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Key Economic Drivers

1. Panama Canal: The Panama Canal is the backbone of the country's economy. The canal not only generates significant revenue through tolls but also supports various related services, such as logistics, shipping, and finance. The expansion of the canal in 2016 further enhanced its capacity, boosting trade flow between the Atlantic and Pacific Oceans.
2. Services Sector: Panama’s economy is heavily reliant on services, which account for over 75% of GDP. Key sectors include banking, insurance, logistics, and tourism. The country is known for its status as an international banking hub, with numerous multinational financial institutions operating there.
3. Foreign Direct Investment (FDI): Panama is a top destination for FDI in the region, attracted by its stable political environment, dollarized economy, and pro-business policies. Real estate, infrastructure, and logistics are the primary sectors receiving investments.
4. Free Trade Zones: The Colón Free Trade Zone is the largest in the Americas and the second-largest in the world. It plays a crucial role in the re-export of goods to Latin America and the Caribbean, making it a key component of Panama’s trade and commerce.
5. Tourism: Tourism is an increasingly important sector for Panama. The country attracts visitors with its diverse ecosystems, modern infrastructure, and cultural heritage. The government has invested in promoting Panama as a tourist destination, further boosting this sector.

Source: BBC

Trade Balance

Panama typically runs a trade deficit, importing more than it exports. In 2023, the total trade value reached $51.262 billion, with exports accounting for $17.127 billion and imports at $34.135 billion. The Colón Free Trade Zone plays a significant role in these figures, particularly in re-exports.

Source: Penobscotfa

Key Export Products

1. Mineral Fuels and Oils: One of Panama's top exports, primarily due to its role as a shipping hub.
2. Machinery and Equipment: Panama exports a range of machinery, with a focus on maritime and transportation equipment.
3. Pharmaceutical Products: The country has a growing pharmaceutical export market.
4. Seafood: As a coastal nation, Panama exports significant quantities of fish and seafood.
5. Agricultural Products: Despite its service-oriented economy, Panama exports bananas, sugar, and coffee.

Key Import Products

1. Machinery and Equipment: Panama imports a vast amount of industrial machinery, particularly for its construction and shipping sectors.
2. Petroleum Products: The country relies on imported fuel to meet its energy needs.
3. Pharmaceuticals: Panama imports a wide range of medicines and medical equipment.
4. Automobiles and Parts: The automotive sector is another major import category.
5. Food Products: Panama imports foodstuffs to meet domestic consumption needs.

Trade Partners

1. United States: The U.S. is Panama’s largest trading partner, benefiting from the U.S.-Panama Trade Promotion Agreement (TPA).
2. China: China is the second-largest user of the Panama Canal and a key supplier of goods to Panama.
3. European Union: Several EU countries engage in significant trade with Panama, particularly in machinery and pharmaceutical products.
4. Latin America: Colombia, Mexico, and Brazil are among the top regional trade partners.

Strategic Advantages

1. Panama Canal: The canal is a vital global trade route, handling about 6% of world trade. It significantly impacts trade flows between the Atlantic and Pacific Oceans.
2. Colón Free Trade Zone: The largest free trade zone in the Americas, it serves as a major re-export hub, especially for electronics, clothing, and pharmaceuticals.

Useful Website

Search Engines

• Google Panama https://www.google.com.pa/
• Local Search Engine http://www.pa/buscar.html

Official Trade Websites

• Panama Ministry of Commerce and Industries (MICI) http://www.mici.gob.pa 
• Panama Canal Authority (ACP) https://www.pancanal.com
• Colón Free Trade Zone http://www.zolicol.gob.pa 

E-commerce Platforms

• Mercado Libre Panama https://www.mercadolibre.com.pa
• Amazon (Serving Panama)https://www.amazon.com
• Encuentra24 https://www.encuentra24.com 
• PriceSmart Panama https://www.pricesmart.com/site/pa/en

Payment Methods

Panamanian merchants rarely use Letters of Credit (L/C). The most commonly used payment methods are Telegraphic Transfer (T/T) and Documents Against Payment (D/P).

1. Telegraphic Transfer (T/T): T/T is a common international trade payment method with two typical practices. The first involves an advance payment of 30% (or 20%, etc.) via T/T, where the buyer transfers 30% of the payment to the seller upon order confirmation, with the balance paid after the seller sends the bill of lading (B/L) following shipment. The second method requires full or 30% advance payment via T/T, with the balance paid before shipment.
2. Documents Against Payment (D/P): After shipment, the seller submits the bill of lading and other documents to the bank. The bank releases these documents to the importer upon payment, allowing them to clear customs and collect the goods. Essentially, it’s a "cash against documents" system, though it carries some risk for the exporter.

How to Prevent Payment Delays from Panamanian Customers?

Conducting due diligence, including credit checks and obtaining credit reports on Panamanian companies, can help exporters understand the financial stability and creditworthiness of their Panamanian clients. This can reduce risk and enhance caution in dealings.

How to search for reliable buyers and suppliers in Panama?

Topease was established in 2004 as a comprehensive marketing and sales solution service provider for your import-export-trading and logistics businesses.

By using trade data based on customs and bill of ladings, you can easily find reliable buyers and suppliers in Panama.

How can you find global trade opportunities in a smart way?

Check out this video! https://youtu.be/3KNvoZ8bths

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