About Panama
Panama is an emerging Central American economy that is shaping to be a beneficial trading partner for California. The United States is one of Panama’s most important trading partners, importing almost 50% of Panamanian goods, and U.S. products enjoy a high degree of acceptance in Panama.
Panama has historically served as the crossroads of trade for the Americas. Its strategic location as a bridge between two oceans and the meeting of two continents has made Panama not only a maritime and air transport hub, but also an international trading, banking, and services center.
Panama is enhancing its global and regional prominence through trade liberalization and privatization, and it is participating actively in the hemispheric movement toward free trade agreements. Panama’s U.S. dollar-based economy offers low inflation in comparison with neighboring countries, and zero foreign exchange risk. Its government is stable and democratic, and actively seeks foreign investment in all sectors, especially services, tourism, and retirement properties. U.S. Department of Commerce
With a population of 4.5 million and a GDP of $82 billion in 2023, roughly 80% of Panama’s GDP is created within its services sector. Operation of the Panama Canal, the banking industry, container ports, and medical and health are the largest factors of this service economy. U.S. Department of State
In 2023, the United States exported $11.2 billion to Panama, an increase from $8 billion in 2021. Top exports included petroleum and coal, oil and gas, transportation equipment, chemicals, and processed foods. Panama is currently the United States’ 32nd largest export partner. The United States imports $527 million from Panama, including re-imports, fish, waste and scrap, agricultural products, and processed foods. U.S. Department of State
In 2023, Panama was California’s 31st largest export partner, up from 45th in 2021, with total imports from Panama coming in $761 million worth of goods. Top categories included petroleum and coal products ($527 million), computer and electronic products ($54 million), transportation equipment ($39 million), processed foods ($36 million), and non-electrical machinery ($19 million). California imported approximately $32 million from Panama in 2023. Top imports included processed foods, reimports, agricultural products, and fish and other marine products. U.S. Department of Commerce
U.S. foreign direct investment (FDI) into Panama totaled $3.8 billion in 2022, and FDI from Panama into the United States totaled $1.9 billion in the same year. Bureau of Economic Analysis
U.S.-Panama Free Trade Agreement
In June 2007, the United States and Panama signed a Free Trade Agreement (also referred to as a Trade Promotion Agreement). The Panamanian government approved the FTA in 2007.
On October 12, 2011, the U.S. House passed the FTA with a vote of 300 – 129 and the U.S. Senate passed the measure with a vote of 77-22.
The California Chamber of Commerce supported the U.S.-Panama Trade Promotion Agreement, which went into effect on October 31, 2012. The agreement significantly increases the ability of American companies to export their products to one of Latin America’s fastest-growing economies, while dramatically reducing the tariff rates across the range of U.S. industrial and agricultural goods.
Blog By
(Mrs.) Susanne Stirling
Vice President, International Affairs
susanne.stirling@calchamber.com