trade

Proposed FTA violated

Changes the government made to its procurement regulations confllct with the proposed FTA.

The agreement calls for a $193,000 cap on no-bid contracts, while a higher cap was approved June 30.

LA PRENSA

trade issue:While the FTA with the U.S. has not even been approved, Panama has already violated it by increasing the threshhold the government can award in “no bid” contracts.1069290

Even as Panamanian officials are pushing the U.S. to approve a free trade agreement (FTA) between the two countries, the Torrijos administration has pushed through a law that violates the pact's parameters.

On June 30, the Asamblea Nacional approved a measure proposed by the Ministerio de Economía y Finanzas to change the country's procurement regulations. One of these changes allows the government to award consulting contracts of up to $300,000 without putting them up for public bid.

But according to the proposed FTA, Panama is obligated to establish “clear rules” in government procurement procedures that should focus on “respect for the principles of non-discrimination, transparency and due process.”

The agreement specifically sets a $193,000 limit on contracts awarded without putting them out for public bid. This would allow U.S. companies to bid on government contracts on an equal footing with local entities.

“The changes to the Ley de Contrataciones violates the proposed treaty with the United States,” said Manuel Ferreira, president of the Cámara de Comercio de Panamá. “This administration's term is coming to an end, and now they want to do everything quickly. But they are not doing things right.”

Ferreira said the Asamblea should take steps to eliminate the changes and return to the original procurement regulations.

“We are doing a disservice to its ratification by the United States Congress if the agreement has not even been ratified and we are unilaterally changing the rules of the game,” said Enrique de Obarrio, the president of the Consejo Empresarial Estados Unidos-Panamá (USPA).

Members of the legislature apparently were unaware that the changes violated the FTA when they approved them in June. The head of the Comisión de Relaciones Exteriores, Héctor Alemán, said he did not know about it.

“Off the top of my head, I do not have an accurate answer,” he said. “Obviously, there is a problem.”

Ministerio de Comercio e Industrias officials declined to comment about the situation for this story.

Panama has high hopes that the FTA will be approved once Pedro Miguel González steps down as president of the Asamblea Nacional. This new issue, however, could further delay the ratification of the agreement.