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In April 2004, the Bush administration began negotiating a free-trade agreement with Panama.
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As part of the agreement, more that 88% of U.S. exports to Panama would be duty-free upon entry, and the remaining tariffs would be phased out over 10 years.
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Panamanian goods would become permanently duty-free in the U.S., customs officals would have authority to conduct surprise site visits to Panamanian producers, and the United States would be permitted to pursue a variety of enforcement actions.
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A Government Accountability Office study identified Panama as one of eight countries-- and the only current or prospective FTA partner-- listed on all major tax-haven watchdog lists.
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With 350,000 registered corporations, Panama is second only to Hong Kong as a home for multinational firms' subsidiaries-- many created for the sole purpose of avoiding taxes in the U.S.
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Panama is one of few countries that refused to sign any tax information exchange treaties. This international legal instrument allows for a standard exchange of tax-related information between countries, and helps to identify and catch tax cheats.
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The Panama FTA uses the same NAFTA/CAFTA foreign investor language that promotes off-shoring and subjects our domestic environmental, zoning, health and other public interest policies to challenge by foreign investors in foreign tribunals.
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Not one U.S. labor union, faith organization, family farm organization or enviromental group has yet to endorse the Panama FTA, or push for its passage.
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Supporters of trade with Panama are working under a soft deadline of late June when Panamanian President Martin Torrijos leaves office.
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House Ways and Means Chairman Charlie Rangel (D-NY) and Subcommitee on Trade Chairman Sander Levin (D-MI) are seekign to eliminate international tax havens in Panama.
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The Obama administration has expressed support for the Panama agreement.
