• 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

Slothy Sunday: End your February with a sloth
Sloth Sundays
2539 views
Sloth Sundays
2539 views

Slothy Sunday: End your February with a sloth

The Tico Times - February 28, 2021

Happy Slothy Sunday from Costa Rica! We hope you enjoy the rest of your weekend, and the end of February…

How can I immigrate to Costa Rica?
Business
73 views
Business
73 views

How can I immigrate to Costa Rica?

Lic. Jorge Montero B. - February 28, 2021

Back in September 2016, when we lived in a completely different social environment, not yet affected by the global pandemic,…

Central America begins ban to protect lobster
Fishing
1708 views
Fishing
1708 views

Central America begins ban to protect lobster

AFP and The Tico Times - February 27, 2021

Countries of Central America and the Dominican Republic on Monday will begin a ban to protect the Caribbean spiny lobster…