Panama is weighing whether to cancel its contract with the Hong Kong-based company that operates ports near the Panama Canal, people with knowledge of the situation said, a potential concession to defuse US President Donald Trump’s threats about countering China’s influence around the key waterway.
The government of Panamanian President Jose Raul Mulino is weighing the possibility of canceling the contracts held by Hutchison Ports PPC, a subsidiary of billionaire Li Ka-shing’s (李嘉誠) conglomerate CK Hutchison Holdings Ltd, said the people, who asked not to be identified given the commercial and political sensitivity of the issue.
They cautioned that no decision has been made, and that the government would proceed in a way intended to avoid lawsuits and follow due process.
Photo: AFP
Panama’s presidential office did not immediately respond to a request for comment, and Hutchison Ports PPC did not respond to a request for comment.
If such a move goes through, it would mark a major gift to Trump, who says that China has too much control over the canal and has not ruled out seizing it by force. Hutchison Ports PPC operates two of the five ports adjacent to the Panama Canal, one on each side. China has steadily eroded Hong Kong’s autonomy over the past few years.
US Secretary of State Marco Rubio told Panamanian authorities during a visit on Sunday that steps must be taken to curb what he called China’s “unacceptable” influence over the US-built canal, which was ceded to Panama in 1999 under a treaty signed two decades earlier by former US president Jimmy Carter.
Hutchison has run the ports in Panama’s Balboa and Cristobal under a concession that was first signed in 1997 and, in 2021, extended until 2047.
It is not the only action concerning the ports. Two attorneys filed suits against the Hutchison contract on Monday, alleging it violates the country’s constitution. One of the attorneys, Norman Castro, said the concession contains excessive tax breaks and cedes large swaths of land to the port company, contravening the constitution’s guarantee of placing the public good over private interests.
Trump’s threat to take over the waterway has set off a slew of actions targeting the Hong Kong mogul’s port business in the region. Last month, Panamanian authorities sent a team of auditors to Hutchison Ports PPC to conduct what they called an “exhaustive” review to “guarantee the efficient and transparent use of public resources.”
In response to the probe, Hutchinson Ports PPC said it is committed to operating in the country and was fully cooperating with the audit.
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