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North & Central America and Caribbean

Panama

 Flag of Panama

Last reviewed: 4 August 2009

Country information

INTERNATIONAL RELATIONS

Relations with the International Community

For historical, geographical and economic reasons, Panama has a very close relationship with the US. Under the 1977 Torrijos - Carter treaties, sovereignty of the Canal was handed back to Panama on 31 December 1999; the US withdrew all troops; and military installations were returned. The Neutrality Treaty, also signed in 1977 grants expeditious passage to US warships, and calls for US and Panama to defend the Canal from any threats. Threats to the Canal under the Neutrality Treaty where invoked by President Bush Senior to justify 1989 invasion of Panama. Unlike the Torrijos - Carter Treaties the Neutrality Treaty has no expiration date. The Treaty of Monteria signed in 1979 with Colombia and The San Jose Declaration, exempt government owned ships from Colombia and Costa Rica from payment of tolls.

Panama is one of the few countries to have diplomatic relations with Taiwan, which is an important source of aid, as are Japan, Spain and the EU. Panama and Taiwan signed a Free Trade Agreement (FTA) in 2003, which took effect from January 2004. The Panama –Singapore FTA of 2005 was one of the first bilateral FTAs signed by Singapore with a Latin American country. The Panama- Taiwan FTA was also Taiwan’s first with a Latin American country. Panama also has a FTA with El Salvador (2003). In the Americas, only Panama and Chile have negotiated a FTA bilaterally with the US. All other FTA’s negotiated by the US in the American continent have been multilateral. The Panama–US FTA, which was signed in Washington on 28 June 2007 is still pending US Congress ratification. Panama concluded FTA negotiations with Chile, Honduras, Costa Rica and Guatemala. The FTA between Panama and Nicaragua is pending ratification from the Panamanian National Assembly. Together with its neighbours, Panama also negotiated a Political Dialogue and Co-operation Agreement with the EU, which was signed in Rome on 15 December 2003.

Relations with Neighbours

Colombia

Links with Colombia are stretched from time to time with the presence on Panamanian territory of Colombian paramilitaries and guerrilla groups. Occasional skirmishes occur between the latter two and the Panama police force in the Darien region.

For the last two years Colombian Customs (CC) have unilaterally imposed restrictions on goods coming from the Colon Free Zone (CFZ). CC now requires that goods from CFZ enter Colombia only through the Port of Barranquilla if goods are shipped and only through Bogota if goods are transported by air. Other restrictions include list of goods and countries that are not subject to normal customs valuation procedure. Instead minimum prices and benchmarking valuation to local products are used. Panama considers measures inconsistent with Colombia’s WTO obligations, mainly MFN Treatment (Art II of GATT), Freedom of Transit (article V of GATT) and breach of the Customs Valuation Agreement.

Association Agreement with the EU

Panama has participated alongside the other five Central American countries in talks to reach an association agreement. In order to comply with the EU’s requirement to negotiate jointly with the rest of Central America, Panama will have to overcome two major obstacles in order to access the negotiations. First, it will have to sign the protocol of accession to SICA (Permanent Secretariat of the General Treaty on Central American Integration) and agree on a common customs union. However, the negotiations are moving slowly overall.

Relations with the UK

Recent Inward Visits

The Vice President of Panama, Samuel Lewis Navarro, made a successful visit to the UK in June 2006. The speaker of the Panamanian National Assembly, Elias Castillo, also visited in February 2006.

Recent Outward Visits

Mr Bill Rammell, then Parliamentary Under Secretary of State, FCO attended the inauguration of President Martin Torrijos on 1 September 2004.

In March 2005, a Ports & Logistics Trade Mission visited Panama

Lord Triesman, Parliamentary Under Secretary of State, visited Panama in April 2007

A UKTI led Ports & Maritime Trade Mission visited Panama in March 2007

Meg Munn, Parliamentary Under Secretary of State, visited Panama 11/13 September 2007

Climate Change Projects Office trade mission took place 24-25 September 2007

Sir Andrew Cahn, UK Trade & Investment CEO, visited Panama in February 2009

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Contacts

Panama

Address:

Embassy of Panama
40 Hertford Street
London W1J 7SH

Telephone:

(020) 7493 4646

Fax:

(020) 7493 4333

Email: panama1@btconnect.com

Office hours: