Panama Rejects US Demand for Free Passage Through Canal

Panamanian President Jose Raul Molino has accused the United States of spreading false and fabricated information, following the US State Department’s demand that US government ships no longer pay tolls for transiting the Panama Canal.

US Secretary of State Marco Rubio, while backing away from his office’s demands, said charging US ships was “unreasonable” because, under the treaty, the US is obligated to take action to protect the canal if it comes under attack.

Since taking office as US president, Donald Trump has repeatedly expressed interest in taking control of the Panama Canal. He has not ruled out the possibility of taking it by force. Trump is scheduled to meet with Molino on Friday.

The 51-mile (82-kilometer) waterway connects the Atlantic and Pacific Oceans. All ships must pay a fee to use the Panama Canal. The fee is based on the size and type of ship. However, U.S. ships receive priority in the waterway.

In a post on social media last Wednesday, the US State Department wrote, “US government ships will now be able to navigate the Panama Canal without paying any fees. This will save the US government millions of dollars each year.”

Mullino reacted to the US State Department’s statement, saying he is not in favor of continuing bilateral relations based on lies and dishonesty. Mulino asked the Panamanian ambassador to Washington to take “firm action” to reject such US demands.

Mulino also said that US government ships, including Navy ships, have to pay $6 million to $7 million each year to transit the Panama Canal. Mulino believes that it is not the case that paying canal fees is destroying the US economy.

The Panama Canal Authority (ACP) said in a statement that it had not made any changes to the toll rules for the waterway, adding that Panama’s door was open for discussions. Following the meeting between Rubio and Mulino, Panama announced that it would not renew its membership in China’s infrastructure construction program known as the Belt and Road Initiative.

Rubio welcomed the move, calling it “a great step.” However, Panama denied that the decision was made at the request of the United States. Trump has expressed concern that China could close the canal to the United States in a time of crisis, but Panama and China have strongly rejected that.

Chinese Foreign Ministry spokesman Lin Jian said on Wednesday that their cooperative relationship with Panama was bearing fruit, and called on the country to “resist external interference.” Rubio met with Canal Administrator Ricaurte Vázquez Morales, along with Mulino, on Sunday, urging Panama to take immediate action against China’s influence and control over the canal.

Trump made the same point in his first speech as president. Trump said that the canal was being operated by China and that he wanted to return control of it to the United States. Molino has denied the allegations and rejected Trump’s plan, saying that Panama has and will continue to control the trade route.

The United States dug the Panama Canal in the early 20th century. But after years of protests, then-US President Jimmy Carter signed a deal with Panama in 1977. The deal gradually handed over control of the waterway. And since Trump became president, he has been saying that the decision to hand over control of the Panama Canal was a big mistake for the United States.