Panama President: Country Maintains Ties With China Amid Port Dispute

Panama finds itself navigating a complex geopolitical tightrope, caught between the United States and China over port concessions crucial to the Panama Canal's strategic importance. President Jose Raul Mulino asserted that Panama's relationship with China remains positive, even as the nation defends its decision to take over port contracts previously managed by Hong Kong's CK Hutchison.

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We are, in a way, being carried along like a tide by the outcome of a problem between two major powers, the United States and China.

The dispute centers on concessions at ports vital to the Panama Canal, a waterway that handles 5% of global maritime trade. A recent Panama Supreme Court decision stripped CK Hutchison's local unit, Panama Ports Company, of concessions it held for nearly three decades. This move is widely interpreted as a result of U.S. pressure aimed at curbing Chinese influence over the strategic canal. Panama subsequently granted temporary operations to Maersk's APM Terminals and MSC's TIL Panama.

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We did not expropriate the ports, we took over the ports because they were left without a contract.

President Mulino clarified that Panama did not expropriate the ports but rather took them over because the contracts were no longer valid. He emphasized his lack of desire to escalate the issue with China, noting that a "high-level" message from Beijing acknowledged the dispute would be subject to international arbitration, signaling a less confrontational approach from China's ambassador in Panama.

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I have no interest in escalating this problem with China.

However, Mulino also voiced concern over a noticeable surge in detentions and inspections of Panama-flagged ships in Chinese waters. He views this as a potential tactic to exert pressure on Panama, stating, "We are, in a way, being carried along like a tide by the outcome of a problem between two major powers, the United States and China." He stressed that he does not want the situation to escalate due to geopolitical conflict, nor does he want Panamanian-flagged vessels to be used as leverage, deeming such actions unfair. The U.S. and its allies have publicly supported Panama's sovereignty in response to China's actions, a statement China has labeled as misleading and a politicization of the port issue. From our perspective at The Straits Times, Panama's skillful diplomacy will be tested as it seeks to balance its economic ties with China against U.S. security interests, all while safeguarding its own sovereignty and the unimpeded flow of trade through its vital canal.

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I do not want this to escalate due to a geopolitical conflict, and for our Panamanian-flagged vessels to be used to try to apply pressure.