Houston, Panama officials urge OK of free trade pact

Panama City is amid a boom as condominium towers and office buildings go up. Panama and Houston traded $1.7 billion in goods and services last year, up sharply from 2009.

PANAMA CITY — Hard hats, drills and cranes are everywhere in this city of 1.3 million, where construction of condominiums and office buildings continued even during the global recession.

Panama is enjoying a boom as it expands what already is one of the world's most important waterways, the Panama Canal, and some of the steel, plastic and machinery changing the capital city's skyline was shipped out of the Port of Houston.

Last year, Panama and Houston traded $1.7 billion in goods and services, up from $897.3 million in 2009.

Hoping to boost that commerce, a delegation from Houston joined Panamanian officials Thursday in urging the United States and Panama to complete a stalled free trade agreement.

"We know with the free trade agreement, those numbers will grow even more dramatically," said Jeff Moseley, president and CEO of the Greater Houston Partnership, which led a trade mission to Panama this week.

The trade pact has languished since the U.S. and Panama negotiated it in 2007. Supporters hope President Barack Obama will send it to Congress for ratification before the August recess.

"It seems like there's a good chance to finalize it within the next few weeks," said Juan Carlos Arias, president of the American Chamber of Commerce and Industry of Panama, which plans to visit Washington next month to push for approval of the trade pact.

Data-sharing agreementOn Thursday, the chamber and the Greater Houston Partnership signed a memorandum of understanding promising to share economic studies and marketing information.

And last month, the partnership passed a resolution supporting approval of the trade agreement.

The pact would eliminate tariffs on U.S. exports to Panama that now range from 10 percent to 15 percent.

Reducing those additional levies on goods and services sold by medium-size and small U.S. companies will make them more competitive, said Daniel Crocker, a senior commercial officer for the U.S. Embassy in Panama City.

Even without the trade pact in place, Panama is attracting more U.S. investors and exporters, in part because of the dollar-based economy and the stability, said Crocker, who spoke to the Houston group Thursday.

"The free trade agreement is not going to transform Panama into an open economy. It already is," Crocker said.

A political statementBut he said the treaty represents a political statement demonstrating the strong relationship between Panama and the U.S., which controlled the Panama Canal until December 1999.

Since it reached the trade agreement with the U.S. in 2007, Panama has changed its labor laws to allow union organizing across the nation and has agreed to let the U.S. collect Panamanian banking information about American companies or individuals suspected of tax evasion.

Trade between the two nations will grow even if Congress doesn't ratify the free trade agreement, said Houston City Controller Ronald Green, one of two dozen Houstonians who participated in the trade mission that concludes today.

But Ricardo Quijano, Panama's vice minister of trade, added a word of caution in noting that Panama has signed free trade agreements or is in negotiations with several other nations.

"Our trade with other countries could increase and could decrease with the United States," he said.

jenalia.moreno@chron.com