New Free Trade Agreement
March 9, 2016
On April 3 2014. Mexico and Panama signed a Free Trade Agreement (FTA), which came into force on July 1 2015.
Panama imported nearly $1 billion in goods from Mexico last year while exporting $20 million in goods to Mexico. The deal bodes well for Panama as it covers 72% of its total imported products.
In terms of investment, in recent years, about 20 Mexican transnationals have been registered in Panama to participate in various production sectors ranging from finance, the construction industry, cement and metals, bakeries and restaurants to telecommunications. Mexico’s foreign direct investment (FDI) in Panama was $2.32 billion, as of March 2013; while the cumulative FDI of Panama in Mexico was $876 million between 1999 and 2013.
Within the region, Mexico is Panama’s fourth-largest investor. Moreover, Panama is the second most popular destination for Mexican investments in Central America. Data from the Ministry of Economy of Mexico also reflects that Panama’s investments in Mexico occupy the following positions: no.19 globally; no.2 in Latin America and the Caribbean; and no.1 in Central America. Likewise, Mexico is a major user of the Panama Canal, with its cargo flow on the canal ranking in eighth place in 2013.
Through the growth of economic relations and a long-term vision, Panama and Mexico are certain that this new treaty will be key to ensuring the free movement of goods and services in Latin America and the Caribbean, while raising their competitiveness and diversifying their regional presence in international markets.