By Elida Moreno
PANAMA CITY, April 9 (Reuters) – Panamanian President Jose Raul Mulino on Thursday sought to calm tensions with China, striking a conciliatory tone a day after his foreign minister called out the Asian superpower for an increase in inspections of Panama-flagged vessels as a tit-for-tat response to China’s CK Hutchison losing its port concessions in the Central American country.
“We are not interested … in having a problem with China,” Mulino said on a visit to Balboa port on the Pacific side of the Panama Canal. “I hope … this situation de-escalates … and that we return to a normality both in the political relationship and in the understanding that this is a problem that will be resolved.”
When asked about Panama-flagged vessels being held in Chinese ports, Mulino said such inspections were not unusual in global shipping and said similar trends had affected other major registries, including Liberia and the Marshall Islands. He added Panama was still assessing the situation.
“They have nothing to do with political retaliation,” he said, while adding that Panama had raised its concerns with Chinese authorities and wanted to verify the basis for holding vessels for inspections.
MINISTER LINKED INSPECTIONS TO COURT RULING
Last month, the U.S. Federal Maritime Commission said it is closely monitoring the surge in detentions of Panama-flagged vessels in China, saying it exceeded historical norms.
Mulino’s remarks marked a softer line than comments by Foreign Minister Javier Martinez-Acha. He said on Wednesday that the uptick in inspections and detentions was a result of Panama’s Supreme Court ruling against CK Hutchison’s right to operate the Balboa and Cristobal terminals.
Panama’s Supreme Court in late January invalidated the legal framework supporting the 1997 concession granting CK Hutchison’s Panama Ports Company the right to operate the terminals, a decision that Beijing opposed.
The cancellation followed U.S. pressure to curb Chinese influence around the strategic canal, which handles 5% of global maritime trade.
CK Hutchison, which operated the ports for nearly 30 years, has accused Panamanian authorities of unlawfully seizing property and launched an international arbitration case against the country, claiming damages of more than $2 billion.
Mulino declined to comment on a new arbitration claim by CK Hutchison’s Panama Ports Company against Maersk, which took over temporary management of the terminals, saying it was not a matter for the government.
(Reporting by Elida Moreno, Writing by Natalia Siniawski; editing by Stephen Eisenhammer, Rod Nickel)
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