Free Trade with Martinelli’s Panama: A Bad Deal for All

Washington is currently considering three free trade agreements (FTAs) that await congressional ratification. While U.S. lawmakers hesitate to approve deals with Colombia and South Korea, the proposed U.S.-Panama FTA does not seem to generate much controversy. Although the ongoing transgressions in Panama have not made big headlines in the States, the events transpiring in that country warrant very serious scrutiny. Law 30—nicknamed the “sausage law” because it crams many unrelated provisions into one omnibus piece of legislation—was recently passed by Panama’s National Assembly in an effort to fast-track U.S. approval of the FTA. While the new law simultaneously amends the penal code and regulates commercial aviation, some of its other stipulations dramatically weaken Panama’s labor standards.

Panamanian Lawmakers intentionally slipped these provisions into the new legislation in order to minimize opposition from civil society. The move reeks of political and economic opportunism on the part of President Ricardo Martinelli and his pro-big business cronies in the National Assembly. Though the measure ostensibly seeks to improve the investment climate, it does so at the expense of the average Panamanian worker, dismantling traditional labor rights in an attempt to encourage ratification of the FTA. Given its controversial aspects, U.S. lawmakers ought to reject this FTA lest they condone the intolerable labor conditions espoused by the increasingly authoritarian Martinelli.

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