Panama slipping into China’s ready grasp?

By Gordon Sumner & Howard Phillips
Washington Times, 18 August 1997

With virtually no serious debate, Congress has committed $6 billion to pay for U.S.
intervention in Bosnia, where no perceptible U.S. vital interest is at risk.

Closer to home, Congress has thus far proven unwilling to spend a fraction of that amount (less
than $100 million per year) to maintain an essential U.S. military presence at the isthmus at
Panama and to block eventual control of the isthmus by interests allied with Communist China.

At the beginning of 1997, there were 6,800 U.S. military personnel in Panama. By the end of
this year, that number will have been reduced to 4,410.

Under the terms of the Carter-Torrijos Panama Canal Treaty, which expires on Dec. 31, 1999,
the United States is not obliged to leave Panama until midnight, as the year 2000 begins.

Nonetheless, in a penny-wise, pound-foolish manner, we have been prematurely reverting
facilities and resources years before the treaty requires.

Moreover, the 1978 treaty provides a procedure whereby a continuing U.S. presence well into
the next century can be secured.

The Panama Canal Neutrality Treaty reads: “Nothing in the Treaty shall preclude the Republic
of Panama and the United States of America from making agreements or arrangements for the
stationing of any United States military forces or the maintenance of defense sites after that date
in the Republic of Panama that the Republic of Panama and the United States of America may
deem necessary or appropriate.”

A U.S.-Panama accord to carry forward the American presence is not “pie in the sky.” Surveys
conducted in Panama over a period of years have indicated repeatedly that the overwhelming
majority of Panama’s citizens want the United States to stay. The margin of support swells to 80
percent and beyond if the United States agrees to pay a leasing fee to maintain its presence.

Our opportunity to negotiate such an accord is nothing new. It has been there since the late
1970s. Many of us had hoped that Ronald Reagan would take early action to exercise it during
his presidency, or that George Bush would.

Instead, top Panamanian officials have attested, some with disappointment, that Gens. Brent
Scowcroft and Colin Powell, acting in behalf of the Bush administration, made it very clear that it
was their intention to expedite the U.S. withdrawal, and that under no circumstances would they
consider a lease arrangement for continuation of the bases.

And President Clinton has squandered more than four years, failing to proceed in a timely and
serious manner.

With each passing day, U.S. options in Panama are being narrowed. We are creating a
political vacuum, and there are already signs that potentially hostile forces are moving to fill that
vacuum.

Already, key port facilities on the Atlantic and Pacific sides of the canal (Cristobal and Balboa)
have been leased by Hutchison Whampoa, 10 percent of which is owned by China Resources
Enterprises (100 percent of which is controlled by the Red Chinese government).

A major share of Hutchison Whampoa is owned by Li Ka-shing, a Hong Kong billionaire
heavily dependent on good relations with Beijing. Hutchison Wampoa itself is used by Beijing to
run commercial ports controlling a preponderance of South China’s seaborne commerce.

Hutchison Whampoa is closely associated with the China Ocean Shipping Company, a 600-ship
global corporation supervised by the People’s Liberation Army.

As part of the Cristobal-Balboa lease agreement, in apparent violation of the Carter-Torrijos
Treaty, contractual influence over facilities adjacent to Cristobal and Balboa has been assigned to
Hutchison.

The 25-year lease will cost COSCO $22.2 million a year, but the deal grants a two-year waiver
of labor laws and veto rights over the use of abutting properties (in clear violation of the Panama
Canal treaty). A Hutchison lawyer, Hugo Torrijos, was also the head of the port authority that
awarded the contract.

Red Chinese influence in Panama is growing in many ways. Recently, the Bank of China
extended a 15-year $120 million loan to Panama at 3 percent interest to finance the government’s
investment program and to purchase and sell assets.

And, under pressure from China, both the United States and the United Nations have
withdrawn from official participation in a ceremony scheduled next month to commemorate the
completion of the Panama Canal in 1914 (the Universal Congress of the Canal in Panama).

Panama is one of only 30 countries in the world which continues to recognize the Republic of
China on Taiwan. Arguably, of all those countries it is the most important to Taiwan’s
international standing.

Taiwan has considerable investments in the Republic of Panama, but now it is being crowded
by the Communist Chinese. Last year, China seized recognition away from Taiwan in the
Republic of South Africa, despite Taiwan having contributed substantial sums into the political
coffers of Nelson Mandela’s African National Congress, and despite South African President
Nelson Mandela’s personal promise that recognition of Taiwan would be maintained under his
leadership.

Panama’s President Ernesto Perez Balladares similarly is now asserting that there is no intent to
shift official recognition from Taipei to Beijing, but, in Panama as elsewhere, money and
momentum can have an impact on political decisions.

Just as Soviet hegemony in Cuba during the 1960s, ’70s and ’80s had a significant impact on
U.S. national security, in a similar fashion, the growing Communist Chinese presence in Panama
could have highly adverse consequences for the United States in the decades just ahead.

Congress can show that it understands this problem by asserting its intent to provide: (a)
necessary funds through Dec. 31, 1999 to prevent the premature reversion of U.S. facilities
before then and (b) adequate funds thereafter to maintain a continuing presence, one that will have
the support of the Panamanian people.

Unless Congress acts soon, the United States will lose:

• The ability to project power from the Arctic Circle to Antarctica, solidly positioned at the
  belt buckle of the Western Hemisphere.
• The ability to defend the Panama Canal from acts of terrorism or sabotage.
• The ability to train 7,800 military personnel annually at Panama’s topographically and
  climatologically unique Jungle Operations Training Base.
• The ability to outflank terrorist and guerrilla activity in Central America and the Caribbean.
• The ability to effectively monitor drug activity in South America.
• The ability to rapidly transfer U.S. Navy vessels between the Atlantic and Pacific Oceans.
• The ability to monitor submarine activity in the Atlantic and Pacific.
• The ability to prevent an alien power, such as China or the drug traffickers, from controlling
  the isthmus.

Senate Majority Leader Trent Lott, whose home state of Mississippi benefits from cargo ships
transiting the canal, and House Speaker Newt Gingrich of Georgia should act promptly so that
Mr. Clinton and Vice President Al Gore will be unable to point their fingers to Capitol Hill when
the question is asked: Who lost the Panama Canal.

Lt. Gen. Gordon Sumner Jr. (Army, retired) is a former chairman of the Inter-American
Defense Board. Howard Phillips is chairman of the Conservative Caucus.