PANAMA CITY: Tensions surrounding the Panama Canal have escalated as the United States and Panama recently formalised a military agreement. This deal marks a significant development as US Defence Secretary Pete Hegseth seeks to counteract perceived Chinese influence over the strategic waterway.
US Concerns Over Canal Operations
During a visit on 8 April 2024, Hegseth made it clear that the US will not permit any country—including China—to threaten the canal’s operations. He emphasised the importance of the canal, which sees about 5% of global shipping traffic.
- The Panama Canal was constructed by the US and handed over to Panama in 1999.
- China’s presence in the canal area is viewed by US officials as a potential security risk.
Military Agreement Details
The memorandum signed by Hegseth and Panama’s security chief Frank Abrego allows US troops to deploy at Panama-controlled facilities for various purposes, though it stops short of establishing permanent bases. This concession seems to respect Panamanian sovereignty, despite the historical context of US involvement in the region.
The Impact of Chinese Interests
Hegseth pointed out that the control of critical infrastructure by a Hong Kong company, Panama Ports, raises concerns about espionage and security for both Panama and the US. In response to US pressure, Panama has been investigating the operations of Panama Ports, alleging breaches in their contract.
- Panama Ports is operated by CK Hutchison, which is reportedly selling its port operations to a consortium led by BlackRock for US$19 billion.
- This move has triggered significant backlash from Beijing, which has announced an antitrust review of the sale.
Broader Implications
Trump’s administration has increasingly viewed the situation surrounding the canal through a geopolitical lens, suggesting that its operation must remain free from Chinese influence. This situation remains delicate, as the area is tied to both cultural history and ongoing economic interests of Panama and the US.
As both nations navigate this complex relationship, it will be interesting to see whether peace remains amidst the looming presence of a global superpower.