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Brady Opening Statement: Hearing on the Pending Trade Agreement with Panama

March 30, 2011

Good afternoon.  I would like to welcome all of you, especially Panamanian Ambassador Jaramillo, to our hearing on the U.S.-Panama Trade Promotion Agreement.  Today’s hearing is the second in a series of hearings we will hold on the pending trade agreements with Colombia, Panama, and South Korea. 

As I’ve said before, I strongly believe that we should consider all three pending agreements by July 1.  We in Congress have made repeated bipartisan calls to strongly urge the President to promptly move forward with all three.  

The President himself has already made the case for why we should move the Panama and Colombia agreements now.  Before he departed on his trip to Latin America last week, the President noted that we export three times more to Latin America than to China because of our trade agreements across the region.  He also stated that our exports to the region will soon support more than two million U.S jobs.  And yet, even though the President explained why we need to move forward with the agreements, we wait.  In the case of Panama, it’s been almost four years.

Not only has this delay caused American companies, workers, farmers and ranchers to miss opportunities to sell more to Panama, we also run the risk of falling behind.  Panama has concluded trade agreements with our major competitors, such as Canada and the European Union, and more are in the pipeline.  If these agreements go into effect before ours, we will face even greater competitive challenges. 

And the opportunities lost to these competitors could be gone for a very long time.  Panama is experiencing an infrastructure building boom, due to the $5.25 billion expansion of the Panama Canal and Panama’s growing role as a logistics hub for Latin America.  If U.S. companies lose out on these infrastructure contracts, they cannot hope to bid again later.  Those contract opportunities will be lost for good.

Panama’s expansion as a logistics hub also offers unique opportunities for U.S. service providers, in addition to our manufacturers.  Services already make up over 78 percent of Panama’s economy.  This sector will swell as Panama develops greater capabilities in information technology, finance, and insurance.  U.S. service providers are well-positioned to meet this growing demand, but their market access depends on having our agreement in place.

The economic reasons for the Panama agreement are by themselves significant, but the need to strengthen our relationship with Panama and engagement in the region is just as compelling.  I was heartened by the President’s trip to Latin America and his words about the importance of Latin America to the United States, but we need to provide tangible evidence of our commitment.  Panama is obviously a vital ally in terms of port and maritime security.  It is also an important partner in combating drug trafficking and terrorism.  Then, of course, there is the Panama Canal.  The United States is the largest user of the Canal, and Canal security is paramount to our national security and broadly to open sea routes.  Panama’s cooperation in maintaining the security of the Canal has been vital to our security in the region.

The significance of our relationship with Panama is obvious.  Now is the time for action and for the President to send the Panama agreement to Congress.

Ambassador Sapiro, I was encouraged by your positive remarks regarding the status of the Panama agreement in our last hearing, but we have yet to hear from the Administration a defined timetable for bringing this agreement into force.  But in the meantime, Panama has made extraordinary strides in meeting U.S. demands.  First of all, the Panamanian legislature approved the agreement to include the provisions of the May 10, 2007 deal back in July 2007.  Then there were concerns raised regarding Panama’s tax transparency – and in response, Panama signed a TIEA with us in November and passed all implementing legislation.  Concerns have been raised about Panama’s labor laws – and Panama has implemented substantial labor protections and is undertaking even more just this week in its legislature. 

In my opinion, this substantive action by Panama is more than enough to allow Congressional consideration of the agreement.  Ambassador Sapiro, I want to ask you again, just as I did two weeks ago at our previous hearing, to present to us a specific timeframe as to how the Administration plans to proceed.  In addition, I again call on the Administration to begin the technical drafting with us on the Panama and Colombia agreements, just as we have begun with the South Korea agreement.

I would like to welcome all of our witnesses today and thank them for being with us.  I look forward to hearing the testimony of both panels. 

At this time, I will yield to Ranking Member McDermott for the purposes of an opening statement.