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Panama and China and Free Trade Agreement (FTA) Negotiations; Increasing Commercial / Cultural / Educational Activity Between the Two Countries


This topic was split out from the following existing topic because it appears that it will be a fairly significant topic: http://www.chiriqui.life/topic/6251-strengthening-of-diplomatic-and-economic-ties-between-panama-and-china-post-taiwan-era/

Also, several postings related to the exportation of Panamanian beef to China have been split out into a separate topic because there are numerous postings on that specific topic, including some controversy. Please see http://www.chiriqui.life/topic/12134-exportation-of-beef-and-other-food-products-to-china/ for more details.

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Moderator comment: Posted as yet another perspective on the subject of Panama-PRC relations.


The evolution of Panama-PRC relations since recognition, and their strategic implications for the U.S. and the region


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World’s largest bank plans regional headquarters in Panama capital

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The World’s largest bank is planning to establish a regional headquarter in Panama says the Superintendent of Banks of Ricardo Fernandez

The Industrial and Commercial Bank of China (ICBC) is in the process of internal authorizations prior to the request for a general license in Panama that will allow it to operate both inside and outside of the country, said Fernandez.

“A bank of this magnitude is positive for the country because it would bring an important player that will promote more financing from Panama both internally and in the region, it would be a stimulus to the economy and an important player in infrastructure projects”, said Fernandez, who also advanced the interest of a Japanese entity (in an international license.

The superintendent made the statements during the announcements of the First International Banking Congress for Regulators and Bankers, to be held in Panama in  February 2019, with the participation of banking supervisors of the region, risk rating agencies, directors of banks, as well as correspondent and multilateral banks.


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The Cement market is one that Chinese interests are looking to break into and existing players are questioning the quality of their product and demanding standards be imposed.

This article states that there are over 7,000 tonnes or 164,000 sacks of the Chinese stuff currently warehoused near Tocumen. Free samples are being distributed to Chinese building suppliers such as Ferreterias Ivan and Alto Dorado.



Edited by Keith Woolford

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Labor rights, the stumbling block in a new relationship between Central America and China

Tue, 12/04/2018 - 10:41

Diseño sin título_0.jpg

Panama and the rest of the countries of Central America that have embraced China face the challenge of coupling different cultures in all areas, including labor, which may be a stumbling block in this new relationship in the opinion of analysts consulted by EFE.

Panama, El Salvador and the Dominican Republic, which is located in the Caribbean but is politically in the Central American region, a region historically under the control of the United States, also faces Washington's distrust of these new diplomatic ties with China in times of tension between both powers for the commercial issue.

In the last year and a half the three countries broke ties with Taiwan and accepted the "One China" doctrine, which has generally brought great and positive expectations in each other's economic and political sectors, but also some fears about the US reaction, which even called its ambassadors for consultations.

Chinese President Xi Jinping on Sunday begins an official visit to Panama, historic for being the first of a Chinese president, and does so full of "great expectation", as expressed in a letter published in the local newspaper La Estrella.

Xi asked in his letter to Panama to work "against the clock to achieve the advance in the curve of our links despite its late start" (June 2017), acknowledged "geographical distance" and "multiple differences" between both countries, as well as also that they share entrepreneurial and creative peoples.

The Panamanian internationalist Julio Yao affirmed to EFE that "for Panama it is very important to open relations" with China, "especially symbolized by the presence of President Xi" in the Central American country.

For Yao "there is no doubt" that Panama will be strengthened, thanks to Chinese investments, its logistics center and the financial, banking and domestic production, now famished but can grow because the Central American country "can easily place its agricultural production "in the Asian giant.

But the challenge, "the most important thing, is for China to fulfill what it has already promised: that it will obey the labor laws of Panama," something that depends on Panamanians, he said.

"There can be labor problems if we neglect ourselves and let China do what it likes," said the analyst, a reality that can be applied to all Central American countries that have accepted Beijing.

In this context, Yao pointed to the Panamanian Government as responsible for making "capable, technically qualified and accredited people" available to be "in charge" of projects run by Chinese companies, such as the construction of the fourth bridge on the canal, a work of 1,420 million dollars.

Chinese investments well carried could also generate economic conditions that discourage migration in countries like El Salvador, which together with Guatemala and Honduras make up the Northern Triangle, where each year tens of thousands of people flee violence and poverty towards the U.S.

Thousands of Central American migrants are now in Mexican territory after taking a trip in mid-October, while US authorities have deployed thousands of agents on the southern border to prevent their entry.

The United States should "let China make the investments" that it has in mind in Central America so that "people stay to work" and desist from going to North America, said Yao.

For the former Ambassador of Panama in the Organization of American States, Guillermo Cochez, the cultural clash in labor matters is inevitable with the Chinese.

"I do not trust the Chinese very much, they are totally different from us, they work 20 hours a day, they do not believe in the Labor Code or in human rights," the former diplomat told EFE.

And on the issue of human rights, activist Ti-Anna Wang, daughter of Chinese opposition leader Wang Bingzhang, sentenced to life imprisonment, told EFE in Guatemala that a country with China's economic influence "is very difficult to criticize (...) when China acts against human rights, it practically enjoys the permission of the Western world."



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China and Panama sign 28 cooperation agreements

Presidentt Xi and Varela
Post Views: 400
Chinese President  Xi Jinping, and the president of Panama, Juan Carlos Varela, signed 28 agreements on Monday, December 3  with which they seek to face the challenges of protectionism and promote the liberation of trade in Latin America with Panama as a regional commercial hub.

President Varela, during a  public conference, told media that the relations open a future of growth and prosperity, because “both nations believe in free and fair trade that benefits our peoples and is a key engine for economic growth. and for social development. ‘

Among the agreements signed are protocols that will allow Panama producers to export fruits meat and sea products, to China, these instruments will promote the growth of these productive sectors’, in addition to the educational cooperation agreement that ensures scholarships for higher education for  Panamanians in China, and Chinese in Panama.

Varela, in his speech, said he would soon  know the progress in the feasibility study of the construction of a train that will reach Chiriquí “which is being developed with cooperation funds from the Chinese government.”

He rejected interference from third countries in the relationship between China and Panama, “We are a small country, but worthy and sovereign and our relations will continue to be strengthened and well managed with transparency. I am sure that our relations will not only bring benefits to our people but to our region and the world, guaranteeing greater connectivity.

President Xi said that his country is willing to work with Panama to promote cooperation in the areas of trade, tourism, infrastructure, finance, and cultures to bring greater benefits to both peoples.

“We come to reinforce our communication in international affairs and to deepen the coordination of multilateral forums such as the UN, the WTO, etc. to defend the common interests of developing countries,” said Xi

An understanding between the National Bank and the Development Bank of China, laying the basis for cooperation in the granting of financial services to business projects.

Multiple entry visas for ordinary passport holders. They are stamped visas of multiple entries, which will have a duration of stay that does not exceed 90 days, valid for 5 years.

Agreement that seeks to promote cooperation in science, technology, and innovation, establish a strategic framework through the execution of joint projects for the strengthening of systems in these fields.

Cultural cooperation agreement that promotes collaboration between both countries in art, industries, and cultural heritage, through assistance and collaboration between their artistic groups, museums, libraries.

In environmental matters, with which they will implement projects, research for the prevention and management of air pollution, water, waste and the development of policies and environmental management, education, awareness, mitigation in the face of climate change.



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5th Panama-China FTA round in Beijing


Néstor González, Minister of Foreign Trade, and Alberto Alemán, chief negotiator of the Panama-China FTA. Néstor González, Minister of Foreign Trade, and Alberto Alemán, chief negotiator

Posted 26/03/2019
The  fifth round of negotiations on the Panama-China Free Trade Agreement (FTA) in Bejjing  will cover financial services, market access and customs procedures. Talks will run from April 24 to 26 in Beijing.

Néstor Gonzalez, Minister of Commerce and Industries said:"Every day the Panamanian negotiating team will give a progress report and receive feedback from interested parties, as has been done in all previous rounds,"

The Panamanian team will continue negotiating with China to ensure market openings for those products with the greatest potential to be commercialized in the Asian market and generate favorable conditions and legal certainty for those sectors with the greatest potential for investment.

Alberto Alemán, Vice Minister of Foreign Trade and chief negotiator for Panama said that they have made progress on issues related to sanitary and phytosanitary standards, legal issues, electronic commerce, transparency, commercial defense, among others.

In this fifth round, the commercial interests that have arisen from the persistent consultations with the private sector and organized civil society will continue advancing, defending the requested positions, and also safeguarding agriculture, agroindustry and domestic industry, which has been a fundamental principle during the whole process of development of commercial agreement, said Alemán. "Although progress has been made, the agreement is negotiated under the principle of" single commitment ", which implies that nothing is closed until everything is closed,".he said.



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Panama - China FTA: Fifth Round of Negotiations

The fifth round of negotiations, to be held from April 24 to 26 in Beijing, is expected to make further progress on issues related to market access and attracting investment, among others.

Wednesday, April 24, 2019

From the statement of the Ministry of Commerce and Industries of Panama:

Panama City, April 23, 2019. The teams from the Republic of Panama and the People's Republic of China begin tomorrow Wednesday the fifth round of negotiations for the Trade Agreement between the two countries.
This round of negotiations will take place from April 24 to 26, 2019 in the city of Beijing, China.
The Panamanian negotiating team is headed by the Minister of Commerce and Industries, Néstor Gonzalez, and the Vice-Minister of Foreign Trade and chief negotiator for Panama, Alberto Alemán Arias. A large representation of the private sector, mainly representatives of the productive sectors, have also confirmed their attendance.

"We feel optimistic to be able to move forward in the negotiations while maintaining our position of looking out for the best interests of Panama, ensuring market openings for those products with the greatest potential and seeking the best conditions for attracting foreign investment from China," said Minister Gonzalez.
Gonzalez highlighted the active participation of the private sector, which has attended the call of the Ministry of Commerce and Industries to participate in the negotiations through the Fourth Deputy, specially enabled to facilitate and ensure interaction with the Negotiating Team of Panama.



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FTA with China: Concern Over End of Negotiations

Since Cortizo took office, Panamanian exporters have been concerned about the negotiation of the agreement with China, as they believe the delays could affect the results achieved so far.

Thursday, August 8, 2019

At the end of April, it was the last time that a round of negotiations between the two countries took place, when issues related to access to markets and attraction of investments, among others, were discussed.

Rosmer Jurado, president of the Panamanian Association of Exporters (Apex), told Elcapitalfinanciero.com that "... if relations with China are cooled can significantly affect the export of items in which we have advanced, such as cod, pineapple and meat, which represents a great opportunity.·

Months ago it was reported that after completing all the requirements, on June 21 left the first container with 200 tons of beef bound for the Asian country.

On the other hand, Ramon Martinez, Minister of Commerce and Industry (Mici), explained that "... they will review with caution the Free Trade Agreement (FTA) with the People's Republic of China although 'we have seen that the advances are very positive for Panama; the People's Republic of China has been very interested in the country and the investments are arriving without having the FTA yet'."



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Panama to Restrict Trade Agreement with China

Although there have already been five rounds of negotiations to sign a free trade agreement, the Cortizo administration announced that they decided to restrict themselves to signing a partial-scope agreement.

Monday, August 26, 2019

Representatives of the Ministry of Commerce and Industries (Mici) explained that they want the scope of the trade agreement with the Asian giant to be limited to the exchange of agricultural and industrial goods, which is known as a partial scope Free Trade Agreement (FTA).

See "Panama - China FTA: Fifth Round of Negotiations

Ramon Martinez, head of Mici, explained to Elcapitalfinanciero.com that "... the main objective of the current administration is to enhance exports of agricultural and industrial goods, so the best option to achieve that goal is to reach an agreement that provides access of Panamanian products, in competitive conditions, to the Chinese market."

Martinez added that another factor that prompted the decision was that "... the country lacks the necessary laboratories to certify the safety of a wide range of products, which has limited the possibility of taking advantage of trade agreements signed with other trading partners such as the United States (EU) and the European Union (EU), an experience that does not want to repeat in the case of the People's Republic of China, so we will work on this issue before being able to extend the FTA with that country to all the exportable supply of both parties.

According to Wei Giang, ambassador of the People's Republic of China in Panama, specified that "... it is vitally important for China to take full account of mutual interests, without trying to impose ideas, a timetable or a negotiation plan that benefits one of the parties, but rather by consensus, consultation and mutual understanding. There is a willingness on the part of China to continue to work with its Panamanian counterpart, in the interests of Panama, always based on mutual respect and mutual trust'."

This announcement clarifies the position of the new Panamanian government, since weeks ago Panamanian exporters expressed their concern about the ceasing of negotiations between the two countries.



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Pressures on Panama to cool relations with China not effective - Ambassador


China Ambasssador ,Wei Qiang,

Posted 10/09/2019

Pressures  on Panama by  a "great power"  to cool relations with China are not working   said China’s  ambassador to Panama, Wei Qiang, on Tuesday, September 10

"I feel that there are (pressures), but both China and Panama are sovereign, independent countries, we are mature nations, capable of making our own diplomatic decisions," Wei told local media.

Although the diplomat did not expressly mention that the "pressures" come from the United States, he did say that the recent statements against China of a White House adviser during a recent  visit to Panama were "degrading and unfounded."

"One turns on the television and important gentlemen of some great world power appear ... I do not understand why being such a powerful country they speak against bilateral relations between two independent, sovereign countries," said Wei.

"They are relationships that are not doing or have the least interest in harming third parties," he added.

The director of the US National Council For the Western Hemisphere, Mauricio Claver-Carone, met last August with Panamanian President Laurentino Cortizo , and during an interview with TVN News said that "Chinese investments are a lot of foam and little chocolate" and that the Asian giant just wants to "use" Panama because of its geographical position.

It is not the first time that a senior US official attacks the growing presence of China in Panama reports TVN  Already in October of last year the US Secretary of State, Mike Pompeo, asked Panama to "keep eyes open " with China.

Panama, a historical ally of the United States, in June 2017, became the second Central American country after Costa Rica (2007), to establish diplomatic relations with China.

China already had an important presence in Panama before the establishment of relations, as it is the leading t provider of the Colon Free Zone (the largest in the continent) and the third user, behind the United States and Japan, of the interoceanic canal, through which  passes 6% of world trade.

However, since the new relationships, Chinese companies have won billionaire contracts, such as a cruise terminal and the fourth bridge over the canal.

The previous government began negotiating a free trade agreement (FTA) with China, but it did not conclude and left the task to the Cortizo Administration, which took office last July and has not yet said  when they will resume conversations

The ambassador denied that the relationship with this government is more distant than with the previous one and assured that "we are working normally to consider the next steps to take" in the FTA negotiations.



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No cooling of tango with China says Panama president


Posted 11/09/2019

Panama President, Laurentino Cortizo, ruled out on Wednesday, September 11 a cooling in relations with China, although the government stalled the negotiations of a bilateral free trade agreement and sidelined a bullet train from Panama to  Chiriquí  that Beijing hoped to build.

 "Panama's relationship with China is extremely important there is no doubt," Cortizo said in a meeting with foreign press correspondents.”

Washington viewed with suspicion the opening of diplomatic relations between Panama and Beijing in 2017, after which the two countries signed more than twenty agreements in various areas. They also began the negotiation of an FTA and began the study for the construction of a train between the Panamanian capital and the border with Costa Rica. However, the government of Cortizo has slowed the FTA negotiations and has rejected at least for the moment the construction of the train proposed by Beijing, which generated speculation about a freeze in relations with China due to pressure from the United States.

 Beijing has argued that Panama, with the Canal, its dollarized economy and its strategic position, can be the spearhead for its expansion through Latin America.

 "It is incorrect" that Panama has cooled its relations with China, Cortizo said. "Good investments from the United States and China can come to Panama," he said  and  affirmed that the paralysis of the train is due to the fact that "it is not a priority" and would cost Panama more than $4, billion  

. On the FTA with China, he indicated that at the moment Panama prefers to "analyze each chapter" to "be clear where we are going" with what has been negotiated to date.

The United States is the main user of the Panama Canal, it is also the first investor in the Central American country and the main destination of its exports.

 Relations with the United States and China are "of great interest to Panama and one does not have to interfere with the other," said Panamanian Foreign Minister Alejandro Ferrer. "Panama's relationship with any country should not in any way interfere with relations with another," Ferrer added.



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