The United States wanted Panama to recognize the USDA certification process as equivalent to Panamanian standards, in order to ensure unfettered access to U.S. meat exports. This issue became highly controversial during the ninth round of negotiations, when U.S. negotiators proposed to put the agreement in a formal subsidiary letter. Panama responded that the SPS chapter was already closed, that its meat inspection standards were among the highest in the world, and that a last-minute attempt to change SPS rules raised sovereignty issues in Panama by possibly forcing Panama to lower its standards in some cases.44 The United States and Panama have entered into numerous agreements over the past 150 years. the most prominent defining their relative stakes in the canal that crosses the isthmus of Central America and crosses Panamanian territory. The canal has been a critical factor influencing Panama`s internal and external affairs and, like previous agreements between the United States and Panama, the importance of the free trade agreement is linked to a Panamanian economy that has formed largely around the canal. The ideal free trade agreement from the point of view of a free trader is an agreement that blocks governments` access to discriminatory protectionism and obliges the parties to refrain from any setbacks. It minimizes market barriers and allows for maximum market integration while preserving national sovereignty over legislation and regulation, in a way that does not discriminate 20/ imported goods, services and capital.
The free trade agreement would create a Trade Capacity Building Committee (TCB) to help Panama move to freer trade with the United States. In general, the committee`s mission is to provide technical assistance and coordinate funding to accelerate the transition period, in the hope of increasing trade while minimizing adjustment costs. The TCB Committee would help coordinate technical assistance to U.S., regional and multilateral organizations to help Panama meet its obligations under the free trade agreement. Key objectives identified include cross-sector coordination, increased exports to the United States, improved investment climate, better integration of education and innovation into the economy, and improved government trade facilitation (processing imports and exports).