The chief of the Federal Maritime Commission is set to inform a U.S. Senate committee that the United States has strategies available to counter the expanding influence of China and Chinese companies in Panama.
President Donald Trump has vowed that the United States would take back the Panama Canal but has given no further details on when or how he intended to reclaim the canal – which is the sovereign territory of an ally.
“We need to increase support for American companies seeking to do business in Panama and throughout the Americas. Chinese companies must not be the sole bidders on contracts,” Federal Maritime Commission Chair Louis E. Sola said in written testimony to be presented on Tuesday at the Senate Commerce Committee hearing on the Panama Canal. The testimony was seen by Reuters.
Chinese Infrastructure Contracts Flourish
Sola added that “Chinese companies have been able to pursue billions of dollars in development contracts in Panama, many of which were physical infrastructure projects, some on or adjacent to the Panama Canal.”
Senate Commerce Committee Chair Ted Cruz said ahead of the hearing: “The United States paid for and built the Panama Canal, but Panama is treating America unfairly and ceding control of key infrastructure to China.”
Previously, Trump has refused to rule out the possible use of military force, drawing criticism from Washington’s Latin American friends and foes alike.
US ‘Not Without Options’
In Sola’s testimony, he said: “The United States is not without options in addressing the growing presence of China and Chinese companies in Panama and throughout the Americas. Nor are we without options as they relate to the continued viability of the Canal.”
He also said it was crucial to protect the independence of the Panama Canal Authority.
Panama’s president, Jose Raul Mulino, said last week that Panama has administered the canal responsibly for world trade, including for the United States, and that it “is and will continue to be Panamanian.”
Vital US Trade Route
More than 40% of U.S. container traffic, valued at roughly $270 billion annually, transits the Panama Canal.
In August of last year, Sola and the FMC’s then-chair, Dan Maffei, visited Panama and met with Mulino after drought conditions seriously impacted canal operations.
Maffei said in written testimony to be presented to the Senate committee on Tuesday that Panama’s rainy season last year has fortunately alleviated acute water-supply issues “for the time-being and restored normal transit volumes.”
(With inputs from Reuters)
