The Panama Canal: How Important to U.S. Grain/Oilseed Exports

摘要

The Panama Canal will be transferred to the Republic of Panama on December 31, 1999 Some believe the Panamanians will not follow the break-even management philosophy of the U.S. and will attempt to maximize toll revenues. Other ritics hold that Canal management and maintenance will suffer from corruption and nepotism. They believe political patronage and inflated payrols will drain resources fromthe Canal, and this will lead to inadequate maintenance which eventually will make the Canal virtually inoperable. Spatial models of the international corn and soybean sectors are used to evaluate the strategic role played by the Panama Canal for U.S. corn and soybean exports. Grain and oilseeds are the leading commodities transiting the Canal: about 44 percent of U.S. corn and soybeans move via this transport artery. Two secnarios are examined. The first scenario determines th eeffects of ncreasig Canal tolls while the second examines the effect of Canal closure. Increasing tolls reduce exports via U.S Gulf ports, increase exports via U.S. pacific northwest prots, reduce quantities transiting the Canal and increase flow to east Asia via Africa's Cpae of Good Hope. In addition, the U.S.'s role in sia's corn and soybean markets declines while Europe and north Africa become increasingly important markets for U.S. producers. Total corn and soybean exports of the U.S. decline no more than 2 percent. Analysis suggests a revenue-maximizing Canal operator could substantially increase revenues by adjusting tolls upward by