PANAMA CITY, Feb. 13 (Xinhua) -- Panama and Guatemala inked a free trade agreement (FTA) Wednesday to boost bilateral trade after nine rounds of negotiations.

    The pact, which still requires the ratification of the two countries' legislatures, will help Panama expand its trade not only with Guatemala but with the whole of Central America, said Panama's Commerce and Industry Minister Alejandro Ferrer.

    Guatemala is Panama's second biggest trade partner in Central America, and their bilateral trade volume reached 120 million U.S. dollars in 2007, up 15 percent from the 2006 figure.

    After the accord comes into effect, 93 percent of Panama's exports to Guatemala and 80 percent in the reverse direction will be tariff-free, according to a communique released by Panama's Ministry of Commerce and Industry.

    Panama has to date signed FTAs with all the other four Central American countries, namely El Salvador, Honduras, Nicaragua and Costa Rica, besides Singapore, China's Taiwan, Chile and the United States.