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Statement by Deputy U.S. Trade Representative Miriam Sapiro Before the House Committee on Ways and Means Subcommittee on Trade

Statement by Ambassador Miriam Sapiro
Deputy United States Trade Representative

Before the House Committee on Ways and Means
Subcommittee on Trade
Washington, DC
March 30, 2011

“Chairman Brady, Ranking Member McDermott, Members of the Committee, it is a great pleasure to be back here and to testify today about the United States-Panama Trade Promotion Agreement.

“Two weeks ago I highlighted the importance of a robust trade policy that creates jobs for America’s workers and advances the President’s goal of doubling exports by the end of 2014.

“We would like to see all three pending agreements, once their outstanding issues have been addressed, approved by Congress as early as possible this year. Earlier this month we notified the full Committee that we are ready to begin work on the text of the implementing bill for the U.S.-Korea trade agreement as soon as you are able to schedule those sessions. We are working to advance the Panama agreement too, with the broadest possible bipartisan and stakeholder support, because of its importance to the United States.

“Panama is one of the fastest growing economies in Latin America, expanding by over 6 percent in 2010. Its strategic location as a major shipping route is clear: approximately two-thirds of 14,000 annual transits through the Panama Canal are bound to or from U.S. ports.

“Currently the U. S. market is already largely open to imports from Panama. This Agreement will level the playing field by giving American workers, farmers, ranchers, and businesses greater reciprocal access to Panama’s growing market, including nearly 10 billion dollars in new infrastructure projects and an 18 billion dollar services market.

“As important as these benefits are, President Obama has made it clear that any trade agreement we present to Congress must be consistent with our key values and in the clear interests of Americans.

The Administration has therefore been working hard with Congress and stakeholders since it came into office to identify specific steps that Panama could take to improve its protection of internationally recognized labor rights.

“As a result of this work, Panama has taken several steps to address our concerns. With respect to enforcement of its labor laws, Panama has issued executive decrees to address the misuse of subcontracting and temporary work contracts, to strengthen collective bargaining and the right to strike, and to prevent employer interference in union activities. In addition, Panama’s Labor Ministry has issued a resolution to increase labor inspections in the maritime sector, and to ensure that maritime workers are aware of their rights and the means to address any problems.

“As Panama has strived to improve its tax transparency practices, we have worked with its Government to address impediments in its domestic law that had prevented the conclusion of a Tax Information Exchange Agreement, known as a TIEA, with the United States. Such an agreement was signed in November and is consistent with internationally agreed standards established by the OECD. We expect that Panama will ratify the TIEA in the near future.

“On February 9, Ambassador Kirk announced that we would intensify our discussions with Panama to complete remaining work, and we have done so. I am pleased to announce that Panama is now in the process of completing work on the last few steps. The Government introduced legislation this week to ensure that companies in the Barú special economic zone will no longer be exempt from key labor rights provisions. Also pending before Panama’s National Assembly is legislation to ensure labor rights are respected in export processing zones and to eliminate restrictions on collective bargaining in companies less than two years old. Last evening, both pieces of legislation passed their second reading.

“Once all of the outstanding issues are addressed, the Administration will be ready to prepare the Agreement for Congressional consideration. Together we will ensure that American workers enjoy a level playing field with a trading partner that has adopted strong worker protections and sound tax transparency policies.

“I also want to update you on our efforts to work intensively with Colombia to address outstanding concerns regarding the protection of internationally recognized labor rights, the prevention of violence against labor leaders, and impunity from prosecution. I am pleased to say that this afternoon I will resume high-level discussions with President Santos’ senior advisers on how best to advance these goals.

“In the meantime, I ask you to keep faith with America’s workers by renewing Trade Adjustment Assistance as soon as possible. I urge you also to renew the GSP and the ATPA programs for as long as possible. We look forward to working with you on all aspects of our trade agenda in a manner that builds bipartisan support, and creates new opportunities for the Americans we serve.

“Thank you.”