Chile and Panama sign Free Trade Agreement

On June 27, 2006, the Chilean Minister of Foreign Affairs, Alejandro Foxley, and Panamanian Minister of Trade and industry, Alejandro Ferrer, signed the Chile-Panama Free Trade Agreement (FTA).

Negotiations for this FTA were initiated in November, 1996. After a few referrals due to disagreements in a small number of subjects, negotiations were taken up again in September 2004 and concluded in February 2006.

The FTA includes important themes such as market access, trade remedies, investment, dispute settlement, and two protocols regarding labor cooperation and environmental issues.

Panama is an important market for Chilean manufactured and food exports, namely apples, pears and peaches. Other products, such as lamb, fish, fresh shellfish, fresh fruits, and insecticides will benefit from this agreement.

In 2005, Chilean exports to Panama totaled US $111.5 million, with a strong participation of copper, gasoline, and wine. Panamanian exports to Chile totaled US $10.8 million in the same year, including fishing supplies, perfumes, and ship-factory items.

The new agreement provides immediate duty free access for 64,5% of Chilean exports to Panama. Panama will enjoy the same access for 92.5% of its exports to Chile.

This FTA is also important because of the strategic location of the Panama Canal as both a vital center of distribution within Central America and a commercial connection between the Southern and Northern Hemispheres.