Development: On 28 April Panama's President Ricardo Martinelli and US President Barack Obama met in Washington.

Significance: As expected, the US-Panama Free Trade Agreement (FTA) proved the focal point of the meeting which saw Obama declare a further pledge of support for the FTA. Inked by both countries in 2007, the FTA has been ratified by Panama but awaits approval by the US. The new Republican-dominated House of Representatives and implementation of a new tax information exchange agreement have provided fresh impetus to the deal. Obama also praised Martinelli's leadership and alluded to the importance of "showcase[ing]… commitments to democracy". This is an important endorsement for Martinelli given recent cracks in the bilateral relations resulting from ‘WikiLeaks'. These had exposed major US reservations about Martinelli's commitment to democracy and to tackling corruption .

Key points:

• The US gave Panama the green light with regard to the FTA on 19 April, following the entry into effect of a bilateral Tax Information Exchange Agreement (TIEA) the previous day. Signed by both countries in November 2010, the TIEA allows the US and Panama to request information on all types of national taxes in civil and criminal matters.

• The US is the most obvious beneficiary of the new FTA, given that almost all of Panama's exports have long entered the US duty-free under various trade preference programmes – for example, under the Caribbean Basin Initiative more than 99% of Panama's agricultural exports enter the US market duty-free.

• Under the FTA, over 87% of US consumer and industrial exports will immediately enter Panama duty-free, with the remaining tariffs to be phased out over a decade. In terms of agricultural products, nearly 56% of current trade will receive immediate duty-free treatment, with most of the remaining tariffs eliminated over 15 years. According to the US trade office, US industrial goods currently face an average tariff of 7% in Panama, with some as high as 81%. US agri-exports face an average tariff of 15%, though some reach 260%.

• Martinelli also used his trip to the US to flag up his alignment with Israel. He attended the annual gala of the American Jewish Committee (AJC), where he received the "Light Unto the Nations award", the highest award presented to "distinguished national leaders". Martinelli's endorsement of Israel bucks the Latin American trend, with most countries having recognized Palestine of late. It has proved controversial domestically, given Panama's traditionally neutral foreign policy.