panama shall endeavor to adopt the Protocol to the Madrid Agreement Concerning the 
International Registration of Marks of 1989 ( Article 15.4) . In this regard, Panama's authorities 
indicated that this Protocol has not been yet adopted . 
5.10.2   Geographical indications , indication of source,  and distinctive products  
5.26.   The Parties commit to protect the appellations of  origin and indications of source listed in  
Annex 15.5 .48 Mexico's list includes products such as "Tequila", " Mezcal" and "Café Chiapas", while 
Panama lists  "Seco"  (sugar -cane alcoholic beverage) , "Seco de Panama", "Café Renacimiento" and 
"Café de Boquete".  Pending the adoption of its legislation on  the protection o f foreign geographical 
indications (GI), Mexico also commits  to protect , subject to certain condition s, any new appellation  
of origin, GI and indication of source from Panama  (Articles 15.5 and 15.6 ).  
5.27.   Moreover, the Parties recognize the  names listed  in Annex 15.5 as distinctive products , so 
that their sale is prohibit ed unless they have been produced in their  respective territories in 
accordance with their domestic legislation. The Parties also commit to take the necessary 
measures to avoi d the registr ation of any distinctive signs, which could  create con fusion with 
respect to the names  listed in Annex 15.5 (Article 15.7).  
5.10.3   Copyright  and related rights  
5.28.   The Parties recognize their rights and obligations under six WIPO -administered Treaties, 
namely the Berne Convention, Rome C onvention, Geneva Convention, mentioned earlier, but also 
the Brussels Convention relating to the distribution of programme -carrying signals transmitted by 
                                                
48 According to the WIPO, a n app ellation of origin is a type of geographical indication and is used for  
products whose quality or characteristics result exclusively or essentially from t he geographical e nvironment in 
which they were  produced . WT/REG374/1  
 
- 46 - 
 
  satellite, the WIPO Copyright Treaty and the WIPO Performances an d Phonograms Treaty. In 
accordance with these treaties and their legislation, t he Parties  shall provide  adequate and 
effective protection to the authors of literary and artist ic works, interpret ers and performers, 
producers of phonograms and broadcasting o rganizations  (Article 15.9) .  
5.29.    The Parties also include a provision on moral rights , which mirror to a large extent Article 
6bis of the Berne Convention, except that they exten d its application to performers. Under this 
provision, author s or performers, re gardless of their economic rights, and even after the transfer 
of the said rights , shall have the right to claim authorship of the work or performances (live or 
fixed) and to object to any modification or related action that would be prejudicial to their honour 
or reputation. After their death , these rights shall be exercisable by the persons or institutions 
authorized by the legislation of the coun try where protection is claimed  (Article 15.9) . 
5.30.   The Parties must also ensure that broadcasting organizations h ave, at least,  the exclusive 
right to authorize the fixation, reproduction, and rebroadcasting.  Other provisions on copyright  
include provisions on  the possibility of exceptions and the effectiveness of technological measure s 
intended to protect the work o f IPR holders  (Article 15.9) .  
5.10.4   Other IPR provisions  
5.31.   The Parties commit to protect plant varieties in acc ordance with their legislation, and 
observe, to the extent possible, the International Union for the Protection of New Varieties of 
Plants  (UPOV ) Conven tion (Article 15.8 ). 
5.11  Other provisions  
5.11.1   Electronic commerce  
5.32.   The Agreement contains a Chapter on electronic commerce  (Chapter 14) , under which  the 
Parties prohibit the application of customs duties, fees or charges on the import or export of 
products delivere d electronically (Article 14.4).  Chapter 14 also includes provisions to enhance 
transparency, consumers'  protection, data protection, electronic authentication , data transmission  
and to promote cooperation and paperless procedures  (Articles  14.5-14.11). In the event of any 
inconsistency between this chapter and other chapter s in the Agreement , the other chapter  will 
prevail to the extent of th e inconsistency (Article 1 4.13). 
5.11.2   Environment  
5.33.   The Parties recognize that it is inappropriate to relax or reduce the e nvironmental protection 
afforded by their legislation to promote investment in their territories , and thus  commit to ensure  
that its legislation is properly applied. Moreover, n othing in the  Chapter  on investment  shall be 
construed to prevent a Party from applying or adopting any measure (consistent with th e 
Agreement ) to ensure that investment s in its territory  take into account environmental concerns  
(Article 10.9) . WT/REG374/1  
 
- 47 - 
 
  ANNEX 1  
1. Tables A1.1 -A1.2 present the Parties' tariff elimination schedule by total,  agricultural and 
non-agricultural  products. In the case of Mexico , the overall share of dut y-free tariff lines rose 
from 58% in 2015 to 70 % upon the Agreement's entry into force and the average a pplied tariff 
faced by Panamanian exporters went from 5.7% to 3.8% (Table A1 .1), giving them a re lative 
margin of preference of 33%. For agricultural products the share of duty -free tariff lines increased 
from 22.8% to 52.6 % and the  average tariff rate fell to 9.3% from 15.2%. For non -agricultural 
goods, the share of duty-free tariff lines went from 62.1% to 72 % and the average tariff fell from 
4.6% to 3.2% upon the Agreement's entry into  force. In both cases, Panamanian  exporters 
benefited from a relative margin of preference of about 39% and 30%, respectively . At the  end of 
the implementation period the share of duty free lin es is expected to increase to 96.4% overall, 
85.1% for agricul tural products and to 97.7 % for non -agricultural products.  
Table A1.1 Mexico: Indicators of MFN tariff rates and preferential rates fo r imports from 
Panama  
Origin 
of 
goods  Year ALL PRODUCTS  Agricultural productsa 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 2015 5.7 13.5 58.0 15.2 19.8 22.8 4.6 12.1 62.1 
Panama  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2015 3.8 12.7 70.0 9.3 20.0 52.6 3.2 11.3 72.0 
2016 3.4 11.3 70.0 8.7 18.6 52.6 2.8 9.9 72.0 
2017 3.0 9.9 70.0 8.0 17.2 52.6 2.4 8.6 72.0 
2018 2.5 8.5 70.0 7.3 15.6 52.6 2.0 7.2 72.0 
2019 2.1 10.6 79.8 6.5 20.7 67.4 1.6 8.6 81.2 
2020 1.9 9.6 79.8 6.3 19.9 67.4 1.4 7.6 81.2 
2021 1.7 8.5 79.8 6.0 19.0 67.4 1.2 6.5 81.2 
2022 1.5 7.5 79.8 5.7 18.1 67.6 1.0 5.5 81.2 
2023 1.3 6.5 79.8 5.4 17.2 67.6 0.8 4.4 81.2 
2024 1.1 14.2 92.1 5.0 25.7 79.3 0.6 10.1 93.6 
2025 1.0 13.4 92.1 4.8 25.0 79.3 0.6 9.2 93.6 
2026 1.0 12.6 92.2 4.7 24.8 79.7 0.5 8.4 93.6 
2027 0.9 11.8 92.2 4.6 24.2 79.8 0.5 7.5 93.6 
2028 0.8 11.0 92.2 4.4 23.5 79.8 0.4 6.7 93.6 
2029 0.8 22.9 96.4 4.3 31.9 85.1 0.4 16.6 97.7 
a WTO Definition.  
Note:  For the calculation of averages, specific rates are excluded and the ad valorem  parts o f alternate 
rates are included . 
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data  provided by Mexico . 
 
 
 
 
 
 
 
 
 
 
 
 
 
 WT/REG374/1  
 
- 48 - 
 
  2. For Panama , the overall share of dut y-free tariff lines rose from 34.5% to 51.1 % upon the 
Agreement's entry into f orce, and the average applied tariff fell from  7.6% to 5.4% (Table A1 .2), 
giving Mexican exporters a relative margin of preference of  29%. For agricultural goods, the 
average tariff rate fell to  10.2% from 13.7 %; and to 4.5% from 6.4% for non -agricultural 
products, resulting in a relative margin of preference for  Mexican exporters to Panama of 25 % and  
30%, respectively. As for the share of duty -free lines, it went from  23.5% to 46.4 % for 
agricultural products  and from 36.6% to 52 % for non -agricultural produ cts. At the end of the 
implementation period this share is expected to increase  to 81.3% for agricultural products, 95.8% 
for non -agricultural products, and t o 93.5% overall.  
Table A1.2 Panama: Indicators of MFN tariff rates and preferential rates for impo rts 
from Mexico  
Origin 
of 
goods  Year ALL PRODUCTS  Agricultural productsa 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 2015 7.6 11.6 34.5 13.7 17.9 23.5 6.4 10.2 36.6 
Mexico  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2015 5.4 11.1 51.1 10.2 19.0 46.4 4.5 9.4 52.0 
2016 4.8 9.7 51.1 9.6 17.9 46.4 3.8 8.0 52.0 
2017 4.1 8.4 51.1 9.0 16.8 46.4 3.2 6.6 52.0 
2018 3.5 7.1 51.1 8.4 15.8 46.4 2.5 5.2 52.0 
2019 2.8 10.3 72.7 7.9 19.7 60.0 1.8 7.4 75.2 
2020 2.6 9.5 72.7 7.6 19.0 60.0 1.6 6.6 75.2 
2021 2.4 8.7 72.7 7.3 18.4 60.0 1.4 5.8 75.2 
2022 2.2 8.0 73.0 7.1 18.5 61.8 1.2 4.9 75.2 
2023 2.0 7.2 73.0 6.8 17.9 61.8 1.0 4.1 75.2 
2024 1.7 12.3 85.8 6.6 26.5 75.1 0.8 6.7 87.8 
2025 1.7 11.8 85.8 6.5 26.2 75.1 0.8 6.2 87.8 
2026 1.6 11.5 85.9 6.5 26.7 75.8 0.7 5.7 87.8 
2027 1.6 11.1 85.9 6.4 26.7 76.0 0.6 5.3 87.8 
2028 1.5 10.7 85.9 6.4 26.5 76.0 0.6 4.8 87.8 
2029 1.4 22.2 93.5 6.3 33.8 81.3 0.5 12.4 95.8 
a WTO Definition.  
Note:  For the calculation of averages, specific rates are  excluded . 
 Based on the HS 2012 nomenclatur e. 
Source:  WTO estimates based on data  provided by Panama and WTO -IDB. WT/REG374/1  
 
- 49 - 
 
  3. Table A1 .3 shows market access opportunities for Panama 's top 25 exports  in the Mexican 
market . These products accounted for 74.9% of its world expo rts during 2012 -2014 and covered  
87 tariff lines at the HS 6-digit level. Of these lines, 55  were already duty free on a MFN basis 
when the Agreement entered into force . Of the remaining lines, all except for six will become duty 
free by 2029, with only one line being liberalized immedia tely after the Agreement's entry into 
force.  The average applied MFN rate for the products remaining dutiable ranged in 2015 from 
1.8% for medicines to 20% for fresh or dried bananas, pineapples, and coffee; one line relating to 
raw cane sugar is subject t o a specific rate of duty.  
Table A1.3 Mexico: Market access opportunities under the agreement for Panama's top 
25 exports to the world  
Panama's top export products in 2012 -2014  Access Conditions to Mexico's import 
markets  
HS number and description of the product  
Share in global 
exports (%)  MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain Dutiable  Average 
MFN applied 
rate (%)  
No. of 
dutiable 
lines  
No. of duty 
free lines  
2015  
2019  
2024  
2029  
080390  Fresh or dried bananas (excl. 
plantains)  10.8 20.0 1      1 
030616  Frozen cold -water shrimps and prawns 
"pandalus spp., crangon crangon", 
even smoked, whether in shell or not, 
incl. shrimps and prawns in shell, 
cooked by steaming or by boiling in 
water  7.8 17.0 1      1 
710812  Gold, incl. gold plate d with platinum, 
unwrought, for non -monetary purposes 
.. 7.4 0.0  1      
080430  Fresh or dried pineapples  4.6 20.0 1     1  
720410  Waste and scrap, of cast iron ..  4.2 0.0  1      
030219  Fresh or chilled salmonidae ..  3.6 17.0 1  1     
170113  Raw cane sugar, in solid form, not 
containing added flavouring or 
colouring matter, obtained without 
centrifugation, with sucrose content 
69° to 93°, containing only natural 
anhedral microcrystals ..  3.4 n.a.a 1      1 
230120  Flours, meals and pellets of fish or 
crustaceans, molluscs or other aquatic 
invertebrates, unfit for human 
consumption  3.1 15.0 1    1   
740400  Waste and scrap, of copper ..  2.7 0.0  3      
020230  Frozen, boneless meat of bovine 
animals  2.7 25.0 1     1  
220840  Rum and other spirits obtaine d by 
distilling fermented sugar -cane 
products  2.5 20.0 2   2    
300490  Medicaments consisting of mixed or 
unmixed products for therapeutic or 
prophylactic purposes, put up in 
measured doses "incl. those in the 
form of transdermal administration" or 
in for ms or packings for retail sale ..  2.4 1.8 14 36  9 4  1 
410419  Hides and skins of bovine "incl. 
buffalo" or equine animals, in the wet 
state "incl. wet -blue", tanned, without 
hair on, whether or not split ..  2.3 0.0  4      
151110  Crude palm oil  2.3 3.0 1   1    WT/REG374/1  
 
- 50 - 
 
  Panama's top export products in 2012 -2014  Access Conditions to Mexico's import 
markets  
HS number and description of the product  
Share in global 
exports (%)  MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain Dutiable  Average 
MFN applied 
rate (%)  
No. of 
dutiable 
lines  
No. of duty 
free lines  
2015  
2019  
2024  
2029  
760200  Waste and scrap, of aluminium ..  2.1 0.0  2      
080711  Fresh watermelons  2.0 20.0 1   1    
440399  Wood in the rough, whether or not 
stripped of bark or sapwood, or 
roughly squared ..  1.8 0.0  1      
481910  Cartons, boxes and cases, of 
corrugated paper or paperboard  1.6 0.0  1      
440349  Tropical wood specified in the 
subheading note 1 to this chapter in 
the rough, whether or not stripped of 
bark or sapwood, or roughly squared ..  1.4 0.0  3      
150420  Fats and oils of fish and their fractions, 
whether or not refined ..  1.1 10.0 2    2   
030389  Frozen fish, n.e.s.  1.1 17.0 2   2    
020610  Fresh or chilled edible offal of bovine 
animals  1.0 20.0 1   1    
090111  Coffee (excl. roasted and 
decaffeinated)  1.0 20.0 2      2 
720429  Waste and scrap of alloy steel ..  1.0 0.0  1      
711291  Waste and scrap of gold, incl. metal 
clad with gold, and other waste and 
scrap containing gold or gold 
compounds, of a kind used principally 
for the recovery of precious metal ..  0.9 0.0  2      
TOTALS  74.9 9.0 32 55 1 16 7 2 6 
Note:   For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included.  
  Based on the HS 2012 nomenclature.  
a The MFN rate for tariff lines under  the subheading "170113" consi st of only one specific rate. 
n.a.  not applicable  
Source:  WTO estimates based on data provided by Mexico and UNSD, Comtrade database.  WT/REG374/1  
 
- 51 - 
 
  4. Table A1.4 shows ma rket access opportunities for Mexico 's top 25 exports in Panama's  
market. These exports, which cov ered 92  lines at the  6-digit level, accounted for 46.8% of 
Mexico 's global exports during 2012 -2014. Of these  lines, 72 were already duty-free in 2015 on a 
MFN basis , another  seven will be liberalized upon the Agreement's entry into force and the rest in 
2019. 
Table A1.4 Panama: Market access opportunities under the agreement for Mexico's top 
25 exports to the world  
Mexico's top export products in 2012 -2014  Access Conditions to Panama's import 
markets  
HS number and description of the product  Share in 
globa l 
exports 
(%) MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain Dutiable  Average 
MFN applied 
rate (%)  
No. of 
dutiable 
lines  
No. of duty 
free lines  
2015  
2019  
270900  Petroleum oils and oils obtained from 
bituminous minerals, crude  10.9 0.0  2    
870323  Motor cars and other motor vehicles 
principally designed for the transport of 
persons, incl. station wagons and 
racing cars, with spark -ignition internal 
combustion reciprocating piston engine 
of a cylinder capacity > 1.500 cm³ but 
<= 3.000 cm³ . . 5.5 0.0  12    
852872  Reception apparatus for television, 
colour, whether or not incorporating 
radio-broadcast receivers or sound or 
video recording or reproducing 
apparatus, designed to incorporate a 
video display or screen  3.8 5.0 1 1 1   
870431  Motor vehicles for the transport of 
goods, with spark -ignition internal 
combustion piston engine, of a gross 
vehicle weight <= 5 ..  2.9 0.0  2    
847149  Data-processing machines, automatic, 
presented in the form of systems 
"comprising at least a central 
proce ssing unit, one input unit and one 
output unit" ..  2.1 0.0  2    
854430  Ignition wiring sets and other wiring 
sets for vehicles, aircraft or ships  1.7 10.0 1  1   
851762  Machines for the reception, conversion 
and transmission or regeneration of 
voice, im ages or other data, incl. 
switching and routing apparatus ..  1.6 0.0  1    
870120  Road tractors for semi -trailers  1.6 0.0  1    
851770  Parts of telephone sets, telephones for 
cellular networks or for other wireless 
networks and of other apparatus for 
the transmission or reception of voice, 
images or other data, n.e.s.  1.5 0.0  1    
847150  Processing units for automatic data -
processing machines, whether or not 
containing in the same housing one or 
two of the following types of unit: 
storage units, input u nits, output units 
.. 1.4 0.0  2    
710812  Gold, incl. gold plated with platinum, 
unwrought, for non -monetary purposes 
.. 1.4 0.0  1    
940190  Parts of seats, n.e.s.  1.2 6.0 4   4  WT/REG374/1  
 
- 52 - 
 
  Mexico's top export products in 2012 -2014  Access Conditions to Panama's import 
markets  
HS number and description of the product  Share in 
globa l 
exports 
(%) MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain Dutiable  Average 
MFN applied 
rate (%)  
No. of 
dutiable 
lines  
No. of duty 
free lines  
2015  
2019  
870829  Parts and accessories of bodies for 
tractors, motor vehicles for the 
transport of ten or more persons, 
motor cars and other motor vehicles 
principally designed for the transport of 
persons, motor vehicles for the 
transport of goods and special purpose 
motor vehicles..  1.1 5.0 1 1 1   
851712  Telephones for cellular netw orks 
"mobile telephones" or for other 
wireless networks  1.1 0.0  1    
271019  Medium oils and preparations, of 
petroleum or bituminous minerals, not 
containing biodiesel, n.e.s.  0.9 13.1 8 4 2 6  
870899  Parts and accessories, for tractors, 
motor vehicles for the transport of ten 
or more persons, motor cars and other 
motor vehicles principally designed for 
the transport of persons, motor 
vehicles for the transport of goods and 
special purpose motor vehicles, n.e.s.  0.9 5.0 1 1 1   
870422  Motor vehicles for  the transport of 
goods, with compression -ignition 
internal combustion piston engine 
"diesel or semi -diesel engine" of a 
gross vehicle weight > 5 t but <= 20 t 
.. 0.9 0.0  2    
870324  Motor cars and other motor vehicles 
principally designed for the transp ort of 
persons, incl. station wagons and 
racing cars, with spark -ignition internal 
combustion reciprocating piston engine 
of a cylinder capacity > 3.000 cm³ ..  0.9 0.0  12    
853710  Boards, cabinets and similar 
combinations of apparatus for electric 
control or the distribution of electricity, 
for a voltage <= 1.000 v  0.9 10.0 1   1  
710691  Silver, incl. silver plated with gold or 
platinum, unwrought ..  0.8 0.0  1    
840734  Spark -ignition reciprocating piston 
engine, of a kind used for vehicles of 
chapter  87, of a cylinder capacity > 
1.000 cm³  0.8 5.0 1   1  
870332  Motor cars and other motor vehicles 
principally designed for the transport of 
persons, incl. station wagons and 
racing cars, with compression -ignition 
internal combustion piston engine 
"diesel or semi -diesel engine" of a 
cylinder capacity > 1.500 cm³ but <= 
2.500 cm³ ..  0.8 0.0  12    WT/REG374/1  
 
- 53 - 
 
  Mexico's top export products in 2012 -2014  Access Conditions to Panama's import 
markets  
HS number and description of the product  Share in 
globa l 
exports 
(%) MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain Dutiable  Average 
MFN applied 
rate (%)  
No. of 
dutiable 
lines  
No. of duty 
free lines  
2015  
2019  
870850  Drive -axles with differential, whether 
or not provided with other transmission 
components, and non -driving axles, 
and parts thereof, for tractors, motor 
vehicles for the transport of ten or 
more persons, motor cars and other 
motor vehicles principally designed for 
the transport of persons, motor 
vehicles for the transport of goods and 
special purpose motor vehicles, n.e.s.  0.8 5.0 1 1 1   
870322  Motor cars and other motor vehicles 
principally designed for the transport of 
persons, incl. station wagons and 
racing cars, with spark -ignition internal 
combustion reciprocating piston engine 
of a cylinder capacity > 1.000 cm³ but 
<= 1.500 cm³ ..  0.7 0.0  12    
840991 Parts suitable for use solely or 
principally with spark -ignition internal 
combustion piston engine, n.e.s.  0.7 5.0 1   1  
TOTALS  46.8 2.8 20 72 7 13 - 
Note:  For the calculation of averages, specific rates are  excluded . 
 Based on the HS 2012 nomenclat ure. 
Source:  WTO estimates based on data provided by Panama, WTO -IDB and UNSD, Comtrade database.  
__________