* New president want U.S. trade deal "as soon as possible"
* Government to seek foreign investment in infrastructure
By Mica Rosenberg
PANAMA CITY, May 4 Finalizing a free-trade deal
with the United States is a major goal for Panamanian
President-elect Ricardo Martinelli, but the supermarket tycoon
rejects U.S. accusations that the country is a tax haven.
"It will be our number one priority," Martinelli said of
the accord on Monday in front of his house after sweeping
Sunday's election with over 60 percent of votes.
The U.S.-Panama trade pact was signed in June 2007 by
Panamanian President Martin Torrijos, but the agreement has
been stalled in the U.S. Congress over criticisms that Panama
is an offshore tax haven for wealthy foreigners.
Panama only collects income tax on money judged to have
been earned in the tiny Central American nation.
Martinelli's economic team disagrees with U.S. lawmakers
who say Panama has failed to deal with tax evasion and needs
tougher labor rights standards.
"The perception that Panama is a tax haven is totally
false," Frank De Lima, Martinelli's top economic adviser told
Reuters. De Lima said the new government will be open to
sharing information with U.S. authorities and plans to work to
pass the agreement as soon as possible.
Other Central American countries and Mexico already have
free trade deals with the United States, putting Panama at a
disadvantage, De Lima said.
Torrijos has pledged to sign the trade agreement before
stepping down on July 1, but negotiations are moving slowly.
The administration of U.S. President Barack Obama has said
it hopes to win approval of the Panama deal relatively quickly
and to work with Congress to establish "benchmarks" for
progress on pending trade deals with Colombia and South Korea.
Panama's economy has led Latin America with growth of
around 10 percent in recent years, fueled by luxury real
estate, a booming banking sector and U.S.-Asia trade through
the Panama Canal.
But growth in 2009 could slow to below 3 percent as the
global financial crisis hits credit and shipping, making a U.S.
trade deal all the more important.
"Martinelli will enter office during a challenging period,"
said Theresa Paiz Fredel, an analyst at Fitch Ratings in a
note. Fitch said the election result will not affect the
country's ratings, since Martinelli is expected to push ahead
with Panama's $5.25 billion canal expansion plan.
Martinelli, a 57-year-old U.S.-educated businessman who
owns the dominant Super 99 grocery chain, is open to foreign
investment and has pledged to simplify the country's tax code
with a 10 to 20 percent flat tax.
He has promised massive infrastructure spending on a new
Panama City subway system, highways and new airports built in
partnership with foreign investors.
(Additional reporting by Elida Moreno and Sean Mattson)