Trade data on services are not available to small U.S. trading partners, including Panama. Congressional leadership and the Bush administration agree to change the language of the work, environment, investment and intellectual property chapters in this free trade agreement and three others proposed on the basis of principles set out in a multi-party agreement. As part of the resolution, Panamanian officials visited the United States to verify the meat and poultry food safety control system and found that the adoption of the U.S. system would not pose a health threat to Panama. This agreement was formalized as part of a separate bilateral agreement between the two countries, along with a streamlined import documentation system. The agreement, signed and entered into force on 20 December 2006, stipulates that Panama accepts US health, plant health and regulatory systems as equivalent to Panama`s for meat, poultry, dairy products and other processed products and no longer requires individual plant inspections. Panama has since amended its laws accordingly.45 At the beginning of the 21st century, the canal and close ties with the United States continue to define the characteristics of Panama`s economy, but in the past these characteristics have hindered Panama`s participation in regional integration. Although Panama is part of the Central American integration system, a large-scale political agreement, it has refused to join the Central American common market and has instead relied on the canal and the major U.S. economy as an economic anchor.
Since independence, Panama has had a fully dollarized monetary system and has benefited from the unilateral trade preferences of the United States established by the Caribbean Basin Economic Recovery Act (CBERA), the Caribbean Basin Trade Partnership Act (CBTPA) and the Generalized System of Preferences (SPG).24 These historical circumstances have provided little incentive for Panama to become a more open economy. It was only since joining the World Trade Organization (WTO) in 1997 that Panama began to reduce tariffs, an important step in the preparation of a free trade agreement with the United States. The U.S.-Panama FREI trade agreement adopts new pharmaceutical standards for IPRs that reflect a bipartisan understanding, as developed by congressional and USTR leaders in the May 10, 2007 agreement. They deal with three important issues.