U.S. Secretary of State Marco Rubio on Thursday voiced serious concerns about recent detentions of vessels flying the Panamanian flag in Chinese ports, linking the actions to a legal decision in Panama that affects a Hong Kong-based port operator.
The U.S. Federal Maritime Commission said last week it was tracking a rise in detentions of Panama-flagged ships in China that appears to be connected to a Panama court ruling targeting CK Hutchison, the operator based in Hong Kong.
Rubio criticized the detentions in a statement, saying:
"China’s recent actions against Panama-flagged vessels raise serious concerns about the use of economic tools to undermine the rule of law in Panama, a sovereign nation and vital partner for global commerce,"and added that Panama plays a critical role in international trade.
The legal dispute stems from a move by Panama’s Supreme Court in late January to void the legal framework underpinning a 1997 concession. That concession had granted CK Hutchison’s Panama Ports Company the rights to operate terminals at Balboa and Cristobal, serving the Pacific and Atlantic entrances to the Panama Canal.
Panama’s cancellation of the framework followed mounting U.S. pressure aimed at reducing Chinese influence around the canal, which handles roughly 5% of global maritime trade. Rubio described the court’s action as a sovereign ruling that "upheld transparency, the rule of law, and held private operators accountable to the public interest."
China, for its part, has strongly objected to the Panamanian decision. Officials there have characterized the ruling against Hutchison’s port concessions as an "act of bad faith."
The sequence of events - a judicial annulment in Panama, heightened diplomatic scrutiny, and a reported uptick in detentions of Panama-flagged vessels in China - has drawn public statements from U.S. authorities expressing concern about the possible use of economic measures in response to a sovereign court decision. Regulators and government officials continue to monitor developments.