The trade ministers of Panama and Chine, Augusto Arosemena and Zhong Shan, respectively, on Tuesday signed a memorandum formalizing negotiations for a free trade agreement (FTA) within the framework of the first anniversary of the establishment of bilateral diplomatic ties.
At an official ceremony on Tuesday in Beijing, the two ministers confirmed that the first round of talks will take place from July 9-13 in the Panamanian capital.
"We have the firm commitment to reach an agreement beneficial to Panama and the Panamanians, always looking out for our best interests, improving our strengths in the area of goods and services and safeguarding our sensitive sectors," said Arosemena in a statement released by Panama's Trade and Industry Ministry (Mici).
He said that Panama's "fundamental interest" in an FTA with China "is to strengthen the trade relationship with the world's second-largest economy," to push the Central American country "as a center of value added and regional distribution operations for large Chinese technology companies and to strengthen Panamanian exports to the Asian market."
Mici said that currently China is the third-largest buyer of Panamanian exports, purchasing more than $42 million worth in 2017, and that the FTA with the Asian giant "will significantly increase" that figure.
In 2017, Panama imported $1.344 billion in Chinese goods and services, ranging from high technology to garlic, and exported products valued at $42.6 million to China, including copper and aluminum scrap, crustaceans, wood and coffee, among other things.
China has been one of Panama's strategic trade partners for decades, being the largest provider for the Colon Free Trade Zone, the hemisphere's largest, and the second-biggest user of the Panama Canal, exceeded only by the US.
Mici announced that within the framework of Arosemena's visit to Beijing, both nations' authorities established the Panama-China Mixed Commission to strengthen and promote bilateral cooperation in economic matters, trade and investment.
On June 12, 2017, Panamanian President Juan Carlos Varela announced in a nationwide television and radio address that he was breaking off relations with Taiwan, which China considers to be a rebel province, and establishing relations with Beijing instead.
Since then, the two nations have signed 23 bilateral agreements in various areas.