UPDATE - Panama to withdraw from China’s Belt and Road Initiative

UPDATES WITH MORE REMARKS BY PRESIDENT MULINO, MORE DETAILS

By Sinan Dogan, Yasin Gungor, and Merve Berker

BOGOTA/ISTANBUL/ Panama has officially announced its withdrawal from China’s Belt and Road Initiative, President Jose Raul Mulino confirmed during a weekly press conference.

Mulino said on Thursday that Panama’s ambassador to Beijing had submitted the necessary documents to China, notifying them of the decision 90 days in advance, as required by the agreement.

Mulino emphasized that the decision was entirely his own, questioning the benefits Panama had gained from the initiative.

“I don’t know what those who signed this agreement with China were thinking. What great things has it brought to Panama over the years? What has the Belt and Road Initiative contributed to the country?” he said.

Mulino also strongly rejected recent claims by the US State Department that American government vessels would be allowed to pass through the Panama Canal without paying.

He denounced these statements as "lies and falsehoods" and emphasized that Panama's sovereignty over the canal remains intact.

The Panama Canal Authority issued a statement denying the US claim that fees had been waived for government vessels, refuting reports that such an agreement had been reached.

*Mulino also questioned the legitimacy of the US assertion: "Why are they making an important institutional statement from the entity that governs the foreign policy of the US, under the president of the US, based on a falsehood?"

He added that he had instructed Panama’s ambassador in Washington to take firm steps to refute the Trump administration’s claims and safeguard Panama’s control over the canal.

The tensions between Panama and the US come at a delicate time, as Washington had recently cited progress in military cooperation and countering Chinese influence in the region.

However, Mulino stressed that the decision to withdraw from the Belt and Road Initiative was not influenced by the US and that Panama was independently assessing its foreign policy to determine the best course of action for the country.

Mulino confirmed that Panama had formally presented its exit document from the Belt and Road Initiative but reiterated that it was a sovereign decision, and so not related to US pressure.

"I am taking the necessary time to evaluate Panama’s relationship with China and what is best for our country," he noted.

The US State Department has not yet responded to Mulino's remarks, but the ongoing dispute signals heightened diplomatic tensions between the two nations.

The agreement, signed in 2017, was set to automatically renew every three years, with the next renewal scheduled for 2026. However, either party could terminate it with a three-month notice. Under the initiative, China has expanded its investments in Panama.

The announcement follows a visit by US Secretary of State Marco Rubio to Panama on Feb. 2, during which he stressed the need to reduce China’s influence over the Panama Canal.

Mulino assured Rubio that Panama would not renew the initiative agreement, asserting that the sovereignty of the Panama Canal is non-negotiable.

US President Donald Trump has previously expressed concerns over China’s involvement in the canal and expressed his interest to take back its control.