Panama and U.S. Relations have Settled Down in order to Create a Security Declaration

The Trump administration has been seeking to offset Panama Canal fees against US Department of Defense spending in Panama. US Secretary of Defense Pete Hegseth pictured below, said he signed “a couple of historic deals” at the Panama Canal last week during a visit to Panama.  Hegseth pitched the agreements as the US taking back control of the canal from “Chinese interests”, although recognizing that the Panama Canal is owned and operated by the Panamanian government.

The Panama Canal Authority (ACP) said it had signed a joint declaration on security matters that “reaffirms respect for, and the recognition of, Panamanian sovereignty over the interoceanic waterway, as well as compliance with the Neutrality Treaty and the legal framework governing its operation.”  ACP said the declaration also states that efforts will be made to develop a mechanism to allow compensation for services provided to warships and auxiliary vessels, “seeking a cost-neutral basis”. The mechanism will be evaluated jointly with the Ministry of Security of Panama and will consider as part of its compensation definition the existing co-operation with the US Department of Defense on in areas including engineering, security, and cyber-security.

Speaking with US President Donald Trump, Hegseth said the deal established a framework for US vessels “first and free” through the Panama Canal.  Earlier this year, ACP refuted claims made by the US State Department that it had secured free passage for US government vessels and Panama’s president José Raúl Mulino accused the US of spreading lies and falsehoods. US Secretary of State Marco Rubio later walked back the comments.  At the time, ACP said the US had paid a total of $25.4m over the last 26 years for warship transits.

Panama’s Minister of Canal Affairs has stated his country cannot legally exonerate ships from canal fees, but that the proposed mechanism would compensate the tolls with services Panama receives from the US.  US attention has been focused on the transoceanic waterway since President Trump said in January that he planned to “take back” the Panama Canal, over a perceived loss of control to China. Hegseth said the proposed mechanism and an agreement to revive US bases along the canal for training and other purposes was made in order to counter “China’s maligned influence” in Panama. 

“The remarks from the US officials are filled with ideological bias and cold war mentality – they represent outright lies and fallacies,” said China’s Foreign Ministry spokesman Lin Jian.