Market of the Month: Panama
With its strategic location at the meeting point of two oceans and two continents, Panama has historically served as the crossroads of trade for the Americas. Today, the country is not only a maritime shipping and air transport hub, but also an international trading, banking, and services center.
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|Gatun Locks on the Atlantic side of the Panama Canal. In a 2006 referendum, Panamanians authorized a major reconstruction project for the canal, which will create a demand for technology and services that U.S. companies will be able to fulfill.
Panama’s dollar-based economy offers low inflation and zero foreign exchange risk, and its legal and regulatory regimes are business friendly. Its government is stable, democratic, and reform-minded, and it actively seeks foreign investment in all sectors—especially services, tourism, and retirement properties.
Panama’s economy is based primarily on a well-developed services sector, which accounts for about 80 percent of its gross domestic product (GDP). Benefits include the Panama Canal, a well-established banking and insurance sector, the Colon Free Zone (CFZ), container ports, and flagship registry. Manufacturing and mining account for roughly 14 percent of GDP.
The CFZ is the world’s largest free trade zone, importing and reexporting more than $14 billion worth of goods annually. It is a vital trading and transshipment center that serves the region and the world.
In 2006, Panamanians approved a $5.25 billion project to expand the capacity of the Panama Canal. In conjunction with the planned expansion of port facilities on both coasts, the projects will solidify Panama’s unique global logistical advantage. The projects will also generate enormous requirements for technology, goods, and services. Participation is expected to be global, and competition will be fierce.
Panama has the potential for substantial growth in the areas of electric power generation, health care services, port services, land development, road construction, water distribution and purification, telecommunications, and tourism.
U.S. companies seeking help in entering or expanding in the Panamanian market should look to the Department of Commerce’s Commercial Service. With a network of domestic offices across the United States and specialists located in more than 80 countries overseas, the Commercial Service can use its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. To locate the U.S. Commercial Service trade specialist nearest you, visit the U.S. government exporting Web portal at www.export.gov.
(A longer version of this article is available on export.gov.)