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Dewey Sim

Teresa Elena Frontado

US Secretary of State Marco Rubio has voiced “serious concerns” over China’s intensified inspections of Panama-flagged vessels, vowing that the US “stands firmly” with Panama amid the Latin American country’s escalating fallout with Beijing.
Rubio said China’s recent actions “raise serious concerns about the use of economic tools to undermine the rule of law in Panama, a sovereign nation and vital partner for global commerce”.
“Detentions, delays, or other impediments to the movement of vessels undermine the stability of global supply chains, increase costs for businesses and consumers and erode confidence in the international trading system,” the top US diplomat said, according to a State Department statement issued on Thursday.
“The United States stands firmly with Panama and looks forward to increasing our economic and security cooperation with this important partner.”


Liu Pengyu, spokesman for the Chinese embassy in the US, told the South China Morning Post on Thursday that China’s position on issues concerning the Panama Canal ports was clear, reiterating the foreign ministry’s earlier comment that Washington’s allegations expose its own ambitions over the canal.
On Friday, when asked about US accusations that China was detaining Panama-flagged ships, Chinese foreign ministry spokeswoman Mao Ning said they were “groundless” and confused “right and wrong”.
“The US’ repeated wrongful allegations only reveal that it seeks to take over the Panama Canal,” Mao told a regular ministry press briefing.
“Who is blatantly undermining the neutrality of the canal and the stability of global supply chains through unilateral bullying and coercive actions – the facts are crystal clear for all to see,” she said, highlighting that China would firmly defend its “legitimate rights and interests”.
Washington has accused Beijing of ramping up inspections of and detaining Panama-flagged container ships in retaliation for Panama’s decision to strip Panama Ports Company – a subsidiary of Hong Kong conglomerate CK Hutchison – of concessions to operate ports at both ends of the Panama Canal.
Panama’s Supreme Court declared the concession unconstitutional in January, and the government took control of both terminals in February, designating US-linked operators APM Terminals and Terminal Investment Limited as interim administrators for 18 months.
The decision followed sustained US pressure on Panama to limit what it saw as growing Chinese influence over the canal, a vital waterway handling around five per cent of global maritime trade, turning the domestic legal spat into a new front in the broader rivalry between Washington and Beijing.
“The Panama case will be closely watched over by other countries to see what happens when a Latin American government chooses the US over China in one of these disputes,” said Benjamin Gedan, Senior Fellow and Director of the Stimson Centre Latin America programme.
“If a country is left vulnerable to Chinese retaliation, as appears to be happening in Panama, does the United States seek to protect that country from the consequences of those decisions and give special treatment in investment or other areas?”
In January, following the Panama court decision, Beijing vowed to resolutely safeguard the rights and interests of its enterprises.
The US Federal Maritime Commission last week warned that Beijing had ramped up port inspections of Panama-flagged vessels and that the inspections appeared to follow informal directives that could amount to reprisals.

The commission noted that Panama-flagged ships carry a significant share of US container trade and raised concerns about supply chain disruptions, adding that it had the authority to investigate whether foreign governments’ practices created unfavourable conditions for shipping linked to the US.
“Any action by a foreign government that delays or prevents the movement of vessels trading with the United States may be inconsistent with our mandate,” the commission stated.
In the statement on Thursday, Rubio described the Panama court ruling as having “upheld transparency, the rule of law, and held private operators accountable to the public interest”.
“The judgment also makes clear that Panama is a reliable partner for international investment and business opportunities,” he said.
CK Hutchison earlier rejected the ruling and launched international arbitration proceedings under the International Chamber of Commerce rules. Last week, the Hong Kong firm filed new claims seeking more than US$2 billion in damages from the Panamanian state.


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US Secretary of State Marco Rubio at the G7 Foreign Ministers’ meeting in Paris last month. Photo: Reuters

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The administrative entrance at the port of Balboa in Panama City on February 12. Photo: AFP

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Diplomacy

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Panama’s decision to strip Panama Ports Company of its concessions is a test of US backing for countries challenging China, experts say


Panama’s decision to strip Panama Ports Company of its concessions is a test of US backing for countries challenging China, experts say.


Rubio raises concerns over China’s detention of Panama-flagged ships

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Panama’s decision to strip Panama Ports Company of its concessions is a test of US backing for countries challenging China, experts say

Panama’s decision to strip Panama Ports Company of its concessions is a test of US backing for countries challenging China, experts say