Panama - Foreign policy

The main challenge for the Moscoso government is to oversee a peaceful and trouble-free management of the canal. Many experts predict that Panama will run into difficulties trying to operate the canal and meet the 2020 deadline for its expansion to meet the anticipated increase in traffic. If Panama fails to successfully manage the operations of the canal, the United States will be ready to step in, but national pride and the international reputation of the country will suffer tremendously. Moscoso has taken steps to establish herself as a national leader, one who unifies opposing political interests in a country that is geographically positioned to play a key role in the world economy in the 21st century. Many analysts have noted that Panama would probably not exist today as a country had it not been for the canal. Moscoso has attempted to establish that Panama is a country capable of operating one of the greatest engineering works of the 20th century and expanding its role to satisfy the demands of an ever more trade-interdependent world.

Beginning in March 2001, Panama served as host for the 2001–03 Free Trade Area of the Americas negotiations. At the same time, Panama was negotiating free trade areas with Costa Rica and Mexico, among others. In 2003, Panama and Puerto Rico signed an agreement aimed at strengthening economic and cultural ties.

Panama continues to fight against illegal narcotics. In 2000, Panama passed a number of significant reforms aimed at strengthening its cooperation against money laundering and other international financial crimes, although these remain problems still facing the country.

In early 2003, Panama and Colombia agreed to work out a system of sharing strategic information about each country's national security. This step marked a change in Panama's foreign policy, which previously had been one of neutrality in Colombia's civil war. With rising crime and terrorist activity carried out by the Revolutionary Armed Forces of Colombia (FARC), however, Moscoso officially took the side of Colombia in its civil war. On 11 February 2003, the presidents of Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Argentina's foreign minister, in addition to Moscoso, met to sign the Panama Declaration, pledging to apply existing international norms in Colombia's conflict. In March 2003, officials from the United States, Brazil, Panama, and the Andean nations met in Colombia to attempt to work out a regional strategy against the FARC.

Panama is a member of the United Nations (UN) General Assembly and most major UN agencies; the country has served three terms as a member of the UN Security Council. It maintains membership in several international financial institutions, including the World Bank, the Inter-American Development Bank, and the International Monetary Fund. Panama is also a member of the Organization of American States (OAS) and was a founding member of the Rio Group. Panama joined with six Central American neighbors at the 1994 Summit of the Americas in signing the Alliance for Sustainable Development known as the Conjunta Centroamerica-USA (or CONCAUSA), to promote sustainable economic development in the region.