[Excerpt] This employment impact report was prepared pursuant to section 2102(c)(5) of the Trade Act of 2002. Section 2102(c)(5) requires the President to review and report to the Congress on the impact of future trade agreements on U.S. employment and labor markets. This report describes the relevant provisions of the United States–Panama Trade Promotion Agreement (TPA), including a summary of the labor provisions of the TPA, and assesses the potential employment effects of the TPA.
The major finding of this report is that the TPA is not expected to have a measurable effect on employment in the United States. This finding is attributable to: (i) the very small size of Panama’s economy relative to the United States; (ii) the very small volume of bilateral trade between the two countries; (iii) the fact that over 98 percent of all U.S. imports from Panama already enter the United States duty-free; (iv) provisions in the TPA for the gradual removal of U.S. tariffs on import-sensitive goods from Panama over an extended period; and (v) safeguards contained in the TPA to attenuate the effects of certain increases in imports.