Panama Investor Blog

Martinelli lashes out at Obama

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.

Are you a wolf or sheep-Another choice to make

Hat tip to Richard Hunt for sharing this inspirational post. People contact me all the time wanting my opinion of their ideas. They see me as someone who is innovative and successful and they hope to learn a secret to the success. The fact is there is a secret and it is to ignore everybody. This post bellow is so powerful that I felt compelled to share it with you. Whether it is an idea or a change in your lifestyle, only you can know if it is right. You have to ignore everyone else, even family and friends.

I have taken the liberty to cut out some things that you might want to read so you can always go the links to get the whole story.

Are you a wolf or a sheep-Another choice to make by MAria Brophy

Only you know what’s right for you, so ignore everybody else.  This includes family, friends and the smartest guru in town.
Most of us are unknowingly trained to NOT trust in our own judgment.  Our parents made decisions for us, our teachers told us how things should be done, and society has its own rules on what is right and wrong.
After being beat down by authority for years on end, many people just become one of the sheep.  They follow the status quo.  It’s easier that way.
The wolfs, also known as the stubborn trouble makers (I was one) tend to have their own ideas of how things should be.  They stand away from the crowd, make waves and piss a lot of people off.  But they also find great happiness, because they follow their own dreams and make their own plans. Their lives tend to end up just the way they want them to.
Wolfs trust in their own desires.  They lean towards the professions that they were meant (made) to do.  Wolfs are the innovators, the inventors and artists and writers.  They ignore everybody.  They have to or they’d never get things done.
There’s a price for ignoring everybody:  You’ll become the lonely wolf, separated from the bored sheeples.
But there’s great payment that you’ll receive for trusting in yourself: Success, happiness and sometimes a lot of money.  And you’ll get in the habit of tapping into your intuition, your own brain and your passions, which will lead to more success.
Making sense of modern life, Hugh MacLeod’s cartoon drawings on the back of business cards get to the heart of the truth.  Hugh’s art is simple and often delightfully offensive.
Though his artwork has not been recognized by the New York art gallery mafia (his term), he’s captured the hearts of millions of people with his art and his Best Selling Book IGNORE EVERYBODY.
I’m glad to say that his success has made a mockery of every person who told him that drawing on the back of business cards is meaningless.
Hugh’s book, IGNORE EVERYBODY, will inspire you to be more like a Wolf than a Sheep.  And the world needs less sheep.
Here’s a (shortened) excerpt from the first chapter of IGNORE EVERYBODY:

1. Ignore everybody.

The more original your idea is, the less good advice other people will be able to give you. When I first started with the cartoon-on-back-of-bizcard format, people thought I was nuts…

You don’t know if your idea is any good the moment it’s created. Neither does anyone else. The most you can hope for is a strong gut feeling that it is. And trusting your feelings is not as easy as the optimists say it is. There’s a reason why feelings scare us.

And asking close friends never works quite as well as you hope, either.  It’s not that they deliberately want to be unhelpful. It’s just they don’t know your world one millionth as well as you know your world, no matter how hard they try, no matter how hard you try to explain…

…Good ideas come with a heavy burden. Which is why so few people have them.  So few people can handle it.
If you’re going to get anywhere with your crazy, ass-backwards ideas, you really have to just do things your own way.  That means not caring what anyone else says, and if you do care, ignore them anyway.
This is hard for many humans to digest.  Most people worry incessantly about what others think, and they sadly make their decisions based upon the opinions of losers who haven’t achieved anything for themselves.
Don’t be a SHEEPLE!  (Sheeples follow the herd in a group-think mentality.  Sheeples will make a decision, then change their minds once they hear from other sheeple that their idea is stupid.  They can’t think for themselves.)
You don’t need confirmation from anyone else that you are doing the right thing.
THE PROBLEM WITH ASKING FOR CONFIRMATION THAT YOUR IDEA IS GOOD
Nobody really KNOWS if it’s good.  If Hugh MacLeod would have taken heart to those who laughed off his cartoons on the back of business cards, he wouldn’t be the artist-success story that he is now.
I DON’T KNOW IF IT’S GOOD.  Often, I’ll have artists ask me to look at their artwork and tell them if they have a chance to succeed with it.  Even if I think their art looks like a fourth grader painted it, I won’t tell them.  Because how do I know if it’s going to make it or not?
I’m not going to crush a dream.  When an artist asks if they stand a chance with their art, my standard answer is “It doesn’t matter what I think.  The only thing that matters is how far you want to take it.  It’s your choice.”
The main driving force for success isn’t just the greatness of the idea or the level of talent, it’s the PASSION and COMMITMENT and the TIME YOU PUT INTO IT.  None of the other stuff matters as much.  And no-one’s opinion matters.  Except your own.
IT’S LONELY AT THE TOP:  THE PRICE OF BEING A WOLF
It’s not all that lonely at the top.  The only lonely part is that you alone have to make decisions for yourself.  And that can be scary, but also liberating, because being fully responsible for your own success allows you to have more control over your own life.  You get used to having that control with practice.
Often I dream of finding a wise person who can tell me what my next move should be.  It’s very difficult cutting a new path with very little advice from others.  But that wise person doesn’t exist, so I’ve become used to trusting in myself.

Lonely Wolf - Sir Richard Branson
The founder of Virgin Atlantic, Richard Branson, is a wolf.  But he doesn’t look very lonely.  And trust me, he’s taken his share of criticism and crap from people over the years.  He doesn’t let it stop him – he’s always having fun, embracing life, and laughing at the naysayers.
But Toby Myers is bored.  He’s at home doing the same ‘ol same ‘ol.  Every now and again he comes up with a brilliant idea and runs it by at least 14 friends, 12 of which shut it down.  And so he goes back to watching T.V. and resigns himself to the will of the Sheeples.  (What, you’ve never heard of Toby Myers?!)
Ironically, Hugh MacLeod’s art will not be taken seriously by the Art World anytime soon.  Most critics and professionals aren’t able to recognize the brilliance of new art forms until at least a decade or two after everyone else gets it.  Andy Warhol is a great example of this fact.
That’s why it’s a good thing that Hugh has decided to Ignore Everybody.  Because that’s what it takes to get your nutty idea from no-where to somewhere.  You can’t buy into what everyone else is doing.  Sheeples don’t know what’s cool, they only know what everyone else thinks is cool.

Panama to become the second largest copper producer in the world

I was amazed to see this report that Panama has such huge copper reserves. Along with copper there is gold and the gold mines in Panama are really starting to produce. The environmentalists are not happy but there needs to be a balance. As long as the mines reclaim the land and control pollution according to laws in place then Panama can benefit greatly and it will reduce the pressure on the public treasury and hopefully the public.

From Panama News room

Panama gold production triples

Petaquilla Gold, which has been a target of  Panamanian environmentalists and indigenous groups, is likely to become one of the darling’s of government. Following the recent statement by President Martinelli that Panama’s doors are open for mining investment and that current laws could be changed comes the government report that Petaquilla’s project in Donoso, Colón, tripled the amount of the the country’s gold production in 2009 over 2008
Panama produced about $16 million worth of gold in 2009, exporting about 1.6 metric tons according to an economic report of the Ministry of Economy and Finance.
The government also expects the country's copper production to rapidly increase with the opening of the Cerro Colorado project in the Comarca Gnabe Buglé, an area with one of the region's largest known copper reserves.

The project is expected to make Panama the second-largest copper producing nation in the world.
Environmentalists and others have expressed concerned about mining impact on the environment.

Trump Ocean Club Panama see's significant cost overun

Although things are moving along fairly well with the project there were significant cost overruns in the last quarter of 2009 that could adversely affect the project. We will have to watch the 26.9MM equity call from the stakeholders that is due by April 14.

 Download Management Discussion on Results as of December 31st 2009.

Highlights

• Sales from January to December 2009 amounted to US$ 41.1 million excluding the effect of the defaulted units returned to the remaining inventory. These sales were adequate to maintain collateralization ratio above 1.25.
 
• For the first semester 2010, Management expects sales for US$ 18.1 million, which include the sale of a second portion of the casino in addition to sales of other type of units at an average pace of US$ 1.3 million per month.
 
• Due to the higher pace of collections with respect to the generation of receivables associated with
new sales, eligible receivables had a reduction of US$ 3.1 million during 2009. Nevertheless the
collateralization ratio was successfully maintained above 1.25x level. 
 
• Collections for the year 2009 amounted to US$ 35.7 million, providing enough funds to cover working
capital needs and to make interest payments on the notes on May 15th and November 15th, 2009.
Management expects collections for the first semester 2010 of approximately US$ 16.1 million
including those derived from the accelerated discount program. This cash will allow the company to
fully replenish the DSRA by July 2010, thus having enough funds to cover the November 2010 coupon
and also to cover working capital needs.
 
• As per December 31st, 2009, Newland reported a restricted cash balance of US$ 66.6 deposit mainly
in the Construction Escrow Account (US$ 55.6 million) and the Debt Service Reserve Account (US$
10.5 million).
 
• Construction schedule has been reassessed due to several factors. The delivery of units will start by
the end of 2010 and the hotel opening has been rescheduled for February 2011. The new closing
pattern arising from this schedule will not affect the project’s ability to make interest payments on time.

In January 2010, the Contractor submitted to Newland, a change order request for US$ 11.3 million,
which increased the value of the construction contract from US$ 228.3 million to US$ 239.6 million
(US$ 212.5 million construction costs and US$ 27.1 million construction and management fees). As a
consequence, the available contingency fund in the CEA (cushion) was reduced from US$ 15.1 million
to US$ 3.8 million.
 
• In March 2010, Newland was informed by the Contractor that, after considering the increases and
decreases of the different chapters of the construction budget and after receiving relevant information
from the architectural designers especially in the Finishes and FF&E – OS&E categories, his current
estimation of the cost to complete the building is US$ 238.9 which is higher than the US$ 212.5 million
reported to the Independent Engineer in January, 2010 and produces to a Construction Shortfall of
US$ 26.9 million.
 
• The Developers are aware of their obligations under the CCSA and have informed Management that
they are working towards funding the Construction Shortfall directly to the Construction Escrow
Account on the required date as stated in the CCSA and the Indenture. 
 
• As stated in the Independent Engineer’s Report issued on February 2010, the project specifications
have been successfully maintained.
 
• The project’s safety records remain within the best standards. 

Canal revenue to increase 150% ($5 billion) by 2014?

Panama bond sales have not gone to well lately, but maybe with their new investment grade rating by Fitch, things will go better this time around. Morgan Stanley will be offering these notes at a slightly lower rate than before, 6.1% versus 6.7%. But .6% on $100 million is certainly not chump change. 

Everyone is in the selling mode in Panama including the politicians, and like most salesman, they tend to exaggerate, embellish reality and paint a very rosy forecast of the future.

Here's an example from Panama minister of finance in the article below: The country plans to slash its public debt to 35 percent of gross domestic product from 45 percent by 2014 as collections from the upgraded Panama Canal rise to $5 billion a year from about $2 billion, Finance Minister Alberto Vallarino said at a conference in Panama City March 24.

So much of their planning hinges on additional canal revenues, yet revenues are going in the opposite direction and ocean shipping companies are in dire straights and balking at toll increases. A number of them have decided to take the longer route below South America. Yet they expect to increase volume and tolls enough to increase revenue 150% in four years. Who would like to take bets on that?

Bloomberg

Panama Taps Morgan Stanley to Sell Bonds Through Fund

(Adds comments from finance minister in final paragraph.)

By Drew Benson and Veronica Navarro Espinosa

March 29 (Bloomberg) -- Panama hired Morgan Stanley to sell $95.9 million of bonds due in 2036 through a state development fund after pulling the transaction in December, according to a filing with the U.S. Securities and Exchange Commission.

The country scrapped a plan to sell $760 million of bonds due in 2036, 2027 and 2034 through the development fund in December after the offer sparked a rout in the country’s debt. The fund, which holds the government bonds as assets in its portfolio, has sold this year more than $500 million of securities due in 2027 and 2034.

The fund’s sale comes a week after the Central American country’s credit rating was raised to investment grade by Fitch Ratings. Fitch lifted Panama’s foreign- and local-currency debt to BBB-, the lowest investment-grade level, with a positive outlook, citing low debt levels and a resilient economy.

The yield on the 6.7 percent notes due in 2036 has fallen to 6.1 percent from 6.28 percent on Jan. 1, according to Bloomberg data.

Panama included documentation today from a previous shelf filing that had authorized it to sell the bonds. Dario Espinosa, the sub-director for public credit at the Finance Ministry, said in a telephone interview that the government has no plans to issue bonds in international markets in the “near future.”

The country plans to slash its public debt to 35 percent of gross domestic product from 45 percent by 2014 as collections from the upgraded Panama Canal rise to $5 billion a year from about $2 billion, Finance Minister Alberto Vallarino said at a conference in Panama City March 24.

--Editor: Glenn J. Kalinoski, David Papadopoul

The United States Government Does Not Want You to Move to Panama

My friend and colleague, Paul McBride wrote this piece earlier this week. Paul and I have been watching things pretty closely over the years and it has become clear to us both that the window of opportunity is closing for those who want to get their assets and their asses out of the U.S.. We don't believe the government will stop you from leaving, but they will make it very much more difficult and expensive to do so. I believe Paul's scenario below is very close to the truth.

The United States Government Does Not Want You to Move to Panama

Actually, the U.S. government doesn’t care whether you decide to move to Panama or not, they just don’t want you to take your money.

 

Most of the people I meet who are looking for a home or property in Panama just want to live comfortably in a beautiful environment at a reasonable cost.  For many, Boquete is the perfect choice.  Mild weather, magnificent scenery, great community and most, if not everything, they need to live a cozy day to day existence.  I can safely say that the average couple living in Boquete spends less than $2,000 a month in total living expenses.  That’s everything – car, health and home insurance, food, gas, entertainment (we go out a lot!), utilities, cable TV, Internet.  You name it, the whole enchilada. Did I mention very low or no property taxes?

This simple formula, low living costs and quality lifestyle, was the reason that Boquete became one of the most desirable retirement destinations in Latin America.

But what if I told you that the price of real estate in Boquete was likely to increase as much as 30% in the next two years or so?  A home that costs $250,000 today could be as much as $350,000 in that short period of time. A $150,000 condo could cost $215,000 or more.   In today’s market that sounds absurd.  But this is a real possibility…… if you happen to be a U.S. citizen.

You see, the United States Treasury is concerned about money leaving the country.  Money that they’re going to need to pay their bills.  The Federal government is running an operating budget deficit of over a trillion dollars this year and, by their own admission, this level of deficit spending is projected to continue for several years in the future.  In order to service this unfathomable debt they’re going to need to do one of two things – drastically cut spending on defense and entitlement programs or significantly raise taxes.  Which way do you think they’ll go?

My bet is that they will raise taxes and it’s not unthinkable to believe that the total tax burden for high income workers (the definition of which keeps changing all the time) will reach a combined total of 60% to 70% when you include state, local and federal taxes.  Think about that – 60 to 70 cents of every dollar you earn will go to the government, with much of it being spent to cover the debt.  And the state and local governments are in even worse shape.   I project that will see increases in income taxes, capital gains taxes, payroll taxes, Medicare withholding, property taxes, sales taxes, death taxes, increased fees for services, all types of licenses and taxes we haven’t even heard of yet.  If a state, local or the federal government can squeeze a nickel out of you, they most certainly will.

In an environment like this, more than a few people will stop voting at the ballot box and start voting with their feet.  They will begin leaving the country with as many assets as they can and go somewhere where they can live their lives in comfort without watching everything they’ve worked for, everything they sacrificed for, get taken away in taxes or eaten up by inflation.

The federal government is aware of this real possibility.  So aware, in fact, that they’ve been methodically preparing for this potential exodus of money for the past two years.

On June 17^th, 2008 the Heroes Earnings Assistance and Relief Tax Act of 2008 (H.R. 6081), also known as the Heart Act, was unanimously passed by Congress and signed into law by the President (a Republican no less).  This piece of legislation was very well intended.  It provided much needed tax relief for the men and woman of our military who are sacrificing their time and their lives for our country.  But this bill also contained some language that targeted a very different group – expats who, for whatever reason, decided to give up their U.S. citizenship.  The bill provides for withholding taxes of up to 30% on certain assets held by the expat as well as assessing the value of the property of the expat 24 hours prior to the renouncing of their citizenship.  Keep in mind; only around 600 Americans renounce their citizenship each year, so the expected revenue from this small group is relatively limited.   More important are the procedures and policies established by this bill that can be modeled for future legislation.

Okay, so this bill is not a big deal.  Few people actually give up their U.S. citizenship and it’s not likely to directly affect you.  What’s more, if someone decides to give up their citizenship, who really cares how much they’re taxed?  But it does establish some policies, procedures and tax rates for individuals who decide to live offshore.  Policies, procedures and tax rates that very well could affect you in the future.

As a follow up to the Heart Act of 2008 we have the Hiring Incentives to Restore Employment Act (H.R. 2487) commonly known as the HIRE Act (don’t you just love these names?).  This is the jobs incentive bill that was signed by the President on March 18^th amid little fanfare.  In a congressional bill of 47 pages, presumably written to address the unemployment situation in the U.S., 21 pages are devoted to the treatment of foreign bank accounts and other offshore investment vehicles held or controlled by U.S. citizens.  But I thought U.S. citizens were already required by law to disclose their overseas account to the IRS, so why do we need this legislation?  Well, yes they are.  But this law goes a bit farther in that it requires foreign financial and non-financial firms to report accounts held by American citizens to the U.S. Treasury.  So, in effect, the United States Congress has passed a law that requires a foreign firm, located in a foreign country, to disclose account information held by a U.S. citizen (including name, address, tax ID number, account number, account balance, and flows of funds into and out of the account) to the United States Treasury on their demand.  Now, that takes some nerve.  What if the country where the financial firm is located has laws against disclosing this information?  In that case, the law requires the financial firm to obtain a signed waiver from the account holder authorizing the firm to disclose the information.  If they don’t sign the waiver, the financial firm is required to close the account.  I spoke to an attorney friend of mine who told me that his firm is no longer accepting U.S. clients because they don’t want to be harassed by the IRS.  Because of this law, foreign banks are likely to close accounts held by Americans due to the bookkeeping hassle or the potential liability posed by the U.S. account holder.  The fact that banks and law firms will no longer want to work with U.S. citizens is an unintended consequence of this legislation.   Or was that the real intended purpose?

Despite these two laws, the U.S. Treasury knows that a determined citizen, driven by the fear of increasing taxes and confiscation, will find ways to keep their privacy and their assets away from the long reach of the U.S. government.  In fact, the Hire Act even has a name for these non compliant citizens – recalcitrant tax payers. And this is where I think a third piece of legislation will fill the gap.

It’s my belief, based on the actions already taken by the U.S. government, that an exit tax will be instituted to capture money at the source (your U.S. bank), before it leaves the country.  I believe that this exit tax will apply only to certain specified transaction (since senators, congressmen and their wealthy patrons will still need to get their money out of the country).  Further, I think this tax rate will be in the 30% range (remember the Heart Act and the withholding requirements of the Hire Act?) and will be withheld by your bank and remitted to the U.S. Treasury at the time you make a transfer to a foreign entity.  Like the provisions inserted into the Heart Act and the Hire Act, this exit tax will likely make its way into some well meaning piece of legislation, inconspicuously inserted in the arcane language of the bill and will become the law of the land.  Most Americans will not even know the law exists and many of those that do understand won’t object because it will not have any impact on their lives.

And this, my friends, is how the $250,000 house in Panama suddenly costs $357,000 and the $150,000 condo will take $215,000 of your hard earned cash to buy.

If you are thinking about moving to Panama (or any foreign country) or investing overseas, the window of opportunity is getter smaller and smaller.  Although I don’t believe the U.S. government will ever prohibit you from leaving the country, I’m convinced that they will make it increasingly difficult to get your money out without a punitive tax.

Perhaps I’m wrong.  Maybe I’m misreading the situation and the U.S. government isn’t concerned about the flows of funds overseas for the average citizen.  And maybe this current financial crisis is just a bump in the road and the economy of the United States will start growing enough to cover the debts that are piling up without huge tax increases.  Maybe.

But try this mental exercise – Let’s say you believe the scenario I’ve described is a real possibility and you decide to act by moving some of all of your assets overseas, buying a house and creating a “Plan B” lifestyle for you and your family.  And then, none of the currency restrictions predicted happen, the U.S. economy springs back to life, the government institutes favorable tax policies to encourage investment and growth and money making opportunities abound.  What’s the worse thing that can happen?  You can always move your assets back to the U.S. since you’ll never see restrictions on money moving into the country.

But what if I’m right?  What if the economy continues to sputter?  What if unfunded liabilities like Medicare, Social Security or the new health care plan continue to expand the federal debt causing the economy to stagnate, forcing increases in tax rates and placing restrictions on the flow of capital overseas?  If you’ve chosen not to take action, what options are left for you and your family and at what cost?

Freedom means having the ability to make choices.  I believe there’s still time to make choices but the clock is winding down.

 Good luck and God bless.

 

Paul McBride

 You can email Paul by clicking here.

President Martinelli lobby's the U.S. for free trade

Panama president Ricardo Martinelli has written an editorial piece for The Hill, a Washington news source. He expounds on our similarities and the benefits that will arise from a trade pact between the U.S. and Panama.

I see the trade agreement as a two edged sword. Panama wants the benefits of additional trade it believes will develop, but for the U.S. an agreement represents in trade just a few hours of their yearly GDP. I believe the U.S. only wants the agreement in order to foist its agenda on Panama. Many of the recent reforms that have taken place have been to placate the U.S.. As we see the U.S. using strong arm tactics against foreign banks to disclose information on U.S. citizens with accounts, it is clear that a trade agreement will make it even easier for the U.S. to apply pressure to its "partner". Do this or we will pull out of our trade agreement. What leverage does Panama have in this partnership? I am beginning to question the real benefits Panama will see from an agreement with the U.S..

Pact between U.S., Panama will further strengthen nations’ ties

Last week in a speech before the U.S. Export-Import Bank’s Annual Conference, President Barack Obama made impassioned remarks about the vital role of trade in growing economic opportunity and international cooperation. I share his support for this vital principle, as do members of both political parties in Congress. However, many critics insist on perpetuating a misperception that could actually serve as a barrier to living up to that principle. Some have argued recently, including in this newspaper, that pending trade deals like the current U.S.-Panama Trade Promotion Agreement do not uphold U.S. values, which has delayed U.S. ratification of these agreements. Since Panama has already ratified the trade agreement we signed with the U.S., the implication is that a significant difference exists in the values our two countries embrace.

 As president of the Republic of Panama, I believe our country shows a daily commitment to a common set of values with the U.S. — democracy, economic opportunity and free trade. What we are seeking is a partner willing to demonstrate a commitment to us in return.

 One way we prove our commitment to these shared values is by shouldering much of the burden of addressing the threats that menace them in our hemisphere.

 Our common interests are at risk from many of the same dangers — political instability, North America-bound narco-trafficking and the broader perils of widespread poverty — but Panama has to confront them directly whereas the U.S. has the respite of distance.

 We are undertaking a significant effort on our own to strengthen our economy, creating good jobs for Panamanians while offering our trading partners a greater return on their commitment to our country and our people.

 Our efforts include reforming our tax code to help international companies support employees in Panama. We’re also modernizing immigration laws to establish a business-friendly visa regime that accommodates the travel demands of international commerce in the 21st century. Finally, we are creating an ambitious nationwide wireless broadband capability, providing access to high-speed Wi-Fi in all public buildings by April of this year.

 This concentration on making Panama open for business includes a dramatic expansion of the Panama Canal.  Adding a new channel to the canal to accommodate the largest and most modern cargo ships will facilitate expanded global trade and mean significant new opportunities for U.S. ports.

 These actions clearly demonstrate Panama’s commitment to a set of common values with the U.S. Unfortunately that commitment has been met so far by an unwillingness to act on one of the most significant, and mutually beneficial, elements of our partnership: the U.S.-Panama Trade Promotion Agreement.

 Rather than highlighting a difference in values, the agreement our two countries negotiated, signed, and which our country ratified, is a practical application of the values we both profess to share. The U.S. should ratify it immediately so both countries can begin to enjoy the benefits of increased trade that President Obama has broadly described.

 I know there are some in the United States who still have concerns about this agreement. I respect their views because Panama also did not get everything we wanted. But the Trade Promotion Agreement should be the beginning of a new phase in our economic relationship rather than the end.

 Upon U.S. ratification of TPA, our two nations should also immediately begin working together on additional negotiations to identify new opportunities for combined job creation and economic growth. These talks would be a useful venue to continue work on those issues still outstanding from our original TPA negotiations.

 Because of the values we share, and our deep appreciation for the United States, Panama continues to be a long-standing ally of the U.S. in Latin America. Approving the U.S.-Panama Free Trade Agreement will further strengthen the relationship between our two countries, offering the benefits of jobs and economic growth that both countries want.

Martinelli is the president of the Republic of Panama.