SIP and APEX demand clear rules in Panama to establish themselves in the market.

The guilds agreed that the country has focused more on being an importer rather than an exporter. They insist that Free Trade Agreements have not been fully utilized either.

Panama is lagging behind in key areas to boost the local industry and attract Foreign Direct Investment (FDI), such as institutional strength and human capital, according to the 2025 Annual Economic Report of the Panama Industrial Union (SIP).

The report, titled Competitiveness and Growth: The Future of the Industrial Sector Amid New Economic Challenges, states that regional competition to attract FDI has intensified, and Panama is not among the top competitors.

It details that in 2022, most of the FDI entering Panama came from the service sector, totaling $2.268 billion— a low figure compared to the $3.422 billion generated by the Dominican Republic in 2023. Similarly, FDI in manufacturing in Panama reached only $331 million in 2022, whereas Costa Rica managed $2.592 billion in 2023.

During the presentation of the report, SIP President Raúl Montenegro criticized the fact that, despite the industrial sector being largely concentrated in food production (53%), Panama has become an importer of agri-food products instead of an exporting country.

He explained that, according to the study, over the past 21 years, exports have dropped from $804 million to $402 million, while imports have risen from $595 million to $1.132 billion.

Montenegro stated that while the decline in exports can be observed by sector, the report shows that fish and seafood exports were around $413 million, but in 10 years, they have dropped to just over $152 million.

Free Trade Agreements (FTAs)

He also argued that the current export issue is due to Panama’s poor utilization of Free Trade Agreements (FTAs).

«Panama has signed more than 20 FTAs. And what has that accomplished? Instead, we have been flooded with imports. We have made it clear to the President of the Republic, José Raúl Mulino, that we want to compete on equal terms. If other countries are doing it, we can do it too,» Montenegro stated. He also pointed out that while the industrial sector represents 4.6% of Panama’s GDP, it has maintained an average growth rate of 8% over the past 24 years.

He explained that this decline is partly due to the expansion of the Panama Canal being incorporated into the country’s economic structure, both before and after the project, similar to what happened with the mining industry, among other cases.

Export Challenges

Bianca Morán, President of the Panamanian Exporters Association (APEX), stated that although exports increased in 2024, the figures still do not compare to those from the last decade, before Panama signed the FTA with the United States, when exports were significantly higher.

According to Morán, Panama must comply with international export agreements to ensure the quality of Panamanian products is recognized. To achieve this, she emphasized the need to develop a national brand, strengthen the export sector, and improve workforce training.

«The support we have received for exports has always been closely tied to the government in power. We would like to have access to an institution like other countries do, as well as a diplomatic body capable of promoting Panamanian production,» she stated.

Urgent Need for Agro-Industrial Transformation

While Panama has the potential to develop sectors such as pineapple, palm, cocoa, and fish, SIP President Montenegro admitted that the country lags behind others in the region in agro-industrial transformation. This is partly because Panama still dedicates a significant portion of its land to less competitive crops such as rice and corn.

«With bananas and plantains alone, we barely hold 5% of the market share. Everyone talks about the richness of our land, both in Puerto Armuelles and Bocas del Toro, but then we ask ourselves—what are we waiting for?» Montenegro emphasized.

APEX President Morán reinforced that «for exports to be facilitated, there must be clear rules that allow all industrial sectors to increase their exports. This includes having a strong market strategy, modernizing the system, and increasing the number of skilled workers.» According to SIP’s report, only 7.5% of university graduates are linked to the industrial sector.

«We must align our production with global market demands, not the other way around. We need to identify market niches,» Morán stated.

An example of this, according to SIP President Montenegro, is the opportunity Panama has in the agri-food industry, pharmaceuticals, and integration into the semiconductor value chain, particularly in light of the growing nearshoring trend.

He also stressed the importance of developing a multisectoral national strategy that directs advanced education towards these industries while prioritizing and strengthening ProPanamá.