Greetings from Panama, the other country that has a trade agreement pending with the United States. I will leave hand-wringing over trade to those in Geneva this week – because here it’s awfully hard to find anyone who doesn’t support the idea of free trade and, more specifically, the U.S.-Panama Free Trade Agreement.
Landing yesterday, the plane made a sweep over the Pacific, where I counted 17 container ships lined up on approach to the Canal. Lots of commerce, on its way from Asia to the East Coast and points further east. There was a similar queue on the Atlantic end of the Canal too. This is trade at its most fundemental, and few nations are better positioned to benefit than Panama. The United States and China are the two largest users of the canal.
Having lunch al fresco along the Canal approach, it was hard not to notice the constant procession of PanaMax ships in both directions. You can propose a time-out on trade in Washington, but it’s not going to make a whit of difference here. They’re expanding the Canal in one of the largest public works projects in the world. U.S. Companies stand to benefit greatly from this project – so passing the trade agreement and getting those tariffs removed will be a great thing for lots of manufacturers. More on the Canal tomorrow after our tour.
From nearly any vantage point, Panama City reminds you of Hong Kong, with scores of 50 and 60 story residential towers crowded together. It is a bit surprising to find such a concentration of tall buildings in a small country, but Panama continues to be a big draw for U.S. and European retirees, and is a critical logistics and services center for Latin America. It is predominently on on services economy, including call centers, banking, insurance, and lots and lots of shipping-related business.
Three million people live in this country, about half in Panama City. This is still a developing country, with poverty levels still above 30%. But unemployment is low – below 5%, and GDP is growing. Inflation, particularly food prices, is running about 8-10% this year, I was told this morning. A trade agreement will certainly lower food prices, as agriculture and food tariffs tend to be high.