There have been sometimes deadly protests in Panama over a government decision to allow the sale of valuable state-owned land.
Residents in the city of Colon fear that they will lose out if the land, which forms an enormous duty-free zone, is offloaded.
Violence broke out just hours after the National Assembly approved the new law.
Professor Carlos Baltasar, a protester and member of the local Frente Amplio Colonense organisation said: “We will continue with this peaceful event. Our organization does not want violence. We want the law to be repealed. The law has been approved irresponsibly.”
The free-trade zone is home to 2,000 companies that employ 30,000 people from Colon, a city that already has one of the highest rates of poverty and crime in the country.
The government argues that selling the land will bring in more money than the current 25-million euros a year in rent.
At least one person, a nine year old boy, died in clashes earlier in the week. Local media reported as many as three people had died.