I posted an editorial earlier this week from President Martinelli expounding on how much Panama and U.S.A. have in common and why the free trade agreement should move forward. I took this as his last push to make it happen. Now comes this report from Eric Jackson's Panama News on Martinelli lashing out at Obama for continued delays and continuing to use the banking issue as the major stumbling block. Eric reports "The
strains between Martinelli and Obama have been ever more evident in
recent weeks, in particular by the Martinelli administration's decision
to hire Republican lobbyists and speechwriters --- people like George
W. Bush's speechwriter Terry Holt. The move, made before the passage of
the Democrats' health insurance reform bill, suggests that Martinelli
has either bet on the Republicans winning control over the US Congress
in November or that for ideological reasons he's siding with the right
regardless of the diplomatic consequences."
Knowing Martinelli, I can say he has hired Republican speech writers because they are more in line with his political philosophy. Eric goes on to say "Although key members of Congress demand an end to Panamanian banking and corporate secrecy, which they say assists tax evasion and the laundering of the proceeds of organized crime, Martinelli asserted that a series of agreements to avoid double taxation of income ought to address those concerns."
Martinelli's team has been working fast an furious at getting double taxation agreements with various states around the world and about once a month a new agreement is announced. But the Obama administration wants more than that. They really want automatic tax and financial information exchange. "Tax information exchange" is generally understood to mean negotiating and signing bilateral treaties between nations providing a specific method to be followed when one nation formally asks another nation for financial information about one of their citizens. Such requests are governed in each case by the specific terms of the bilateral treaty. Martinelli is attempting to comply by the letter and it is just not good enough for the Obama Administration.
At the economic forum in Cartegena Colombia Martinelli complained, "In Latin America we love the United States very much, but the United States has forgotten us --- who knows the dynamics of their domestic politics? --- as he always has forgotten his younger brother in the back yard,"
On CNN's Spanish-language network, Martinelli advised that "Obama should change his attitude." He said that he's "not going to lose more time" with the US-Panama free trade pact, which was signed in 2007 but has not been ratified by the US Congress. "The treaty favors the United States more than it favors Panama," Martinelli said, the failure to ratify it "disenchants US investors" thinking about doing business in Panama.
I believe Martinelli is wrong in his belief that a FTA with the US would attract more foreign direct investment and he is right when he says "The treaty favors the United States more than it favors Panama". Panama will do much better without a trading partner who makes unreasonable demands on this small sovereign nation. I hope he sticks to his guns because now he is on the right track IMO.
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