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 separation from Colombia.   That year, through the Hay/Bunau-Varilla Treaty, Panama granted the United States 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 United States and Panama signed the Carter-Torrijos Treaties 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 and operational control 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 Noriega.  During Operation Just Cause in 1989, U.S.  troops entered Panama and captured Noriega, who would not cede power following elections.   Since the restoration of democracy, Panamanians have elected seven presidents from three political parties in free and fair elections.

Given Panama’s location and role in global trade, its success is vital to U. S.  prosperity and national security.  Panama’s key location along major land and sea transit routes makes it a critical partner in the interdiction of illegal drugs destined for the United States.  While Panama’s economic growth rate is among the highest in the hemisphere, the country faces the challenge of making this growth more inclusive.

U. S.  Assistance to Panama

U. S.  assistance to Panama aims to ensure Panama remains a secure, prosperous, and democratic country that continues to partner closely with the United States.  The United States and Panama work together to advance common interests, to include improving citizen safety and strengthening the rule of law.  Our countries cooperate in many ways, including combating illegal drug trafficking and other criminal activity, as well as promoting economic, democratic, and social development.

U. S.  Strategy for Managing Migration

On the margins of the Ninth Summit of the Americas in Los Angeles, the Government of Panama publicly endorsed the Los Angeles Declaration on Migration and Protection (Los Angeles Declaration), which commits states to protecting the safety and dignity of all migrants, refugees, asylum seekers, and stateless persons, regardless of their migratory status, and acknowledges that addressing irregular migration requires a regional approach.

The U. S.  Strategy for Addressing the Roots Causes of Migration in Central America (RCS) guides U. S.  diplomatic efforts and foreign assistance in the region.  RCS is a bipartisan, multiyear U. S.  government plan covering all seven Central American countries (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama).  The RCS aims to address the security, governance, and economic drivers of irregular immigration and transnational crime, while increasing opportunities for U.S.  and other businesses.

RCS focuses on five pillars: 1) Addressing economic insecurity and inequality; 2) Combating corruption, strengthening democratic governance, and advancing the rule of law; 3) Promoting respect for human rights, labor rights, and free press; 4) Countering and preventing violence, extortion, and other crimes perpetrated by criminal gangs, trafficking networks, and other organized criminal organizations; and 5) Combating sexual, gender-based, and domestic violence.

Bilateral Economic Relations

The United States and Panama signed a bilateral investment treaty and a Trade Promotion Agreement.  The trade agreement significantly reduces or eliminates tariffs and other barriers to U. S.  exports, promotes economic growth, sets high standards for the treatment of investments, provides a framework for resolution of investment or trade disputes, and expands trade between the two countries.  U. S.  exports to Panama include oil, machinery, aircraft, agricultural products and consumer goods, and account for 25% of all goods and services imported by Panama and 60% of all food imports.  U. S.  imports from Panama include seafood, tropical fruits, cane sugar, coffee, and precious metals.

In addition to bilateral trade, Panama facilitates trade as a transshipment hub for all Western Hemisphere economies, including the United States, which creates an important service-based economy in the country.  The expansion of the Panama Canal in 2016, which permits larger “New Panamax” ships to transit, has provided substantial benefits to Panama and many U. S.  East Coast ports.   The United States is the number-one user of the Canal, with 72 percent of all transits heading to or from U. S.  ports.  In 2022, trade in goods between the United States and Panama totaled $12.5 billion dollars.  The United States provides more foreign direct investment in Panama than any other country, with a total direct investment position of $3.8 billion in 2022.  The energy and infrastructure, finance and insurance, and wholesale trade sectors lead U. S.  direct investment in Panama, while the real estate and wholesale trade sectors lead Panamanian direct investment in the United States.

Panama’s Membership in International Organizations

Panama and the United States belong to many of the same international organizations, including the United Nations, Organization of American States, International Monetary Fund, World Bank, International Civil Aviation Organization, International Maritime Organization, and World Trade Organization.

As of January 2023, Panama is the President Pro Tempore of both the Regional Conference on Migration (RCM) and the Comprehensive Regional Protection and Solutions Framework (or MIRPS from the Spanish abbreviation).  The Regional Conference on Migration is an eleven-member consultative mechanism committed to addressing issues of international migration in a multilateral context that respects orderly movements and human rights.   The Comprehensive Regional Protection and Solutions Framework is a seven-country body focused on promoting a coordinated regional response to forced displacement, including humanitarian, development, public, and private sector initiatives.  Both groups provide spaces for respectful, frank, and honest discussions among member countries on regional and international migration, ensuring greater coordination, transparency, and cooperation.

Panama is a founding member of the Alliance for the Development in Democracy (ADD) and the Americas Partnership for Economic Prosperity (APEP).   It also serves as President Pro Tempore of the Eastern Tropical Pacific Marine Corridor (CMAR) and Co-Chair of the Economic and Health Dialogue of the Americas (EHA).

Bilateral Representation Principal U. S.  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:

CIA World Factbook Panama Page 
U.S.  Embassy
USAID Panama Page 
History of U.S.  Relations With Panama
Office of the U.S.  Trade Representative Countries Page
U.S.  Census Bureau Foreign Trade Statistics 
Export.gov International Trade Administration
Library of Congress Country Studies 
Travel Information

U.S. Department of State

The Lessons of 1989: Freedom and Our Future