Mireya Moscoso, the first woman president of Panama, received the salute of a US Army honor guard at noon. The ceremony was deliberately held twelve hours before the new millennium. The United States transferred all remaining military bases, the canal's operation, and the land of the Canal Zone to the Republic of Panama. The event fulfilled the 1977 Torrijos-Carter Treaties, which had set this date twenty-two years prior.
This mattered because it closed a chapter of American hemispheric imperialism that began with Theodore Roosevelt. The 10-mile-wide, 50-mile-long Canal Zone had functioned as a colonial enclave, complete with American schools, post offices, and segregated housing. Its return was a potent symbol of post-Cold War sovereignty and a rare instance of the US voluntarily ceding a strategic asset. The handover was not merely symbolic; it included the physical infrastructure of one of the world's most critical maritime chokepoints.
The transition was misunderstood by many Americans as a loss of security or a gift. In reality, the treaties guaranteed the canal's permanent neutrality and gave the US the right to defend it. The Panamanian state assumed a massive financial and operational burden, along with the revenue. The Panama Canal Authority, a Panamanian agency, has operated it profitably and efficiently since, overseeing a recent multi-billion-dollar expansion.
The impact is one of quiet normalization. The canal is no longer a geopolitical flashpoint but a Panamanian-run utility of global trade. The handover demonstrated that such transitions, however historically fraught, could be executed peacefully and professionally. The Zone's lands and facilities were converted into economic development projects, museums, and rainforest reserves, physically erasing the footprint of a foreign occupation.