The announcement followed President Jose Mulino’s meeting with U.S. Secretary of State Marco Rubio in Panama City on Sunday.
Panama President José Raúl Mulino said on Sunday that his country will not renew its memorandum of understanding with China to be a part of the Chinese Communist Party’s (CCP) Belt and Road Initiative (BRI).
Speaking to reporters, Mulino said the agreement is due for renewal in two years and his government is looking into the possibility of terminating it earlier, according to local media reports.
“We are going to study the possibility of whether it can be finished earlier or not. I think it is due for renewal in one or two years,” he said in Spanish.
Mulino made the announcement after a meeting with U.S. Secretary of State Marco Rubio in Panama City earlier in the day, during which Rubio called on Panama to urgently address the CCP’s influence over the region. The Trump administration had accused the country of failing to ensure the U.S.-built Panama Canal’s neutrality, which was a requirement set forth by the “Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal” of 1977. The treaty paved the way for the United States to hand control of the canal to Panama in 1999.
“I do not feel that there is any real threat at this time against the [neutrality] treaty, its validity,” the Panamanian leader said.
Panama signed the agreement to join China’s global infrastructure project in 2017 under the former administration of President Juan Carlos Varela after it severed diplomatic ties with Taiwan.
U.S. officials have warned that the BRI project is “debt-trap diplomacy” by the CCP. Around the world, the CCP has offered loans through BRI agreements to developing nations for infrastructure projects that have ultimately led to unsustainable debt levels for participating nations, leaving their strategic infrastructure vulnerable to control by China.
During their talks on Feb. 2, Rubio told Mulino that U.S. President Donald Trump is concerned about the CCP’s “current position of influence and control” over the Panama Canal area, citing the neutrality treaty.
Rubio made clear that the status quo is “unacceptable” and said the United States will “take measures necessary to protect its rights” under the treaty, according to State Department spokesperson Tammy Bruce.
In response, Mulino affirmed his country’s sovereignty over the Panama Canal and said the waterway will continue to function as “an autonomous entity,” according to a readout in Spanish issued by his office.
“I understand that this is a concern of President Donald Trump, given the time when these treaties were signed and the current situation” of Hong Kong-based Hutchison Ports operating the ports at both ends of the canal, Mulino said.
Panama also pledged to form a technical team to “clarify any doubts” that U.S. officials may have about the operations of the waterway, his office stated.
Mulino added that Panama would expand its July 2024 memorandum of understanding with the U.S. Department of Homeland Security to assist U.S. authorities on illegal immigration issues.
Several U.S. officials took to social media to celebrate Mulino’s decision to end the BRI agreement, with National Security Adviser Mike Waltz describing it as a “step in the right direction.”
Rep. Bill Huizenga (R-MI) praised Rubio for his efforts in countering the CCP’s influence in Panama.
“China has seen much too much influence here in the Western Hemisphere. Now on to Africa and other spots around the world,” Huizenga stated on X.
The House Committee on Foreign Affairs stated on X that “Panama appears ready to turn off the spigot” after Rubio’s single visit to the country.
The talks marked Rubio’s first overseas trip since assuming the post less than two weeks ago. The trip, which includes stops in El Salvador, Costa Rica, Guatemala, and the Dominican Republic, also marks the first time in a century that a U.S. secretary of state has made Latin America the first official destination, reflecting a U.S. desire to counter rising Chinese diplomatic encroachment in the region.
The United States spent a decade building the Panama Canal, which connects the Caribbean Sea with the Pacific Ocean. In 1999, under the 1977 treaty, Panama took control of the 51-mile-long waterway.
Eva Fu contributed to this report.
