Work on the expansion of the Panama Canal, led by a European consortium, resumed recently after a disturbing interruption of the project because of a cost dispute. Completion of the work may now have been set back to December 2015 or later. The visit to the canal last November by Vice President Biden, Baltimore Mayor Stephanie Rawlings-Blake and several others from major port cities demonstrated how much we have at stake in Panama. Yet since we turned the canal over to the Panamanians at the end of 1999, most of the rest of us have failed to realize that U.S. global competitiveness may depend even more now on how well the big ditch continues to work for us.
The government of Panama entrusted the job of running the canal to the Autoridad del Canal de Panamá (The Panama Canal Authority), and the ACP professionals have done a tremendous job of operating and modernizing the canal for over 13 years, and U.S. concerns for what was once Ronald Reagan's hot button political issue have all but disappeared. Now with about two thirds of our seaborne trade depending on the $5.25 billion enlargement, the U.S. stakes in Panama have again been dramatically revived.
U.S. interests in the Panama Canal had already been raised a lot. Most of us just did not know about it. When the Panamanians took control in the 1990s, they launched a comprehensive modernization program that widened channels, provided lighting for 24-hour operations, improved navigation aids to increase safety and upgraded equipment to speed transits. Then they introduced a new system of reservations and bidding to determine the place of ships in transit instead of the old first come, first served U.S. practice. Increasingly since 2000, ships have been able to cross the isthmus more rapidly and safely, and the Panamanians have also increased environmental protection and restored some of the watershed the U.S. had allowed to deteriorate.
Yet the success of the ACP in running the canal only tells part of the story of the new advantages for the U.S. When the security of the canal was threatened by terrorism after the 9/11 attacks, the ACP and the government of Panama quickly turned to the U.S. to develop a new security system in which other stakeholders now also share the burden. Panama then took the lead in convincing the International Maritime Organization to adopt the U.S. proposal that has become the new standard for global maritime security, the International Shipping and Port Security Code.
The government of Panama also took advantage of the U.S. return of territory by opening up the former Canal Zone for development of a new hemispheric shipping and logistics hub for which we in the U.S. are also the major beneficiaries after the people of Panama. The four sleepy little ports that moved a couple of hundred thousand containers a year under U.S. control have been transformed into mega terminals that will move over 8 million containers, mostly to U.S. consumers or customers, this year.
The expansion project launched in 2009 to double the capacity of the canal will make the inter-oceanic connections there all the more valuable. Ports all over the U.S. have launched expansion, dredging and other improvements worth at least $12 billion to accommodate the larger ships that will be docking thanks to the canal's new third set of locks, now about 70 percent complete. The reputation of American business is also at stake because the job of managing the expansion project was awarded to the CH2M Hill Inc. of Colorado.
Most importantly, the success of President Obama's drive to deepen our economic revival depends greatly on the effort to boost U.S. export competitiveness, and nowhere is this more important than for the big new ships needed for growing liquefied natural gas exports. Clearly, the U.S. needs to do whatever possible to keep the work on track. The world needs to know that we still trust the ACP to get the expansion completed with the same competence and reliability with which it has run the canal.
Gene E. Bigler is a retired foreign service officer and former professor who has followed U.S.-Panama relations closely since 1968. His email is email@example.com.
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