Panama president says he won’t renew Belt and Road deal with China, as US demands less Chinese influence over canal

Panama’s president reiterated on Sunday that Panama’s sovereignty over the Panama Canal is not up for debate, saying that during talks with US Secretary of State Marco Rubio that he had addressed the United States’ concerns over China’s presence around the vital waterway.

President Raúl Mulino added however that Panama would not renew a 2017 memorandum of understanding to join China’s overseas development initiative, known as the Belt and Road, and suggested that the deal with China could end early.

Panama will seek to work with the US on new investments, including infrastructure projects, he said. “I think this visit opens the door to build new relations … and try to increase as much as possible US investments in Panama,” Mulino told reporters on Sunday after Rubio’s first foreign trip as the United States’ top diplomat.

Mulino’s comments were followed by a US State Department readout of the meeting, which said Rubio told Panama’s president and Foreign Minister Javier Martínez-Acha that concerns over China’s “control” of the Panama Canal may mean the US has to “take measures necessary to protect its rights” per a longstanding treaty on the neutrality and operation of the canal.

Under the 1977 treaty, the US returned the canal to Panama’s control with the understanding that the waterway remain neutral. According to the agreement, the US could intervene militarily if the canal’s operations were disrupted by internal conflict or a foreign power. Today, more cargo than ever runs through the canal than it did during the years of US control.

US President Donald Trump’s repeated and publicly stated desire for the US to retake control of the key waterway has already caused a diplomatic stir, with Mulino repeatedly stating that that Panama’s sovereignty over the canal is not up for debate.

Mulino said Sunday he doesn’t think there is a real risk that the US would use military force to retake the canal.

‘Panama won’t invest a single dollar in it’

Mulino also said Panamanian authorities are carrying out an audit on a company linked to China that operates two terminals around the canal.

“We have to wait until that audit ends before we can reach our legal conclusions and act accordingly,” Mulino said.

The company in question is the Panama Ports Company, part of a subsidiary of the Hong Kong-based conglomerate CK Hutchison Holdings. Hutchinson Ports is one of the world’s largest port operators, overseeing 53 ports in 24 countries, including for other US allies such as the UK, Australia and Canada.

Mulino also said Panamanian authorities spoke with Rubio about the possibility of expanding a migrant repatriation flight program to remove foreign nationals who don’t have the legal basis to be in Panama, insisting that the US would have to shoulder the costs.

Asked to clarify if migrants would come to Panama and subsequently be transferred to their respective countries, Mulio said, “Yes. Exactly … We can do that, without a problem, under the total cost of the US. Panama won’t invest a single dollar in it.”

The program, signed in July, is aimed at reducing irregular migration through the Darien Gap, a mountainous rainforest region connecting South and Central America. The 66-mile (106-kilometer) hike through the Darien brings migrants from Colombia to Panama and is a crucial passage for those hoping to reach the United States and Canada.

Mulino said Sunday that those repatriated could include migrants from Venezuela, Colombia, Ecuador and other countries.