Panama exported USD 843.9 million in 2013, reflecting an increase of 2.7% compared to the previous year, when it reached USD 821.8 million. This is the highest figure in the last five years, according to statistics from the General Comptroller’s Office of Panama.
Rest of the country's exports
According to the General Comptroller of Panama, value-added products such as the case of fish meal and oil sales reached in the international market for USD 34.8 million at the end of 2013 to grow 76%, while others like leather totaled USD 21.6 million, for an increase of 21%.
However, traditional products such as bananas (5.4%), shrimp (84.4%) and pineapple (18.9%) remained on top of the exports.
According to the President of the Panamanian Association of Exporters, Juan Planells, it is necessary to improve production yields and reduce waste or use them for conversion into high value export and agricultural production order, maximizing highly profitable activities in foreign markets.
National export FOB totaled at the end of December 2013 USD 843,913 million, representing an increase of USD 22,061 million or 2.68% compared to last year, primarily attributable to growth in demand and prices of consumer goods and gold and bananas. Increases recorded the exports of leather, meet, meal and fish oil, tuna and fishes, shrimps, pineapple, melon, watermelon, and oil related products.
In addition, Panama has 3.4 million hectares destined to agricultural activities, of which 1.5 million are arable farming. The growing demand for non-traditional crops is the main attraction for investors in the field. The farmers claim to feel safe in this aspect because of the increased purchasing power of markets like China and India which sets a promising scenario.
Europe represented 60% of the non-traditional agro exports of Panama, surpassing the United States.
Free Trade Agreements
With the signature of the Free Trade Agreement between Panama and the United States, a new commercial phase after mid-2012, once the processes of signature and ratification by the congresses of United States. This commercial instrument has 23 chapters providing substantial legal security for business, trade and investments between both countries increasing opportunities to investors from the United States.
The Panama-US FTA expected to generate an increase in the exports of goods and services towards an efficient and demanding market, increasing the interest in Panama as a safe harbor for investments. The main objectives of this treaty includes eliminating obstacles to trade, consolidating access to goods and services and favoring private investment in and between both nations. Apart from commercial issues, it incorporates economic, institutional, intellectual-property, labor and environmental policies, among others. The main focus of this treaty is for the United States to maintain its level of investment in Panama, in business areas of importance such as:
Another important freetrade agreement is the one between Canada and Panama.
Panama and Chile entered a Free Trade Agreement because the South American country opened 92.5% of their tariff lines. Similarly, Costa Rica joins the list of agreements, negotiating areas such as dairy, beef, pork and chicken, as well as telecommunications and financial services. On the other hand since 2010, Colombia beginning negotiations on a Free Trade Agreement (NAFTA), South Korea addition, CARICOM and Peru are treaties that have initiated processes of negotiation.
In 2010 Panama signed together with the countries of the Central American region an association agreement with the EU, which gives a very positive for the region, achieving consolidation and improved access for many products such as bananas, sugar , meat, textiles, tuna and rice, which will grow in that market conditions predictable and safe. Domestic products will have preferential access to a market of half a billion consumers with high purchasing power.
Export Processing Zones
The Export Processing Zones governed by Law No. 25 of November 30, 1992 are defined as Duty Free Zones of Free Enterprise, specifically designed for developing all the infrastructures, as well as the operative organization and the administrative activities that are necessary, under maximum efficiency criteria, so that within them are established, companies from all over the world which activities are the production of goods and services for the exportation.
The main export industries allowed in the EPZ are:
The promotion/development and the operation of the EPZ are well-defined and the Law grants extensive power to the promoter to develop land; construct building and installations for all purposes; construct technical, medical, sporting, public service, transport and other centers; install and operate gas, energy, water, telecommunications and sewage systems, schools and other facilities; and construct and operate airports, ports, docks, cargo facilities, roads and other infrastructure, all subject to the applicable laws of Panama.
The labor relations within a processing zone are more flexible than those in effect in the rest of the national territory.
Similar incentives exist for oil and petrochemical companies located in the country’s Petroleum Free Zones as well as for Call Centers.
The export processing zones in Panama are regulated by Law 25 of 1992, which has the objective of attracting light manufacturing companies dedicated to the transformation and ensemble of products. To grasp the attention of these types of companies, the national legislation offers incentives of tax, migratory and labor type.
In migratory matter, the foreigners that prove they have invested a sum no less than USD 250,000.00 in an export processing zone will have the right to a permanent resident visa as an investor. The foreigners hired as trusted personnel, expert or technical executives for promoting companies or companies established in export processing zones will have the right to a temporary resident visa for the term of the contract duration. And foreigners that travel to Panama to make transactions in export processing zones, established or to be established in Panama will have the right to a merchant resident visa valid for a year. These visas are granted to the requestor’s spouse, children under age and those of age that are still dependents.
In labor matter, the law of incentives to the export processing zones establishes for promoting companies or companies established in a processing zone, a requirement of justified layoff of its special workers, consistent in the market loss or clients’ loss.Â It also establishes that for legal effects, the production premiums, bonuses and rewards that are granted to the worker will not be considered as part of their salary. Finally, the law of incentives empowers these companies to rotate their workers in the different production lines of the company, and to split the annual vacation period in two equal parts.
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