America is taking a great stride in our international trade strategy with the pursuit of the expansion of the Panama Canal, also called the Third Set of Locks Project.              

The plan started in 2007 but stopped due to an underestimate of funding, from which was blamed on error by the Panama Canal Port Authority’s “poor geological studies.” The mammoth project is 85% complete, with the final cost of the expansion totaling over $7 billion, and a projected date of completion this coming December. A new third lane will double the canal's capacity to start accommodating Post-Panamax ships, which are 1,200 feet in length and carry three times the cargo of 965-feet-long Panamax ships. Further research has shown many benefits the project will bring to U.S. trade, especially with Asia.                                

According to the reports by the Panama Canal Authority, the route from Sabine Pass in Louisiana to Japan would be cut by 11.4 days.  Furthermore, with the “oil glut” resulting in a gloomy layoff frenzy affecting natural gas workers, the Panama Canal may offer new opportunities for the industry due to the newly expanded canal being able to accommodate close to 90% of LNG tankers, compared to less than 10 percent currently. Also included in the prize are substantial increases in coal and propane exports. But this isn’t limited to only a North American success. According to energy analyst Alexis Arthur of the Institute of Americas, the canal has the potential to alter LNG trade routes globally. In Peru’s Camisea Gas Project, the shipment of its natural gas to Spain via the canal would save eight days’ transit. Additionally, the route from Trinidad and Tobago to Chile would be cut by 6.3 days.                                          

As reported in a study by The Maritime Administration, the expansion will result in a significant increase in the exports of shipments of grain, including soybean, wheat, and corn products, as these new generation of energy efficient ships will have 25% more capacity than the previous, which according to Rabobank analysts, will reduce the cost of shipping grain from the American Midwest corn belt to Asia by roughly 12%. Again, beneficiaries also include Brazil and Argentina and cost effectiveness of their grain exports to Eastern Europe.                                 

Of course, not mentioning the spillover effects on the Republic of Panama itself would be short sighted, after all, 6% of world commerce passes through there annually. In 2012, Panama’s GDP grew by 10.5 percent and unemployment is at the lowest levels ever experienced, at 3.5 percent. Jobs are in abundance, as the canals expansion has been accompanied with a huge hiring spree, especially with financial institutions in dire need of professionals to fill vacancies of over 100 banks that hold more than $100 billion in assets.  Furthermore, the expansion is bringing an influx of commercial developers along the banks of the Caribbean, they’re seeking proposals that could have significant effects on the country’s water resources and tropical landscape. The projects include a $US 6.4 billion open-pit copper mine powered by a 300-megawatt coal-fired power plant, a $US 8.7 billion container terminal east of Colon, and a $US 4 billion residential resort.