The United States and Panama have enjoyed long-standing, strong economic ties and a mutual commitment to deepening the trade relationship through a free trade agreement. A free trade agreement with Panama is an important link in the Administration's strategy of opening markets in the Hemisphere through competitive liberalization.

In 2003, bilateral trade between the United States and Panama totaled $2.1 billion, with U.S. exports accounting for $1.8 billion of that amount. Between 2002 and 2003, U.S. exports to Panama grew over 30%. Nearly half of Panama's total imports come from the United States. U.S. foreign direct investment in Panama totals roughly $25 billion. Panama currently enjoys broad access to the U.S. market. In 2002, over 90% of Panama's goods exports to the United States came in duty free under unilateral benefits programs like the Caribbean Basin Initiative (CBI) and the Generalized System of Preferences (GSP) or under 0% MFN tariffs.