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The dispute between the Trump Administration and China over the Panama Canal could be a blessing in disguise for Panama, according to Bloomberg Opinion columnist Juan Pablo Spinetto. The dispute is the perfect opportunity for Panama to “leverage its strategic location, woo investors and revamp its economic model,” Spinetto recently wrote.

“Rather than being a victim in this rivalry, Panama is finding new opportunities to strengthen its economy and strategic position,” says Spinetto, a respected voice in Latin American affairs. 

Sinetto notes Panama is seizing this moment by pursuing ambitious projects, including a $1.5 billion reservoir project to secure the canal’s water supply, a new pipeline for energy liquids, and a plan to operate port and transshipment hubs at both ends of the waterway.

“The battleground of this geopolitical discussion is in Panama,” says Ricaurte Vásquez Morales, the canal’s administrator. “For the first time, we have chips to participate in the game.” 

Sinetto backs up his thesis with facts about recent economic activity. For example, Danish shipping giant A.P. Moller-Maersk A/S recently purchased the railway linking ports at both ends of the canal, a clear sign of renewed investor interest.

“You only need to see the feverish diplomatic action in Panama City, with a constant flow of high-level political visits and quiet but intense lobbying, to realize the outsized attention that the country is drawing,” Sinetto says.

“Mulino has made clear that Panama doesn’t want to take sides — a stance that, despite Washington’s pressures, is the smartest play,” Stiletto says. China remains an important ally and business partner for Panama, and Panama is home to a significant Chinese community dating back to the 19th century.

“The country’s best approach is to position itself as the Western Hemisphere’s answer to Singapore, maintaining strong relationships with both superpowers — as the Southeast Asian island does — while safeguarding its strategic autonomy, which is integral to the canal’s neutrality,” Sinetto writes..

The U.S.-China dispute over the canal simply highlights Panama’s importance in the global trade landscape. It isn’t about choosing a side, Sinetto explains, it’s about Panama using the attention to its advantage, ensuring its success and stability.

Read the full article here.