U.S. Commercial Service Panama. Panama s Business Opportunities. Daniel Crocker Senior Commercial Officer Embassy of the United States of America

Transcription

1 U.S. Commercial Service Panama Panama s Business Opportunities Daniel Crocker Senior Commercial Officer Embassy of the United States of America

2 Panama The Crossroads of the World Location, Location, Location Population: 3.5 million. GDP: est. $39 bn (PPP). Services 80%. Industry 14%. Agriculture 6%.

3 Panama s Advantages Logistics hub for Americas. Canal operations, direct air routes. Dollarized economy. simplifies business planning, no currency risk. Sophisticated banking sector. finance & credit availability. Stable economic and political environment. Affinity for U.S. goods and services. Safe. High level of personal security.

4 Panama s Challenges Security. Could deteriorate. Workforce. Inflexible labor laws, small population. Education. Key limiting factor. Government. Limited capability, susceptible to influence. Legal Complications.

5 The Panama Canal Eighth Wonder of the World Panama s Unique Advantage. $250 mn./yr procurement. $5 bn. Canal Expansion why it matters.

6 The Colon Free Trade Zone Second Largest Worldwide $18 Billion in Trade (2010) Founded in 1947 in the Atlantic deep water port of Colon. Over 1,200 acres, 1,800 companies, 24,000 employees. Advantages : Central point for worldwide re-distribution. Centralized marketing to promote sales. Credit facilities to finance re-exports. Dollar transactions. Established channels of distribution. Duty Free treatment of In Bond goods. Contact us or go to

7 Panama s Principal Trading Partners Panama s Imports from U.S.: $6.1 billion (40% of total imports). Other major trading partners: Europe, Japan, Mexico and South America. U.S. Imports from Panama: $379 million.

8 FREE TRADE AGREEMENT U.S. Panama The Free Trade Agreement between the United States and Panama was ratified by Panama in July Waiting U.S. Congressional Approval.

9 Free Trade Agreement will Benefit U.S. Companies Tariffs: drop from 10-15% to 0%. Makes your goods and services more competitive. Gives you better margins. Bypass burdensome exemption processes to secure subcontracting business with Canal, Metro projects. Greater Transparency in Public Procurement. Statutes give U.S. Government greater leverage to encourage a open and transparent process. Political Statement. Re-affirmation of U.S. Panama historic relationship, which fosters even more trade. Strengthens Panama s goal of becoming another Singapore. More selling opportunities for you.

10 Opportunities for U.S. Companies Panama Canal and Expansion. Ports. Port Transshipment, rail activity. Colon FTZ:, 3PL Logistics, Consumer Retail. Regional Hub: Air activity, support for multinationals. Infrastructure: $13 billion in announced projects mass transit, airports, hospitals, water treatment, roads. Energy: generation, regionalization of transmission, and downstream conservation. Consumer Retail: not only for Panama, but for Latin America through the Colon Free Trade Zone. Bottom Line: not just a market of 3.5 million

11 Next Steps: How We Can Help The U.S. Commercial Service is part of the U.S. Department of Commerce, with 101 offices in the 50 States and 75 countries world wide. Our Mission: Help U.S. companies export goods and services to Panama. Defend U.S. business interests in Panama.

12 Our Services Gold Key Service Single Company Promotion Background Checks Trade Counseling Market Research

13 Getting Paid: Knowing Your Buyer High Risk Buyer: Cash in Advance Letter of Credit Exim Financing an Attractive Option IF Over $250k Low Risk Buyer: Open Account Terms Documents Against Acceptance (D/A) Medium Risk Buyer: Open Account Terms w/export Credit Insurance Documents Against Payment (D/P) Increasing risk

14 Open Account Terms with Export Credit Insurance US Exporter offers open account terms to Panamanian Buyer. US Exporter purchases Export Credit Insurance. If Panamanian Buyer can t pay, Credit Insurer pays up to 90% of the value of the receivables. US Exporter should shop carefully a variety of risks can be covered. Costs range from.08% - 1.5% of insured receivables for days. But US Exporter is liable typically if there is a dispute! For many US Exporters, Credit Insurance is a good way to offset risk of offering terms to buyers in order to increase sales. Exim Bank is now the main player in this business for U.S. exports!

15 Open Account Terms with Export Credit Insurance United States 2 Ships Exports Panama 1 Exporter buys insurance US Exporter 4 Insurer pays IF buyer defaults 3 Term ends, buyer pays Panamanian Buyer Insurer in US 5 Insurer seeks payment IF buyer defaults

16 Putting it all Together Our services (GKS, IPS, ICP) help you identify agents, representatives, distributors, end users and they also allow you to assess risk. We also can assist in some payment disputes with advocacy. By knowing your customers, you can lower your risk and win more export business: High risk: Cash in Advance, Letter of Credit. Medium risk: Terms w/credit Insurance. Low risk: Open Account. For $250k plus sales to qualified Foreign Buyers: Ex-Im Bank Insured Export Finance is attractive.

17 Contact Us U.S. Commercial Service Panama Embassy of the United States of America Phone: