On Tuesday, April 28th, the United States Department of State, along with five Latin American countries including Bolivia, Costa Rica, Guyana, Paraguay, and Trinidad and Tobago, issued a joint statement openly supporting the sovereignty of Panama and condemning recent “targeted economic pressures” imposed by the Chinese Communist Party on Panamanian vessels.
The statement, which can be seen in the link provided, asserts that these actions are an attempt to politicize maritime trade and infringe on the sovereignty of countries in the Western Hemisphere. The nations warn that any Chinese Communist interference in Panama’s sovereignty would pose a threat to all countries in the Western Hemisphere.
The incident stemmed from a ruling by the Panama Supreme Court in January this year, which annulled the long-term operating rights of the Hong Kong-based Hutchison Group over Balboa and Cristobal ports at both ends of the Panama Canal.
According to data from the global logistics platform The Loadstar, there has been an abnormal change in enforcement actions at Chinese ports following the loss of operating rights. In March, out of 123 vessels detained at Chinese ports, a significant number of 91 were Panamanian-flagged, showing a sharp increase compared to earlier in the year.
On Tuesday, the six countries emphasized in their joint statement: “We are closely monitoring the targeted economic pressures from China and recent actions impacting Panamanian vessels.”
“These actions represent a blatant attempt to politicize maritime trade and infringe upon the sovereignty of our hemisphere countries,” the statement reads. “Panama is a cornerstone of our maritime trade system and must be safeguarded from any undue external pressures.”
“Any attempt to undermine Panama’s sovereignty constitutes a threat to all of us,” the six nations stated in the joint declaration. “We stand united with Panama.”
The Panama Canal handles approximately 5% of global maritime trade and holds significant strategic value. Following the annulment of Hutchison’s operating rights, the terminals are currently under the temporary operation of APM Terminals belonging to Maersk and TIL under the control of the Mediterranean Shipping Company (MSC).
Hutchison Group has expressed discontent with the situation, accusing Panamanian authorities of unlawfully confiscating properties and initiating international arbitration to claim over $20 billion from the Panama government.
In March of this year, following the frequent acts of detainment of Panamanian vessels by China, Laura DiBella, Chair of the United States Federal Maritime Commission, warned in a statement (link included) that Beijing was using port state control inspections to pressure Panama.
“The Chinese authorities are using port state control as a reason to detain Panamanian vessels on a large scale in Chinese ports, far exceeding historical norms. These heightened inspection actions seem to be executed based on informal directives and are apparently in retaliation for the transfer of port assets from Hutchison Group,” DiBella stated. “These actions may result in significant commercial and strategic consequences for American shipping.”
At the same time, Chinese authorities criticized Panama’s decision to remove Hong Kong-related operators and denied U.S. allegations of “retaliatory vessel detentions.”
The joint statement on Tuesday reflects the united position of American allies in the region on regional security.
The statement mentions, “We, Bolivia, Costa Rica, Guyana, Paraguay, Trinidad and Tobago, and the United States, stand together in carrying out the mission of defending the Western Hemisphere, and reaffirm that our regional freedom is non-negotiable.”
The participating countries pledge to ensure America remains a region of freedom, security, and prosperity through enhanced peace, security, and regional cooperation.