US relinquishes control over Panama Canal

PANAMA WILL soon have full sovereignty over its territory and the crowds came out to cheer yesterday. The Spanish King Juan Carlos, six heads of state and beribboned dignitaries from all over Latin America gathered in the isthmus to witness the ex-US president Jimmy Carter hand over the Panama Canal.

Bedecked with flowers for the celebration, the complex system of locks that raises ships 64 feet on a short cut from the Atlantic to the Pacific through a 51-mile-long cut in the mountains, is no longer considered vital for American domination of the hemisphere.

The Panamanians are rather miffed that the Clinton administration has cold-shouldered their moment because of domestic politics.

When the Secretary of State Madeleine Albright bailed out at the last minute, anti-American sentiment soared. In 1906, the US president Teddy Roosevelt travelled to the canal construction site. It was the first international trip by an American president, and the absence yesterday of President Clinton, who with 60 official foreign visits is the most globe-trotting chief executive on record, was taken as an intentional slight.

Curiously, though, most Panamanians are underwhelmed by the significance of the 31 December change in canal operations. Most still support some kind of US military presence in Panama, primarily to pump dollars into the economy. The US Navy retains the right to guarantee the security of the region and also to cut to the front of the queue when sailing through the American-built canal.

When the Panamanian President Mireya Moscoso decided to mark the change with an early party rather than wait for New Year's day, she ensured a greater VIP turnout, but it put a damper on the festivities. "The ceremony should have been on 31 December at noon, when by the Torrijos-Carter treaties the canal is actually turned over, so this dilutes the significance," complained Juan Antonio Tack, who as Panama's foreign minister was a negotiator for the 1977 treaties

With 14,000 ships passing through the canal each year, the canal has mammoth earning potential and is worth at least $5bn(pounds 3bn).

Earlier this year, General Charles Wilhelm, head of the US Army's Southern Command, warned that Panamanian forces would be powerless to stop rebel incursions into Panama once US forces pulled out. On Sunday, militants overran a Marine base on the Panamanian border and killed at least 34 troops.

The hand over is seen by some as an unwelcome retreat of US power and arrangements for managing the canal have been criticised. The contractwas won by the Hong Kong company, Hutchinson Whampoa, but as Hong Kong is a part of China it led some to see the hand of the Chinese People's Liberation Army in the agreement and to claim that the canal will be effectively under Chinese control.

Thus, in a low-key way, will end a US endeavour that was in its day the biggest, most complex and most expensive undertaken by the US outside its borders, a project that became a source of American pride, and international power, for most of the century. The US gained sovereign rights over the Panama Canal Zone, a 16km wide strip flanking the planned canal, in 1903, as a reward for sending a gunboat to help Panama wrest its independence from Colombia.

The canal was opened to traffic 11 years later. It was militarised during the Second World War, when up to 65,000 US servicemen were based there. Now that the Cold War is over, it is seen in Washington as a commercial transit route, no longer as a vital military asset.