Commentary

Ghosts of the Cold War

By Ivan Eland
October 12, 1999
Old cold warriors never die, they just get more paranoid. A prime example is Sen. Trent Lott’s request—and Sen. John Warner’s assent—for the Senate Armed Services to investigate allegations that China is undermining U.S. security by attempting to gain control of shipping through the strategic Panama Canal. Nothing could be more preposterous.

Some conservatives argue that the Panama Ports Company, which won a long-term contract to operate the port facilities at both ends of the canal, and the owner of its Hong Kong-based affiliate Hutchison-Whampoa Ltd. shipping company have links to China’s People’s Liberation Army and intelligence services. Adm. Thomas Moorer, former chairman of the Joint Chiefs of Staff, goes even further: “Hutchison-Whampoa controls countless ports around the world. My specific concern is that this company is controlled by the Communist Chinese. And they have virtually accomplished, without a single shot being fired, a stronghold on the Panama Canal.”

The alarmists also note that 10 percent of Panama Ports is owned by China Resources Enterprise (CRE), the commercial arm of China’s Ministry of Trade and Economic Cooperation. Sen. Fred Thompson (R-Tenn.) has called CRE an agent of espionage for China.

Yet do the Hutchison-Whampoa owner’s links to the Chinese military and intelligence services and the Chinese government’s ownership stake in Panama Ports necessarily constitute an insidious geopolitical plot by China to control a strategic asset in America’s backyard? The contract by a shipping company to operate port facilities may simply be designed to make money. Even the Chinese government and military have routinely been engaged in business activities overseas to turn a profit—for example, in the food and clothing industries.

Because he felt that commercial distractions undermined the Chinese military’s effectiveness, Jiang Zemin, China’s leader, recently ordered the armed forces to get out of such activities. If those business ventures have such a detrimental effect on China’s military readiness, perhaps the United States should encourage the Chinese military to conduct more business, not less even in the Western Hemisphere.

Furthermore, the Panama Canal Commission insists that Panama Ports cannot determine which ships can transit the canal. In fact, according to the Panama Canal Treaty of 1977 which ends U.S. military presence in Panama in December 1999, U.S. military vessels will continue to have priority for passage through the isthmus.

Even if the Chinese business activities in Panama have a geopolitical motivation rather than a commercial one, they will likely have little strategic effect. After the demise of the Soviet Union, which was capable of launching simultaneous, coordinated attacks in the Atlantic and Pacific Oceans, the Panama Canal is much less important for U.S. security. Today, the two large American navies—the Atlantic and Pacific fleets—each can maintain overwhelming dominance in their respective regions. Even during the Cold War, the Navy’s capital ships—the aircraft carriers—were too large to fit through the canal.

The Chinese would probably be reluctant to close a waterway that they also use for commerce. In the worst case—if Panama Ports blocks the canal or refuses U.S. Navy vessels passage during an international crisis—the world’s most powerful naval forces could open up the waterway rapidly. Even conservatives admit that the treaty allows the United States to intervene if access to the canal is blocked. Although the alarmists hint that China could extend the range of its navy by controlling Panamanian ports, the antiquated Chinese fleet has problems just patrolling the nearby South China Sea.

And exactly what would the “China threat” faction have the U.S. government do about the situation? The sovereign government of Panama—finally in charge of all of its territory after a 96-year U.S. colonial presence—has entered into a long-term contract with a private company for operation of the waterway. What right does the U.S. government have to veto commercial agreements by other governments? Should the United States invade Panama again and occupy the canal zone to assuage the paranoid fears of those who would like China to be the enemy in a new Cold War?

According to Gen. Barry McCaffrey, former head of the U.S. Southern Command when it was based in Panama and now the U.S. anti-drug czar, “We don’t have vital national security interests in Panama.” In addition to McCaffrey’s assessments, a report written in 1997 by a member of the staff of Jesse Helms, chairman of the Senate Foreign Relations Committee, also seemed to discount threats to the canal. After conducting extensive discussions with U.S. and Panamanian government officials, the staff member concluded, “All those interviewed for this report state the HPH’s [Hutchison Port Holdings] development of the two ports does not translate into a direct national security threat to the Panama Canal.”

Finally, the timing of the alarmists’ shrill warnings is suspicious. The search for threats to a man-made body of water that has declined in strategic importance is a desperate attempt to roll back the treaty-mandated withdrawal, to take place in December of this year, of an unneeded U.S. military presence. Imperialist cold warriors just cannot bear to give up Panama. They will have postpartum depression, but the rest of us can celebrate the rebirth of Panama without a humiliating and anachronistic colonial presence on its territory.

Ivan Eland is director of defense policy studies at the Cato Institute.