Caterpillar Pushes for Passage of U.S.-Panamanian Trade Promotion Agreement
Caterpillar Vice President for Latin America appears before the U.S. International Trade Commission in Washington, D.C. and calls for free trade to support the political and economic relationship with this important democracy and ally
WASHINGTON, D.C.—In testimony given Wednesday, May 16, before the United States International Trade Commission in Washington D.C., the Caterpillar Inc. vice president with responsibility for Latin America emphasized why a Panama Trade Promotion Agreement will be remarkably beneficial for the U.S., Panama and the region.
Tom Gales cited a major construction project the country is embarking on—the expansion of the Panama Canal—as one reason why duty-free trade is essential. The expansion is the world’s largest public works project since the Three Gorges Dam was constructed in China.
"The current canal is itself a trade barrier," Gales explained. "Today, about five percent of all world trade passes through the Panama Canal, and much of that trade originates in the ports of Miami, New York City, and Los Angeles. But with the Canal at capacity and many of the newer, larger ships unable to use the Canal, it takes longer than it should for some U.S. exports to reach overseas markets. An expanded Canal would help fix that and allow many American manufacturers to be more competitive by shortening their supply chain and reducing inventories. Now is the time to act."
The potential economic benefits for Caterpillar, the world’s largest producer of earthmoving equipment, and other U.S. and Panamanian businesses and consumers are significant. If enacted, a Panamanian Trade Promotion Agreement would immediately eliminate tariffs ranging from three to 15 percent on Caterpillar products, benefiting both the company and its customers.
"In addition to manufacturing, American agriculture and service industries will also benefit from this agreement," said Gales. "Services represent the fastest growing sector of the Panamanian economy and freer trade will further enhance investment opportunities in financial services, real estate, tourism and transportation. For agriculture, the agreement will allow U.S. exporters to maintain and expand their 50% market share in Panama."
Caterpillar has also recently appeared before the U.S. International Trade Commission urging passage of Trade Promotion Agreements in Peru and Colombia. All have compelling economic and national security reasons to be enacted. "Free trade has the ability to help transform these regions by improving living standards because more products could be offered at lower prices," said Gales. "Free trade will also help promote peace and prosperity in these countries, bringing us all closer together."