Car Deals

Executive Summary – There were rumors going around that Panama was going to get two new US Navy bases. Well that is not exactly true. They are going to open two new Panama bases. Of course Panama has no military so it is a good question as to how they are going to operate a Naval Base.

Then we learn that the US Navy and the US Coast Guard will be assisting Panama with these bases. Assisting seems to be a bad choice of words since Panama has no serious radar, sonar ship detectors, satellites, air force, naval air force, aircraft carriers, anti-mine craft, LST (landing boats), helo carriers, submarines, missile cruisers, supply ships, frigates, and so forth. I would guess the panama government does not even own a seaplane.

Panama may indeed have enough watercraft to rescue a fisherman in distress close to their mainland or shoot up some smugglers in a zodiac but beyond this they have no assets of military value since Noriega and he had precious little at that. The two new bases will be located at Bahía Pina in the Darien Jungle region known for smuggling in close proximity to the border with Colombia, and in Punta Coca in the area known as Veraguas.

Collateral Factors – China has contracts enabling them to operate the container loading and unloading facilities at both ends of the Panama Canal. It is not clear how this fits in yet but read on. Obama has been imposing protectionist import duties on Chinese tires and steel pipes which have the Chinese mad. See the story on Reuters.

In December 2007, China’s Sinopec signed a $2,000,000,000 contract with the Iran government to develop the Yadavaran oil fields. In January 2009, CNPC, (China oil and gas company) entered into a $1,700,000,000 oil contract for the Azadegan oil field. In March 2009 Iran and China signed a $3,200,000,000 deal for natural gas development. China is also importing 15% of its crude oil from Iran. So China has a vested interest in Iran.

It looks like the Middle East may ignite into a war with Iran. The USA may directly be involved or may not be directly involved but the USA will support Israel and it looks like there will be an attack. Of course China could become a pain to the USA. What if they say well we are going to take sanctions against USA and not load the USA ships containers, or same for ships going to or from USA. What if they delay the loading by a few days? What is they raise the rates? USA has a problem potentially so they put in two new navy bases in the name of the war on drugs.

I believe it is getting a head start on taking back the Panama Canal if need be, which is allowed under the terms of the treaty. If the US says the canal is threatened or the efficiency is off then they can unilaterally take it back. Possibly they would take back the container loading facilities that China has and would like some localized muscle there if they go this route. This may be a more attractive option now since the canal expansion is well under way.

The new expanded canal will allow the oil super tankers to pass through thus making it even more strategically important. I would not be surprised to soon see USA police agents operating (like conducting investigations, conducting interviews as in the old days) freely in Panama or with the local Police, to assure the security of the canal from terrorists.

In the old days the USA agents had authority in Panama proper if they were investigating something that occurred in the Canal Zone like a crime. Another consideration is the USA federal agents like NCIS (Naval Criminal Investigative Service) and CGI (Coast Guard Intelligence) will be assigned to Panama to protect the assets now placed on these bases. Their duties will include conducting investigations concerning crimes, potential crimes, threats to the military assets, anti-terrorism, conducting background investigations like on civilians they employ or suppliers they contract with, and since it is supposedly an anti-drug operation they will be investigating drug traffickers one can assume.

This will all be going on in Panama proper (there is no more Panama Canal Zone of 25 sq. miles) along with interdicting “suspicious” ships in Panama waters which the US Coast Guard has been doing for some time. If I were a bookmaker I would give good odds on the Panama ship registry shrinking in size soon.

Panama held an attraction in the past for people seeking to leave their high tax police state country and live in a neutral country as free people without daily interference by government. Panama does not get it yet.

http://www.panamalaw.org

Aurelia Masterson writes for http://www.panamalaw.org

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