PANAMA CITY – The governments of Panama and China said on Thursday in Panama City that they would begin negotiations for a Free Trade Agreement between both countries during the second half of 2018.
China agrees that it needs to accelerate the pre feasibility study of the bilateral free trade agreement in order to promote cordial negotiations as soon as possible, Chinese Commerce Minister Zhong Shan said during an official visit to Panama City on Thursday.
For his part, Panama’s Trade and Industry Minister Augusto Arosemena said, while standing alongside his Chinese counterpart at a press conference, that Panama would like to complete the pre feasibility study in June 2018 and then start the negotiations.
Zhong said that the fact that he travelled to Panama just two weeks after Panamanian President Juan Carlos Varela’s visit to the Asian country already showed China’s sincere commitment to strengthen economic and commercial ties with Panama.
Zhong added that both countries agreed to promote the establishment of Chinese companies’ regional headquarters in Panama and take advantage of the existing Colon Free Trade Zone, which is the largest free trade agreement in the Americas, to enter the Latin American market.
On June 13, Panama decided to switch diplomatic ties from Taiwan to China and recognized the “One-China” policy, meaning that it became the second Central American country after Costa Rica to establish diplomatic relations with Beijing.
China is currently the second largest client of the Panama Canal, behind the United States, and also the biggest supplier of goods to the Colon Free Trade Zone, located on Panama’s Caribbean coast.
Zhong acknowledged during his visit to the headquarters of the Panamanian Foreign Ministry that there is great potential for the construction of infrastructure in Panama, and said he would encourage Chinese companies to actively participate in these projects.
During his brief visit to Panama, the Chinese minister also met with President Varela and visited the country’s famous canal and the new Cocoli locks on the Pacific side.
On Nov 17, Varela and his Chinese counterpart Xi Jinping held their first bilateral meeting at the Great Hall of the People in Tiananmen Square, Beijing, and signed 19 cooperation agreements on different economic sectors such as transport, tourism, commerce, energy and finance.
Zhong also confirmed on Thursday his government’s commitment to finance a feasibility report on the construction of a passenger and cargo train that connects the Panamanian capital with Chiriqui, a western province bordering Costa Rica.