Canal Invasions Y2K
by Sarah Town

With the final withdrawal of U.S. troops from Panama and official turnover of the canal and remaining properties quickly approaching, controversy has resurfaced over the United States' impending departure. Elaborate scenarios depicting threats of various sorts to U.S. security and business interests circulate.

The Reds
One oft-invoked scenario stems from port concessions made over two years ago by the Panamanian government to Hutchison Whampoa Ltd. The company won a twenty-year contract for ports at both the Atlantic and Pacific entrances in 1997, as part of the Panamanian government's plan to privatize the Canal by encouraging international investment in the region. The Miami Herald elaborates on the Hutchison threat, saying the company is "controlled by Hong Kong tycoon Li Ka-shing, a 71-year-old billionaire ranked as the ninth most powerful man in Asia by Asia Week magazine…. Li and his empire are linked to several companies known as fronts for Chinese military and intelligence agencies."

At the time the contract was awarded, some U.S. business, military, and diplomatic sectors complained that the concessions process had been unorthodox and discriminatory, and expressed fears that Chinese "control" of the Canal could hurt U.S. business and security interests. But the controversy was contained within those circles until earlier this year when a few published articles and dedicated lobbying efforts brought the issue to light.

At the forefront have been organizations such as the National Security Center, an organization whose advisory board includes 80 retired military officials, and the Atlantic Council, a Washington-based conservative think-tank made up of ex-military and business people. In a New American article published in August, Center spokesman retired Admiral Thomas Moorer warned that "the United States is on a suicide course that will surrender its American Canal in Panama into the hands of a hostile and dangerous foreign power."

Moorer blames "14 consecutive cuts in the defense budget" for what he calls the current lack of U.S. military preparedness and "Beijing's massive payoffs to Clinton-Gore and the Democratic National Committee" for the Clinton administration's "willful blindness" to the Chinese threat. In an October press conference, in which the National Security Center delivered 250,000 petitions on the subject, Moorer was quoted as saying that if U.S. needs aren't met under the new arangement, "we would be forced to take [the Canal] back."

Dedicated lobbying efforts finally paid off when Senate Majority Leader Trent Lott wrote Defense Secretary William Cohen, complaining that "we have given the farm away without a shot being fired." Lott and Representative Bob Barr also held congressional hearings on the matter in October, in this Latin American episode of Clinton's "Chinagate."

Not So Scary
Robert Pastor, National Security Council member under Jimmy Carter, calls the current Red Scare one of the more "absurd" turn-of-the-millennium "anxieties," pointing out that Chinese investments will mean a greater Chinese stake in the smooth functioning of the Canal, rather than the contrary. Peter Romero, the State Department's top official on Latin America, recently reassured lawmakers that after initial worries about Hutchison's presence on the Canal, further review found that the bidding process had not been discriminatory to the United States, and that Hutchinson's presence poses no serious security threat.

As Lloyd's List explains, for many in the port developing world, Hutchison is known as a British company operating some 18 or 19 ports around the world. Mike Booth, general manager of its Panamanian wholly-owned subsidiary, Panama Ports Co., points to the irony of the uproar surrounding Hutchison's Panama holding, while there is silence regarding the port it operates in Freeport, Bahamas, even closer to the U.S. mainland. La Carta de Panama reports that Hutchison also controls London ports Thamesport, Harwich, and Felixtowe, and wonders sarcastically if that doesn't put Britain in even greater danger.

In fact, certain fears expressed by Trent Lott and others appear to be misguided, as for example concerns that canal operations would be taken over by the Chinese. The Panamanian Constitution designates the Panama Canal Authority as the sole operator and administrator of the Canal. In addition, a U.S. reservation appended to the Neutrality Treaty, part of the 1977 Canal Treaties, guarantees equal access to all ships and allows U.S. military intervention if Canal security is threatened.

Panamanians call the U.S. position hypocritical, since its dogged lobbying for free markets appears to extend only as far as its sphere of influence. In addition, they see this controversy as just the latest instance of Panama's being drawn into U.S. domestic political maneuvering. Roberto Roy, a member of the Canal's future public managing body, the Panama Canal Authority, points out that properties along the Canal have also been granted to companies from Taiwan and the United States. Presidential advisor Roberto Eisenman adds that from Panama's perspective, the important thing is that Hutchison has already invested $100 million to renovate the two ports.

Narco-Terror-Guerrillas
International terrorist attacks on the Canal are another source of worry for some. A July Dallas Morning News article quotes military experts alluding to the ease with which the Canal could be taken over or shut down for months or years. The article suggests that the major mission of the 10,000- plus U.S. troops formerly stationed in Panama was to guard the Canal.

A long-standing fear in U.S. military circles is that of the "Colombianization" of Panama. This scenario points to occasional incursions into Panamanian territory by Colombian guerrillas and paramilitaries and Colombian drug traffickers' use of Panama for stopovers and money laundering, suggesting that the only thing standing in the way of total mayhem is the U.S. military presence there, which will end on December 31.

Republican Senators Robert Smith, Sam Brownback, and Jesse Helms introduced Senate Concurrent Resolution 59 calling for the U.S. President to renew negotiations with Panama for a continued presence there after December 31, 1999. Their reasoning includes references to Colombian guerrilla incursions, drug trafficking, money laundering, and of course the discriminatory bidding process which turned control of the canal over to Hutchison, whom the senators call an agent of the Chinese Republic and Popular Liberation Army. The Senate has not acted on the resolution.

Sources: AP 10/6/99; Dallas Morning News 7/4/99; Lloyd's List 9/3/99; Miami Herald 10/11/99; The New American 8/99; Peter Romero statement 9/29/99; Senate Concurrent Resolution 59, 106th Congress.

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