US and China remain at loggerheads over the commerical power of Canal.


This is not the first time that Daniel Runde, a senior executive at the Center for International Strategic Studies, has written about the Panama Canal. He did it in 2011 when he analyzed the impact of the road expansion. In 2017 he described the exchange of messages between President Donald Trump and Panamanian Juan Carlos Varela, when the former was proud of the authorship of the road’s construction, its relevance today and his leading role in trade logistics. world. Fox News recently interviewed Runde and the report generated headlines in local media.

On this occasion, it highlights the way in which the United States fits China in the context of contemporary geopolitics, its commercial power in Panama, especially on the banks of the Canal. For the Pentagon, Chinese influence in the Panama Canal is seen as an “urgent matter of national security.”

The urgent issue is framed in the commercial penetration of China in the isthmus as of 2017, when the Varela government began diplomatic relations with China and cut with Taiwan. For the Americans, the fact that Panama never told them that it intended to open its doors to its biggest commercial competitor was perceived as a betrayal by a historical partner. For China, it was the opening of hundreds of millions of dollars in infrastructure works contracts awarded to Chinese companies on the banks of the Canal, in addition to the signing of twenty agreements in different fields (2018) with the historic visit to Panama between the president of the Asian giant, Xi Jinping and Varela.

The Fox News note is published when relations between China and the United States, in addition to being commercially confronted, become more critical as a result of the visit to Taiwan (August 2) of the president of the House of Representatives, Nancy Pelosi, with the desire to honor the unwavering commitment that unites the United States with the island’s democracy. A gesture that China condemned and warned that it will adopt the necessary measures to safeguard the sovereignty of the island, which it considers part of its territory, which it defends under the principle of one China.

The dispute between China and the US over commercial power in Panama and the Canal
Daniel Runde, Senior Vice President CSIS

Fox News also highlighted the statements of the commander of the Southern Command, Laura J. Richardson, who criticized that the operation of the ports in the Atlantic and Pacific are under the control of Hutchinson Ports, as has in fact been the case since the 1990s. the situation did not seem threatening because Hong Kong, where the company originated, was part of the British colonies and they did not consider it an intimidating issue for their interests. But after China declared its autonomy over Hong Kong in 2020, “having two main ports managed by a holding company based in Hong Kong is a greater security concern today than it was two decades ago,” analyzes the executive of the Center for Studies.

“They look like civilian companies, but they can be used for a dual purpose, that is, military,” Fox News reproduced the commander’s words. In June, the head of the Southern Command visited Panama and spoke with President Laurentino Cortizo and the Minister of Security, Juan Manuel Pino.

A spokesperson for the Foreign Ministry told La Estrella de Panamá that they have been reviewing the entire situation generated by a statement attributed to a US official. “In our analysis work, so far we have not found an official statement, either from the United States or China, that warrants a statement from Panama,” he told this newspaper. Overall, he added, “we were delighted to meet and serve you recently, we will continue to monitor the situation.”

The foregoing in response to whether the concern of the commander of the Southern Command had been expressed in front of Cortizo or a member of the Cabinet, or if there are indications that in the ports in question there is some change in the infrastructure to the military.

Suddenly, “now they allude to something well known in order to draw attention to a broader reality, since it is a reality throughout Latin America” ​​the influence of China that expands the silk route on the continent, told this newspaper the professor of international relations at the University of Panama Euclides Tapia.

Runde invited the United States to pay more attention to China’s influence over Panama: “We had a conflict with Taiwan that has escalated and if there is an area in which China would be interested in creating conflict, it would be the Panama Canal,” he told the news. American.

The statements made by Runde to Republican Fox News echo one of his articles published in May 2021, in which he answers key questions about the future of the interoceanic highway after its expansion and the trade threat posed by China. for the United States for its growing presence in and around the Canal.

According to Runde, “due to the growth of the Canal activities of the state-owned China Overseas Shipping (Cosco), as well as investment groups and construction companies allied with China, Hutchinson Ports PPC could be vulnerable to the influence of other China-based companies in the coming years.

A situation that has been accentuated since 2017 “opening the door even further to the expansion of China’s footprint in the critical infrastructure of the Canal and laying the foundations for alignment with the Belt and Road Initiative,” Runde analyzes in the aforementioned article. entitled ‘Key Decision Point for the Panama Canal’.

In the same letter, he alludes to the Neutrality Treaty signed between the United States and Panama, justifying any action in the event of a threat: “The United States reserves the right to exercise military force in defense of the Panama Canal against any threat to its neutrality.” . And it went further: “Any interpreted Chinese threat to the neutrality of the Canal could activate US forces through this treaty, which means that current and future Chinese interventions must be calculated taking into account this possible response.”

route and strip

Chinese companies have penetrated the commercial infrastructure sector of the isthmus. In 2018, Panama was the first Latin American country to endorse the Chinese Belt and Road initiative; In that year, the China Harbor Engineering Company and China Communications Construction Company consortium won a $1.4 billion contract to build the fourth bridge over the Canal; the Colon Free Zone feeds mainly on Chinese products. Construction Americas completed the Amador convention center along the Pacific side of the Canal, a project contracted by the Varela government and financed with Chinese loans. China has also invested in energy-related facilities along the Canal.

All these projects are mentioned by Runde as part of the Chinese commercial dominance in Panama, as well as the renewal (January 2022) of the concession to Hutchinson Ports PPC for 20 more extendable years. A fact that for the vice president of the Center for Strategic Studies, “could shape the geopolitical actors of the Channel in the coming years.”

Despite the commercial importance of the Asian in Panama, China has not yet managed to establish land for its embassy. Varela had located a lot on the banks of the Canal, in Amador, the reverted areas that were once occupied by the Americans before the reversion of the Canal to Panamanian hands, but “internal pressure from the United States put an end to China’s plans to build a great embassy at the mouth of the Canal,” Runde described in the article. It has not only been that project that has been frustrated, he adds, numerous others have been canceled or reduced during the administration of Laurentino Cortizo, which he interprets as a “desire to maintain open relations with the Americans” and an “opportunity for The United States takes the lead in the geopolitical competition surrounding the Panama Canal.”

To regain ground advanced by its competitors, Runde predicts that the United States will need to devise a unique approach to bolster its presence in Panama and particularly around the Canal. It proposes working with the Panama Canal Authority to counteract corruption in the award of public contracts related to Canal infrastructure projects, support Panama in security issues against drug trafficking, “with the additional benefit of rivaling China without only in the Canal, but in the region in general”, settles the also director of the project on Prosperity and Development.

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