The debate on labour and environmental standards reflects differences from both the economic and political perspective. From an economic point of view, it has been suggested that firms in developing countries could benefit from an « unfair » competitive advantage, as their lower standards are the basis of their lower costs, resulting in lower prices for products that may compete with those of industrialized countries59. In addition, critics have argued that trade agreements should not support production standards that lead to unacceptable working conditions or serious environmental degradation. At the beginning of the 112th Congress, the review of free trade agreements to implement laws for Colombia, Panama and South Korea was part of a broader trade policy legislative agenda, which included the re-budgeting of Trade Adjustment Assistance (AAT) programs. Two issues needed to be resolved if the legislation were to proceed. First, Congress had to draft a TAA bill that would garner enough support between the two houses. Second, Due to strong differences of opinion and growing mistrust between the legislative and executive branches, a legislative pathway was needed to ensure the adoption of the three implementing laws and the legislation of the TAA13.13 An agreement was reached on a compromise on the TAA, which the parties and the houses of Congress eventually adopted.14 The free trade agreement between the United States and Panama is a comprehensive and reciprocal trade agreement. , replaces the unilateral preferential treatment of the United States, extended by the Caribbean Basin Economic Recovery Act (CBERA), the Caribbean Basin Trade Partnership Act (CBTPA) and the General Preferences Plan (PSA). Approximately 88% of U.S.
commercial and industrial exports will be duty-free after implementation, with the remaining tariffs maturing over a 10-year period. More than 50% of U.S. agricultural exports to Panama will also benefit from an immediate duty-free regime, with tariffs and tariff quotas (trQs) for certain agricultural products expiring until the 17th year of the agreement (year 20 for rice). The free trade agreement also concludes agreements on telecommunications, trade in services, government procurement, investment and intellectual property rights. The U.S.-Panama Free Trade Agreement, known as the Panama United States Trade Trade Agreement (TPA), was signed by both governments on June 28, 2007. It was approved by Panama on 11 July 2007 and by the United States on 21 October 2011; The agreement came into force on 31 October 2012. Trade between the United States and Panama is weak, as shown in Table 2.29. In 2011, the United States exported $8,252.6 million and imported US$389.2 million, generating a trade surplus of $7,863.4 million in the United States, the largest in the Western Hemisphere. Yet thepanama is ranked as only the 32nd largest export market for U.S.
goods and 101st for imports. The largest U.S. exports are oil and especially capital-intensive and technology-intensive industrial goods such as airplanes, machinery, electrical machinery, pharmaceuticals and motor vehicles. Obligations to protect labour and environmental rights The TPA obliges both parties to adopt and maintain in their laws the five fundamental labour rights contained in the 1998 ILO Declaration on Fundamental Principles and the Right to Work. Both parties are also obliged – and should not repeal – to effectively enforce labour legislation with regard to fundamental labour rights. Both parties also committed to effectively enforcing their own national environmental laws and to enacting, maintaining and implementing laws, regulations and all other measures that apply to their obligations under the multilateral environmental agreements covered.