U.S. presses on Panama, Colombia deals

By Doug Palmer

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.