Panama Canal –dispute with Donald Trump & Treaty of neutrality of 1977 and details

 Donald Trump raised concern last year regarding Chinese influence on the Panama Canal and how the canal authority is charging high amount to USA vessels and how it can be a danger to America’s sovereignty. All though many experts denied it and said the canal is neutral in its actions is still working as per 1977 treaty of Neutrality.

Panama President Jose Raul Mulino has clearly denied the statement of Donald Trump and has stated that canal still has a neutral stand for ships of all nations passing through it.

1977 - Treaty of Neutrality.

It was signed between USA and Panama in 1977 and accordingly the canal was transferred under the authority and control of USA to Panama. The treaty also established the rules and regulations for control of the canal – vessel passage / neutrality to all nations etc.

Torrijos Carter Treaty

-          Signed on 7th Sept’ 1977

-          Signed by Panama Leader Omar Torrijos & USA president Jimmy Carter.

Complete control of Panama Canal was transferred from USA to Panama on 31st Dec’ 1999.

Panama Control Authority was Created after 1999, its actual name is Autoridad del Canal de Panama – ACP. It controls the canal and as per rule no country can get a preferential treatment and its equal for all irrespective of country, of military or commercial ship. 

History of Panama Canal

Since long people wanted to connect both Pacific and Atlantic Oceans.

The French tried and under the leadership of Ferdinand de Lesseps (builder of the great Suez canal), failed around 1880 due to labours death from diseases, issues with mosquito and challenges in construction.

USA warships under President Roosevelt supported Panama’s freedom from Colombia and Panama got independence on 3rd Nov’ 1903.

Building the Panama Canal Started in 1903 and got completed on 1914 by USA.

The canal was under control of USA till 31st dec’ 1999 under Torrijos Carter Treaty on 1977.

Since 2000 the canal is completely the control of ACP.

Details of the Canal

-          Length – 82 Kilometers.

-          Time taken by a vessel to cross the canal – approx.  10 hours

-          A Panama Canal Pilot is on the ship and controls the movements.

There are 3 locks

1.       Gatun Lock – towards Atlantic Ocean

2.       Pedro Miguel Lock – Middle

3.       Miraflores Lock – towards Pacific Ocean

The vessels is moved to a height of 8 -10 meters by lock gate by water from man made Gatun Lake.

How the toll charges of Panama canal is made

It varies depending on size / type of the ship

Note – Through Electronic verification and Weighing system, ACP verify the toll amount to be billed.

Ships saves around 15-20 days by not sailing through South America.

The highest toll record is $1.2 million from MSC Gulsun.

Vessel movement through Panama Canal

-          Approx 35- 40 vessels per day movement

-          Annually 12K-14K vessels pass through Panama Canal

Limit of vessel size - Panama Canal still limited to vessel with length of 366 meters (Neo Panamax Ship).

The total revenue received from Panama Canal in 2024 was around 5 Billion USD.

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