"My expectation is that as part of a broader trade package that we're going to be presenting to Congress, that we're going to be able to get this done," he said after a White House meeting with Panamanian President Ricardo Martinelli.
The long-stalled pact would tie Panama's largely service-based economy even closer to the United States, which has been deeply involved in the country for over a century because of its role in building the Panama Canal.
"We are very pleased by the progress we've made in moving forward a U.S.-Panamanian free trade agreement," Obama told reporters in the Oval Office.
The trade agreement with Panama is one of three left over from the administration of former President George W. Bush, along with pacts with Colombia and South Korea.
Republicans want President Barack Obama to send all three agreements to Congress so they can be approved by July 1.
"I will continue to encourage the President to send the agreements with Panama, Colombia and South Korea to Congress," Senate Republican leader Mitch McConnell said in a statement.
Action on the three pacts has become linked largely because of Republican concern the White House might abandon the Colombia pact, the most controversial due to concerns about anti-union violence raised by U.S. labor groups.
The top U.S. trade official said on Thursday that Congress needs to renew a retraining program for American workers who have lost jobs due to foreign competition to marshal the votes needed to approve the three pending free-trade agreements.
"Passing trade adjustment assistance is critical," U.S. Trade Representative Ron Kirk said in a speech. "For us, it has to be right up there with the three FTAs."
The United States and Colombia recently signed a labor action plan to address those concerns. But lawmakers are still waiting for the Obama administration to say it is ready to begin work with Congress on a draft bill to implement the Colombian agreement as it already has for the Panama and South Korean deals.
Business Opportunity
Companies such as Caterpillar strongly support the Panamanian agreement, which they believe will open the door for increased sales as the country pursues a $5.25 billion expansion of the nearly 100-year-old canal.
"We are very pleased by the progress we've made in moving forward a U.S.-Panamanian free trade agreement," Obama told reporters in the Oval Office.
The agreement requires Panama to immediately eliminate tariffs on 88 percent of U.S. commercial and industrial exports and phase out the remaining tariffs in those areas over 10 years.
Panama would also immediately eliminate duties on more than 60 percent of U.S. farm exports and phase out most other agricultural tariffs and quotas over 17 years.
Most of Panama's exports already enter the United States duty-free under various trade preferences programs. However, the pact would lock in that access and also encourage increased U.S. investment as a result of other reforms.
"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, would create jobs here in the United States, would open up new markets with potential for billions of dollars of cross border trade. We think it would be also very good for Panama," Obama said. (Reuters)
