WT/REG334/M/1  
 
19 May 2014  
(14-3009) Page: 1/4  
Committee on Regional Trade Agreements 
Seventy-second Session    
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
CANADA AND PANAMA, GOODS AND SERVICES 
NOTE ON THE MEETING OF 8 APRIL 2014 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  Under Agenda Item B.IV of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Canada and Panama (hereinafter "the Agreement"). 
1.2.  The Chairman said the Agreement had en tered into force on 1 April 2013. It had been 
notified to the WTO by the Parties on 10 April 2013 under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of  Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG334/N/1) and under GATS Article V:7(a) as an Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/691). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG334/1 dated 16 January 2014 had been prepared by the Secretariat on its own 
responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Regional Trade Agr eements (document WT/L/671). Written questions 
and replies on this Agreement had been distributed in document WT/REG334/2 dated 28 March 2014. He proposed to organize the consideration of the Agreement by first asking the Parties and 
then other Members to give any general comments and then then turn to the specifics of the 
Agreement, using the Factual Presentation, document WT/REG334/1 to guide the debate. They would then go through the questions and replies document. 
1.3.  The representative of Canada welcomed the opportunity to speak about the Canada-Panama 
Free Trade Agreement (FTA). He thanked the WTO Se cretariat for the detailed factual presentation 
on the Canada-Panama FTA, and expressed appreciations for the contribution to the process by 
the Government of Panama.  
1.4.  The Government of Canada had been active ly pursuing a trade liberalization agenda through 
bilateral and regional trade initiatives. Currently, Canada had FTAs covering trade with 13 countries, eight of which had come into force since late 2009. This included the FTA with 
Panama, which had entered into force on 1 April 2013. Since then, Canada and the European 
Union had announced an agreement-in-principle on a Comprehensive Economic and Trade Agreement (October 2013), Canada had signed an FTA with Honduras (November 2013), and most 
recently in March 2014, Canada and South Korea had concluded a bilateral free trade agreement. 
Canada continued to pursue FTAs to provide a level playing field for both Canadian and foreign producers and service providers.  
1.5.  The Canada-Panama FTA was a comprehensive agreement that sought to liberalize trade in 
both goods and services, and to promote investment. A key component in Canada's trade agenda was an enhanced focus on deepening its engagement in the Americas, and Panama was an important partner for Canada in advancing this agenda. Canada and Panama had established 
strong economic ties. In 2013, bilateral merchandise trade between Canada and Panama exceeded 
more than C$169 million, including Canada's merchandise exports to Panama at C$96 million and Canada's merchandise imports from Panama at C$73 million.  WT/REG334/M/1 
 
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  1.6.  The Canada-Panama FTA was a comprehensive trade agreement providing both Canadian 
and Panamanian producers and service providers with greater and more secure access for their 
goods and services. It included chapters related to  goods market access and cross border trade in 
services, an institutional framework, and dispute settlement. In addition, there were chapters on 
government procurement, trade-related cooperation, labour and environment. The FTA also 
included a chapter on investment, which superseded the 1998 Canada-Panama Foreign 
Investment Protection and Promotion Agreement. The FTA was also accompanied by parallel 
Agreements on Labour and Environmental Cooperat ion. All three Agreements had come into force 
on April 1, 2013.  
1.7.  With respect to market access for goods, the Canada-Panama FTA provided for the 
immediate elimination of Canadian tariffs covering 97.2% of Panamanian imports. The remaining 
tariff reductions were to be made in successive stages between 2013 to 2017, and a very small 
percentage was to be phased out by 2027. By th en, 8,315, or 98.3% of Canada's tariff lines would 
be duty free, which covered nearly 100% of current Canadian imports from Panama. For Panama, 
89% of tariffs on non-agricultural imports from Canada had been duty free upon entry into force, 
and the remaining tariffs would be phased out between five to fifteen years. In addition, duties on 47% of Panama's agricultural tariff lines were eliminated immediately, corresponding to 89% of 
Canadian agricultural exports to Panama.  
1.8.  On services, the Canada-Panama FTA pr ovided improved market access beyond their 
respective commitments under the WTO General Agreement on Trade in Services (GATS), and included chapters dealing with professional services, telecommunication and financial services, as 
well as the temporary entry of business people. The investment provisions of the Agreement 
ensured greater stability for both Canadian and Panamanian investors, transparency and protection for their investments. They included the establishment, acquisition, expansion, 
management, conduct, operation and sale or othe r disposition of an investment in the other 
Party's territory. The investor-state dispute settlement procedures provided access to binding, impartial, international arbitration to resolve disputes arising under the Agreement.  
1.9.  Recognizing the importance of Governme nt Procurement, the FTA had also established 
market access for both Parties in the government procurement sector. For Canada, this expanded market access ensured Canadian goods and services  suppliers opportunities to bid on government 
contracts for infrastructure projects in Panama, including the Panama Canal expansion that was to 
be completed within the coming years. Broadly speaking, such enhanced market access 
guaranteed suppliers in both countries the right to bid on a broad range of goods, services and 
construction contracts carried out by federal government entities. It also ensured that practices 
remained transparent and fair for suppliers. 
1.10.  The Canada-Panama Free Trade Agreement included a non-binding Chapter on Labour that 
reaffirmed both countries' obligations and objectives as outlined in the parallel Agreement on 
Labour Cooperation. Through the Agreement on Labour Cooperation, Canada and Panama had 
committed to ensuring that their laws respected the International Labour Organization's 1998 Declaration on Fundamental Principles and Rights at Work (1998 ILO Declaration), which covered the right to freedom of association and to collective bargaining, the abolition of child labour, and 
the elimination of compulsory labour, and discrimination. As part of the comprehensive Free Trade 
Agreement, Canada and Panama had negotiated a principles-based Environment Chapter as well as a parallel Agreement on Environmental Cooperation. The parallel Agreement committed both 
countries to pursue high levels of environmental protection and to continue to develop and 
improve their environmental laws and policies. 
1.11.  Finally, the FTA contained sections relevant to a range of important matters, including: rules 
of origin; customs procedures, trade facilitation; sanitary and phytosanitary measures; monopolies 
and state enterprises; technical barriers to trade; electronic commerce; emergency action; and dispute-settlement. Canada welcomed questions or comments from Members. 
1.12.  The representative of Panama said Panama was honoured to participate in the 72
nd session 
of the WTO Committee on Regional Trade Agreements , on the occasion of the consideration of the 
Free Trade Agreement between the Republic of Pa nama and Canada. For Panama, this type of 
exercise, which promoted the transparency of Regi onal Trade Agreements by allowing Members to 
formulate their concerns and in turn improv e the understanding and operation of such 
Agreements, was of great importance. WT/REG334/M/1 
 
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  1.13.  The Agreement had been signed in Toronto on 14 May 2010 and brought into effect on 
1 April 2013, in Panama's case pursuant to Law No. 69 of 26 October 2010. It contained 24 chapters, covering areas such as market access, trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, electronic commerce, government procurement, investment, 
the environment, and labour, and which improved  market access conditions while establishing 
clear disciplines that promoted a greater level of complementarity in trade in goods and services and investment between Panama and Canada. 
1.14.  According to data from the Panamanian Statistics Institute for 2007 to 2012, trade 
between Panama and Canada had increased by 125% in five years, from B/. 78.7 million in 2008 to B/. 177.5 million in 2012. In 2013, Panamanian imports from Canada totalled $65.2 million, while Panamanian goods exported to Canada amounted to $65.9 million. As far as goods were 
concerned, the main products imported from Canada included newsprint in rolls, aircraft 
equipment and parts, lentils, fertilizer, filter parts, malt, and edible swine offal, while the most important Panamanian exports to Canada included gold, silver, coffee, wood, shark fins and tails, 
and papayas. He emphasized that most products exported from Panama to Canada were directly 
related to the immediate free access established upon the entry into force of the Agreement. He also noted that Canada was the eleventh most important user of the Panama Canal in terms of 
freight flow. 
1.15.  Canadian investment in Panama was concentrated essentially in the banking, construction, 
pharmaceutical distribution, logistics, mining an d hotel sectors. Official figures showed that 
the position of Canadian direct investment in Panama had risen from C$105.1 million in 2011 
to C$137.5 million in 2012, an increase of 31%. 
1.16.  The Agreement covered issues of interest to both parties, such as government procurement, 
which in Canada's case was dealt with almost exclusively at the federal level, thus enhancing 
business opportunities for Panamanian suppliers. The Agreement also contained a chapter on 
cooperation, the main objectives of which were to promote new trade and investment 
opportunities and competitiveness and innovation, including cooperation between each country's 
respective science academies, governmental organizations, non-governmental organizations, 
universities, higher technical institutes, centres of technology, science and research, and private-sector companies, in areas of mutual interest relating to science, technology, innovation and sustainable economic development, with emphasis on small and medium-sized enterprises and 
poverty alleviation through trade. 
1.17.  Upon the entry into force of the Agreement, two parallel agreements had also entered into 
effect. The Panama-Canada Labour Cooperation Agreement, which for Panama 
corresponded to Law No. 72 of 27 October 2010, and the Panama-Canada Agreement 
on Environmental Cooperation, which corresponded to Law No. 71 of 27 October 2010. These Agreements sought firstly to promote the enforcement and effective implementation 
of labour legislation, in particular the commitments undertaken by both Parties as members 
of the International Labour Organization (ILO), and secondly to foster sustainable development 
through mutually supportive environmental, ec onomic and trade policies, and to encourage 
environmental conservation, protection and improvem ent in the territories of both countries with 
a view to ensuring the well-being of present and future generations. Mutual cooperation between 
the parties' labour and environmental authorities was also promoted, all of which showed that both clearly recognised the importance of both areas and the need for a harmonious interrelationship 
between these areas and the promotion of trade. 
1.18.  The presentation of the Agreement for cons ideration was of great importance and one which 
gave Panama great pleasure. Canada was one of its main trading partners and Panama had 
deepened its trade ties with Canada since the entry into force of the Agreement. Canada was also 
an important ally in Panama's foreign trade strategy. 
1.19.  He briefly highlighted the exceptional dynamism of Panama's economy, the fastest growing 
in the region, which was stimulated principall y by the establishment of free market-oriented 
policies, the alliance with strategic partners such as Canada, and compliance with multilateral 
trade rules. By way of illustration, he noted that over the last 12 months, Panama had completed its incorporation into the Central American Econ omic Integration Subsystem in May 2013, put into 
effect an Association Agreement with the European Union in August 2013, and had signed a Free 
Trade Agreement with the countries of the European Free Trade Association (EFTA) in June 2013, WT/REG334/M/1 
 
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  a Partial Scope Agreement with Trinidad and Tobago in October 2013, a Free Trade Agreement 
with Colombia in September 2013, and more recently, on 3 April 2014, a Free Trade Agreement with Mexico, all of which demonstrated the strength of Panama's bilateral trade agenda. 
1.20.  Finally, he thanked the WTO Secretariat for preparing the factual presentation of the 
Agreement under consideration, the Members that had shown an interest in the consideration and 
had formulated questions, the delegation of Canada for its cooperation and constant support in the preparation and coordination of replies to the concerns raised by Members and in the overall 
process leading up to this meeting, and the Members present at the meeting of the CRTA. 
1.21.  The representative of the United States had no questions but noted that Panama had a 
number of RTAs that had not been notified and hoped these would be notified shortly to the WTO. 1.22.  The representative of Colombia thanked the Parties for their response to questions posed by 
Colombia on the Article on business and social responsibility which Colombia found to be novel and 
interesting. It had no follow up questions. 
1.23.  The Chairman said that the considerat ion of the Goods and Services Aspects of the 
Free Trade Agreement (FTA) between Canada and Panama had allowed the Committee to clarify a 
number of questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 of the Transparency Mechan ism. If any delegations wished to as
k follow up questions 
they were invited to forward submissions in writing to the Secretariat by 14 April 2014 and Parties 
were asked to submit replies in writing by no later than 28 April 2014. In accordance with paragraph 13 of the Transparency Mechanism all wr itten submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available 
on the WTO website.  
1.24.  The Committee took note of the comments made. 
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