Panama and China renew bilateral maritime agreement

Panama and China this week renewed a maritime agreement whereby Panama-flagged ships enjoy favourable terms when calling Chinese ports. Under the agreement, which was due to end this year, Panamanian-flagged ships are offered preferential tariffs and easier bureaucratic rules.

The agreement is significant in that it comes after Panamanian claims that its ships were being unfairly targeted by China’s Port State Control authorities. This in retaliation for Panama’s having declared Hong Kong-based CK Hutchison’s concessions at the ports of Cristóbal and Balboa, via Panama Ports Company (PPC), to be “unconstitutional” and taken over control of the terminals located at either end of the Panama Canal.

PPC has since begun arbitration proceeding over the dispute, while Chinese officials have said the inspection rate of Panama-flagged vessels has returned to “historic levels”, suggesting an easing of tensions between the two countries over the matter.

Questioned as to whether renewal of the agreement signalled a diplomatic rapprochement, China’s Foreign Ministry spokesperson Lin Jian was reported as saying: “China has always been committed to developing its relations with Panama based on the principles of equality, mutual benefit, and win-win cooperation. Strengthening exchanges and cooperation between China and Panama in various fields serves the interests of both countries and meets the common expectations of our peoples.”

Panamanian President Jose Raul Mulino had previously rejected suggestions that US pressure had shaped his government’s handling of the ports concessions, saying: “The decision we made regarding those two ports was genuinely Panamanian.”