Historical development of the Panama Canal construction project

Foreign Policy

Panama Canal

Treaty process history. What are 2-3 most important factors of the Panama Canal?

The history of the Panama Canal goes back to 16th century. After comprehending the riches of Peru, Ecuador, and Asia, and taking into account the time it took the gold to reach the ports of Spain, it was recommended that by cutting out a piece of land somewhere in Panama. Trips would become shorter and the risk of taking the treasures through the isthmus would validate such a venture. In 1529, a study of the isthmus was ordered and afterward a working plan for a canal was developed. The wars in Europe and the thirsts for the control of kingdoms in the Mediterranean Sea simply put the project on permanent hold (the Panama Canal, n.d.).

In the early 19th century the German scientist Alexander von Humboldt revitalized interest in the project, and in 1819 the Spanish government formally certified the construction of a canal and the formation of a company to build it. Various surveys were conducted between 1850 and 1875 that showed that there were only two routes that were realistic, the one across Panama and another across Nicaragua. In 1876 an international company was put together. In 1878 it obtained permission from the Colombian government to dig a canal across the isthmus. Unfortunately, the international company was unsuccessful, and in 1880 a French company was put together by Ferdinand Marie de Lesseps, who had built the Suez Canal. It was in 1879, that de Lesseps planned a sea level canal through Panama (the Panama Canal, n.d.).

The discovery of gold in California in 1848 and the charge of would-be miners is what stirred America's interest in digging the canal. It was thought that both mileage and time would be drastically reduced when going from the Atlantic to the Pacific Ocean or vice versa. It was thought that it would save a total of 18,000 miles on a trip from New York to San Francisco. Even though de Lesseps was not an engineer, he was chosen to head the building of the Panama Canal. Upon taking charge, he planned an International Congress to discuss several plans for constructing a ship canal. He decided that a sea-level canal similar to that of the Suez Canal would be the best option. He believed that if a sea-level canal worked when building the Suez Canal, it would certainly work for in this case (the Panama Canal, n.d.).

In 1899 the United States Congress created an Isthmian Canal Commission in order to look at the potential for a Central American canal and to come up with a route. The commission had first chosen a route through Nicaragua, but later overturned that decision. The Lesseps Company presented its resources to the United States for a price of $40 million. The United States and the new state of Panama signed the Hay-Bunau-Varilla treaty, in which the United States promised the independence of Panama and protected a perpetual lease on a 10-mile strip for the canal. Panama was to be compensated by an initial payment of $10 million and an annuity of $250,000 that was to start in 1913 (the Panama Canal, n.d.).

2. Why did the U.S. want the canal?

The United States had been attracted to the idea of a canal since the middle of the 19th century. It was well-known that it was only a matter of time until the United States or some other power built a canal across the isthmus in Central America. The big problem was deciding whether it would go across Panama or across Nicaragua. President Roosevelt thought that the United States had to build and defend this canal. When Roosevelt was vice president there was a treaty signed with Great Britain that gave the United States the right to build the canal but not to protect it. From the beginning Roosevelt was against this treaty. Along with others, he forced the United States to renegotiate that treaty so the United States would have the authority to deal with the building of a canal in Central America (LaFeber, n.d.).

Roosevelt believed the canal was of vital importance because travel at that time from New York to San Francisco had to be taken around the tip of South America, which was close to 13,600 miles. It would take an extraordinary amount of time to move the American fleet from the Atlantic to the Pacific in case of a war. Having the canal, would be reduced this distance to about 5,000 miles. Roosevelt saw this as not only a tremendous benefit for American commerce, but it would be a way of moving the American fleet and keeping the fleet together from the Atlantic to the Pacific, or vice versa, depending upon where the fleet was needed. According to Roosevelt, the building of a great navy and the building of a canal were all part of the same foreign policy. He felt that without the canal, the rest of the foreign policy would not fall into place (LaFeber, n.d.).

5. Why did the United States give the canal back to Panama?

The United States had had a close and often troubled relationship with Panama going back to the dawn of the twentieth century. At that time, American and European businessmen looked enthusiastically toward rising commercial markets in East Asia, which would need a shortcut between the North Atlantic and the Pacific. The pace of shipping was frustratingly slow, as Asia-bound vessels traveled all the way around the tip of South America (Why Did We Give Away the Panama Canal, 2005).

The Panama Canal Treaty along with the Treaty on the Permanent Neutrality of the canal, both affirmed that the United States would transfer control of the canal to Panama by the year 2000. After this Panama would keep the canal neutral, and both countries would be responsible for protecting it. With Vietnam a recent memory, Carter and Linowitz hoped their spirit of cooperation toward Panama could usher in a new era of international reason, respect, and peace. They may not have completely attained that lofty goal, but their dealings in Panama were successful. The final transfer of rule took place in 2000 as planned and without trouble. It went very smoothly since 96% of the canal's workers were already Panamanian and since 1990 the chief administrators have also been native-born. Even though it suffered during the recessions of 2001 and 2002, the Panama Canal continues to flourish and deliver its vital services. Panamanian President, Martin Torrijos, son of the former dictator, worked towards a multi-billion-dollar expansion to permit more and larger ships to pass through the isthmus. Under new management, the Panama Canal continues to function as a very important gateway connecting the oceans (Why Did We Give Away the Panama Canal, 2005).

6. What was the performance of governments who controlled the canal?

For almost forty years, the Panama Canal Zone functioned under various acts of Congress with executive management. In 1950, Congress passed the Thompson Act, which fashioned the Panama Canal Company, which was to be operated under the sponsorship of a board of directors. A governor of the Canal Zone, who was appointed by the U.S. president, watched the day-to-day operations of the zone and used revenues in order to make improvements and maintain the canal. Additionally, the U.S. military kept military bases in the Canal Zone in order to protect the site. During this period, Panamanian nationalists wanted for more useful terms than those in the 1903 treaty. A 1936 agreement increased the annuity paid by the U.S. government to Panamanians, and a 1942 treaty transferred various civil works projects to the Panamanian government and promised additional infrastructure development. Additional revisions occurred in the 1950s, including the flying of the Panamanian flag in the Canal Zone as the United States tried to address issues of sovereignty (Panama Canal, 2010).

While blaming the communists, most American policymakers could not ignore the animosity that provoked the confrontation. In the aftermath, the Chiari government and the Johnson administration opened negotiations to address Panama's grievances. Ultimately Washington agreed to terminate the 1903 treaty in return for granting U.S. control and operation of the canal until 1999. Despite strong public criticism, Johnson submitted the treaty to the Senate in 1967. It languished there as Johnson's attentions focused on Vietnam and internal events in Panama sabotaged acceptance. It would take another Democratic president, more than a decade later, to push through Johnson's original ideas. In 1999 control of the Panama Canal was officially given back to the nation of Panama (Panama Canal, 2010).

7. How is the current government's performance?

The Panama Canal Treaty, which went into effect in 1979, granted full control of the canal to Panama after a transition period of 20 years. On Dec. 31, 1999, the Panama Canal Authority assumed full control of the waterway. And although the Panama Canal Authority has managed the canal successfully since then, the waterway's age and its volume of traffic are starting to catch up to it. it's become somewhat of an international trade traffic jam, with fleets of ships waiting offshore to go through. Many vessels are also no longer built as Panamax ships, the maximum size the canal can accommodate. The owners of post-Panamax supertankers and naval ships find it more efficient to increase their loads and take alternate routes than wait in line at Panama (Dowdey, 2010).

Panamanians who depend on the canal for their country's livelihood can't afford to see it become obsolete. With Nicaragua planning its own canal and threatening the old monopoly, Panamanians enthusiastically voted in favor of a 2006 referendum in order to modernize the canal. The plan is to add an additional larger set of locks, and a third lane that will double the waterway's capacity. Some environmentalists, however, aren't too happy about the expansion plan. The canal's traffic, as well as the populations of Panama City and Colon, already takes a tremendous toll on the area's watershed which is an area filled with diverse wildlife and important to intercontinental migrations. But planners say that the new set of locks will use water-saving basins to conserve 60% of the water used on each transit. Reforestation of surrounding areas should also help keep the reservoirs flowing and traffic bustling (Dowdey, 2010). The controlling powers appear to be attempting to improve the Canal so that it is not only more efficient but so that it will continue to prosper and grow in the future.

8. Who is the one controlling the canal today?

The Panama Canal Authority is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the Panama Canal Authority is based on its organic law and the regulations approved by its Board of Directors. The Authority's responsibility to the Panamanian people is paramount. The Canal belongs to the people and benefits from the Canal should accrue to as many Panamanians as possible. The Authority will plan its future so that it will continually contribute to the economic development and welfare of the citizens of Panama. For nearly 90 years, the Panama Canal has served as the global gateway, a pathway for the shipment of major world commodities. Since the end of 1999, the ACP assumed the responsibility for the management, operation and modernization of the Canal as well as the protection and conservation of its watershed. In the past few years, the ACP has made significant strides, shifting to a market-oriented business model focused on customer service and reliability, making major capital investments for new and modern equipment and machinery, increasing safety and operational efficiency for customers, decreasing the time it takes ships to travel through the Canal and widening and deepening sections of the waterway. An important transportation link, the Canal services more than 140 different transportation routes from every corner, it is where major trading routes of the world connect and intersect providing safe, reliable and secure passage for all vessels (Panama Canal Authority, 2005).