Former President Varela Responds to Mulino: The Establishment of Relations with China ‘Was Done with Transparency’

Former President of the Republic, Juan Carlos Varela (2014-2019), reaffirmed Thursday, January 30, his position on the establishment of diplomatic relations with China, describing it as “one of the most important steps” in the country’s foreign policy.  According to his statements, this decision was taken with transparency and dignity, in line with the principles of the United Nations system and with the support of more than 182 countries.  He also said that the strengthening of the relationship with China did not affect the strategic, commercial and security relationship with the United States, highlighting that during his administration the largest US investment in Panama was made through the company AES, with an amount exceeding 2,000 million dollars. 

The former president emphasized that the diplomatic decision did not compromise the country’s neutrality or the operation of the Panama Canal. He also clarified that it had no relation to port concessions or Canal tolls.  In his statement, via video, he called on the authorities of Panama and the United States to seek agreements through diplomatic channels that allow progress in the strategic relationship with Washington, guaranteeing peaceful coexistence and the benefit of the peoples of the region.  “I take political responsibility for having established diplomatic relations with the second largest economy in the world,” he said.  Varela reiterated his willingness to answer any questions about the decision to establish diplomatic relations with China and defended his actions as an act of transparency, conviction and commitment to the country’s interests. 

At his weekly press conference, President José Raúl Mulino blamed Varela for questioning US President Donald Trump regarding alleged Chinese influence over the Panama Canal.  According to the president, Varela “is indirectly responsible.” This is because, according to Mulino, the former president made “a shady negotiation” when establishing diplomatic ties with China.  “Millions of dollars, among other things. But nobody asks him anything. He can’t leave the country, so he must be wandering around. He has to tell the story. Varela has to tell the story,” he added.  It would appear that Varela’s story has been told…..

US Envoy Calls China’s Presence around Panama Canal a Security Concern

WASHINGTON, January 31 – China’s presence around the Panama Canal is a national security concern that Panama’s government has to deal with, Mauricio Claver-Carone (pictured above), the U.S. special envoy for Latin America, said on Friday, ahead of U.S. top diplomat Marco Rubio’s visit to the country.  Rubio will depart on Saturday on his first foreign trip, with a scheduled visit to the canal and a meeting with Panamanian President Jose Raul Mulino, the first talks between the countries since President Donald Trump’s threat to take control of the U.S. built canal. 

Rubio will also visit El Salvador, Costa Rica, Guatemala and the Dominican Republic, where the Trump administration’s efforts to repatriate migrants from the region and stem migration into the U.S. will be on the agenda, Claver-Carone said in a briefing call with reporters.  Claver-Carone said it was not Mulino’s fault that China’s presence around the canal “got completely out of hand” under previous Panamanian governments, but added that the Panamanian president now “has to deal with it.”  “This increasingly creeping presence of Chinese companies and actors throughout the Canal Zone, in everything from ports and logistics to telecommunications infrastructure and otherwise, which is very concerning, not only frankly to the national security of the United States, but frankly to the national security of Panama and to the entire Western Hemisphere,” he said. “So that will be an issue of discussion.” 

Hong Kong-based CK Hutchison Holdings has for more than two decades operated the ports at the canal’s entrances. The company is publicly listed and not financially tied to the Chinese government, though Hong Kong firms are subject to government oversight.  China’s economic influence has been growing in Latin America, fueling worries in Washington that the resource-rich region will tilt to Chinese interests rather than those of the U.S.  Panama has vehemently denied ceding operation of the canal to China, but Rubio said on Thursday he had “zero doubt” that Beijing had a contingency to be able to block the canal in the event of a conflict.  Mulino says he won’t discuss control of the canal with Rubio.

Panama is awaiting the results of an audit into CK Hutchinson’s payments to the state, which analysts say could provide Panama with a pretext to alter its concession with the company.  Despite the awkwardness in relations with Panama, one of the closest U.S. partners in Latin America, R. Evan Ellis, a professor at the U.S. Army War College, said he thought the two sides were likely to search for a quick resolution.  “I think it could actually go down relatively quickly,” Ellis said. “At the end of the day, President Trump is probably looking for a deal where he can declare victory. The Panamanians are looking for what they can give up in the context of not violating their own management of the canal.”