PANAMA CITY: The decision by Hong Kong firm CK Hutchison to sell its Panama ports to a US-led consortium provides the Central American country with a convenient way out of its standoff with President Donald Trump, experts said Tuesday.
Trump has been fixated on the question of who controls shipping in the Panama Canal, which was built by Washington over a century ago to link the Pacific and Atlantic oceans and later handed over to Panama.
The Republican leader has repeatedly threatened the use of force to seize the canal, claiming that Hutchison’s ownership of two ports, one at either entrance to the canal, gave China control over the strategic waterway which links the Pacific and Atlantic oceans.
Panama rejected the claim that China had de facto control over the canal, which handles 40 percent of US container traffic, while taking various actions to appease Trump.
Its campaign to dodge his fury received a major boost on Tuesday with Hutchison’s announcement that it would offload its ports to a group led by giant US asset manager BlackRock.
The sale offers Panama “a way out of the diplomatic crisis without needing to cancel (Hutchison’s) concession, which would further damage the investment climate in Panama,” Benjamin Gedan, director of the Latin America program at the Washington based Wilson Center think tank told AFP.
Panama’s government insisted that it had no hand in Hutchison’s sale, insisting it was a deal “between private companies.”
Frank Sixt, co-managing director of CK Hutchison, also argued that the deal was “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports.”
But analysts said it came as a relief nonetheless for President Jose Raul Mulino, who had been under fierce pressure to reduce China’s footprint in the country, without riling the second-largest user of the canal after the United States.
In January, his government ordered an audit of Hutchison’s Panamanian subsidiary, Panama Ports, in what was seen as a shot across the bow at the group owned by businessman Li Ka-shing, one of Asia’s richest men.
In the end, one of Hong Kong’s largest conglomerates decided to bow to Trump’s pressure. “In the Trump era, business is the new geopolitics,” Sabrina Bacal, a Panamanian political scientist, told AFP.
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