Costa Rica Coffee Guide

Venezuela, Colombia woes drag down Panama’s free trade zone

February 26, 2016

PANAMA CITY – Panama’s free trade zone — the biggest in Latin America — is in crisis in large part because of economic woes sapping major export customers Venezuela and Colombia, Commerce Minister Augusto Arosemena said Wednesday.

“The patient [the Colón Free Trade Zone] is in a coma because re-exports have gone down and some companies have closed,” he told reporters.

“Colombia and Venezuela were the main markets for the free trade zone, and a big part of that [the crisis] can be attributed to the situation they have,” Arosemena said.

The free trade zone is vital to Panama’s economy but has been in decline since 2012, prompting companies located there to demand tax cuts. An association representing firms in the zone says that in January this year 55 companies shut down, following 155 that closed over 2015. Thousands of jobs have been lost in recent years, it said.

Panama free trade zone in Colón
Elmer Martínez/AFP

Official figures show that, between January and November 2015, commercial movement through the free trade zone dipped 10 percent to $20.3 billion compared with the same period in 2014.

Venezuelan companies especially have contributed to the downturn. They face big obstacles in paying invoices because of devaluation and rigid currency controls in place in Venezuela for the past 13 years. Some Panamanian sources put their accumulated debt at some $1 billion.

Colombia, meanwhile, has been imposing duties on clothes and shoes — most of them made in Asia, especially China — that come from Panama, particularly from the free trade zone. It brought in the tariff to protect its own textile industry. Panama won a complaint against the tariff before World Trade Organization, but Colombia lodged an appeal in January.

You may be interested

Costa Rica immigration offices to remain closed until October
Costa Rica
5544 views
Costa Rica
5544 views

Costa Rica immigration offices to remain closed until October

Alejandro Zúñiga - September 19, 2020

The Immigration Administration on Friday said its main and regional offices will remain closed until October due to the coronavirus…

Pic of the Day: Hopping into the weekend
Pic of the Day
776 views
Pic of the Day
776 views

Pic of the Day: Hopping into the weekend

Alejandro Zúñiga - September 19, 2020

Happy weekend from all of us at The Tico Times! [caption id="attachment_62085" align="aligncenter" width="740"] (Courtesy of Brian Kubicki)[/caption] [caption id="attachment_111342"…

Top dental clinics in Costa Rica meet patient needs in the age of COVID
Dental Tourism
2503 views
Dental Tourism
2503 views

Top dental clinics in Costa Rica meet patient needs in the age of COVID

Vayolla Quiros / Goodness Dental - September 18, 2020

The Centers for Disease Control and Prevention (CDC) released its guidelines for dental settings in response to the COVID-19 pandemic.…