When Panama’s President Juan Carlos Varela arrives in Beijing on Thursday to witness the opening of its brand new embassy, it would be a dream 10 years in the making.
Varela first floated the idea of cutting diplomatic ties with Taiwan a year after he became leader of his party in 2006, with Panama announcing its decision this June to recognise “one China” and that Taiwan was part of the country.
Now that he has achieved his political aim, Varela will spend his week-long visit focusing on business, namely inking trade deals between the Central American country and China.
“When you see … ‘one China’ and it’s being led by President Xi Jinping, in a country of almost 1.4 billion people, that’s basically the market,” Panama’s new ambassador to Beijing, Francisco Carlo Escobar, said in an exclusive interview with the South China Morning Post.
Panama’s move was a major victory for Beijing, which has been luring away the dwindling number of countries that have formal relations with the island China claims as its own.
Only 20 countries continue to recognise the Republic of China, the official name of the Taiwan government.
Varela, who at the time dismissed the idea Panama was playing “chequebook politics”, will witness the conclusion of at least 15 agreements between China and Panama, covering agriculture, aviation and tourism, according to Escobar.
“The focus of President Varela is on China right now. This is one of the biggest goals that he has reached during his presidency,” Escobar, who was named Panama’s first ambassador to Beijing in September, said.
“Politics helps a lot in trade,” he added. “[China] had been a country that for us was a little distant because of the lack of diplomatic relations. Now that we have this relationship we are able to explore and optimise with regards to everything.”
The two countries are expected to be part of a feasibility study for a free-trade agreement. Panama, the top envoy said, would try to attract Chinese investors in the Colon Free Trade Zone, located near the Atlantic entrance to the Panama Canal.
Another deal will allow airlines to operate flights between the two countries.
“We may be a very small country, but we have a great geographical position. We are the hub of the Americas,” Escobar said.
Panama is also trying to “learn Chinese railway technology” as it looks to expand plans to link up its border with Costa Rica.
China has been exporting railway technology to other countries as part of Xi’s “Belt and Road Initiative”, a modern-day Silk Road.
The visiting president will lead his 100-plus delegation on a 4.5-hour bullet train trip from Beijing to Shanghai, spending two of his seven days of the trip to pay homage to a city that impressed him years back.
“In 2010, I went to Shanghai for the World Special Olympic Games and I was very impressed with the city,” Varela said in an interview with Chinese state media in September.
For Escobar, Panama’s decision to ditch ties with Taiwan was as much a surprise as his appointment as the first ambassador to Beijing.
“It was something we had to do for many years – that’s the right thing,” Escobar said of Panama’s new diplomatic relations with Beijing, though he conceded the Taiwanese public was disappointed by the decision.
After the news was announced in June, there was a guessing game within Panama’s diplomatic circles on who would be the inaugural ambassador, he recalled.
As ambassador to Cuba at the time, Escobar was in Panama when the president summoned him to his office and told him to get ready for his next posting.
“To open an embassy is not an everyday thing; it’s something that is very difficult to do,” he said.
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