Panama’s Foreign Minister Calls for Respect of Sovereignty
On Wednesday, Panama’s Foreign Minister, Javier Martínez Acha, urged China to honor Panama’s legal sovereignty following a series of arbitrary detentions of Panamanian-flagged ships by Chinese authorities. This situation arose after the Hong Kong-based CK Hutchison lost control of two of the Panama Canal’s key ports.
During a press conference in Asunción alongside Paraguay’s Rubén Ramírez, Martínez Acha addressed the retaliatory measures taken by the Chinese Communist Party against Panamanian shipping. These actions followed a decision by the Panama Supreme Court that invalidated two controversial contracts awarded to CK Hutchison’s subsidiary, Panama Ports Company (PPC). These contracts provided control over two significant ports at either end of the Panama Canal, locations crucial to 40% of the canal’s traffic.
CK Hutchison had been managing these ports since 1997, and the contract was set to automatically renew for another 25 years in 2021.
“In a democracy, the decisions of the Supreme Court should be respected by all,” Martínez Acha remarked. He noted that the Panamanian government was simply adhering to the Court’s ruling. “The Hong Kong company had the chance to settle amicably, but they opted for legal action instead.”
He further pointed out, “Since the ruling, we’ve experienced a rise in inspections and seizures of Panamanian vessels in Chinese ports. This uptick is worrisome. We ask China, as well as any other nation, to respect Panama’s legal sovereignty, just as Panama respects the sovereignty of others. It’s our hope that the recent trends will ease.” He emphasized that Panama is a nation connecting the world and deserves the same treatment.
The Supreme Court’s decision came into effect in late February, enabling the government, led by conservative President José Raúl Mulino, to take immediate control of the ports of Balboa and Cristobal. This shift is part of an interim process related to future leases of port operations to other companies. To facilitate normal canal operations, temporary control of Balboa was handed to APM Terminals, which is linked to Danish shipping giant Maersk, while Cristobal is managed temporarily by TIL Panama, associated with the Mediterranean Shipping Company (MSC).
Shortly after, United States officials reported that China had threatened to take action against Panamanian-flagged ships due to Panama losing control of the ports. In late March, Federal Maritime Commission Chair Laura DiBella indicated that the U.S. was keeping a close watch on the increasing detentions of these vessels, suggesting that they seem to serve as punishment for Panama’s Supreme Court ruling. She noted the potential commercial and strategic ramifications of China’s actions on U.S. shipping.
Rubén Ramírez, Panama’s Foreign Minister, commented that China’s moves against Panama’s ships do not promote social development in today’s shifting world. “It’s vital to support trade and enhance logistics to facilitate better economic and commercial exchanges,” he remarked.
While Paraguay lacks diplomatic ties with China, Ramírez noted that this situation may still impact trade freedom for their market.
Reports suggest that three out of four Panamanian vessels entering Chinese ports undergo inspections, an anonymous Panamanian official relayed to a Spanish news agency. While not all seizures result in outright confiscation, they can lead to delays and extended inspections by port authorities.
Secretary of State Marco Rubio expressed serious concerns about China’s approach to undermining the rule of law in Panama, labeling the country as an important partner in global trade. He stated, “Delays and disruptions in ship movements can destabilize global supply chains and increase costs for consumers and businesses alike.”
On Saturday, Panama’s Ministry of Foreign Affairs shared appreciation for support from countries like the U.S., Israel, Ukraine, Chile, Costa Rica, Honduras, Paraguay, and Peru in light of the recent seizure of a Panamanian-flagged ship in China.
