President-elect Donald Trump has expressed a strong interest in acquiring control of the Panama Canal, potentially by force if necessary.
“Look, the Panama Canal is vital to our country. It’s being operated by China. And we gave the Panama Canal to Panama; we didn’t give it to China. And they’ve abused it. They’ve abused that gift,” Trump said at a press conference from his Mar-a-Lago resort on Tuesday.
Trump added that the deal to give away the canal “should never have been made.”
“Giving the Panama Canal is why Jimmy Carter lost the election, in my opinion, more so maybe than the [Iranian] hostages,” he said.
The deal to give away the Panama Canal was made, no matter how foolish it might have been. Control was ceded to the government of Panama in the Torrijos-Carter Treaties of 1978 and the handover took effect in 1999.
As things stand, the Panama Canal is legally owned by the government of Panama, but that ownership is not entirely unconditional. The Carter-Torrijos Treaties contain “neutrality” guarantees that, if violated, could present a legal justification for challenging Panamanian ownership.
Otherwise, the government of Panama could voluntarily sell the canal back to the U.S. government. Unlike the complex situation at the turn of the 20th Century, there would be no doubt such a voluntary deal was legitimate and properly respected Panamanian sovereignty — assuming, of course, the Panamanians accepted whatever offer the United States made. It seems unlikely Panama could sell the canal to any other country, given the guarantees made to the U.S. in the Carter-Torrijos Treaties.
The history of the canal arguably goes back centuries to the first explorers who realized it would serve both strategic and commercial interests to have a waterway connecting the Caribbean with the Pacific Ocean. The narrow Isthmus of Panama seemed like a good place to do it. The eventual Panama Canal only needed to be about 51 miles long.
Panama was not the first attempt at building a “trans-isthmian” canal. The U.S. and Britain tried to work out a deal for a canal in Nicaragua in the 1850s, to no avail. France then tried building a canal in Panama in 1880, but they severely underestimated the difficulty of the project and the lethality of tropical diseases and gave up about 20,000 corpses later.
The United States was eager to build a canal, but the albatross of the failed project in Nicaragua was wrapped around its neck until 1901 when a new agreement between the U.S. and U.K. called the Hay-Pauncefote Treaty abrogated the 1850 treaty, clearing away the last legal obstacles to a new project. The last physical obstacle was eliminated in 1905, when the U.S. effectively wiped out yellow fever in the construction zone.
The U.S. Senate voted to take the plunge on another canal project in 1902, and within six months, a deal was offered — to Colombia, which controlled Panama at the time. Colombia’s foreign minister signed the treaty offered by the U.S., but the Colombian congress refused to ratify it, believing the compensation offered by America to be insufficient for the land Colombia would surrender.
The people who actually lived on that land were much more amenable and they no longer wished to be ruled from Colombia. President Theodore Roosevelt thought it would be a smashing idea if Panama could sign its own treaties, and he sent American gunships to express his enthusiasm.
The Republic of Panama was thus born on November 3, 1903, and worked out a complex deal with America for construction of the canal, known as the Hay-Bunau-Varilla Treaty — which included the U.S. paying a then-impressive $10 million up front and guaranteeing Panama’s independence. The canal was completed in 1914 and operated under U.S. control for decades afterward.
Many residents of the new Republic of Panama were unhappy with the Hay-Bunau-Varilla Treaty, which was actually signed by two people, not three. Panama’s representative, Philippe-Jean Bunau-Varilla, was not Panamanian, did not live in Panama, and did not have authorization from the newborn government of Panama to sign the treaty. He signed the treaty literally hours before Panamanian government officials could reach Washington to have their say and, when they objected to aspects of the deal, Bunau-Varilla threatened to let the Colombians conquer Panama again.
Bunau-Varilla became sort of a national villain for Panama — he was not even allowed to attend the opening of the great canal in 1914 — and resentments over the canal treaty grew. There were occasional riots in Panama. A set of new treaties clarifying the exact status of the canal and Panama’s sovereign rights was put on the table in 1967, but the government of Panama was overthrown by a military coup before they could be ratified.
The coup leader was Col. Omar Torrijos, who began driving a hard bargain with the administration of President Richard Nixon. The Nixon administration came to believe that not just Panama, but all of Latin America, was so unstable that retaining control of the Panama Canal in perpetuity would be extremely difficult. Instead, a draft agreement was prepared that would give America perpetual rights to use the canal, without owning it.
This became a contentious issue in the tumultuous politics of the 1970s, with even 1976 Democratic candidate Jimmy Carter vowing that he would never cede “practical control of the Panama Canal Zone.” He proceeded to do exactly that once he was elected, however, signing a set of treaties with Torrijos and barely muscling them through the Senate.
The treaties, signed into law in 1979, sought to address a major concern of critics by giving the United States the right to defend the Panama Canal against foreign interference. They addressed charges of imperialism and compromising Panama’s sovereignty by dissolving the Panama Canal Zone — the part of Panama owned by the United States — in 1979 and turning control of the canal over to Panama in 1999. This had the happy coincidence of getting the canal handover past the reign of deranged Panamanian dictator Manuel Noriega in the late 1980s.
The Panamanians have stridently denied Trump’s claim of Chinese interference with the Panama Canal. China does, however, have significant influence over the Panamanian government — it was able to bully Panama into cutting its longstanding ties with Taiwan in 2017 — and Chinese companies have been heavily involved with numerous upgrades and renovations to the canal in recent years.
Panama joined China’s Belt and Road Initiative (BRI) in 2018, and China has acquired control of land on both sides of the canal, including leases and investments in Panamanian ports. This all comes arguably close to activating the clauses in the Carter-Torrijos Treaties that give the United States the right to use force to counter any threat to the neutrality of the Panama Canal.
In December, Trump also criticized the “ridiculous, highly unfair” fees being charged for transit of American military and commercial vessels and promised to “immediately stop” the “complete rip-off of our country.”
Trump said that if shipping rates through the Panama Canal were not lowered, “we will demand that the Panama Canal be returned to us, in full, quickly and without question.”
Panama claims the higher fees are necessary due to droughts in the region and argues that American ships are treated no differently than those of other nations. Any difference in fees due to national origin could be taken as a challenge to the guaranteed neutrality of the canal.
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