Panama: Political and Economic Conditions and U.S. Relations [Updated September 4, 2007]   [open pdf - 329KB]

"The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the Panama Canal was under U.S. control and Panama hosted major U.S. military installations. The current bilateral relationship is characterized by extensive counternarcotics cooperation, assistance to help Panama assure the security of the Canal, and negotiations for a bilateral free trade agreement (FTA). The United States provided Panama with $9.4 million in foreign aid in FY2006 and an estimated $12.2 million in FY2007. The FY2008 request is for $5.1 million. After 10 rounds of negotiations, the United States and Panama announced the conclusion of an FTA on December 19, 2006, although U.S. officials stated the agreement was subject to additional discussions on labor and that the Administration would work with Congress to ensure strong bipartisan support. Subsequently, congressional leaders and the Bush Administration announced a bipartisan deal on May 10, 2007, whereby pending FTAs, including that with Panama, would include enforceable key labor and environmental standards. On June 28, 2007, the United States and Panama signed the FTA, which included the enforceable labor and environmental provisions. Panama's Legislative Assembly overwhelmingly approved the agreement on July 11, 2007 by vote of 58 to 3, with 1 abstention. The U.S. Congress could consider implementing legislation as early as September 2007."

Report Number:
CRS Report for Congress, RL30981
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