What Makes Panama Canal Important and Could Trump Really Seize It?
18:45 GMT 26.12.2024 (Updated: 19:08 GMT 26.12.2024)
© AP Photo / Arnulfo Franco, File
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The US president in waiting has set his sights on the Panama Canal, triggering a backlash from Panama City, and leaving observers scrambling to study whether Washington could actually seize the strategic waterway. What makes the canal important, and could Trump possibly be serious? Sputnik asked a veteran geopolitical expert.
President-elect Donald Trump proved he’s still a master troll this week with a series of viral social media posts talking about a US desire to seize the Panama Canal and Greenland and turn Canada into the 51st state.
Panama apparently didn’t get the ‘joke’, with President Jose Raul Mulino taking to social media to emphasize that “every square meter” of the canal “belongs to Panama and will continue to belong to Panama.”
“We’ll see about that!” Trump retorted.
What’s the Canal’s Importance?
Accounting for about 6% of all global maritime trade, and shaving 8,000 nautical miles or more (as much as 22 days) off trips between the Pacific and Atlantic Oceans, the Panama Canal has served as a key economic and strategic chokepoint for more than a century, spending most of that time under US control.
Crossable by ship in just 8-10 hours, the 81.5 km long, 33-150 m wide mega canal earns Panama about $3.5 billion in transit fees.
The canal was opened in 1914 after a decade of US-led, supervised and financed construction - costing the equivalent of over $15 bln in today’s money.
The US gained control of the Panama Canal Zone as a concession in 1903 after recognizing Panama’s independence from Colombia, and jealously guarded it until 1999 – when it was transferred back to Panama in accordance with the terms of a 1979 treaty, reached partly thanks US fears of growing Soviet influence in Latin America. The US maintained the right to guard the canal in perpetuity.
The canal has proven so impactful on global shipping that it led to the creation of its own class of massive bulk carriers – known as the Panamax – featuring a deadweight capacity of 60,000-80,000 tons.
Whether he's joking or not, Trump isn’t the first Republican to criticize the 1979 treaty, with Ronald Reagan doing so on the campaign trail in 1976 and 1980, but dropping the idea soon after actually entering office.
Could Trump Really Be Serious?
Trump “was just making a joke” and there is no legal way for US to actually restore its control over the Panama Canal, veteran geopolitical affairs and trade policy expert Thomas Pauken II told Sputnik.
Besides highlighting the “overreaction” to his gag by media and senior officials, Trump’s discussion of the canal is really designed to address the reported overcharging of US shippers, with his hardball threats aimed at seeing “those rates go down,” and addressing whether the US’s trade competitors, particularly China, are receiving any preferential treatment, Pauken said.
“It's really a simple case of wanting to negotiate lower rates on shipping charges and then making a joke about how America may supposedly try to seize control of the Panama Control Canal and take charge of it. Of course, everybody who has any common sense, including people who are supposedly diplomats, media officials and even law experts, should know that Trump cannot take control of the Panama Canal if Panama refuses to allow that,” the observer stressed.
The canal could become a hotspot for confrontation between China and the US, Pauken believes, but only “if Beijing and Washington choose to start and launch and spark trade wars” instead of sitting down and hammering out a “grand bargain” that both sides would find fair – like the Phase One Trade Agreement reached in late 2019.
