On December 31, 1999, the United States will formally hand over total control of the Panama Canal and withdraw its troops from the canal zone. This is in accordance with the treaty ratified by the U.S. Senate in 1977.

The canal has been a vital sea link for the United States, saving military and commercial ships the long trek around Cape Horn. More than 15 percent of goods imported into and exported out of the U.S. pass through the canal.

A major concern over continued free access to the canal comes from the fact that Panama has granted a Chinese company, Hutchison Whampoa, Ltd., a 25-year concession to operate the Atlantic and Pacific entrances. Because Hutchison has ties to the Chinese Communist Party it is feared this important waterway could come under the control of China. American leaders fear that U.S. naval ships could be denied access to the canal at a time of international crisis (Forbes, October 4, 1999).