WT/REG374/M/1  
 
29 November 2017 
(17-6537) Page: 1/4 
Committee on Regional Trade Agreements  
Eighty -seventh  Session    
 
 
FREE TRADE AGREEMENT  BETWEEN  MEXICO AND PANAMA  
(GOODS AND SERVICES ) 
NOTE ON THE MEETING OF 9 NOVEMBER 2017 
Chairman: Ambassador Walid DOUDECH (Tunisia)  
1.1.  The 87th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee')  was convened in Airgram  WTO/AIR/RTA/12/Rev.1 dated 30 October 2017 . 
1.2.  Under Agenda Item D.II of the Session, the CRTA considered the  Free Trade Agreement 
between  Mexico and Panama , goods  and services , (hereinafter "the Agreement").  
1.3.  The Agreement had entered  into force on 1 July 2015. It had been notified to the WTO by the 
Parties on 6  June 2016 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 
(docu ment WT/REG374/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/864). 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/REG374/1 dated 11 July 2017) and questions and replies on the Agreement 
(document WT/REG374/2 dated 2  November 2017)  had been distributed.  
1.4.  The represen tative of Panama  thanked the delegation of Mexico and the Secretariat for 
preparing the Factual Presentation. He also t hanked Members  for the questions  submitted . Panama 
was pleased to participate  in the review  and appreciated  the work undertaken by the Committee to 
enhance the understanding of the Agreement.  
1.5.  In recent years, Panama had  excelled in opening up trade with important trading partners in 
the region  and it was committed to  foreign investment and trade as important dr ivers of economic 
growth and development. Economic and trade ties with Mexico had  strengthen ed thanks to the 
Agreement . 
1.6.  The Agreement had been signed on 3 April 2014 , ratified by Panama on 17 November 2014 
and had entered into force on 1 July 2015. The obj ectives of the Agreement  were to strengthen 
regional economic integration schemes, focusing on the Pacific Alliance; achieve a better balance 
in the trade relations between the two countries, bearing in mind their levels of economic 
development; strengthen  Panama's role as a logistical hub for the distribution of goods and 
services to the global market; establish tariff preferences and eliminate non -tariff barriers for trade 
in goods; facilitate an increase in and the diversification of exports  of goods and  services; protect  
investments and investors, ensuring their legal certainty and promoting a suitable environment for 
them; and incorporate new -generation issues , such as IPRs and their appropriate protection.  
1.7.  Over the last 20 years, 20 transnational corporations had established themselves on 
Panamanian territory to participate in various product ion sectors  such as finance, construction, 
cement, metal, bread production, restaurant s and telecommunications.  Econom ic relations had 
deepened since the entry into force  of the Agreement . Free access to Mexico was granted, within a 
period of five years, for Panama's exports of goods such as flowers, watermelons, melons, rum, 
bovine offal, processed chicken, chicken sausa ges, cocoa and seafood (salmonids, trout, fish fillets 
and fish meat).  The Agreement also offered new opportunities for medium - and long -term market WT/REG374/M/1  
 
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  access for new Panamanian exports to Mexico including pineapples, papayas,  chillies,  fresh 
peppers, fish fl our, electrolyte drinks, beer, toilet paper and paper towels.  
1.8.  Since  the entry into force of the Agreement, bilateral relations between Mexico and Panama 
had been dynamic  as reflected in the increase in trade and investment flows, which had 
contributed  to improvements in the well-being of the citizens  of Panama . Panamanian exports to 
Mexico had risen by 22 % and Mexican imports into Panama by 8 %. In 2015, trade between 
Panama and Mexico had amounted to US$634.5  million. Mexico's top exports to Panama include d 
vehicles with piston engines, medicines, deformed bars and rods, reception apparatus for 
television, diapers, shampoos, sweet biscuits, and beer made from malt . Panama's top export s to 
Mexico include d palm oil, medicines, hides and skins, and aluminium, iron and copper waste, in 
addition to the new exports of  agricultural products.  In 2015, Mexico's foreign direct investment 
(FDI) in Panama was over US$1.6 billion, representing about 4.1 % of total FDI.  
1.9.  The representative of Mexico  thanked  the Secretariat for preparing the Factual Presentation 
of the Agreement and the delegation of Panama for its outstanding coordination and efforts in the 
joint endeavour. He also thank ed the delegations of El Salvador, Thailand, the European Union and 
Canada for their questions, which had demonstrate d interest in learning more about the 
Agreement.  
1.10.   The Agreement had proven to be an essential tool for increasing trade and investment flows 
between Mexico and Panama , enhanci ng economic growth and development, and boosting the 
competitiveness of both economies.  The Agreement was also part of Mexico's strategy to further 
diversify its trade and deepen trade ties with La tin American countries. It had opened  up new 
markets for Me xican export s and had strengthened  the legal certainty of international transactions 
with Panama.  
1.11.   The Agreement replaced  two instruments: the Agreement for the  Promotion and Reciprocal 
Protection of Investments and the Partial Scope Agreement. It contained  21 chapters covering 
trade in goods and services, investment, and intellectual property, including one chapter on 
electronic commerce and one on dispute settlement.  
1.12.   Five years from the entry into force of the Agreement, Mexico would  obtain duty -free acces s 
to 72% of Panama's tariff l ines. The remaining 28% included  products that would be liberalized 
within  eight to 15 years , with the exception of a few sensitive products that had been excluded 
from the negotiation .  
1.13.   Owing to the Agreement, Mexico's fastest growing exports had been medicines, fuel oil, 
reception apparatus for television s with flat screens, and vehicles for the transport of goods.  
Panama's cumulative investment in Mexico had amounted to US $1.05 billion as of June  2017, and 
Mexico's cumulative investm ent in Panama had been  more than US$3. 5 billion.  
1.14.   In light of the developing trade  between the Parties , the future growth prospects for 
Panama and its significance for world trade, the FTA was of particular im portance and opened  
doors to many opportunities.  While Mexico had high potential in manufacturing, Panama had 
become the most important logistical hub in Latin America . Thanks to its macroeconomic stability 
and favourable geographical position, Panama had established itself as a significant, world -class 
supplier of services in the areas of finance, tourism, ports, transport, storage, distribution and 
transit.  
1.15.   Such complementarity was one of the main strengths of the bilateral relationship. In that 
regard , both countries were seeking to consolidate their position as a continental trade corridor 
enabling the production and distribution of goods and services in both the North and the South of 
the American continent, as well as in other important global markets such as Europe and the 
Asia-Pacific region.  
1.16.   Furthermore, Panama's economic growth outlook presented  tremendous opportunities for 
Mexican firms. In particular, the expansion of the Panama Canal would substantially reduce 
transport costs, which could bolster  production chains between Latin American countries and boost 
competiti veness  in the region.  He reiterate d his readiness to expand on any point of interest that 
may arise.  WT/REG374/M/1  
 
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  1.17.   The representative of the European Union  thanked the Parties for their presentations  and 
the Secretariat for its hard work in the preparation of the Factual Presentation. The EU had 
submitted a number of questions on some aspects of the trade facilitation chapter such as risk 
management and authorized economic operators. The EU also asked  questions on geographical 
indications and on the provisions on environment. She thanked the Parties for their satisfactory 
replies. She had noticed that the conclusion of the Agreement was a prerequisite for Panama to 
join the Pacific Alliance and asked whether there were any updates from Panama  on its accession.  
1.18.   The representative of Canada  thanked Mexico and Panama  for their presentations and for 
their replies to Canada's questions. She also thanked the Secretariat  for the preparation of the 
Factual presentation. Canada had no additional questions at that moment.  
1.19.   The representative of Thailand  thanked Mexico and Pana ma for the ir introduction s of the 
Agreement. Thailand had submitted question s in advance of the meeting  related to the Parties' 
liberalization of trade in services  as well as to other provisions of the FTA . She thanked the Parties 
for the response  provided. Thailand would study the English translation of the response s and 
would keep the Parties informed if any further question s arose .  
1.20.   The representative of the United States  thanked both Parties for the ir informative 
presentations  of the Agreement  and the Secretariat for preparing the Factual Presentation . He had 
noticed a familiar and robust structure in th e Agreement  which included m any chapters that he 
expect ed from a  high-quality agreement . He appreciate d the strong customs and trade facilitation 
chapter. Also , he applauded the incorporation of some of the TBT Committee decisions as well as 
language on re gulatory cooperation  in the TBT chapter . He recognize d the approach in the services 
area and look ed at the negativ e list approach as leading to an ambitious outcome. Mode 3 had 
been place d under  the Investment Chapter which made sense to him.  The f inancial  services and 
telecom munications  chapters were strong. He acknowledge d the inclusion of strong e -commerce 
elements in the Agreement. In that respect, t he Agreement covered many important elements 
including the prohibition of customs duties f or products del ivered digitally. He also welcomed the 
strong and ambitious approach regarding cross border data flow s. Since both Parties were LAIA 
members , he encourage d them to properly notify  other agreements . If they we re doing great 
things under the Agreement , he assume d that they were doing great thing s also  in LAIA and it 
would be useful to review those agreements as well. In the past , the United States had asked  
question s about Panama's  accession to LAIA and had noted how other justification s would  not 
neces sarily  apply to an acceding m ember . Therefore he would expect to see a notification from 
Panama in that respect.  
1.21.   The representative of Panama  thanked the delegations that took the floor. Regarding the 
EU's question on  the ratification of the Agreement and  Panama's accession to the Pacific Alliance, 
the Agreement was one of the issues that had to be dealt with before the completion of the 
accession. He would transfer the EU's question to capital to see k additional information. He took 
note of the Unites Sta tes' concern about the notification of Panama's accession to LAIA and 
understood its interest in the issue. As he has already stated on  previous occasions, Panama  was 
aware of its commitment  to notify  and took it seriously. Any notification had to take pla ce in 
coordination with all parties  concerned in order to be effective . Members had already s een the 
consequences of the lack of coordination . When he had been the Chair of the CRTA in 2010 , there 
had been a number of issue s, often related to unilateral notifications, that had taken up a great 
deal of time and had not yet been settled. He hoped that the efforts would be successful in order 
to submit a notification and the necessary information in a way that would allow prompt 
consideration of the agreements under the TM. He envisage d the consideration process happening 
in the CRTA or perhaps in another Committee, depending on the position of other  countries . He 
would work as effectively as possible to ensure that the issue move d forward . 
1.22.   The Chairman  said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between Mexico and Panama  had allowed the Committee to clarify a number of 
questions and it could now conclude oral discussion of the RTA in ac cordance with paragraph 11 of 
the Transparency Mechanism. If any delegations wished to ask follow -up questions they were 
invited to forward submissions in writing to the Secretariat by 16 November 2017 and Parties were 
asked to submit replies in writing by  no later than 30 November 2017. In accordance with 
paragraph  13 of the Transparency Mechanism all written submissions, as well as minutes of the 
meeting would be circulated promptly, in all WTO  official languages, and would be made available 
on the WTO we bsite.  WT/REG374/M/1  
 
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  1.23.   The Committee took note of the comments made.  
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