(PanamaInvestorBlog) What comes first, the chicken or the egg? In this case the chicken is the Free trade agreement (FTA) with the U.S. and the Tax information exchange agreement (TIEA) with the U.S.. As has been posted previously, the U.S. plans to ratify the FTA with South Korea, but Panama and Columbia will have to wait. For how long, no one is sure, but  Panama has pandered significantly in order to get the FTA even going as far as giving up Panama’s long standing privacy in banking and business in order to get the agreement with the U.S..

Now Panama lawyers are rightfully questioning the benefits to the country of the TIEA at a recent lawyer gathering, not because of the loss of privacy for the many individuals and businesses that have put their trust in the promises of the country, but the possible losses to their firms if these individuals and businesses decide to close up their affairs and future clients dry up. I would say that this is a very good possibility and reminds me of the old say of having a bird in the hand being worth two in the bush.

I have yet to see the advantages to Panama for either of these agreements being spelled out clearly other than vague statements about U.S. companies being more apt to set up shop because of certain protections granted them under the FTA. But if you speak to any minister in Panama government they will tell you the pipeline is full and businesses are lining up to come into Panama without any agreements in place.

So one really has to wonder whay Panama would be so compelled to give up so much on the promises of an even brighter future.  I am not privy to all the machinations of politics, but I am familiar with what is right and wrong in this world and there is no question that certain powers in this one want a one world government and tax system and the rights of privacy in ones personal life and property get in the way of those grandiose plans.

The U.S. is one of the only countries in the world that taxes its citizens on their world wide income whether they live in the U.S. or not and in my humble opinion this is tantamount to making one a slave to the state. Of course statists love this and believe whole heartedly that everyone should be a slave to the state, unless of course they have to be the ones who pay. But the ones who make these insane rules do not have to pay and in fact they most likely feed at the government tit which is why they want more milk from those who can produce it.

Here is a translation of two articles regarding this subject in La Prensa today.

Martinelli said that there was trouble with the TPC

The country is not among the priorities of Obama, who did not specify a date for ratifying the treaty with Panama after three years of being signed.

Mary Triny Zea Mary Triny Zea
mzea@prensa.com

The president, Ricardo Martinelli, said yesterday that there is “no hurry” for the United States Congress (EU) to ratify the Trade Promotion Agreement (TPA) signed between the two countries in 2007.

His reaction came after an inquiry from the news agency AFP before the U.S. president’s remarks, Barack Obama, who in a speech before Congress on Tuesday said that the TPC with Panama would materialize only if it involved employment generation his country and gave no signs of an early ratification.

Martinelli, who in 2008 was highly critical of the management of the Democratic Revolutionary Party (PRD), for having “their partisan interests above the interests of the country,”  now downplays the deal saying it is of interest for investment and U.S. products.

Former Foreign Minister Jorge Ritter was skeptical of the arguments of the President, because if the TPC is so beneficial to the U.S., then it should be “Obama who was imploring that we approve.” Just on 12 January, Martinelli said he had called a meeting with Obama to push the TPC because he felt it was timely. According to Laurentino Cortizo, former Minister of Agriculture and member of the PRD, it is contradictions that confuse. ”

The former president Mireya Moscoso stressed that the TPC is very important for the country, while the Chamber of Commerce reiterated that they will continue to defend the  TPC because he believes in the benefits to Panama.

Former Trade Minister Joaquin Jacome said Bush shared the frustration of Martinelli, who was not able to achieved it during his administration the ratification of the agreement, but suggested further efforts in this direction.

Possible effects of the tax treaty with EU

Roberto González Jiménez
roberto.gonzalez @ prensa.com

The impact on the local economy of the treaty of exchange of tax information (TIEA, for short) signed between the U.S. and Panama will depend on the interpretation and enforcement to do the same Panamanian authorities said Rigoberto Gonzalez’s attorney under X National Congress of the Association of Panama.

In general, described as positive the idea of reaching an agreement to exchange tax information and cooperate in the fight against tax evasion.  However, there are several aspects to be considered, since, in practice, could be the result of a request and provide information about a person without the affected aware of it.

“Yes it will be a guarantee,” he acknowledged, that the agreement establishes a protocol in which the information requested must be specified.

Signed on 30 November in Washington, a treaty enters into force upon adoption by the Assembly, said Deputy Economy Minister Frank De Lima. For the moment do not know the date on which the text will be sent.

Among the negative consequences that could be generated would be less attractive to stop the creation of trusts and foundations in the country.