By Elixsandro Ballesteros, Former Ambassador of Panama in Venezuela, professor at the Faculty of Economy, University of Panama
To understand the impact that President Donald Trump’s threats have on the Panamanian nation, one must recall the history of the Panama Canal in the existence of this country, and also explain the content of the Treaties that are part of international law, preventing doing what the Trumpist vision arbitrarily proposes: Reissuing Monroeism.
Recognizing the strategic, economic, and above all military importance of an interoceanic route, the United States took over the project initiated by the French in the 19th century and intervened in the separation of Panama from Colombia. This was a result of the expansion of American imperialism, which in reality invaded the Isthmus of Panama to consummate the separation. In 1903, after the separation of Panama from Colombia, the Hay-Bunau Varilla Treaty was signed, granting the United States perpetual control over the Canal Zone, a strip of land approximately 16 kilometers wide along the isthmus.
The American construction of the canal took place between 1904 and 1914, using mainly Caribbean labor and a minority of other nationalities such as Spanish and South American workers. It represented a monumental engineering endeavor. Through advances in technology and health sciences, such as the discovery of the yellow fever vector that decimated the mass of workers who attempted to build the failed French canal by Cuban scientist Carlos J. Finlay, which had a positive impact on the control of tropical diseases, the United States was able to complete the canal. It was officially inaugurated on 15 August 1914. The canal significantly reduced the time and distance of navigation between the Atlantic and Pacific oceans, transforming world trade and strengthening the geopolitical position of the United States as an emerging power. Besides, with the Canal, the United States established numerous military bases and a colonial legal regime.
For much of the 20th century, the Panama Canal was established as a vital artery for international trade, facilitating the transit of goods between Asia, America and Europe, and generating the emergence of other important activities for the circulation of goods and the financial capital of global capitalism. Militarily, the canal was also strategic for the United States, especially during the two World Wars and the Cold War, allowing the rapid movement of military vessels between the oceans and ensuring the national security interests of the northern power.
For Panama, however, the US appropriation of the Canal and the Canal Zone represented a source of conflict and the maturation of a nationalist consciousness. The presence of a “colonial zone” in the heart of the country and the exclusion of Panama from the full economic benefits generated by the canal fueled the rejection of the Canal Zone enclave, the demand for the withdrawal of troops from the Southern Command of the Department of Defense from the country, and the struggle to recover sovereignty over this strategic territory. In January 1964, the crisis in relations between the United States and Panama due to the colonial regime reached its peak. The incapacity of the ruling political class facilitated a viable solution through the leadership of General Omar Torrijos Herrera and the willingness of US President James Carter.
In this context, negotiations between Panama and the United States intensified during the 1970s. General Omar Torrijos Herrera played a crucial role in pushing for a new agreement that would recognize Panamanian sovereignty and return control of the canal to the country, following on from the achievement of the Tack Kissinger Declaration of February 1974. This agreement was also facilitated by the support given by the United Nations Security Council a year earlier, despite the United States veto. For his part, US President Jimmy Carter, committed to a foreign policy based on human rights and justice, saw in the negotiation of the treaty an opportunity to improve relations with Latin America and demonstrate the United States’ respect for the sovereignty of other nations.
On September 7, 1977, Torrijos and Carter signed two fundamental treaties:
- Panama Canal Treaty: Concluded on December 31, 1999, handing over to Panama the operation, administration and defense of the canal after a 23-year transition, which ensures the efficient operation and neutrality of the canal.
- Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal: Guaranteed the permanent neutrality of the canal, ensuring that it remained open and accessible to ships of all nations in times of peace and war, under Panamanian administration. The United States and Panama agreed to maintain and protect this neutrality, with the right of the United States to intervene to defend the canal if its neutrality was threatened.
The Torrijos-Carter Treaty transformed the relationship between Panama and the United States, moving from a colonial and asymmetric dynamic to one based on cooperation and respect. Despite obstacles placed in the way of the Treaty’s execution, Panama assumed ownership and operation of the canal, the full exercise of its sovereignty, and the dismantling of military bases. Panamanian leaders after General Omar Torrijos have strived to establish a relationship of strategic partners and allies with the northern power. Panama continued to play a key role in the military geostrategy of the United States. “Under the umbrella of the Pentagon,” the neocolonial relationship was built, transcending beyond the security, defense, and protection of the Panama Canal.
The US military invasion on December 20, 1989, was not due to the fact that the neutrality of the Panama Canal was under threat from a foreign power or because of the internal political situation in the country. The confrontation with its former ally, General Manuel Antonio Noriega, could have been resolved by the northern power through a surgical operation. However, the destruction of the Panamanian military forces as a result of the invasion violated the provisions of Article V of the “Neutrality Treaty”:
“After the termination of the Panama Canal Treaty, only the Republic of Panama will manage the Canal and maintain military forces, defense sites and military installations within its national territory.”
President-elect Donald Trump’s surprise attack on Panama is met with a similar situation in the governments of Canada and Denmark, weak allies. The core of his offensive in the case of Panama is the conflict with the People’s Republic of China.
President Donald Trump complains about high tolls and discrimination in these areas. His provocative speech is intended to intimidate the Panamanian government, has no basis and reveals a gross ignorance of the legal instruments signed by both nations.
The Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal not only aims to prevent the Canal from being attacked, but also to ensure free transit, which could be threatened in the event that a great power occupies the banks of the Canal. The Treaty Concerning the Permanent Neutrality of the Canal and the Operation of the Panama Canal establishes the criteria for tolls, which must be fair, reasonable, equitable and consistent with the principles of international law, as recognized in the Panamanian Political Constitution.
During the colonial period, the United States maintained a policy of low tolls, which subsidized the economy of that country. It should be noted that the Panama Canal is competitive with other routes, so its costs are calculated based on other commercial routes. Its estimate is based on the fact that the toll allows shipping companies to obtain profits compared to the costs of alternative routes. Therefore, the criteria applied to the tolls are strictly commercial and competitive, not arbitrary.
The international community recognizes Panama’s exceptional capacity in the administration of the Canal, as well as its firm commitment to respect the neutrality of this interoceanic route. Panama has fulfilled and continues to fulfill its responsibility in world trade and has made the necessary investments to respond to the needs posed by the expansion of ship traffic.
President Trump is resuming the Monroe Doctrine as a resource to counter the crisis of US hegemony. Panama will be subject to pressure and it is expected that it will be forced to negotiate, for which Trump, through the use of intimidation, will seek to subject it to his geopolitical vision, where China is the enemy to beat.