The Donroe Doctrine is still having its effect in Central America. The country of Panama, which contains the commercially and strategically critical Panama Canal, has been working to push Chinese interests out of the region. Now, on Tuesday, we learned that Panama is pushing a Chinese conglomerate based in Hong Kong out of two critical ports.
Hong Kong conglomerate CK Hutchison said Tuesday that Panama authorities had threatened its employees with criminal prosecution if they defied orders to leave two strategic canal ports at the center of a legal battle that has embroiled Beijing and Washington.
CK Hutchison said Panama’s decision to cancel key port contracts and grant temporary licenses to the Danish shipping company Maersk and the Geneva-based Mediterranean Shipping Company (MSC) was “unlawful” as it considers national and international legal action against the country.
Panama on Monday published in its official gazette a Supreme Court ruling canceling key port contracts held by a subsidiary of CK Hutchison, known as Panama Ports Company (PPC).
The publication finalizes the legal annulment of concessions for the Balboa and Cristobal terminals near the Panama Canal, which Panama Ports Company, a subsidiary of CK Hutchison, had operated for nearly three decades.
Remember that key point: Panama's Supreme Court canceled these port contracts, for two vital ports near the Canal. China is not amused.
CK Hutchison said Panamanian authorities made “direct physical entrance” to the Balboa and Cristobal ports on Monday to remove PPC employees, who were threatened with criminal prosecution if they defied orders. CK Hutchison said PPC staff were told not to make contact with the company.
“CKH considers the ruling, the executive decree, the purported termination of PPC’s concession, and the takeover of the terminals to be unlawful,” CK Hutchison said in a statement to the Hong Kong Stock Exchange.
“The actions by the Panama State also raise serious risks to the operations, health and safety at the Balboa and Cristobal terminals.”
The proper reply from Panama and, for that matter, the United States, to CKH's pious pronouncement should be "tough noogies." The Trump administration has, since resuming office, to wear away Chinese influence in the Western Hemisphere, and it's undeniable that it's not in the best interests of the United States to let China have much (or any) control over the Panama Canal. It's in China's interest, of course, to have such control - because it gives them the ability to throttle trade at will.
And remember, China is not a friend of the United States. A trade partner, yes; a rival, certainly. An enemy? Possibly, and maybe before we expect it.
Read More: There's No Hiding It; China's Actions Say It's Planning a Preemptive Attack on the US
Panama's president had this to say:
Panamanian President José Raúl Mulino said the temporary contracts had been issued as “a legitimate tool that respects asset ownership.”
“Let me be clear, this does not imply an expropriation of those assets, but rather their use to ensure the operation of the ports until their real value is determined for the corresponding actions. I repeat, this is not an expropriation,” Mulino said in a televised address on Monday afternoon.
Until their real value can be determined - at which point Panama (or the United States) will "purchase" those ports, leaving CKH out in the cold? Maybe. Hopefully. We shouldn't let China gain this foothold. If we do, sooner or later, we'll regret it.
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