By Sir Ronald Sanders
Recent remarks by US president-elect Donald Trump have drawn attention to the Panama Canal. He accused the Panama Canal Authority (PCA) of charging higher fees for US ships passing through the canal compared to other nations.
Trump, who is to be inaugurated for a second time as President on January 20, also expressed concerns that China is effectively operating the canal. He even refused to rule out using military force to retake control of the canal, emphasizing its importance for US economic security.
To be fair to the president-elect, he did not volunteer the latter statement about the use of military force; he was responding to a reporter’s question at a free-wheeling press conference as to whether he would assure the world that he would not use military or economic coercion to gain control of the Panama Canal and Greenland. He responded by saying he could not give assurances on “either of those two, but I can say this, we need them for economic security.”
The human sacrifice behind the Panama Canal
The story of the Panama Canal is not only one of significant financial investment and engineering skill by the US; it is also one of human sacrifice by West Indians. Between 1904 and 1914, the canal was constructed by approximately 200,000 West Indian workers who faced gruelling conditions and significant risks. Research reveals that, in relation to Barbados alone, 5,893 workers perished, succumbing to disease, landslides, explosions, and machinery accidents. By comparison, 350 US nationals died.
The historical context
In 1903, the United States signed a treaty with a nascent Panama, granting the US perpetual control over a 10-mile-wide canal zone. While this agreement enabled the construction of the canal, it was negotiated under circumstances of Panama’s limited bargaining power. Over time, Panamanians increasingly viewed US control as an impediment to their sovereignty.
However, the United States did invest significantly in the canal’s construction between 1904 and 1914. The total cost of the project was approximately $375 million, which included the purchase of the assets of a French company that had previously failed to build the canal.
During the 89 years that the US operated the canal, it generated substantial revenue from tolls charged to ships passing through. However, the primary goal of the canal was to provide a strategic and economic advantage by shortening shipping routes between the Atlantic and Pacific Oceans, not only for trade but also for the US military. Therefore, the strategic and economic benefits of the canal to the US were immense.
The mid-20th century saw growing agitation for change in Panama, leading twice to amendments to the original treaty and granting some concessions to Panama, but not to any alteration of the fundamental structures of US control. Violent protests by Panamanians, especially students, in the 1960s, together with the rise of independent nations advocating for fair treatment around the word, paved the way for the 1977 Torrijos-Carter Treaties. Under these treaties the US committed to gradually transfer control of the canal to Panama. By December 31, 1999, Panama assumed full authority, with the obligation to maintain the canal’s neutrality and to ensure fair access for all nations. That is an obligation that the PCA unequivocally states it upholds.
The Canal today
Since the transfer of control, no country or company using the canal has officially complained about discriminatory fees or non-compliance with international law. The canal’s revenue funds its operations, maintenance, and expansions, without external financial dependency on the Treasury of any other nation.
The PCA has categorically denied the suggestion by the President-elect that it charges US ships higher fees, emphasizing its commitment to neutrality. Similarly, it stated that concerns about China “controlling” the canal are unfounded. The Authority points out that while Chinese companies manage ports near the canal and have invested in Panamanian infrastructure, the canal itself remains under the full authority of the PCA.
Addressing misunderstandings
In any event, president-elect Trump’s concerns about the canal’s financial arrangements and Chinese influence underscore the importance of clarifying these issues. Misunderstandings can strain international relations and obscure the collaborative history between the US and Panama over the canal.
For example, the suggestion that Panama is seeking a $3 billion loan from the US for canal repairs is rejected by the PCA, which points to its historical record of managing its finances responsibly, using revenues and loans from the international financial market to fund projects like the canal’s expansion in 2016.
Opportunities for dialogue
The Panama Canal is a vital conduit for global trade, and its neutrality and accessibility benefit all nations, including the United States. Given that president-elect Trump has expressed concerns, his remarks highlight the need for open, respectful dialogue to address them.
Latin American and Caribbean countries, long committed to principles of mutual respect and cooperation, would undoubtedly be supportive of efforts between the US and Panama to clarify misunderstandings. Having moved beyond the tenets of the Monroe Doctrine, the region’s interest is to maintain an area of peace where all forms of aggression are rejected in favour of dialogue and cooperation. The economic and social growth of each of these countries depends on upholding mutual respect and pursuing shared interests.
Looking ahead
As president-elect Trump prepares to assume office, there is an opportunity to build on the legacy of US-Panama collaboration. With an open exchange of views and a commitment to clarity and respect, both nations – and the wider Americas – can reaffirm the principles of the Torrijos-Carter Treaties, ensuring that the operation and practices of the canal remain cooperative and not contentious, and that diplomacy and international order prevails.
