Taiwan loses a friend

Panama officially cut ties with Taiwan. The country has switched its diplomatic relations from Taiwan to China. Panama acknowledges that there is only ‘One China’ and Taiwan is a part of it. 

State of the relationship

Panama had previously shared diplomatic relations with Taipei and only economic ties with Beijing. However, the official communiqué signed by the Chinese foreign minister and his counterpart on Tuesday ratifies this change in diplomatic relations. This is a massive setback for Taiwan as they now retain only 20 diplomatic allies. In retaliation, Taiwan has accused Panama of ‘bullying’ and has expressed ‘anger and regret’ to this political move. In addition, they stated that this is only a ‘diplomatic money game’ and have decided to evacuate their embassy in Panama and all its technical personal in order to safeguard its national sovereignty and dignity.

On March 8^th, China’s foreign minister declared that there is only ‘One China’ and Taiwan is a part of it. Taiwan plays an inalienable part of the ‘One China’ policy in expectation that it will be reunited with the mainland. Having said so, Taiwan has a democratically elected President, laws and its very own armed forces. A major fallout could be the break in economic trade and foreign relations.

Assessment

Until last year China displayed a softer phase in its attempts of persuading Taiwan of reunification with the country. However, the newly elected president Tsai Ing -Wen’s efforts towards independence of Taiwan could have triggered Panama’s retreat. The President’s endeavour to pursue independence may result in other countries following the same path.

Panama has shared a very important economic relation with Taiwan. It is the third biggest economic partner of Taiwan amongst its 20 diplomatic allies and has a very significant role to play in the control of the Panama Canal. The canal provides transport access between the Pacific and the Atlantic Ocean. Incidentally, Beijing is the second most important customer of Panama’s key shipping canal. By providing better access to its container ports with natural gas facilities, Panama would like to economically engage more with China.