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From everything I read, a certain Colombian river near the Colombia-Panama border, the Río Atrato, was and has been proposed for an inter-ocean canal. The river's course comes very close to the Pacific Ocean--from there, you'd make a cut in the divide between Atlantic and Pacific and route the waters to a nearby river going to the Pacific, thus making your canal. The Panama Canal does not seem to merely have been a competition between Panama and Nicaragua. For instance, Alexander von Humboldt considered the Atrato River to be a very good choice to build that inter-ocean canal.

I think the implications of this place being chosen for the "Panama Canal" are huge. Either you have your "Republic of Panama" include the region around the Río Atrato, or else Colombia keeps Panama and the builders of the Canal just forge an "Atrato Canal Zone" instead.

And then there's also the matter if this old proposal was revived and, say, China decided to invest in making the "Atrato Canal" happen, instead of their current (and by the looks of things, stalled) investment in the Nicaragua Canal. What is the maximum potential of the "Atrato Canal"? Is it easily expandable to be post-Panamax? What does look apparent is that the potential of environmental destruction, as the Nicaragua Canal has been criticised for, is less with the Atrato Canal, although it would pollute several river basins as well as flood much of the rainforest in the region. Despite that, it still is less than doomsday predictions of the Nicaragua Canal's ecological impact.

And one more thing, this would be absolutely huge for the city of Quibdó in Colombia, which is positioned along the Atrato and would thus receive a huge amount of commerce from the canal. How important can Quibdó get being the interoceanic city?

This is an interesting article, in Spanish however, as most articles on this proposal are.
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