Panama’s President José Raúl Mulino issued a statement last Thursday calling for calmer relations with China amidst rising tensions over the increase in holding and inspection of ships carrying the Panamanian flag (Reuters). This comes a week after United States Secretary of State Marco Rubio accused China of “bullying… Panama-flagged ships,” and only a day after inflammatory remarks from Panama’s Foreign Minister Javier Martínez-Acha (Associated Press). At a conference in Paraguay, Martínez-Acha called for China to respect Panama’s sovereignty, as Panama does for the rest of the world.
The rise in tensions between Panama and China comes after a decision from the Panamanian Supreme Court to invalidate Hong Kong based conglomerate C.K. Hutchinson’s right to operation at two canal terminals. China responded to this ruling by calling it an “act of bad faith” (Reuters). In response to the cancellation of C.K. Hutchinson’s concessions in the canal, China has begun detaining and searching Panamanian ships for extended periods of time, something Martínez-Acha called a “tit-for-tat” response. American public figures, most notably Secretary Rubio, have stated that they are closely monitoring China’s actions towards Panamanian ships. A spokesperson from the Chinese embassy claimed that the American focus on the conflict constitutes evidence of the U.S. government’s attempt to control the canal, an interest that U.S. President Donald Trump has expressed throughout his second term.
This conflict both comes at a time and is an expression of American and Chinese competition over the Panama Canal, a globally important shipping passage that handles 5% of all international trade. The involvement and comments from the U.S. Secretary of State shows that this spat is bigger than just Chinese-Panamanian trade relations and has the potential to expand into a much larger, more inflammatory conflict.
President Mulino’s statement sends a strong message: there is no need for soured relations between Panama and China. It shows that international trade can be a motivator for international crises as well as a tool for creating peace. Panama’s president has chosen to extend a hand to China in an attempt to mitigate strife and open the door to a more level-headed approach. Mulino’s emphasis on de-escalation and normalization of relations is a sign of a shift away from global power proxy conflicts in Central America and towards using diplomatic powers to create peaceful solutions to potentially provocative situations.
