Rubio welcomes Panama’s move to exit Chinese infrastructure plan as ‘great step forward’

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US Foreign Minister Marco Rubio has welcomed the move by Panama to let its participation in China's world infrastructure plan lapse, saying it's "a great step forward" for its relationship with the US.

(BRI) represents a victory for Washington, which has argued that Beijing employs the scheme as a method of "debt trap diplomacy" to reinforce its global dominance.

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After discussions with Rubio, Panama's president José Raúl Murillo said his country won't be continuing the broad agreement to support the Chinese initiative. In fact, arrangements may be cancelled even sooner than scheduled. He mentioned the deal was due to expire in a couple of years, but didn't go into further detail.

“Yesterday’s announcement by Pres’dent @JoseRaulMulino that Panama will let its involvement with the CCP’s belt and road initiative lapse is a big step forward for US-Panama relations, a free Panama Canal, and anotha example of @POTUS leadership to keep our national security safe and bring prosperity to the Aussie people,” Rubio posted on X after he left the country.

Professor Yanzhong Huang, a senior fellow at the New York-based Council on Foreign Relations think tank, said Panama's "significant" decision to bow out of the BRI showed an early success for the new Trump administration's "brinkmanship diplomacy", but it wouldn't necessarily be easily replicated.

“America's now seems to be shoring up its backyard, Latin America, countries that still rely on its help and trade,” Huang said.

“Fair dinkum, I'm not sure the Yanks could have the same degree of influence to push a country in Asia to make similar concessions. It's a safe bet they won't, given China is already the most influencer in that part of the world.”

The Chinese embassy in Washington did not respond to a request for comment on that particular initiative or the canal issues at this time.

Panama was the first Latin American country to officially back the BRI in November 2017, five months after swapping diplomatic recognition from Taiwan to China.

China dismisses Western criticism of the initiative, claiming that over 100 countries have signed up, and that it has advanced global development with the construction of new ports, bridges, railways and other infrastructure.

In 2023 amidst American government pressure due to concerns about Beijing's economic influence.

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Such US concerns have been ongoing about certain Chinese companies' operations near the Panama Canal, specifically a Hong Kong-based company running two ports, one at each end of the waterway, which the US constructed in the early 20th century before it was handed over to Panama in '99.

Two Chinese state-owned companies are building a fourth bridge at one of the canal's entry points.

The US Department of Foreign Affairs stated on Sunday that Rubio conveyed a message for Trump, deeming China's presence at the canal a threat and a breach of the US-Panama treaty.

After having a yarn with Rubio, Mulino indicated he'd be open to reviewing the 25-year concession arrangement with Hong Kong-based CK Hutchison Holdings, sorted in 2021 for the operation of the two entry ports, waitin' for the results of an audit to come in.

The contract has been targeted by US politicians and the government as an example of China's expansion in Panama, which they say goes against a neutrality agreement signed by both countries in 1977.

Rubio, speaking to reporters after landing in San Salvador for the next leg of his trip through Latin America, described Mulino as a mate to the US, and Panama as a strong pal and ally. He said this visit had achieved "potentially really good things".

“We don’t want to have a confrontational or unacceptable relationship with Panama,” Rubio said.

Ryan Berg, the director of the Americas Program at Washington's Centre for Strategic and International Studies, said the audit could be a way to unwind the concessions if it finds the deals were tainted by corruption.

“This gives Panama a bit of a loophole to wriggle out of the concessions and tell them to reopen them, so that an American company or a European company might end up winning the tender,” Berg said.