Note to our readers: Background Notes are no longer being updated or produced. They are being replaced with Fact Sheets focusing on U.S. relations with countries and other areas and providing links to additional resources. For archived versions of Background Notes, visit http://www.state.gov/outofdate/bgn/.
More information about Panama is available on the Panama Page and from other Department of State publications and other sources listed at the end of this fact sheet.
U.S.-PANAMA RELATIONS
The United States established diplomatic relations with Panama in 1903 following its declaration of independence from Colombia. That year, through the Hay/Bunau-Varilla Treaty, the United States was granted rights to a zone spanning the country to build, administer, fortify and defend an inter-oceanic canal. The Panama Canal opened in 1914. In 1977, the Torrijos-Carter Treaties were signed to set basic governing standards for the Canal through 1999 and guarantee its permanent neutrality. These treaties went into effect in 1979 and on December 31, 1999, Panama assumed full jurisdiction over the Canal.
Changes in Panama's government and tensions over the canal led to the interruption of diplomatic relations several times during the 20th century. From 1987-1989, relations deteriorated sharply under the rule of Manuel Noreiga. During Operation Just Cause in 1989, U.S. troops entered Panama and captured Noreiga, who would not cede power following elections.
Panama's location and role in global trade make its success vital to U.S. prosperity and national security. While Panama's economic growth rate is among the highest in the hemisphere – surpassing ten percent in 2011 – the country faces the challenge of making this growth more inclusive. Increasing pressure from drug trafficking and organized criminal activity contributes to security problems that threaten to undermine Panamanian security, democratic institutions, and economic prosperity. Because of our shared history, cultural ties between both countries are strong.
U.S. Assistance to Panama
U.S. assistance to Panama aims to ensure that it remains a secure, prosperous, and democratic country that continues to work with the United States as a principal partner in Central America. The United States and Panama work together to advance common interests in improving citizen safety and strengthening democratic and governance institutions. They cooperate in many ways, including combating illegal drug trafficking and other criminal activity and promoting economic, democratic, and social development through U.S. and international agencies.
Bilateral Economic Relations
The United States and Panama have signed a bilateral investment treaty and a Trade Promotion Agreement. The trade agreement will eliminate tariffs and other barriers to U.S. exports, promote economic growth, set high standards for the treatment of investments, provide a framework for resolution of investment or trade disputes, and expand trade between the two countries. U.S. exports to Panama include oil, machinery, aircraft, agricultural products, and low-value shipments. U.S. imports from Panama include returns, fish and seafood, gold, cane sugar, and bananas and pineapples. Reported U.S. direct investment in Panama is led by the finance/insurance and wholesale trade sectors. Reported Panamanian direct investment in the United States is led by the manufacturing and real estate sectors.
Panama's Membership in International Organizations
Panama and the United States belong to a number of the same international organizations, including the United Nations, Organization of American States, International Monetary Fund, World Bank, and World Trade Organization.
Bilateral Representation
The U.S. Ambassador to Panama is Jonathan D. Farrar; other principal embassy officials are listed in the Department's Key Officers List.
Panama maintains an embassy in the United States at 2862 McGill Terrace, NW, Washington, DC 20008 (tel: 202-483-1407).
More information about Panama is available from the Department of State and other sources, some of which are listed here:
Department of State Panama Country Page
Department of State Key Officers List
CIA World Factbook Panama Page
U.S. Embassy: Panama
USAID Panama Page
History of U.S. Relations With Panama
Human Rights Reports
International Religious Freedom Reports
Trafficking in Persons Reports
Narcotics Control Reports
Investment Climate Statements
Office of the U.S. Trade Representative Countries Page
U.S. Census Bureau Foreign Trade Statistics
Export.gov International Offices Page
Library of Congress Country Studies
Travel and Business Information
