Final answer:
The US returned the Panama Canal and the Canal Zone to Panama in the year 2000 as per the Torrijos-Carter Treaties signed in 1977.
Step-by-step explanation:
The United States returned the Panama Canal and the Canal Zone to Panama in the year 2000. The transfer was part of the Torrijos-Carter Treaties, which were signed in 1977 by U.S. President Jimmy Carter and Panama's General Omar Torrijos. The treaties stipulated an orderly transfer process that concluded on December 31, 1999, leading to the full control by Panama at noon on January 1, 2000.
After gaining control, Panama faced the challenge of managing and maintaining the canal operations. Nonetheless, to spur economic development, Panama created a free-trade zone and capitalized on its banking sector to become a regional economic hub.