'State of emergency' in Panama

Summary

Marketplace Morning Report: 'State of Emergency' in Panama Release Date: May 28, 2025

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Overview

In this episode of the Marketplace Morning Report, host Liana Byrne delves into the escalating crisis in Panama, where a prolonged strike has forced the government to declare a state of emergency. The report also touches upon significant developments in global markets, including challenges faced by major corporations and advancements in Europe's rare earths processing capabilities.

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Panama's Banana Strike and State of Emergency

Triggering the Strike

The episode opens with Liana Byrne introducing the central issue in Panama: a month-long strike that has crippled the banana industry, a sector valued at approximately $100 million. Vanessa Boschleuter from the BBC World Service provides an in-depth analysis of the situation.

Vanessa Boschleuter [01:46]: "This strike was triggered at the end of last month by a law passed by the conservative president of Panama aiming to address a shortfall in the country's pension system."

The conservative administration, in collaboration with Congress, enacted pension reforms perceived by unions—including banana workers, teachers, and other labor groups—as a covert privatization effort. This perception ignited widespread protests.

Escalation and Government Response

As the strike persisted, union members employed effective protest strategies, notably blocking the Pan American Highway. This blockade impeded the transportation of essential goods like food and water into the affected province, intensifying the crisis.

Vanessa Boschleuter [02:43]: "The government has declared a state of emergency to gain additional powers to navigate the strike, though they have refrained from forcibly removing the roadblocks to prevent further escalation."

The state of emergency grants the government enhanced authority to manage the situation without directly confronting the protesters, a tactic learned from past experiences where force led to exacerbated conflicts.

Impact on Chiquita and Employment

The strike's repercussions extended to Chiquita, the prominent US fruit company operating in Panama, which responded by laying off thousands of workers. Vanessa Boschleuter elaborates on this development.

Vanessa Boschleuter [03:46]: "Chiquita described the strike as an 'unjustified abandonment of work,' citing a loss of $75 million as justification for terminating 5,000 banana workers."

The mass layoffs have further strained the economic landscape, highlighting the strike's profound impact on both the company's operations and the livelihoods of its employees.

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Global Market Insights

U.S. and Chinese Market Dynamics

The report transitions to a broader economic overview, emphasizing fluctuations in U.S. and Chinese markets. Pinduoduo (PDD), the Chinese e-commerce titan behind Temu, experienced a sharp decline, closing over 13% following a nearly 50% drop in profits. This downturn is attributed to increased scrutiny from both domestic authorities and international pressures, including actions spearheaded by former President Trump targeting duty-free imports.

European and Brazilian Market Movements

European markets remained relatively stable as investors awaited developments in U.S. trade negotiations and regional economic indicators. In Brazil, legal challenges emerged as prosecutors filed a lawsuit against the Chinese electric vehicle manufacturer BYD. The company, alongside two contractors, faces accusations of human trafficking and maintaining slave-like conditions at a factory site, where 220 Chinese workers were recently rescued. Although BYD has yet to respond to the allegations, it has previously affirmed its stance against rights violations.

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Europe's Push for Rare Earths Independence

Solvay's Pioneering Facility in La Rochelle

Jonathan Josephs from the BBC provides an exclusive report on Europe's efforts to reduce dependence on China for rare earth minerals, essential for smartphones, electric vehicles, and wind turbines. The focus is on Solvay's state-of-the-art rare earths processing facility in La Rochelle, France—the largest of its kind outside China.

Philippe Caron [07:09]: "Recycling can probably represent 30% or maybe even a bit more, but never 100%."

Philippe Caron, CEO of Solvay, underscores the significance of developing self-sufficiency in rare earths through both recycling and domestic processing. While current recycling capabilities are limited due to the nascent stage of end-of-life electric motor retrieval, future projections anticipate substantial growth in recycled materials contributing significantly to rare earth sourcing.

Production Process and Future Prospects

The facility employs advanced separation techniques to refine rare earth elements from recycled materials, transforming them from liquid nitrates into usable powder forms. This process is pivotal for integrating rare earths into cutting-edge technologies.

Sebastian Scarci [06:35]: "At the end of the separation stage, we have liquid. For this liquid, finished product is a powder."

Solvay's initiative not only enhances Europe's strategic autonomy in critical materials but also positions the continent as a leader in sustainable and innovative processing technologies.

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Conclusion

The episode of Marketplace Morning Report provides a comprehensive examination of the socio-economic turmoil in Panama's banana industry and its broader implications. Additionally, it highlights significant movements in global markets and Europe's strategic advancements in rare earths processing. Through expert interviews and detailed reporting, listeners gain valuable insights into these pressing international issues.

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For more detailed discussions and updates, tune into the full episode of Marketplace Morning Report.

Transcript

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[Liana Byrne]

Blockades and a multi million dollar strike. Hello, this is the Marketplace Morning Report and we're live from the BBC World Service. I'm Liana Byrne. Good morning. So we start today in Central America and a blow to a $100 million banana market. The Panamanian government has declared a state in a key province after a month long strike, shut down banana production and led the US fruit giant Chiquita to lay off thousands of workers. The BBC's Vanessa Boschleuter has been following this. Hello.

[Vanessa Boschleuter]

Hello, how are you?

[Liana Byrne]

Vanessa? Let's start with the basics. What triggered the strike and why has it dragged on for so long?

[Vanessa Boschleuter]

This strike was triggered at the end of last month, at the end of April by a law that was passed by the conservative president of Panama who who was trying to fight a shortfall in the country's pension system. So he, with the help of Congress, passed this law which will reform the system of pensions in the country. And the unions, not just the union of the banana workers, but also the teachers unions and unions representing other workers, think that this reform is a privatization through the back door. So they have taken to the streets and protested against this law. Now a tribunal declared the strike illegal and that's when Chiquita decided to sack 5,000 banana workers, which of course has made the situation worse.

[Liana Byrne]

Why has the Panamanian government declared a state of emergency?

[Vanessa Boschleuter]

As you can imagine, the strike has now gone on for a month. And what union members tend to do in Panama is they tend to block the Pan American highway, which is a very effective means of protest. That means that transport companies can't get food and water and other essentials into that region. And of course, this makes the situation escalate quite rapidly. So the government has taken the decision to declare the state of emergency in order to give it more powers to circumvent the strike, although they have said, it has to be said that they will not remove the barriers erected, these roadblocks that the protesters have erected by force. The reason for that is that when the government in the past has tried to remove roadblocks by force, the situation has really blown up. So for now, they want to avoid that situation, but they want to be able to, for example, have the security forces bring in food, bring in essentials.

[Liana Byrne]

Have we heard from Chiquita on this at this point?

[Vanessa Boschleuter]

Yes. Chiquita said that the strike was an unjustified abandonment of work and that's the reason it gave for sacking those 5,000 workers. The it also said that it had lost $75 million by the strike. So that's the reasons it is giving for this sacking of those thousands of banana workers.

[Liana Byrne]

Okay. Vanessa Bush Lute, thank you so much for joining us on Marketplace.

[Vanessa Boschleuter]

You're welcome.

[Liana Byrne]

Now let's do the numbers. U.S. listed shares and PDD holdings, the Chinese e commerce giant behind Temu closed down more than 13% yesterday after the company reported a near 50% drop in profits. It's facing press at home and abroad, including from President Trump's crackdown on duty free imports. Meanwhile, European markets were flat as investors watched for movement on US Trade talks and regional economic data. And in Brazil, its prosecutors are suing the Chinese EV giant byd, accusing it and two contractors of human trafficking and slave like conditions. At a factory site, 220 Chinese workers were rescued. BYD hasn't commented on the case, but has previously said it has zero tolerance for rights violations. Smartphones, electric vehicles and wind turbines, they all rely on rare earth minerals. On Monday, we looked at concerns that the processing of these materials is heavily dominated by China. Like the U.S. europe is trying to reduce its dependence on Beijing. But right now it only has two processing plants. The biggest is in France, owned by chemicals giant Solvay. The BBC's Jonathan Josephs has been given exclusive access.

[Florian Gounod]

Welcome to the historic port city of La Rochelle. The old limestone buildings are part of the attraction for tourists, but it's some very different materials that are putting it on the map for Western politicians. Well, we're in the car now on the way to Solvay's Rare Earths processing facility. They don't let very many people in here. Now this is the largest plant of its kind outside of China. Let's go and take a look inside.

[Sebastian Scarci]

Good morning. I'm Florian Gounod. I'm a production site manager here in La Rochelle. Basically what we do here in La Rochelle is we separate and we purify rare earth's element. It's basically like if you have a multi fruit juice with orange juice, apple juice, pineapple juice. The objective of the liquid heat separation unit will be to separate apple juice on one side, orange juice on the other side, and so on.

[Florian Gounod]

We're stepping inside to a huge room. Must be almost the size of a football pitch. Here it's row after row of conjoined metal vats. And this is where a lot of that separation happens.

[Philippe Caron]

I'm Sebastian Scarci, I'm the site director of OLV La Roche. @ the end of the separation stage, we have liquid. For this liquid, finished product is a powder. So we need to transform the liquid, the rare earth nitrates, into rare earth oxide, which is a powder.

[Florian Gounod]

So that's how the rare earths go from recycled and unfiltered materials to ready for use in the latest tech. Today, Belgium's Solvay is run by Philippe Querenne. I asked him how important it is that Europe becomes self sufficient and expands its own mining of rare earths.

[Philippe Caron]

I think it's important to also be independent. Keep in mind that we can use recycled material. So of course today it's still the beginning because you don't have a lot of end of life electric motors and so on. But this will develop and by 20, 30, 35, you will have more and more material. And this can represent a big part of the sourcing. I think the recycling can probably represent 30% or maybe even a bit more, but never 100%.

[Liana Byrne]

That was Solvay CEO Philippe Caron finishing that report from Jonathan Josephs. And I'm Liana Byrne with the Marketplace morning report from the BBC World Service.

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When newlyweds Chantal and Travis Lipzak started searching for their dream home, it became clear they were not on the same page. I was so deeply irritated because his reasonings just did not feel valid. I felt a little bit slow, stuck. I'm Maria Reyes and this week on this is Uncomfortable. A financial therapist sits down with this Seattle couple to talk through their money differences and the tensions that can arise when making big life decisions together. Listen to this is uncomfortable. Wherever you get your podcasts.