Israel concluded negotiations with Panama on a free trade agreement: an Israeli delegation headed by the Foreign Trade Administration at the Israeli Ministry of Economy which included seven representatives from relevant government ministries held the fourth round of talks in Panama City between November16th -19th, 2015 and succeeded in bridging the remaining gaps between the sides and completing the talks.
In 2016, Panama Will Join the List Of Countries with which Israel Enjoys Free Trade Agreements, Including the US, the EU, AFTA Countries, Canada, Turkey, Jordan, Mexico, Colombia, Brazil, Argentina, Uruguay and Paraguay.
Panama enjoys free trade agreements with several countries, including the US, the EU, Canada, AFTA countries, Singapore, Taiwan, Peru, Colombia, Chile and Mexico. The free trade agreement with Panama will put Israel in a similar position regarding trade benefits.
The agreement, which will include a clause on the services sector, represents another springboard for Israeli companies in the service industry (a field comprising 30% of all Israeli exports). Israeli companies will now be able to participate in this sector in Panama -- with an emphasis on software, communications, information security, engineering and research and development – and thus enjoy the potential of this and related markets.
Ohad Cohen, Head of the Foreign Trade Administration at the Israeli Ministry of Economy, said: "The Ministry of Economy continues to strengthen Israel's economic ties with countries around the world, with an emphasis on developing economies with high growth potential. This will strengthen Israel's foothold in Latin America, in line with our policy of expanding export channels for Israeli industry and various services sectors. The agreement will open new possibilities for Israeli industry while giving a competitive edge to Israeli manufacturers. Panama is a candidate to become member of the Pacific Alliance, a bloc of Latin American countries comprising Mexico, Colombia (both countries with which Israel has free trade agreements), Chile and Peru. The bloc includes some 200 million people and a combined GDP of more than $3 trillion; it covers 35% of the GDP of all Latin American countries and more than 50% of Latin American trade."
According to the Foreign Trade Administration at the Israeli Ministry of Economy, the economy of Panama is based mainly on a highly developed services sector, which represents more than three-quarters of the country's GDP, and includes management of the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, operation of the ports, shipping registration and tourism.
The rate of economic growth in Panama reached 8.4% in 2013 and 6.2% in 2014, significantly higher than the average for Latin America and the Caribbean Islands (1.7% in 2014, according to World Bank data). Panama's growth is attributed among other things to the widening of the Panama Canal, begun in 2007 at a cost of $5.3 billion. Additional infrastructure development projects expected to take place may also draw Israeli companies with relevant experience.