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Diplomacy

Panama to discuss China trade pact after ditching ties with Taiwan

PUBLISHED : Friday, 08 December, 2017, 9:32am
UPDATED : Friday, 08 December, 2017, 9:45pm

Panama and China will begin negotiations in June next year to sign a free-trade deal, the two countries’ trade ministers said on Thursday, consolidating a relationship that has strengthened after the Central American nation ditched ties with Taiwan.

Panama’s decision in June to end diplomatic links with Taiwan was a major victory for Beijing as it lures away the dwindling number of countries that have formal relations with the island China claims as its own. A senior Chinese diplomat said last month China would provide Panama with whatever help it needs.

Chinese firm begins Panama port project after diplomatic ties restored

Panama’s trade minister Augusto Arosemena gave details of the talks, speaking in Panama City alongside his Chinese counterpart, Zhong Shan.

The Chinese official said it was important to accelerate talks to open up trade between the two countries and deepen commercial links.

“China is willing to stimulate its companies to actively participate in the construction of infrastructure in Panama, including ports, that would be based on mutual interest,” said Zhong.

China and Taiwan have tried to poach each other’s allies for years, often dangling generous aid packages in front of developing nations, although Taipei now struggles to compete with an increasingly powerful Beijing.

Panama establishes diplomatic ties with Beijing in blow to Taiwan

Panamanian President Juan Carlos Varela, who signed 19 deals during a visit to Beijing last month, told Chinese state television in September the decision to switch recognition to China had nothing to do with “chequebook diplomacy”.

A group including China Harbour Engineering Company began building a US$165 million port in Panama in October for cruise ships, the first project announced between China and Panama since they established diplomatic ties.