FMC Testify before U.S. Senate Committee About Panama Canal

Here are key takeaways:

Statement from Chairman Louis E. Sola:

• Vital to U.S. Trade: The Panama Canal handles 40% of U.S. container traffic ($270B annually).
• Drought Challenges: 2024 water shortages reduced transits; by 2050, capacity could drop 50% without improvements.
• Foreign Influence & Corruption: Chinese investments and Panama’s corruption issues threaten fair competition and security.
• U.S. Response: Support American businesses in Panama, protect Panama Canal Authority (PCA) independence, and expand FMC oversight to ensure fair practices.

Statement from Commissioner Daniel B. Maffei:

• Operational Risks: The Canal depends on freshwater, and droughts have repeatedly disrupted trade.
• Economic Impact: 2023-24 transit reductions raised shipping costs, worsened by Suez Canal disruptions.
• FMC Monitoring: U.S. regulators met with Panamanian officials; concerns remain over slot allocation pricing during crises.
• Future Actions: FMC will continue oversight and is prepared to intervene if U.S. trade is harmed.

Overall Summary:

• The Panama Canal is crucial to U.S. trade but faces climate, corruption, and foreign influence challenges. The U.S. must take proactive steps to ensure fair competition, maintain PCA independence, and protect America’s economic interests.

Video Recording:

• The full hearing, titled “Fees and Foreign Influence: Examining the Panama Canal and Its Impact on U.S. Trade and National Security,” is accessible on the Committee’s website.