Economics and Agricultural Markets in Panama
Panama is a small Central American country with a territory of 75.400 square kilometers, which is slightly smaller than South Carolina. At the same time, Panama has a relatively small, yet very diverse population, of 3.7 million citizens. While the country’s economy relies heavily on the income from the famous interoceanic canal, Panama is also a big services provider as well as manufacturer. Overall, Panama’s economy is divided into 3% agriculture, 14% manufacturing industry, and 83% services. However, the agricultural industry employs an average of 17% of the total labor force, while manufacturing employs another 19% and services employ 64%.
With a gross domestic product (GDP) of approximately US$90 billion annually, Panama’s main products and resources include cement, construction materials, sugarcane, bananas, rice, corn, coffee, vegetables, livestock, shrimp, copper, and mahogany woods. Furthermore, Panama has enjoyed positive economic growth above 5% annually throughout the last several years. In terms of trade, Panama does not take part in the Dominican Republic and Central America Free Trade Agreement (CAFTA-DR) with the United States. However, ever since 2012, the US-Panama Trade Promotion Agreement entered into full force. Similarly, the US is Panama’s most important trading partner, followed by China and the European Union.
Economics and Agricultural Markets in Panama
Panama has one of the biggest expatriate populations within Latin America, composed largely of North American retirees. Likewise, Panama has a large tourism industry, which features high-end estates and activities, such as golfing. Given these demographics, Panama imports the majority of its food and agricultural consumer goods, most of which come from the US. These imported goods are bound for middle and upper class local consumers, including expatriates, as well as the hotel and tourism industries. Amongst the agricultural consumer goods imported into Panama from the US are beef and pet food products. Meanwhile, products such as non-iodized salt face harsh import restrictions.
During 2016, Panama imported over US$130 million worth of grains from the US, including wheat, rice, and corn. Similarly, Panama imported more than US$19 million worth of alcohol products and almost US$5 million in fish foodstuffs from the US during 2016. In terms of genetically engineered (GE) crops and foodstuffs, Panama’s National Commission on Biosafety for Genetically Modified Organisms is in charge of regulating in-country usage as well as authorizing the import of GE products. Currently, one of the few GE crops authorized for cultivation within and import into Panama is corn.
Finally, Panama is one of the most important transit hubs of Latin America, for both air and maritime trade. Panama’s location between the Caribbean, Central and South America as well as its positive relations with all of its neighbors make it a strategic departure point for market entry into the region. Furthermore, Panama recently completed major expansions to the interoceanic canal allowing for the transit of much larger vessels. Likewise, the country has numerous major ports as well as free trade zones including Colon, Balboa, Panama city, and Cristobal.