Panama is a long, thin country in Central America, famous as the land link between North America and South America. It is also famous as the home of one of the world's largest tropical rainforests, prolific banana plantations and, of course, the Panama Canal. Panama is not famous for its wine, however, as viniculture has never been practiced on a commercial scale here. In spite of this, many millions of liters of wine pass through the country each year, giving Panama a vital role in the global wine economy. Quite how this unlikely seeming situation has come about is explained below.
The only overland route between South America and North America runs along the Panamanian Isthmus, just 30 miles (48km) wide in places. Panama's unique location was once of great strategic importance, although this has now been lessened by the rapid and dramatic advances in aviation that have taken place over the past several decades. Panama was the narrowest point of land in the Americas, linking South America (right down to the bottom of Argentina and Chile) with North America (all the way up to Canada and Alaska), and thus everything in-between. But Panama's status as a helpful link between the continents was precisely what made it unhelpful as an unnavigable barrier between the oceans. The 30-mile strip that links the Americas is also all that separates the Atlantic and Pacific oceans. It was this fact that motivated the United States to build the trans-isthmian canal between 1904 and 1914, succeeding where a French-led project had failed 20 years earlier.
The completion of the Panama Canal cut the sailing route from New York to San Francisco by more than half and connected Europe with the Pacific, across which lay Australia and New Zealand. These, happily, are now major wine-producing nations, whose wines regularly travel across the Pacific to their key American markets. The canal also provided a sea route from California to the ports of Europe and vice-versa, providing the wines of France, Italy, Spain and Germany with an unbroken trade route to their consumer bases in the western United States.
Today, roughly 15,000 ships pass through the canal each year, a good number of which are transporting wine between the continents. Without the canal, a wine container sailing between Bordeaux and San Francisco would be forced to cross both tropics (Cancer and Capricorn) twice, pitching and rolling for many weeks in their warm, moist air. The costs of this, not to mention the added risk of wine deterioration, would make such a shipping option decidedly unattractive. It was this self-same logistical challenge, ironically, that was inadvertently responsible for the development of the Madeira wine style.
So substantial is the canal's impact on wine trade routes that the US-Panama Free Trade Agreement, drafted in 2005 and passed in 2007, stipulated that all wine traveling through the canal would be free of local duty and taxes.
