(Investing) – WASHINGTON – Detentions of Panama-flagged vessels by China that followed a Panamanian court ruling raise serious concerns about efforts to undermine rule of law in the Latin American country, U.S. Secretary of State Marco Rubio said on Thursday.
The U.S. Federal Maritime Commission said last week that it was closely monitoring a surge in detentions of Panama-flagged vessels in China that appears tied to a Panama court ruling against Hong Kong-based port operator .
“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,” Rubio said in a statement.
Panama’s Supreme Court in late January invalidated the legal framework supporting the 1997 concession granting CK Hutchison’s Panama Ports Company the right to operate the Balboa and Cristobal terminals on the Pacific and Atlantic sides of the Panama Canal.
The cancellation followed mounting U.S. pressure to curb Chinese influence around the strategic canal, which handles about 5% of global maritime trade.
China’s embassy in Washington did not immediately respond to a request for comment on Rubio’s statement. Beijing had said it firmly opposed the court ruling against Hutchison’s port concessions, calling it an “act of bad faith.”
CK Hutchison, which operated the ports for nearly 30 years, has rejected the court ruling, accused Panamanian authorities of unlawfully seizing property, and launched an international arbitration case against the country, claiming damages of more than $2 billion.
“This sovereign ruling upheld transparency, the rule of law, and held private operators accountable to the public interest,” Rubio said.
The U.S. “stands firmly” with Panama and looks forward to expanding economic and security cooperation, he said.
The FMC had said China’s detentions of Panama-registered ships far exceeded historical norms, with Lloyd’s List Intelligence report saying last week that the number had reached nearly 70 since March 8.
