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The presidents of Panama and Costa Rica signed a free trade agreement between their respective countries on October 24, 2008. The treaty will allow duty free passage of goods from country to country. Initially about 90% of goods will be duty free and over the following years all goods will gradually become duty free. This treaty is typical of the activities of countries throughout Latin America creating free trade zones, jobs, and prosperity. Panama stands to gain by this sort of treaty as it serves to lower costs in the face of current inflation and typically helps create jobs.

Press reports note that “Costa Rican president, Oscar Arias, and his Panamanian counterpart, Martin Torrijos, met [October 24, 2008] to sign the Tratado de Libre Comercio (TLC) - free trade agreement - between [the] countries.

“The trade deal is expected to greatly benefit small and medium sized exporters as well as consumers on both sides of the border, with lower prices for many products.

"Costa Rica is Panama's major market in Central America", said Torrijos, who assures that the trade deal will mean a greater exchange of goods between the two countries as the two countries have strong commercial ties.

“The trade deal frees up of any tariffs 90% of the goods now exchanged between the two countries and with the rest of products dropping duties in the next 3 to 17 years.

“Only a small number of products are not included in the free trade deal, items like rice, sugar, potatoes, onions and coffee.

“According to official figures, trade between the two countries was $551 Million USD, 60% or $327 million of the total was of Costa Rican exports and the rest of Panamanian goods.”

Panama has benefited from free trade for more than half a century with the Colon Free Zone, the world’s second largest duty free zone. Forty percent of Latin American container shipping passes through the Panama Canal. Much of that is received, repacked, and reshipped from the Colon Free Zone.

Panama Investment

Panama has the highest per capita foreign investment in Latin America. Investment in Panama ranges from the high rises going up in Panama City to the Panama Canal Expansion mega project. Panama’s economy has been growing near ten percent per year. As Panama further improves it infrastructure Panama attracts world class companies such as Caterpillar, Dell, and others to do business here.

The list of those bidding on the locks for Panama Canal “third lane” reads like a who is who is world class engineering projects. While the world is in a credit crunch Panama is attracting capital. All said Panama is and remains a place to invest, whether in real estate, or directly in a business. If you are interested in exploring investment in Panama and need competent real estate advice come to see us at ABPanama where we have over 23 years experience managing real estate portfolios.