Panama canal and US sign joint declaration on security and warship toll compensation

By Admin

14 Apr, 2025

On April 9, 2025, the United States and Panama signed a joint declaration aimed at enhancing the security and operational cooperation of the Panama Canal. This agreement introduces a framework allowing U.S. warships and auxiliary vessels to transit the canal under the principle of "first and free," granting them priority passage without toll charges.​

Strategic Significance

The Panama Canal is a critical maritime route, facilitating approximately 40% of U.S. container traffic and about 6% of global trade. Given its strategic importance, the canal has become a focal point in the geopolitical competition between the U.S. and China. U.S. Defense Secretary Pete Hegseth emphasized concerns over China's growing influence in the region, particularly regarding Chinese companies managing port facilities at both entrances of the canal. He asserted the necessity of countering this influence to ensure the canal's security and neutrality.

Terms of the Agreement

The joint declaration outlines several key provisions:​

• Priority Passage: U.S. warships and auxiliary vessels are granted priority in transiting the canal.

• Toll Exemptions: These vessels are exempted from paying tolls, aligning with the principle of "first and free."​
  
  

• Enhanced Security Cooperation: The agreement includes measures for joint security initiatives, such as cyber defense collaboration and technical support from the U.S. Army Corps of Engineers to ensure the canal's long-term sustainability.
  
  

Legal and Operational Considerations

While the agreement signifies a strengthening of U.S.-Panama relations, it also raises questions regarding its alignment with existing treaties and laws. The Panama Canal Authority (ACP) maintains that toll exemptions are governed by international treaties ratified by Panama. According to Article 76 of the Panama Canal Law, neither the government nor the ACP may authorize toll exemptions unless stipulated by such treaties.

This has led to some ambiguity, as the ACP has not officially confirmed changes to the toll structure. Therefore, while the joint declaration sets a framework for toll exemptions, its implementation may require further legal and diplomatic steps to align with Panama's existing legal framework.​

Geopolitical Implications

The agreement is part of a broader U.S. strategy to counter China's influence in the Western Hemisphere. By securing priority, toll-free passage for its naval vessels, the U.S. aims to reinforce its strategic presence and ensure the canal remains neutral and secure. This move also reflects Panama's recent shift away from China's Belt and Road Initiative, signaling a realignment towards closer ties with the United States. 

Conclusion

The U.S.-Panama joint declaration marks a significant development in the management and security of the Panama Canal. While it underscores a mutual commitment to safeguarding this vital maritime route, the agreement's practical implementation will depend on reconciling it with Panama's legal obligations and the ACP's regulatory framework. As geopolitical dynamics continue to evolve, the canal's role as a strategic asset remains central to both regional and global trade and security considerations.