The selection of former Sen. Marco Rubio to become the nation’s secretary of state sent the message that shoring up Latin America will be a top priority for the new administration.

Early returns suggest the selection is paying off. Rubio’s trip to Panama, his first stop as the nation’s most senior Cabinet member, delivered a significant concession from the Panamanian government. Following his meeting with Rubio, President Jose Raul Mulino, after months of denying President Donald Trump’s claims that China controlled the Panama Canal, announced that his country will not renew a 2017 infrastructure funding agreement with China. 

As a result, Panama will cease participating in China’s Belt and Road Initiative once the current agreement expires in 2027. Mulino even expressed openness to ending the agreement beforehand. 

While Panama’s exit from the BRI will not directly involve operations or control of the canal, it is significant on a number of fronts. 

For the United States, the Panama Canal is critically important for national security because of its location for commercial and military traffic. China’s partnership with the Panamanian government raised concerns about its influence over the canal, which would enable them to disrupt U.S. commerce, influence toll rates and ship prioritization, and provide economic leverage for China to make strategic gains in the region. 

Mulino’s concession not only keeps the canal from falling under Chinese control but also broadly blunts Chinese expansionism in Latin America. In recent years, China has invested heavily in the region on infrastructure projects and increased trade. Chinese development banks have provided substantial loans to Latin American countries for infrastructure deals or resource-backed loans. This has stoked U.S. fears of “debt trap diplomacy,” in which high levels of debt would give China control over key assets.

The case of Sri Lanka’s Hambantota Port is instructive. Completed in 2010, the port, which is positioned on major shipping routes in the Indian Ocean, was built by China Harbour Engineering Company and funded by the Export-Import Bank of China. However, it quickly became apparent that the port was not generating enough revenue. Debt repayment problems caused Sri Lanka to lease the port in 2017 to China Merchants Port Holdings Company Limited for 99 years. Today, China controls the port. 

While Rubio’s success in convincing Panama not to renew its participation in the BRI is a positive step in countering Chinese influence in Panama, there is still plenty of work to be done in the region.

For instance, countries such as Panama must agree to accept more deportees, as well as increase their cooperation in curbing the flow of migrants to the U.S., especially by way of the perilous Darien Gap. It is part of the Pan-American Highway that was never completed and is one of the most dangerous migration routes in the world. Mulino has vowed to “close” the gap — and he must be held to his word. 

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Panama must also clamp down on organized crime, which exacerbates migration to the U.S. and causes regional instability generally. The U.S. Embassy’s Bureau of International Narcotics and Law Enforcement has provided $12 million in recent years to help Panama fight organized crime, which includes drug trafficking in the country that serves as a transit point for drugs that eventually arrive in North America. To win this battle, Mulino must also tackle deep-seated corruption in the Panamanian government, which is no small task. 

Increased security cooperation and enhanced economic ties between the U.S. and Panama are crucial components of maintaining U.S. leadership in the Western hemisphere and beyond. Rubio’s mission to achieve this is a good start, but the real work has only just begun.