A consortium led by U.S.-based investment company BlackRock agreed last week to buy two major ports on the Panama Canal from their Hong Kong-based owner, CK Hutchison. The companies reached the $22.8 billion deal after U.S. President Donald Trump expressed concerns over Chinese involvement in the area and threatened to seize the canal. To what extent does the sale address the Trump administration’s concerns regarding Chinese involvement in the Panama Canal? How do the developments related to the canal affect U.S.-Panamanian relations and the two governments’ cooperation on issues such as migration and trade?
Henry Ziemer, associate fellow at the Center for Strategic and International Studies: “The BlackRock-Hutchison deal goes a long way toward mitigating concerns that ports along the Panama Canal could be employed against the United States in a conflict with China. What remains to be determined is whether the deal will involve steps to remove or mitigate the associated physical and digital infrastructure that could still provide Beijing with a back door to monitor activity within former Hutchison ports. Security cameras, gantry cranes and inventory management programs could all still present cybersecurity risks, allowing China to collect intelligence on the movement of people and goods through the canal. Accordingly, merely handing the keys over to new owners is a necessary first step, but no substitute for more robust U.S.-Panama cooperation. There is reason for optimism— Panama has made clear its desire to be a closer partner of the United States, particularly to help spur investment and address the migration crisis through the Darién Gap. The U.S. Southern Command already has a strong track record working with Panama to bolster its cyber defenses and counter illegal fishing. Other areas could include helping Panama rip and replace its Huawei-built telecommunications infrastructure, as well as critical mineral security. But lingering concerns, including over the free passage of U.S. government vessels through the canal—something Secretary of State Marco Rubio announced but later walked back following objections from Panama City—could threaten to reignite tensions. Whether more overarching U.S.-Panama cooperation materializes will be one of the first true tests for Secretary Rubio’s ‘Americas First’ foreign policy.”
Michelle Watts, associate dean of the School of Security and Global Studies at the American Public University System: “U.S. President Donald Trump claims that the port purchase by a U.S. company marks the beginning of the United States retaking the canal. Portraying the sale as a U.S. victory is grating to the Panamanian government, which still must review and approve the sale. Panamanian President José Raúl Mulino sees Trump’s rhetoric as undermining Panama’s sovereignty; it implies that the canal is changing hands from the Chinese to the United States, when Panama has run the canal efficiently since the turnover in 1999. Both the Panama Ports Company representative and President Mulino deny the sale is due to U.S. pressure, pointing out that the transaction is between two private companies. However, there are indications that Panama is willing to make concessions to the United States. In the face of U.S. criticism of supposed Chinese control of the canal, the Panamanian government undertook an audit of the Panama Ports Company. Two Panamanian lawyers have challenged the constitutionality of the Panama Ports Company’s 25-year lease extension. Moreover, Panama took a significant step away from China, withdrawing from China’s Belt and Road Initiative at the end of a week-long visit from U.S. Secretary of State Marco Rubio, when he urged changes to counteract Chinese influence in Panama. Panama is trying to achieve a difficult balance as it rejects Trump’s claims in no uncertain terms but quietly makes changes to keep Trump at bay. It appears that Mulino would be quite happy to turn the discussion back to issues of mutual interest, such as organized crime and drug trafficking.”
Orlando Pérez, professor of political science at the University of North Texas at Dallas: “The purchase by BlackRock of CK Hutchison’s port concessions at either end of the Panama Canal is a significant development in the saga initiated by U.S. President Donald Trump’s threats to ‘take back’ the waterway. One of Trump’s complaints has been that China controls the canal. Evidence suggests BlackRock reached out to the White House for support, and the administration encouraged the global investment firm to make a deal. For China, the transaction allows the country to diminish its exposure in Panama when pressure from the United States had led to increased scrutiny of CK Hutchison’s management of the ports and alleged influence over the canal. Panama had already initiated an audit by the comptroller’s office, which many assumed would find sufficient irregularities to warrant changes to the concession agreement. The BlackRock deal thus gives CK Hutchison $19 billion and lowers the risk for China. Trump touted the deal during his address to Congress on March 4, but he continued to spout lies and insist the United States would take back the canal. However, the BlackRock deal takes a significant talking point—that China controls the canal—off the table. For Panama, it is an opportunity to renegotiate the port concession to increase the payout and other benefits the country receives from the ports. The irony of this episode is that despite the rhetoric coming from Washington, Panama and the United States continue to cooperate on migration and security issues at an operational level. Panama’s willingness to serve as a conduit for processing third-party deportees from the U.S. reflects the extent to which Panamanian President José Raúl Mulino is ready to collaborate on the issue of immigration.”
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