WT/TPR/S/301/Rev.1 14 October 2014 (14-5833) Page: 1/148 Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT PANAMA Revision This report, prepared for the second Trade Policy Review of Panama, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Panama on its trade policies and practices. Any technical questions arising from this report may be addressed to Ms Martha Lara (tel.: +41 22 739 60 33) or Ms Silvia Ávila (tel.: +41 22 739 50 64). Document WT/TPR/G/301/Rev.1 contains the policy statement submitted by Panama. Note: This report was drafted in Spanish. WT/TPR/S/301/Rev.1 • Panama - 2 - CONTENTS SUMMARY ........................................................................................................................ 7 Economic environment ...................................................................................................... 7 Trade and investment policy framework ............................................................................... 8 Trade policies by measure .................................................................................................. 8 Sectoral policies .............................................................................................................. 10 1 ECONOMIC ENVIRONMENT ........................................................................................ 12 1.1 Overview ................................................................................................................. 12 1.2 Recent economic trends ............................................................................................ 13 1.2.1 Growth and structure of the economy ....................................................................... 13 1.2.2 Fiscal policy .......................................................................................................... 15 1.2.3 Monetary policy ..................................................................................................... 18 1.2.4 Balance of payments .............................................................................................. 19 1.3 Trade performance ................................................................................................... 20 1.3.1 Trend of merchandise trade ..................................................................................... 20 1.3.1.1 Composition of merchandise trade ......................................................................... 21 1.3.1.2 Direction of merchandise trade .............................................................................. 24 1.3.2 Trade in services ................................................................................................... 24 1.4 Foreign direct investment .......................................................................................... 25 2 TRADE AND INVESTMENT REGIME ............................................................................ 27 2.1 General Framework .................................................................................................. 27 2.2 Trade policy objectives .............................................................................................. 27 2.3 Trade agreements and arrangements .......................................................................... 28 2.3.1 World Trade Organization ........................................................................................ 28 2.3.2 Preferential trade agreements.................................................................................. 29 2.3.2.1 Regional integration agreements ........................................................................... 30 2.3.2.1.1 Latin American Integration Association (LAIA) ...................................................... 30 2.3.2.1.2 Central American Economic Integration Subsystem (SIECA) and Free Trade Agreement between Panama and Central America ................................................. 31 2.3.2.2 Other trade agreements ....................................................................................... 32 2.3.2.2.1 Association Agreement between the European Union and Central America ................ 33 2.3.2.2.2 Panama - Canada ............................................................................................. 33 2.3.2.2.3 Trade Promotion Agreement between Panama and the United States ....................... 34 2.3.2.2.4 Panama - Peru ................................................................................................. 34 2.3.2.2.5 Panama - Chile ................................................................................................ 34 2.3.2.3 Other trade agreements ....................................................................................... 35 2.3.2.4 Trade agreements currently being negotiated .......................................................... 35 2.3.3 Other agreements and arrangements ........................................................................ 35 2.4 Investment regime ................................................................................................... 35 2.4.1 General framework ................................................................................................ 35 WT/TPR/S/301/Rev.1 • Panama - 3 - 2.4.2 Establishing a business ........................................................................................... 38 3 TRADE POLICIES AND PRACTICES, BY MEASURE ....................................................... 40 3.1 Overview ................................................................................................................. 40 3.2 Measures directly affecting imports ............................................................................. 42 3.2.1 Customs procedures ............................................................................................... 42 3.2.2 Customs valuation ................................................................................................. 45 3.2.3 Rules of origin ....................................................................................................... 46 3.2.4 Tariffs .................................................................................................................. 48 3.2.4.1 Structure and levels ............................................................................................ 48 3.2.4.2 Tariff bindings .................................................................................................... 51 3.2.4.3 Tariff concessions ................................................................................................ 51 3.2.4.4 Preferential tariffs ............................................................................................... 52 3.2.5 Other import charges and taxes affecting imports ....................................................... 53 3.2.6 Import prohibitions, restrictions and licensing ............................................................ 54 3.2.7 Contingency measures ........................................................................................... 56 3.2.7.1 Anti-dumping and countervailing measures ............................................................. 57 3.2.7.2 Safeguard measures ............................................................................................ 59 3.2.8 Standards and technical regulations ......................................................................... 60 3.2.9 Sanitary and phytosanitary measures ....................................................................... 62 3.3 Measures directly affecting exports ............................................................................. 66 3.3.1 Export procedures and requirements ........................................................................ 66 3.3.2 Export taxes, charges and levies .............................................................................. 67 3.3.3 Export prohibitions, restrictions and licensing ............................................................. 67 3.3.4 Export incentives ................................................................................................... 68 3.3.4.1 Drawback, duty-free replacement of goods and temporary admission regimes ............. 69 3.3.4.2 Free zones covered by Law No. 32 of 2011 ............................................................. 69 3.3.4.3 Colón Free Zone ................................................................................................. 71 3.3.4.4 Other free zones ................................................................................................. 72 3.3.4.5 Other export incentive programmes ....................................................................... 73 3.3.4.5.1 CAT and CeFA .................................................................................................. 73 3.3.4.5.2 Payment certificates ......................................................................................... 74 3.3.5 Export financing, insurance and guarantees ............................................................... 74 3.3.6 Export promotion ................................................................................................... 74 3.4 Measures affecting production and trade .....................................................................