US-Panama FTA linked to tax evasion

THE PANAMA PAPERS affair is being cited in the USA as a warning sign over Free Trade deals between the two countries, with Hillary Clinton a torch bearer and Bernie Sanders predicting tax evasion problems.

On Tuesday, President Obama claimed that activity like that exposed by the Panama Papers was the result of “poorly designed” laws, some analysts state that relevant regulations were not exactly “poorly designed,” but skillfully designed to facilitate certain interests says Washington based Institute for Public Accuracy.

Lori Wallach director of Public Citizen’s Global Trade Watch said on Wednesday, April 6:  “It’s worth nothing that in 2011 the White House said that the U.S.-Panama Free Trade Agreement and various tax haven/secrecy ‘reforms’ extracted from Panama would end Panama’s financial crime secrecy protections and tax haven and money laundering activities. The Panama Papers just show once again how entirely cynical and meaningless are American presidents’ and corporate boosters’ lavish promises of economic benefits and policy reforms from trade agreements. In fact the FTA’s investor protections and official U.S. stamp of approval made it safer to send dirty money to Panama … Now the same cast of characters is making equally outlandish promises of the benefits of the TPP [Trans-Pacific Partnership].”

President Obama and then Secretary of State Hillary Clinton both sold the FTA as fixing the Panama tax haven/secrecy issue in 2011.

President Obama: “Thanks to the leadership of President Martinelli, there have been a range of significant reforms in banking and taxation in Panama. And we are confident now that a free trade agreement would be good for our country….”

Reuters reported: “Washington also hopes to enact two long-delayed free trade agreements with Colombia and Panama this year,  she [Clinton] said.”‘We are making great progress on both agreements,” noting steps to guarantee labor rights in Colombia and ensure tax transparency in Panama that will help win U.S. lawmakers’ approval of the trade deals.”
Sen. Bernie Sanders said at the time: “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in offshore tax havens. The Panama Free Trade Agreement will make this bad situation much worse. Each and every year, the wealthiest people in this country and the largest corporations evade about $100 billion in taxes through abusive and illegal offshore tax havens in Panama and in other countries.