Foreign Policy of PanamaPanama 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 receives ships and boats from all over the world every day. This unique feature attracts other states to negotiate and enter into agreements with the small country. Democracy shaped their foreign relations and therefore diplomacy was the only means by which they dealt with big powers towards small countries. Panama developed friendly, albeit rational, communication with Asia and communist countries, while maintaining close relations with the West and other sovereign states. She moves forward, puts aside the burden of the past and focuses on a broad and deep relationship with Colombia and Costa Rica, the countries bordering this small country. China implemented a law that 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 conducted with China, all trading partners need this to decide which country to recognize. Panama was one of 23 countries that decided to recognize Taiwan. However, Panama was the only country that still had trade agreements and relations with the "One and True China". The Central American country's foreign policy sticks to its traditional political approach. As President Torrijos announced in 2008, nothing would change in the way they treat China or Taiwan. Panama has this strong influence in China because of the canal and its international position. The Canal gives them soft power in the large emerging country. China does... middle of paper ...... the factors that were discussed above, their relations have been strong since the day of their independence and after the United States returned the canal to Panama. The close association between the use of the same currency, the dollar, says a lot about how Panama deals with the foreign market and Western diplomacy. Panama follows a westernized approach to dealing with all countries, although it differs in that it has no grudges or sanctions against any other state like the Americans (Mark, 2013). Nevertheless, it is impressive how much open market, agreement and involvement the country has with the biggest power, the United States, but also with its biggest debtor, China. Cooperation between the two promotes the stability and growth of the country. Panama would continue to prosper and further consolidate its position in the world thanks to its diplomatic approach to all matters..