The Obama administration is currently considering plans to pass the Panama Free Trade Agreement (Panama FTA). The agreement–which is a NAFTA-style free trade agreement–was negotiated under the Bush administration but was not passed before he left office.
Presently, it is being pushed by a number of large banks–many of which received government bailout money. Obama’s trade representative has indicated that the administration is supportive of the agreement.
This is unfortunate as during the 2008 presidential campaign, Barack Obama expressed opposition to NAFTA, saying that he was open to having that treaty “renegotiated” to expand environmental and labor protections.
Public Citizen’s Citizens Trade Campaign came out against the agreement, stating:
On behalf of our more than twelve million combined members, we are writing to express our strong opposition to the Panama “Free Trade Agreement” (FTA). This pact reflects the unsuccessful ending point of the past administration’s trade policy and should not serve as the starting point for the new Congress and administration.
Responding to broad public demand for change, more than one hundred candidates from both parties ran on platforms of trade reform in 2008. The past trade model has led to massive American job loss, downward pressure on wages, the loss of nearly 300,000 family farms and massive trade imbalances that have contributed to our current economic crisis. It has given broad, expansive new rights to foreign corporations to challenge our environmental and public health standards, and flooded the United States with unsafe imported food and products. And, it has devastated developing nations where millions of family farmers have been forced off their land and poverty, despair and desperation-driven mass migrations have grown.
Like many of the proposed free trade agreements in the Americas, the Panama FTA uses language that is almost directly replicated from the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA). This language is problematic and raises doubts about the extent to which environmental and labor standards will be enforced, limits access to medicines, and grants preferences to foreign investors that allow them to sue governments in order to create a more business-friendly climate.
Panama’s Offshore Tax Haven Status also an Issue
Public Citizen has also released a report criticizing the prospect of a free trade agreement with Panama because the country makes it easy for U.S.-based corporations to setup subsidiaries in Panama in order to avoid paying taxes. In fact, it is so easy to do so that Public Citizen’s dispatched one of its interns to give it a try. Here’s what she found:
Passage of the Panama FTA would not reign in these practices. In fact, Public Citizen argues it would take away regulatory provisions aimed at restricting the use of offshore tax havens.
More on the Panama FTA can be found on Public Citizen’s Global Trade Watch website.