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Seizing the Panama Canal again would be Operation Bad Idea

As Henry Kissinger pointed out, it may be dangerous to be America’s enemy. But to be America’s friend is fatal

A second military intervention would be detrimental to shipping, not to mention the US economy

IT IS not that long since the US last seized control of Panama. Just before Christmas 1989, the first president Bush despatched his armed forces to enforce the extradition of the country’s unpleasant military strongman General Manuel Noriega.

Given the subsequent Gulf War and the second president Bush’s invasions of Afghanistan and Iraq, the incident many be the least-remembered of the family’s multiple military incursions.

But Operation Good Cause nicely illustrates the dictum attributed to Henry Kissinger that while it may be dangerous to be America’s enemy, to be America’s friend is fatal.

Noriega was indisputably a card-carrying homicidal thug. But he had been on the Central Intelligence Agency’s payroll for decades and was a prominent backer of Washington’s efforts to bring down the Sandinista government in nearby Nicaragua.

Several good reasons were advanced to justify the campaign, from Noriega’s involvement in drug dealing to his penchant for murdering political opponents and annulling elections that didn’t go his way.

But the realisation that the Panamanian government was scheduled to take control of the Panama Canal in the following decade was openly admitted by Washington foreign policy makers as the crucial context at play.

Unlike most other attempts at regime change, Operation Good Cause proved successful by its own lights. Panama is now a functioning democracy, with orderly rotations of power and freedom of expression and assembly.

But as Lloyd’s List reported this week, the new occupant of the White House is threatening to send in the Marine Corps again. Donald Trump’s complaints include high canal fees and allegedly excessive Chinese influence, with Hong Kong’s Hutchison running the ports of Balboa and Cristobal at both ends.

Newly installed secretary of state Marco Rubio has also made free with Beijing-bashing rhetoric. But lurid talk from other Republican operatives of “the People’s Liberation Army flying the red flag” demonstrates levels of paranoia on a par with 1962 movie The Manchurian Candidate.

The reality is Hutchison is a highly reputed and profit-driven private company and the world’s sixth-largest port operator, with terminals throughout the Americas, Europe, the Middle East and Asia.

The current batch of proffered pretexts look demonstrably more flimsy than last time round. A rerun of 1989 would amount to a transparent grab of an international waterway of crucial importance to our industry in the name of naked American self-interest.

In recent decades, the Panama Canal Authority (ACP) has repeatedly shown itself to be a responsible steward of the Panama Canal. Yes, it seeks to maximise revenue from an asset that is the central pillar of the local economy. But why wouldn’t it, and why shouldn’t it?

It was the ACP that oversaw the $5.2bn Panama Canal Expansion Project, which added a third set of locks and widened and deepened the canal, which since 2017 has allowed it to accept larger vessels than previously.

Between 2023 and 2024, drought across the entire region forced the authority to ration transits, resulting in significant disruption. But for that, blame climate change rather than malign intent.

The practice of auctioning slots caused shipowners, especially those transporting lower margin goods such as dry bulk rather than more valuable consignments such as LNG, to grumble.

It is true that ACP profits rose. But not unconscionably so, given the necessity to fund climate change mitigation measures in future. Nor were its actions unreasonable in the circumstances; the alternative of queuing vessels up on a first-come-first-served basis would have multiplied the chaos immeasurably.

The impact of US military adventurism — with the attendant potential for temporary closure — would no doubt provide shipping with a sugar rush in the form of higher freight rates. But it would also wreak havoc with supply chains and result in higher costs for US importers and exporters.

Additionally, it would jeopardise the neutrality that is a key element of the canal’s offer. Reduced fees for US ships would mean higher fees for the ships of all other nations.

We will largely leave aside the predictable political and military outcomes. But most commentators believe that intervention would spark deserved animosity towards the US across Latin America, not to mention much of the world.

Noriega’s ouster took only weeks, with the populace little inclined to rally to his aid. This risk that this time could be very different is worth remembering, especially in a region still scarred by recent guerilla conflicts.

Calling the first US invasion Operation Good Cause was a small masterpiece of disculpatory euphemism. If history repeats itself, the second might appropriately brand itself Operation Bad Idea.

 

 

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