Ambassador highlights benefits of free-trade pact, canal expansion.
Recent headlines about international relations have often been about wars, threatened or avoided, and “red lines.” Trade treaties concern bottom lines, and the wars avoided by them are the economic kind, but trade remains another crucial component of foreign policy.
Case in point: The U.S.-Panama Trade Promotion Agreement, which was obscured by other foreign affairs issues, and by the much more impactful pact with South Korea. But the Oct. 2012 deal has already mattered.
The U.S. Commerce Department reported that by May, U.S. exports to Panama had increased by $770 million — a 20 percent jump since the deal took effect. Panamanian imports rose $50 million, or 34 percent.
Overall, 2012 merchandise exports to Panama totaled $9.9 billion, while imports totaled $542 million.
Minnesota’s manufactured exports have shown great growth, too, rising from $4.5 million in 2002 to $34.4 million in 2012, according to the Minnesota Department of Employment and Economic Development.
The trade totals are expected to increase. Especially because the Panama Canal is growing, too, with a $5.2 billion expansion scheduled for completion by 2015.
“This will change the whole rule of the game in world trade,” said Mario Jaramillo, ambassador of Panama to the United States. Jaramillo, who was in Minneapolis last week on a visit coordinated by the Minnesota International Center, added that while the full effect of the deal can’t yet be quantified, its impact is still definitely felt.
“The Free Trade Agreement with the United States is like a seal of certification that a country complies with environmental law, human rights and labor, so the investor can see that we are a first-world country.”
In terms of economic growth, Panama is not only first-world, but maybe first among nations: The International Monetary Fund predicts 9 percent growth in its economy in 2013.
The torrid pace led to a Panama City building boom. But benefits have been unevenly distributed, a lament shared by some who see free-trade producing inequities in America.
These are legitimate concerns. But in a world desperately seeking economic growth, trade is a net benefit that creates wealth and friendship among nations.
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