U.S. presses on Panama, Colombia deals

WASHINGTON (Reuters) - Panama has made "very good progress" on labor issues blocking U.S. approval of a free trade agreement, but needs to do more to address U.S. concerns over its tax laws, U.S. Trade Representative Ron Kirk said on Tuesday.

"We've made very good progress with them on the labor issues. We're still working to resolve the issues with respect to their tax laws," Kirk said at the Reuters Latin American Investment Summit.

The administration of former President George W. Bush negotiated the deals with Panama and Colombia, but could not persuade the Democratic-run Congress to approve the pacts.

Now, President Barack Obama is confronted with getting the agreements through Congress or spoiling relations with two long-time friends in the regions.

The Panama agreement, which was signed in June 2007, is considered the less controversial of the two pacts.

But many of Obama's fellow Democrats have pressed Panama to approve a number of labor law reforms before they vote on the pact. Concerns about Panama's status as a tax haven also have gained attention with Obama now in the White House.

"This is an issue of great importance to us as you can tell by the president's announcement yesterday - one that we need to find a way to resolve," Kirk said.

On Monday, Obama proposed legislation that would make it harder for wealthy individuals and corporations to avoid paying taxes by putting their money in overseas accounts.

The Organization for Economic Cooperation has listed Panama as one of 30 tax haven jurisdictions that have committed to international standards on bank secrecy, but have not yet substantially implemented those standards.

Kirk said he saw a "a window" to resolve remaining labor and tax issues before Panama's current President Martin Torrijos leaves office on July 1.

"I would like for us to take as much advantage of that as possible," Kirk said, without predicting the agreement could be approved by Congress by then.

"ONLY FAIR"

Meanwhile, U.S. and Colombia officials will soon hold their first meeting to begin identifying specific actions Colombia must take to win approval of its more controversial trade deal with the United States, Kirk said.

"It's only fair for Colombia to know exactly what it is they need to address," Kirk said.

Democrats refused last year to approve the trade deal on the grounds that Colombian President Alvaro Uribe's administration had not done enough to stop killings of labor leaders and to prosecute those responsible for the crimes.

Colombia says it has made great progress over the past decade reducing all forms of violence in a country once on the verge of collapse from a decades-old civil war.

The Uribe administration has pressed U.S. Democrats to spell out precisely what more they thinks should be done.

Obama, who also opposed the pact last year, recently asked Kirk to work with Congress and Colombia on a plan to address the anti-labor violence.

"Ours teams will be meeting shortly to discuss and crystallize those issues that need to be resolved," Kirk said.

"The president and I both believe that president Uribe has shown remarkable courage in dealing with the issue of violence," he said.

(Reporting by Doug Palmer; editing by Dan Grebler)