My traveling recently took me to Panama. Little did I know that when I was looking over the Panama Canal, President Trump’s Inaugural Address would put Panama in the News. When talking to locals, this was front and center.

What does this have to do with Real Estate? The answer is logistics. The canal cuts shipping trips by approximately 3 weeks between the Atlantic and Pacific Oceans. Many of our goods for production, construction and consumer use travel through this intricate canal. In 2024, traveling through the Panama Canal were:

• 11,240 transits of deep and small vessels (A)
• hauling more than 470 billion pounds of goods. (B)

I was curious about the specifics. I saw a path from one ocean to the other and a canal that divided the country. Here is what else I learned from my research:

The Torrijos-Carter Treaties, on September 7, 1977 by U.S. President Jimmy Carter and Panamanian leader General Omar Torrijos, consisted of two main agreements: The Treaty Concerning the Permanent Neutrality and the Operation of the Panama Canal.

The Neutrality Treaty guaranteed the permanent neutrality of the Panama Canal, ensuring it remains open to ships of all nations. Also, the U.S. retained the right to defend the canal from any threat that might interfere with its neutral service to ships of all nations[1][6]

The U.S. would gradually cede control of the canal’s operations to Panama, with full control being transferred by December 31, 1999[1][2]. The treaties led to the transfer of nearly 370,000 acres of land, including military facilities, warehouses, schools, and private residences, from the U.S. to Panama by the year 2000[1].

The treaties required ratification by a two-thirds vote in the U.S. Senate.[4][3]. Panamanian voters approved the treaties in a special referendum[3].

Why did this happen?:

The United States turned over the Panama Canal to Panama due to a combination of historical, diplomatic, and economic factors. Here are some key reasons:

• Historical Tensions and Sovereignty Issues: The U.S. had controlled the Panama Canal since its completion in 1914, following the Hay-Bunau-Varilla Treaty of 1903. This treaty was a source of ongoing tension between the U.S. and Panama. [3][6].
• Economic and Administrative Costs: By the 1970s, maintaining the canal had become increasingly costly for the US. Administrative expenses were rising, and there was a growing recognition that it was time to reassess the U.S. role in managing the canal[1].
• International Pressure and Global Politics: The post-Cold War era saw a shift towards greater international cooperation and recognition of national sovereignty. This global context supported the transfer of the canal as a gesture of goodwill and a recognition of Panama’s rights over its territory[4].

Citations:
[1] https://en.wikipedia.org/wiki/Torrijos%E2%80%93Carter_Treaties
[2] https://billofrightsinstitute.org/e-lessons/the-panama-canal-treaties-jimmy-carter
[3] https://www.nps.gov/teachers/classrooms/the-panama-canal-the-ratification-of-the-carter-torrijos-treaties.htm
[4] https://www.heritage.org/americas/report/panama-terms-the-treaty
[5] https://scholarworks.uvm.edu/cgi/viewcontent.cgi?article=1743&context=hcoltheses
[6] https://study.com/learn/lesson/panama-canal-treaty-overview-goal.html
[7] https://2001-2009.state.gov/p/wha/rlnks/11936.htm
[8] https://pancanal.com/en/torrijos-carter-treaty/
[5] https://www.usnews.com/news/politics/articles/2024-12-23/a-history-of-the-panama-canal-and-why-trump-cant-take-it-back-on-his-own
[6] https://en.wikipedia.org/wiki/New_Panama_Canal_Company?oldformat=true
[7] https://history.state.gov/milestones/1899-1913/panama-canal
[8] https://history.state.gov/milestones/1977-1980/panama-canal
A. https://www.ceicdata.com/en/panama/panama-canal-cargo-traffic/panama-canal-cargoes-ot-pa-
container-cargo
B. https://www.statista.com/statistics/710185/gross-tonnage-panama-canal/
[1] https://www.nbcsandiego.com/news/national-international/a-history-of-the-panama-canal-and-why-the-us-
cant-just-take-it-back/3707946/
[2] https://edconway.substack.com/p/time-to-talk-about-the-panama-canal
[3] https://www.archives.gov/research/foreign-policy/panama-canal
[4] https://constitutioncenter.org/blog/looking-back-panama-regains-the-panama-canal

Sofitel Legend Casco Viejo Panama City