US and Panama Forge Agreement for Warships to Navigate Canal Without Fees

In a significant development for bilateral relations, U.S. Defense Secretary Pete Hegseth announced that officials from the United States and Panama are set to sign a framework agreement. This agreement will allow U.S. warships to navigate the Panama Canal on a ‘first and free’ basis, which aligns with U.S. interests in the region.

Framework Agreement Details

During a press conference, Hegseth stated that both nations have previously signed a memorandum of understanding focusing on security cooperation. The upcoming agreement will ensure that U.S. warships and auxiliary vessels enjoy priority passage without incurring tolls through this critical waterway.

Prior Claims and Reactions

Earlier in the year, Secretary of State Marco Rubio visited Panama. Following that meeting, reports indicated that the U.S. had reached an agreement regarding free passage for its warships. However, Panamanian President José Raúl Mulino disputed this claim, asserting that no such agreement had been formalized.

“I completely reject that statement,” Mulino remarked when addressing the media. Additionally, the Panama Canal Authority clarified that there had been no changes to its toll structure.

Concerns Over Chinese Influence

On the same day as the announcement, Hegseth voiced concerns regarding China’s growing military footprint in the Western Hemisphere. During his visit to Panama, he engaged with local officials, met with U.S. troops, and examined the canal’s critical ports. Hegseth emphasized that China is investing significantly in operations that could yield military advantages and promote unfair economic gains.

He declared, “Beijing is investing and operating in this region for military advantage and unfair economic gain. China’s military presence in the Western Hemisphere is excessive. They are managing military facilities that extend their reach into space and are depleting regional resources to support their global ambitions. Furthermore, China’s fishing fleets are depleting food sources for our nations and communities.”

Despite expressing these concerns, Hegseth affirmed that war with China is not a predetermined outcome. The U.S. does not seek conflict but aims to deter potential threats effectively and robustly.

Strengthening Ties with Panama

In a bid to solidify military collaboration with Panama and restore influence over the canal, the U.S. intends to deploy the USNS Comfort, a Navy hospital ship, to the region. Hegseth reiterated his commitment to ensuring that the canal remains a strategic asset free from Chinese influence. He noted that the U.S. would ‘take back’ the Panama Canal from external control, particularly referring to operations managed by the Hong Kong-based firm CK Hutchison.

Recent Developments Regarding Canal Ownership

In a recent development, CK Hutchison, which manages some of the canal’s port operations, agreed to a substantial deal valued at $19 billion. This agreement pertains to the sale of 43 ports, including two located in Panama, to the U.S.-based investment firm BlackRock. Trump’s administration welcomed this transaction as a way to alleviate concerns surrounding Chinese ownership of the canal. However, uncertainties have emerged indicating that the deal may be in jeopardy.

Chinese entities have responded negatively, initiating antitrust investigations into the sale. Concurrently, a Panamanian official accused CK Hutchison of failing to renew contracts appropriately and described a debt of $300 million owed to the country.

Reassurances from the U.S.

Following meetings with President Mulino, Hegseth reaffirmed the U.S. commitment to protect the operational integrity of the Panama Canal. He stated, “To this end, the United States and Panama have strengthened our defense and security cooperation more in recent weeks than we have in decades.” This ongoing cooperation emphasizes the importance both nations place on maintaining a secure and sovereign Panama.

A Geopolitical Battle

The exchanges regarding control of the canal come amid a broader geopolitical conflict between the United States and China. The tensions have escalated into a trade war, resulting in significant tariffs imposed by both countries. While Trump targeted Chinese goods with tariffs reaching 104%, China retaliated with tariffs of 84% on U.S. products.

As the war of words continues, the implications for Panama and its relations with both superpowers will likely require careful navigation. Hegseth’s commitments signal a strategic pivot back towards bolstering U.S. influence in the region amidst China’s ongoing efforts to expand its presence.

Looking Ahead

The upcoming agreement between the United States and Panama represents an important milestone in re-establishing cooperative defense efforts in a pivotal region. As both countries seek to strengthen their military and economic ties, the implications will reverberate through the geopolitical landscape of the Americas.

Officials from both nations are closely watching the unfolding dynamics as they embark on a path that they hope will ensure greater security and cooperation in the face of emerging global challenges.