Panama's Foreign Policy Panama maintains a positive, constructive and traditional approach to its foreign policy with the international community. Even if it is not a great power, it has a soft power due to the Canal which welcomes ships and boats that pass through every day from all over the world. This unique feature attracts other states to negotiate and make agreements with the small country. Democracy shaped their foreign relations, so diplomacy was the only way they dealt with great powers towards smaller countries. Panama has developed friendly, albeit rational, communication with Asia and communist countries, while maintaining close relations with the West and other sovereign states. He moves forward, puts aside the burden of the past and focuses on a broad and deep relationship with Colombia and Costa Rica, the small country's neighbors. China implemented a law in which it did not allow any of its trading partners to recognize Taiwan as a country and only recognizes "The One True China". If this law were to be ignored, no economic trade should be done with China, all trading partners need it to decide which country to recognize it. Panama is among 23 countries that have decided to continue recognizing Taiwan. However, Panama was the only country that still has trade agreements and relations with "The One and True China". The Central American country's foreign policy sticks to its traditional political approach. Indeed, in 2008, President Torrijos announced that nothing would change in the way they treat China and Taiwan. Panama has this strong influence in China thanks to the Canal and its international position. The Canal provides them with soft power over the large emerging country. China does… middle of paper… the factors that were discussed above, their relationship is strong since the day of their independence and after the US returned the Canal to Panama. The close association with even the use of the same currency, the dollar, says a lot about the way Panama deals with foreign markets and Western diplomacy. Panama follows a westernized approach towards all countries, although it differs in that it does not hold a grudge or sanctions against another state like the Americans (Mark,2013). However, it is impressive how it has an open market, agreement and involvement with the largest power, the United States, but also with its largest debtor, China. Cooperation between the two promotes the country's stability and growth. Panama will continue to prosper and increasingly secure its position throughout the world thanks to its diplomatic approach to any issue.