Chile and Panama sign free trade pact

Chile and Panama yesterday signed a free trade agreement that will eliminate 98 percent of tariffs on trade between the countries within 10 years.

‘‘Panama and Chile are generating the necessary conditions for an economic takeoff that will allow us to leave underdevelopment behind,’’ said Panamanian Vice-President Samuel Lewis Navarro.

Chilean Foreign Relations Minister Alejandro Foxley described Panama as ‘‘politically close’’ to Chile.

While the agreement will take effect over a period of years, Panamanian Commerce and Industry Minister Alejandro Ferrer said that cooperation between Chile and his country was already bearing fruit.
The two nations have a longstanding commercial relationship.

The majority of the trade is in Chilean exports to Panama, which reached US$111.5 million out of US$122.3 million in bilateral trade last year. Panama hopes the pact will narrow the imbalance.

Chile is the fourth-heaviest user of the Panama Canal, a position which could be boosted by the pact, according to Foxley. He also expressed support for plans to expand the canal.