A free trade agreement between Panama and Canada is scheduled to come into force April 1 that would help generate jobs and prosperity in the two countries, the federal government has said.
"I am very pleased to mark this important step in Canada's deepening partnership with Panama-a country that boasts one of the fastest-growing markets in our hemisphere and that serves as a strategic gateway to Latin America," said Diane Ablonczy, Canadian minister of State of Foreign Affairs Sunday.
"This free trade agreement, a key part of our government's plan to strengthen our relationships in the Americas, will cement the ties between our nations and help us build greater prosperity for the peoples of our hemisphere," said the minister in a press release.
The announcement was made while the Inter-American development bank meeting was underway in Panama City.
By strengthening the existing trade relationships between the two countries, the free trade agreement is expected to increase Canadian exports to Panama, the southernmost country of Central America.
Canadian Trade Minister Ed Fast called the free trade a 'significant milestone' in the history of Canadian trade relationship with foreign countries.
"The entry into force of the agreement is a significant milestone, one that will have immediate benefits for Canadian exporters," said Minister Fast. "The agreement will immediately eliminate tariffs on more than 90 percent of Canadian goods exported to Panama, benefiting a wide range of sectors, including aerospace, pharmaceuticals, pulp and paper, and agriculture and agro-food."
According to the press release, Panama is Canada's third-largest merchandise-export market in Central America, with bilateral merchandise trade reaching $213.6 million last year.
The Panamanian government has a five-year plan to invest in major infrastructure projects worth $13.4 billion.
Within last six years, the Canadian federal government has signed free trade deals with nine countries: Colombia, Honduras, Jordan, Panama, Peru and the European Free Trade Association member states of Iceland, Liechtenstein, Norway and Switzerland.
In coming years, the federal government is targeting to sign free trade deals with the European Union, India, Japan, and the members of the Trans-Pacific Partnership, according to the release.