Why is panama good location for a canal?

It creates a huge short cut for boats so they do not have to sail all the way around the continent
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Panama, with its location in central america, provide easy access to the Atlantic from the western Pacific coast as the country itself is small in width (77km). The canal therefore would be shorter in Panama as opposed to any other Central American country. Before the canal was built in 1914, ships had to sail around the perilous Cape Horn at the tip of Argentina.

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