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PANAMA CITY (Reuters) - Canada signed a free trade deal with Panama Tuesday and said it wanted to conclude more such agreements, given that talks to open up the global trading system were going nowhere.
Canadian Minister Stephen Harper signed the agreement with Panamanian President Ricardo Martinelli during an official visit to the Latin American country. Harper said the Panama deal was Canada's eighth such agreement since he took office in early 2006.
Last year, talks on the Doha round of trade liberalization at the World Trade Organization collapsed.
"We've all recognized for some time that the future of the Doha round is uncertain -- we've been operating on that assumption almost from the beginning," Harper said.
"We want to make sure, while world trade talks are stalled, that Canada is not falling behind. We are very determined ... to promote trade liberalization and this is an example of us doing it," he told a news conference.
Trade between Canada and Panama was only C$149 million ($135 million) in 2008. The deal will eliminate tariffs on most agriculture goods and machinery exported to Panama.
Martinelli said the agreement will help Panama's agricultural sector. Panama has also agreed to lift a ban on Canadian beef.
"I agree a number of these agreements are small but if you add them up they become larger and larger," said Harper.
Canada's main trading partner by far is the United States, but bilateral trade flows have been hit hard by the global financial crisis and recession. The two countries are currently involved in a spat over "buy American" provisions in the U.S. stimulus package that Canadian firms say are unfairly shutting then out.
"As much as I try and encourage the United States and our other allies to remain committed to open markets and oppose protectionism, we see some slowing down of the trade initiatives from that country," said Harper.
Martinelli, a pro-market multimillionaire, took office on July 1 to buck a trend of Latin America's swing to leftist, leaders in recent years.
"For the people of Panama, this free trade agreement is an alliance with one of the biggest and most stable economies in the world," he said.
Canada signed a trade deal with Colombia last year but the opposition-controlled House of Commons has delayed ratification over humans rights and labor concerns.
In May, Canada and the European Union signed a deal to open talks on a comprehensive trade agreement.
Writing by David Ljunggren; editing by Rob Wilson