Washington issues vague threat over Panama – China business ties

Varela and Xi
Presidents Varela and Xi. Soon after Panama and the Peoples Republic of China established formal diplomatic ties, the two governments signed at least 19 economic agreements, many of them in general and prospective terms. China contemplates using Panama as a warehousing and financial services center for its dealings with much of Latin America and the Caribbean, and has offered Panama generous lines of credit unavailable on those terms from US-dominated international lenders. Photo by the Presidencia.

Is it a draft notice for Trump’s trade war with China?

press release by the US State Department, analysis by Eric Jackson

On September 20, by way of a press release on the website of the American Embassy in El Salvador, the US State Department reacted to recent decisions by Panama, El Salvador and the Dominican Republic to cut ties with Taiwan and establish formal relations with the Peoples Republic of China. It warned of dealings with “unfamiliar partners whose methods lack a proven, positive track record” that may not be in the interest of the countries involved, and warned that if there are dealings that Washington considers to be corrupt the US visas of those involved in the transactions and their families might be revoked.

The statement is likely to stir a bit of nationalistic outrage in Panama, particularly because it is vague. Does it mean that private Panamanian businesses that make deals with Chinese businesses may be penalized? Does it mean that Donald Trump considers US and Panamanian economic interests to be one and the same, such that deals by Panamanian companies with Chinese businesses that have US competitors might be considered some sort of betrayal? Is it a draft notice by which Panama is warned to close ranks with the United States in a trade war with China?

Read the US statement and see if you can figure it out:

September 20, 2018

Conclusion of consultations by Ambassador Manes and the Chiefs of Mission to the Dominican Republic and Panama

Ambassador Jean Manes and the Chiefs of Mission in the Dominican Republic and Panama concluded productive consultations at the Department of State, as well as with policy leaders from the White House, the Department of Justice, the Department of the Treasury, the US Congress, and others about the decisions of those countries to end diplomatic relations with Taiwan.

The Chiefs of Mission provided valuable insight into discussions on how the United States can continue to support stable, independent, democratic institutions and economies throughout Central America and the Caribbean. The United States remains committed to supporting our partners’ efforts to promote transparency, rule of law, economic growth, and democratic values in the region and the world.

As countries throughout the region increasingly pursue economic agreements and relationships with unfamiliar partners whose methods lack a proven, positive track record, we note a disturbing trend that many of these transactions often lack transparency and do not serve the long-term interests of those countries. Effectively preventing and combating corruption is essential to strong, well-functioning democracies throughout the Americas, and our Embassy in San Salvador and others in the region will continue to support those efforts and monitor allegations of illicit enrichment. Where corruption or other significant wrongdoing are identified, the US government will consider the cancellation of visas for travel to the United States for those involved and their family members.

Building the capacity of the institutions that serve the Salvadoran people and lead the fight against corruption is a central element of our bilateral relationship with El Salvador. The US government remains fully committed to supporting the people of El Salvador in efforts to make their nation more prosperous, safer, stronger, and more democratic.


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