New Panama President is Opportunity for US and Chiriqui

Panama’s new President provides new opportunities for the US to regain influence in the region and for Chiriqui Province to see major impacts from a new train that will reach Chiriqui from the capital of Panama City.

The train has the potential to transform towns and cities along its path with Chiriqui Province a major benefactor.

Easy to miss, the article also mentions that an amazing 80% of Panamanians have a positive view of the United States, far more than most other countries in Latin America where the average is only about 60%. Panamanians often have deep, personal ties with the United States.  Many have lived or studied in the U.S. Those who haven’t often have close friends and relatives who have.

The positive connections Panamanians have with the U.S. help to make it a great retirement or 2nd home destination.

Meanwhile, the new pro-growth, pro-business Mulino administration offers the U.S. and Panama an opportunity to offset China’s gains in the region.  And, Mulino’s receptivity to restricting migrant flows through the Darien jungle could make Panama even more important to the United States given the high profile of U.S. border politics today.

Foreign Policy’s latest article provides an in-depth analysis of the evolving geopolitical landscape in Panama following the election of its new president, José Raúl Mulino. Written by Benjamin N. Gedan, deputy director of the Wilson Center’s Latin American program, the article explores how Mulino’s administration could represent a significant turning point in the region’s engagement with China and the United States.

In 2017, Panama shocked many by severing its long-standing diplomatic ties with Taiwan in favor of establishing relations with China—a move that not only caught the United States off guard but also signaled a broader trend of Latin American countries leaning towards Beijing. This decision paved the way for other countries like the Dominican Republic, El Salvador, Nicaragua, and Honduras to follow suit, effectively eroding Taiwan’s presence in the region and bolstering China’s influence. As a result, the United States became increasingly sidelined in a region that it had previously dominated without challenge.

The article delves into how President Mulino’s recent election presents a unique opportunity for the U.S. to regain a foothold in Panama and, by extension, in Latin America. Although Mulino was endorsed by controversial former President Ricardo Martinelli, he has made efforts to distance himself from his predecessor’s legacy, emphasizing Panama’s strategic partnership with the United States. His government has already shown signs of shifting away from China, with increased diplomatic engagement in Washington and a cautious approach to Chinese investments in the country.

Mulino’s foreign policy could be transformative not only for Panama but also for the broader U.S.-China rivalry in Latin America. Restoring ties with Taiwan—or even strengthening unofficial relations—would be a major victory for Taiwan and a rare win for U.S. diplomacy in a region where China’s economic clout has been growing unchecked. However, this path is fraught with challenges, as Panama would need assurances from the U.S. and Taiwan to mitigate Beijing’s inevitable backlash, which could include economic retaliation or diplomatic isolation.

The article further explores the complexities of Panama’s position as a nation deeply intertwined with both U.S. and Chinese interests. The Panama Canal, a critical artery for global trade, remains a symbol of U.S. influence, but China’s investments in infrastructure and trade zones have made it an indispensable economic partner as well. Mulino’s administration will need to navigate these competing interests carefully, balancing economic needs with geopolitical strategy.

The stakes are high for Panama’s new government as it seeks to redefine its role on the global stage. The decisions made in the coming months could reshape not only its own foreign policy but also the dynamics of international relations across Latin America.

Panama’s New President Means New China Policy

After Latin America’s long drift toward Beijing, the United States can shore up its position.

By Benjamin N. Gedan, deputy director of the Wilson Center’s Latin American program. September 24, 2024

Excerpts: “Panama’s decision in 2017 to jettison Taiwan and establish diplomatic relations with China caught the United States off guard and signaled Beijing’s growing influence in Latin America. It was the first time China had poached a country in the region in a decade, and it cleared the way for others to ditch Taipei, including the Dominican Republic, El Salvador, Nicaragua, and Honduras.

Now, however, Panama might consider reversing the trend it started, provided that Taiwan and the United States protect it from Beijing’s inevitable backlash and compensate for economic losses. … It would also represent a rare win for the United States in its fight for influence in a region where its power was once largely uncontested.”

“In May, Panamanians elected a conservative former foreign minister, José Raúl Mulino, as president.

… He has moved quickly to portray Panama as a “strategic partner” for the White House.”

“These days, the United States is widely admired in Panama. Nearly 80 percent of Panamanians have a positive view of America, almost double the number that view China favorably, according to the polling organization Latinobarómetro.”

“Mulino has shown special interest in issues that interest the White House. Just hours after his inauguration, Panama signed an agreement with the United States to deport migrants arriving from Colombia through the Darién Gap on their way north. He has also supported the U.S. hard line on Venezuela following its disputed election in July

“Panama could be an even more important partner beginning next year, when it starts a two-year term on the United Nations Security Council.”

“Rather than take sides in the U.S.-China rivalry, the business community prefers to drink from both cups. China has a major presence in Panama’s Colón Free Trade Zone, and it is currently building a fourth bridge over the canal.”

“But even if Panama does not restore diplomatic ties to Taiwan, it could strengthen their relationship, demonstrating that Taiwan could be a valuable partner to all countries in the region… One promising area is semiconductors, given Taiwan’s expertise and Panama’s ambitions. Panama is already a recipient of U.S. funds intended to promote the “nearshoring” of chip production.

“Panama is mulling two mammoth projects, a $1.6 billion dam to meet the canal’s freshwater needs and a 250-mile tourist train from the capital to the western city of David. The U.S. government and U.S. companies could play a role in both projects as well as in meeting other infrastructure needs.”

“China has been schooling the United States in Latin America for decades, but a strong showing in Panama could begin to turn the tide. This is the right moment for a comeback. China’s lending to the region has fallen sharply … In the meantime, debt to China is coming due, sapping goodwill. Many governments run trade deficits with China. Countries that dropped Taiwan—such as Costa Rica —have buyer’s remorse, with unmet expectations for big investments and rising trade.

Regional leaders are beginning to stand up to Beijing.”

“Washington is typically tightfisted when it comes to Latin America, but there is bipartisan interest in outmaneuvering China and recognition that Panama’s new government is a potentially important ally in that competition. China had a “foothold” in Panama, one senator said at a recent hearing, “until we got this president in down there.” Will the United States seize this opportunity? It is hard to say, but it should”

Read the full article here.