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Panama, China Set Date to Start Free Trade Negotiations

Panama and China will begin negotiations in June 2018 to sign a free-trade deal, the two countries’ trade ministers said on Thursday7 December 2017, consolidating a relationship that has strengthened after the Central American nation ditched ties with Taiwan.

Panama’s June decision to end diplomatic links with Taiwan was a major victory for Beijing, as it lures away the dwindling number of countries that have formal relations with the island China claims as its own. Last month, a senior Chinese diplomat said China will provide Panama with whatever help it needs.

Talks to sign a free-trade treaty will begin in June next year, said Panama Trade Minister Augusto Arosemena, who was speaking in Panama City alongside his Chinese counterpart, Zhong Shan.

“We agree that we need to accelerate the feasibility study of the bilateral FTA in order to promote cordial negotiations as soon as possible,” said Chinese Trade Minister Zhong Shan, while on an official visit to the Panamanian capital.

“We hope to complete the pre-feasibility study (of the FTA) in June 2018 and immediately launch the negotiations,” Panama’s Trade and Industry Minister Augusto Arosemena said at the same press conference.

Zhong said that the fact of traveling to Panama just two weeks after Panamanian President Juan Carlos Varela’s visit to the Asian country “shows once more the sincerity of China for strengthening economic and commercial ties with Panama.”

The Chinese official said it was important to accelerate talks to open up trade between the two countries and deepen commercial links.“China is willing to stimulate its companies to actively participate in the construction of infrastructure in Panama, including ports, that would be based on mutual interest,” Zhong said.

China and Taiwan have tried to poach each other’s allies for years, often dangling generous aid packages in front of developing nations, though Taipei now struggles to compete with an increasingly powerful Beijing.

Panamanian President Juan Carlos Varela, who signed 19 deals during a visit to Beijing last month, told Chinese state television in September the decision to switch recognition to China had nothing to do with “checkbook diplomacy.”

In October, a group including China Harbour Engineering Company Ltd (CHEC) began building a $165 million port in Panama for cruise ships, the first project announced between China and Panama since they established diplomatic ties.

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