Concerns Over China's Role

With the U.S. set to relinquish control of the Panama Canal, some Republicans in Congress have expressed concern that American interests may be threatened by an accord permitting a Hong Kong company with ties to Beijing to operate ports at both ends of the canal.

"America is going to be vulnerable because we now have created a vacuum in which some very evil forces -- drug dealers, communist Chinese and others -- are coming in to fill that void in Panama," says Rep. Dana Rohrabacher, R-Calif.

"It appears we have given away the farm,'' said Senate Majority Leader Trent Lott, who raised questions on the canal takeover with Defense Secretary William Cohen last summer.

"U.S. naval ships will be at the mercy of Chinese-controlled pilots and could even be denied passage,'' Lott said in a letter to Cohen.

A Hong Kong-based company will run two of the four canal ports, but the canal itself will be controlled solely by Panamanian authorities. And the U.S. retains rights to defend the canal from any security threats.

Robert Pastor, who helped negotiate the canal treaty for the U.S., dismisses the Republican fears.

"There are a lot of outrageous ideas that bubble out of the Congress from time to time," he said, "but certainly the idea that China is about to grab the Panama Canal has to rank as one of the most ludicrous of all time."

President Clinton says he is "comfortable" with the arrangement, which allows multinational Hutchison Whampoa Ltd. to take over container port operations on the waterway. Mr. Clinton said the canal itself would be entirely controlled by the Panamanian government when the U.S. withdraws.

"The Hong Kong company which got the concession to operate the ports will be responsible for loading and unloading ships. They also do this in three or four ports in Great Britain. It's one of the biggest companies in the world that does this. The managing director is British. Most of the employees will be Panamanian," Mr. Clinton told a televised news conference last week.

Drugs may be a more valid concern, reports CBS News Correspondent Jim Axelrod. U.S. drug agents report a recent explosion of cocaine and heroin production in Colombia, Panama's neighbor. The U.S. military bases that used to offer a foothold for the war on drugs are now ghost towns.

"I think Panama is anxious about their security," says U.S. drug czar Barry McCaffery, "and they should be. They're living right next to Colombia and the 25,000 heavily armed narco-guerillas."

But Panama, say its leaders, is ready. The canal is a convenience for others, for Panama, this water is literally its lifeblood.