One notable point of contention between Panama and the United States was the Panama Canal Zone, which was under US control from 1903 until 1999. The presence of the US military and administration in the Canal Zone was a source of discontent and nationalism among Panamanians, and the issue of sovereignty over the Canal Zone was a major factor in Panama-US relations for many years.
The 1989 US invasion of Panama, known as Operation Just Cause, represented a significant turning point in Panama-US relations. The invasion aimed to overthrow the Panamanian leader, General Manuel Noriega, and restore democratic governance in the country. While the US military action achieved its objective of capturing Noriega, it also resulted in significant casualties among Panamanian civilians and caused damage to the country's infrastructure. The invasion remains a contentious topic in Panama, with some viewing it as a violation of national sovereignty and others considering it necessary to address the undemocratic and oppressive nature of Noriega's regime.
In subsequent years, Panama and the United States have worked to strengthen their diplomatic ties and cooperation. The Panama Canal Zone was transferred to Panamanian control in 1999, marking a new chapter in the relationship between the two countries. Both nations have engaged in various agreements, including the 2007 Panama-US Trade Promotion Agreement (TPA), and collaborate in areas such as trade, security, and development.
Despite the historical tensions and past disagreements, Panama and the United States maintain regular diplomatic dialogue and work to address common challenges. The relationship between the two countries has generally improved over time, with a focus on mutual respect and cooperation.