On Sunday, voters in Panama voted in favor of a plan to expand and update the Panama Canal, with about 78% voting in favor and 22% against. The $5.25 billion plan would add a third set of locks that would allow larger container ships, cruise liners and tankers to pass through that currently can not fit into the 108-foot wide locks.
The expansion should significantly affect U.S. exports, as American vessels are the canal's top users. "There will be an impact on the pocketbook," says U.S. Ambassador William Eaton. "The transit costs will be cheaper, and that will have an effect on the market."
"This is important to the U.S. It's important to our economy," Eaton says.
Around half of U.S. corn exports travel through the canal, which currently handles around 4% of global trade. The canal's administrator, Alberto AlemÃ¡n Zubieta, points out the benefits the expansion will have for agricultural exports.
"Now you will be able to bring agricultural products in a larger vessel," he says. "Then you reduce the unit costs."
According to a spokesman for the Port of Los Angeles, about 30% of the vessels that dock there are too large for the Panama Canal.
Construction is set to start in 2007, with an estimated construction time of about eight years. Taiwan has already offered to help with the project's costs. The locks represent a fifth of Panama's economy, employing 8,000 workers.
Some opponents of the expansion remain vocal, warning of possible corruption, and many who voted in favor of the expansion are cautious as well.
"The expansion is necessary, but we all have to watch closely, make sure there isn't embezzlement and corruption," says Igor Meneses, a 34-year-old voter from Panama City. "With that kind of money there's a lot to steal."
The U.S. built the Panama Canal in 1914 and ran it until 1999, when it handed the canal's operations over to Panama.