Panama announced that it is withdrawing from China's grandiose "One Belt, One Road" infrastructure construction program, also known as the "New Silk Road", as a result of pressure from Washington, the agencies reported, BTA writes.
The news, announced by the President of the Central American country, José Raúl Molino, at the end of last week, turned out to be the first major success of the policy of the new government of US Republican President Donald Trump. It came on Thursday, just after a visit by new US Secretary of State Marco Rubio to Panama, where he met with Molino and issued a stark warning against growing Chinese influence.
Molino announced that his country had given China the required 90-day notice that it would not renew its participation in the project.
“We will consider the possibility of ending our entire participation in this agreement early“, the Panamanian president was quoted as saying by Reuters.
Molino added that the contract will expire in two – three years, meaning that his country will simply let the agreement expire without formally denouncing it.
US WELCOMES PANAMA'S DECISION
US Secretary of State Marco Rubio welcomed Panama's decision and described it as a major step forward in bilateral relations.
„Yesterday's statement by President Molino, which will allow Panama's participation in the „One Belt, One Road“ to expire without being renewed, is a major step forward for US-Panamanian relations and for ensuring a Panama Canal free (from Chinese influence). "This is yet another example of the US president ensuring the protection of national security and the well-being of the American people," Rubio wrote on social media after leaving Panama.
DIPLOMACY ON THE BORDER OF CONFLICT
Professor Yangzhong Huang, a senior fellow at the Council on Foreign Relations, a New York think tank, told the Guardian that this significant decision by Panama was the first major success for Trump's "diplomacy on the brink of conflict," but added that a similar result would be difficult to achieve with an Asian country, for example.
"The US seems to be paying more attention to its backyard - Latin America. These are all those countries in the region that still need US aid and trade with them," Huang said. “But I am not convinced that using the same means, Washington is able to force an Asian country, for example, to make the same concessions. This is unlikely, because China is the most influential player in its region.“
Panama was the first country to join the New Silk Road. This happened in November 2017, five months after it broke off diplomatic relations with Taiwan and established them with China, notes “The Guardian“.
According to Washington, the basis of the Chinese initiative “One Belt, One Road“ is the “debt trap policy“, which is expressed in Beijing providing loans on unaffordable terms to poor countries around the world. If these countries are inevitably unable to repay their debt at some point, this will make them dependent on China, and the ultimate goal is for the Asian giant to increase its influence in the world, the United States believes.
Beijing rejects Western criticism and points out that over 100 countries have already joined the New Silk Road. In addition, the Chinese side points out that the project promotes international development and has contributed to the construction of new ports, bridges, railways and other infrastructure.
However, the initiative has nevertheless caused controversy, with some partner countries expressing dissatisfaction with the high cost of the projects and the difficulties they face in repaying their debts to China. In 2023 Italy also left the Silk Road, again under American pressure, and the reason for Washington's insistence on Rome was again concerns about increasing Chinese economic influence.
THE TOPIC OF THE NEW SILK ROAD PASSES THROUGH THE PANAMA CANAL
The topic of the New Silk Road and Chinese influence is closely intertwined with another issue on the agenda in Panamanian-American relations - that of the Panama Canal and its management.
The United States is concerned about the activities of Chinese companies, including one from Hong Kong, which operates two ports in the Canal, one at the entrance and the other at the exit of the facility. The Panama Canal, one of the world's most important shipping corridors, was built by the United States at the beginning of the last century, but in 1999 they are handing it over to Panama under a bilateral treaty for the gradual transfer of sovereignty over it, concluded during the time of Democratic President Jimmy Carter.
Separately, two Chinese companies are building a fourth bridge over one of its entrances.
The US State Department announced that Rubio had conveyed a message to Panama on behalf of Trump that the Chinese presence was a threat to the US and a violation of the 1977 US-Panama Treaty, which, among other things, provides for Panama to pursue a policy of neutrality in international relations.
After talks with Rubio, Molino signaled his readiness to terminate the contract with the Hong Kong company “Hutchinson Holdings“, renewed in 2021 for the management of the two ports at the entrance and exit of the Canal by the Chinese company. Officially, Panamanian authorities will audit this company, and until it is completed, the company will not actually operate the Canal.
In front of reporters in San Salvador, the next stop on his regional tour after Panama, Rubio called Molino a friend of the United States, and Panama a good partner and ally. He added that his visit had achieved really “good results“.
“We don't want to have either hostile or negative relations with Panama“, Rubio said.
Ryan Berg, director of the Americas program at the Washington-based Center for Strategic and International Studies, said the audit could be a way for Panama to get rid of the port concession if the audit reveals corruption schemes in the signing of the deals.
“This would give Panama a legal basis to terminate the management contract and create an opportunity for American or European companies to come forward and win the port concession if Panama organizes a new tender“, the expert believes.
CHINA'S REACTION
The agencies unanimously noted that between Panama's decision to leave the New Road There is a direct causal link between the silk road and Trump's threats regarding the Panama Canal. Since winning the election, the American president has been making threats, including the use of military force, if Panama does not agree to return the Panama Canal to the United States, according to Agence France-Presse.
All this has caused China to react sharply to the events surrounding Panama.
The government in Beijing expressed "regret" for the actions of the Panamanian authorities and accused the United States of "exerting pressure and coercion in order to denigrate and undermine" the "One Belt, One Road" project.