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Law professor tells Senate the Panama neutrality treaty allows U.S. remedies if de facto foreign control threatens the Canal
Summary
A law professor told the Senate committee that the 1977 neutrality treaty requires Panama to operate the Canal and that treaty language and ratification history allow the U.S. to determine and respond to perceived threats to neutrality—remedies range from conditioning relationships to, in extreme historical interpretation, use of force; fact-dependent analysis is required.
In testimony to the Senate Commerce Committee, law professor Eugene Korovich laid out how the 1977 U.S.-Panama neutrality treaty frames possible U.S. responses if the Canal's neutrality is compromised.
Korovich said the treaty's key obligations include keeping the Canal open to all nations, ensuring tolls are just and reasonable, and reserving operation of the Canal to the Republic of Panama. "Article 5 provides that only Panama shall operate the canal," he said, noting that the treaty and accompanying ratification history indicate that each party retains authority to determine whether the neutrality regime has been threatened and to take measures to defend it.
On remedies, Korovich told senators that responses can be diplomatic and economic, such as conditioning investment or aid, and that the ratification record reflects that the treaty's drafters contemplated a range of measures for enforcement. He also said that, historically, debates in the Senate recognized that unilateral measures could be taken to defend neutrality; however, he emphasized that whether a given arrangement constitutes a treaty violation is a mixed question of law and fact that requires evidence about the degree of foreign control or influence.
Senators repeatedly asked whether Chinese-linked port concessions or construction near Canal entrances could amount to impermissible foreign control under Article 5. Korovich responded that contracts with foreign companies (even private firms) can raise treaty concerns if the degree of de facto control by a foreign sovereign or state-owned firm is sufficient, and that the treaty is silent on a precise threshold; the determination requires case-by-case factual inquiry.
Korovich's legal framing gives the committee a roadmap for oversight: gather factual evidence on ownership, contractual rights, operational control, and any links to foreign governments; if facts show significant government-directed control that compromises neutrality, the United States has options to press Panama to remediate and to re-evaluate bilateral economic relationships.
The hearing did not produce a finding of treaty violation; Korovich and other witnesses recommended audits, further intelligence-briefed testimony and more document production before the committee could reach legal conclusions.
