In his inaugural address, President Donald Trump made a bold statement by vowing to “take back” the Panama Canal. However, according to international law expert Eugene Kontorovich, this would not be possible within the confines of the 1977 treaty that transferred authority over the canal to Panama. Kontorovich, a senior research fellow at the Heritage Foundation, emphasized the importance of countries carefully considering the implications of signing treaties that involve strategic assets like the Panama Canal. While the U.S. has the option to cancel or withdraw from the treaty, doing so would not automatically reverse the concession and return control of the canal to the U.S.
During a hearing before the Senate Commerce Committee, Kontorovich highlighted concerns about China’s influence on freight flows through the canal. Chinese-backed terminal operators on both sides of the waterway raised questions about potential violations of neutrality under the treaty between the U.S. and Panama. Kontorovich discussed the range of remedies available in the event of treaty violations, including the use of armed force to enforce neutrality provisions. While armed force should not be the first recourse in resolving international disputes, the treaty does allow for such measures in case of violations.
Another topic of discussion during the hearing was the Panama Canal Authority’s practice of allocating transit times to the highest bidder during times of low water levels. This practice came under scrutiny during a water shortage in the region in 2023, with concerns raised about the increased revenue collected by the Canal Authority during the crisis. Federal Maritime Commission board member Dan Maffei expressed concerns about the auction-like slot allocation procedures and mentioned the possibility of sanctioning Panamanian-flag ships if interference with U.S. foreign trade is detected.
Maffei also addressed the broader issue of China’s influence on the Panama Canal, pointing out that Chinese-backed company Hutchison Ports operates ports in various regions around the world. He emphasized the need for a comprehensive maritime strategy to address national security concerns and economic resilience. Maffei stressed the importance of countering China’s investment efforts, making it a national priority to safeguard strategic assets like the Panama Canal.
While the focus of the hearing was on the Panama Canal and China’s influence, Maffei highlighted the broader implications of strategic port operations around the world. He emphasized the need for a coordinated approach to maritime security and economic resilience, acknowledging the significance of countering foreign investments in critical infrastructure.
In conclusion, the hearing underscored the complex geopolitical dynamics surrounding the Panama Canal and the need for a comprehensive strategy to address national security concerns and safeguard strategic assets. The discussions highlighted the importance of upholding treaty obligations, enforcing neutrality provisions, and countering foreign influence to ensure the long-term security and resilience of critical maritime infrastructure.
