ABC News | 11 July 2006

Panama upbeat on US free trade deal by year end

Reuters

PANAMA CITY — Panama could reach a free trade deal with the United States by the end of this year, despite lingering differences over U.S. food safety, a senior negotiator said on Tuesday.

Talks stalled at the beginning of this year over agriculture issues and analysts had predicted new negotiations would be delayed until 2007, after an awaited referendum on a proposed Panama Canal expansion.

"We intend to conclude negotiations on a (free trade deal) with the USA soon — possibly before the end of the year," Estif Aparicio, Panama’s chief trade negotiator, told Reuters.

Panama’s Agriculture Minister Laurentino Cortizo resigned in January in protest of the proposed free trade agreement, which he said would expose Panama to an increased risk of importing animal diseases — a charge U.S. officials denied.

"Our focus has been to find the middle ground on food safety. Once we clear that issue we can move ahead," he said.

Many Panamanian farmers reject the free trade agreement, claiming they will lose out to cheap U.S. agriculture imports.

Panama says it exported $433 million of goods to the United States in 2004, around half of its total exports. It imported around $1.8 billion of U.S. goods in the same year.

Panamanian government officials fear the canal expansion referendum could be used by critics as a protest vote against the free trade deal.