News

Wednesday 22nd January 2025.

January 21, 2025

 

The National Chamber of Milk Producers (CNPL) of Costa Rica expressed its rejection of the possible appeal by Panama to the ruling of the arbitration panel of the World Trade Organization (WTO) , which favored Costa Rica in the trade conflict related to dairy and agricultural products.

Ivannia Quesada, president of the CNPL, said that the ruling, issued last December, confirms that Panama violated international regulations by preventing the renewal of health approvals for 16 Costa Rican establishments, which constitutes a de facto ban on the importation of dairy products.

“We regret that Panama continues to use unfounded health pretexts to block our exports, harming Panamanian consumers,” said Quesada.

The WTO arbitration panel found that Panama violated several international agreements, including unjustified delays in processing health approvals, excessive information requirements and arbitrary trade restrictions.

The ruling also recommended that Panama adjust its practices to international regulations.

Panama decided to deactivate 26 Costa Rican plants that process meat and dairy products in 2020, because the authorities of the neighboring country did not deliver the required documentation on time to continue with the renewal of health permits.

When the ruling was announced, Alicia Jiménez, president of Fedecámaras, which brings together companies in the commerce, industry and agriculture sectors, said that it was now up to Panama to appeal the decision so that the WTO could re-evaluate its ruling, since the country has sufficient arguments to prove that the restrictions were duly applied.

The ruling, issued on December 5, 2024, must be adopted by Panama within 20 to 60 days.

The Ministry of Commerce and Industry (MICI) has until February 3 to appeal the decision and provide reasons why import restrictions to the neighboring country have not been lifted.


President Donald Trump ‘s threats to seize the Panama Canal have yet to have a real impact on the financial market regarding Panama’s sovereign debt.

At the time of Trump’s statement, the markets in the United States were closed for the Martin Luther King holiday, so it will not be until Tuesday that the reactions will be seen.

In the case of Panama, analysts from investment banks and multilateral organizations indicate that Panamanian debt had already been penalized with a lower valuation in the market for several months, when investors classified it as if it had definitively lost its investment grade due to the deterioration of public finances reflected in the increase in debt, a higher fiscal deficit and low income, in addition to the concern about the reform of the Social Security Fund and the lack of definition regarding the issue of the mine.

An updated analysis by US investment bank JP Morgan prior to Donald Trump’s remarks warned that “bonds are already trading worse than they would have if the country had lost its investment grade rating, raising the question of how justified investors’ position is.”

JP Morgan questioned whether investor sentiment was too pessimistic, while reaffirming the bank’s view of Panama.

“Our view has been contrary to the consensus regarding growth for 2024, forecasting that it would grow above 5%, while rating agencies expected less than half this growth rate. We argue that this gives Panama time to implement the fiscal changes it has outlined on paper, which is why we do not expect it to lose its investment grade rating in 2025,” reiterated JP Morgan.

On the other hand, after the inauguration in the United States, where Trump’s rhetoric against the Canal escalated even further, Panama’s sovereign bonds have only moved 7 basis points, which is a minor variation.

Financial analyst Álvaro Naranjo commented that today the Panama Global benchmark bonds maturing in 2036 are stable and their price has even risen slightly.

“ Trump’s rhetoric does generate some noise, but the financial markets are focused on the issuer’s ability to pay, which is determined by the state of public finances and the economy in general,” he said.

He commented that sovereign bonds have been punished for several months, when for example, the maximum price of the Panama Global reference bond maturing in 2036 was on October 2, 2024, when it was at 105.38, since then it has been falling little by little and today it is at 93.80,” Naranjo explained.

He also pointed out that the factors that have been influencing the decrease in recent months are related to the effect of the reduction in the Standard & Poor’s rating , added to the increase in Panamanian public debt, the uncertainty over the process of reforming the social security law, the still unresolved mining issue and, in general, Panama’s deficit and economic growth.

Naranjo says that once the reform of the social security law is finalized and the future of the mine is defined, the probability of losing the investment grade may increase.

Panamanian dollar-denominated government bonds have tightened 5.6 basis points this week, on average, compared with 4.8 basis points for all government bonds in the Bloomberg Emerging Markets LatAm Index.


On Tuesday, January 21, the Government Commission of the National Assembly approved, in its first debate, the bill that makes the clandestine sale of lottery tickets a crime.

The penalty could range from 6 to 15 years in prison for those who engage in this practice.

The document, submitted to the Office of Citizen Participation, seeks to include an article in the Penal Code that penalizes this type of sale as a crime against the economic order.

The proposal establishes that those who illegally obtain public funds from the National Lottery of Charity through the clandestine sale of lottery tickets, whether by electronic means or any other method used in any modality or denomination, provided that these games depend on the results of the draws of the National Lottery of Charity, will be punished with sentences of 6 to 10 years in prison .

If the amount of the clandestine sale exceeds one hundred thousand dollars, or if there is a repeat offense, the penalty will be 8 to 15 years in prison.

Alfredo Sosa, from the Panamanian Banknote Sellers’ Union, described the initial approval of the proposal as positive.

He said that many “people are getting rich illegally” and that this practice is seriously harming them. “Last year we had 55% of banknotes returned. It was quite catastrophic,” he said.

The document now moves on to its first debate in the Government Commission.


Strengthening commercial competitiveness and modernizing port and logistics infrastructure were among the topics discussed by the President of the Republic, José Raúl Mulino, in a bilateral meeting with the CEO of AP Moller – Maersk, Vincent Clerc, one of the most important shipping companies in the world and a user of the Panama Canal.

President Mulino and Clerc explored opportunities to advance sustainable port operations, leverage Panama’s strategic position to enhance global connectivity, and offer innovative supply chain solutions that are aligned with Panama’s development priorities.

The meeting, which took place within the framework of the World Economic Forum in Davos, was also attended by the First Lady, Maricel Cohen de Mulino, the Ministers of Commerce and Industry and Foreign Affairs, Julio Moltó and Javier Martínez Acha, respectively, the administrator of the Panama Canal, Ricaurte Vásquez and Alberto Alemán Zubieta, former administrator of the interoceanic route.

AP Moller – Maersk CEO Vincent Clerc expressed his interest in strengthening the historical relationship that Maersk has with Panama and deepening its commitment to the country’s economic development, particularly in the modernization of port infrastructure and sustainability in logistics operations.

Today, Maersk handles approximately 35% of Panama’s import and export volumes , highlighting its pivotal role in positioning the country as a global trade hub

“With a deep-rooted presence in the country, Maersk has two warehouses and around 600 employees in its offices in Panama City and Colon. This operation contributes significantly to the economic growth and commercial competitiveness of Panama.”

The collaboration between Maersk and Panama has a long history dating back to 1917, when Maersk ships began transiting the Panama Canal. This link was consolidated with the first liner transit in 1928 and the first container ship transit in 1975.

“The company, with its global experience, would provide innovative solutions in terms of port technologies and process digitalization, which would accelerate the efficiency of the supply chain. Panama, being a global logistics hub due to the Panama Canal, constantly needs to modernize its infrastructure, including its railways, to maintain its global competitiveness,” the Presidency of the Republic said in a statement.

The relationship with Maersk, one of the largest transportation and logistics companies, strengthens Panama’s connectivity on a global level.

The company has a network of more than 130 countries, which would facilitate the access of Panamanian companies to new international markets and improve the country’s competitiveness in foreign trade.


Deputy José Pérez Barboni , from the Otro Camino Movement , reported in the plenary session of the National Assembly that he has received complaints about the alleged payment of “bribes” to invalidate several resolutions that sanction ships, vessels and other boats that fish in prohibited areas.

During the incident period of this Monday, January 20, Pérez Barboni requested that his intervention be sent to Eduardo Carrasquilla , general administrator of the Aquatic Resources Authority of Panama (Arap).

“They are breaking the law, but then they pay a bribe and, three or four days later, the resolutions are disqualified. This shows that there is a strange procedure because there is a pattern that we must continue to investigate,” said the deputy.

Last December, the Arap reported that it had signed an agreement with the Panama Maritime Authority (AMP) with the purpose of coordinating, establishing and strengthening joint collaboration mechanisms and communication channels essential to prevent, discourage and eliminate illegal, unreported and unregulated fishing.

“We will strengthen surveillance and monitoring controls; in addition, we will apply the Port State Control measures, the Flag State Control measures and all the international measures developed by the country’s strategy,” Carrasquilla said, according to a press release from Arap.

La Prensa has obtained the Arap administrator’s version of the complaint filed by the deputy. A response is awaited.


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