Colombia, Panama kick start free trade era
Colombia signed a free trade agreement with Panama on Friday. The agreement was signed in Panama City by Colombia’s Minister of Trade, Industry and Tourism Sergio Diaz Granados and Panama’s Minister of Trade and Industry Ricardo Quijano. Negotiations for the free trade agreement began in 2009.
Diaz Granados called the agreement, “the most important milestone in the history of relations” between the two countries. Quijano added that the agreement would “open the doors to trade and legal security”.
The agreement brings Panama one step closer to joining the Pacific Alliance, an important Latin American trading bloc comprising Chile, Colombia, Mexico and Peru. The conditions of membership of the Pacific Alliance require each new member to maintain bilateral free trade agreements with existing member states. Panama now only lacks a free trade agreement with Mexico.
Before it takes effect the agreement will need to be ratified by the Colombian congress. This will occur in the coming weeks, according to Diaz Granados. The agreement represents a significant step in the Santos government’s program of trade liberalisation, which includes the free trade agreement signed between the United States and Colombia in May of this year. “Colombia continues to deepen its presence in international markets through commercial agreements that will bring possibilities for growth and the generation of employment”, added Diaz Granados.
Colombia and Panama presently trade 2.8 billion US dollars of goods and services annually. The agreement is sure to increase this amount.
Colombia Politics view
Following the national farmers´ strike in August, Colombians appear to be turning off Free Trade Agreements. Erroneously many lay the blame for the crisis in Colombia´s agriculture sector squarely at the feet of the new free trade pacts with the US and Europe. Although the crisis in the campo runs a lot deeper, Colombian society has developed a critical eye against the policies which Santos at the beginning of his premiership heralded as a panacea for record-breaking economic growth. Santos has unsurprisingly been a little more reticent about the new agreement with Panama.
Colombia Politics is a champion of the principle of free trade. The devil is always in the detail, however, and most accept that Santos – and Uribe – Governments dropped the ball in their negotiation of the deal with the US. Free trade is fine, but Colombia must negotiate on her terms.
