US: Panama Canal Interests OK

The Clinton administration insisted Thursday that a Chinese shipping company that will operate terminals in the Panama Canal poses no threat to U.S. shipping or security interests, despite fresh concerns from Senate Majority Leader Trent Lott.

"The company does not have any ability to stop or impede traffic through the canal," said Pentagon spokesman Kenneth Bacon.

Lott, R-Miss., in a letter to Defense Secretary William Cohen, raised the possibility that "U.S. naval ships will be at the mercy of Chinese-controlled pilots" and could even be denied passage.

At issue is Panama's 1997 decision to award a Hong Kong-based shipping company, Hutchinson Whampoa Ltd., a long-term contract to operate ports on the canal's Atlantic and Pacific entrances.

Lott cited reports that the company had ties to China's leadership and its military.

"This administration is allowing a scenario to develop where U.S. national security interests could not be protected without confronting the Chinese Communists in the Americas," Lott protested.

Other conservative Republicans have raised similar concerns about the arrangement in the past, but Lott's was the highest-level congressional protest thus far.

The administration was quick to insist that the Chinese shipping company's presence was not a security threat, reports CBS News Correspondent Mark Knoller.

"The United States is satisfied our interests will be protected after the canal is turned over this December. We have seen no capability on the part of (China) to disrupt the canal's operations," said David Leavy, a national security spokesman at the White House.

"I would caution people not to get too concerned," Leavy said. "Our team looked into this, analyzed this and made a judgment."

Bacon, the Pentagon spokesman, said the Hong Kong firm will essentially operate terminals at either end of the canal to unload containers from container ships too large to fit through the canal. The shipping company will then transport the containers to the opposite end of the canal and load them onto other container ships.

In any event, Bacon said the United States is prepared to use force, if necessary, to guarantee that the canal remains open to international shipping.

"The United States has a unilateral right to maintain the neutrality of the canal and to reopen if there should be any military threat," he said. "We do not see Chinese-owned port facilities as a military or a national security threat."

At the State Department, spokesman James Rubin said, "We have seen no capability or interest on the part of the People's Republic of China, a major user of the Panama Canal, to disrupt its operations."

"We will maintain a close interest in canal operations after transfer of the canal to Panama on December 31, 1999," he added.

The 1977 Panama Canal treaties guaranee the neutrality of the canal after 2000, requiring Panama to let all ships cross independent of political conflicts and letting the United States intervene militarily if it doesn't.

The U.S. military also will leave Panama on Dec. 31, 1999.

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