"Free" trade with Panama to benefit tax-cheating corporations

[eridani]

http://www.alternet.org/workplace/61739/

Two other agreements are already in the queue, awaiting a date to be set for Congressional consideration. Public statements by members of the House and Senate suggest that these two pending agreements-with Peru, and with Panama-are relatively non-controversial and will probably pass.

Indeed, the proposed bilateral trade agreement with Panama has skated through without much attention at all. But the agreement with Panama is highly significant. The problem is, the trade agreement with Panama isn't really about trade. It's about foreign investor rights, money laundering, and tax dodging. And the United States should in no way reward this notorious offshore tax haven with a "gold star" Free Trade Agreement.

To begin with, the United States has greater foreign investment in Panama than it does in the five Central American countries in the CAFTA agreement. CAFTA was ratified by just two votes in the House after rancorous debate-but Panama's greater economic slice hasn't occasioned much attention. So just from the perspective of investment alone, the Panama agreement is more significant than CAFTA.

Second, what's the external economic environment of Panama actually like? The vast majority of US goods already flow into Panama with low tariffs. Panama is a huge reshipment zone because of the Canal, and so it doesn't maintain very high tariffs compared to its Latin American neighbors. And the main manufacturing area of Panama-responsible for 10% of the country's GDP-is a tax and tariff-free zone.
Panama has two major areas of "economic comparative advantage" in the region. One, obviously, is the Canal. But the other is much more insidious-and major U.S. corporations are hoping that no one draws any attention to it.

Panama's other economic comparative advantages are in the area of tax and banking secrecy, and the ease with which U.S. companies can create subsidiaries in Panama for purposes of dodging taxes.

[fed-up]

1. a recent credit card offer I got had their call center in Panama...nt