Bush to argue free trade in Panama

U.S. President George W. Bush will discuss free trade with Panama's president, Martin Torrijos, on Monday, and the enthusiastic reception he is set to receive will stand in stark contrast to that of a regional summit just held in Argentina.

Thirty-four countries failed to reach agreement on the proposed Free Trade Area of the Americas, or FTAA, during a weekend summit in Argentina, but Bush's first visit to Panama is a sign of his administration's varied strategy for opening up world markets. While the FTAA is stalled and worldwide trade talks are embroiled in thorny issues of farm subsidies, Bush has set his sights on individual countries that are eager to do business with the United States.

Torrijos is a proponent of free trade and his country is in talks with the U.S. on a bilateral pact. Torrijos was a leader in trying to move along negotiations for the FTAA at the weekend talks.

The Central American Free Trade Agreement, or CAFTA, was recently ratified by the U.S. Congress in a narrow vote after tough lobbying by the White House.

Panama is not a part of CAFTA because Bush negotiated the pact with a pre-existing trading bloc of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

"CAFTA is important, and it makes sense for Panama to be considered to be a part of these trading agreements that are growing," Bush said last week in a preview of his trip.

White House aides said going into the Panama talks that they did not expect to leave with a completed agreement. But they said Bush was expected to make more progress with Torrijos in their one-on-one meeting than he did on a visit Sunday with Brazilian President Luiz Inacio Lula da Silva in Brasilia.

Bush came out of their meeting saying that although Silva wanted to work on worldwide trade, he still needed to be convinced that an agreement in the Western Hemisphere would be a job creator for Brazil.

Other topics on the agenda for Bush's meeting with Torrijos included drug trafficking and the Panama Canal, which could undergo a nearly US$10 billion expansion if Panamanian voters approve the project. The United States opened the canal in 1914 to help ships avoid a long trip around the southern tip of South America. The U.S. also built military bases on the Canal Zone to serve strategic military purposes in the region.

Under treaties signed in 1977 by U.S. President Jimmy Carter and Panama's Gen. Omar Torrijos, the current president's father, the United States handed over control of the canal and the surrounding zone on Dec. 31, 1999.

The U.S. still is the largest user of the canal, which Bush planned to tour. Fourteen percent of U.S. exports and imports, as well as 4 percent of the world's trade, pass through it.

But 10 percent of the world's ships today are unable to navigate the narrow waterway. Canal authorities say its expansion would help it remain the fastest and easiest shipping route between the Pacific and Atlantic oceans, reports the AP. I.L.