The Reversion of the Panama Canal

The time period stipulated in the Torrijos-Carter Agreements for the Panama Canal and its surrounding zones to revert to Panamanian sovereignty ended on December 31, 1999. In 1903, the governments of Panama and the United States signed the Hay-Bunau Varilla Agreement, which laid the legal bases for the construction, operation and running of the waterway by American government agencies. The establishment of a ten-mile strip along the route was also negotiated, that would be the site of United States military installations. The final construction of the canal began in 1904 and it was opened to navigation in 1915. Since then, the interoceanic canal has become the point of passage for approximately 5% of the world's trade. Approximately 144 international sea routes converge in it. According to the authors, the resounding military, technicaI and administrative presence of the United States in the isthmus during the first decades the canal was in operation reaffirmed the clause under which the canal zone had been ceded perpetually to control by the United States government, which behaved as if it were an extension of United States territory. Consequently, throughout the 20th century, Panamanians waged a diplomatic struggle to recover their territorial integrity. This struggle ended in September 1977 when the Torrijos-Carter Agreements were signed, under which the interoceanic canal and its surrounding areas would revert fully to Panama at noon, Panamanian time, on December 31, 1999. This fact, singularly important for Panama as well as for the rest of the Latin American countries, involves a series of administrative, economic, infrastructure—and security—related challenges that Mireya Moscoso’s government will have to face. If reversion of the canal and its surrounding zones handled correctly, it offers important opportunities for Panama to become a diversified center of development, where industry and agriculture follow in the steps of the successful services sector.