Panama’s Irreplaceable Role in International Trade
Panama has effectively stewarded the Panama Canal, an irreplaceable link in global trade. The country also plays a substantial role in finance, as a tax shelter and sometimes money launderer.
The Panama Canal links the Atlantic and Pacific Oceans. It allows dozens of ships to cross per day, avoiding a detour of 12,500 kilometers around South America, and saving about a week and a half of travel time, depending on the ship’s speed. About 5% of the world’s shipping passes through the canal, especially on the route between Asia and the Eastern United States. The U.S. relies on the canal to transport about 40% of its containerized freight, which accounts for almost all manufactured goods and high-value foods.1 The canal runs through Panama, a small nation of some 4.4 million people and a de facto protectorate of the United States, which cares a great deal that the canal continues to run efficiently and cares little for the details of how Panama is run internally.