The number of nations with which Panama maintains formal diplomatic relations expanded during the 1970s, in part because of the campaign to renegotiate the canal treaties and in part because of its role as a commercial, banking, and trading center. During the 1980s, economic difficulties contributed to slowing, but not reversing this trend toward expanded international contacts. In most cases, the focus on bilateral relations was on economic issues, with political matters more frequently addressed through multilateral forums.
Relations with Cuba have been a subject of some controversy, both within Panama and in Panama's relations with the United States. Panama broke relations with Cuba in the 1960s, but reestablished them in the early 1970s, and by the end of the decade, Cuba's diplomatic mission in Panama City was second only to that of the United States in the number of its personnel. Torrijos openly solicited Cuban support during the canal negotiations, but CubanPanamanian relations generally have been based more on commercial than political grounds. During the 1970s, Cuba made extensive use of the Colón Free Zone to obtain materials that the United States trade embargo of Cuba made it difficult to obtain directly.
Relations with Cuba have been a side issue in disputes between Panama and the United States. Cuba has openly supported Noriega and attempted to portray criticisms of the general as part of a United States plot to sabotage the Panama Canal treaties. The United States, for its part, has accused Panama of participating in the illegal shipment of American high-technology equipment to Cuba.
Panama's relations with its southern neighbor, Colombia, have never been close since Panama broke away from Colombia and declared its independence (see The 1903 Treaty and Qualified Independence , ch. 1). Part of this coolness was a function of poor communications; the border area is wild and thinly populated and represents the last gap in the Pan-American Highway system (see fig. 8). Relations have been strained by Panamanian concerns that Colombian settlers and guerrillas were moving into areas on the Panamanian side of the border and by the prevalent belief in the Colombian military that Panama was supporting Colombian guerrilla groups.
Relations with other states of Latin America and the Caribbean were of lesser importance in the late 1980s. There was some strengthening of ties with Venezuela in the 1970s, spurred by the economic resources available to Venezuela as a result of the rise in oil prices. But the precipitous fall in oil prices in the mid1980s damaged the Venezuelan economy and reduced the Panamanian incentive to seek any further expansion of existing ties. Panama sought to expand its ties with the smaller Caribbean states in the late 1970s and early 1980s. It even undertook the training of police in Grenada. But the more active United States presence in the area, signaled by the Caribbean Basin Initiative and the 1984 Grenada intervention, undercut this effort, which, in any case, was limited by economic, cultural, political, and linguistic factors.
Relations between Panama and Canada, Western Europe, and Japan were largely commercial in nature. Relations with Western Europe were somewhat complicated by ties between West European political parties and opposition groups in Panama. These links have been an increasing problem in relations with the Federal Republic of Germany (West Germany), whose Christian Democratic Party maintained close ties with Panama's opposition Christian Democrats. Relations with Japan have assumed growing importance, in part because of Japan's participation on the Commission for the Study of Alternatives to the Panama Canal.
Panama has long maintained close ties with Israel and, in 1987, Delvalle made a state visit to that nation. Nevertheless, late in 1987 Panama indicated an interest in expanding contacts with Libya, with which it had no formal diplomatic relations, and some officials expressed the hope that Libya could become a major source of financial assistance. It was, however, unclear whether this was a serious proposal or simply a tactic in Panama's ongoing dispute with the United States.
Panama had no formal diplomatic relations with the Soviet Union or China. In the case of China, this situation was because of Panama's maintenance of diplomatic relations with the government on Taiwan. Interest in expanded ties with socialist and communist nations has, however, increased, fueled by the fact that the Soviet Union has become the third largest user of the canal. In March 1987, Panama and Poland initiated a broad program of educational, scientific, and cultural cooperation. That same month, the president of Panama's Legislative Assembly visited the Soviet Union, but Panama denied that this was a prelude to establishing diplomatic relations. In December, Panama gave the Soviet airline Aeroflot permission to begin regular flights to Panama, but once again denied that it was planning to open formal diplomatic relations.
Data as of December 1987