No, the United States no longer pays rent for the Panama Canal. The Canal and the surrounding Canal Zone were fully transferred to Panamanian control on December 31, 1999.
The Transfer of Control: From U.S. Administration to Panamanian Sovereignty
The status of the Panama Canal evolved significantly over the 20th century. While the United States administered and operated the Canal for most of its history, the territory it occupied was always recognized as belonging to Panama.
Historical Context of U.S. Payments
From the inception of the Canal's operation, the United States made annual payments to Panama for the use of the land where the waterway was constructed. This arrangement underscored Panama's sovereignty over the territory, a fact consistently affirmed by U.S. Supreme Court decisions and various American Presidents. The Canal Zone, despite U.S. administration, remained Panamanian territory. These payments were essentially for the privilege of operating the Canal on land that was not U.S. property.
Key agreements that shaped this relationship include:
- Hay-Bunau-Varilla Treaty (1903): Granted the U.S. a perpetual lease on the Canal Zone for a fixed annual payment.
- Torrijos-Carter Treaties (1977): Signed by President Jimmy Carter of the U.S. and General Omar Torrijos Herrera of Panama, these treaties set in motion the process for the full transfer of the Canal and the Canal Zone to Panamanian control.
Current Status of the Panama Canal
Since December 31, 1999, Panama has held full control, operation, and maintenance responsibilities for the Panama Canal. This means:
- No Rent Payments: The U.S. no longer makes any "rent" payments to Panama for the Canal's use or operation.
- Toll Payments: Like any other nation, U.S.-flagged vessels pay transit tolls to the Panama Canal Authority (ACP) for passage through the waterway. These tolls are a primary source of revenue for Panama and are used to operate, maintain, and modernize the Canal.
- Economic Impact: The Canal is a vital economic asset for Panama, contributing significantly to its Gross Domestic Product (GDP) through tolls, port services, and related industries.
Key Milestones in Canal History
| Year | Event | Significance |
|---|---|---|
| 1903 | Hay-Bunau-Varilla Treaty | U.S. granted rights to build and operate Canal; annual payments to Panama began. |
| 1914 | Panama Canal Opens | Operational phase begins under U.S. control. |
| 1977 | Torrijos-Carter Treaties Signed | Paved the way for full Panamanian control. |
| 1999 | Full Transfer to Panama | Panama assumes complete control and responsibility for the Canal. |
| Present | Panama Canal Authority (ACP) Operations | Panama collects tolls and manages all Canal operations. |
The transition marked a significant shift in international relations and reaffirmed Panama's sovereignty over its national territory and critical infrastructure.
