Panama Consolidates Its Role as a Mercosur Associated State, Opening New Trade Opportunities

By De Puy & Asociados

Panama continues to deepen its economic ties with South America after becoming an associated state of the Mercosur in December 2024.

The agreement was formalized during the 65th Mercosur Summit held in Montevideo, where Panamanian President José Raúl Mulino signed the accession documents alongside the leaders of the bloc’s member countries. The move made Panama the first Central American nation to obtain associated-state status in Mercosur.

Mercosur’s full members are Argentina, Brazil, Paraguay, Uruguay and Bolivia. Associated states include Chile, Peru, Colombia, Ecuador, Guyana and Suriname. With Panama’s incorporation, the bloc expanded its links with Central America and strengthened its regional integration strategy.

Since joining the scheme, Panamanian authorities have emphasized the potential benefits of closer economic cooperation with Mercosur, particularly in logistics, trade facilitation, transportation and financial services. The country’s role as a major regional logistics hub—anchored by the Panama Canal—positions it as a strategic bridge between Central and South America.

As an associated state, Panama does not participate in Mercosur’s common external tariff but gains access to preferential trade arrangements and cooperation mechanisms with the bloc. The status is also expected to encourage greater investment flows and commercial exchanges between Panama and South American markets.

The move reflects Mercosur’s broader effort in recent years to expand partnerships beyond its core membership, strengthening economic integration across Latin America and creating new opportunities for regional trade.