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Panama’s president-elect wants to review trade agreements with US, Costa Rica

May 7, 2019

The president-elect of Panama, Laurentino Cortizo, said he wants to revise free-trade agreements with the United States and Central America and that he will bring respect to a country whose image has been stained by tax evasion.

Cortizo (Democratic Revolutionary Party, PRD) defeated the right-wing Rómulo Roux by a narrow margin on Sunday. It marked the sixth general elections after the 1989 US invasion, which put an end to the dictatorship of Manuel Antonio Noriega (1983-1989).

Analysts doubt that Cortizo, who will succeed current president Juan Carlos Varela, will make major changes to international policies, and they are uncertain of what he could do to the Free Trade Agreement (FTA) with the United States.

Cortizo resigned in 2006 as Minister of Agricultural Development for arguing that Panama should not accept the relaxation of the sanitary norms that, in his judgment, the FTA imposed.

Cortizo said Sunday that “like it or not, it is a treaty that we Panamanians have to respect”, although “there are clauses in the treaty that allow us to make that request” for a review.

“Obviously with the United States we have to be very cautious when we request to revise treaties […] because they are our main trade partner,” Cortizo said.

But some analysts believe it is unlikely that the future president will revise the trade pact with the United States.

“I do not think there will be a revision of the FTA, but perhaps adjustments that are included in the protocol of the Treaties. The relationship between Panama and the United States, especially with the PRD governments, has always been good and intense,”  James Aparicio, director of the newspaper Metro Libre, told AFP.

– Will he dare? –

The United States is the main commercial partner of Panama and the first user of its Canal, with which it transported 174 million tons of cargo last year.

In addition, the countries operate joint security programs in the fight against drug trafficking, organized crime, money laundering and illegal immigration.

Carlos Guevara-Mann, a professor of International Relations at Florida State University in Panama, believes Cortizo will follow “the orbit of influence of the United States,” so he will “avoid taking actions that irritate” the Donald Trump government.

“I doubt they dare to propose reforms to the FTA,” he said.

Cortizo, a businessman and rancher, has also been in favor of reviewing trade agreements with Central American countries, which in his opinion are detrimental to Panamanian producers who complain about the imports that displace their products.

“I do know that there are other treaties in Central America that we are going to request a review, like Costa Rica and Nicaragua,” Cortizo said on Sunday, though he did not provide further details.

– ‘Rescue the image’ –

The president-elect also stressed that he will enforce the interests of Panama, a phrase he has repeated to accuse the Varela government of not fighting enough change the country’s reputation as a tax haven.

One of his plans is to create a group of experts to develop a strategy to “rescue” the name of the country, three years after it was exposed as a sanctuary of tax evasion of the rich, famous and powerful in the so-called “Panama Papers.”

“Of the 125 commitments we have in the action plan, the number one talks about rescuing the name of Panama,” Cortizo said.

Panama has made legal reforms to adapt to the international fight against money laundering and tax evasion.

“It is up to the new government to continue along these lines,” said Rita Vásquez, director of the newspaper La Prensa.

However, local sectors consider that these reforms threaten the country’s sovereignty and damage the competitiveness of its financial system.

“Cortizo really, like the government of Varela, has among its close associates people who are directly involved with the business related to the creation of offshore companies,” said the vice president of the Center for Democratic Initiatives (CIDEM), Claire Nevache.

“Obviously it is an important factor, but there is little room for movement, so I think there is a little show for the electorate [in Cortizo’s statements],” Nevache added.

“These are demagogic statements; the best way to rescue the name of Panama is to fight the corruption that suffocates the country,” said Guevara-Mann.

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