Panama seeks to renew its maritime agreement with China while negotiations continue despite growing tensions linked to the pressure of the United States around the Panama Canal.
The president of Panama, José Raúl Mulino, stated on Thursday, 28/5, that he is confident the country can renew the maritime transport agreement with China despite the growing geopolitical pressure linked to the efforts of the US president, Donald Trump, to strengthen the influence of Washington in the Panama Canal.
The agreement, which was originally established after the conclusion of diplomatic relations between Panama and China in 2017, provides preferential port fees and simplified administrative procedures for vessels flying the Panamanian flag in Chinese ports.
The agreement is due to expire later in the year.
Panama seeks its extension even though it has expressed concerns that its vessels now face stricter inspections in China.
The issue followed the cancellation by Panama of the concession to a company based in Hong Kong for the management of two ports along the Panama Canal.
The company Panama Ports Company is a subsidiary of Hutchison based in Hong Kong, which previously managed basic terminals in the zone of the canal.
The decision led to diplomatic and trade tensions between Panama and China, complicating the ongoing negotiations for maritime access and the operation of the ports.
High level talks in New York
The efforts to resolve the dispute advanced this week after the meeting of the Chinese Minister of Foreign Affairs, Wang Yi, with the Minister of Foreign Affairs of Panama, Javier Martínez-Acha, in New York.
Mulino characterized the meeting without a doubt a decisive step, adding that he remains optimistic about achieving a mutually beneficial agreement based on respectful dialogue.
Martínez-Acha also stated that the Chinese side expressed optimism that the two countries can reach a beneficial negotiation for both sides through mutual respect.
US pressure for influence in the Panama Canal
The diplomatic tensions are further complicated by the broader geopolitical rivalry involving the United States.
The US president, Donald Trump, seeks greater influence in the Panama Canal, promoting claims about Chinese involvement in the strategically important maritime route.
However, the Panama Canal is operated by an autonomous Panamanian authority and is not directly controlled by the government despite its great strategic importance as a basic interoceanic shipping artery.
China has reportedly tightened inspections on vessels of Panama after the dispute over the concession of the ports, burdening further the already sensitive maritime relations.
China warns Panama of a heavy price
In February, China addressed a stern warning to Panama, threatening a heavy price after the decision of the Supreme Court which cancelled the contract of CK Hutchison based in Hong Kong for the management of two ports in the Panama Canal.
The Hong Kong and Macau Affairs Office characterized the decision unreasonable, shameful and pitiful, and pledged to defend the rights of Chinese companies.
The authorities of Panama have not yet officially commented on the decision.
The judicial decision, issued last week, cancelled a basic contract held since the 1990s by the Panama Ports Company, a subsidiary of CK Hutchison, which manages container terminals both at the Pacific and the Atlantic entrance of the canal.
The decision cited violations of the constitution and public interest issues.
It is widely considered as a gain for Washington amid the escalating confrontation over global maritime infrastructure and trade routes.
The geopolitical importance and the upcoming battle
The Panama Canal constitutes one of the most important maritime arteries of the world, as approximately 5% of global maritime trade passes through it each year.
The canal connects the Atlantic with the Pacific Ocean and has critical importance for trade flows between Asia, America, and Europe.
China constitutes the second largest user of the canal after the United States, a fact which explains the increased strategic interest of Beijing in the port and maritime infrastructure of the region.
Hutchison Ports, a subsidiary of the group CK Hutchison of the billionaire Li Ka-shing, operates for decades in dozens of large ports worldwide and is considered one of the most important port management companies internationally.
The tensions around the Panama Canal are part of the broader context of the US and China competition for the control of critical trade corridors, ports, and global supply chains.
In recent years, Washington has repeatedly expressed concerns about the growing Chinese presence in ports of Latin America, Africa, and the Mediterranean, considering that the economic influence of Beijing can be transformed into a geopolitical and strategic advantage.
For its part, China argues that its investments concern exclusively commercial and economic cooperation and accuses the United States that they attempt to limit the Chinese international presence through political pressures and economic interventions.
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