Before reviewing this section, we recommend visiting our Doing Business in Panama set of reports, which gives a general overview of what U.S. companies need to know to get started.
Since Panama is largely a service-based economy with no history of manufacturing, it is used to importing practically all goods. On the one hand, this is great news for U.S. exporters – you don’t have to compete against an entrenched domestic manufacturer who may remain protected by tariff and non-tariff barriers. On the other hand, Panama is a trading culture, which means that the competition among imports can be fiercely competitive. In many ways it is similar to competing in the U.S., where tariff barriers are relatively low for practically all products. Since Panama’s tariff rates rarely go higher than 12-15% and shipping and logistics are very efficient given the prominence of the Panama Canal’s global shipping operations, you will need to be prepared to compete against Asian and European imports. Even with the U.S. – Panama Free Trade Agreement, which went into effect on October 31, 2012 and dropped tariffs on 87% of U.S.-made products to 0%, you are still competing against Asian-made goods that may be lower priced due to labor or input costs.
At the same time, Panama has a strong cultural affinity for U.S. goods and services. And the service-based element and strong reputation for high quality, coupled with shipping proximity and the fact that the dollar is weak now, mean that U.S. products currently enjoy an estimated 30% market share of all of Panama’s imports. If you don’t see your product represented below, don’t assume there’s no market for it. Instead, please contact us for a quick market assessment. In addition, you should be aware that Panama often presents an opportunity as a marketplace for the rest of Latin America – in other words, particularly for consumer retail, you should consider selling through Panama to the rest of the region. Please read our report on selling through the Colon Free Trade Zone to Latin America.
You can click on the reports on the left hand menu or just click through the following sections:
Finally, while our reports serve as a good overview for getting started on doing business in Panama, we encourage you to take advantage of our 105 U.S. Export Assistance Centers (USEACs) located throughout the U.S. to discuss how we can help you sell your products and services overseas and defend your interests should challenges arrive. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac.