Nicaragua is reviving century-old plans for a canal that will be built with the help of China. The new canal will bridge the Pacific and Atlantic oceans and come into direct competition with the Panama canal, which until now has been the only waterway between the two oceans.
This soon-to-be-built route through central America will rival the Panama canal in size – even with a planned expansion of the Panama canal in 2015. What this means is that the potential for inter-ocean trade is likely to surge. A second canal means more transport between the Pacific and Atlantic oceans, leading to lower trading costs in the process. Due to it’s larger size, the new Nicaragua canal will also increase the total volume of goods shipped, further reducing shipping costs.
Beyond the commercial implications, there are also military ones. The U.S. Navy’s next generation of aircraft carriers – the Ford Class – could sail through the new canal.
Even though some believe this will give the U.S. military additional flexibility when moving around the world, there are others who think it will only complicate matters. Especially when you consider the costs of patrolling multiple waterways vs. only one. Whether or not this has been taken into account by the Chinese contractors is an entire topic of it’s own.
Although there are clearly benefits to be had from the Nicaragua canal, project experts say it could take 11 years to be built by China. Not to mention, cost $40 billion and require digging about 130 miles (200 kilometers) of waterway which will be 200 feet (60 meters) deep in many places.
If it’s any indicator of the project’s importance, Nicaraguan President Daniel Ortega, presented the project with the hopes of getting it to an initial vote within one week.
Once the Nicaragua canal is built by China, what do you think the implications will be for the US?