President of Panama, José Raul Mulino, met with U.S. Secretary of State Marco Rubio and made the announcement that Panama would withdraw from the world network program that was funded by China. Although this decision is a significant win for the Trump administration, more action is required to counteract China’s control over the Panama Canal.
In the early 20th century, the United States constructed the Panama Canal, which was afterwards redrawn as a result of a agreement signed by former US President Jimmy Carter in 1977. The Canal remains critical for U. S. financial and strategic objectives. The Panama Canal is” a major gateway between the Atlantic and Pacific Oceans and a provider of lower shipping costs for U.S. and global trade,” according to the Center for Strategic and International Studies ( CSIS ). Interestingly, more than 60 percent of the items that go through the Canal either originate in or are destined for U. S. areas, making equitable access necessary for U. S. national security and economic well-being.
Over the years, China has emerged as the second-largest users of the Panama Canal, regarding it as a vital entry level for exerting its economic, political, and social impact throughout Latin America. In Panama, over the past three decades, China’s economic endeavors have increased.
Since 1997, when Beijing took control of Hong Kong, Hutchison Ports, a subsidiary of Hong Kong-based CK Hutchison Holdings, has been operating the Balboa and Cristobal ports on the Panama Canal. In 2022, the Panamanian government extended Hutchison’s lease for these ports for an additional 25 years.
During Trump’s first term, China’s economic and political influence in Panama grew significantly. In 2016, Landbridge Group, a prominent Chinese firm, made headlines by acquiring control of Margarita Island, the largest port on the canal’s Atlantic side, for a staggering$ 900 million. In order to create a deep-water port specifically designed for mega-ships, Landbridge established a subsidiary called Panama Colon Container Port Inc. (PCCP), which works with China Communications Construction Company (CCCC ) and China Harbor Engineering Company ( CHEC ).
A year later, following Beijing’s intense campaign to politically isolate Taiwan, Panama abruptly terminated its long-standing diplomatic relationship with Taiwan. The Panamanian government claimed that Taiwan is a part of China and that this decision was made to support the” One China” policy. Shortly thereafter, Panama became the first country in Latin America to sign a cooperation agreement under China’s” One Belt and One Road” ( OBOR ) infrastructure initiative. OBR is more than just a Chinese-funded global infrastructure project; it is China’s strategic maneuvering to expand access to crucial global locations and resources while also establishing a robust export market.
China’s commitment to Panama is obvious, especially now that Xi Jinping, the head of the Communist Party, visited in 2018. Since that visit, China has increased significantly in and around the Panama Canal. A Chinese consortium was given a substantial$ 1.4 billion contract by the Panamanian government for the construction of a bridge over the Panama Canal. Additionally, the Amador Convention Center, which is strategically located near the Panama Canal Estuary that opens to the Pacific Ocean, was given a$ 93 million contract by the China State Construction Engineering Corporation ( CSCEC ). China’s Shanghai Gorgeous Group started construction of a natural gas-fired power plant at the Panama Canal’s Atlantic exit the same year.
Huawei, China’s telecom giant with Chinese military connections, has established a regional hub within the Panama Canal’s Colón Free Trade Zone and has installed its” Safe City Technology” (SCT) in the area. Face recognition cameras are included in this intrusive surveillance system, allowing China to follow activities in and around the Panama Canal.
Panama has received$ 2.5 billion in Chinese investments since 2005, making it the largest recipient of Chinese investment in Latin America as of 2022, according to a U.S. Congressional report. The United States needs to pay attention to China’s growing involvement in the Panama Canal in order to protect its vital interests in this crucial region.
Only Panama is permitted to operate the Canal and station military forces in accordance with the 1977 Neutrality Treaty, which guarantees” fair access for all nations and nondiscriminatory tolls.” Additionally, the agreement guarantees that the United States will always have access to the Panama Canal by using its military to defend it from threats to its neutrality.
The Panama Canal’s growing influence is a violation of the Neutrality Treaty, according to President Trump. In consequence, he has not abandoned the possibility of using force to regain control of the Panama Canal.
Secretary of State Marco Rubio’s choice to visit Panama as his first stop powerfully signals the Trump administration’s resolve to combat China’s growing influence in the Western Hemisphere. According to Rumbio, Rubio reportedly warned Panama’s president that” Abstant changes would necessitate the United States take the necessary measures to protect its rights under the treaty.”
Rubio’s warning had a significant impact. President Mulino of Panama made the announcement right away that his nation would not renew its 2017 commitment to participate in China’s infrastructure program. Further, Mulino made it known that his administration has begun audits of Hutchison, a Hong Kong-based business that runs two Panama Canal ports.
Mulino’s announcement marks a foreign policy victory for the Trump administration. After four years of Biden administration’s foreign policy failures, a win is refreshing. Mulino’s concession does not, however, address persistent concerns about Chinese companies ‘ extensive influence over the Panama Canal through various infrastructure projects. It probably explained why Trump said,” We’re taking it back, or something very powerful is going to happen, instead of doing a victory lap.”
What bold steps will he take to combat China’s influence and maintain neutrality of the Panama Canal will be interesting to watch.
