The Commissioner of the U.S. Federal Maritime Commission, Laura DiBella, issued a statement on Tuesday regarding China’s detentions of Panama-flagged vessels, warning that increased Chinese detentions could create a highly negative precedent for the global supply chain.
Commissioner DiBella, in a statement expressing her personal views and published by the US Embassy in Panama and FMC website, reiterated concerns about China’s ‘weaponization,’ as she called, of port state control inspections against vessels flagged in Panama.
She described the inspections as “retaliatory” and said they appeared aimed at punishing Panama over its Supreme Court decision to invalidate the concession Hong Kong-based CK Hutchison previously held to operate the Balboa and Cristóbal terminals on the Pacific and Atlantic sides of the Panama Canal.
Earlier this year, a top court in Panama issued a ruling declaring the concession granted to Panama Ports Company S.A. (PPC) to operate the ports at the Panama Canal “unconstitutional” – terminals it had managed under the concession contract since 1997. US accused China of detaining Panama-flagged ships in response to a takeover by Panamanian authorities of terminals at the ports of Balboa and Cristóbal previously run by the Hong Kong-based company.
DiBella, in her statement, said the port state control inspections against vessels flagged in Panama had continued “with no sign of abatement.” The statement notes that Panama-flagged ships “carry a meaningful share of U.S. trade, and unwarranted, retaliatory vessel detentions could result in significant commercial and strategic consequences to U.S. shipping.”
The statement also highlights that the world cannot simply normalize these ongoing detentions. This, as she said, would create a highly negative precedent for the global supply chain.
“With that in mind, I again note that laws the Commission administers empower it to investigate whether regulations or practices of foreign governments result in conditions unfavorable to shipping in the foreign trade of the United States,” she said, adding that “an investigation of the conduct taking place in Chinese ports could result in the implementation of remedial measures, including measures affecting Chinese-controlled carriers operating in U.S. trade.”
Chinese Ambassador and permanent observer to the Organization of American States Xie Feng refuted Panamanian accusations about China’s port state control inspections on incoming vessels.
While attending the Dialogue with Permanent Observers of the Organization of American States on June 23 held in Panama, Xie stressed that as a major shipping country, China always attaches great importance to maritime traffic and personnel safety.
The Chinese Ambassador clarified that China conducted port state control inspections on incoming vessels in accordance with Chinese laws and international conventions, which do not target any specific country or flag and are fully legitimate.
Ambassador Xie noted that since being granted the concession in 1997, the related Chinese enterprise had operated the ports at both ends of the Panama Canal in accordance with the law, making positive contributions to local economic development, according to a statement released on June 23 by the Chinese Embassy in the United States of America.
According to Xie, cooperation between the two sides had been smooth over the past three decades.
However, he strongly criticised the Panamanian Supreme Court ruling issued in January this year, regarding the Balboa and Cristóbal terminals.
“Anyone clear-eyed can see this is politically driven. If contracts could be disregarded, market principles ignored, assets taken over and operators forced out at any time, who would have the confidence to invest and seek cooperation?” Xie asked, according to the statement.
Ambassador Xie urged the Panamanian side to protect the legitimate and lawful rights and interests of Chinese businesses, the statement reads.
