The announcement caught a lot of observers off guard because the Central American country has long been regarded as being firmly under American influence, which explains why it sided with Taiwan for decades just like most of its regional neighbors. Nevertheless, China’s magnetic economic pull has finally brought forth diplomatic dividends for Beijing, as the People’s Republic is the second-biggest user of the Panama Canal and a key partner for the Latin American country. The reason why Panama’s decision is so important in the grand scheme of things is that only 20 countries recognize Taipei as the legitimate Chinese government, and 11 of them are in the Western Hemisphere.
This has prompted some experts such as Ja Ian Chong, an associate professor with the National University of Singapore who specializes in Asia-Pacific relations, to warn that “There may be a domino effect in terms of de-recognition”, which would be devastating for the ‘legitimacy’ of the unilaterally proclaimed entity.
At the same time, however, Panama is still one of the US’ closest partners anywhere in the world, and there’s no way that Washington would ever let it fully pivot towards China in any game-changing way. Recognizing Beijing, as the US already did decades ago, is one thing, but cooperating with it in any manner which could potentially shift the balance of power in Latin America away from Washington and towards its Chinese rival is bound to be opposed, though Panama City doesn’t appear to have any such intentions. In fact, President Varela’s upcoming meeting with President Trump on 19 June is expected to deepen their two countries’ partnership by focusing on the shared threats of transnational organized crime, illegal migration, and illegal substances. Moreover, the White House website also reports that they’ll discuss “how to counter democratic backsliding in Venezuela”, as the US puts it.
What this means is that Panama is still firmly on the US’ side, but that this hasn’t stopped its leadership from making pragmatic and long-overdue outreaches to China. The example that Panama is setting holds the potential of being emulated all throughout the region, especially among the 11 holdout states which still recognize Taipei, so it’s important to discuss the political implications of Panama City’s latest decision and assess the state of Chinese strategy in Latin America more broadly.
Andrew Korybko is joined by Fernando Martinez, Independent news analyst located in the Dominican Republic, and Sebastian Tapia, International political analyst from Argentina.
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