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No Chinese Threat Seen in Panama

December 11, 1999

PANAMA CITY, Panama (AP) _ It doesn’t look much like a communist invasion of the Americas: Huge cranes scoop corn from a Louisiana ship. An Ecuadorian trawler waits for food and fuel. Panamanian workers train to lift containers off cargo ships.

While U.S. conservatives claim Panama is handing over the Panama Canal to China through a concession to operate ports at each end, the ports themselves are working at full speed, and expanding fast _ and in a seemingly capitalist manner.

Executives at the Hong Kong-owned port company say they don’t see what the fuss is all about. They took over the ports two years ago, and have been loading and unloading containers, grain and passengers since.

``We’re a public company operating a container port facility,″ said John Merideth, group managing director of the company, Hutchison Port Holdings, and a native of Salisbury, England. ``The most extraordinary comments are being made. It’s a bit time consuming, but it doesn’t affect us.″

As Panama prepares for a gala Tuesday ceremony to mark the year-end handover of the canal, conservative U.S. groups say the changeover is a deadly serious business. They accuse Hutchison of being controlled by the Chinese military and say the company, with the cooperation of corrupt Panamanian officials, could use the ports as a base to spy on the United States, to smuggle goods, or even to mine the canal.

``If we proceed along our present course, by the end of this year ... Communist China will become the de facto new owners and rulers of the Panama Canal,″ retired Adm. Thomas Moorer, former chairman of the Joint Chiefs of Staff, wrote recently in the magazine The New American, published by the right-wing John Birch Society.

Senate Majority Leader Trent Lott, a Mississippi Republican, wrote Defense Secretary William Cohen in August to warn that Hutchison’s parent company, Hutchison Whampoa Ltd. of Hong Kong, has ties to China’s communist leadership and military.

``U.S. naval ships will be at the mercy of Chinese-controlled pilots, and could even be denied passage through the Panama Canal,″ he wrote.

Lott bases that claim on the 1997 Panamanian law that gave Hutchison the ports concession. But the text of that law says no such thing.

Hutchison has no influence on canal pilots. It can arrange for pilots to move ships within its own ports _ and even then only if the canal pilots don’t have time. It has no control over what ships move through the canal.

``It’s the most ridiculous thing I’ve heard in my life,″ said Fernando Manfredo, a former top canal official. ``Navigation in the waters of the canal is in the hands of the Panama Canal.″

Hutchison is a publicly traded company with 80,000 employees and operations in 24 countries.

Moorer described it as ``a partner with the China Ocean Shipping Company (Cosco) the merchant marine arm of the (Chinese) People’s Liberation Army.″

Hutchison says its only relationship with Cosco is that the company’s ships use its ports _ much as they use ports throughout the world. And Cosco, one of the world’s largest shippers, is more business than politics these days.

Even if Hutchison had sinister intentions, it is unclear how its lease on the ports would give it dominance in Panama.

By far the largest port here is Manzanillo International Terminal, which is run by the U.S. company Stevedoring Services of America. A distant second is the Colon Container Terminal, run by a company from Taiwan, China’s archrival. Hutchison’s ports handle less than 5 percent of the total traffic.

``Manzanillo accounts for nearly 90 percent of the cargo,″ said Jaime Beitia, spokesman for Panama’s Maritime Authority.

On Wednesday, President Clinton dismissed the possibility that China is gaining a foothold in the Americas through the Hutchison contract. He said the company’s duties will be limited to loading and unloading ships.

``They also do this in three or four ports in Great Britain. It’s one of the biggest companies in the world that does this. The managing director is British. Most of the employees will be Panamanian. So I feel comfortable that our commercial and security interests can be protected,″ Clinton said.

Some people attribute the uproar to sour grapes from American conservatives who are upset over the 1977 treaties that are handing the canal and the land surrounding it back to Panama on Dec. 31.

Manfredo said the opponents of the canal transfer had predicted there would be chaos when Panamanian officials began taking over operations two decades ago. Since the transition has been smooth, he said, they are looking for a scapegoat.

``The Panama Canal treaties have never been popular in the United States. Losing the canal is like losing a war,″ he said. ``When they see the U.S. flag start to disappear here, I can understand their feelings.″

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