This morning, in a signing witnessed by Secretary of Commerce Gary Locke and Panamanian Vice President Juan Carlos Varela, Copa, the Panamanian airline, signed a contract to purchase more than 20 Boeing 737-800 airliners equipped with General Electric engines. This deal, worth more than $2 billion, will support thousands of American jobs – not just Boeing and GE workers – but also jobs in their hundreds of Boeing’s and GE’s suppliers, many of whom are small or medium-size firms.
What this huge sale indicates is that the Panamanian market is important to U.S. manufacturing, and we want to see trade with Panama expand. Among other things, Panama is planning upwards of $20 billion of infrastructure projects, including the world’s largest construction project – expanding the Panama Canal. We certainly want to see American manufactured goods and American-supplied services employed in those projects.
But there’s a problem. Our competitors, including Canada and the European Union, have signed Free Trade Agreements (FTAs) with Panama that will soon go into effect. Those will allow their manufactured goods duty-free access to Panama, while American manufacturers will have to face import duties that can be as high as 15 percent.
The United States concluded a trade agreement with Panama three years ago, an agreement that would eliminate import duties on U.S.-made goods. Most unfortunately, that agreement has languished, as opponents have said they are concerned about money-laundering and won’t agree to a Congressional vote until Panama signs a tax-exchange agreement with the United States.
Well, today’s second piece of goods news is that this afternoon, Treasury Secretary Geithner and Vice President Varela signed the Tax Information Exchange Information agreement. That agreement now removes the hurdle to sending the U.S.-Panama Trade Agreement to Congress for a vote that is unambiguously in the interest of manufacturing in America.
Let’s get on with it and beat the competition for a change! We want more deals like today’s Boeing-GE deal with Panama. And we want them with Colombia and Korea too. Congress must get out of the business of blocking U.S. jobs and should get into the business of supporting U.S. manufacturers’ efforts to create jobs.
Frank Vargo is the National Association of Manufacturers’ vice president for international economic affairs.
Latest posts by Frank Vargo (see all)
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- 86.9 Percent of World Market Still Maintains Barriers Against U.S. Exports - May 15, 2012
- Colombia Trade Agreement Certified, Creating New Export Market - April 16, 2012