By John Q. Hosedrinker 
Panama has formally withdrawn from China’s Belt and Road Initiative, with President José Raúl Mulino citing a lack of demonstrable benefits to the country from the 2017 agreement. The decision, announced at a press conference, follows concerns regarding Chinese investment in the Panama Canal. Mulino stated that he instructed Panamanian diplomats in Beijing to provide the required notification. This action comes amidst speculation of US influence.
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Panama’s recent decision to formally withdraw from China’s Belt and Road Initiative has sparked a wave of reactions, with the United States claiming a significant victory. However, the long-term implications of this move are far from clear-cut, and a simple “win” or “loss” narrative fails to capture the complexities at play.
The success of this move hinges entirely on whether the US or a close ally steps in to fill the void left by China’s withdrawal. Without substantial investment and engagement, Panama’s exit might prove to be merely a temporary pause, a tactical retreat before a renewed engagement with China under a different guise. The situation might even be seen as a strategic game of chess against a less predictable opponent, with potential for unforeseen consequences.
Some view the US’s actions as a win, pointing to the benefits of reducing China’s influence on the Panama Canal, a strategically crucial waterway. This, they argue, has implications for containing China’s ambitions regarding Taiwan. However, concerns remain about the methods used to achieve this outcome. The potential damage to the US’s international standing and reputation through the perceived bullying of a smaller nation cannot be ignored. Critics suggest that the US actions, regardless of immediate gains, may ultimately drive Panama further into China’s embrace in the long run.
A significant point of contention lies in the implications of defunding USAID, a vital tool of American soft power. Reducing this soft power, especially without a viable replacement, could create a vacuum ripe for exploitation by China, effectively counteracting any gains made by pushing China out of Panama’s Belt and Road participation. This action may inadvertently strengthen China’s influence in other parts of the developing world, negating the perceived victory in Panama.
The narrative that this is a US victory is also challenged by questions surrounding the extent of China’s actual involvement in Panama’s infrastructure projects. There are arguments that China’s involvement was less extensive than initially believed and that the US’s portrayal of the situation might be exaggerated for political gain. Additionally, the focus on the ports overlooks the wider implications of the Belt and Road Initiative and its impact on Panama’s broader economy.
Panama’s economic ties with China are substantial, particularly in terms of exports. The loss of this significant trade relationship, coupled with the uncertain prospect of increased trade with the US, could negatively impact Panama’s economy and overall well-being. Whether the potential gains from improved relations with the US outweigh the economic losses from distancing itself from China is a matter of ongoing debate. The question remains: did Panama genuinely benefit from this shift, or did it merely succumb to pressure, sacrificing long-term economic benefits for short-term political expediency?
Some believe that the US action risks alienating Panama and other nations, thereby undermining trust and hindering future diplomatic efforts. The aggressive approach is seen by some as a display of unilateral power, potentially damaging US relations with other countries in the region. Such actions could fuel resentment and push them toward closer ties with China, a much more equitable partner according to several views.
While the US may claim a victory, the long-term consequences are uncertain. The situation underscores the complexities of great power competition and the need for nuanced strategies that prioritize diplomacy and mutual benefit over short-sighted power plays. Without a proactive and comprehensive strategy to replace China’s investment and influence, the supposed “victory” could prove to be a costly and ultimately Pyrrhic one. The true consequences of this action may only become fully apparent over time.