CONTROLLING THE CANAL

December 1999
		Does handing over the Panama Canal pose national security dangers to the United States? William Ratliff of the Hoover Institution at Stanford University and John J. Tierney of The Institute of World Politics in Washington, D.C., respond to your questions.

Forum introduction Is the Panama Canal an American territory? Do Marxist movements in Latin America threaten the security of the canal? Can handing over the canal -- in a spirit of international peace -- increase security in the canal zone? What will the hand-over's economic impact be to Panama? How will the canal be run differently by Panama? Can the U.S. strengthen ties with Panama via free trade relations?   Online Special: The Panama Canal Dec. 13, 1999: An in-depth look at the Panama Canal and U.S. interests. Browse the NewsHour's coverage of Latin America.     The Hoover Institution The Institute of World Politics The Panama Canal Commission The U.S. State Department

K.D. Livingston, of Silver Spring, MD, asks: Under the agreement, the two main ports within the canal zone would be maintained and operated by a company from Hong Kong. More than likely, any company from the Peoples Republic of China would be closely aligned with the communist government of China. With the surge of socialism in Latin America, Colombia on the verge of being toppled by Marxist rebels, the U.S. government is on the brink of having on its hands more than it can "shake a stick at." In closing, just where does the Monroe Doctrine fit into this scenario?   William Ratliff responds: I will focus here on concerns expressed over the 1996 Panamanian concessions to the Panama Ports Company (PPC) -- a member of the Hong Kong-based Hutchinson Port Holdings Group (HPHG), the world's largest independent port operator -- and touch the threats others in comment No. 6. The dispute is over what powers were given the PPC in the concessions of ports at Balboa on the Pacific and Cristobal on the Caribbean. Is the PPC a stalking horse for Beijing, or will it become one, and/or do the concessions to the PPC make China master of the canal now, or will they in the future? Among others, Retired Adm. Thomas Moorer, former chairman of the U.S. Joint Chiefs of Staff, testified before the Senate in mid-1998, and wrote more recently, that beginning in 2000 "Communist China will become the de facto new owners and rulers of the Panama Canal." Making his point, Moorer cited Law No. 5, which Principal Deputy Assistant Secretary of State Lino Gutierrez, also in Senate testimony, says proves the opposite, as does information I have received from PPC on the content of the law. In fact, Law No. 5 evidently says the PPC will not have any role in deciding what ships can use the canal, what order they can use it or what canal pilots are used. The matter must be seen in the context of China's emergence as a world player with broad international interests. I have discussed this in the U.S. and Beijing with Latin Americanists in both of China's top think-tanks, the Chinese Academy of Social Sciences and the China Institute of International Studies. All affirm increasing Chinese interest in the region, but deny that China will control the canal in 2000. Of course, Beijing would like to oust diplomatic representatives from the Republic of China (on Taiwan) from Panama and other Central American capitals and replace Taiwan's Evergreen Company, which also has port concessions. Gen. Charles Wilhelm, current Commander-in-Chief of the U.S. Southern Command, says that during the 1988-97 period China quadrupled its investments in Latin America to $8.2 billion. But in Senate testimony he concluded that "the impact of Chinese commercial interests in Panama is less a local threat to the Canal and more a regional threat posed by expanding Chinese influence throughout Latin America." Former Southcom Commander-in-Chief General Fred Woerner also finds the alleged Chinese "national security threat" to the canal wildly exaggerated. It is true that Beijing can apply pressure on the HPHG, but doing so would exact a very high price for the HPHG, Panama, China and the United States. Finally, if Panama gave such authority to China through the PPC, it would be inviting the U.S. to intervene immediately in accordance with the terms of the supplementary treaty written to guarantee the permanent neutrality of the canal. The Monroe Doctrine tells foreign nations we won't tolerate their messing around in what we consider our sphere of influence. Every nation that has the means to resist what it considers potential threats has its own usually unstated "Monroe Doctrine." During the 20th century it was "applied" a number of times, preventing some problems and causing or aggravating others. During the past decade, foreign involvement in the Americas, particularly economic, has expanded exponentially on initiatives from within and outside the hemisphere, encouraged in part to the "vacuum" left by the absence of any serious U.S. government efforts to develop hemispheric trade, even as private U.S. trade and investments mushroomed.   John J. Tierney responds: These are not the "two main ports," but two of five -- the others being owned by U.S. and Taiwanese firms. Hutchinson-Whampoa, the Hong Kong-based company you refer to, controls only about 9 percent of the cargo traffic between the oceans, hardly an immediate security threat. The long-term implications of the question, however, are more troubling. Hutchinson-Whampoa, through its CEO Li Ka shing, has close ties to the Chinese Communist government, the Peoples Liberation Army (PLA) and to other Chinese Communist conglomerates, such as China-International Trust and Investment Corp. (CITIC) and the China Ocean Shipping Company (COSCO), both of which serve the interests of the political regime. The steady growth of Chinese geopolitical reach, including facilities in the mid-Pacific, Cuba and the Bahamas in the Caribbean and now in Panama offer warning signs against the once-unquestioned U.S. strategic control of the Western Hemisphere. The Monroe Doctrine is relevant here and I, for one, would not hesitate to employ it as a political guard against external encroachments in Latin America.