The Defense chief laid out the reasons why the United States should ratify the "Law of the Sea" treaty during a Wednesday speech at the Atlantic Council in Washington.
The treaty "is the bedrock legal instrument underpinning public order" over the world's oceans, he added.
Set up through the United Nations, the treaty establishes a common framework to delineate maritime territorial claims and creates an international forum to resolve any disputes over those claims.
More than 160 countries aside from the United States have already signed on to the treaty, Panetta noted. Top Navy and Marine Corps leaders, as well as senior industry executives from American commercial shipping firms, have also backed Senate ratification of the treaty.
In February, Senate Armed Services Committee member Sen. James Inhofe (R-Okla.) said he plans to call formal hearings on the Senate's decision not to ratify the treaty.
But opponents of the pact on Capitol Hill continue to argue the terms of the treaty will impede the Navy's freedom of movement across the world's oceans.
Should the United States agree to the treaty, American naval operations would be subject to review by the treaty's international forum, opponents argue.
In response, Panetta made clear that the treaty's mandates "in no way harms our intelligence collection activities or constrains our military operations."
By agreeing to the treaty, U.S. military commanders would not be beholden to anyone other than the White House and Pentagon.
The treaty's guidelines would also give American diplomats the ability to "promote the peaceful resolution of [territorial] disputes within a rules-based order," Panetta added.
The guiding principles for resolving international maritime disputes are currently governed by international law, "which can change to our detriment" as quickly as the tides, Panetta pointed out.
Those changing rules could put the United States at a disadvantage should things come to a head with China, Iran or and other regional powers in the Pacific and the Middle East. Beijing has been increasingly imposing its military muscle against a number of nations in the Asia-Pacific region.
Disputes between China and others over who controls the waterways in the South China Sea have raised tensions in the region significantly.
In April, Beijing sent three warships to a section of the South China Sea, off the northwest coast of the Philippines, to support a Chinese fishing ship being detained by the Philippine navy.
Claiming territorial sovereignty over the coastal waters where the Chinese fishing vessel was detained, Manila has deployed an additional warship to the area.
Beijing's continued investment in advanced military hardware, from fifth-generation fighters to aircraft carriers, has only added fuel to those tensions.
"By not acceding to the [treaty] ... we potentially undercut our credibility in a number of Asia-focused multilateral venues, just as we're pushing for a rules-based order in the region and the peaceful resolution of maritime and territorial disputes in the South China Sea," Panetta warned.
American agreement to the treaty would help enforce "freedom of transit" along the Straits of Hormuz and counter any potential threat posed by Iran over that strategic entrance into the Persian Gulf.
Tehran set off a seemingly dangerous game of one-upmanship with Washington and its allies when it threatened to take control of the Straits in January.
Weeks of diplomatic sabre-rattling between the two countries eventually forced Iran to back off, but not before it banned U.S. Navy warships from entering the waterway.
In April, Tehran announced that a number of areas in the Persian Gulf would be off-limits to U.S. warships in the region, and would treat any incursion into those waters as threat to Iran.
"We have warned [foreign naval forces] before that some areas in the Persian Gulf are considered by us as zones of threat and they should not stop in those areas," Maj. Gen. Ataollah Salehi, commander of the Iranian Army, told the state-run Fars News Agency at the time.