(\ f PROPOSED PANAMA CANAL TREATIES HEARINGS BEFORE THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES NINETY-FIFTH CONGKESS FIRST SESSION SEPTEMBER 8, 14, 15, 20, 26, 28, AND OCTOBER 11 AND 20, 1977 Printed for the use of the Committee on International Relations .f/»''''''^'-^- '^'^N^M/^//^ V PROPOSED PANAMA CANAL TREATIES HEARINGS BEFORE THE COMMITTEE ON INTEMATIONAL RELATIONS HOUSE OF REPRESENTATIVES NINETY-FIFTH CONGRESS FIRST SESSION SEPTEMBER 8, 14, 15, 20, 26, 28, AND OCTOBER 11 AND 20, 1977 Printed for the use of the Committee on International Relations U.S. GOVERNMENT PRINTING OFFICE -991 WASHINGTON : 1978 For sale by the Superiutendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 COMMITTEE ON INTERNATIONAL RELATIONS CLEMENT J. ZABLOCKI, Wisconsin, Chairman L. H. FOUNTAIN, North Carolina DANTE B. FASCELL, Florida CHARLES C. DIGGS, Jr., Michigan ROBERT N. C. NIX, Pennsylvania DONALD M. ERASER, Minnesota BENJAMIN S. ROSENTHAL, New York LEE H. HAMILTON, Indiana LESTER L. WOLFF. New York JONATHAN B. BINGHAM, New York GUS YATRON, Pennsylvania MICHAEL HARRINGTON, Massachusetts LEO J. RYAN, California CARDISS COLLINS, Illinois STEPHEN J. SOLARZ, New York HELEN S. MEYNER, New Jersey DON BONKER, Washington GERRY E. STUDDS, Massachusetts ANDY IRELAND, Florida DONALD J. PEASE, Ohio ANTHONY C. BEILENSON, California WYCHE FOWLER, Jr., Georgia E (KIKA) DB LA GARZA, Texas GEORGE E. DANIELSON, California JOHN J. CAVANAUGH. Nebraska WILLIAM S. BROOMFIELD, Michigan EDWARD .L DERWINSKI, Illinois PAUL FINDLEY, Illinois JOHN H. BUCHANAN, Jr., Alabama J. HERBERT BURKE, Florida CHARLES W. WHALEN, Jr., Ohio LARRY WINN, Jr., Kansas BENJAMIN A. OILMAN, New York TENNYSON GUYER, Ohio ROBERT J. LAGOMARSINO, California WILLIAM F. GOODLING, Pennsylvania SHIRLEY N. PETTIS, California John J. Bradt^ Jr., iJhief of Staff Robert K. Boter, Staff Consultant George M. Ingram, Staff Consultant J. Edward Fox, Minority Staff Consultant RoxANXE Perugino, Staff Assistant (H) CONTENTS WITNESSES Thursday, September 8, 1977: Page Hon. Ellsworth Bunker, conegotiator for the Panama Canal Treaties.. 3 Hon. Sol M. Linowitz, conegotiator for the Panama Canal Treaties 6 Herbert J. Hansell, legal adviser. Department of State 9 Lt. Gen. Welburn Dolvin, member, U.S. Negotiating Team for the Panama Canal Treaties 14 Wednesday, September 14, 1977: Hon. Dean Rusk, former Secretary of State 123 Hon. Henry A. Kissinger, former Secretary of State 127 Thursday, September 15, 1977: Dr. John Wasylik, national commander in chief, Veterans of Foreign Wars of the United States 155 Wilham J. Rogers, immediate past national commander, the Ameri- can Legion 163 Frank D. Ruggiero, national commander, AMVETS 171 Dr. Robert P. Foster, chairman, National Foreign Relations Commis- sion, the American Legion 175 Col. Phelps Jones, director. National Security and Foreign Affairs, Veterans of Foreign Wars 177 Tuesday, September 20, 1977: Hon. Samuel S. Stratton, a Representative in Congress from the State of New York 181 Hon. Larry P. McDonald, a Representative in Congress from the State of Georgia 198 Hon. Philip M. Crane, a Representative in Congress from the State of Illinois 205 Alfred Graham, president, Central Labor Union/Metal Trades Coun- cil, Canal Zone 224 Wilham Drummond, legislative chairman. Central Labor Union/ Metal Trades Council, Canal Zone 231 Monday, September 26, 1977: Hon. Harold Brown, Secretary of Defense 237 Gen. George S. Brown, Chairman, Joint Chiefs of Staff 240 Lt. Gen. Welburn Dolvin, member, U.S. Negotiating Team for the Panama Canal Treaty 266 Wednesday, September 28, 1977: Adm. Thomas H. Moorer, former Chairman, Joint Chiefs of Staff — 277 Tuesday, October 11, 1977: Wilham P. Stedman, Deputy Assistant Secretary of State for Inter- American Afifairs 304 Rose Marie Aragon, Panamanian Committee for Human Rights 320 David Carhner, attorney for Rose Marie Aragon 326 Curtis Cutter, Legislative Officer, Congressional Relations, Depart- ment of State 328 Winston Robles, assistant professor of pohtical science, Florida Inter- national University, and director of the Panamanian Committee for Human Rights 338 Rev. Leo T. Mahon, St. Victor's Parish, Calumet, 111., former priest in Panama 344 Thursday, October 20, 1977: Hon. Cyrus R. Vance, Secretary of State 364 Hon. Ellsworth Bunker, conegotiator for the Panama Canal Treaties. 381 Hon. Sol M. Linowitz, conegotiator for the Panama Canal Treaties.. 382 (III) IV MATERIAL SUBMITTED FOR THE RECORD Page "Declaration of Washington" 1.5 Letter, arguments, and counterarguments on Panama Canal Treaty 22 Statement of Herbert J. Hansell, legal adviser, Department of State, before the House Committee on Merchant Marine and Fisheries, August 17, 1977 26 Legal opinion of the Attornej^ General on the Panama Canal Treaties 28 1977 January-February issue of Freedom House 48 Exchange of notes, loan guarantees, credit papers, and related documents concerning various U.S. Government activities located in the Canal Zone 62 Total amount of canal construction costs and total payments to Panama by the United States 116 Book value of the Panama Canal enterprise 119 Resolution No. 402, U.S. Sovereignty Over the U.S. Canal Located on the Isthmus of Panama, submitted by Dr. John WasyHk, commander in chief, VFW 156 U.S. Government use of Panama Canal before, during, and after Vietnam. 217 List of U.S. facilities in Canal Zone to be relinquished and kept under the treaty provisions 2.52 Estimate of cost of the canal to the United States during the Vietnam war_ 270 Statement of Hon. William L. "Bill" Dickinson, a Representative in Congress from the State of Alabama 272 Statement of Hon. John M. Murphy, chairman, House Committee on Merchant Marine and Fisheries 297 Data in support of the contention of the continuing importance of the Panama Canal and Canal Zone 303 Freedom House human rights rating on Panama 307 Freedom House's formula for determining its human rights ratings 310 Press release from Freedom House "Urges Approval of Canal Treaties Despite Panama's 'Deplorable' Human Rights Record," dated Novem- ber 17, 1977 312 Relationship between Torrijos and Qadhafi of Libya 316 Clarification of Cabinet Decree No. 343 — Self-censorship of the Pana- manian media , 317 Visa case of Leopoldo Aragon Escalona submitted by the Department of State 328 Canal Zone police involvement in the capture and beating of Leopoldo Aragon 329 Documentation on the case of David Mendelson 330 Excerpts from the testimony of Jerome J. Shestack, president of the International League for Human Rights, before the Subcommittee on Foreign Operations and Related Agencies, House Committee on Appro- priations, April 5, 1977 351 Letter to Inter-American Commission on Human Rights, OAS, from International League of Human Rights, concerning human rights viola- tions in Panama 351 Press release of the Office of the White House Press Secretary on "State- ment of Understanding," dated October 14, 1977 368 Telegram from U.S. Embassy to Secretary of State, dated September 29, 1977 368 "Panama: Escobar Tells Press of Carter-Torrij os Meeting," telegram to Department of State dated October 1, 1977 369 "Panama: Escobar Betancourt Holds Press Conference," telegram to Department of State dated October 1, 1977 372 Letter sent to Chairman Zal)locki from J. R. Williams, president of the Panama Canal Pilots Association 380 Letter to President Gerald Ford concerning ongoing SALT negotiations. _ 385 Questions submitted for the record by Congressman Larry Winn, Jr. and responses by the Department of State 388 APPENDIX 1. Staff summary of the issues, pro and con on the Panama Canal Treaties 403 2. Texts of treaties relating to the Panama Canal 427 I Agreement in implementation of article III of the Panama Canal Tiiee Treaty 446 Agreement in implementation of article IV of the Panama Canal Treaty 513 Statement of Understanding between the United States and Panama regarding the Neutiality Treaty 564 Remarks of Dr. Romiilo Bethancourt before the Panamanian National Assembly, from the American Conservative Union News, dated September 7, 1977 565 PROPOSED PANA3IA CANAL TREATIES THURSDAY, SEPTEMBER 8, 1977 House of Representatives, Committee on International Relations, Washington, D.C. The committee met at 10:25 a.m. in room 2172, Raybum House Office Building, Clement J. Zablocki, chairman, presiding. Chairman Zablocki. The committee will please come to order. The committee is beginning today the consideration of one of the most important — and controversial — matters before our Nation. The issue is whether the Congress should approve the proposed Panama Canal treaties and the legislation to implement them. The President has made his decision and commitment. At a his- toric gathering last night, attended by many Members of Congress and an unprecedented number of Government leaders from Latin American countries, the President signed the treaties as Chief Executive of the United States. The President of Panama signed for his nation. Now it is up to the Congress to decide whether the United States should ratify the treaties and enact the necessary implementing legislation. Under our Constitution, only Senate action is required for congres- sional approval of treaties. However, where further U.S. legislation is needed to carry out any of the treaty terms, as in this case, the House must act on such legislation as well as the Senate. The House International Relations Committee will be receiving part of the legislation required to implement the treaties. To under- stand fully what is involved, we will be looking simultaneously at both the treaties and the need for enabling legislation. The Chair is hopeful that this series of hearings will be productive for the Congress, and for interested Americans everywhere, in bringing out the facts on this important matter. We have scheduled distinguished witnesses who will testify before us over the next several weeks. We will hear from the present Secre- tary of State and two of his predecessors, from the Secretary of Defense and from the Chairman of the Joint Chiefs of Staff, from labor, business, and representatives of veterans' organizations and other leaders. We will hear from both proponents and opponents of the treaties. Let me emphasize at the outset of these hearings that we are deter- mined to be fair and thorough in our deliberations on this issue and to allow both sides to present their respective arguments. I can announce this morning that an additional witness, not previously listed, will be Adm. Thomas H. Moorer, former Chairman of the Joint Chiefs of Staff and former Chief of Naval Operations. Admiral Moorer will testify on September 28. (1) We will do our utmost to be thorough in bringing out the issues and the facts surrounding the treaties — and we will be guided by what is in the best interests of the United States. At this time I would like to briefly outline some of the questions on which we need answers, and I think the people of the United States will require answers to better understand what our country's agreements and negotiations contain. For example, what is the extent of our military and economic interest in the canal? How will our defense and national security best be served? How can we best assure continued access to the canal by American ships, those of our allies, and by ships of all nations and the world generally? What measures may be needed to secure the canal against sabotage or external attack? What is the economic value of the canal to our commerce? What is the cost to us of operating the canal under the present arrangement? What will happen to canal transit costs under the new treaties? Can the Panamanians successfully take over operation of the canal by the year 2000? What impact might the domestic political situation in Panama have on the canal operation under the present arrangement, and under the new treaties? What steps need to be taken to assure fair treatment of present canal employees? What are the possibilities for building a sea-level canal at some future time? What role should Congress as a whole have constitutionally in regard to the new treaties and implementing legislation? And from the standpoint of our relations with our Latin American neighbors and other nations around the world, w^hat will be the results for the United States if we do — or do not — ratify the proposed treaties? Before each member is a copy of the negotiated treaties, and related materials. May I also remind the members that their microphones are now controlled by the switches in front of them. You push the switch forward to turn them on, to activate them — so the sign in front of m}^ switch says. To begin these hearings, we are pleased to have before us the two principal negotiators of the treaties — Ambassadors Ellsworth Bunker and Sol M. Linowitz. They are accompanied at the witness table by Lt. Gen. Welburn Dolvin, a member of the negotiating team, and the Honorable Herbert Hansell, Legal Adviser of the Department of State. Gentlemen, we welcome you to the committee. I want personally to take this opportunity to congratulate you for the efforts you have made and the success you have had in the treaties that have been negotiated. You may proceed with your statements, gentlemen, after which we will have questions, I am sure. Ambassador Bunker. STATEMENT OF HON. ELLSWORTH BUNKER, CONEGOTIATOR FOR THE PANAMA CANAL TREATIES Mr. Bunker. Thank you, Mr. Chairman. Mr. Chairman and gentlemen, Ambassador Linowitz and I greatly appreciate the committee's invitation to discuss the new Panama Canal Treaties. This is our first appearance before a congressional committee since completion of the new treaties, which were signed A-esterdav by President Carter and Panama's General Torrijos, and which ^yill shortly go to the Senate for advice and consent to ratification. The new agreements include the following documents: The Panama Canal Treaty, with two imi)lementing agreements concerning : Canal operation — Agreement in Implementation of article III of the Panama Canal Treaty. Defense — Agreement in Im})lementation of article IV of the Panama Canal Treaty. Treaty concerning the permanent neutralit}- and operation of the Panama Canal. Exchanges of notes concerning various U.S. Government activities currently located in the Canal Zone. A note concerning loans, loan guai'antees and credits to be provided to Panama to assist its economic development and to enhance its capability to contribute to canal defense. In our opening statements Ambassador Linowitz and I will review a few of the most important features of these documents. I will out- line the provisions governing canal operation and defense through December 31, 1999. Ambassador Linowitz will describe the neutrality treaty and the economic arrangements. Before taking up canal opera- tions and defense, I want to make a few preliminar}^ remarks. Among the committees of the House, yours is the one most concerned with this Nation's interests abroad. Nothing could better serve the underscore of the new canal agreement to our foreign policy interests than the ])resence in Washington for yesterday's signing ceremony of Presidents or Prime Ministers from 20 countries of the hemisj^here and of high-level representatives from 8 other I^atin American nations. For man}^ of these countries, the canal is an important trade artery. For all of them, the extended negotiations for a new canal agreement have been viewed as a test of our willingness to deal equitably with our Latin American neighbors. Two U.S. foreign policy interests are involved in the new canal treaties. The first is our interest — for reasons of both trade and defense — in assured use of an efficiently operated and secure Panama Canal. The second is our interest in cooperative and productive relations with Latin America. The nations to the south of us are important not only as neighbors sharing the same hemisphere but also as partners in trade and investment, sources of important raw materials, and as collaborators in building a secure, peaceful and prosperous world community. Four presidents of both political parties have recognized that the protection of our nation's interest — with regard both to the Panama Canal and to the hemisphere — required reform of the treat}^ arrange- ments governing the canal. We beheve that the terms that have been negotiated fully meet the needs of the United States : They assure the efficient operation of the canal. They enable the United States to protect the canal. They guarantee the canal's neutrality permanently. They provide an economic settlement that is fair and reasonable. And they provide a firm foundation for long-term cooperation between the United States and Panama. Let me now describe how canal operation and defense will be carried out under the terms of the Panama Canal Treaty which will remain in force until December 31, 1999. The basic principle is that for the dura- tion of the treaty — that is, for the rest of this century — the United States will retain control of operation and defense with Panama taking part in both activities. This arrangement will assure that the United States can guarantee the uninterrupted, efficient operation and secu- rity of the canal after the new treaty goes into effect. it will also provide the necessary preparatory period for Panama to develop the capability to assume responsibility for canal operation and defense beginning in the year 2000. The key provisions are articles III and IV of the Panama Canal Treaty. In article III Panama grants to the United States ''the rights to manage, operate and maintain the Panama Canal, its complementary works, installations and equipment and to provide for the orderly transit of vessels through the Panama Canal." Article III further lists a number of specific powers which the United States will have in order to exercise its responsibility for canal operation. These include the authority to ''make and enforce all rules pertain- ing to the passage of vessels through the canal," and "to establish, modify, collect and retain toUs." In similar fashion, article IV which deals with defense matters, provides that for the duration of the treaty, the United States "shall have the primary responsibility to protect and defend the canal." The agreement in implementation of article IV sets forth the specific rights which the United States wiU have in order to carry out its defense responsibilities. These include rights to "station, train, and move military forces within Panama." Of special importance to canal operation and defense are the arrangements for use of lands and waters in the present Canal Zone. Under the new treaty the Canal Zone will cease to exist, and the territory included in the zone will come under the general territorial jurisdiction of Panama. However, the United States will have access to and the rights to use all lands and waters needed for operation, maintenance, and defense of the canal through December 31, 1999. The specific areas reserved for these purposes and the rights for their use are set forth in detail in the two implementing agi'eements. The designated areas include the canal itself and related facilities, together with military bases for the use of our forces. To administer the canal, the United States will estabhsh, under legislation to be sought from Congress, a U.S. Government agency, which will be called the Panama Canal Commission and which -^^ill replace the present Panama Canal Company. i Article III of the Panama Canal Treaty provides that the Com- mission will be supervised by a Board composed of five Americans and four Panamanians. The executive officers will be an Administrator and a Deputy Administrator. Until 1990, the Administrator will be an American and the Deputy a Panamanian. Thereafter, the Admin- istrator will be a Panamanian and the Deputy an American. The Administrator, the Deputy Administrator, and all Board members — both American and Panamanian — ^will be appointed by the United States. Also affecting canal operation are the treaty provisions dealing with personnel of the canal enterprise. The basic guidelines on personnel are set forth in article X of the Panama Canal Treaty. In general, these are designed to allow present employees, both American and Pana- manian, whose services will be required by the new Panama Canal Commission, to continue working under conditions generally no less favorable than those which they currently enjoy. For those who are displaced from their jobs, various procedures are provided to facilitate placement in other U.S. Government positions, to the extent these are available, and to assist in finding other jobs when necessary. In addition, the United States will provide a special optional early retirement program to all persons employed by the Panama Canal Company and the Canal Zone Government immedi- ately prior to entry into force of the new treaty. The treaty also established guidelines for increasing employment of Panamanians at all levels in the canal enterprise in preparation for Panama's assumption of responsibility for canal operation at the treaty's end. The right to collective bargaining for canal emplo3'ees is guaranteed. We believe these provisions will make it possible for the Panama Canal Commission to retain a qualified work force and will provide fair treatment for existing emploj^ees. In this connection, I think it worth noting that the AFL-CIO, which represents most of the United States and Panamanian canal employees, has endorsed the new canal treaties. The treaty makes special provision to insure that environmental considerations are not overlooked. In article VI, both governments commit themselves to implement the treaty in a manner consistent with the protection of the natural environment of Panama. The article also calls for the creation of the Joint Commission on the Environment which will review the treaty's implementation and will recommend wa^'S to avoid or to mitigate any adverse environ- mental impacts which might arise from actions taken pursuant to the treaty. A separate exchange of notes will provide for continued operation of the Smithsonian Institution's Tropical Research Center which makes such a valuable contribution to our understanding of the natural environment of the canal area. The wildlife preserve on Barro-Colorado Island will also be maintained. Taken as a whole, the treaty provisions concerning operation and defense provide a comprehensive approach toward meeting U.S. interests in the near and long term. They build on the effective admin- istration and experienced personnel developed in 60 years of U.S. operation and provide a means to utilize these important assets under the new treaty. The new agreements also establish an organized framework for development of an effective Panamanian management that can carry 6 out canal operations after the year 2000. And they open the way for modernization of the canal should that become necessary in the future. That, Mr. Chairman, completes m}^ statement. Ambassador Lino wit z will follow. Chairman Zablocki. Thank you. Ambassador Bunker. Ambassador Linowitz. STATEMENT OF HON. SOL M. LINOWITZ, CONEGOTIATOR EOR THE PANAMA CANAL TREATIES Mr. LixowiTZ. Mr. Chairman, members of the committee, first let me express my appreciation to you for scheduling these hearings and focusing attention on an issue which is one of the most important certainly confronting the American people today. As Ambassador Bunker has indicated, for more than 13 years, under four presidents, the United States has been seeking to find the basis for a new treaty with Panama to replace the outmoded treat}^ of 1903. It has been a long and arduous road beset with many obstacles and frustrations. Last evening we came to the end of the road. The President of the United States, on behalf of this countr3% signed two new treaties with Panama to replace the 1903 treaty. These new treaties, we believe, re])resent a fair and equitable basis for dealing with the issues which have been the cause of so much dissension and hostilit}" over the years. And the}' do so in a manner which full}' protects our interests, properly recognized Panamanian aspirations, and does us credit as a great democratic countiy. As you know, President Ford has joined President Carter in announcing his full support for these two treaties, and they have been joined by a number of other leaders of both parties. They recognize that in these new treaties the United States has finalty realized the result of such great effort by Democratic and Republican administra- tions alike to achieve a fair and reasonable new treaty arrangement which permits us to act the wa}' a great nation should act. Ambassador Bunker has outlined a number of the major features of these new treaties to you, and I would like to follow by describing several others. As 3'ou know, the new Panama Canal Treaty provides the basis for assuring to the United States continued access to a canal which is open and secure. Under the new treat}^, U.S. Forces will have the primar}^ responsibility" for maintaining canal defense until the year 2000. But the United States will have very important rights extending bcA'ond that date. The separate treaty on the permanent neutrality and operation of the Panama Canal, which will take effect simultaneously with the new canal treaty, commits the United States and Panama to maintain a regime of neutrality of the canal. Under the rules of neutrality set forth in the treat}^, the canal is to be open without discrimination as to conditions or charges of transit. A special provision authorizes United States and Panamanian warships to transit the canal expedi- tiously in both peace and war without being subject to any restrictions as regards means of propulsion, armament, or cargo. The treaty gives the United States the right to assure that the canal's permanent neutrality is maintained and places no limitation on our ability to take such action as may be necessar}- in the event the canal's neutrality is threatened or violated. It also ])rohibits any foreign country from oj^erating the canal or stationing troops in Panama after the j^ear 2000. It is most important to stress that unlike the treaty governing canal operation, the Neutrality Treaty is of indefinite duration and calls for the maintenance of the canal's permanent neutrahty. The Neutrality Treaty will also apply to any other international waterway that may be built in Panama in the future. In short, the Neutrality Treaty provides a firm foundation for assuring that our long-term interest in the maintenance of an open, accessible, secure, efficient canal is preserved — now and in the future. In order to em])hasize the importance of the regime of neutrality to world shipping, there is a protocol to the Neutrality Treaty which will be open to accession by all countries of the world. The signatories to this protocol will, in effect, endorse the Neutralit}^ Treaty by specifically associating themselves with its objectives and by agreeing to respect the regime of permanent neutrality of the canal both in time of war and in time of peace. The instruments of accession will be deposited with the Secretary General of the Organization of American States. Now, a few other comments about the Panama Canal Treat}^ itself and those aspects which Ambassador Bunker did not allude to. Now as to the economic terms of the new canal agreement: At the start of these negotiations, both countries agreed — in the 1974 Kis- singer-Tack statement of principles — that Panama should receive a ''just and equitable share of the benefits derived from the operation of the canal in its territory." Consistent with this principle, the United States maintained during the negotiations that ])ayments to Panama should be drawn entirely from the canal revenues — that is, that the payments should reflect the canal's economic value as measured by its revenue-generating capacit}^ The agreement which has now been worked out has two components. First, pa3^ments to Panama, to be financed entirely from canal rev- enues, will be provided for in the new treaty. And a package of loans, loan guarantees, and credits outside of the treaty and subject to existing statutory procedures is also planned. Payments to Panama from canal revenues to be provided for in the new treaty will consist of: A fixed share of tolls amounting to 30 cents per Panama Canal ton. We estimate that this will yield about $40 million per year. A fixed payment of $10 million per year, also to be drawn from canal revenues. And third, and only if additional revenues permit, an additional sum of up to $10 million per year. The economic development program outside of the treaty consists of loans, loan guarantees, and credits extending over a period of 5 years which will include the following components — aU designed to support Panama's economic development. Up to $200 million in Export-Import Bank credits. Up to $75 million in AID housing guarantees. A $20 million Overseas Private Investment Corporation (OPIC) loan guarantee to Cofina, the Panamanian national development corporation. s Let me be very clear about this. None of these loans, guarantees, and credits will require appropriations from the Congress. I want to stress, however, that the disbursement of funds under these programs will be subject to all the procedures and criteria which normally apply to each of the programs mvolved. In addition, the United States is undertaking to provide to Panama up to $50 milhon in foreign military sales credits oyer 10 years to assist it in developing the capability needed to exercise its responsi- bilities for canal defense under the new agreement. We believe that the economic settlement is fair, reasonable, and appropriate. We are conA-inced that it is a good investment toward establishing a new relationship with Panama that will protect our long-term interest in the canal. And it will not involve any additional burden for the American taxpayer, since it can be financed from canal revenues. The canal treaty also grants to the United States certain rights in connection with adding a third lane of locks to the canal, or possibly construction of a sea-level canal in Panama. Under the treaty, we have the right to construct a third lane of locks if we should choose to do so at any time during the treaty. With respect to a sea-level canal, the United States and Panama commit themselves jointly to study the feasibility of such a canal, and if they agree that such a canal is necessary, to negotiate mutually agreeable terms for its construction. Panama agrees that it will not negotiate with any other country for the construction of such a sea- level canal and the United States undertakes not to negotiate with another nation for a sea-level canal in any other country in the hemisphere. As was clear last evening during the treaty signing ceremonies, these new treaties will have profound significance throughout the hemisphere and they have the full approval of all the countries of Latin America. It has been apparent for years that the countries of Latin America have regarded the Panama Canal issue not as a bilateral matter but as a problem involving the United States on the one hand and all Latin America on the other. At the beginning of this year the heads of state of eight countries wrote to President Carter urging him to give highest priority to the resolution of this important issue which so strongly affects our re- lations with our neighbors to the south. So, in going forward with these new treaties and their ultimate ratification, the United States will be opening up a new era in its relationship in this hemisphere. Beyond that, we believe that these new agreements present us with a rare opportunity to demonstrate to the world how a large nation and a small nation can settle their differences amicably and with mutual respect and enter into a lasting partnership of which future generations will be proud. Such a treaty will bear witness to our intention to build a balanced, constructive and lasting relationship among the countries of the hemisphere and around the world. As a last word, it is fitting to go back to Teddy Roosevelt, with whom all this started I think he put it very well. We have no choice as to whether or not we shall play a great part in the world. That has been determined for us by fate. The only question is whether we will play that part well or badly. Thank you, Mr. Chairman. 9 Chairman Zablocki. Thank you, Ambassador Linowitz. On behalf of the members I thank both of the Ambassadors for their excellent statements. At the very outset let me say I would agree with you that the treaty signing ceremonies obviously indicated the profound significance throughout the hemisphere that the treaties have full approval of the Latin Americans. However, I can't say that has similar approval in this country, in many segments of the country, so we will pose many questions. Let me at the very outset further state that my first question will be primarily on procedural matters. NEED FOR IMPLEMENTING LEGISLATION For example, what parts of the treaties are not self-executing and will, therefore, require implementing legislation and, further, we would like to know when will the executive branch send up its proposed im- plementing legislation? Mr. Linowitz. Mr. Chairman, Mr. Herbert Hansell, who is the legal adviser to the State Department, is here with us and I wonder whether he could first address himseK to that? Chairman Zablocki. Yes, sir. STATEMENT OF HERBERT J. HANSELL, LEGAL ADVISER, DEPARTMENT OF STATE Mr. Hansell. Thank you, Mr. Chairman. There are a number of major subject matters under the treaties on which legislation will be required for implementation of the treaties and the various related agreements. The most important areas would include, first, provisions relating to the new relationships with Panama and the diplomatic aspects of the treaty. Second, the organization and activities of the new Panama Canal Commission, including the regime for collection of the tolls and pay- ment of the various stipulated amounts to be paid to Panama. The objective here is to establish a self-sustaining entity that will generate revenues sufiicient to meet expenditures and rather extensive legis- lative provisions will be needed with respect to this subject matter. Third, all of the provisions that will be needed relating to terms of employment, and employment practices, for the new Commission and the special provisions for current employees that are provided for in article X of the Panama Canal Treaty. Fourth, adjustments of the jurisdictional provisions applicable to judicial and law enforcement functions during the transitional period following the entry into force of the Panama Canal Treaty. And, fifth, there are a number of other amendments to existing legislation that will be needed by the transfer of jurisdiction to Panama. Those are five principal areas, Mr. Chairman, that will be dealt with in the proposed implementing legislation. implementation of military and economic assistance package Chairman Zablocki. At this point. Ambassador Linowitz has stated that the $50 million in foreign military sales credits will not require 10 appropriations from the Congress. Do 3-011 agree with that under- standing? Shouldn't that be inckided as part of the implementing legislation that will have to come to Congress? Further, there is a possibility that OPIC may be discontinued. A continuation of OPIC is necessary in order to have the agreement as far as OPIC's guaranteeing loans that the treaty includes. Would you agree with that? Mr. Hansell. We had been distinguishing, of course, in drafting legislation to implement the treaties, between the provisions I have described and those actions that would be needed with respect to the economic package. The hope is with respect to the economic package that no congressional appropriations would be needed. There will presumably be some legislative activity that might be required and I don't think we have focused on that precisely as yet. Chairman Zablocki. Is it not necessary, however, that 3'ou do focus on that? Mr. Hansell. Yes, indeed. Chairman Zablocki. Furthermore, the executive branch has not anticipated that Congress will act prior to the ratification of the treaty? Mr. Hansell. I believe that is right, Mr. Chairman. We do hope to be able to submit the proposed implementing legislation within a period of weeks because it will be a comprehensive package of legis- lation and clearly will take a great deal of time of the appropriate congressional committees, but we would not anticipate that the legis- lation could be enacted or even acted on definitively prior to the ratification by the Senate. Chairman Zablocki. I have just one further related question. In the statements made by both of the Ambassadors, the United States pledged its efforts outside the treaty to arrange for an economic pro- gram of loans, guarantees and credits for Panama amounting to approximately $375 million. Is this program in any way tied to the implementation of the treat}"? I am thinking of the Sinai accords we had agreed to and then we were told later as to some of the economic and military assistance programs that were apparently tied in with this. Could a similar situation be interpreted as existing in this case? Mr. Hansell. These are not commitments in a contractual sense. The documents themselves will be submitted to the committee as soon as the copies have been made, but these are to be efforts inde- pendent of the program with respect to the treaties. Chairman Zablocki. And in no way tied to the implementation of the treaty? Mr. Hansell. No, sir. Mr. LiNOWiTZ. Mr. Chairman, there is no direct connection but as ])art of these negotiations, we have, of course, been aware of the discussions which have been going on between the representatives of Panama and other agencies of our Government, and there already has been transmitted a letter from the Secretary of State to the proper Panamanian officials indicating our intention to use our best efforts to bring into being all of these economic development programs we have discussed. Chairman Zablocki. Thank you. My time has expired and I note there is a rollcall vote. We will continue until the second bell. If some 11 of the members want to leave now and come back it is the hope of the Chair we continue our hearings. I understand both Ambassadors have to leave by 12 or shortly thereafter. Mr. LiNOwiTZ. If we could, Mr. Chairman, for a meeting with the Chiefs of State. Chairman Zablocki. Mr. Fountain. U.S. GAINS FROM THE TREATIES Mr. Fountain. Thank you, Mr. Chairman. Mr. Ambassador, I have just a couple of questions. What does America get in return for this enormous financial consideration we are giving to Panama? Mr. Linowitz. The most important thing we get, sir, is the en- hanced assurance of a continued open, accessible, secure, and neutral canal . Mr. Fountain. That is the main thing? Mr. Linowitz. Yes, sir. The reason we went into the Panama Canal at all was to have an accessible, open canal to meet our needs. It is the judgment of our highest defense officials and Joint Chiefs of Staff, those most concerned with our securit}", that our security will be enhanced, not only preserved, by insuring that the canal remains open, accessible, secure, and neutral under the provisions which have been worked out in these treaties. Mr. Fountain. That accessibility is guaranteed to be kept open mutually between the two countries for how long a period of time? Mr. Linowitz. Permanently, sir. U.S. military status under treaties Mr. Fountain. What about our military situation there? How long will we have military bases? Mr. Linowitz. Until the year 2000. Mr. Fountain. And then we give up those bases? Mr. Linowitz. At that point no other country will have trooi)s or bases in Panama. Mr. Fountain. But we give up our bases? Mr. Linowitz. Yes. Mr. Fountain. We move all of our troo])s out? Mr. Linowitz. That is right; there will be no troops there. Chairman Zablocki: Mr. Winn. Mr. Winn. I would like to reserve my time, Mr. Chairman. Chairman Zablocki. The Chair would suggest that we now recess and come back in 5 minutes. [Whereupon, a brief recess was taken.] Chairman Zablocki. The committee will be in order. Mr. Derwinski. Mr. Derwinski. Thank you, Mr. Chairman. I would hope, because of the limited time our distinguished diplomats have, that perhaps at some later time in the year they might return. I am sure there ^\ ill be more exhaustive questioning. Chairman Zablocki. There is no question we will have tlie Am- bassadors as well as executive branch witnesses ^\henever necessary. Mr. Derwinski. My first question is. Ambassador Bunker: Have or will all agreements related to the canal been made public in the process of congressional deliberations? 9S-991— 77 2 12 Mr. Bunker. Yes; they will be made public. As a matter of fact, they may not have been made public as of today but they will be made public. PROCEDURE TO ESTABLISHING PANAMA CANAL COMMISSION Mr. Derwinski. I direct myself specifically to some of the points in your statement. Ambassador Bunker, on page 7, you pointed out that the board members of the new entity to administer the canal, both American and Panamanian, will be appointed by the United States. Do I assume that means the Panamanians vnl\. supply a list of names from which their members will be drawn? Mr. Bunker. Yes; that is correct, they will supply the names. EMPLOYEE RIGHT TO STRIKE Mr. Derwinski. Then I noted further in your statement that the right of collective bargaining for canal employees is guaranteed. What about the question of the right to strike, the question of canal em- ployees' right to strike? Is that in any way involved? FINANCIAL REQUIREMENTS OF THE TREATY Then, Ambassador Linowitz, you made reference, sir, to the fact — and I quote you — "It will not involve any additional burdenforthe American taxpayer since it can be financed from canal revenues." You are referring to the economic settlement. Yet in an earlier statement you made reference to the fact that Panama would receive an additional sum up to $10 million if canal revenues permit. Now, if revenues do not permit ihhi $10 million, at that point would appropriations from the United States be called for? Mr. Linowitz. No, sir; that additional $10 million is not a comit- ment; it is there if the canal earns the money. If it does not, then there is no obligation to Panama ; and the only limitation on that is : If there are surpluses in future years, then that surplus may be used to make up the deficit. Other than that there is no obligation to do anything about making that payment to Panama. SEA LEVEL CANAL Mr. Derwinski. Now may I move on to the issue of negotiations for the construction of a possible sea level canal. You state. Ambas- sador Linowitz, that Panama agrees it will not negotiate with any other country for the construction of such a canal and that the United States undertakes not to negotiate with an}^ other nation. Doesn't that put us in a situation where the Panamanians have the veto power if we reach some decision at some point we may for practical purposes build a canal elsewhere? We have agreed under this treaty not to negotiate with another country. Mr. Linowitz. To the same extent we have a veto power against their undertaking to negotiate with any other country. In other words, the correlativity of responsibility is to deal only with one another in the construction of a sea level canal in the Western Hemisphere. 13 And in that regard may I just say, sir, that when the study was made in 1970 regarding the feasibility of a sea level canal, the recom- mendation was: If it were to be built at all, it be built in Panama. Mr. Derwinski. Dr. Romulo Bethancourt is the head of the Panama negotiating team that concluded this agreement with you. ^Ir. LiNOWiTZ. Yes, sir. PANAMANIAN NEGOTIATOR DISPUTES U.S. RIGHT TO INTERVENE Mr. Derwinski. I have a copy of his statement he made to the Panamanian Assembly a few weeks ago, and I am quoting from that statement: "We are not giving the United States the right of inter- vention." And he goes on to say that, ''What we are giving is assur- ance that the canal will be permanently neutral." Now, how does this square with the argument that we will have the assurances that the canal will be maintained, will be free for our use and will be protectable? Mr. LiNOwiTZ. The neutrahty treaty specifically says that the United States and Panama agree to maintain the regime of neutrality established in this treaty which shall be maintained in order that the canal shall remain permanently neutral notwithstanding the termina- tion of any other treaties entered into b}^ the two contracting parties. Interpretation of that language, which the Panamanians Imow and which they understand, is that we will be in a position to take such action as we may deem necessary in the event of any threat or attack upon the neutrality of the canal. Mr. Derwinski. Thank you, Mr. Chairman. Chairman Zablocki. The Chair would like to state that, as is the custom when there is a matter of such vital interest to a particular subcommittee, as a courtesy to the subcommittee chairman, he will be recognized out of order. Mr. Yatron. Mr. Yatron. Thank you very much, Mr. Chairman. Ambassador Linowitz or Ambassador Bunker, our Subcommittee on Inter-Ameri- can Affairs of the International Relations Committee just completed a 14-day study mission to South America. We visited six countries; we met with five Presidents out of the six countries as well as other leaders from each of those countries. latin AMERICAN SUPPORT FOR TREATIES QUESTIONED We were told by the State Department prior to going on our trip that all of these nations were very strongly in favor of the treaty; and it is at least my impression, although I believe others share this feeling, that at the completion of our mission, of all the leaders we spoke to, including the Presidents, not one of them spoke very strongly in support of the treaty. Would you care to comment as to why you feel that they took this attitude? Mr. Linowitz. It simply doesn't jibe with our impression, with our information and with the results of our own discussions. We know that there are some leaders of Latin American countries who would be disturbed if today we were to undertake to transfer control of the canal to Panama. They don't feel the Panamanians are ready to undertake operation and they have some questions as to whether this would be the right course at the moment. 14 We have not talked to any leader of any Latin American country who questions the need for our recognition of the sovereignty of Panama or the desirability of reaching an agreement, as we have, for turning over the operation and control of that canal to Panama. TOLL INCREASE Mr. Yatron. As I said, not one of them said they were opposed but no one spoke very strongly in favor. As a matter of fact, in one country I believe they were concerned about the increase in tolls, and in each instance our delegation had to bring up the subject of the Panama Canal. Mr. LiNowiTz. Let me say, on the tolls issue — because that may be one of the things you are alluding to — there are some countries in Latin America who have expressed their opinions at the OAS as being concerned about the effect of a toll increase, surmising correctly that some toll increase will be put into effect under the new treaty. But when they understand that the United States is going to be responsible for setting tolls as part of its operation, management and control of the canal under this treaty, then they recognize that their concern has been dealt with. I don't know whether your trip, sir, was contemporaneous with or preceded the agreements we reached. Mr. Yatron. It was before, or just about the same time. Mr. LiNowiTz. We do know that the reaction we have had has been uniformly approving of the treaties as we have finally reached them. PANAMA CANAL COMMISSION TO BE SUPPORTED BY CANAL REVENUES Mr. Yatron. The Panama Canal Treaty provides for the creation of several bodies entrusted with the implementation of the treaty, namely, the Panama Canal Commission, the Panama Canal Consul- tative Committee, a combined board or joint commission on environ- ment and training employees, Panama employees, and will these be agencies supported by U.S. tax dollars? STATEMENT OF LT. GEN. WELBURN DOLVIN, MEMBER, U.S. NEGOTIATING TEAM FOR THE PANAMA CANAL TREATIES General Dolvin. No, sir, those are organic parts of the new entity. The Canal Commission will then be supported out of toll revenues as an expense of doing business. It is ])ossible that you might have some Government official who might at some time sit in one of those, but in general the answer to your question is no. Mr. Yatron. I have one further question, then I am sure my other colleagues have other questions. U.S. DEFENSE RIGHTS UNDER NEUTRALITY TREATY Article IV of the proposed neutrality treaty states that the United States and Panama agree to maintain the regime of neutralit}^ estab- 15 lished in this treat}" which shall be maintained in order that the canal shall remain permanently neutral, notwithstanding* the terTnination of an}^ other treaties entered into by the contracting; parties. Does this mean that the United States has the right under the treaty to defend the canal unilaterally', if necessary? Mr. LiNOWiTz. Yes, sir, uneqnivocall}^ I can tell yon that is the case. May I, in res])onse to your earlier question, Mr. Yatron, about the attitude of the other Latin Americans, call to your attention that 3"estei'da3^ before the sio;ning of the treaties every country repj"esented here sio^ned a declaration of Washington, in which as the heads of these countries they noted that the Panama Canal Treaty, which does recognize the sovereignt}^ of the Republic of Panama, and taking into account what the_y said, settlement of the issue, represents a major stej:) toward strengthening of relations among tlie nations of the Western Hopiisphere on a basis of common interest, equality and mutual respect for the sovereignty and independence of every state, recognizing the importance for hemisphere and word commerce and navigation have an arrangement for assuring the continuing accessi- bility and neutrality of the canal record our ])rofound satisfaction at the signature of these treaties. I\fr. Yatron. Thank you. Mr. LiNowiTz. I am just told 25 of 26 countries. Mr. Yatron. Were present? Mr. LiNOwiTZ. Yes, sir. Would it be useful if I entered the text of this declaration in the record? Chairman Zarlocki. Without objection. [The text of the declaration follows:] Dkclaration of Washingtox We, the Chiefs of Stat^, Heads of Government or other representatives of the Anieriea*! Republics and other states present at the ceremony for the signature on this day of the Panama Canal Treaty estabhshing new ai-rangements for the operation, mailitenance and defense of the Panama Canal until December 31st, 1999, and the Treaty concerning the permanent neutrality and operation of the Panama Canal, l:)oth concluded by the Goveinments of Panama and the United States of America, in accordance with the Joint Declaration between the two countries of April 3, 19G4, agreed under the auspices of the Council of the OAS; Noting that the Panama Canal Treaty is based on the recognition of the sovereignty of the Republic of Panama over the totality of its national territory; Considering that settlement of the Panama Canal issue represents a major step toward strengthening of relations among the nations of the Western Hemisphere on a b:i, cl. 2 of the Constitution, all treaties made under the authority of the United States which are self-executing take effect as the law of the land. The Constitution, of course, contains some provisions which limit the treaty power with respect to specific subjects. Principal instances are Art. 1, § 7, cl. 1 and Alt. 1, § 9, cl. 7. The former clause provides that "all bills for raising revenue shall originate in the House of Representatives." The second clause cited ordains that "no money shall be drawn from the Treasury, but in consequence of appro- priations made by law." Hence it is recognized that treaties may neither impose taxes nor directly appropriate funds. The property clause in Article 4, however, contains no language that would exclude concurrent application of the treaty power. In fact the placement of the property clause in Article 4 of the Constitution (which deals with federal-state relations), rather than in Article 1 (which deals with the powers of Congress), provides further evidence that the property clause does not restrict the treaty power. As the debates in the Constitutional Convention of 1787 show, the property clause originated in conjunction with the grant to Congress, in the preceding clause of section 3, of the power to create new states in the territories ceded to the United States. The powers of Congress enumerated in cl. 2 of that section were added to establish federal authority over these territories and other property belonging to the United States, w^hile preserving the claims of the states and the United States in disputed matters. The drafting history of that clause shows no indication of any intent to restrict the scope of the treaty power. It is also significant that the property clause in Article 4 links "the power to dispose of" property closely to "the power to make aU needful Rules and Regula- tions" respecting the Territory and other property belonging to the United States. These two categories of Congressional power are closelj'- related. The applicability of the treaty power for one of these categories should be the same for the other. It is well settled that the treaty power can be used to make rules and regiilations governing in the territory belonging to the United States, even in the District of Columbia.^ The power to dispose of public land and other property belonging to the United States by treaty is also supported by judicial decisions ^ and long standing practice. The most familiar judicial statement of the power to transfer rights in land by treaty was made by Mr. Justice Clifford in Holden v. Joy: * ". . . it is insisted that the President and the Senate, in concluding such a treaty, could not lawfullj^ convenant that a patent should be issued to convey lands which belonged to the United States without the consent of Congress, which cannot be admitted. On the contrary, there are many authorities where it is held that a treaty may convey to a grantee a good title to such lands without an act of Congress conferring it, and that Congress has no constitutional power to settle or interfere with rights under treaties, except in cases piu-ely poHtical." Similarly in Jones v. Aleehan,^ Mr. Justice Gray stated: "It is well settled that a good title to parts of the lands of an Indian tribe may be granted to individuals by a treaty between the United States and the tribe, without any act of Congress, or any patent from the Executive authority of the United States." ^ 1 133 U.S. 258 at 267 (1890). «Goe/ro2/v.i2{gf7S, 133 U.S. 258 (1890). ^ ^ „,,»»„„ 'Holden v. Joy, 17 WaU. (84 U.S.) 211, 242, 243 (1872) ; Geofroy v. Riggs, 133 U.S. 258, 267 (1890) ; Missouri v. Holland, 252 U.S. 416, 433 (1920) ; Aaakura v. Seattle, 265 U.S. 332, 341 (1924) ; Santovincenzo v. Egan, 284 U.S. 30, 40 (1931) ; Reid v. Covert, 354 U.S. 1, 16 (1957). • Holden v. Joy, 17 Wall. (84 U.S.) 211 at 247 (1872). • 175 U.S., 1 at 10 (1899). • 175 U.S. 1 at 32 (1899). <>.«!-Oni — 7R 3 28 Although the treaties in these cases were concluded with Indian tribes, the decisions are authoritative precedents for treaties with foreign nations. As the Supreme Court has stated/ the former power of the United States to make tieaties with the Indian tribes was — ". . . coextensive with that to make treaties with foreign nations. In regard to the lattoi, it is, beyond doubt, ample to cover all usual subjects of diplomacy." Let me now tui-n to the treaty practice of the United States. There the prece- dents look two ways. The record shows instances where transfers of territory and other i^roperty have been made by or pursuant to treaties alone and instances where treaties or executive agreements disposing of property belonging to the United States have been concluded pursuant to or contingent upon Congressional authorization. Precedents supporting the power to dispose of property by treaty alone can be found in the boundaiy treaties with neighboring powers, especially in the tiea- ties between the United States and Great Britain of 1842 and 1846 for the location of our northeast and northwest boundaries, and in the treaty with Spain of 1819 wbich effectuated the cession of Florida and determined the boundary west of the Mississippi, ceding lands claimed bj^ the United States on the Spanish side of the boundarJ^ I would like to call j^our special attention to the treaty with Mexico of 1933 and the tr(;aty with Mexico of 1970. Both of these treaties provided for the rec- tification of the river channel and the cession of lands which would have been left on the other side of the channel. Other recent examples of treaties transferring or providing for the transfer of real and i:)ersonal pioperty are the treaties between the United States and Hon- duras of 1971 recognizing the sovereignty of Honduras over the Swan Islands and the treaty between the United States and Japan of 1971 for the return to Japan of the Ryukyu and Daito Islands. Both treaties included provisions for the transfer of real and personal property belonging to the United States or its agencies. The terms of the treaties either transferred the property directly or agreed upon the transfer of property. The transfers were made without imple- menting legislation apparently in reliance on the treaty or general statutory authority to dispose of foreign excess property. In the history of transfers of property to Panama we have had a mixed practice. Property has l^een transferred by executive agreement implemented by a Joint Resolution, l^y treaty providing specifically for legislation; and in at least one instance by treat}?" alone. However, in the legislation implementing the 1955 Treaty, Congress recognized the validit.y of conveyances made bv operation of the Treaty. Thus, Mr. C/hairman, for all of these reasons, we conclude that the Constitu- tion permits the transfer of property belonging to the United States under the treaty power. Mr. Chairman, I am authorized by the Attorney General to state that he concurs in the conclusions I have expressed here today. The Attorney General has provided a formal written opinion setting out his views. With your permission, Mr. Chairman, I submit a copy of that opinion for the record. Mr. Chairman, this concludes my presentation. I will be pleased to try to answer any questions. Thank you very much for this opportunity to appear. Legal Opinion of the Attobnet General on the Panama Canal Treaties Offick of the Attorney General, Washingto7i, D.C., Arigust 11, 1977. The Honorable the Secretary of State. My Dear Mr. Secretary: Your letter of July 23, 1977, requests my opinion, in connection with the negotiation of a new Panama Canal treaty, on a question involving the treaty-making power of the President and its relation to the power of Congress to dispose of territory or property belonging to the United States. The question is whether a treaty may dis]iose of territory or propeity belonging to the United States absent statutory authorization. The Constitution provides that the President shall have power to make, treaties with the advice and consent of the Senate, if two-thirds of the Senators present - U.S. V. i,S Gallons of Whiskey, 93 U.S. 188 at 197 (1876). 29 concur (Article II, section 2, clause 2) ; and it provides further that treaties made under the authority of the United States shall be the "supreme law of the land." Article VI, clause 2. At the same time, the Constitution gives Congress a number of specific powers that bear upon matters commonly subjected to the treaty power. I need mention but a few: pursuant to Article I, section 8, Congress has power to regulate foreign trade, to provide for the protection of rights in useful inventions, to make rules governing captures on land and water, to estabhsh a uniform rule for naturaliza- tion, and to punish offenses against the law of nations; and, of course, pursuant to Article IV, section ?>, Congress has power to dispose of tciritory or property belonging to the United States. Moreover, tiiere is authcrity for the proposition that Congress has general power, quite apart from these specific powers, to enact legislation relating to foreign affairs. United States v. Curtiss- Wright Export Corp., 299 U.S. 304 (1930) ; Perez v. Brnwnell, :3.")6 U.S. 44 (1958). A question that arose very eai-ly in our constitutional history was whether the existence of these congressional i)owers limits the power of the President and the Senate to make law h\ treaty. ^ If a treat}' touches a matter that Congre>s has power to regulate, can the treaty be given the force and effect of law, in and of itself, if Congress has not enacted legislation putting it into effect? The que>tion you raise is one aspect of that general question. II. I shall make two observations with respect to the general issue. Fii-st. from the earUest dixyn of the Republic the decisions of the Supreme Court have provided convincing support for the proposition that a treaty, unaided by an act of Congress, has the force and effect of law even if it touches a matter that is within the legisla- tive jurisdiction of Congress. Indeed, the Court has held that a treaty, of its own force, may supplant prior acts of Congress to the extent that its enforcement may require that result. Cook v. United States, 288 U.S. 102 (1933). The seminal case, United States v. The Schooner Peggy, 1 Cranch 103 QSOU, was decided in an opinion by Chief Justice Marshall. During the undeclared na\al war with France, Congress enacted a statute that authorized the President to grant commissions to pubUc vessels, with instructions that they should seize armed French vessels on the high seas, bring them to our ports, and subject them to condemnation in the courts of the United States. Act of July 9, 1798, c.LXVIII, 1 Stat. 578. In 1800 the American ship Trumbull, saiUng under a commission issued pursuant to the statute, seized an armed French vessel, the schooner Peggy, and brought her to port. A proceeding was then instituted against the Peggy: and after a sentence of condemnation was entered in the com-t below, an appeal was taken to the Supreme Court. During the pendency of the appeal President Jefferson, with the advice and consent of the Senate, concluded a treaty with France. The treaty provided, among other things, that vessels that had been seized by either nation should be "mutually restored" if they were not yet "definitively condemned." Thus, when the case of the Peggy came before the Court, the question was whether the treaty controlled the disposition of the prize. If it did, the schooner was to be restored to France. If it did not, the schooner was to be condemned, imder the statute; and the proceeds were to be distributed equally between the United States and the officers and men of the TruinbuU. The Court held that the treaty controlled. It was a law of the United States, not by virtue of any act of Cong-ress, but by virtue of the command of the Con- stitution itself; and it had interveneti during the appeal to change the statutory rule that had governed the decision below. Because the sentence of condemnation was not yet final, the schooner was not yet "definitively condemned," and it was therefore subject to the treatv. The schooner was to be restored to France. 1 Cranch at 109-10. 1 Indeed, the question arose in connection with the debate over the very first treaty made under the Constitution, the Jay Treaty with Great Britain. The treaty provided for the creation of certain commissions and therefore required an appropriation of fun<'.b. President \Yashington, together with other Federalists, including Hamilton and Chief Justice Ellsworth, took the view that the treaty, of its own force, created an indispensable obligation as a matter of domestic law, and that Congress was required to api'roi>riate the necessary funds. Jefferson, Madison, and other Republicans took the view that neither the Jay Treatv nor any other treaty could regulate matters that were within the legis- lative iurisuiction of Congress. See 1 C. Butler. "The Treaty-Making Power of the United States." 422 et seq. (1902) ; S. Crandall, "Treaties Their Making and Enforcement." 165 et seq. (2d ed. 1916) ; 1 W. WlUoughby. "The Constitutional Law of rhe United States," 549 (2d ed. 1929). Jefferson reiterated the Republican view in his "Manual of Parliamentary Practice." See L. Henkin, "Foreign Affairs and the Constitution," 141 ot seq. (1972) [hereinafter cited as Henkin], 30 Implicit in the decision was the elementary proposition that the President, •with the advice and consent of the Senate, had power to make a self-executing treaty affecting the disposition of a vessel captured at sea even though Congress had power to make rules (and had in fact made a conflicting rule) governing the same subject matter. The Court expressed no doubt whatever about the constitu- tionality of the treaty. In the years that followed this decision the Supreme Court gave "self-execut- ing" effect to numerous treaties that disposed of matters that Congress had power to regulate. See, e.g., Hijo v. United States, 194 U.S. 315, 323-24 (1904) (claims against the United States); Cook v. United States, 288 U.S. 102, 118-19 (1933) (customs inspections); Bacardi v. Domenech, 311 U.S. 150, 161 (1940) (trade- marks); see generally Henkin, supra, note 1, at 149. Today, as a result of these and other decisions, it could not be successfully maintained, as a general proposi- tion, that the treaty power stops where the power of Congress begins. On the con- trary, the Court has said that the treaty power, operating of itself and without the aid of congressional legislation, extends to all proper subjects for negotiation between our Nation and others. Asakura v. City of Seattle, 265 U.S. 332 (1924). The lesson of history is that these "proper subjects" include many that are within the legislative jurisdiction of Congress. My second observation is related to the first. I have suggested that the two powers — the power of Congress to legislate and the power of the President and the Senate to make "self-executing" treaties — may overlap. I do not mean to suggest that they are coextensive. They are both created by the Constitution, and they are both subject to the fundamental hmitations that are imposed there- under; 2 but the limitations that apply to the one do not necessarily apply to the other. The treaty power may extend to subjects that are beyond the legislative jurisdiction of Congress. Missouri v. Holland, 252 U.S. 416 (1920). Similarly, the President and the Senate may be powerless to accomplish by treaty what the Congress can accomplish by statute. I shall elaborate brief!}- upon the latter point. Some lower courts ' and many serious students of the law * have expressed the view that certain matters are subject to regulation by Congress only; and that a treaty, if it purports to deal with such a matter, can be given effect only to the extent that it may be authorized or implemented bj^ statute. The two matters that are frequently mentioned in this regard are the raising of revenue and the appropriation of funds. The Consti- tution provides that "all" bills for raising revenue "shall" originate in the House (Article I, section 7, clause 1), and, further, that "no" money shall be drawn from the Treasury except in consequence of "appropriations" made by law (Acticle I, section 9, clause 7). In the face of these provisions the opinion expressed by some is that a treaty purporting to require the establishment or alteration of a revenue measure, or a treaty purporting to require an appropriation of funds, could not be effective, as a matter of domestic law, in the absence of statutory authorization or implementation. I find it unnecessary to deal with that issue in order to answer the question you have put to me. I now turn to the question at hand. III. The point of departure is the broad principle that was laid down in Geofroy v. Riggs, 133 U.S. 258 (1890), and was repeated in Asakura v. City of Seattle, 265 U.S. 332 (1924), to which I have alluded above: the treaty power extends to all proper subjects for negotiation between our Nation and others; and when a treaty purports to do so, it acts ex proprio vigore, without the aid of legislation, and is effective for all purposes, provided it does nothing that is forbidden by the Constitution. 3 In Reid v. Covert, 354 U.S. 1 (1957), Mr. Justice Black stated the applicable rule: "The prohibitions of the Constitution were designed to apply to all branches of the National Government," including the Congress, the Executive, and the Executive and Senate combined. Id. at 17-18. 9 See, e.g., Turner v. American Baptist Missionary Union, 24 P. Cas. 344 (No. 14251) (C.C. Mich. 1852). * John C Calhoun was of opinion that a treaty could not authorize a withdrawal of funds from the Treasury. 29 Annals of Congress, 531-32 (1816). In 1949 the Secretary of State, Dean Acheson, expressed the view a treaty could not put the United States into war. Only Congress could declare war. "Hearings on the North Atlantic Treaty Before the Senate Committee on Foreign Relations," 81st Cong., 1st sess., pt, 1, at 11 (1949). See generally Henkin, supra, note 1, at 159. 31 Does the Constitution forbid the President and the Senate to mnke self- executine treaties disposing of territory or property belonging to the United States? I have taken note of the opinion, held by some, that the Constitution entrusts certain matters to Congress alone. In my opinion, however, the disposition of territory or property belonging to the United States is not such a matter. In my view, territory or property belonging to the United States may be disposed of by action of the President and the Senate under the treaty clause. There are at least four considerations that support this conclusion, and I shall discuss them briefly below. First, the fact that the Constitution gives Congress power to dispose of terri- tory or property belonging to the United States does not suggest that the President and the Senate have no power to do so under the treaty clause. This was the implicit teaching of Marshall's decision in the Peggy and of the cases that followed. The existence of power in Congress does not imply an absence of power under the treaty clause. On the contrary, the one proposition of which we can be certain is that many of the powers that are given to Congress are shared by the Presiden and the Senate when they act, under the treaty clause, to conclude and effectuate bona fide international agreements. I think it follows that if one were to hold that the power to dispose of territory or property belonging to the United States resides in Congress alone and is distinguishable in that respect from the numerous powers that are shared, one would be obliged to find some basis for the distinction either in the text of the Constitution or in the history of the relevant provisions. I find none. The language of Article IV, insofar as it confers upon Congress the power of disposition, is identical to the language of Article I, which confers upon Congress numerous powers that may be exercised by the President and the Senate through the self-executing treaties. Article IV says that Congress "shall have power" to dispose of territory or property belonging to the United States, just as Article I says that Congress "shall have power" to regulate foreign commerce, to make rules govern- ing captures on land and water, and so forth. Article IV goes on to say that Con- gress shall have power to make "all" needful rules and regulations respecting territory or property. As in the case of Article I, however. Article IV does not say that the powers it confers — the power to dispose of territory or property, and the power to make rules and regulations respecting it — shall reside in Congress alone. The record of the proceedings during the Constitutional Convention supports the interpretation that is suggested by the language of the Constitution itself. The territory and property clause of Article IV was adopted during a general discussion of the role that the central government should play in connection with the ter- ritorial claims that had been asserted by the several States with respect to the western lands. In the course of the discussion there was no suggestion whatever that the purpose or effect of the clause was to give Congress exclusive power to authorize or implement international agreements disposing of territory or property. See 2 M. Farrand, "The Records of the Federal Convention of 1787" 457-59, 461-66 (rev'd ed. 1937) [hereinafter cited as Farrand]. The history of the treaty clause is even more conclusive. During the course of the convention several proposals were put forth. One would have required every treaty to be approved by both Houses of Congress. 2 Farrand, supra, at 532, 538. That proposal was rejected. Another would have required the Senate to concur in treaties, but would have exempted peace treaties from that requirement, except for peace treaties depriving the United States of territory or territorial rights. 2 Farrand, supra, at 533-34, 543. That proposal was rejected as well. In its place, the convention adopted a proposal that required the Senate to concur in all treaties. It may be possible to interpret these actions in a different way, but the simplest and, for me, the most persuasive interpretation is this: the delegates to the con- vention assumed (1) that the treaty power could and would extend to questions of territory, and (2) that treaties, including treaties affecting rights in territory, could be effective in the absence of action by both Houses.' ^ I should note that this verv point was considered in the State conventions that were called to ratify the new Constitution. The objection was made that the treaty clause gave the President and the Senate power to alienate territory. The VirKlnia and Norh Carolina conventions proposed a remedial amendment that would have requiretl every treaty ceding or compromising rights or claims of the United States in territory to be approved by three-fourths of the Members of both Houses of Congress. 2 "Documentary History of the Comstitutlon." 271. 882 (in. U.S. Cong. Doc. Ser., No. 4185) : see generally S. Crandell. "Treaties Their Making and Enforcement," 220-21 (2d ed. 1916). 98-991 O - 78 32 This brinjrs me to the third consideration that supports mv basic conclusion. To the extent that the Sunreme Court has spoken to the question, the Court has said that the President, with the concurrence of the Senate, may conclude a treatv disposing of territory or property helonging to the United States, and that such a treaty may convey good title to the territory or property in Question. No act of Congress is required. United States v. Brooks, 10 How. 442 (1850); Doe v. Wilson, 23 How. 457 (1859); Holden v. Joy, 17 Wall. 211 (1872): Best v. Polk, 18 Wall. 112 (1873); Francis v. Francis, 203 U.S. 233 (1906). The dictum in Holden v. Joy is one of the clearest statements of this principle: "flit is insisted that the President and Senate, in concluding such a treaty, could not lawfully covenant that a patent should be issued to convey lands which belonged to the United States without the consent of Congress, which cannot be admitted. On the contrary, there are many authorities where it is held that a treaty may convev a good title to such lands without an act of Congress conferring it " [ 17 Wall, at 247]. I do not hold that these cases provide a sufficient answer to the question you have raised. They all involved Indian treaties and questions of "title" to real property. I do think, however, that the principle for which they stand is one of general application ; that it bears upon your question ; and that it supports the conclusion I have reached. These cases, when viewed in light of the textual and historical considerations I have already mentioned, provide substantial support for the proposition that a treaty disposing of territory or property belonging to the United States may be self-executing. I find no cases to the contrary. Finally, my conclusion is supported by historical practice. While I do not suggest that the commands of the Constitution may be attenuated by persistent practices not in conformity with them, I must observe that as a matter of historical fact the President and the Senate have made self-executing treaties disposing of territory or property belonging to or claimed by the United States. I shall mention one rather clear example of the practice. Under the Florida Treaty with Spain (1819) the United States ceded all its territory beyond the Sabine River in Texas to Spain in return for the cession of the Spanish territories of East and West Florida. 8 Stat. 252, T.S. No. 327. While there had been some dispute over some of the relevant boundaries, the congressional debates, as well as President Monroe's annual message to Congress, make it clear that many considered the action to be an outright 'cession of American territory in exchange for Spanish territory. 36 "Annals of Congress" 1719-38, 1743-81; 2 J. Richardson, "Messages and Papers of the Presidents" 55 (1896). No statute authorizing the American cession was ever enacted. * There have been a number of other treaties that have been self-executing inso- far as they have disposed of territory or property belonging to the United States or have compromised a claim of the United States to property or territory claimed by a foreign power. ^ I do not believe that the validity of these treaties could be questioned today. IV. In stating my opinion with respect to the question you have raised, I have taken note of general principles that bear upon the relation between congressional power and the power of the President and the Senate under the treaty clause; but I have no occasion to express an opinion with respect to any other questions that may arise in that context, and I express none. Sincerely, Griffin B. Bell, Attorney General. Mr. LiNowiTz. May I add a word? Chairman Zablocki. Yes. Mr. LiNowiTz. Because I think the situation is quite clear, as I understand it. Both the Attorney General and the legal adviser of the ' The self-executing effect of the Spanish cession was the subject of two decisions by the Supreme Court. Foster v. Neilson, 2 Pet. 253 (1829) ; United States v. Arreilondo 6 Pet. 691 (1832). Conjrress did enact legislation authorizing the President to take pos- session of the Spanish cessions and to provide rules for their government. Act of March 3. 1819. e. XCIII. 3 Stat. 523. Act of March 3. 1821. c. XXXIX. 3 Stat. 637. ^ See. e.g.. United States-Great Britain Treaty of 1842 ( Webster-Ashburton). 8 Stat. 572, T.S. No. 119: United States-Great Britain Treaty in Regard to Limits Westward of the Rocky Mountains of 1846 (Oregon Treaty). 9 Stat 869. T.S. No. 120. 33 State Department have pointed out that there are certain powers which are exclusively within the provision of the Congress and there are certain powers which may be exercised by treaty or by legislation. Thus, for example, the appropriation power or the raising of funds for revenue purposes must be by legislation. But in this case both article II and article IV, in our view, and in the view of the legal authorities who are responsible for these determinations have decided that either is legally feasible and that in this particular instance the better course would be to proceed with the self-executing authority. Mr. Buchanan. As your decision may imply, while you have been through an arduous process of negotiating and you have represented our country ably, I think you know that perhaps your most difficult task lies ahead in helping the President convince the Congress and the American people of the merit of the fruits of your labor. Let me ask one more question. I hate to keep plowing the same ground. I want to be sure I under- stand, sharing your view very strongly of the importance of the permanent guarantee of the neutrality of the canal, and since you have made some very strong statements concerning our unilateral right to provide such a guarantee should neutrality be violated or threatened, in the treaty concerning the permanent neutrality article IV, of course, commits us along with the Panamanians to such permanent neutrality, but article V says that after the termination of the Panama Canal Treaty only the Republic of Panama shall operate the canal and maintain military forces, defense sites and military installations within its national territory. In discussing that before the National Assembly of Panama, Dr. Bethancourt who headed their negotiating team said on August 19, 1977, that they had first wanted to make plain that American forces couldn't be there after December 31, 12 noon, 1999, but your objection on the ground that might imply there could be Cuban forces or Russian forces led to the end result of the present language providing only for Panamanian forces after that time. U.S. ABILITY TO DEFEND THE CANAL UNDER TERMS OF NEUTRALITY TREATY Now, my question is, If we have no military presence there and the Panamanians only will maintain military forces, defense sites, and military installations, how then do we fulfill our role should it become necessary? Mr. LiNowiTz. General Dolvin may want to amplify this. I can say to you this provision has the full approval of the Department of Defense and the Joint Chiefs of Staff. General Dolvin. Mr. Buchanan, if I could, we interpret that to mean no other nation other than Panama could garrison forces there and the Joint Chiefs feel that they can carry out that responsibility from the forces located elsewhere, external forces, we can bring them in. But when it says no other forces would station themselves there it is in the sense of garrisons we now have there, but we would exercise whatever forces are needed, we will bring them from Fort Bragg or Fort Campbell or marines at sea or wherever needed. 34 Mr. Buchanan. Is our present presence there such that you don't feel this would be a si^ificant difference, the difference between the present situation and the situation you have described in terms of our ability to defend neutrality? General Dolvin. Well, at present, sir, we have what I would call a modest garrison in Panama. It is essentially as you probably know an infantry brigade, which is enough for normal circumstances. Even under the present circumstances, if required, we would bring in extra forces. However, it is a little different military operation when you have bases that you reinforce as compared to a situation when you don't have a base. But either one of them are workable military solutions. Mr. Buchanan. Politically do you think it is clear enough to the Panamanians as well as to us that in the unhappy event that that time should come this would not be treated, for example, like the Turkish action on Cyprus or the American action in Vietnam, even though we were invited by the then Government of South Vietnam? I mean do you think it is clear enough that such action would not be construed as an invasion by outside force since we would have no military presence? PROTOCOL TO NEUTRALITY TREATY Mr. LiNowiTZ. Yes, sir. Moreover, let me point out something. I refer to in my opening statement to the protocol which will be appended to the neutrality treaty. This protocol, as I said, will be offered for signature to all the countries in the world. We have every reason to believe that, well, it is certainly overwhelming perhaps all others in the hemisphere and I should think a number of others will want to subscribe to this protocol. This protocol says : The regime of neutrality which the United States of America and the Republic of Panama has agreed to maintain will insure permanent access to the canal by vessels of all nations, et cetera, and whereas the said regime of effective neutrality shall constitute the best protection for the canal and shall ensure the absence of any hostile act against it, the contracting parties hereby acknowledge the regime of permanent neutrality and associate themselves with its objectives. And the signatories further on agree to observe and respect th® permanent neutrality. If, therefore, a circumstance should arrive in which we found it necessary to take some form of military action with respect to an attack on the neutrality of the canal, we would be doing so not only pursuant to the specific permanent neutrality treaty but with the knowledge and the endorsement of the other countries in the world who are looking to us to preserve that neutrality. Mr. Buchanan. Thank you. Chairman Zablocki. Mr. Wolff. Mr. Wolff. Thank you, Mr. Chairman. I have listened in the short time I have been here with great interest to some of the questions that have been proposed regarding the treaty. One area of concern that I have, and I take it that this has been questioned before, but I would like to raise the point again, Ambas- sador Bunker and Ambassador Linowitz, are there any other codicils to this agreement other than this protocol that we have seen, the 36 papers that we have before us? Are these the only two papers that there are? Mr. LiNowiTZ. No, sir; there are two treaties. Appended to the neutrality treaty is the protocol. There is also an instrument which contains two a^eements in implementation of two provisions of the treaty and then there will be annexes and maps. The treaties and the implementation agrreements are now available and have been publicly made available. The annexes, I guess, are now beins: printed in final form and maps have been prepared in final form and that is evervthinp;. Mr. Wolff. There are no other? We have had some difficulties with Vietnam, as you know. Mr. LiNowiTz. I know. EXISTENCE OF OTHER AGREEMENTS Mr. Wolff. And there are no other memorandums of agreement? Mr. LiNOwiTZ. There are no other agreements, written, unwritten, understandings, which affect this treaty that are not covered in any one of these, in one of the documents I referred to. Mr. Wolff. There are no others not affecting this treaty, but there are no other memorandums of agreement nor have there been any other conversations held with the Government of Panama that would in any way bind our Government to any other activity other than that which has been spelled out. Am I correct in that? Mr. LixowiTz. Yes, sir. But let me be sure that I say it clearly. There are no other agreements or understandings which are not already public or which will not be made public affecting these treaties. There are some documents which have been exchanged on some minor things such as on post office and Gorgas Memorial Institute and so forth, letters between the two governments. There are eight of them, I guess, or nine of them dealing with — I can read the listing of these. These are the notes which have been exchanged on commissary, post office and Gorgas Memorial Institute on what is called joint agreement on certain activities on the FA A, on the protective status of Barro- Colorado Island, Smithsonian Institution and implementation of the Barro-Colorado agreement, and I think that is it. Those are the only letters which are ancillary^ to the documents. Mr. Wolff. Have there been any other unilateral declarations that have been made by either side? What I am trying to get at is, is there anv other discreet documents we don't know about right now that are liable to be surfaced in the future? It took us some 4 years to find another document that unfortunately causes us great embarrassment today. Mr. LixowiTz. Mr. WolfT, in answer to your question, there are none. You want to know if there is anything of substance, anything of significance that is not contained in the documents that have been made public or will be made public. The answer is "no." Mr. Wolff. Are there an}' promises or recommendations that have been made with the Government of Panama that have not surfaced? Mr. LixowiTz. There is a letter from the Secretary of State to the officials of Panama which undertakes to use our best efforts to make available the economic arrangements which I discussed in my opening statement. 36 Mr. Wolff. Thank you very much. It is very reassuring to know that we won't be met in the future with some additional documenta- tion that might influence us one way or the other as to how we should proceed at this point. Mr. LiNOwiTZ. May I also say we were cognizant of the past history. Mr. Wolff. Thank you. Chairman Zablocki. The Chair would like to announce there is a quorum call in progress if the Members intend to return. If the Members want to stay on, the Chair is willing to continue. Well, the Chair will forego going for a quorum. Mr. Pease. Mr. Pease. Yes. Mr. Chairman, I thought the Chair was going to recess and I wouldn't have a chance. I appreciate this opportunity, just a couple of questions. Before I begin the questions, let me just say that I think that our representatives in this negotiating session have done an excellent job and are to be highly commended for the work that they have done. Obviously, the Congress needs to look at your work and it may be open to some question at some point, but I think overall you have done a fine job. I commend you for it. APPROVAL OF DISPOSITION OF U.S. PROPERTY T am just sort of curious. There has been a lot of discussion about the route taken to approve the disposition of U.S. property, the transfer of U.S. property, whether it should be through the Congress or through the treaty process. When you are thinking in those terms, thinking of land transfer, is it your position that you are transferring only improvements to the land, and does the question of sovereignty and ownership of the land come into play there? Mr. Hansell. Well, if we can distinguish between sovereignty and ownership. There is no doubt that we are dealing with ownership of land. That is, there are lands and waters involved in the transfer. Questions of title are somewhat uncertain as to some parcels of prop- erty, but there is no question that we are dealing with lands and waters as well as improvements. Mr. Pease. OK. ECONOMIC DEVELOPMENT PACKAGE The economic development program that is outside of the treaty contains several elements. Are those figures already agreed to or will they be provided to Panama through action of the executive branch; have the decisions been made, in other words? Mr. LiNowiTz. Best efforts will be provided to provide up to those amounts. Mr. Pease. Best efforts will be made to provide those? Mr. LiNOwiTZ. Yes, sir. Mr. Pease. Particularly FMS credit, that could require an action of Congress to do that. 37 What effect, if any. will there be on the treaty if those efforts were not successful and none of those economic development program elements were included? Mr. LixowiTz. Let me reemphasize as T think we have indicated before, Mr. Pease, the economic development packapre is not part of the treaty, it has been negotiated separately, and it calls for an under- taking on the part of the United States to use its best efforts to provide these economic elements. Therefore, the treaty would stand even if the economic development package does not go forward. Obviously we would hope it does go forward; we think it is in our highest interests to help Panama with its economic development, but it is not integral as part of the treaty itself. IMPACT OF FAILURE TO RATIFY TREATY Mr. Pease. My final question, Mr. Chairman, what do you see as the effect of nonratification of this treatv if it were not to be ratified by the U.S. Senate*? Mr. LixowiTZ. ^Ir. Hamilton asked that question earlier and the response was that there would be a deep sense of disappointment throughout Latin America, that there would be a reaction, we don't know what form it might take, but after all these years of expectation we shouldn't be surprised at outbursts that could cause real problems. Mr. Pease. In terms of the operation of the canal, things will proceed as they have been going for the last 60 years, we would proceed under the existing treaty. Mr. LixowiTz. There would be a new structure, the L'nited Stated would work throucrh a new Government agency which, as Ambassador Bunker said in his opening statement would be supervised by five American and four Panamanian appointees. Mr. Pease. Excuse me. I am thinking if the treaty were not ratified, the operating arrangements would continue? Mr. LixowiTz. Lender the present system yes, sir. Mr. Pease. Thank \ou, Mr. Chairman. Chairman Zablogki. Perhaps the Chair should recess and still tv}' to make this quorum, if you gentlemen don't mind. Thank you very much. [Whereupon, a short recess was taken.] Chairman Zablocki. The committee will resume the hearing. Mr. Goodling. Mr. GooDLixG. Thank you, Mr. Chairman. I have a couple of questions that I would like to ask. As both of you know, we have met on a couple of occasions, several members of the committee, and on both occasions we talked about four partic- ular areas that I had great concern about, and I would like to mention those. U.S. RIGHTS UXDER THE XEUTRALITY TREATY First, that the United States has the right to guarantee the neu- trality of the canal without any termination date. One question I have in relationship to that. I would perceive that the problem would come internally, that if we in fact need to guarantee 38 the neutrality it just rrTig:ht be that the problem is with the Panaman- ians themselves or with problems within Panama. I am assuming when you say we have the risjht to guarantee neutrality that includes any Panamanian problems that may cause a problem as far as neu- trality is concerned? Mr. LiNOWTTZ. Mr. Goodling, there is no limitation on our authority to do what has to be done to assure the preservation of the neutrality. Mr. GooDLiNG. I have another problem with that which I will bring up a little later. EXPEDITIOUS PASSAGE OF U.S. WARSHIPS Second, our concern was that our warships would not be impaired as they go to and from, and if I read the treaty properly, I assume that that is true, that we do have access, rapidly, to warships going back and forth? Mr. LiNOWiTz. Yes, sir, expeditious passage in time of peace and war. LOSS OF U.S. INTEREST PAYMENTS Mr. GooDLiNG. And the third concern that we have had when we talk about no American tax dollars, I assume everything comes out of tolls. I do have a little concern with the loss of $20 million in interest. I would have to assume that we have lost $20 million, at any rate, of income that we normally would have had. Is that not right? Mr. LiNowiTZ. Probably, unless there are unanticipated earnings, but I think for all practical purposes we probably are not going to have that. Mr. GooDLiNG. But again, I am correct in saying that there is no request for tax dollars involved in the treaty? Mr. LiNOWiTZ. Yes, sir. U.S. EMPLOYEES IN CANAL ZONE Mr. GooDLiNG. And, fourth, our concern was Americans working in the Canal Zone. I am a little concerned with the way it was written in, I think it was Ambassador Bunker's statement, "in general, these are designed to allow present employees, both American and Pan- amanians, whose services will be required by the new Panama Canal Commission to continue working under conditions generally no less favorable." There are a lot of generalities. I am assuming there is some provision for those people who are 5 years from retirement, 8 years from retirement, no place to go, there is some specific area that they can go to in Government work if they are not needed in the canal? Mr. Bunker. Early retirement provisions are provided for, Mr. Congressman. ECONOMIC DEVELOPMENTS PACKAGE SEPARATE FROM TREATY Mr. GooDLiNG. And then one question that goes back to the question that was posed about the neutrality, I think that it was by Mr. Hamilton. I wasn't quite sure in your response to Mr. Hamilton. I had a feeling that what he was tying into this package, it goes back 39 to my question about the tax dollars. I thought he was tying into this whole thing the area they talked about, economic assistance, military assistance and so on, and I am under the impression that that in no way has anything to do with the treaty, yet nobody seemed to separate that during your give and take on that particular area. Mr. LiNowiTz. In my opening statement, sir, I did point out that the economic package, so-called, economic development package is separate and apart from the treaty. Mr. GooDLiNG. I am very sensitive to that because I don't want some ''Vietnamese letter" coming forth 5 years down the pike and saying oh, when you agreed to that treaty you agreed that you were going to send — I have a pretty good record against military sales and I don't want to get caught in that bind down the pike. I want to be assured that in no way does my own record being for the treaty have anything to do with any economic packages or military packages down the pike 5 years, 10 years or whenever it may be, that they are not just tied together. Can I be assured of Mr. LiNowiTZ. We understand your concern and can assure you nothing has been agreed to that has not been disclosed in our testimony. Mr. GooDLiNG. I have a feeling as .we go down the pike and if in fact guaranteeing the neutrality is a problem with the Panamanians, and I am voting to send militar^^ equipment sales and so forth into Panama the Panamanians can in fact defend the canal, or whatever it is, then they are shooting my GI's as we come in to defend the neutralit}^ of the canal. So you are assuring me that there is no con- nection between the treaty and the idea of some kind of assistance, be it military, economic or whatever, in the future? Mr. LiNowiTZ. No; this is as I think we have testified previously, the economic development package and the military assistance package is outside of the treaty entirely. Mr. GooDLiNG. But it isn't bait? Mr. LiNowiTz. It isn't bait? Mr. GooDLiNG. Wasn't used as bait? Mr. LiNowiTZ. No ; it is of significance to Panama and I think it is very important to make this clear. Panama has felt that it needs help with its economic development program, particularly under the new regime as it will be developing. It, therefore, has sought to obtain the assurances from our appropriate governmental agencies and depart- ments that it could have help along the lines we have testified to. Mr. GooDLiNG. But they understand that is a long process through this committee and many other committees in the Congress and so on? Mr. LiNowiTZ. I think the answer, sir, as I clearly testified, is that they understand that there is nothing in the treaty which assures them of treatment otherwise than that to which they would be entitled if there were not a treaty. OPPOSITION TO PANAMANIAN GOVERNMENT Mr. GooDLiNG. Could I have one other reaction from either or both. I think again it was my colleague, Mr. Hamilton, who mentioned what would happen if the Senate did not ratify the treaty, and you responded, T think, Ambassador Linowitz, to that. I get a lot of feed- i i 40 bark along: the line that if the treaty is signed, the antidictator forces, et cetera, are the most likely people to get involved in the act of trying to bring about disruption, and so on. How would you react to that? Mr. LiNowiTZ. The antidictator people? Our assumption is that the people who would most like to see the treaty not ratified would be the Communists and those who are trying to foment unrest in Latin America. As a matter of fact, the Communists in Panama have come out very strongly against the ratification and the support of these treaties. Mr. GooDLiNG. How about the antidictator forces within Panama, for instance? Mr. LiNowiTZ. You can't lump them that easily. There are some that are antidictator and some prodictator, but the fact is the basic thing to insure, sir, is that everything that General Torrijos has been trying to achieve, Presidents and Chief of State of Panama have been trying to achieve for decades, is nothing new in what is being sought, recognition of sovereignty, proper payment for what they regard as their own territory. When you take into account that whatever is here approved will have to have the plebiscite endorse- ment it is very difficult to say that an anti dictatorship group would be in opposition to these treaties, it is the people who have an opportunity to express their opinion. Mr. GooDLiNG. I would like to conclude then by saying that in spite of the fact that the loud voices in my district are tremendously opposed and they seem to think I must have lost my marbles some- where along the line, from what I see of the treaty, I am very much in support of the treaty, and I can look way beyond the 10 square miles of water and land, as to what it means to us I think in the future. Mr. LiNowiTz. Thank you. Mr. GooDLiNG. I congratulate you. Mr. LiNowiTz. Thank you. Chairman Zablocki. Mr. Bingham. Mr. Bingham. Thank you, Mr. Chairman. I am sorry that I have missed most of the hearing today. I am very much in support of the treaty and I would like to join in extending my congratulations and appreciation to the principal negotiators, Ambassador Bunker and Ambassador Linouitz. DISPOSITION OF U.S. MILITARY EQUIPMENT I just would like to ask a couple of questions with regard to the disposition of U.S. military equipment. Under the terms of article 1.3, relating to property transfer, what will be the disposition of the U.S. military equipment as U.S. bases are turned over to Panama? General Dolvin. I don't believe, Mr. Bingham that applies to military equipment, but if it does, it states that all movable equip- ment can be brought back to this country. Now, if it is fixed property, it would remain in Panama. But there is no prohibition, we don't have to leave our military equipment in Panama if that is the ba.sis of your question. 41 Mr. Bingham. Well- General DoLviN. Unless we made some sort of arrangement and wanted to do it. Mr. Bingham. In other words, that is something that is not deter- mined under the terms of the agreements? General Dolvin. Well Mr. Bingham. What will happen to the mobile equipment, is not covered, is that right? General Dolvin. Clearly whatever we want to do with.it, bring it back home or dispose of it any other way, because it is movable equipment Mr. Bingham. At the present time, does the executive branch intend to ask for authority to turn over that equipment to Panama? General Dolvin. To my knowledge, sir, that has never been raised and that is 23 3^ears down — it would be down the pike that long and has never been raised. Mr. Bingham. Thank you. Chairman Zablocki. Mr. Burke. Mr. Burke. Thank you. FINANCIAL ASPECTS OF THE TREATIES Gentlemen, since 1903, if I understand the figures correctly, the United States has from time to time subsidized the Panama Canal by act of Congress. Since that period of time, we have an unrecovered indebtedness, including accrued interest of about $700 million. Now we propose to pay $40 million out of revenues to the Panama Canal and in addition we have pledged an additional $10 million. If we take the accurate and true investment figures how then are you going to manage to do what you say without taking money from the taxpayers to guarantee the operation of the Panama Canal? Mr. LiNowiTz. We have already testified about that, Mr. Burke, I think when you were not here. Mr. Burke. Perhaps I wasn't since I was attending another com- mittee hearing. Mr. LiNowiTZ. Let me repeat it then, sir. In the first place, there is $20 million a year roughly which we have been paying to the United States as interest, so-called, on our original investment. We have now received $642.5 million as interest on that original investment. The original investment by the way is $387 million, which has since Mr. Burke. But I am talking about the totaV investment, not the original $387 million investment. If you take the original investment in our present dollars you will find it to be a great deal more. Mr. LiNowiTz. I agree. What I am trying to say, we have been paying about $20 million a year as interest to the U.S. Treasury. That sum has been considered an operating expense and would be available for payments as may be required under this new treaty arrangement. Second, we are going to increase tolls and we know that with the toll increase it will be possible, according to our best estimates, to meet the financial commitments we are hereunder taking without going to Congress for appropriations. 42 Mr. Burke. Without going to Congress is one thing, but if you use a bookkeeping system like the Government very often does, you can go to the taxpayers sometimes without going to the Congress, be- cause budget items can be moved from one thing into another, thus I am talking about sound business bookkeeping and honest banking practices, rather than Government accounting practices. NEED FOR APPROPRIATIONS Can you guarantee the American people that this arrangement that you have made will not cost the taxpayers one cent? Mr. LiNowiTz. No, sir. Mr. Burke. You can't guarantee it? Mr. LiNOwiTz. It is impossible to guarantee. All we can say is according to the best estimates we can today make. Mr. Burke. For the moment, you mean, Mr. Linowitz, estimates you make today but tomorrow might create a different picture? Mr. Linowitz. As of today, according to our best estimates, which have been made available to us by people most apt to know, we see no need to consider going to Congress for appropriations. Mr. Burke. If I was a betting man, and being a conservative I would like to bet that it won't happen your way. LIMITATIONS ON NEGOTIATIONS TO BUILD SEA LEVEL CANAL Now why do you, in this agreement, preclude our rights as Ameri- cans to negotiate with any other nation in connection with the rebuild- ing if needed, of another new sea level canal? Mr. Linowitz. Because we had asked the Panamanians to forego their rights to negotiate with anybody else for a sea level canal in Panama. Mr. Burke. I know, but now suppose the Panama Government says no and we need it, are we then bound by our own agreement to say the heck with the American people, or our own security, we cannot do it because we pledged to Panama who would no longer be friendly to us? Mr, Linowitz. Well, I think it would be unthinkable for us to say we have made up our minds and we want to build a sea level canal in Panama and to try to do so over the objection of Panama. Mr. Burke. Well, I didn't say within Panama, there are other areas. Mr. Linowitz. Well Mr. Burke. We are precluding ourselves under this agreement from even going to any other nations? Mr. Linowitz. Yes, sir, we have, sir. Mr. Burke. Why? Mr. Linowitz. Because we wanted to be sure that Panama did not negotiate with anybody else for a sea level canal in Panama. Mr. Burke. What difference would it make if they did, if we negotiate next to them, they haven't got the money to build it, and right now we are committed, if I understand this agreement, right now we are committed to defend the canal, but are we going to defend it if the Panamanains say get out? Isn't that exactly the reasoning for giving into the treaty. 43 Mr. LiNowiTz. Are you talking about a sea level canal or the present one? Mr. Burke. I'm talking about the present one. We have committed ourselves to Panama on the basis we can take the present leader's of Panama's word for something. We did this with the Japanese, as I recall, when Pearl Harbor was bombed. We have also taken the words of Communist-orientated governments and been fooled. Why, then, do you think the government leaders, such as we have in Panama, w^th a known record of violations of human rights, a dictatorship, why do you think that all of a sudden they are going to sit down and say we like you — you are no longer imperialists. This has been their argu- ment all the time in the past. In fact, it has been the argument of all of the pro-Soviet nations. Frankly, I can't understand why we have not negotiated on the basis that we have done something right with this canal. We built it and it cost the American people a great deal of money and we also defended and made this hemisphere safe from invasion by other nations during World War I and II. I can't understand why we would exclude ourselves by this type of agreement to even looking forward to building another one if it is needed, particularly since the Panama Canal presently isn't capable of handling aircraft carriers or super oil tankers and, second, we have the question, even though we have the right under the treaty to have our warships come through there, but it couldn't be sabotaged, no matter who has control of it, and since Panama could remain neutral, our enemys' ships could pass through. Mr. LiNowiTz. I wdll take that in pieces. Panama's record on treaties termed excellent In the first place, the record of Panama has been excellent in con- nection with the observance of treaties. If you look back over the years, even this highly distasteful treaty to them has been one to which they have adhered over the years. So I think, in fairness, we ought to recognize that. Second, what we have tried to indicate is that we are going to make a new treaty arrangement which we believe \vi\\ merit the strict commitment of the Panamanians and which as signed by Torrijos will be endorsed by a plebiscite among the Panamanian people. In other words, you are here talking about a treaty which represents the will of the Panamanian people. SEA LEVEL CANAL In your other issue on the sea level canal, in 1970 we made a study of where a sea level canal should be put if it were to be placed some- where in the hemisphere, and the recommendation was, it ought to be placed in Panama. Therefore, it becomes of the greatest importance to us to be assured of having the right to a sea level canal in Panama and that no other country be able to work with Panama in putting through such a canal. That is what we got in this agreement and in return we agreed we won't go to any other country for such a sea level canal. 44 Mr. Burke. I know we must trust some people in diplomatic circles but I still can't understand why we are precludinpf ourselves and didn't give ourselves a way out, particularly since nations change and a government's leadership can change. We have now right in our own hemisphere Castro who would love, and some of the other nations there who are anti-American, pro-Communist, and certainly in my opinion very capable of causing additional trouble in this hemisphere. Why then have we precluded ourselves from dealing with some of our friendly nations, particularly since we dealt with Panama who has a horrible record with regard to human rights, and we criticized some other nations in that same area because we don't want to deal with them. Now, let me HUMAN RIGHTS ISSUE Mr. LiNOWiTZ. Maybe Ambassador Bunker may want to say a word on the human rights aspect. Mr. Bunker. Yes. Mr. Congressman, it is true that there have been some violations of human rights in Panama and when there have been we have stressed our concern about them. Most of those violations occurred prior to 1970 when Torrijos consolidated his position and his power. Amnesty International made a report in 1973 referring to some violations by saying then that most of these had occurred prior to 1970. In 1975, Amnesty International did not include Panama in its criticisms of violations of human rights. In the spring of this year, the administration mads a report to this Congress saying that there was no evidence of systematic violations of human rights in Panama. So that the record I think while not perfect certainly cannot be said to be horrible. Mr. Burke. Well, did you read the report of Freedom House on their analysis of various countries in the world and their record on human rights? Mr. LiNowiTZ. When was that, sir? Mr. Burke. January of this year the report was completed. It seems to me if we are going to look at violations, we should look at all the reports and not just one that makes it convenient to say so. In any event, analysis is certainly strongly in disagreement with you. Chairman Zablocki. The Chair would like to advise the gentleman's time has expired. The Chair will recognize the gentleman for another question. PANAMANIAN EMPLOYEES OF THE PANAMA CANAL COMMISSION Mr. Burke. Thank you. With regard to the employees, and you may have answered this, but with regard to the amount of the em- ployees that are presently employed by the canal commission, what will happen particularly to the Panamanians themselves who are now being paid by the present commission. Will they be paid by the United States or will there be any guarantee of their jobs by the United States which is the U.S. taxpayers? Mr. Bunker. Well, the present employees of the Panama Canal will continue in employment under the new canal commission. 45 Mr. Burke. We are committed under this asreement the same as we were under the old one, that is. to make sure of their employment status and to make sure they ^et paid and unemployment and what- ever else it may be? Mr. Bunker. Yes, sir. Mr. Burke. So the American Government could be stuck with that, too. Mr. BuxKER. It will be paid by the new Panama Canal Commission. Mr. Burke. Thank you very much. Chairman Zablocki. Mr. Whalen. Mr. Whalex. Thank you. Mr. Chairman. Gentlemen, I would like to add to the accolades you have already received on the very excellent work which you have done on behalf of our countrv'. I was at the treaty ceremony last evenins: and T was rather struck by the fact that the siting on behalf of the Republic of Panama was done by a Panamanian citizen this time instead of a French citizen who signed in 1903. PLEBISCITE IX PANAMA TO RATIFY TREATIES Instead of looking at the U.S. Senate let us look at the Republic of Panama. Are there any further ratification procedures which must take place in that country and, if so. what are they and when might they be concluded? Mr. LixowiTZ. There is a plebiscite and it will probably take place before the end of the year. Mr. Whalex. a vote among the citizens of Panama, is that correct? Mr. LixowiTZ. Yes, sir. Mr. Whalex. The treaty, of course, provides for a reversion of the canal and its property to the Republic of Panama by the year 2000. Maybe this is a little bit of a followup on Congressman Burke's question. DOLLAR VALUE OF CAXAL ZOXE Has there been any dollar value attached to these assets? Mr. LixowiTZ. I think we made some statements. Part of the problem is that you try to calculate the value as of the year 2000 and that is conjecture. We don't know what the Panama Canal will be in the year 2000. It may at this point be more valuable as it is or as seems more likely considerably less valuable. It may be an archi- tecture monument, so it is very hard to say what its value will be at that time. We have made some estimates. I believe, of the value of the property which will presently be transferred. Those we can submit for the record. IXTEREST PAYMEXTS RECEIVED BY TREASURY DEPARTMEXT Mr. Whalex. You have indicated that the $20 million received annually in interest amounts to something over $600 million. I presume that originally this was an arbitrary figure and undoubtedly has more than recompensated the United States for its original investment. 46 Now has that money ^one to the Panama Canal Company or has it gone to the Treasury? Mr. LiNOWiTZ. Goes to the U.S. Treasury. Mr. Whalen. So in effect we at least have more than recouped our original investment? Mr. LiNOwiTZ. Yes, sir; the original investment, of course, a great deal had been added since that original Mr. Whalen. As improvements have been added how has that cost been covered, through the revenue of the canal or through direct in- vestment appropriations by the Federal Government? Mr. LiNOwiTZ. Both. SEA LEVEL CANAL NOT UNDER TREATY TERMS Mr. Whalen. You have indicated that the treaty provides for the possibilities for negotiating either for a third lane or a new canal. If such a treaty or agreement were concluded, would the year 2000 con- version clause also apply to this facility? Mr. LiNOwiTZ. We have provided terms and conditions would be worked out. In other words, if we decide that we want to put in a sea level canal, then we would work out terminal dates, what rights Mr. Whalen. I see. So if there were a new facility created as a result of any further agreement, it would not be bound by the language in the treaty that is now before us? Mr. LiNowiTZ. That is right, it would be subject to mutual agree- ment. IMPACT OF TREATY ON PANAMANIAN JURISDICTION OVER CANAL ZONE Mr. Whalen. Ambassador Bunker, on page 6 of your statement I think you have outlined what I suspect the Panamanians see as the most important provision of the treaty. You say the Canal Zone under the one treaty will cease to exist and the canal territory will be under the general territorial jurisdiction of the Republic of Panama. This deals, I think, with the sovereignty question which has been a very significant issue. I wonder if you could outline specifically some of the changes that will take place if this is implemented? Will the Panamanian Government police the area and so forth? Mr. Bunker. There will be a transition period of 3 years during which period our police will still function. At the end of the 3-year period general jurisdiction will be turned over to Panama. Mr. Whalen. I realize that. I just wondered if you could be perhaps a little more specific in terms of arrests, trials, and so forth. Apparently the American citizens now are not subjected to Mr. Bunker. There will be a procedural guarantee of trials for American citizens which will be spelled out in the annexes which will be submitted to you. Mr. Whalen. Would the Republic of Panama police then actually have responsibility for policing all of the area in the canal, for appre- hending those alleged to have violated Panamanian law, be they American citizens or Panamanian citizens? Mr. Bunker. Yes; that is correct. Mr. Whalen. They don't have this responsibility or jurisdiction now, as I understand it? I 47 Mr. LiNOwiTZ. That is correct. Mr. Bunker. That is correct. U.S. MILITARY PRESENCE IN CANAL ZONE Mr. Whalen. One final question. How many noncanal U.S. mili- tary facilities now are in operation in the Republic of Panama that we eventually would either turn over or abandon? Also, while you are looking for your fie:ures, gentlemen, you miorht indicate how many personnel are involved — I am referring: to facilities outside of the Panama Canal Zone itself. General Dolvin. That is a very difficult question to be precise about, Mr. Whalen. The Federal Repster shows three bases in Pan- ama. The fact sheet that was passed out shows seven. The facts are the entire Canal Zone is about twice the size of say Fort Knox, Ky. These are relatively small bases. But I think seven is probably a fair way of grouping them because there are some small installations, such as antenna farms and things like that. The whole Canal Zone as you know was put together as one entity. Mr. Whalen. They are outside of the zone? General Dolvin. They are outside of what will be the canal oper- ating area under the new treaty. Mr. Whalen. But would be within the zonal territory? General Dolvin. They are all within. Mr. Whalen. There is no military facility of the United States in the Republic of Panama outside of the zone boundaries, is that correct? General Dolvin. That is correct. We have not had any since 1956. Mr. Whalen. France Field I understand was outside the zone? General Dolvin. That was in the Canal Zone, old France Field. I will say on treaty day that very little of what are now military bases will go back to Panama. We do anticipate over the life of the treaty, as we possibly draw down our forces, that some of these will return to Panama but the option on when it takes place rests with the United States. Chairman Zablocki. Mr. Lagomarsino. Mr. Lagomarsino. Mr. Chairman, I wonder if we might have per- mission to submit questions in writing. It is obvious we are not going to have time to go into all of the things we should here. Chairman Zablocki. Without objection, questions not asked now will be submitted to the witnesses and I am sure they are willing to respond for the record. Mr. Lagomarsino. I wonder also if we might have permission to submit for the record the 1977 January-February issue of Freedom House, which refers to human rights in Panama and other countries in the world. Chairman Zablocki. Without objection, so ordered. [The publication referred to follows:] 48 [From Freedom at Issue, Jauuary-tFebruary 1977, No. 30] The Comparative Survey of Freedom — ^VII Thailand is the year's greatest loss, moving from free to "not free." This failure is somewhat offset by a major gain, as Portugal joins the free nations. Also joining the 'free list" is Sri Lanka and the newly indepen- dent Seychelles. Important gains were also made by, especially, Spain, and by Egypt, Sweden, Cyprus, Nigeria, and Guyana. But the overall world trend away from freedom continues, notably in South America: El Salvador declines to partly free, and Argentina, Uruguay, and Paraguay to "not free." Also newly " not free" are Kuwait and the Malagasy Republic, while in India and South Korea civil and political rights continue to fade. by Raymond D. Gastil Director of the Survey Since 1972 Freedom House has conducted country-by- tendency of people concerned with human rights to stress country comparative surveys of the status of freedom in those situations where they think improvement is possible the world as a complement to its more generalized yearly rather than those which seem hopeless. The imbalance is also surveys. Previously, there had been a few comparative an inevitable result of the fact that we are apt to hear in surveys of freedom, but since these were generally published conTirmed detail about oppression only in countries where in books and not reissued, they were quickly outdated by the oppression is incomplete. Thus, international opinion has flow of events, particularly for areas with unstable political been exposed to several years of relative silence on the conditions. The Freedom House Comparative Survey fills suppression of liberties in China or Albania while hearing a the need for a continually adjusted survey. Moreover, as a great deal about those in Chile or the Soviet Union. It is result of the continual monitoring on a counlry-by-country hoped that in a small way the Survey can provide more basis, the methods and judgments used in the analysis have balance. With increasing interest in relating U.S. foreign gradually been improved.' policy, and particularly foreign aid, to human-rights There are several reasons why a comparative survey of considerations, the Survey may contribute to the setting of freedom is important. First, it is useful for those reporting objective standards for policy decisions, on, evaluating, or simply concerned with denials of freedom A quite different purpose of the Survey is to give to be able to place particular gains and losses for freedom recognition to the efforts and difficulties of all those who against a more or less consistent standard. This is persistently struggle for freedom wherever they may be. By particularly important in the face of the double standards of its existence, the Survey indicates that there are those in the reporting that condemn restrictions on freedom in countries Western democracies that care about the progress of such as Chile, while ignoring them in Tanzania or Bulgaria. freedom in every country, even if at limes our foreign This imbalance may reflect the socio-political bias of the policies do not reflect this concern. reporter, or, paradoxically, stem from the unfortunate In order to evaluate the following Survey, the reader must be clear about our definition of freedom. First, by freedom 1 This and other notes are at end of article. *"= '*° "°' "'''''" "^''°"^' 5°^"'='g"^y Although the Survey Note — Copyrighted by Freedom House and reprint permission granted. 49 gives aileniion lo the question of "freedom" from domination of one people by another, in general it does not use freedom in the sense of independence. Since independence is not a critical component of our definition, in the Comparative Survey a former colony may be rated less free after independence than before — for example. Uganda. Given this limitation, "freedom," as used in the Survey, refers, first of all. to the extent to which the people of a country are able to play an active and critical role in choosing their leaders, and thus ultimately in determining the laws and means of enforcement under which they will live. Such political rights generally imply an authentic electoral procedure. Secondly, freedom refers to the extent to which people openly express opinion without fear, and are protected against arbitrary actions by an independent judiciary. Consideration of fiv/7 rights of this kind also includes a wide spectrum of other personal rights, such as those to freedom of religion, voluntary organization, and freedom of movement and occupation. We would argue that the freedoms the Survey compares are the essential human rights that political systems must guarantee. However, we are aware that the term "human rights" is now often used in a much broader sense, to apply to the full spectrum of human needs, for it is now widely believed that political systems should meet those further needs." This approach would add "positive rights" to the negative ones we consider; for example, the right to food, education, health care, recreation, or even aesthetic ex- perience. This is, of course, the "freedom from" usage of the "Four Freedoms." However, no matter how desirable positive rights of this kind may be. it is a mistake to attempt to make the concept of freedom cover the full range of desirable social goals for a society. The reader should be warned that the Comparative Survey is not an attempt to compare the quality of life or the provision of happiness among countries, but only ;o compare certain specific aspects of life — though admittedly we feel these aspects are of critical importance. It is often objected that the Survey attempts the impossi- ble, for it is inappropriate to compare the political systems of wealthy, literate West European nations with those in poor, illiterate countries with traditions different from Western ones. In part, this criticism is justified. But it is less cogent if two points are made. First, by scoring countries in terms of freedom, we do not mean to imply that all peoples, or their leaders, should immediately achieve the levels of freedom in a country such as Denmark We recognize the many special problems that confront less favored societies. We believe only ihai progress toward greater freedom is possible almost everywhere, and that there is very seldom an adequate justification for backward steps. Secondly, we believe that ruling elites, once they embark upon social and economic modernization, will have little choice but to adopt a model of government adapted from Europe (including Marxist- Leninist); and that, if given the choice, there is a prima facie case that they will eventually prefer those systems offering more freedom over those offering less. ' Ranking!) for political and civil rights In the Survey, slates are ranked in terms of their political and civil rights on separate seven-point scales, from (1). most free, to (7), least free. The numbers by which the ranks are identified do not represent quantities, nor can they be simply calculated from other quantities. A numbered ranking sim- ply indicates that the state in question seems to fall within a grouping of Slates at a certain point along an arbitrarily divided continuum from free to unfree. Ratings are now based on the comparison of ratings on a check list of political and civil rights. Ideally, for each item on the list each country is given a rating of high, medium, low, or very low There is no attempt to mathematically compute the results, but the patterns of those states which enjoy more freedom must ob- viously lie to the high side of those which are less free. To achieve a high ranking (I or 2) in political rights a country must have the critical rights provided by a fully operative electoral procedure, generally including an elect- oral confrontation of multiple parties with a significant op- position vote, and those elected must receive the great preponderance of political power. A state ranked (I) will also be strong in subsidiary indicators, such as a recent change of government from one party to another, lack of foreign domination, decentralized political power, or a broad in- formal consensus that allows all segments of society de facto power. A state at (2) must have a high rating for most critical rights, and a relatively strong position elsewhere. Violence, foreign domination, high illiteracy, or extreme poverty are environmental conditions that may cause a ranking of (2) in- stead of (I). States ranked at (3) and (4) generally have com- petitive voting procedures, but these may be marred by the banning of opposition parties, unfair electoral procedures, or elimination from the rolls of large portions of the popula- tion. Stales at (5) have poor, if any. electoral procedures, but significant opposition may be allowed to organize — for ex- ample, through legal opposition parties. Alternatively, such states may strive for a broad consensus among segments of the population, or accept a high degree of decentralization. Regimes at (6) have merely a faqade voting procedure (out- comes generally 95 to 99.9 percent favorable to the government), or none at all, but they show some respon- siveness to common public pressures, have some claim to consensual support, or provide a voting procedure that allows limited choice among selected individuals. At (7) political competition is narrowly restricted to in-fighiing within party hierarchies, and all other attempts to influence policy or personnel are considered illegitimate. In general a low civil-rights score will reduce political rights — although not vice .ersa. An election without a right lo express opinion publicly is hardly I'ree. States are also reduced by one point on political rights by a less than high rating on freedom from foreign control. Foreign control is defined for this purpose rather narrowly, emphasizing the extent to which the government and people of a slate are free to publicly criticize a hypoihetically dominating stale, or how mucti the government is allowed to diverge from the dominating stale's position in international consultations and organizations. In civil rights we consider four critical rights: freedom from political censorship, open public discussion, the maintenance of a rule of law (especially as signified by the ability of the courts to decide against the government), and freedom from government terror (for example, freedom from imprisonment or lonure for political reasons) Here also, foreign control ma\ impede rights, especially the first two. In addition to these four, we consider two types of sup- porting or subsidiary freedoms. First are those from totalitarianism: economic independence of ihe media from 50 Ranking of Nations by Political Rights Mosl Free Least Free 1 2 3 4 5 6 7 Australia Botswana Cyprus Andorra China (Nal.) Algeria Afghanistan Austria Colombia El Salvador Bhutan Comoro Is. Angola Albania Bahamas Fiji Guyana Brazil Congo Rep. Arccnlina Benin Barbados Finland India Dominican Rep. Egypt Bahrain Brunei Belgium Gambia Malaysia Guatemala Indonesia Bangladesh Bulgaria Canada Greece Mauritius Lebanon Kenya Bolivia Burundi Costa Rica Grenada Liechlenstein Korea (S) Burma Cambodia Denmark Israel Maldives Lesotho Cape Verde Is. Cameroon France Italy Mexico Morocco Ecuador Central Afr Rep. Germany (W) Japan Monaco Nicaragua Equatorial Guinea Chad Iceland Luxembourg Pakistan Paraguay Gabon Chile Ireland Nauru South Africa Philippines Guinea-Bissau China (Com.) Jamaica Papua-New Guinea W.Samoa Qatar' Ham Cuba Malta Portugal Sao Tome & Honduras Czechoslovakia Netherlands San Marino Principe Hungary Ethiopia New Zealand Sri Lanka Singapore Iran Germany (E) Norway Surinam Spain Ivory Coast Ghana Seychelles Trinidad &. Tobago Tonga Jordan Guinea Sweden Turkey United Arab Kuwait Iraq Switzerland Emirates Liberia Korea (N) United Kingdom Upper Volta Malagasy Rep. Laos U.S.A Zambia Mauritania Libya Venezuela Nepal Nigeria Oman Peru Poland Rhodesia Saudi Arabia Senegal Sierra Leone Sudan Swaziland Malawi Mall Mongolia Mozambique Niger Panama Rumania Rwanda Somalia Togo Uganda USSR Syria Tanzania Vietnam Thailand Yemen (S) Transkei Zaire Tunisia Uruguay Yemen (N) Yugoslavia Most Free Ranking of Nations by Civil Rights Least Free 1 2 3 4 5 6 7 Australia Bahamas Botswana Andorra Argentina Afghanistan Albania Austria Fiji Colombia Bahrain Brazil Algeria Benin Barbados Finland Comoro Is. Bangladesh Angola Bulgaria Belgium Gambia Dominican Rep. Bhutan Cameroon Burma Cambodia Canada Greece El Salvador Bolivia Chile Burundi Central Afr. Rep. Costa Rica Liechtenstein Guatemala Cyprus China (Nat.) Cape Verde Is. China (Com ) Denmark Malta Guyana Ecuador Ghana Chad Equaiorial Guinea France Mauritius Honduras Egypt India Congo Rep. Germany (E) Germany (W) Monaco Israel Grenada Indonesia Cuba Guinea Iceland Nauru Jamaica Lebanon Ivory Coast Czechoslovakia Iraq Ireland Papua-New Guinea Spain Lesotho Kenya Ethiopia Korea (N) Italy Portugal Sri Lanka Liberia Gabon Laos Japan San Marino Tonga Malaysia Malagasy Rep. Guinea-Bissau Mall Luxembourg Seychelles Turkey Maldives Morocco Haiti Mongolia Netherlands Surinam Mexico Nepal Hungary Mozambique New Zealand Trinidad & Tobago Nigeria Nicaragua Iran Somalia Norway Venezuela Peru Pakistan Jordan Uganda Sweden W. Samoa Senegal Philippines Korea (S) Vietnam Switzerland Swaziland Qatar Libva Yemen (S) United Kingdom Rhodesia Maiaw. Zaire USA Rwanda Sao Tome & Principe Sierra Leone Singapore South Africa Transkei Tunisia United Arab Emirates Upper Volta Yemen (N) Zambia Mauritania Niger Oman Panama Paraguay Poland Rumania Saudi Arabia Sudan Syria Tanzania Thailand Uruguay Yugoslavia 61 government, and freedom of individuals lo move about, choose among educational systems and occupations, obtain private properly, operate in the market freely, or organize and join private organizations of choice. These latter freedoms include freedom of religion, as well as freedom to organize and join unions. Civil rights are also affected by the presence or absence of nongovernmental, environmental in- adequacies, such as illiteracy and debilitating poverty. In this second category of subsidiary freedoms we also place losses to freedom occasioned by private forces such as bosses, landlords, or labor leaders (and, at the extreme, private slave-holders). Questions of illiteracy and poverty bring us back, of course, to the positive rights which we argued above should be outside our concern. Yet they must be taken into account in so far as they affect a population's ability to ex- press opinion or vote effectively. (In passing it should be noted that evaluating the effects of such factors needs a great deal more study.) A country ranked (1) in civil rights must rank high on ail critical rights, and medium or higher on nearly all other rights. In this consideration the most important subsidiary rights are those to individual movement, choice of occupa- tion and organizational affiliations, and freedom from private terror (especially as related to political opinion). Level (I) countries must also not have very low levels of poverty or illiteracy (although this is much less important in very small countries). Rank (2) in civil rights generally im- plies a high ranking on three of the four critical rights, and not more than two lows in the subsidiary rights. Successively lower patterns are then attached to succeeding rankings, un- til rank (7) implies a very low score on all critical rights and low scores on most of the other check list items. In considering these rankings it is well to remember that the foregoing patterns are highly generalized. There are special situations in which one or a few considerations override the general picture, or in which lack of information forces reliance on only a portion of the full spectrum of evidence that should be considered. An example of both of these problems is Lebanon. This formerly free country is now split into areas with widely varying local and foreign leadership and security conditions, and must for the time be- mg be very roughly estimated for the purposes of the Survey. The Tables of Nations and Territories The heart of the Comparative Survey is found in the ac- companying Table of Nations and Table of Territories and Dependencies. Updated at least each year, these tables record the current status of freedom in each country or dependent area; the changes that have occurred since the last Survey: and, for some countries and dependencies, the out- look for or prognostication of likely directions, given the current situation and the government's apparent plans for the future. Examination of the Tables will reveal that, in ad- dition to the rating scales for civil and political rights dis- cussed above, the nations and dependencies of the world are divided into Free (Fl. Partly Free iPFj. and Noi Freeli\Fl. For this division slates ranked (1) or (2) for both civil and political rights will be rated free, states ranked (3), (4), or (5) will be rated partly free, and states ranked (6) and (7) will be considered not free. Borderline cases are more difficult, and the final category is not predictable simply from the numbers. Thus, while a (7) and (5) state — such as Chile — is bound to be not free in our ratings, one marked (5) and (6) ma) or may not be In making this judgment »c must con- sider how a state compares to other partly free and not free states overall, and consider where it would fall in a finer analysis wuhin the still rather broad categories (6) and (.">) The Tables also record changes from previous ratings that are based on reanalysis rather than on changes in the coun- tries during the year. For example, new information may cause a change in our understanding of a long-standing situation in a country. In addition, we sometimes decide that we have been regarding an issue from the wrong point of view. This year a number of changes of this kind occurred because of the introduction of a new and more adequate check list for comparative examination. Without being exhaustive, some of the changes due to this >ear's reanalysis will be mentioned here, while others will be considered later in the course of discussing changes that oc- curred within the countries in 1976. Of greatest interest to many will be the reevaluation of civil rights upward from (2) to (1) for Ireland, Italy, and France. It was felt that in reviewing the full spectrum of civil rights we no longer had adequate justification for this distinction, particularly since our interest in free expression is in politically relevant ex- pression, and not in social controls such as those on abortion or pornography. In the case of France, this change was also made possible by an improvement in politically relevant liberties over the past several years. In the political realm, reevaluation led us to move Italy down from a (1) to a (2) because of the continued inability of the Italian system to change the party in power (as is done in most democracies), or to incorporate all major groups in decision-making (as is done in Switzerland). This is not to imply that the Christian Democrats should bring the communists into the govern- ment, for we realize that in the long run this might be the greater threat to democracy. Elsewhere in the world political liberties were raised from (2) to (1) for Venezuela, (3) to (2) for Papua-New Guinea, and (6) to (3) for Nationalist China, because comparatively we simply did not have the evidence to continue placing these states in the lower categories. In the case of several small Persian Gulf slates, political liberty was raised from (6) to (5) because of the consensual factors involved in the per- sistence of traditional forms, the extremely small size of the stales, the often very large relative size of the ruling family and tribe, the openness of rulers to their people, and. in the case of the United .Arab Emirates, the broad distribution of power in a federal system. In considering alternative forms of consensual politics, there should perhaps be reevaluation also of the Chinese situation of the last few years, in which currents of communist opinion seem to compete for in- fluence in a manner that, within narrow limits, appears more consensual than the rank of (7) suggests. However, because of current unrest and the difficulty of the question, recon- sideration here was postponed until the next Survey, when perhaps the situation will be clearer or more information available. Declines in freedom During 1976 the most dramatic loss to freedom was the destruction by another military coup of the promising Thai experiment in democracy. Again the problem was the un- willingness of opponents in incompletely institutionalized democratic systems to accept the fact that in a democracy no group gets everything it desires. Instead of intervening on the $2 The Comparative Survey of Freedom Table of Nations Pol ical Civil Status of Ri( Rights Ml Freedom <■■ Outlook 1' l.usemhourg F Arph.o,.un NF Mjljpjss Republic NF- Altunu Nh Mjla«i NF Alfcru b * NF Mjlassia PF Andorra PF Maldives PF u Angola NF Mali NF F Atpenlmj NF- -f Malta Au«iralij F Mauritania NF Axnttu F Mauritius F Bahamas F Memco PF Bahrain PF Monaco PF Bangladesh PF-f Mongolia NF Barbados F Morocco PF + Belfum F Mozambique NF Benin"! NF Nauru F Bhuun PF Nepal NF Bolivia 4 • PF • Netherlands F BoiMini F New Zealand F Bratil PF Nicaragua 5 • PF Brunei NF Niger NF Bulfan. 7 • NF Nigeria 4 • PF + Burma NF Norway F Burundi NF Oman 6 • NF Cambodia'" NF Pakistan 4 • PF Cameroon 3 • NF • .Panama NF Canada F Papua-New Guinea 2 • F • Cape Vcrdc Islands 5 • NF • Paraguay NF- Cenlral African Rep NF + Peru PF + Chad NF Philippines PF Chile NF Poland NF + Ch,na(Com ) NF Portugal 2 + 2 + F-H Chma(Nal ) PF • Qatar 5 • PF • Colombia F Rhodesia NF Comoro Islands 3 • PF NF •f Congo Republic PF Rwanda NF Cosia Rica F San Marino F Cuba 6 * NF ■^ Sao Tome and Princijje PF^ Cyprus PF Saudi Arabia NF Czechoslovakia NF Senegal PF ■1- Denmark F Seychelles l-l- F Dominican Republic 3 • PF Sierra Leone PF Ecuador PF Singapore PF Egvpi PF Somalia 7 • NF El Salvador PF South Africa PF -I- Equatorial Guinea NF Spain 3-^ PF -I- Ethiopia NF Sn Lanka 3 • F • Fiji F Sudan NF Finland F Surinam F France 1 • F Swaziland PF Gabon NF Sweden 1-1- F Gambia F Swiizerland F Germans(E) NF Syria 6 * NF Germany(W) F Tanzania NF Ghana NF Thailand NF- -f Greece F Togo NF Grenada PF Tonga PF Guatemala PF Transke. NF? Guinea NF Trinidad & Tobago F + Guinea-Bissau NF Tunisia NF Gusana PF Turkey F Haiti NF Uganda NF Honduras PF USSR NF Hungary NF United Arab Emirates 5 • PF • Iceland F United Kingdom F India PF United States F Indonesia PF Upper Volla 5-t- PF -t- Iran NF Uruguay 6- • NF- -1- Iraq NF Venezuela 1 • F Ireland 1 • F Vietnam NF Israel F ■ Western Samoa PF ItaK 1 • F Yemen(N) NF Ivorv Coast NF Yemenis ) NF Jamaica F Yugoslavia NF Japan F Zaire 6-I- NF Jofdan ( NF Zambia 5 PF Kens a PF Noin o IW TiU> Korea(N) NF 1 Ihc icilei UK ihe numl>cf» t ihe bifhct k.el of pol.i.c4l or Korea(S) PF^ Kuwait ( NF- decline in lilc falin| una Iht Us period 1*1 114 beencbanledunce Laos Lebanon t Lesotho NF- on b> ike >u rt« ...cb>PF..n■»■< b,NF Liberia e PF .cl.l.«.i.b.l.i,or...,n,>b)a Kio'Th/ouli b> > plus „,n, . i::::^:i° problem, ibe coon- Libya 1 NF l.,,.(.c,n,..(«..ylhe,<,..,n mcnijnd|>eopc.rerua.nflo hese problem ..ndlhelo»|err.n Liechtenstein < PF pol.lK.1 i.»ollc New Caledonia 3 Terr.ofthe Afars&lss as 3-H 3 V\alli5andFuluna 3 Netherlands Nelh.Aniillcs 2 2 F New Zealand Cook Islands 3 2 PF Niue 2 2 F Tokelau Islands 4 2 PF Portugal Azores 4 2 PF Macao 5 + 4 PF Madeira 2 PF Spain Canary Islands 6 4 + PF-I- -^ Places of Sovereignty in Africa 6 4 + PF+ + South Africa South West Africa' 6 5 NF + United Kingdom Belize 1 2 F Bermuda 1 F Bni Indian Ocean Terr. 4 2 PF Brit Virgin Islands 3 2 PF Cayman Islands 4 2 PF Channel Islands 3 1 F Falkland Islands 2 2 F Gibraltar 2 2 F Gilbert Islands 2 2 F Hong Kong 3 2 F IsleofMan 2 1 F Montserrat 2 2 F St. Vincent 2 2 F + St. Helena 2 2 F Solomons (Bril.) 2-t- 2 F Turks and Caicos 2 PF Tuvalu 2 2 F West Indies Assoc, States 2 3 F New Hebrides (Brit-French Condominium) 3-t- 3 PF -I- United Slates American Samoa 3 2 PF Canal Zone 5 3 PF Guam 3 PF Puerto Rico 2 1 F Micronesia 4 2 PF Northern Marianas 3 2 PF Virgin Islands 3 2 PF most of its opposition, as well as all ethnic groups. Finally, in Malta, electoral violence and restrictions on press freedoms have marked the last two years. 54 Advances in freedom In 1976 ihc most important advances in freedom occurred in Ihc European area. With well-contested legislative and presidential elections, Portugal achieved a fully democratic system, a gain made possible by the existence of a spirit of compromise across at least most of the political spectrum. Portugal's admission into the Council of Europe symbolized Its new status. Without the hazards of revolution, Portugal's example is being followed in Spain. Political rights have been increased in the last two years, with a shift of power toward reliance on a wider consensus, expressed in part through the Legislative Assembly. Civil rights have also advanced, through a relaxation of censorship, and much broader acceptance of political activity, acceptance that extends in some cases even to expressions of regional demands. Sup- ported by the larger European community, Spain should make further progress toward an open and representative system. To the east, democracy seems firmly replanted in Greece, while with a recent senate election Turkey has reaf- firmed, if somewhat violently, its commitment to democracy. Cyprus is still unable to resolve its division, but It is encouraging that both the Turkish and Greek portions of the island held successful democratic elections in 1976. Elsewhere in Europe, Italy and Germany both had crucial elections, while Sweden enhanced the prima facie fairness of its democratic system by voting for a change in its political leadership for the first time since the 1930s. Turning to the rest of the world, Egypt managed to take an important step in its recent movement toward democracy by a legislative election in which three quasi-parlies were allowed to compete. In Guyana the return of the opposition to parliament improved the functioning of the system; however, there appears to be some danger that the rap- prochement may go so far as to eliminate the concept of an opposition. In Bangladesh the military leadership in- augurated a period of moderation during which political par- ties were reestablished, and newspapers critical of the regime reappeared. However, in late November national elections scheduled for 1977 were postponed and opposition leaders arrested. In Zaire, the return of control of their schools to the churches symbolizes a greater degree of pluralism. Other changes and trends We are especially concerned that the projected elections in Sri Lanka, which are to be held before June 1977, should be successful. In view of several factors — the opposition's success in by-elections in the last few years, the ability under pressure of the newspapers to retain a critical role, and the formation of a new Tamil front— it appears that the democratic system here is healthier than we had thought. We hope that a fair election will confirm our judgment, and that talk of an illegal postponement is careless speculation. Although our reassessment did not make it possible for us to revise Senegal's numerical rating, the government's permis- sion for the formation of two opposition parlies during the past year (in a manner very similar to that in Egypt) served to advance freedom of political expression. We assume this trend will soon affect the electoral process. It should also be mentioned that the situation in Nigeria appears to be better than we judged last year; this year progress on the develop- ment of a new and democratic constitution is certainly promising. Independence was achieved during the last year by the Seychelles in freedom and by the Transkei. Unfortunately, the emergence of the latter was marred by the suppression of the main opposition parly, including the jailing of its leaders and the presumption of continued heavy influence from South Africa. However, Chief Maianzima is not a South African puppet and, with the exigencies of the emergence past, Transkei's freedom may soon advance. We do not accept the argument that Transkei should not be regarded as an independent state — indeed it appears to be more inde- pendent than many other satellites (e.g.. East Germany or Mongolia). We agree that the homelands policy of which Transkei is a product is not a just one in its present form, but this judgment cannot determine our assessment of the degree ol Transkei's independence. In the Upper Volta persistent strikes by the powerful unions led on the one hand to repres- sion, but, on the other, to consultations that enhanced the broadly consensual nature of General Lamizana's rule. Essentially free elections have now been proposed for next year. With the cooperation of opposition political parties, Morocco was at last report embarked on a series of elections that were to make possible parliamentary government by April 1977. Changes in territories and dependencies Turning to the ever-decreasing group of territories and dependencies, there have been several changes since the last Survey. These include the disappearance of Portuguese Timor into Indonesia and of the Spanish Sahara into Morocco, though resistance movements continue to exist in both. The island of Mayotte decided to stay with France when the Comoro Islands became independent and, if the Comoros don't interfere, will soon be a Department. Departmental status advanced freedom for St. Pierre and Miquelon. Among British possessions, Tuvalu left the Gilbert Islands to form a separate colony. Improvements in the status of freedom appear to have been achieved in the Territory of the Afars and Issas. ap- parently on its way to independence from France; in Por- tuguese Macao, as it achieved a larger degree of home rule; and presumptively in the remaining Spanish territories as a result of the liberalization at home. In the British-French condominium of the New Hebrides a new constitution and elective assembly raised the status of freedom. (This actually occurred in 1975.) In South West Africa a continuing process of constitutional deliberation has allowed a widened and freer participation of groups in political discussion. Even the internal branches of the Southwest African People's Organization (SWAPO), a revolutionary organization sup- ported by most outsiders interested in the country, have been included in this discussion, although not at the conference table. Our reanalysis did not make possible a change in the rating of this dependency, but there was progress here, and we expect more in the future. To Portuguese territories we have added the Azores and Madeira because of their distance, recent agitation, and analogy to the Spanish Canaries. They are perhaps better placed in the territorial category than some of the British territories, such as the Channel Islands. However, France's Corsica, an area of recent regional agitation, would perhaps as justifiably be placed in the territorial Table. In any event, we certainly do not mean by our inclusion or exclusion that the Azores or Madeira have special rights to self-determina- 55 lion in com parison with other areas at a distance. Comparing two political-economic models Until now the relationship of freedom to socialism and capitalism has been an issue we have avoided, on the plea that those subsidiary, antitotalitarian civil rights, in which capitalist slates will rank high, will be offset by the non- governmental pressures that erode civil rights, and in terms of which socialist states should rank higher. However, if we accept a reasonably strict definition of socialism, it is impor- tant to note the extent to which the world is becoming polarized between those aspiring to one or another of two models of political-economic life — a one-party socialist model and a multi-party nonsocialist model, with the latter far more likely to result in a high level of freedom. The accompanying Table of Political-Economic Systems presents the picture as we see it. Looking first at economic systems, for the purposes of this Table 50Cia/ww is defined as a system in which the government aspires lo directly control the preponderance of economic activity (or to compel and supervise cooperative arrangements). In a strict socialist state no one is in doubt as to the government's objectives, although lack of money or ability may impede full realiza- tion of the model. Private property-holders in such stales have few rights, for their ownership is judged ultimately "wrong." In capitalist societies the presumption is the reverse. The government owns and operates portions of the economy only when and as it has to. In mixed, often pater- nalistic, systems governments play one or both of two roles. First, without denying the rights of private ownership, the government may see itself as responsible for redistritjuting income or providing a high standard of services. Tax burdens in such "social democracies" become very high. Second, for one reason or another government leaders may believe that many key industries should be run directly by the govern- ment. Somewhat intermediate between the two roles is the initiation of extensive land reform (although not collectiviza- tion, which is more characteristic of the socialist model). In mixed systems, particularly those involving extensive government ownership, the countervailing power of the private sector is much weaker than in a pure capitalist socie- ty; although the private sector remains an important factor, for private capital continues to play an acknowledged role. Definitions of the forms of political mobilization by party structure and extent of centralization are less complex. In a decentralized country constituent slates or provinces are not normally governed by appointees from the center, while in a centralized system the main function of regional or provin- cial government is to administer policies worked out al the center. Since no one-party state has a decentralized system (except de facto, where it cannot govern), the Table for this category distinguishes instead between two types of one- party governments, communist and noncommunisl. While all modern one-party governments evidently go back to com- munist models, one-party organization is utilized today as a means of controlling societies from capitalist to socialist. There are. of course, manifold difficulties in placing many countries in such a simplified scheme. There is, for example, a continuum from capitalist through mixed to socialist economies. Since the line between multi-party capitalist and multi-party mixed is particularly hard to draw, it was decided to simply place a few of the highest-tax social democracies in the mixed category (along with those with ex- tensive government ownership) by way of illustration. The line between communist and noncommunisl socialist states was also difficult to draw. To qualify as a communist govern- ment, the leaders had to claim ihal theirs was a communist government and strive to copy in detail the party organiza- tions and control mechanisms of communist stales. The new slates spawned by the collapse of the Portuguese empire, in particular, seem to lie close to this line. However, it should be recognized that some socialist, one-party states clearly differentiate both their organization and ideology from com- munism (e.g., Iraq or Tanzania). Where a state is only tem- porarily in one category, and has serious public aspirations of moving into another, this has been indicated in the Table. We have also indicated the most fiagrant examples of a state failing to follow its ideological line by appropriate actions. The Table of Political-Economic Systems illustrates that, even with all the necessary qualifications, there are two definite clusters of states ideologically. In terms of our definitions there is only one socialist, multi-party state, while there are very few capitalist one-party stales. Apparently, several of these anomalous states may soon shift to one of the larger clusters. It should also be noted that most of the non-party states either have governments that consider ihtT present situation to be merely an interregnum, or represent the last stands of traditional pre-party systems that were once universal. The Table of Political-Economic Systems illustrates the fact that the freer states in the world are nonsocialist, multi- party states, while the less free are one-parly states. Since the existence of multiple parties is an important category of our check list for political freedoms, this result is to some extent an artifact of our classifications. However, where it could be shown that an effective opposition could exist without par- lies, this would not be a critical category of our judgment. Moreover, given our check list, countries without parties or with single parties can easily achieve at least a partly free status. But most do not. Reference to the Table will show that capitalism by itself does not assure freedom (at least as we have defined it), but socialism by itself seems to be positively detrimental. It is either that socialism as we have defined it concentrates too much power lo make possible the maintenance of freedoms, or that the association of socialism with communism in most of the world today is so close as to make independent, freer experiments very dif- ficult. Modern colonialism For this Survey we have again included the Table of Major Subordinate Peoples first presented in 1974 (Freedom at Issue. Jan. -Feb. 1975). .\s, we pointed out at that lime, the consideration of territories and dependencies was not a useful way to look at the problem of colonialism in the 1970s. For the issue is no longer primarily the final elimina- tion of the vestiges of nineteenth-century imperialism, but rather the extent to which some peoples have come to dominate others in their own homelands. This is the point the Third World is making, however inelegantly and one- sidedly, when it condemns Zionism. For this reason we have presented an approach to the question of colonialism that refiects the major forms of sub- ordination most analogous to colonialism. We found the closest analogies to be subordinating unions in which a dominant people with a separate territorial base has ex- 56 CO 11 U CO UJ o 75 S I £ o o a « o E » o S »^ 1 i 1 1 t i. III Z3 • 1 z^zzzzzzzizizz llleJjIllflill Afghanistan"' NF BhutanOl PF Chad(»i ,„ NF Ethiopia'' NF Kuwait NF Nepali '1 NF Oman(>) NF Saudi Arabia NF Uganda ,„ NF N Yemen'"' NF 1 1 China (Nat)'" PI Gabon NF Ivory Coast NF Kenya PF Malawi NF Senegal"" PF z zzz zzzclzziz mmSM zzzzz=.z zzzzzzzt llilllliinlilil vS zzzzz zzzzzzzzzzzzz jiiLiiiiiiwli 1 1 1 |iiH'^ii.t5-|| II i 1 II 1 tri 1 Austria F Japan F Bahamas F So Korea PF Barbados F Lesotho"" PF Bolivia PF Liberia PF Colombia F Luxembourg F Dominican Malaysia PF Republic PF Malta F Ecuador PF Mauritius F El Salvador PF Morocco PF Fiji F New Zealand F Finland F Nicaragua PF France F ParaKuaytO NF Gambia F Rhodesia NF Greece F Sierra Leone PF Guatemala PF Singapore PF Honduras PF South Africa PI Iceland ,^, F Spain PF Indonesia'" PF Surinam F Ireland F Trinidad & Italy F Tobago F Bangladesh"! PF Peru PF Costa Rica F Portugal F Denmark 1 Sri Lanka F Egypt") PF Sweden F Israel F Turkey F Jamaica'" F United Netherlands F Kingdom F Norway F Venezuela F tl tiif ll lili, ' ill 1 yii |S!1«1!0S 1 57 Table of Major Subordinate Peoples Population Cultural Israel Arabs 1 low-med low (dep Similarity Kenya Luo'^' . medium low Dependenl people) 10 dominani Political Mexico Mayans 1 high medium Sla.c People millions) people Equality Morocco Berbers (several groups) 5 high medium'' Afghjnislan Tadzhik Uzbek high medium medium medium Nigeria"! Pakistani" Algena Berbers Peru Ouechua 2-5 medium medium (several groups) high high- Philippines'*' Moros 2 medium low-med Bolivia Aymara medium medium Rumania Mi.g^ars 2.5 high medium? Quechua 1.5 medium medium South Africj Bantu Peoples 14 low Burma Karens 2—3 medium low (Zulu.Xhosa Shan 1.5 medium low Sotho.etc ) Canada Quebec French high high Spam'" Catalan 5 high high Chad Toubous (Arabs) low low (Basque) 1 medium low Ch,na(Cotn.)" Chuang medium medium Sri Lanka Tamil 2.5 medium low-med Hui 3.5 medium low Sudan"! Southern Peoples 4 low medium Korean Miao-Yao Mongol 1.5 medium medium medium medium medium low Switzerland Thailand"! French Malay 1.5 1 high medium high medium Puyi medium medium Turkey Kurds 2 medium low Tibetan low low USSR Armenians 2 medium medium Uighur low low Azerbaidzhani 4 low low Yi(Lolo) low low Bashkir 1 medium medium Czechoslovakia Slovaks 4.5 high high Byelorussian 7 high high Elh.opia Erilreans Galla medium medium medium Chuvash Estonian 1 medium medium medium low (several groups) Gojjam(prov.) Sidamo Tigreans high medium high medium medium high Georgian Kazakh Kn 3 4.5 1.5 15 2-5 medium low low medium medium medium low low low low France"! Alsaiians medium high Moldavian 2.5 medium low'' Breions high high Mordvin medium medium Guaiemala Mayans medium medium? Tartar 4 low-med. low-med. India Assamese high high (several groups) Bengali hiih hiih Tadzhik 1.5—2 low low Bihari high hiih Turkmen 15 low low Gujarali hiih hifh Ukrainians 35 + high high Kanarese medium hiih Uzbeks 8 + low low Kashmiri medium low United Scots 5 high high Marathi high high Kingdom (Scottish-Irish) 1 high hiih Malayalam medium high Welsh 2.5 high high Or.>a high high Yugoslavia Albanians 1 high medium Panjabi high high Bosnian Muslims 1 high medium Rajaslhani high high Croats 4.5 high medium Santali medium? medium Macedonians 1 s medium Tamil medium high Slovenes 1.5—2 medium Telegu medium high Indonesia'"'-'' Ball 1.5—2 med.-high low-med. medium Nololo VTaW. East Timor medium 1 TUm 4.C , num bcrofolhc, major pcop cs thai ma> emerie to clai I. nthls to selt- Kalimantan low-med. medium or theic are no» idcillinell tot Ihe purposes ol UK ubie . Lesser Sundas 3-4 low-med. low-med. 1 Til ihni . . Dan 1 1 complei Since iheeviderKx of eeenilnd (exc. Bali) h.«orVa>id''hc'e"pe' "nee o"°'heMsla(id llalCT lencc movements Molucca low-med. low Ihe major islanri Sulawesi'" low-med. low n„jh,r„l.hem«l.« oppressed by Java Sumatra'" West Irian low-high med.-high ! The Looisorl> ih mosi obvious e.ample of he man, mbes 4 Allhough a numbc of peoples ma> be denied he state, the, are Iran'" Azerbaijani high high ^o;ernP.J,sun'.ho«.e; UK h,.,ah» ma. (Turkic) Kurds high medium i The Ph.hppincs . e .er> complex bold elhnoj.aphicalK Iraq Kurds medium low wp^r.i.sis .,c Icg.or . betinnint oilh the Visayans 0r ciample. Richard Claude, rill) Pieu. 1976) D Cailil. -Am ■onye Human Righii (Baltir g American Ideals in Foreign Policy ." Frerdoif 59 Panama's human rights record Mr. Lagomarsino. Without going: into detail on that report be- cause that would take a long time, I might observe Panama has the worst record of human rights, according to Freedom House, of any of the countries in South America and is on an exact par with the U.S.S.R. just to give some perspective. I was on Congressman Yatron's mission to South America; my impression is exactly the same as his. We talked to five Presidents, to six Foreign Ministers, to many other government officials and, with the exception of the Foriegn Minister of one country, at the end of a 3-hour dissertation, none of them even mentioned the Panama Canal, and this was right after the agreement had been reached and an- nounced early in August. SEVERAL latin AMERICAN LEADERS SAID TO FEAR TOLL INCREASE Several, all of them, did say, when asked, that they supported the canal treaty; however, several of them also said privately they had great concern about it, they would just as soon it didn't happen; and several expressed, in a very concerned way, their fear about raises or increases in the tolls and several were very surprised to learn that the the tolls would be increased, because they — at least one of them said he had been assured they would not. TERMS OF NEUTRALITY TREATY QUESTIONED I would like to ask about the term "permanent neutrality." That is the term used, is it not? Mr. LiNOwiTz. Yes, sir. Mr. Lagomarsino. What does "permanent" mean? Mr. LiNOwiTz. Indefinite. Mr. Lagomarsino. Is it the same as "perpetuity," by which we apparently mean 97 years? Mr. LiNOwiTz. It means the same, I take it, as "in perpetuity." Mr. Lagomarsino. As I understand it, there is a provision in the treaty that results in the fact that if we should be at war our enemy can use the canal; is that correct? Mr. LiNOwiTz. As they do today, sir. Mr. Lagomarsino. That would remain; we would have no control over that; that would not be a violation of neutrality, is that correct? Mr. LiNowiTz. Neutrality today and under the new treaty would call for assuring that the canal remains open to vessels of all nations in time of peace and war. USE OF INTEREST PAYMENTS Mr. Lagomarsino. Relating to the interest payment that has been made to our Treasury and will now be made to the Panamanian Government, I must say I find that to be a rather interesting theory as to how we get money to the Panamanians — in other words, paying them, in effect, interest on our investment; is that correct? Mr. LiNowiTz. Paying them money that we have hitherto been paying ourselves on an investment. 60 Mr. Lagomarsino. So, in fact, it is paying them the interest that we have been paying? to ourselves? Mr. LiNOwiTz. Congressman, we called it interest. Interest on investment is a curious bookkeeping device. What we were saying is that we were getting back a certain amount each year; we were considering a fixed expense on that original investment on the basis of which the so-called interest was calculated. Mr. Lagomarsino. That would have continued had we not entered into this treaty, though, presumably? Mr. LiNOwiTz. I assume so. Mr. Lagomarsino. So, in effect, it is going to cost the taxpayers $20 million a year directly from the Treasury? Mr, LiNOwiTz. Not the taxpayers; the canal operating company. Let me be sure you understand that. The tolls come from shipping, not from the American taxpayers. Most of the shipping is not Ameri- can; therefore, most of the money that gets paid to Panama will not come from America. Mr. Lagomarsino. There will be a shortfall from what is the case now of $20 million to the Treasury? POSSIBLE range OF TOLL INCREASE Mr. LiNOwiTz. That is a different issue; yes, sir. Mr. Lagomarsino. I am unclear on the amount that the tolls will be raised. We were advised right after the agreement was reached — at least I thought I was advised— 'that the tolls would go up im- mediately by 30 cents a ton; that that would make up the $40 million part of this payment to Panama. Was I incorrect; or was whoever briefed us incorrect on that? Mr. LiNOwiTz. We never thought of increasing cents per ton; we talked about a percentage increase and we then did talk about a 30-cent-per-ton increase. We now are not sure that much of an increase will be necessary if there is a lot of oil coming out of Alaska. That is why we haven't arrived at an exact figure. Mr. Lagomarsino. A while ago I thought I heard you mention something about a 20- or 30-percent increase. Mr. LiNOwiTz. Exactly. Mr. Lagomarsino. I don't know how much the tolls are but it would seem to me a 25- or 30-percent increase would be more than 30 cents a ton. Mr. LiNOwiTz. Yes, sir. Mr. Lagomarsino. How much would that be? Mr. LiNOWiTz. It is about 45 cents, 46 cents. Mr. Lagomarsino. About 46 cents? Mr. Linowitz. Yes, sir. Mr. Lagomarsino. I know that, as I mentioned, some of those South American countries were quite concerned about the 30 cents, so you may have to go back and explain how come they weren't advised about it. economic assistance package Now with regard to the items on page 5, the $200 million in Export- Import Bank credits, $75 million in AID housing guarantees, and $20 million Overseas Private Investment Corporation loan guarantees, is it my understanding that those payments or that amount of money 1 61 will be made avai able to Panama without the requirement of any action by the House of Representatives? Mr. LiNOwiTz. No, sir, they will be subject to all the usual obliga- tions and limitations and restrictions that w^ould apply if there were no treaty negotiated. Mr. Lagomarsino. Perhaps I misunderstood. I thought you said we put the paragraph that starts out "None of these loans, guaran- tees" and so on, ahead or right behind that, that we moved that up. Mr. LiNOwiTz. "None will require." If you look over what we are talking about, the Export Bank credits are up to a certain amount which the Congress fixes. The guarantees don't call for further con- gressional action, either for the private investment guarantee or the AID housing. Mr. Lagomarsino. So what you are saying is that that will not require congressional action? Mr. LiNowiTz. These proposals may be implemented within existing statutory programs. Mr. Lagomarsino. The foreign military sales credit will require guarantees? Mr. LiNOwiTz. Yes, sir. SHOULD HUMAN RIGHTS CRITERIA BE APPLIED TO PANAMA Mr. Lagomarsino. The one thing that concerns me about tha^ is: If we are going to apply the same criteria that we applied to Argentina, Brazil, Chile, El Salvador, Paraguay, Uruguay, Guate- mala, how are we going to do so if indeed the analysis of the human rights violations that I mentioned a moment ago is accurate? Mr. LiNowiTz. Well, Mr. Congressman Mr. Lagomarsino. Or is the answer that this is a special case, and we must proceed because we must enter into this treaty? Mr. LiNOwiTz. There are other elements of special character. What we are talking about is putting Panama in a position to be able to join with us in doing what is necessary for the defense of the canal. There is that special character. On the human rights element, as you know, our view of it is quite different from the one you have asserted. Mr. Lagomarsino. Thank you. EXCHANGE OF NOTES ON ECONOMIC ASSISTANCE PACKAGE Mr. Oilman. I will try to be brief. I note that the documents to which you refer are part of the agreements and the related documents concerning various U.S. Government activities currently located in the zone ; you refer also to the loans and loan guarantees, and credits to be provided to Panama to assist its economic development. I don't believe that any of those exchanges of notes or that any of the loan guarantees or credit papers have been submitted to the committee. Could you tell us whether you can make those available to our committee so that we can make them a permanent part of this record? Mr. LiNOwiTz. Yes, sir, we will be glad to. Mr. Oilman. Mr. Chairman, with your permission, I request it be made part of the permanent record. Chairman Zablocki. Without objection, so ordered. [The documents referred to follow :] 62 Exchange of Notes, Loan" Guarantees, Credit Papers, and Related Documents Concerning Various U.S. Government Activities in the Canal Zone The Department of State of the United States of America has the honor to inform the Foreign Ministry of the Republic of Panama that, upon the entry into force of the Panama Canal Treaty, it is the intention of the United States of America to establish the Panama Bureau of the United States Foreign Broadcast Information Service (FBIS) as an integral part of the Embassy of the United States of America in the Republic of Panama. The Bureau would form part of the diploriatic mis.sion, in a manner similar to that of other agencies of the United States Government currently operating in the Republic of Panama, under the authority of the United States Ambassador. The Foreign Broadcast Information Service is an agency of the United States Government with worldwide responsibility for monitoring and translating into English available foreign public media, including (a) transmissions by major press agencies, (b) public radio and television broadcasts, and (c) selected articles from nevrspapers and other publications. These translated materials are. made available in the United States of Amei^ica and abroad to interested persons in both governmental and private sectors. FBIS executes this responsibility from fourteen bureaus located in foreign countries, most of which are established as integral parts of the United States diplomatic missions to those countries. 63 The -Panama Bureau of FBIS will have responsibility for providing this service for an area which includes most countries of Central America and northern South America, and a part of the African continent. The Bureau Staff currently consists of four United States citizen employees (a Bureau Chief, a Deputy Chief and tv;o editors) assigned for rotational tours of two to four years. There are no locally-hired American employees. United States citizen personnel of the Bureau shall have the same privileges and immunities, .and be subject to the same conditions, as other American personnel currently assigned to *the various agencies forming parts of the Embassy of the United States of T^jnerica in the Republic of Panama. The Bureau also currently employs three locally-hired third coimtry nationals resident in Panama, and twenty- nine Pancimanian citizens. FBIS anticipates no perceptible expansion of its American or local staff in the foreseeable future, ■ At the. present time, the Panama Bureau of FBIS is located on a single parcel of land, comprising some 32 acres and including the Bureau office and the Chiva Chiva radio antenna field, located on the Fort Clayton Military Reservation. LA' Department of State, Washington, September 7, 1977. i-991 O - 78 - 6 64 ^ DEPARTMENT OF STATE WASHINGTON September 7, 1977 Excellency: I have the honor to refer to the Panama Canal Treaty signed this date by representatives of the United States of America and the Republic of Panama. In that connection, my Government proposes that negotiations relating to continued air traffic control services commence as soon as possible and that a definitive arrangement on this subject be concluded prior to the exchange of instruments of ratification of the Panama Canal Treaty. If the foregoing proposal is acceptable to the Government of Panama, I shall be grateful to have an cif firm.ative response from Your Excellency. Accept, • Excellency, the renev/ed assurances of my highest consideration. For the Secretary of State: Ellsworth Bunker Ambassador at Large His Excellency Romulo Escobar -Bethancourt, Ciiief Negotiator. m EMBAJADA DE PANAMA WASHINGTON, ID. C. 2000( 7 de septioinbre de 19 77 Excelencia: Tengo el honor de referirir.ci a su r.ota ccn fecha de hoy, relativa a los servicios cG:.t.i nuados de control de trafico aereo, y do conf irinar que rai Gobierno conviene en iniciar nec.o^-ir.c: o.iss a la mayor brevedad posible, y en concluir wn arraglo definitive en torno a eiijta cuestion con antorioridad al intercambio de los instrumenLcs clo ratificacion del Tratadc del Canal de Panarr'a. Ruegole acepte, Excelencia,- lar. £eguri.-.?c-.dos reiteradas de ir.i mas alta connlcl- rac .^ ::. . K<^ulo JT^obar b:vLhan court ' Jefe de las Nogo^iaciones Su Excelencia Ell5v;crth Bunker, Embajador sin Csrtera de loi: Estados Urii''llos do Anc::;'; m DEPARTMENT OF STATE WASHINGTON September 7, 197 7 Dear Dr. Escobar: This is to confirm our understanding, reached in connection v;ith the negotiation of the Panama Canal Treaty, that upon entry into force of that Treaty, Article XVII of the United States-Panama Air Transport Services Agreement, signed at Panama Ilarch 31, 194y, will have no further application. Sincerely, Ellsv7orth Bunker Ambassador at Large U His Excellency Dr. Romulo Escobar Bethancourt, Chief Negotiator. 67 ARTICULO II f Los Gobiernos se comprometen a tratar de promulgar, de' conformidad con sus procesos legislativos nacionales respec- tivos, la legislacion que fuere necesaria por parte de cada uno de alios para garantizar la preservacion y proteccion de dicho Monumento Natural en la forma en que se contempla en la Convcncion, y a no tomar ninguna accion que pueda menoscabar en forma alguna su condicion de monumento protegido, salvo como se dispone a continuacion. ARTICULO III Los Gobiernos acuerdan colaborar en el uso de este Monumento Natural para los propositos de investigacion y estudio cientifi- cos y ayudar a los cientificos y las instituciones cientificas de cada uno a realizar dichas actividades en ol Monumento Natural, Los Gobiernos acordaran periodicamente los arreglos que puedan sc;r mutua:-iente convenientes y deseables para faci liter tal colaboracion. ARTICULO IV Los Gobiernos acuerdan que, de conformidad con los propo- sitos del Artlculo VI de la Convencion, ellos pondtan a la disposicion de todas las republicas americanas por igual, mediante publicaciones u otros medios, los conocim.ientos cien- tificos derivados de los esfuerzos cooperatives para esta- blecer y msntener el Monuraento Natural. 68 ARTICULO V I Los Gobiernos, conscientes de su interes, mutuo en el f uncionamiento efioaz del Canal de Panama, acuerdan que al ejercer sus responFabilidades en virtud del Tratado del Canal de Pana-n?. , tor.^.ran en consideracion este Acuerdo. Qaeda entendido cju:'. el uso del area comprendida en el Monu- mento N.. uural par :• el prcp5sito de mantener las instalaciones existentes rclaci cracas con el funcionamiento del Canal de Panarr;a , no Kcra cc ■.-^id'^ro.do en r^ienoscabo de la condici5n de monumento protecj:; .''r) cue tiene ol Monumento Natural. En caso de que cualc;^quicrc. dr^ los dos Gobiernos considere en cual- quier momento que cl fu};cionaniento eficaz del Canal de Panama precise cv'.^' Vquior otra accion que afecte cualquier parte del Monvne.rl.u ilaturcl, los Gobiernos acuerdan celebrar consultas expcditiv.-.rr-.entc-. y en convenir en las medidas nece- sarias para la pro'ivtccior: de la integridad general del Monuraento Natural y el fomenLo de los propositos de este Acuerdo. AP.Q^ICULO VI Los Gobio.rnc corvicren en transmitir conjuntamente copias de este Acuerdo al Conscjo Econoinico y Social de la Organizaci5n de Estados Air.crica'ics , y solicitar que la Organizacior :,otifique a las Partes Cont-'-' i-~-ntos de la Convencion sobre e^te err^^. 69 ARTICULO VII f Este Acuerdo entrara en vigor al mismo tiempo que el Tratado del Canal de Panama y permanecera en vigor dit z anos y, subsiguientemente, mientras ambas Partes conlf.ruen siendo Partes de la Convencion para la Protcccioii do la Flora, de la Fauna y de las Bellezas Esccn'cas d'^ Ion Palses de America. I 70 DOI\E at VJashington, this 7th day of September, 1977, in duplica-::c, in the English and Spanish languages, both texts being equally authentic. FI}'.?;.mDO en Tvashiiigton, a los 7 dias de septieinbre de IS C7, en lor ic.i.orr.as ingles y espanol, siendo £unbos textos igualir.ente a\jtc'itioo3. FOR TKJ' i:?;:lt:-:d states of AI-IERICA: poll LO*^ F.ST7-.D0S UKIDOS DE AMERICA: FOR THE REPUBLIC OF PAN7iM.^: POR LA REPUBLICA DE PANAMA: ^;, 71 DLf-ARTMz;:r or state WASHINGTON September 1, 19 77 Excellency: I have the honor to refer to the 7-.greo:v;ent pursuant to Article VI of the Convention o.\ Nature Protection and WildJife Preservation in the- Western Hemisphere, and to the Panama Canal Treaty and related agreements signed on September 1, 197 7 by rapresentatives of the United States of America and the Rep\bolic of Panama. Article III of the Agreement rol':"-t-.ng to the Convention on Nature Protection provides th.?t our Govern- ments may agree from timia to time on such r.ri angenients as may be mutually convenient and desirable- to I--:cilitate their collaboration in the use of the Barrn Colorado Nature Monument for the purposes of scicnt-'fic research and investigation. I consider it desirable within the spi-fit of tlie aforementioned Convention and for the purposes of the Agreement based thereon that our Govc-.'ner-t :•• agree that the Smithsonian Tropical Research Institut'^ (STRI) , a trust instrumentality of the United £tatc=:- of America, which I shall hereinafter call the Institute, be designated by both Governments as custodir.r; of the Barro Colorado Nature Monument. I propose tliat cur Governments His Excellency " Rom.ulo Escobar Be than court. Chief Neaotiator. 72 further agree that the Institute shall, during the period of it=^ custodianship, have sole responsibility to act on behalf of our Governments in authorizing use of the Nature Monument for the purposes of scientific research and investigation and for its protection as envisaged in the aforementioned Convention and our Agreement based thereon. In the event that one of the Parties shouD.d attempt to take any action related to the efficient operation of the Panama Canal as provided for in TLcticle V of our Agreement, I propose that the Institute, as custodian, be advised in advance and invited to comment on the potential impact of such action on the overall integrity of the Nature Monument. I consider it desirable and to that end I propose to Youc Exceljency that, during the period of its cuGtodi nnship, the Institute be authorized to employ scientific and support staff, to include game wardens, as necessary to enforce such laws and regulations as may apply to the protection of the Nature Monument. Persons violating the integrity of the Nature Monument contx-ary to the provisions of such laws or regulations shall be promptly delivered to the authorities of the Republic of Panama by game v;ardens employed by the Institute for appropriate action under the laws of the Republic of Panama. I further consider it desirable an-d I therefore propose to Your Excellency that our Governments agree to designate the Institute as custodian for the Barro Colorado Nature Monument for an initial period of five years, to be extended for additional 5-year periods upon request by the Institute at least one year in 73 advance of the date of expiration of the period, or until such time as our Governments may mutually agree on other understandings for the administration of the Nature Monument. If, siibseguent to the termination of the Panama Canal Treaty, the Republic of Panama should desire to terminate the custodianship of the Institute of the Nature Monument, I consider it desirable and I therefore propose that our Government; agree that the decision take effect one year after the day on v;hich the Republic of Panama shall inform the United States of this irrtent. If the foregoing understandings proposed for custodianship of the Barro Colorado Nature I^onument by STRI are acceptable to the Government of the Republic of Panama, I propose that this note and Your Excellency's affirmative response constitute an agrcem.ent betv/een our Governments concerning this matter. Accept, Excellency, the renewed assurances of my highest consideration. For the Secretary of State: Ellsv;orth Bunker Ambassador at Large 74 DEPARTMENT OF STATE WASHINGTON September 1, 1977 Excellency: As you are aware, the Smithsonian Tropical Research Institute, a trust instrumentality of the United States of America, hereinafter called "the Institute," has, for several years, carried out experimental and research activities of an exclusively scientific nature in various parts of the Republic of Panam.a, Those activities are described and authorized in Contract Mo. 1, January 5, 1977, signed by Dr. Abraham Saied, Minister of Health, and Dr. Ira Rubinoff, Director of the Institute. As set forth in the seventh clause of the contract, its duration is indefinite, but it may be terminated if one of the parties so desires, provided that it notify the other one year in advance of the date selected for termination,- Despite the foregoing, it is obvious that the Institute's legal situation and the development of its activities will be affected by the entry into force of the Panama Canal Treaty and related agree- ments, signed September 7, 1977 by representatives of the Republic of Panama and the Unite'd States of America. In anticipation of that eventuality, I His Excellency Romulo Escobar Bethancourt, ^Chief Negotiator. 75 thought it pertinent to propose to you, in coiapliance with precise instructions from my Coverniasnt, that the Republic of Panama and the United S'tates of America agree on the Institute's continuation of its scientific activities in the Republic of Panama, after entry into force of the Panana Ccfii-;- 1 Treaty and related agreements, in accordance v.'ith the provisions of the above-mentioned cont3-^.ct and in order to achieve the objectives therein set forth. The agreement v/hich I present to you for consideration would rem.ain in effect ior five years from the date of the entry into force of the Panama Canal Treaty and v^ould be extended auto::aLically for 5 year periods until either Governinoni:: gave r.otice of termination, at least one year befor^.' the date of automatic extension-. I consider it advisable to propose to Your Excellency that if one of the parties to the contract should v.'ish to terminate it on the basis of the seventh clause thereof v/hile the Pananio. Canal Treaty- is in force, our Governments agree thai:., unless there is a mutual understanding to repli.ce the con- tract, the contract and the agreement -proposed in this note shall remain in force. It could also be agreed, and I so .propose to Your Fxcellency, that, if either party --ishes to terminate the aforementioned contract after the expiration of the Panama Canal Treaty, our Govern- ments shall immediately initiate consulv.cLtions 76 concerning the future legal situation of the Institute and its facilities, properties, and personnel in the Republic of Panama, before the contract expires. With respect to facilities and land and water areas in various parts of the Isthmus of Panama listed and described in the anriex to this note,, the use of which has not been granted by the Republic of Panama to the United States oj: America by any other means, I propose that they be r-ade available to the Institute for its exclusive'*use. It is understood that this agreement v/ilJ not r:ffect the right of the parties to the contract tc enter into subsequent agreem.ents on the terns of thc^ Institute's utilization of other facilities and 2and cu.d water areas in the Republic of Panama which tlic Ic-^.tter may consider it desirable to make available to the Institute for the uses and purposes defined in the contract. I wish to propose thr.t our Governments agree that, as long as the Panama Canal Treaty remains in force, the United States of America m.ay permit the Institute to use any portion of the lands and waters, and of the facilities located therein, situated within the land and water areas the use of which is granted by the Treaty to the United States of i\merica, for purposes of the aforementioned contract, subject to terms and conditions consistent v.'ith the Panama Canal Treaty, as the United States of i\m.erica may define them. 77 I further wish to propose to Your Excellency that upon cessation, under the Panama Canal Treaty, of the right of the United States to use any land and water areas and facilities located therein which are being used by the Institute, our Governments iiranediately begin talks intended to reach agreements permitting the Institute to continue to use such areas or facilities. The possibility should be considered. Your Excellency, that the Republic of Panam.a may establish procedures whereby any natural or legal person could acquire, in accordance with the lavs of Panama, title to land and water areas or properties located therein v;hich were formerly a part of the territory consti- tuting the Panama -Canal Zone. I therefore propose to you that, such being the case, our Governments agree that the Republic of Panama, subject to the applicable laws, shall grant the Institute rights, other than real property title, v;ith respect to any land and \'7ater areas or properties in use by the Institute at the time when such procedures are established. These rights will be granted by the Republic of Panama by an agreement or other means not less favorable than the most favorable granted by the Republic of Panama to any other natural or juristic person. Finally, Your Fxcellency, i should* like to propose that in the event that the Republic of Panama does not establish such procedures for transfer of title to land and water areas or • properties located therein to natural or legal persons other than the Government of the Republic of Panama, 78 the two Governments agree that the Governiuent of the Republic of Panama shall place at the disposal of the Institute, free -of cost, the use of all areas and facilities referred to in this letter, and any others that may be used by the Institute for the purposes defined in the aforementioned contract. An exception will be made for cases in v.-h." ;h the tv70 Governments or the parties to the cif ore;, ra- tioned contract might reach a mutual agreeiaant on other terms. If the aforementioned proposals relating to the operation in the Republic of Panama of the Smithsonian Tropical Research Institute are acccptr^ble to your Government, I should like to propose Ihat this note and Your Excellency's affirmative reply constitute an agreement between our Governmentn concerning this matter. Accept, Excellency, the renewed assurances of my highest consideration. For the Secretary of State: Ellsv;orth Bunker Ambassador at Large 79 ANNEX The following facilities and lands and v,'aters shall be made available for the continued exclusive use of the Snithsonian Tropical Research Institute. 1. Sp.ithsonian Tropical Research Institute Headquarters, shops, administrative offices, cages and laboratories on Gorgas Road. 2. Tivoli Site. Comprises approximately 4.8 acres at the site of the former Tivoli Hotel and adjacent Tivoli Kitchen structure. 3. Naos Island. All facilities and areas being used by the Sm.ithsonian Tropical Research Institute on the date the Panama Canal Treaty enters into force. 4. Flarienco Island. All facilities and areas being used by the Smithsonian Tropical Research Institute on the date the Panama Canal Treaty enters into force. 5. Pipeline Road Reserve. Approximately 37 acres of land near Pipeline Road at coordinates PA 391116 (Sheet 4243 II, Gamboa) . 98-991 O - 78 - 7 80 EMBAJADA DE PANAMA WASHINGTON, D. c. 20ooa -7 dc fjopt i srr±>r 6 de 1977 Excelencia: Tengo el honor de referirine a la nota de Su Excelencia, con fecha de hoy, relativa a la designacion del Institute Smithsonian para Investigaciones Tropicales co:tio cuiitodio C'il Monumsnto Natural de Barro Colorado, quo CJaa lo siguiente: Excellency: I have the honor to refer to tho Agr-r. - ment pursuant to Article VI of ths Co-'-vcnt.^ ori on Nature Protection and VJildlife Prc-erv..-. i.ion in the Western Herdsph'ere, and to th'. Peine. .."i Canal Treaty and related agreements signc.? on September 7, 1977 by repre.sentatives of the United States of 7\mericd and the }es of scientific research and investigation. I consider it desirable v/ithin the spirit of the aforementioned Convention e.nd for the purposes of the Agrecm.cnt based l.her.,-^i. that ■ Su Excelencia Ellsv/orth Bunker, Embajador sin Cartcva da lo.:; Ey.iu':os Uiiidor, il .- Ar.rica. 81 our Govenments agree that the Smithsonian Tropical Research Institute (STRI) , a trust instrumentality of the United States of America, which I shall hereinafter call the Institute, be designated by both Governments as custodian of the Barro Colorado Nature Monument. I propose that our Governments further agree that the Institute shall, during the period of its custodianship, have sole responsibility to act on behalf of our Governments in authorizing use of the Nature Monument for the purposes of scientific research and investiga- tion and for its protection as envisaged in the aforementioned Convention and our Agreement based thereon. In the event that one of the Parties should attempt to take any action related to the efficient operation of the Panama Canal as provided for in Article V of our Agreement, I propose that the Institute, as custodian, be advised in advance and invited to comj^.ent on the potential impact of such action on the overall integrity of the Nature Monument. I consider it desirable and to that end I propose to Your Excellency that, during the period of its custodianship, the Institute be authorized to employ scientific an'd support staff, to include game wardens, as necessary to enforce such laws and regulations as nay apply to the protection of the Nature Monuiaent. 82 Persons violating the integrity of the nature Monuraent contrary to the provi.^ions of such laws or regulations shall be promptly delivered to the authorities of the Republic of Panama by game wardens employed by the Institute for appropriate action under the laws of the Republic of Panama. I further consider it desirable and I therefore propose to Your Excellency that our Governments agree to designate the Institute as custodian for the Barro Colorado Nature Monument for an initial period of five years, to be extended for additional 5-year periods upon request by the Institute at least one year in advance of the date of expiration of the period, or until such time as our Govern- ments may mutually agree on other understandings for the administration of the Nature Monument. If, subsequent to the termination of the Panama Canal Treaty, the Republic of Panama should desire to terminate the custodianship of the Institute of the Nature Monument, I consider it desirable and I therefore propose that our Governments agree that the decision take effect one year after the day on which the Republic of Panama shall inform the United States of this intent. If the foregoing understandings proposed for custodianship of the Barro Colorado Nature Monument by STRI are acceptable to the Government 83 of the Kepublic of Panama, I propose that this note and Your Excellency's affirinative response constitute an agreement between our Governments concerning this matter. Accept, Excellency, the renev/ed assurances of my highest consideration. Tengo el honor de confirmar que mi Gobierno accede al entendimiento dispuesto en la nota de Gu Excclencia, y en que su nota y esta nota de respuesta constituiran un acuerdo entre nuestros dos Gobiernos. Ruegole acepte, Excelencia, las seguridades rciteradas de mi mas alta consideracion. 84 ^ EMBAJADA DE PANAMA WASHINGTON, D.c.aoooe " ^ de septienbre de 1977 Excelencia: Tengo el honor de referirme a la nota de Su Excelencia con fecha de hoy, relativa a las actividades del Instituto Smithsonian para Investigaciones Tropicales en la Rcpublica de Panama, que dice lo siguiente: Excellency: As you are av;arc, tlie Smithsonian Tropical Research Institute, a trust instrumentality of the United States of 7>merica, hereinafter called "the Institute," has, for several years, carried out experimental and research activities of an exclusively scientific nature in various parts of the Republic of Panama. Those activities are described and authorized in Contract No. 1, January 5, 1977, signed by Dr. Abraham Saied, Minister of Health, and Dr. Ira Rubinoff, Director of the Institute. As set forth in the seventh clause of the contract, its duration is indefinite, but it nay be terminated if one of the parties so desires, provided that it notify the other one year in advance of the date selected for termination. Despite the foregoing, it is obvious that the Institute's legal situation and the develop- ment of its activities v.'ill be affected by the Su Excelencia Ellsworth Bunker, Embajador sin Cartern de los Estados Unidos de America. 85 entry into force of the Panama Canal Treaty and related agreeir.ents, signed Septenber 1, 1977 by representatives of the Republic of Panama and the United States of T^erica. In anticipation of that eventuality, I thought it pertinent to propose to you, in cornpliance v/ith precise instructions from my Government, that the Repxiblic of Panama and the United States of America agree on the Institute's continuation of its scientific activities in the Republic of Panama, after entry into force of the Panama Canal Treaty and related agreemsnts, in accordance with the i^rovisions of the above-mentioned contract and in order to achieve the objectives tliorein set forth. The agreement which I present to you for consideration would remain in effect for five years from the date of the entry into force of the Panama Canal Treaty and would bo extended autom.atically for 5 year periods until either Government gave notice of termination, at least one year l^efore the date of automatic extension. I consider it advisable to propose to Your Excellency that if one of the parties to the contract should \-iis\\ to terminate -it on the basis of the seventh clause thereof while the Panama Canal Treaty is in force, our Governments agree that, unless there is a mutual undcratar.dir to replace the contract, the contract and the agreement proposed in this note shall remain in force. 86 It could also be agreed, and I so propose to Your Excellency, that, if eirher party wishes to terminate the aforementioned contract after the expiration of the Panama Canal Treaty, our Governments shall immediately initiate consultations concerning the future legal situation of the Institute and its facilities, properties, and personnel in the Republic of Panama, before the contract expires. With respect to facilities and land and water areas in various parts of the Isthmus of Panama listed and described in the annex to this note, the use of which has not been granted by the Republic of Panama to the United States of America by any other means, I propose that they be made available to the Institute for its exclusive use. It is under- stood that this agreement will not affect the right of the parties to the contract to enter into subsequent agreements on the terms of the Institute's utilization of other facilities and land and water areas in the Republic of Panama which the latter may consider it desir- able to make available to. the Institute for the uses and purposes defined in the contract. I wish to propose that our GoVernmients agree that, as long as the Panama Canal Treaty remains in force, the United States of America may permit the Institute to use any portion of the lands and waters, and of the facilities 87 located therein, situated v/ithir. the j^and and water areas the use of which is crantod by the Treaty to the United States o?. i\p^.erica, for purposes of the aforementioned contract/ subject to terms and conditionr. consistent with the Panama Canal Treaty, as th-:; United States of America may define them. . I further v;ish to propose to Your Excellency that upon cessation, lander the Pana.v..^ Canal Treaty, of the right of the United States to use any land and water areas and facilities located therein which are being usee" by the Institute, our Governments imjicd lately becin talks intended to reach agreements permitting the Institute to continue to use sucl.. areas or facilities. The possibility should be considered. Your Excellency, that the Republic of Pai^araa m.ay establish procedures v.'hereby any natural or legal person could acquire, in accordance v/ith the lav;s of Panama, title to land ar.d vater areas or properties located therein vhich were formerly a part of the territory con^.tituting the Panama Canal Zone. I therefore propose to you that, such being the case, our Governi^ents agree that the Republic of Panama,' subject to the applicable lav/s , shall grant the Institute rights, other than real property title, V7ith respect to any land and v.'ater areas or properties in use by the Institute at the time w'lcn such procedures are established. These rights will be granted by the Republic of Panama by an agreement or other means not less favorable tlian the most favorable granted by the Repxiblic of Panama to any other natural or juristic person. Finally, Your Excellency, I should like -to propose that in the event that the Republic of Panama does not establish such procedures for transfer of title to land and water areas or properties located therein to natural or legal persons other than the 'Government of the Republic of Panama, the two Governments agree that the Government of the Republic: of Panama shall place at the disposal of the Institute, free of cost, the use of all areas and facilities referred to in this letter, and any others that nay be used by the Institute for the purposes defined in the aforementioned contract. An. exception will be made for cases in v;hich the tv;o Governments or the parties to the aforementioned contract might reach a mutual agreement on other terms. If the aforementioned proposals relating to the operation in the 'Republic of Panama of the Smithsonian Tropical Research Institute are acceptable to your Government, I should like to propose that this note and Your Kxcellency's affirmative reply constitute an agreement between our Governments concerning this matter. 89 ''Accept, Excellency, the renev;ed assurances of ry highest consideration. Tengo el honor de confirnar la aceptacion por parte de ni Gobierno de las propuestas contenidas en la presente y su acuerdo de que sa nota y esta respuesta constituiran un acuerdo entre nuestros dos Gobiernos. Ruegole acepte, Excelencia, las seguridades reiteradas de mi rnas alta consideracion. 7araulo r.scobar Bethancourt Jefe de las Negociaciones 90 ANTTEX The follov/ing facilities and lands and waters shall be made available for the continued exclusive use of the Smithsonian Tropical Research Institute. 1. Smithsonian Tropical Research Institute Headquarters, shops, administrative offices, cages and laboratories on Gorgas Road. 2. Tivoli Site. Comprises approximately 4.8 acres at the site of the former Tivoli Hotel and adjacent Tivoli Kitchen structure. 3. Naos Island. All facilities and areas being used by the Smithsonian Tropical Research Institute on the date the Panam.a Canal Treaty enters into force. 4. Flamenco Island. All facilities and areas being used by the Smithsonian Tropical Research Institute on the date the Panama Canal Treaty enters into force. 5. Pipeline Road Reserve. Approximately 37 acres of land near Pipeline Road at coordinates PA 391116 (Sheet 4243 II, Gamboa) . 91 Dr.P*.RTMENT OF STATE WASHINGTON SeptrM-iber 7, 19 77 Excellency: I have the honor to refer to the Gorgas Memorial Institute of Tropical and Preventive Medicine, Incorporated, and its subsidiary, the Gorgas Memorial Laboratory. The Institute and Laboratory v;erc estab- lished in memory of Dr. VJilliam C. Gorgas for research on diseases endemic to Central America and northern South America. The Institute receives from the Government of the United States an annual contx"ibution in Dr. Gorgas' mom.ory for the operation and maintenance of the Laboratory. The Gorgas Memorial Laboratory is established and operates in Panam.a under provisions of Law 15 of October 16, 19 30, Law 5 of February S, 19 5 J and Law 84 ,)of September 20, 197 3 of the Republic of Panama . The Institute has inforncd the United States of its desire to continue its operations in Panaiaa pursuant to the provisions of these laws. I refer further to the Panama Canal Treaty and related agreements signed this date by representatives of the Governments of the United States and Panamr. , end, in that connection, propose that oiir Governments agree that, subsequent to the entry into force of the Treaty, the Gorgas Memiorial Institute and Laboratory shall continue to enjoy the sole and excl'T^. iv~ '^'^'^.', v/ithout His Excellency Romulo Escobar Bethancourt, Chief Negotiator. 92 charge, of the following areas of lands and waters, and installations, being used by the Institute and Laboratory prior to the entry into force of the Treaty: Juan Mina Plantation, approximately 15 acres of land, and one multi-purpose building situated thereon, located on the east side of the Chagres River in the Balboa East District; and Building 2 65, a laboratory building adjacent to the Gorgas Hospital, Ancon, and adjacent land. It is understood that this arrangement shall continue for an initial period of five years, and will be renewed upon request at least one year in advance by the Gorgas Memorial Institute. I propose further that in the event the Republic of Panama establishes any means whereby any legal or natural person other than the Government of the Republic of Panama may acquire title under the lav.'s of the Republic of Panama to any areas of lands and waters, or other real property located thereon, v;hich prior to the entry into force of the Panama Canal Treaty formed part of the Canal Zone, our Governments agree that the Gorgas Memorial Institute shall be permitted by the Republic of Panama to acquire title to the above-mentioned areas the use of which it enjoys. Such title shall be accorded by the Republic of Panama pursuant to an arrangement not less favorable than that accorded by the Republic of Panama to any other such legal or natural person. 93 I propose further that our Governr.ents agree to the issUoTcc of a license to V.\c Gorgas f^emorial Institute in accordance, with the procedures set forth in Article IV of the Agreement in Iir.plcnenta- tion of Article III of the Panama Canal Treaty to permit the use, without charge, by the Gorgas Memorial Laboratory of Abogado and Aojeta Islands, located in Gatun Lake, for the purpor^es of the Laboratory. I further propose that our Governnenti; agree that the United States may permit the Gorgat; Mer.orial Institute and Laboratory to enjoy the privilege of making official purchaser, for the Laboratory's op3rations in the United Ststas; military coirjnissaries and exchanges established pursuant to the Agreement in Ip.plenentation of Article IV of the Panama Canal Treaty, and that the United States may provide to the Institute and Laboratory for offical purpose:^ such other supplies or services of the United States Forc-es or the Panama Canal Commission as may be convenient. It is understood that this agreement will not extend to personal purchases by individual mergers of the staff and employees of the Gorgas Memorial Labora- tory, regardless of their nationality. If the foregoing proposals relating to the status and operations of the Gorgas Memorial Insti- tute and Laboratory are acceptable to the Government of the Republic of Panama, I have the honor to propose that this note, and Your Excellency's affirmative response, shall constitute an agree- ment betv.'een our Governments concerr.ing this natter, which will enter into force on the date of entry into force of the Panapa Canc-,1 Treaty. Accept, Excellency, the renewed r..';surances of my highest consideration. For the Secretary c.f St.;'_a: Ellsworth Bunker Ambassador at Laii.- 94 •:;i •'/i JAOA ijl-- ,^A^^■. MA WA3HiNfirON, o. c. ;;oooa Excelencia: Tengo el honor de acusar recibo de la nota de Su Excelencia, con fecha de hoy, que dice lo siguiente: Excellency: I have the honor to refer to the Gorgas Memorial Institute of Tropical and Preventive Medicine, Incorporated, and its s\absidiary, the Gorgas Memorial Laboratory. The Institute and Lc±)oratory were established in memory of Dr. William C. Gorgas for research on diseases endemic to Central America and northern South America. The Institute receives from the Government of the United States an annual contribution in Dr. Gorgas • memory for the operation and maintenance of the Laboratory. The Gorgas Memorial Laboratory is established and operates in Panam.a under provisions of Law 15 of October 16, 1930, Law 5 of February 5, 19 53 and Law 84 of September 20, 1973 of the Repi±)lic of Panama. The Institute has informed the United States of its desire to continue its operations in Panama pursuant to the provisions of these lav/s . Su Excelencia Ellsworth Bunker, Embajador sin Cartera de los Estados Unidos de America, 95 r ..{^iVr ■\i<'l-]\i:C to ilio Paj;Aa:i.^ Canal Treaty -vid rolatod agroc-jnents signed this date by representatives of the Governments of the United States and Panama, and, in that connection, propose that our Govern- ments agree that, sxobsequent to the entry into force of the Treaty, the Gorgas Memorial Institute and Laboratory shall continue to enjoy the sole and exclusive use, without charge, of the following areas of lands and waters, and installations, being used by the Institute and Laboratory prior to the entry into force of the Treaty: Jucin Mina Plantation, approximately 15 acres of land, and one multi-purpose building situated thereon, located on the east side of the Chagres River in the Balboa East District; and Building 265, a laboratory building adjacent to the Gorgas Hospital, Ancon, and adjacent land. It is understood that this arrangement shall continue for an initial period of five years, and will be renewed upon request at least one year in advance by the. Gorgas Memorial Institute. I propose further that in the event the Republic of Panama establishes any means whereby any legal or natural person other than the Government of the Republic of Panama may acquire title under- the laws of the Rep\ablic of Panama 98-991 O - 78 - 8 96 v.. 5 .- iiy c\i:r',i3 of l-'^.'^s ami t vi'-'-r^, or aL-.\-'.^ir ronl ^yLo^^oJ-'Ly locif-;-d thereon, x^rhxch i;rior "to" theen'txy' 5 )Tt:b~force of the Parian.^ CanaL Treaty formed part of the Canal Zone, our Governnents agree that the Gargas ITenorial Institute shall be permitted by the Hepublic of Panama to acquire title to the above- mentioned areas the use of which it enjoys. Such title shall be accorded by the Republic of Panama pursuant to an arrangement not less favorable than that accorded by the Republic of Panama to any other such legai or natural person. I propose further that our Governments agree to the issuance of a license to the , Gorgas Memorial Institute in accordance with the procedures set forth in Article IV of the Agreement in Implementation of Article III of the Panama Canal Treaty to permit the use, without charge, by the Gorgas !*emorial Laboratory: of Abogado and Aojeta Islands,, located in Gatun Lake, for the purposes of the Laboratory. I further propose that our Goveommants agree that the United States may permit the Gorgas riemorial Institute and Laboratory to enjoy the privilege of making official purchases for the Laboratory's operations in the United States military commissaries and exchanges established pursuant to the 97 Agreement in Implementation of Article IV of the Panama Canal Treaty, and that the United States may provide to the Institute and Laboratory for offical purposes such other supplies or services of the nnited States Forces or the Panama Canal Comnission as may be convenient. It is understood that this agreement v;ill not extend to personal purchases by individual members of the staff and employees of the Gorgas llemorial Laboratory, regardless of their nationality. If the foregoing proposals relating to the status and operations of the Gorgas Memorial Institute and Laboratory are acceptable to the Government of the Republic ..--' -of Panama, I have the honor to propose that this note, and Your Excellency's affirmative response, shall constitute an agreement between our Governments concerning this •matter,' which will enter into force on the date of entry into force of the Panama Canal Treaty. Accept, Excellency, the renev/ed assurances of my highest consideration. Tengo el honor de confirmar que mi Gobierno accede a las propuestas que anteceden, y que la nota de Su Fxcelencia y esta nota constituiran un acuerdo entre nuestros dos Gobiernos, que entrara en vigor en la fecha de entrada en vigor de Tratado del Canal de Panama. Ruegole acepte, Excelencia, las seguridades reiteradas de mi mas alta consideracion lulo Tscfehar Rethancourt Jefe de las rJegociaciones 98 AGREEMENT PURSUANT TO ARTICLE VI OF TTJC CONVENTION ON NATUFE PROTECTION AI -ir collaboration to this end; Aware of the unique importance to the international scientific corraPiunity of the biological reserve locitod r-.t Earro Colorado Island in Gatun Lake in the Rr- public of Pr.naiu.-^r and Considering that the Panama Canal Treaty and related arjr^-j- ments signed this date between them make desirable a furLlier agreement betv;een them to ensure preservation of this b.iologa.al reserve; Have agreed upon the ' follov/ing: 99 ARTICLE I 1. I'r.e area >r.ov.r. 3r Eaxro Colorado Island ir. C-aiur. Lahe in the RopjLlic cf ?£ir.a.-a is declared to be a ::ature y.cr._~er.-:: as definoi in Article I cf the Convention, to be >ncv:n as the Barro Colorado KTture Konursent. Cpcn z'r.e terrinaricn of z'r.e Panama Canal Treaty cigned this date, this :;a-ure ."onuren:: shall also include the -"Ijacerit areas known as Crohid and ?cinr Salud Islands; Bchio, Buen? Vista^ ^ir.d Frijoles Points; and -he snaller islets adjacent to tl.-em. The cforerentioned adjacent areas shall be nade available durir.j the life of the Panan.a Canal Trl^-i ft- the purposes of this 7»grc-t;. rnt.- through the issuance cf l = r. :: use 1:. censes, as provided for ir; 7_rticlo IV of the Agreement in Irpler.entaticn cf Article III of thu Pan -ma Canal Treaty. The Republic of Panama sr^ll issue an c-.ppro^^r:\-tc land use license or make ether arrangements tc afford similar use cf the peninsula ilEmediately south of ::aiz Island, irhich, upon ter^iiacicn cf the PsnejTia Canal Treaty, shall also become a part cf the c f orem.enticned !;atur3 "cn-ument. 2. As used hereafter in this Agreement, the term "Nature Honxir-t" sh? 11 refer to the Nature Monument defined in paragraph 1 of thin Aruicle. ARTICLE II The CcverniK'nts pledge thei^elves to seek, in acccrdance -..ith thT:ir respetjtive national legislative process.es, such legis- lati tn by each cf them as m.ay be necessar-y uo ensure the preserva- tion tnd protection of the Nature Monument as envisioned in the 100 Convention and to take no action which would derogate in any way from its protected status, except as hereinafter provided. ARTICLE III The Governments agree to collaborate in use of the Nature Monument for the purposes of scientific research and investigation, and to assist each other's scientists and scientific institutions in carrying out such activities in the Na.ture Moniiment. The Governments shall agree from time to time on such arrangem.ents as may be mutually convenient and desirable to facilitate such collaboration. ARTICLE IV The Governments agree that, consistent with the purposes of Article VI of the Convention, they shall make available to all the American Republics equally through publication or otherv.'ise the scientific knowledge resulting from their cooperative efforts to establish and maintain the Nature Monument. ARTICLE V The Governments, mindful of their mutual interest in the efficient operation of the Panama Canal, agree that, in executing their responsibilitie:- under the Panama Canal Treaty, they shall take account of this -eement. It is understood that use of area: included in the Natu;- onument for the purpose of maintaining f^xisting facilities r .iting to the operation of the Panama Canal shall not be considered to derogate from the protected status of 101 the Nature Monument. In the event either Governinent at any time considers that the efficient operation of the Panama Canal necessitates any other action materially affecting any part of the Nature Monument, the Governments agree to consult promptly and to agree to measures necessary for the protection of the overall integrity of the Nature Monument and furtherance of the purpose of this Agreement. ARTICLE VI The Governments agree that they shall jointly transmit copies of this Agreement to the Inter-American Economic and Social Council of the Organization of American States, and shall request that the Organization notify the Contracting Parties to the Convention of this Agreement. ARTICLE VII This Agreement shall enter into force simultaneously with the entry into force of the Panama Canal Treaty, and shall remain in force for ten years and, thereafter, for as long as both Governments are parties to the Convention on Nature Protection and Wildlife Preservation in the.V7estern Hemisphere. 102 ACUERDO REFERENTE AL ARTICULO VI DE LA CCNVENCION SOBRE LA PROTECCION DE LA FLORA, DE LA FAUNA Y DE LAS BELLEZAS ESCENICAS DE LOS PAISES DE AI4ERICA Los Gobiernos de la Republica de Panama y de los Estados Unidos de America: Recordando que ambos son Partes de la Convencion del 12 de octubre de 1940 sobre la Protecci5n de la Flora, de la Fauna y dc las Bellezas Escenicas de los Paises ce /uriirica; Deseosos de fomentar y adelantar los propositos de dicha convencion; Tpmando en cuenta que el Articulo VI de la Convencion dis- pone que las partes pueden, cuando lo justifican las circuns- tancias, celebrar acuerdos entre si a los fines de aumentar la eficacia de su colaboracion para este fin; Conscientes de la singvilar importancia que tiene para la comunidad cientifica internacional la reserva biol5gica situada en la isla de Barro Colorado en el Lago de Gatun de la Republica de Panama; y Considerando qv;e el Tratado del Canal de Panama y los acuerdos relacionados -firmados entre ellas en esta fecha hacen deseable la celebracion de otro acuerdo entre ellas a los fines de garantizar la preservacion de esta reserva biologica; Han convenido en lo siguiente: 103 ARTICULO I 1. El area conocida como Isla de.Barro Colorado en el Lago de Gatun de la Republica de Panama se declara Monumento Nacional en los l.'rrriinos definidos en el Articulo I de la Convencion, y so llamcira el Monumento Natural de Barro Colo- rado. Al tcrmimr la vigencia del Tratado del Canal de Panama, firraado en esta fecha, este Monumento Natural incluira tambien las areas adyaccr.l:e3 co;iocidas como Islas Orquideas y Punta Salvid; Puntas Bo]. To, Euena Vista, y Frijolcs; y los islotes mas pequeno.o adyr.centerj a estas. Las antedichas areas adya- centes se haran disponibles durante la vigencia del Tratado del Canal de Pan::r:a para los fines de este Acuerdo mediante la cxpedicjon de Ji'^GiinioS para el uso de tierras, como se dispone en el Articulo IV del /.cuerdo para la Ejecucion del Articulo III del Tratado eel Canal do Panama. La Republica de Panama expedira licencias a prop::; das para el uso de las tierras, o hara otros arreglos para p::-nitir el uso similar de la peninsula situada inmediatamei;te al sur de Isla Maiz, la cual, al terminar la vigen- cia del Tratado cl?l Canal de Panama, tambien formara parte del antedicho Konumc::.'to Natural. ' ' • 2. En-ol scntido en que se usa a continuacion en este Acuerdo, el tern: no "Monujnento Natural" se refiere al Monumento Natural dcfinido en el parrafo 1 de este Acuerdo. 104 DEPARTMENT OF STATE WASHINGTON Excellency: I have the honor to refer to our recent discussions concerning programs designed to enliance cooperation batvjeen the United States of America and-, the Republic of Panama in the economic and military spheres. As a result of these dis^cassions, I am authorized to inform you that my govern- ment is prepared to agree, within the limitations of appli- cable United States legislation and subject to compliance with applicable legal requirem.ents and, v7hore necessary, to the availability of appropriate funds, that: The United States Government will consider applications from tlie Republic of Panama for housing investment guarantees v-'ith a view to approval of specific projects v/ith an aggregate value of not to exceed $7 5 million over a five year period. Approval of specific projects shall be subject to conformance v.'ith any applicable administrative and legislative criteria. The Overseas Private Investment Corporation v;ould guarantee borrowings of not to exceed $20 million in United States private capital by the National Finan'ce Corporation of Panama (COFINA) for use in financing productive projects in the private sector in Panama, subject to terms and condition.^ His Excellency Gabriel Lewis Galindo, Ambassador of Panama. 105 as shall be agreed upon by the Overseas Private Investment Corpo,..:.tion and COFINA, and approved by the Overseas Private .Inve.-t.TioHt Corporation's Board of Directors. The Export-Import Bank of the United States is prepared to of:^cr a latter of intent to provide loans, loan guarantees, and insarr-viCG, aggregating not to exceed $200 million over a five year period beginning October 1, 1977 and ending Sept:-i.ber 30, 1982, for the purpose of financing the U.S. export va.lvri of sales to Panama. Such financing shall, at the discrc'^ion of the Board of Directors of the Export-Import Bank, be j.-.i the form of loans, loan guarantees, or insurance for indi via\-',.,l products or projects approved by such Board. I'lia Ur:itou States Government will issue repoiTnent guarantees under its foreign military sales program in order to f ac:' liL; 1.3 the extension of loans to the Government of Panai,-:. by i..ligible lenders for the purpose of financing the purch.nDc by the Government of Panaraa of defense articles and dcfeii.:o services. The aggregate principal amount of loans gur.j-c.iitaed by the United States Government in accord- ance v.'ith Lhls paragraph shall not exceed $50 million over a ten year period. It is understood that the undertakings of the United States pre. id^d for herein will enter into force upon an exchange cf :\otc3 to that effect between our two governments. Accoi->t Excellency, the renewed assurance^ of miy highest cons j derat i en . \vulX 106 DEPARTMENT OF STATE AMBASSADOR AT LARGE WASHINGTON September '7, 1977 Dear Ambassador Escobar: As was discussed during our negotiations, I am pleased to furnish information on the application of the Wholesale Price Index referred to in paragraph 4 (A) of Article XIII of the new Panama Canal Treaty. The Wholesale Price Index tor Total Manufactured Goods of the United States is understood by the United States to refer to the seasonally adjusted figure for Total Manufactured Goods found in Table 3, "Wholesale Price Indexes for Selected Groupings Unadjusted and Seasonally Adjusted," of the monthly report of the Department of Labor "Wholesale Prices and Price Indexes." Enclosed is a copy of the latest monthly report published by the Department of Labor entit]ed "Wholesale Prices and Price Indexes" v;hich describes the method of calcu- lation of the indexes. The new rate shall be determined by multiplying the rate of 30 cents per Panaraa Canal ton by a fraction the numerator of which is the average index for the twelve months ending the biennial period and the denomi- nator of which is the average index of the twelve months preceding the first biennial period. Sincerely, Ellsv.'orth Bunker Enclosure: Wholesale Prices and Price Indexes His Excellency Romulo Escobar Bethancourt Chief Treaty Negotiator for Panama 107 DEPARTMENT OF STATE vVASlilNGTON September 1, 1977 ExccllenCj'- : I havo the honor to confirm that with respect to T^rticl:^ XII of the Agreement in Implementation of ^..rticjc III of the Paiiama Csinal Treaty, it is undc-rstcocl that immediately follov;ing the exchange of instrv.nr. nts of ratification, the United States Forces v.J.lI con'iuct a thorough study of the feasibility of eccc;,:-..od:^ting the persons authorized to use commissary and po;;. !. c-xch'-^ge facilities at installations v;ithin the dof>;-y.e 5itfr:!S and other areas which the Republic of Pcinaiv : pcr.n.it& the United States to use in accordance with tlic i^groc'iierit in Implementation of Article IV of the Po-r..- ;.'a C-'^nal Treaty. FolT' ->-.;ing Lhe entry into force of that Treaty, the United Stntes v;ill talce all practicable steps to accom- modate pv.ch persons at facilities within defense sites and sue;' other areas. If the United States Forces find that such persons cannot practicably be so accomxaodated, the United States Forces may, for the purpose of providing commissaj.-y a.nd posL exchange services, use the installa- tions, li :ts.'d in paragraphs 1(c) (iii) (A)- and 1(e) (iii) (B) of Annex /'. to the Agreement in Implementation of Article III of tJiC Panama Canal Treaty for a period of six months follo\ving the entry into force of the Treaty. His Exec lie n.cy Koir.ilo Et',ohar Bethanceurt, Chief "egotiator. 108 The -Republic of Panama agrees tuat upon the written request of the United States, through the Joint Committee, that six month period of use will be extended until such time as the United States Forces determine it to be practicable to accommodate such persons within the defense sites and such other areas. In no event, however, v.'ill the total period of such use exceed 30 calendar months follov/ing the entry into force of the Treaty, unless the two Parties otherwise mutually agree. If the foregoing proposal is acceptable to you, I have the honor to suggest that this note and your reply thereto indicating acceptance shall constitute an agree- ment between our tv/o Governments concerning this matter, which will enter into force on the date of the exchange of ratifications of the Panama Canal Treaty, and shall become effective on 'the date of the entry into force of the Panama Canal Treaty. Accept, Excellency, the renewed assurances of m.y highest consideration. For the Secretary of State iMu-'-rlJ^Sc^^, •^k_ Ellsv:orth Bunker Ambassador at Large 1 109 EMBAJADA DE PANAMA WASHINGTON, D. C. 20003 7 de septiembre de 19 77 Excelencia: Tengo el honor de avisar recibo de la nota de Su Excelencia, fechada hoy, que dice lo siguiente: Excellency: I have the honor to confirm that with respect to Article XII of the Agreement in Iirplementation of Article III of the Panama Canal Treaty, it is understood that immediately following the exchange of instruments of rati- cation, the United States Forces will conduct a thorough study of the feasibility of accom- modating the persons authorized to use commissary and post exchange facilities at installations within the defense sites and other areas which the Republic of Panama permits the United States to use in accordance with the Agreement in Implementation of Article IV of the Panama Canal Treaty. Following the entry into force of that Treaty, the United States will take all practi- cable steps to accommodate such persons at facilities v/ithin defense sites and such other areas. If the United States Forces find that such persons cannot practicably be so accorjnodated, Su Excelencia Ellsworth Bunker Embajador sin Cartera de los Estados Unidos de America 110 the United States forces may, for the purpose of providing commissary and post exchange services, use the installations listed in paragrc^phs 1(c) (iii) (A) and 1(e) (iii) (B) of Annex A to the Agreement in Implementation of Article III of the Panama Canal Treaty for a period of six months following the entry into force of the Treaty. The Republic of Panama agrees that upon the written request of the United States, through the Joint Committee, that six month period of use will be extended until such time as the United States Forces determine it to be practicable to accommodate such persons within the defense sites and such other 'areas. In no event, however, will the total period of such use exceed 30 calendar months following the entry into force of the Treaty, unless the two Parties otherwise mutually agree. If the foregoing proposal is acceptable to you, I have the honor to suggest that this note and your reply thereto indicating acceptance shall constitute an agreement between our two Governments concerning this matter, v;hich will enter into force on the date of the exchange of ratifications of the Panama Canal Treaty, and shall become effective on the date of the entry into force of the Panama Canal Treaty. Accept, Excellency, the renewed assurances of my highest consideration. Ill Tengo asimismo el honor de confirmar en nombre de mi Gobierno, los arreglos que anteceden y de convenir en que la nota de Su Excelencia y esta nota constituiran un acuerdo entre nuestros dos Gobiernos concerniente a este asiinto, que entrara en vigor en la fecha del canje de los instrumentos de ratificacion del Tratado del Canal de Panama, y que surtira efecto en la fecha de entrada en vigor del Tratado del Canal de Panama. Ruego a Vuestra, Excelencia acepte las seguridades reiteradas de mi mas distinguida consider acion. iomulo TMBAJAOA D!T PANAMA WAL.HINGrCK', D. c. 2oooa 7 de septiembre de 1977 E::cs;3.c>ncia: Tengo el honor de avisar recibo de la nota d'^ Su Ejjce'.oncia, fechada hoy, que dice lo siguiente: Excellency: I have the honor to confirm our tinderstandiiig, readied during the negotiation of the Panaraa Ccnal Treaty, that the postal services of tho United States Forces and of the Republic of Panama iball e;.:t.r±)lish appropriate arrangements through th3 Joint Cor.jTiittee whereby mail being handled by totl? pc-stal systems may be delivered by the Postal £er-.ico of the Republic of Panama through existing postal facilities in the Canal operating areas L-nd housing areas. Further, it is understood, with respect to Article X of the Agreement in Implementation of /article IV of the Panama Canal Treaty, that the Republic of Panam.a will furnish space in th3 12alboa Post Office (Building 724) and v;ithin the area in the Cristobal Administration Building Su l-::<-.-;clencia Ellsworth Bunker, Embajador sin Cartera do los Estados Unidos de America, 115 (Building 1105) made available to the Postal Service System of the Republic of Panama, which the United States Forces may use for bulk mail sorting and as postal distribution points, under procedures to be developed by the Joint Committee. If the foregoing is acceptable to you, I have the honor to suggest that this note and your reply thereto indicating acceptance shall constitute an agreement between our two Govern- inents concerning this matter, which will enter into force on the date of the entry into force of the Panama Canal Treaty. Accept, Excellency, the renewed assurances of my highest consideration. Tengo asimismo el honor de confirmar en nombre de mi Gobierno, los arreglos que anteceden y de convenir en que la nota de Su Excelencia y esta nota, constituiran vm acuerdo entre nuestroS dos Gobiernos concerniente a este asunto, que surtira efecto en la fecha de entrada en vigor del Tratado del Canal de Panama. Ruego a Vues'tra, Excelencia acepte las seguridades reiteradas de mi mas distinguida consideracion. Lb Ksfcobar Bethancourt Jefe de las Negociaciones 116 U.S. PAYMENTS AND RECEIPTS INVOLVING THE CANAL Mr. Oilman. Mr. Ambassador, can you tell us what is the total amount incurred by the United States since the initial agreement with Panama for canal construction? What is the total amount of dollars we have paid to Panama over the years, including the purchase price and annual payments? Mr. LiNowiTZ. To Panama? Mr. Oilman. Yes. Right from its inception. Can you give us an approximate amount? Mr. Linowitz. It is about $70 million total for all the amounts that have been paid starting with the initial $10 million downpayment and the $250,000 annuity under the 1908 treaty to the recent $2.3 million. Is that the figure you were looking for? Mr. Oilman. Also, the initial cost, which was approximately how much? Mr. Linowitz. $387 million it cost us originally in construction cost. Mr. Oilman. And there have been no other payments than these annual payments of $60 million? Mr. Linowitz. Of course, the initial construction cost was a figure we incurred, and we did pay down $10 million to Panama when we entered into this treaty. Mr. Oilman. I am sorry; I am having trouble hearing you. You say that we paid down $10 million to Panama when we entered into this treaty in addition to the $250,000 a year, is that correct? With your permission, Mr. Chairman, without objection, I request that information be submitted for the record showing the total amount of canal construction costs and total payments to Panama by our Nation since its inception. Chairman Zablocki. Without objection. [The information follows:] Original Cost of Building the Canal. — $387 million. Total Payments to Panama under the 1903, 1936, and 1955 Treaties.— $70.5 million. estimate of further canal traffic Mr. Oilman. Thank you. Could you tell us what are the projec- tions for commercial use of the canal for the next 23 years, the period of time in the treaty in which we will be operating the canal? What are those projections? Is canal usage expected to increase or decrease? Mr. Linowitz. A modest increase, I believe, sir, but again there are uncertainties because we don't know what will happen to the Alaskan oil situation. That could be a large spurt in traffic for the canal. Mr. Oilman. Assuming that the Alaskan pipeline is going to bring additional oil to the west coast and we want to move it to the east coast, won't that considerably increase the trade that goes through the canal, isn't that so? Mr. Linowitz. Yes, sir. 117 U.S. MILITARY PRESENCE IN CANAL ZONE Mr. Oilman. Under the statiis-of-forces agreement, how many U.S. troops and how many U.S. bases will remain in the area of the present zone and where will they be located? Mr. LiNOWiTZ. General Dolvin. General Dolvin. We have there now, Congressman Gilman, about 9,300 Armed Forces people located in what we would call about seven bases. We have no obligation to, although we probably will as a matter of fact, reduce troop levels over the life of the treaty. Mr. Gilman. We have the discretion? General Dolvin. The decision to do so rests with the United States. We have written into the treaty a provision by which we would at- tempt, we will make our best efforts not to increase our troops beyond that which we have there on the effective date of the treaty in normal times. So that is a kind of political problem. We can augment forever if anything happens there. However, the reduction of both the troops as far as troop levels go and military bases is up to the United States. Mr. Gilman. Then do you contemplate reducing the troops, the numbers of bases, over the period of tiine between now and the year 2000? JOINT U.S.-PANAMA DEFENSE ARRANGEMENT CONTEMPLATED General Dolvin. It is contemplated that we will have a joint de~ fense arrangement by which Panama and the United States wir defend the canal jointly, although the command arrangements wiU remain national. If that works out as we hope it will — and we feel sure it will — then it is possible we might be able to reduce our forces, but there is no commitment to do so. Mr. Gilman. No formula has been written into this agreement? General Dolvin. No. Panama's estimated income under treaty provisions Mr. Gilman. Thank you. Using last year's canal transit figures a^ an illustration, how much income would Panama have received and would they have received the additional $10 million under this proposal using last year's figures as a basis? Mr. LiNOwiTZ. No, sir. Mr. Gilman. What is your reahstic projection of the amount Panama will receive in the next few years based on the projections of commeicial usage? Mr. LiNowiTZ. A total of $50 million to $60 milUon a year. Mr. Gilman. That is just out of the revenues, and then, in addition to that, all of the other extra amounts that you have mentioned earlier? Mr. LiNowiTz. None of those are payments, you understand; every- thing else outside of the treaty is loan or guaranteed. There are no payments being made to Panama outside of the treaty. There are loans and guarantees covered in the economic package. 118 Mr. Oilman. That sewage and water amount is a loan, or is that a payment — the $10 million figure that you stated. Mr. LiNowiTZ. That is for costs incurred in connection with the provision of certain services to the canal commission. Mr. Oilman. Those intended are to be payments, aren't they? Mr. LiNowiTZ. Yes, sir, but that is payment for services to be rendered. In other words, the canal commission could do these things itself as we have been doing them at a far greater cost than the $10 million indicated or Panama could provide those services and then the canal commission would reimburse Panama. Mr. Oilman. Would we be saving money by doing it that way? Mr. LiNowiTZ. Based on the present figures, yes. notice not required to carry out defense activities under neutrality act Mr. Oilman. I have just one more question, Mr. Chairman. Mr. Ambassador, could you tell us what type of notice would be required in the event that the United States felt that the neu- trality of the canal was being threatened? Mr. LiNowiTZ. To whom, sir? None is called for. The provision of the canal treaty is general enough and permits us, we believe, to take such action as we may think necessary to assure continued neutrality of the canal. It does not require us to give notice to anybody. Mr. Oilman. We could move the troops in if we felt the canal is being threatened? Mr. LiNowiTZ. If, in our best judgment, the way to preserve the neutrality of the canal requires the use of troops, we would be free to do so. Mr. Oilman. No further questions. Thank you, Mr. Chairman. Thank you, Mr. Ambassador. CANAL HAS OPERATED AT A DEFICIT Chairman Zablocki. The Chair will recognize Mr. Burke for a further question. But first, may I ask a question on this matter of financing. It is my understancjing the last 2 or 3 years there was about a million dollars annual deficit on operation of the canal. Mr. LiNowiTZ. I am told the amount has varied in the last 3 years; but remember, that is after payment of interest, I believe. Chairman Zablocki. There was a deficit? Mr. LiNowiTZ. Yes. Chairman Zablocki. How was that financed? Mr. LiNowiTZ. We used the interest that otherwise woidd have been paid to the United States to make up the deficit. Chairman Zablocki. That is $20 million? Mr. LiNowiTZ. $16.6 million in fiscal year 1976. Chairman Zablocki. The United States received 13 or 14 percent or whatever? Mr. LiNowiTZ. Around $9 million. Yes sir. CURRENT U.S. PAYMENT TO PANAMA Chairman Zablocki. Further it is my understanding that currently the Department of State has permanent budget authority to make I 119 an annual payment to the Government of Panama of $2.3 million annually. Mr. Ltxowitz. Yes, sir. Chairman Zablocki. Will that authority be retained or will Con- fess be asked to repeal this authoritv or will this $2.3 million be in addition to whatever the treaty provides? Tn other words, my ques- tion is: After the treaty is agreed to, should not the $2.3 million permanent authority with the State Department be terminated? Mr. Hansell. Tt would be terminated, Mr. Chairman. If the lesris- lation is in the form that we think it will be, we would contemplate that the new commission would have authority to make the pa^nnents, the annual payment, directly from the tolls to Panama, and the State Department would not continue to have the authorization that you mentioned. Chairman Zablocki. And you anticipate the executive branch will request that it be terminated? Mr. Hansell. Yes, sir. Chairman Zablocki. Mr. Burke. ''book value" of canal Mr. Burke. Thank you, Mr. Chairman. Ambassador Linowitz, I hate to keep talking about the figures that we have; you keep using "$387 million"; but according to the estimate T got, the book value of the Panama Canal presently is $561}^ million. Would that be correct? Mr. Linowitz. Would you repeat that figure? Mr. Burke. I said: You talked about the construction costs of the Panama Canal at $387 million, but presently the book value is $56 IM million. Mr. LiNO\viTZ. Yes, sir. Mr. Burke. What does that include? Mr. Linowitz. I will ask Mr. Wyrough, who ought to know the answer to that, to talk about it for a moment. Mr. Wyrough. T cannot give him the exact basis for that but we can provide Mr. Burke. If you would furnish those figures and also would you furnish the amount of the value of all of the other improvements, including the homes there, the hotel, the golf course and the many other things that are included in our own canal area and zone? Mr. Linowitz. Yes, sir. Mr. Burke. Plus, I understand under the present agreement, the land is worth something also. So we could get some idea for the record what we are talking about and what will be going to the Panamanians just in case that some day if somebody says we cheated the Pana- manians; like Sweden had the gall to say as it did so today, we will at least have some basis to show what they got and what we didn't. Could you furnish us that information? Mr. Linowitz. Yes, sir. [The information follows:] Book value of the Panama Canal Enterprise: MilUont Panama Canal Company $501. 8 Canal Zone Government 59. 6 Total.. 561. 4 Fistimated value of unuscH Canal Zone land 112 120 Mr. Burke. Let me ask one other question, then. I want to thank you gentlemen by the way, for your patience; it has been a pleasure to talk to you. Colombia's position on the canal When we were in Colombia, the President of Colombia, the Foreign Minister, indicated that Colombia was not affected technically by any charges which would be made by the Panama Canal because they go in there free. Why do they get a free ride even though it was carved out of Colombia? Why don't they want it back? We asked them that b}' the way. I would like to get your answer. Mr. LiNowiTz. Well, as you probably know. President Lopez Michelsen, President of Colombia, was one of the closest advisers to General Torrijos throughout these negotiations and strongly sup- ported the Panamanian position. I think he recognizes realistically that Panama would not accede to having Colombia now assert a claim, and therefore the only thing he has been interested in as far as Colombia is concerned is assurance that that toll rate right will continue. I think it is noteworthy that the country which would have probably had the greatest claim on the canal by virtue of its former association with Panama has been at the forefront urging that we enter into this new treaty relationship, and the only condition that, I guess, has ever been imposed by Colombia at any point has been with respect to toll- free passage and in the implementation, in the neutrality treaty, you will also see that Panama has indicated a willingness to extend that same privilege to Costa Rica. These happen to be two of the countries which have worked most closel}' with Panama. Mr. Burke. I know Peru and Argentina, when we talked to the Presidents there, were very surprised to note the rates were going to be what they were; and, as was indicated, you may have some objec- tion, but I might Mr. LiNOwiTZ. Were these the two countries — Peru and Argentina? Mr. Burke. Yes. Mr. LiNOwiTZ. We do know they are aware of them now. Mr. Burke. Chile also was sui prised. Most of these governments indicated that because of the actions of the Organization of the American States they went along with them; some of them had some questions really about what the result might be and some concern. But I might say this rather facetiously: One of the gentlemen we are talking about, being the President of Colombia, said: The truth of the matter is, they didn't want it back. Chairman Zablocki. The Chair promised the witnesses we would keep them no longer than 3:30. I undei-stand they have a prior coni- mitment. However, we would be remiss if we would not permit Congressman Steve Solarz to give the amen to this meeting. Mr. Solarz. Mr Solarz. Thank you, Mr. Chairman. U.S. RIGHTS under NEUTRALITY TREATY As I understand your interpretation of the treaty, we retain the right to intervene miUtarily in order to protect the neutrality of the 121 canal and our access to it. Is that a fair interpretation of the treaty as you understand it? Mr. LiNOwiTZ. I was wincing visibly at your use of the word ''intervene." The proposition is: right to take such action we think might be necessary. Mr. SoLARZ. Would that apply to a situation in which Panama was not invaded by a foreign country but in which, as a result of a domestic insurrection or a change of regime, a future Government of Panama — or the present one if it decided to change its mind — decided to deny us access to or use of the canal at some point in the future, the treaty notwithstanding? Mr. LiNOwiTZ. When I was asked that previously, Mr. Solarz, I responded that there is no limitation in the neutrality treaty on our authority to take such action as we may think necessary to assure that the neutrality of the canal is preserved. Mr. Solarz. So, from our point of view, as you interpret the treaty, even if Panama were to, say, unilaterally abrogate the treaty for what- ever the reasons, from our point of view the rights conferred upon us by virtue of the treaty would remain in existence? Mr. LiNOwiTz. We not only have the right but we would, pursuant to the protocol, have a kind of obligation to the other countries of the world to assure that this neutrality is preserved. SIGNIFICANCE OF NEUTRALITY TREATY DEFENSE POSITIONS Mr. SoLARZ. Let me ask you one final question, then. If, in fact, as many people have said, the canal is inherently indefensible and if one person were to put a bomb in a suitcase he could put the thing out of commission for a couple of years, what is the significance of this clause which you have skillfully managed to get into the treaty giving us the right to act on the basis of our own best judgment for the defense of the canal if, in fact, the canal can't be defended? Mr. LiNOwiTz. Well, the greatest protection of a secure, accessible open canal is the cooperation of the Panamanian people. There is no 100-percent foolproof method that can be devised to guarantee under absolutely no circumstances could anybody tamper with the canal's operation. What we have tried to preserve is as much freedom as possible for us to do what we think has to be done to assure that continued neutrality. Mr. Solarz. Can you envison a situation in which the continued operation of the canal is in some sense a function of our determination to utilize the option contained in the treaty to act in defense of the canal? In other words, can you envision a situation where we would by virtue of our action keep the canal open where it wouldn't have been kept open had we not decided to act in pursuance of the clause in the treaty giving us the right? Mr. LiNOwiTz. Absolutely. Mr. Solarz. Such as? Mr. LiNOwiTz. Well, third party intervention is a clear case. Action as I have indicated which need not be pursuant to third party inter- vention which keeps us from having free access to the canal or any manner impairs its neutrality. I would say any incident that, in our judgment, impedes the free, open accessible canal gives us an oppor- 122 tunity to do what we think might have to be done to assure that it is kept open. Mr. SoLARZ. One final question. JUSTIFICATION FOR *'PAYING" PANAMA TO TAKE THE CANAL How do you respond to the aigument which I have seen emerging that after investing hundreds of millions of dollars, maybe billions in the canal, we are not only turning it over to the Panamanians lock, stock, and barrel, but on top of that we are also paying them for the privilege of taking it from us? Some claim that this seems to conflict with common sense whereby if you really built something and you have invested so much in it and then you are going to give it to some- one else, usually they pay you for what you have given them. Here we seem to be paying them and giving them. Mr. LiNOWiTZ. Well, a very brief answer to a very long question would be that the canal was built by us on another country's territory. We have received as I said before as an interest return a very con- siderable amount of money which we have designated as interest on the original investment. We have gained considerably more and I don't know how to esti- mate it in the bills in terms of what this has meant for our develop- ment, what that means for our economy over the years since the canal was first opened. Now, as we look forward to a decreased significance of the canal both for security and commerce reasons, as we recognize 1977 is not 1903, and as we are at the position now of trying to find a fair figure for the use of the Panamanian territory, which $2.3 million comes to $6 per acre we are now paying, we ought to be able out of the canal operations — mind you, this is not coming out of the United States, this is coming out of canal operation — agree on a mutually acceptable figure which more justly compensates them. That is what we think we have arrived at in the treaty and when we turn over the canal operation in the year 2000, we are turning over to them the responsibility for keeping that canal open on their own territory by assuring ourselves of preserving what is important and vital to us and under those circumstances we think we are acting not only to preserve our interests, to recognize our aspirations, but the way a great nation should act. Mr. SoLARZ. Thank you. Chairman Zablocki Thank you. Ambassador Bunker, Ambassador Linowitz, again on behalf of myself and the committee we want not only to express our deep appreciation for your efforts and congratulate you for the negotiations of the treaties but to extend our appreciation for the amount of time you have given us today in testimony before the committee this afternoon. We also want to thank General Dolvin and Mr. Hansell, your associates here today. If there is a necessity as I have assured my colleagues, we will call upon you again in the future. Again, thank you very much. The committee stands adjourned until further notice. Mr. LiNOWiTZ. Thank you, Mr. Chairman. [Whereupon, at 4:10 p.m., the committee adjourned.] PROPOSED PANAMA CANAL TREATIES WEDNESDAY, SEPTEMBER 14, 1977 House of Representatives, Committee on International Relations, Washington, D.C. The committee met at 10:10 a.m. in room 2172, Rayburn House Office Building, Hon. Clement J. Zablocki, chairman, presiding. Chairman Zablocki. The committee will please be in order. The Chair understands that the members are on their way and will be here very shortly. We meet this morning to continue the committee's hearings on the proposed treaties relating to the future status of the Panama Canal and necessary associated legislation. Last Thursday, the committee heard the principal U.S. negotiators, Ambassadors Ellsworth Bunker and Sol Linowitz. Today, we are honored to have the opportunity to hear the testimony of two distinguished former Secretaries of State, the Honorable Dean Rusk and the Honorable Henry A. Kissinger. Gentlemen, it is a difficult task to say which one of you is more distinguished. On my behalf and on behalf of the members of the Committee on International Relations I welcome you to the committee. If it is agreeable with you and the. members of the committee, we will first hear your prepared statements, then we can proceed with questions. While it is with some trepidation that I set the protocol for two of our most distinguished diplomats, may I suggest that Secretary Rusk, who served with the earlier administrations, speak first. Mr. Secretary, you may proceed. STATEMENT OF HON. DEAN RUSK, FORMER SECRETARY OF STATE Mr. Rusk. Thank you very much, Mr. Chairman. It is very good to see you again and other members of this very distinguished committee. Although I have not yet played the role of a grandstand quarterback since I left Washington, I felt obliged to accept your invitation to present my views on the two Panama Canal I'reaties which will be before the Congress for advice and consent in the Senate and for implementing legislation. The negotiations which eventually resulted in these treaties were begun during the Johnson administration although previous administrations, including that of John F. Kennedy, had been engaged by the Panamanians in discussions looking toward basic changes in the status of the canal and of the zone. In the mid-1960's it became apparent to us that history had over- taken the status quo in Panama and that a new relationship would have to be found if our vital interest in the operation and safety of the canal (123) 124 was to be assured. In these opening remarks I shall limit myself to certain simple but basic considerations which lead me to support the new treaties and to commend them to your favorable action, leaving to others an article by article examination of all their terms. My first point is that the 1903 treaty, as amended, provides a very fragile platform on which to try to stand as we move toward the 21st century. Here I do not rest upon the murky circumstances surrounding the secession of Panama from Colombia and the con- clusion of the treaty with Mr. Bunau-Varilla, a citizen of France with uncertain credentials as a representative of Panama. It is a fascinating story with a colorful cast of characters. But I see little point in our now wearing sackcloth and ashes over what our grandfathers did in another historial era, when what happened in most of the world was determined by decisions made or not made in a handful of Western capitals. We should not, however, be under the illusion that those events could stand the test of modern standards of treatymaking. In 1964-65 it became necessary for us to think very hard about the 1903 treaty. That treaty seemed to me to take its place alongside the so-called "unequal" treaties which certain Western Powers imposed upon China in the 19th century and the capitulations which gave certain powers extraterritorial rights in the Ottoman Empire. Even if we had acquired absolute title to the Canal Zone, which we did not, the general international policy and practice of decolonization would have rendered the status quo in Panama untenable. The Vienna Convention on the Law of Treaties has not yet received the advice and consent of our Senate, apparently because of differ- ences between some Senators and the executive branch as to the handling of executive agreements within our own constitutional s^'s- tem. I would suppose, however, that the contents of that convention apply to the United States and to other nations because it simply codified established rules of customary international law. It seems to me that the 1903 treaty with Panama would be vulner- able to the doctrine of "fundamental change of circumstances" — rebus sic stantibus — found in article 62 of the convention. In my view, the United Nations charter contains the overriding statement of international law and policy — despite our occasional irritations over the conduct of members in some organs of the U.N. organization itself and the many failures of members of the world community in giving effect to charter precepts. The charter insists upon the "sovereign equality of all its mem- bers" — article 2, paragraph 1 — and calls for respect for "the equal rights * * * of nations large and small" — preamble. I have already mentioned decolonization, well established both in principle and practice by the charter and by the history of this postwar era. Article 64 of the Convention on the Law of Treaties states, "if a new peremptory norm of general international law emerges, any existing treaty which is in conflict with that norm becomes void and terminates." Lawyers have debated at considerable length this doc- trine ot "jus cogens" and the identity of the norms which can be said to be peremptory in character. The}^ are probably few in number. I would suggest to you that, in the modern world, one nation cannot maintain a presence within another nation without consent of the 125 second nation. If the situation in Eastern Europe is different, the contrast merely emphasizes the p^eneral rule and provides no precedent for the United States. We have withdrawn from valuable bases and installations in Libya, Ethiopia, and Pakistan; we have seen the use of bases in Turkey sharply restricted by that government; we with- drew our forces from France on the demand of President de Gaulle. We know that such bases and personnel as we have in other countries require the consent of the governments concerned, as this committee knows, and that some of them have charged us very high prices for that consent. The 1908 treaty with Panama is not an adequate substi- tute for such consent. It is not an arrangement which could be negoti- ated in this latter part of the 20th century. I do not know whether President Theodore Roosevelt was accurately quoted in a remark about Panama: "We wanted it, we took it." But let us be under no illusion — an attempt to maintain our position in the Panama Canal Zone on the basis of the 1903 treaty would be an act of force — as in Eastern Europe. We can choose that course if we are prepared to pay the heavy political, economic, and military cost involved. In concluding my comment on the status of the 1903 treaty, let me add that I do not believe that we could afford to allow the validity of that treaty to be tested in the International Court of Justice. I am glad that that treaty has not been pursued in the General Assembly of the United Nations where I would suspect we would be almost alone in the voting. Some of our closest friends would leave us because of considerations of general policy. W^hen the United Nations Security Council — here I amend my written text to make it more precise — met in Panama in 1973 and had before it a resolution on Panama, hostile to the U.S. interests, it was necessary for our representative to exercise a veto, with no member of the council voting with us. There were 13 "yes" votes, the United Kingdom abstained, and the United States cast the only negative vote. An alternative is to try to safeguard our interests in the Panama Canal by agreement between ourselves and Panama in a modern setting. There are very strong feelings among the peoples of our two countries, feelings which make it very difficult for governments to find agreement with which all can be satisfied. These feelings will be further acerbated during the present debate in both countries about the new treaties; already what is said in one country is being used to inflame feelings further in the other country. Opponents of these treaties object to our making such agreements with a dictator. Having been involved with this problem before the present regime in Panama came to power, I would suggest that the more democratic the Government in Panama, the more insistent they would have to be on a prompt and fundamental change in the arrangements regarding the canal. I might add an aside here. I remember talking with some of the high Panamanian officials in 1965 about this and there was a reason- ably democratic government at that time. At that point they were very insistent on putting our presence in Panama on exactly the same footing as was our presence in Spain, short-term agreements based wholly upon the consent of the host government, far different than the kind of treaties we have in front of us today. 126 Our national interest lies in access to and the safety of the Panama Canal itself, not in a continuation of our special position in the zone. I believe that our interest in the canal — I hope our Panamanian friends won't be offended by this — includes a residual responsibility to the maritime nations of the world and to certain nations of our own hemisphere for whom the canal is a lifeline. I think history leaves us with that residual responsibility, as I call it. But surely we should attempt to satisfy these interests by agreement and should seek to engage the friendship and cooperation of the Pana- manian Government and people in the decades ahead. We can give ourselves a chance to repair past injuries and proceed in the future on the basis that we and the Panamanians need each other in these matters. We must take into account, however, the possibility that events will not work out as we now hope. Under the new treaties, we shall have 23 years to test the ability of Panama and ourselves to proceed on the basis of agreement. The responsibilities which we would have until the year 2000 clearly make it possible for us to insure the opera- tion and safety of the canal. Beginning with the year 2000 questions regarding passage and safety of the canal would be governed by the provisions of the Treaty Con- cerning the Permanent Neutrality and Operation of the Panama Canal. Under article IV of this treaty, "The IJnited States of America and the Republic of Panama agree to maintain the regime of neutrality established in this treaty." The separate and joint responsibility of the United States and Panama for that "regime of neutrality" as spelled out in the treaty gives us, in my judgment, all that we need to maintain our essential interests in the matter, namely, passage and the security of the canal itself. I do not believe that we should approach such matters in terms of the worst case imaginable but rather through a genuine desire and expectation to work things out on an amicable basis. In any event, Providence has not given us the ability to pierce the fog of the future with accuracy and the year 2000 is a long way off. Perhaps we should not, today, try to answer every problem which might be posed to some future President and Congress. I must confess, however, that article IV cf the Neutrality Treaty played a major role in my own decision to support these two treaties. If, God forbid, it should ever become necessary for a President and a Congress to take strong measures to keep the canal functioning and safe, they would be in a far stronger position to do so under the treaties of 1977 than under the anachronistic treaty of 1903. Thus, whether we are thinking of the principles upon which we hope to see a cooperative community of nations move into the future or are thinking about a hardheaded approach to adverse contingencies which may lurk in the future, it seems to me to be to our advantage to give effect to these two new treaties. The consequences of not doing so could be very severe. I see no point in inviting these consequences upon ourselves now when we have a good chance to avoid them al- together. Thank you, Mr. Chairman. 127 Chairman Zablocki. Thank 3-011, Mr. Secretary. Your well-thought- out statement outlines very succinctly some of the valid points as to wh}' the treat}' shoukl be carefully considered and are most welcome. STATEMENT OF HON. HENRY A. KISSINGER, FORMER SECRETARY OF STATE Mr. Kissinger. Mr. Chairman, I would like to express m}" pleasure at being able to meet with this committee and also to be able to testify together with my distinguished })re(lecessor, whose patriotism and dedication saw the country through great difficulties. He was a great support to his successors after he left office. I feel also personal!}' glad that he inaugurated the modern tradition of Secretaries of wState who speak with an accent. [Laughter.] I am pleased to be here today to testify on an issue about which I feel deeply. I am here before you today to express mv firm conviction that the new treaties with Panama regarding the canal significantly advance the national interests of the United States. I have carefully reviewed the treaties and discussed them in detail with Ambassadors Bunker and Linowitz; the Chairman of the Joint Chiefs of Staff, General Brown; the Air Force Chief of Staff, General Jones; President Carter and former President Ford. These treaties preserve for the remainder of this century the signifi- cant elements of the existing arrangements for management and defense of the canal, while at the same time establishing a cooperative relationship with Panama which will actually enhance the canal's securit}^ and efficient operation. After the year 2000, wdien management of the canal ])asses to Panama, the United States will continue to have the right to gunrantee the canal's neutrality and impartial access to it. The Neutrality Treaty defines neutrality in terms of specific standards for canal operation. It establishes that the United States as well as Panama has the respon- sibility to mahitaiii those standards. We have in the treaty the founda- tion for acting, if need be, to keep the canal neutral and open. And these treaties will gain international suj)port for the continuing U.S. role and responsibility during this centur\' and beyond. Since 1964, four successive Presidents, representing both political parties, have concluded that the achievement of a new treaty relation- ship with Panama was im})ortant for the long-term security and foreign polic}' interests of the United States. All four Presidents have engaged in negotiations based on the conviction that a modernized relationship embodying shared commitment and responsibilit}' would best assure our basic interest in continuing access to an efficiently run, non- discriminatory, and secure canal. All four Presidents have felt strongly that the present 1903 treaty does not adequateh' assure that interest. In February 1974, I signed on behalf of the United States, in the presence of a bi])artisan con- gressional delegation, a joint statement of principles that was an important step in the negotiation of the new treaties. The new treaties, freely negotiated and signed in 1977 with the support of the other nations of this hemisphere, will improve the political environment for the protection of our interests. VYliile the -991—77 10 128 United States would, in any event, continue to have the ph3'sical means to defend the canal unilaterally, we could exercise that ability under the present 1903 treaty only at the risk of considerable cost to our other Western Hemisphere interests. Were the new treaties rejected, it would be impossible for even our friends in the hemisphere to support us. No leader and no public opinion anywhere in this hemsiphere would be willing to go along with the United States in defense of the consequences of a refusal to modernize the canal relationship with Panama. Rejection of the treaties would poison our relationship with all the countries of Latin America on all other issues, and leave us, for the first time in our history, facing the unanimous hostility of all the nations to the south of us in our o^vn hemisphere. Even on the extreme assumption that Panama might not live up to the terms of the treaties, a new agreement freel}^ worked out and signed in 1977 in the presence of Western Hemisphere heads of gov- ernment places the United States in a far stronger moral and juridical position to defend its interests in such a case than does a treaty con- cluded in 1903 which was not even signed by a Panamanian and which is universally regarded as inequitable. The new treaty arrangement will provide us with international conditions vastly more favorable than currently exist to defend both the agreement and the canal itself should the need arise. The new arrangement, above all, accords with the reality that cooperative endeavor is the only possible basis for the satisfactory operation b}^ the United States of a canal located within Panamanian territory and even now run by a labor force which is predominantly Panamanian. We shall not again have the opportunit}^ to safeguard our real inter- ests in the canal on terms as favorable as those that have been negotiated. The new Panama Canal Treaties present us with the opportunity both to advance our basic interests in the canal and to solidify our long-term friendship and cooperation with the other nations of the Western Hemisphere. A creative Western Hemisphere policy must have many components, but the fate of these treaties will be its touchstone for the countries of Latin America in this period. Of course, even if the treaties are ratified there will be considerable anti-U.S. agitation in the Western Hemisphere. But it will not have the unif3^ing focus of explosive opposition to what will be considered American power politics throughout the Western Hemisphere. And if the treaties are accepted, our friends — the moderate nations that wish to work closely with us on other issues — will have the possibility- of elaborating their cooperation with us. I understand the reluctance and concern of the opponents of the treaties. But there is no viable alternative. It is not a question of "giving" the canal to Panama, it is a question of the United States ability to distinguish between symbol and reality, to plan for our future needs and to preserve and, in fact, enhance our basic interest in the accessibility, neutrality, and security of the canal. Firmness in the defense of essential national interests is vital to any nation. But unreasoning adherence to the status quo has never been the test of an effective foreign policy. A nation assures its inter- national position b}^ understanding clearly what its interests are and by taking timely and eflective action to safeguard those interests. 129 We have often acted on this principle. At the end of Workl War II, we embarked on a number of new initiatives — the Marshall plan, the North Atlantic Treaty, Point 4, to cite a fcAv — that constituted a dramatic change in course from those we had followed in the past. We did so because we realized that the new circumstances of the postwar era called for new responses — that we could not assure the security and prosperity of our Nation by adhering to the isolationist policies of the past. To cling to outmoded approaches was to allow ourselves to be overwhelmed by future events. And there are many more recent examples of constructive responses to changing world conditions. The SALT agreements, the opening of relations with China, our efforts to modernize the institutions of inter- national economic cooperation are cases in point. In each case, we did not hesitate to modify old policies when we felt that our national interests required change. I firmly believe that the new Panama Canal Treaties should be viewed in the same light. They are a step forward — an improvement — over what has existed heretofore. They present the Congress and the people of this country with an opportunity to modernize an outdated arrangement that has itself become a threat to the very interests it was designed to protect. I would like to stress a final point. These treaties represent the most important and serious international undertaking presented to the Congress by the administration of President Carter. A defeat of the Panama Canal Treaties would weaken the President's international authorit}^ at the beginning of his term. It would jeopardize our entire Western Hemisphere relationships. The undermining of Presidential authority at home would be a demonstration of fundamental weakness and a grave responsibility for the Congi-ess to assume. I feel this all the more strongly because in my opinion we have every reason to consider that the new treaties are to our advantage. They make the efficient and neutral operation of the Panama Canal a joint commitment with the broad support of the international com- munity. They are the essential foundation of a long-term relationship of cooperation with the nations of the Western Hemisphere. And they enhance our security and raise new prospects for a peaceful and constructive international order. These treaties, in conclusion, advance fundamental national pur- poses. The consequences of failure would be serious. Their passage undoubtedly would be an act of courage. But we are all accountable to history for our action, and for the consequences. I believe that passage of these treaties is the only possible act of wisdom and the course of true patriotism. It is the necessity of statesmanship. I therefore urge your support. PURPOSE OF COMMITTEE HEARINGS Chairman Zablocki. Thank you Secretary Kissinger. Your scholarh' and concise presentation of support for the proposed treaties, like that of Secretary Rusk, will add to the purpose for which these hearings are held. I have been asked the question why should this committee hold hearings on the proposed treaties when only the Senate ratifies 130 treaties. I think it is ver3^ necessary and very valuable that the Conorress as a whole, including the House of Representatives, which will be asked to act on legislation which will implement the treaties, should be fully informed, and more so, the people need to know about the treaties. Your statements have added much to a better under- standing of the vaUdity of the treaties, and also have signaled some of the dangers that might be forthcoming if the treaties are not ratified. I think this will help the understanding on the part of the public of what is really entailed in the treaties and I hope will engender broader support for the efforts of the past administration and this administra- tion in a new treaty with Panama. REMOVAL OF U.S. MILITARY BASES Secretary Rusk, j^ou have stated at one point that what really convinced you to fully support the treaties was the provisions in article IV, the protection and defense of the Panama Canal. Concern has been raised in prior testimony and in reports in the press that after the year 2000 the United States will have to remove its military bases and forces, in order to comply with the neutrality provisions of the treaties. How important will it be for the United States to maintain bases in the CanaJ Zone after the year 2000 and is the removal of our military bases a valid point of concern? Mr. Rusk. I would think that from a military point of view, if it should become necessary, unhappily, some time in the future, to use force with respect to the canal, there will be considerable con- venience in having forces already ashore rather than making an ab initio landing from the sea. But, on the other hand, that is not a matter of decisive eflPect because our capacity for doing what is necessary would be there in any event. I am a little hesitant to inject this next comment at this stage of the debate in both countries but we have 23 years in which to work out an effective relationship with Panama and with the Panamanian people. I think we have a chance to demonstrate there that just as we need the canal in certain aspects the Panamanians need us and if we conduct ourselves well I don't abandon the possibility that some of these bases might be retained beyond the year 2000 by additional agreements with Panama. That depends upon circumstances. As you know, there have been some OAS training schools down there and some other functions, but I would not think that the mili- tary difference between having forces ashore woidd be important enough to frustrate the broad purposes of these treaties. LATIN AMERICAN SUPPORT FOR THE TREATIES Chairman Zablocki. Thank you. Secretary Kissinger, you made a point that the treaties are in the interest of all Latin America. Is it your understanding that all other Latin American nations are in support of the treaties? Mr. Kissinger. It was my experience when I was in oflfice that all the Latin American leaders with whom I dealt at the yearly OAS meetings, the foreign ministers, at least of all of the represented nations 131 as well as all of the heads of government that I met, were unanimous that this treaty relationship should be modernized. This was true even of countries that might themselves not be overwhelmingly interested in the Panama Canal, but all of them felt that whatever their personal convictions, their public opinion would make it impossible to stand with the United States if a showdown developed over the 1903 treaties. This is what convinced me that the negotiations started by our predecessors should be continued and brought to a conclusion. I support what Secretary Rusk has said, that if these treaties fail of ratification, this would be considered in the Western Hemisphere universally as an insistence by the United States on resting its posi- tion on a demonstration of force and would provide a rallying point for anti-U.S. sentiment throughout the hemisphere, even in countries whose leaders are very well disposed to us. Chairman Zablocki. Thank you, Mr. Secretary. I might point out there is an innovation in the box in front. A ques- tioner is limited to 5 minutes under our rules and when he begins, the green light goes on. It does not necessarily mean, however, that when the red light comes on the witness has to stop in the middle of a sentence. It just means the member should not ask another question. Mr. Kissinger. After 5 minutes I am likely to be in the middle of my first sentence. [Laughter.l Chairman Zablocki. It has been a custom on matters that are of deep interest to a particular subcommittee that the chairman of the subcommittee is given the courtesy of asking questions first, so I will call upon the subcommittee chairman of the Inter-American Affairs Subcommittee, Mr. Yatron. Mr. Yatron. Thank you very much, Mr. Chairman, and I, too, would like to welcome both of you gentlemen here today, Secretary Rusk and Secretary Kissinger. Last week, when we had hearings. Ambassador Linowitz said the treaties have the full approval of all countries in Latin America. However, the Latin American leaders were not strong in their support during my subcommittee's recent study mission in Latin America. We visited six countries. We left on August 9 and returned on th& 23d. We talked to five Presidents as well as other leaders in those particular countries. Now my question, is there intensity of support in Latin America for the treaties? Would either of you gentlemen care to comment? Mr. Rusk. Since I was involved with this prior to my colleague here I might comment first. When this matter came up, during the mid-1960's, very few but some of our Latin American friends said to us privately, look, Panama has had 60 Presidents in 62 j^ears, this canal is a lifeline for us, you rnust not turn this canal over to so uncertain a political regime or situation. On the other hand, even then, pubHcly, they were compelled to support Panama because of the strong pubHc opinion impact of this issue. My view is that there would have been some nervousness in some of the Latin American countries had it not been for, say, article IV of the Neutrality Treaty and also for the supplementary document which most of them signed, which in effect expresses a hemispheric interest in passage and safety of the canal. 132 So I would think now there would be considerably more satis- faction with these arrangements on the part of governments than there would have been without the neutrality treaty. Mr. Yatron. Well, it was the feeling of the committee as well as my own Mr. Rusk. May I ask when your committee was down there? Mr. Yatron. August 9, and we returned on the 23d. We were there for approximately 14 da3^s. Mr. Rusk. That was before the text of the two treaties was available? Mr. Yatron. That was about the same time. Mr. Rusk. Article IV of the Neutrality Treaty would make a very substantial difference to a number of them. Mr. Kissinger. I don't know which countries you visited. My instinct would be that some of the countries might be lukewarm in their support because they think it gives us too much of a right of intervention rather than too little of a right of intervention. But this I coiddn't judge unless I know the countries. Mr. Yatron. We visited Colombia, Ecuador, Peru, Chile, Argen- tina, and Brazil. Mr. Kissinger. And again I can only base it on the experiences I had prior to the unfortunate event of January 20. [Laughter.] At that time, at every OAS meeting we confronted a unanimous request by all of the Latin American countries in favor of a modernized treaty relationship ; and whatever private misgivings individual leaders would have, if they are this reluctant to express themselves publicly, I think this is a fact of life that has to be taken into consideration. Mr. Yatron. OK, thank you. prospective soviet influence in PANAMA I would like to ask you what are the prospects for an increased Soviet influence in Panama, particularly in light of these July 19 agreements between the two countries? Mr. Kissinger. Well, the possibiUty of Soviet influence in Panama exists in an}^ event with or without the treaties. The question is whether the treaties make it more or less likely. I would think that given the past instability of Panamanian governments, it would be hazardous to predict what that govern- ment will do over a period of the remainder of the centur\\ Even more so what they will do over a longer period of time. Mr. Rusk. I might add a Yery brief comment there, sir. I don't know of any better or quicker wa}' to radicalize })olitics in Panama or in some other countries in the hemisphere than for us to reject these two treaties. Mr. Kissinger. That would have been also my judgment. The question is whether the Soviet Union can develoj) a degree of influence that can jeopardize the neutral passage of shipping and the free access to the canal. And I believe that the neutrality treaty, especially article IV of it, gives us the legal basis to prevent this, and that if we do not have the ])reponderance of power in the Western Hemisphere to protect the canal against Soviet miUtar\' interference, then the legal status will not be a determinant factor in this. J 133 Chairman Zablocki. The time of the gentleman has expired. Mr. Findley. LATIN AMERICAN SUPPORT FOR THE TREATIES Mr. Findley. You will learn before the morning is over, if you did not realize it already, that people on congressional study missions sometimes form different impressions from the same experience. I was on the mission with Mr. Yatron as were Mr. Lagomarsino and Mr. Fascell. We met with the heads of government in all of the six countries we visited with the exception of Brazil. I raised this question with each: Is there any aspect to the proposed treaty with Panama which troubles your government. The answer without exception was ''No." In each case, the head of government followed u]) with a comment that he felt it was important that the treat}^ be ratified, he hoped the ratification would occur soon, and he felt it would be a setback if ratification did not occur. Now, I wasn't priv}" to all of the discussions that other members had but my impression was that Latin America is solidly behind the treaty. • ■ article IV — neutrality of the canal In my discussions with constituents back home I find enormous opposition, very little support. Sometimes a constituent will ask what is in the treaty that guarantees the United States the right to intervene to keep the canal open? From your testimony I judge that article IV of the Neutrality Treaty is that portion. Is there anything else in the treaties which limits, which restricts, which conditions, the rights set forth in article IV? Mr. Rusk. I know of none, Mr. Findley. I agree with you that there is very strong feeling against these treaties out in the grassroots where you and I live. I think part of it is that the public does not know a,ll that is in these treaties. For example, when I meet with groups and talk to them about article IV, for most of them that is the first time they ever heard about it and that makes a very considerable difference. I do think the ad- ministration must get the terms of these treaties out to the grassroots because there is too little understanding of what in fact is present in these two treaties. I have read over these treaties very carefully, from the point of view of the question you raised, because you among others can help me remember when I was here in this town that I got very lively criticism from those who thought I was too hardnosed, and so I read over these treaties rather sensitively from the point of view of a future President and a future Congress who might have to take action. Mr. Findley. There is no time hmit on article IV? Mr. Rusk. That is correct. I beheve that the officials call that in- definitely, no time hmit into the future, but I do call to your atten- tion that the treaty is entitled, ''Treaty Concerning the Permanent Neutrahty and Operation of the Panama Canal." Mr. Findley. Is that not in itself an extraordinary conveyance of right by one nation state to another? Mr. Rusk. I think it is. I think this article IV will be the principal subject of opposition within Panama. 134 Mr. FiNDLEY, I don't know of any precedent myself in which a nation has guaranteed indefinite free passage through its territory to another nation. Do either of you gentlemen know of another circum- stance in which such a conveyance has occured? Mr. Rusk. One would have to look at the special arrangements with respect to, say, the Dardanelles, the Kiel Canal, one or two things like that, special regime. Offhand I don't have a ready example. Mr. Kissinger. Well, I think there are precedents for establishing the principle of free passage. I think the Suez Canal guarantees it under the Constantinople Convention of 1888. But I know no prece- dent where one nation gives to one other nation the unilateral right of assuring the neutrality. Even in those cases where there is a general agreement to have free passage I know no precedent, but I would have to do some more research. I know no precedent where one other nation has been specifically designated as having the right to guarantee that neutrality and, moreover, in which the conditions of the free access is rather specifically detailed. So we could invoke not only a general condition but also very specific provisions for the passage of shipping. Mr. FiNDLEY. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Fascell. Mr. Fascell. Thank you, Mr. Chairman. NEED FOR CHANGE TO MEET NEW CIRCUMSTANCES Gentlemen, I never cease to marvel at the dedication both of you have. Already having made great contributions to our country you continue in eveiy way to carry on your activities and present your experienced views. All of us should be extremely grateful to both of you. I believe as you do that the American people once given the facts will make the right decision. Americans are noted for not being blind adherents to the status quo. We are good at change, we initiate it, undei-stand it and accept it. And it is obvious that the change is called for and required in the relationship between the United States and Panama on the canal. We have always been for change based on a judgment for what we consider the best interests of the United States and the world. I think that has been our motivating force. And our actions have been subjected to the closest scrutiny perhaps that any government has ever had in the history of the world. Is it fair to say the U.S. view on the Panama Canal has been pre- dicted on our assessment that the military and economic benefits and necessities were overriding the obvious political disadvantages that were involved? In other words, we had to take a political loss because of the military and economic necessities. Now we find that the situation has changed, that military and economic considerations are such, that we no longer have to take this tremendous political loss and, therefore, we can, without endangering our economic and militaiy requirements, eliminate the poUtical disadvantages which have existed and gotten worse. Is that a fair statement? Mr. Rusk. I would agree with that. Congressman Fascell. I think we can retain the heart of our own interests, which is the passage and 135 safety of the canal. The rest of it is cosmetic frosting on the cake, the zone, for example, extraterritorial rights, things of that sort. Our real interest is passage and safety of the canal. I think these two new- treaties very adequately do so in modern tenns and free us from the very severe limitations of the 1903 treaty. Mr. Fascell. Secretary Kissinger, would you care to comment? Mr. Kissinger. First of all, I agree with your statement. I would say as a general proposition that we are better off if we have to defend the canal to do it under the terms of a 1977 treaty, which is perceived as having been freely negotiated and which was signed in the presence of most heads of government of the Western Hemisphere, than to defend our rights in the name of a 1903 treaty where the rights them- selves will be questioned by most of the countries in the Western Hemisphere. So I would think that these treaties improve the political environ- ment for assuring our basic interests and do not significantly affect our political capability to defend the canal. I think that is also the judgment of the military leaders of this country. NATIONALIZATION OF THE CANAL Mr. Fascell. That leads to the next question, my last question. It has been raised by some opponents to the new treaty that a govern- ment in Panama could nationalize the canal immediately under the 1977 treaty. Is there any difference between nationalization under the 1903 treaty and under the 1977 treaty, and aren't we better off if we have to face that fact under the 1977 treaties than we were under the 1903 treaty? Mr. Kissinger. I don't know, Mr. Fascell, what is meant by nationalizing the canal. Mr. Fascell. Abrogating the treaty, I guess. Mr. Kissinger. Because I was just going to say the manner in which the canal will be run, the hiring procedures, the composition of the Commission that is responsible for the operation of the canal — all of this is specified in great detail in the agreement and could be changed only by abrogating the agreement. And it would have to be changed at a time when we still have military forces in the Canal Zone under the terms of the agreement, and I do not see how any Panamanian Government could conceive that we would accept such a procedure, or how it would implement its so-called nationalization in the face of the continued American presence in the canal. In that case, they would have abrogated the treaties and we would be in a state where our relationships would depend on the relative position of force, but we would then be defending an arrangement that any fair-minded person would have to recognize as having been freely negotiated. I can't accept this proposition of nationalization. Mr. Rusk. There is to me a very amusing question on which I have had differing views from my colleagues in the international law field. Here we have a 1903 treaty which by its terms reaches into perpetuity. These two present treaties contain the instrument of abrogation of the 1903 treaty. Now, suppose the 1977 treaties, which are bound together organ- ically by their terms — suppose those treaties are destroyed by the kind of massive violations that you spoke of on the part of Panamaj 136 if yoii destroyed the instrument of abrogation, does that revive the 1903 treaty? I am not sure I know the answer. I think it is a rather amusing question but some day some Secretary of State may want to take a position on that point. Chairman Zablocki. Time has expired. Mrs. Meyner. Mrs. Meyner. Yes, thank you very much, Mr. Chairman. INTERPREIATION OF ARTICLE IV Secretary Rusk, you pointed out in your testimony that article IV of the treaty played a major role in your support of both treaties and in your testimony you state that article IV says the United States of America and the Republic of Panama agree to maintain their regime of neutrality established in the treaty, but there seems to be a difference of opinion between the American and Panamanian negotia- tors of these treaties concerning just how free the United States is to take unilateral action to protect the security and operations of the canal. What would you define as sufficient gi'ounds for unilateral American military action in defense of the canal after the year 2000? I know that that is a long way in the future but I think it is something that troubles people and we have to consider. Mr. Rusk. It would not surprise me if during the process of ratifica- tion in the two countries different emphasis ^^^ll be put upon dift"erent parts of the treaty and I can well imagine that some spokesmen in Panama will try to minimize the impact of article IV just as I for one would maximize it in this country. But I would think the negotiating record is veiy clear on this point because I understand that it was made very clear, indeed, to Panama that absent article IV it would be impos- sible to expect approval of these treaties in the United States. As you read article IV I should think that is all that a future President and Congress would need, certainly a stronger base than the 1903 treaty for whatever action might have to be taken. Mrs. Meyner. Thank you. Secretary Kissinger. Mr. Kissinger. I would think, first of all, it is not inappropriate for the Congress as it goes through the process of ratification to record its agreement with the interpretation given to the treaty by the admin- istration, namely, that article IV gives us the unilateral right to guar- antee the neutralit}^ of the canal, and to leave no doubt in anybod3^'s mind about the legal significance of article IV as it is conceived by the United States, expressed by the administration and endorsed in this case by the Congress. To define now the specific conditions under which the United States might choose to exercise its right, what it is that in the year 2001 might be considered as jeopardizing the neutrality of the canal, I think would be hazardous to speculate. One would have to reh' on the fact that the administration then in office would be sufficiently sensitive to the vital interests of the United States to know when its rights had to be exercised. But I repeat, as this treaty goes through ratification, I am certain that the administration will express the interpretation of article IV that Secretary Rusk and I have given it, 137 and I would consider it very appropriate for the Congress to record its agreement with that interpretation. Mrs. Meyner. Thank you. IMPORTANCE OF THE CANAL TO THE UNITED STATES Many people don't realize how little our Navy uses the Panama Canal. I was interested to discover that from 1971 to 1975, only 12 small U.S. warships passed through the canal, and in terms of dis- placement tonnage the U.S. Navy tied for 19th with Communist China in use of the canal, well behind the navies of Sweden, Turkey, Spain, and Japan, for example. Do you think, first, that it is possible that the closure of the canal would have a more serious effect on many other nations than it would on the United States, and, number two, how important do you think it is that we seriously consider building a new sea-level canal next to the Panama Canal? Mr. Rusk. On the first point, I don't have the tonnage figures in front of me. I am sure the committee will wish to have those figures. Mrs. Meyner. They are remarkably small. Mr. Rusk. Relative to our economies, I would think the canal would be somewhat less important to us than it would be to some of the countries on the west coast of South America, because the canal is their access to our east coast ports and to Europe. But I still think we have a substantial interest as far as commercial shipping is concerned, and it may grow some depending on what happens to the North Slope oil and how that is transported in this country. SEA LEVEL CANAL Mrs. Meyner. Do you think we should seriously consider building a new sea-level canal that would be big enough to take large tankers and aircraft carriers, which the present canal cannot accommodate? Mr. Rusk. We have looked at that very hard over the years. There was a lot of talk at one time about digging a sea level canal with nuclear explosives. The more we looked at that the less attractive that looked from the point of view of cost and evacuating several million people while all that was going on. But now a])parently there are a few geologic and oceanographic problems. You would have a major pressure of water from the Pacific towards the Atlantic and my ecology friends tell me there are some kinds of living things in the sea in the Pacific they don't want at all to admit into the Atlantic. Subject to that, I think there would be some advantage some day in having a sea level canal. It would be much less vulnerable to sabotage and that sort of thing and it might be easier to operate. Mrs. Meyner. Mr. Chairman, could I just yield myself a minute for Secretary Kissinger to give his view of the sea level canal? Chairman Zablocki. Yes. Mr. Kissinger. On the sea level canal, I would say this depends on a technical judgment on how urgently it is needed. I have to confess that it is not self-evident to me, if we build a sea level canal, why it should be in Panama. I would have thought one canal in a country is enough. 138 Mrs. Meyner. Where would you put it, Mr. Secretary? Mr. Kissinger. Well, I could see an argument of spreading our risk, but I have never gotten myself briefed on why it is thought desirable to have a sea level canal in Panama. I did understand the argument for having a sea level canal as a supplement or eventually as an alternative to the Panama Canal. Mrs. Meyner. Thank you. Mr. Kissinger. I have an open mind on this question. I have simply not studied this limited question of why it should be in Panama. Mrs. Meyner. Thank you. Chairman Zablocki. Mr. Buchanan. Mr. Buchanan. Thank 3'ou, Mr. Chairman. Gentlemen, you have both spoken eloquently and without any equivocation in support of this treaty and yet, I am sure you know, the popular opposition seems to be overwhelming. I would say the average person in my congressional district — and I am afraid in almost every congressional district — would say "It is ours; we built it; we paid for it; and we ought to keep it. If we are going to give it away, it ought not to be to a dictator who is in bed with the Communists, and if we are going to give it awav to him, we ought not to pay them to take it." Now, how do you get from that world view to where you are? I think it would be a miraculous achievement. It would seem to me our President is going to have to perform the kind of miracles he did in getting himself nominated and elected, getting this sold to the U.S. Senate. I think you will need all your eloquence to get that done. position of U.S. military establishment on the treaties One of the things that the critics say is that our high-ranking military people are not really in their hearts on board, that they are going along because they have to, but that this does not serve our national security interests and that this is a matter of having to submit to civilian control rather than an honest evaluation of this being in our national security interests. Would you comment on that from 3'our experience? Mr. Rusk. Mr. Buchanan, it would astonish me if the Congress does not or cannot have before it the full and frank views of the Joint Chiefs of Staff. It is true we have civilian control in this country and that the President determines policy, as far as the executive branch is concerned. But, on the other hand, the Joint Chiefs have a constitutional responsibility to be responsive frankly and candidly when asked by committees of Congress to exj)ress their views. You know that the Joint Chiefs, for example, opposed the B-1 bomber decision. You know that the Joint Chiefs were not in favor of l)roposals for withdrawing forces from Korea. Quite apart from public statements which they can make to Congress, as you know in this town, there is a kind of process of osmosis by which you and the Con- gress can ascertain the views of the military. I think I would be very surprised if you did not find that, from a military point of view, they support these two treaties — but you can find that out. That doesn't concern me very much. 139 Mr. Buchanan. Br. Kissinger, you said specifically you had had conversations with Mr. Kissinger. First of all, I would support strongly what Sec- retary Rusk has said. Certainly, in my 8 years heie in Washington, we never managed to intimidate the Joint Chiefs of Staff to a point where it was not generall}' known what they opposed. I would think that their views would be knowTi as they have been known on these interests that Secretary Rusk mentioned. With respect to my conversations, when the President talked to me, I said to him I would like to hear from the military and from the negotiators. I met for an hour with General Jones, who was acting chairman, and I had another conversation with General BrowTi. They both assured me that the Joint Chiefs stand behind those treaties and that they consider them a preferable situation to the one that now obtains. I cannot believe they would mislead me. I do not believe that they would mislead the Congress on their real convictions. ACCEPTANCE OF THE TREATIES BY FORMER SECRETARIES OF STATE Mr. Buchanan. Now, if the present treaty had been offered during your term as Secretary of State, would you have accepted it and all of its parts at that time? Mr. Rusk. I personally would have and with considerable relief because where we started back in 1965 was so far behind where we are now that I think this is a very substantial achievement on the part of the American negotiators. Mr. Kissinger. I must say that these treaties contain the essential provisions that were being negotiated when I was in office. The modifications are what one would expect in the course of the negotia- tions and I would have recommended that the President accept these treaties and consider them in the best interests of the United States. Mr. Buchanan. Gentlemen, I am very glad that old Secretaries of State do not necessarily fade away. We need your good judgment and your wisdom in all things. Mr. Rusk. Thank you, sir, but it is great to be a private citizen again. Chairman Zablocki. The Chair would like to advise the gentleman from Alabama that we will have the Secretary of Defense, Harold Brown, and Gen, George Brown, Chairman of the Joint Chiefs of Staff, on September 26 to pursue the questions you have asked. Mr. Bonker. Mr. Bonker. Thank you, Mr. Chairman. GUARANTY OF CONTINUED OPERATION OF THE CANAL Following up on what Representative Buchanan stated about the growing opposition to the treaty, which is a reality we have to face on a day-to-day basis. The chief opponent to the treaty is former Gov- ernor Reagan, and when he appeared before the Senate committee he urged them to reject the treaty because of a fatal flaw; and that fatal flaw, according to Mr. Reagan, is a false premise that the United States will insure trouble-free operation of the waterway in the future by surrendering rights acquired by America in the first treaty in 1903. 140 I would like to have you comment on Mr. Reagan's comment and his premise for opposing the treaty. ^Ir. Rusk. Well, it seems to me that what he apparently referred to as a fatal flaw has to do with his fear that some future President and Congress will not act to support our interests in Panama. There is no answer to that. A President and Congress would not have to act under the 1903 treaty. We have 9,000 troops there — so I hear, roughly that — at the present time. During World War II, with a friendly population there, we had about 100,000 there, because that is what we thought it took to insure 500 square miles against sabotage. I don't know any way in which we can now compel a future President and Congress to act one way rather than another, but I would hope a President and Congress would see to it that our interests in the canal :are adequately protected. I know no way to guarantee that. Mr. Kissinger. The problem with the existing treaty is that it raises the question of the significance of a right that nobody else recognizes, and the insistence on exercising a right now accepted by any other nation in the world amounts to an insistence by the United States on resting its case on force and not just its case when there is a treaty but its mere presence in the Canal Zone. This I consider the fatal flaw in the 1903 treaty. The present agreement lays dowm specific criteria for the neutrality and for the operation of the canal. It gives us the right to maintain those criteria. Whether a future administration will in fact exercise its legal rights, no one can predict, but I think it is extremely pessi- mistic to assume that a future administration would not be sufficiently alive to America's vital interests to fail to exercise rights that have been so clearly spelled out, that juridically ^\ill be on a much firmer foundation than the existing anachronistic relationship. WILL THE CANAL BE OBSOLETE IX 2000? Mr. BoNKER. Mrs. Mejmer has mentioned her surprise that so few of our military ships go through the canal, and I read somewhere that less than 4 percent of our commercial ship traffic actually use the canal. The trend these days is to build larger ships — ships too large to passage through the canal. Is it true by the time we reach the turning point in the year 2000 that the canal may well be obsolete? Mr. Rusk. It is possible but I would think not very Ukely that it would be obsolete in the sense that it would not be pretty heavily used. It is true that it is less useful because big oil tankers and certain aircraft carriers and such things can't go through there. But the transcontinental railroads lobbied veiy heavily against the Panama Canal when the Congress was considering what to do about it for the half century leading up to 1903, and we have competing transportation now — truck, railway. A friend of mine who is a member of the board of directoi-s of one of the big railroads said he can move sand from New York to San Francisco by air now more cheaply than he can by rail if you take into account the capital costs of the railroad. He was rather sorry we didn't jump from oxcart to air transportation straight away. So that will impose some limits on the way the Panamanians must conduct themselves because they have got to make the passage thi'ough 141 the canal easy, competitive and attractive if they are to get anything like the kinds of returns on it they now expect. Mr. Kissinger. While the Secretary was speaking I was pondering why anyone would want to move sand from New York to San Francisco. [Laughter.] I will ask him that later. U.S. INTEREST IN THE CANAL It seems to me that we ought to look at the realities of the situation. Here Panama is a country of less than 2 miUion. To beUeve that Panama by its unilateral decision could simply close a canal in defiance of international treaties, with the United States impotent to insist on its rights, is really making a projection into the future that seems to me wildly unrealistic. The real problem, as I see it, is whether we can act now to prevent our presence in the Panama Canal from becoming the unifying force for all anti-American sentiment in the Western Hemisphere and for becoming an issue which will make it impossible to develop a coopera- tive relationship with countries whose interests in the Panama Canal otherwise would be marginal. After we have modernized the relation- ship in the Panama Canal, we will have to have enough confidence that future Presidents will know how to defend vital American inter- ests when the disparity of force is so enormous, when there is no outside country that has any real means of reaching the canal against our opposition. So everything depends on our understanding of our vital interests and on our willingness to insist on rights that are clearly spelled out in a document recently negotiated. U.N. SECURITY COUNCIL VOTE Mr. Rusk. Mr. Bonker, in connection with the attitude of other governments toward this, the validity of this 1903 treaty, the nega- tive attitudes are not just a bunch of kooks we are sort of becoming accustomed to. In that vote in the U.N. Security Council where Ambassador Scali had to cast a veto — the Ambassador is sitting here this morning in another role — those who voted for the resolution defending a new era in Panama, included Australia, Austria, Indo- nesia, Kenya, responsible countries. So this is a very, very rough road to hoe politically in the general world scene if we try to stand on the 1903 treaty. Mr. Kissinger. None of the other members supported us. Mr. Rusk. That is right. Mr. Kissinger. A few of our friends abstained. Mr. Rusk. One, the United Kingdom. Mr. Kissinger. The United Kingdom abstained but no country actually voted with us, even of our closest friends outside the hemisphere. Chairman Zablocki. Time has expired. I would like to advise the gentleman from Washington and others of what I said in my opening statement that we did invite Governor Reagan of California to testify but he declined. His office stated other scheduled commitments prevented his appearance. We still hope that he will appear before the committee. 142 As a matter of fact, the chairman at one time entertained the notion of having him appear at the same time as Secretary Rusk and Kissinger. That would be a departure from our poHcy of not holding an open debate. But I hope Governor Reagan can indeed come before the committee and testify and present his point of view. Mr. Ireland. Mr. Ireland. Thank you, Mr. Chairman. INTERPRETATION OF ARTICLE IV ON NEUTRALITY I would like to pursue for a minute, gentlemen, this different interpretation that apparently exists in Panama and the United States on issues that have been referred to earlier as the real heart of the treaty. The chief negotiator in Panama, as I think most of us are aware, was on the radio in Panama in late August saying that the treaty does not establish that the United States has the right to intervene or send troops into Panama, and that we do not have the rights that have been alluded to as the strong point in the argument presented this morning. My real concern is, should the Congress approve such a treaty based on article IV, based on the interpretation that we do have these rights, and the Panamanians approve the treaty based on the fact that we don't have the rights, what good is the treaty with such a very basic difference of opinion in it. In other words, this is admittedly the guts of it on both sides and we have two entirely different views growing up here at our table, and on the chief negotiator's part in Panama that is. Mr. Rusk. I expressed earlier that to me this article IV is a very im})ortant part of these two treaties and I would hope that this committee, for example, in its committee report, would make this point very clear in terms of U.S. interpretation. Now, if at the time of the exchange of ratifications there is a funda- mental difference publicly expressed by the two sides on this point, then we may have to go back to the drawing board and see what can be worked out. There have been times when such matters have been left for the future. For example, when we concluded the Non-Proliferation Treaty, article I of that treaty says we cannot transfer nuclear weapons to any entity whatever. The United States and United Kingdom made identical statements at that time saying if there should come into being a unified Europe where there is European control of foreign policy and defense matters, that if that unified Europe were to be nuclear, that would not be inconsistent with the Non-Proliferation Treaty, and we said to the Soviets at that time, here is what we are going to say, we gave them a copy of the statement, and we are not asking you to state publicly your agreement with that, because we knew they would not. If you state publicly you disagree -wnth it then there is no agi'eement and we go back to the drawing board. So sometimes you leave some of those problems for the future. Whether that would be wise in this circumstance I am not sure, but as far as this committee is concerned, Mr. Chairman, I would hope that whatever your understanding is, after talking with Mr. Bunker 143 and Mr. Linowitz and others, on the meaning of article IV, you make it very clear. Mr. Kissinger. I would think this is a case in which it is important to spell out the meaning of article IV and I would sui)port a congres- sional attempt to express in turn its support for the administration's interpretation of article IV. I must say my own support of the agreement hinges importantly on the neutrality clause, and it is my understanding that it gives us the possibility to defend the neutrality of the canal unilaterally, and I think it would be appropriate for the Congress to register its agree- ment with the administration's stated view on the subject. I wouldn't even consider that a reservation, I would consider that an act of unison between the administration and the Congress. Mr. Rusk. Over in the other body, for example, in their resolution of advice and consent they might include this as an understanding. I would hope it would not be raised as a technical reservation, because that creates some technical problems, but as understanding so there is no doubt as to what this treaty means as far as we are concerned. Mr. Ireland. How would that operate mechanically should they say this is our understanding and it be dramatically^ different from what has been expressed in Panama? Where would this going back to the drawing board occur, in your opinion? Mr. Rusk. If this should happen and then at that time of the ex- change of ratification, or when you approach the exchange of ratifi- cation, if Panama then does not want to ratify, in the face of that expression of our interpretation, then a'ou are back to the drawing boards. In other words, the public still has some misunderstanding about what ratification means. The Senate gives advice and consent, the President ratifies, and j^ou have this problem at that stage of ratification. Mr. Kissinger. I would think at the time of exchange of ratifi- cations the act of exchanging should make clear that the other side understands our interpretation of this treaty and I think this can be worked out. I haven't discussed it with the administration but, technically, it should not be difficult to work this out between the administration and the Senate since this would not be a new interpreta- tion by the Senate, this would simply support what the negotiators have testified to and what the President has asserted. Mr. Rusk. This point is a basic consideration in exchange for an abrogation of the 1903 treaty, among other things. It is part of the basic consideration. Chairman Zablocki. Mr. Lagomarsino. Mr. Lagomarsino. Thank you, Mr. Chairman. USE OF the canal BY THE U.S. NAVY I want to welcome both of you gentlemen here. You have the very difficult task, thankless in a way, of talking to people who are already converted, and on the other hand, of talking to people like me who you are probably not going to be able to convert. I w^ould like to respond to what Mrs. Meyner and Mr. Bonker said a little while ago; I think perhaps they left an erroneous impression on the record. The fact is that some 93 percent of all U.S. Navy ships can use the canal, 98-991 — 77 11 144 and as a matter of fact, only the 13 largest carriers cannot use it. The largest noncarrier ship we have on active duty is the new class, Tarawa. It went through the canal last year. During the Vietnam war, for example, in 1965, 284 warships went through; 591 in 1966; 1967, 879; 1968, 1,504; 1969, 1,376; 1970, 1,068; and in 1971, 503. So it is not small usage in times of emergencj^, at least. I would like to point out also that of all the world shipping only 3 percent cannot use it, and only the largest oil tankers are now in the category of not being able to transit through the canal. And I also understand the trend is away from larger ships. I would like to point out also that the canal becomes even more im- portant right now. We have a surplus, or soon will have, of Alaskan oil on the west coast. The only practical way to move that now is through the Panama Canal. It is vitally important, and as important as it is to us, it is extremely more important to the countries of Central and South America, particularly to those countries on the west coast of South America. LATIN AMERICAN SUPPORT FOR THE TREATIES I feel a little bit like one of the three blind men asked to describe an elephant, in talking about the mission to South America. We all saw the results of our mission a little bit differently on this question, although I come down very close to what our chairman, Mr. Yatron has said. As he pointed out, we talked to the Presidents of five different countries, to the Foreign Ministers of six countries, and to many other govern- ment officials in all of those countries. This was right during the height of the publicity about the conceptional agreement on the Panama Canal. Our papers were full of it and so was the foreign press. It was certainly the topic of lively discussion, at least in the news media. Not a single one of those officials mentioned it to us, with the excep- tion of the prime minister of one western South American country who raised it at the end of a 3-hour discussion about all kinds of other mat- ters; and then he raised it in the concept of being concerned about the increase in the tolls. Now, it is true, as Mr. Findley pointed out, when asked about it they all said "yes, publicly, we are for it." Several mentioned later in private that they didn't like it too well, they were concerned about the tolls, and one or two even said they were concerned about the treaty itself. The point that Mr. Yatron and I want to make is that if this is such a burning issue in Latin America why wasn't there more interest shown in it, why did they respond only to the questions asked by us? One very pro treaty President became quit« excited, when he was asked if he approved of the raismg of the tolls that would be necessary under the agreement; he said, "that is a rumor, that is not true," and I understand there was a flurry of cable communications after we left his office. There is great concern about the question of tolls, and I heard some concern, although not definitely expressed in clear terms, but certainly the implication, about whether and how Panama would respect the rights that they now have and which have been very well protected for them to use the canal. 145 INTERPRETATION OF NEUTRALITY PROVISION I would certainly agree with you, Dr. Kissinger, that the Congress, especially the Senate, in going through the ratification process, should be very, very careful to nail down the language especially where there is any doubt about interpretation, particularly with regard to neu- trality; and I might like to ask you this. If you were drafting this treaty — I will ask both of you— if you gentlemen had been drafting this treaty would this question be raised about what neutrality means and whether that does include the right to intervene, as we say it does, and apparent^ some Pan- amanians say it doesn't, would not you have spelled that out clearly in the treaty itself? Mr. Kissinger. Well, we have to understand that the treaty is a serious domestic problem not only in this country, but in Panama, as well as in several other countries of Latin America, and for a country as well as in several other countries of Latin America, and for a country to write into an agreement some of the explicit language that we have used here might be considered needlessly offensive or injurious to the process of ratification. I myself read this paragraph, and it does not say jointly — I don't have the text here — but the text says, as I recall it, that the United States and Panama agree to assure, agree to maintain the regime of neutrality established in the treaty which shall be maintained in order that the canal shall remain permanently neutral, notwith- standing termination of any other treaties entered into by the con- tracting parties. If this had been written in my period they would have said it was drafted first in German — it's not the most elegant sentence of which history informs us. But I think it makes it clear to me and to, I think, anyone else who has studied this, that we have the right individually to maintain this regime of neutrality. But if there is any doubt about it I would certainly support a clarification, especially if it is arrived at through cooperation with the administration. Mr. Lagomarsino. I might say that I hope that the Senate in going through this, and the House, if we do have implementing legislation before us, studies this very, very carefully because it might not be drafted as clearly and precisely as some had thought. For example, there is a report in this morning's Washington Post that through, I guess is thought to be inadvertence, the American Panama Canal Zone employees may not have to pay U.S. income taxes after the treaty is ratified. Mr. Kissinger. If I may say another thing. I do not believe one should justify this treaty on the basis that the canal is becoming obsolete or obsolescent. 1 think we should start from the assumption that the canal is important and will remain important and that this in the view of the advocates is a better way of maintaining our in- terests, not that the canal has no longer become important and there- fore it doesn't make any difference what agreement we make. Mr. Lagomarsino. I certainly agree with the first part of your statement. Mr. KusK. I arn not sure we should insist upon this word "inter- vention", because in law and diplomacy — the cameras may not want 146 1 to pick this up — in law and diplomacy there is a fundamental dis- tinction between rape and seduction. The statute of the Oi^anization of American States prevents inter- vention by one State into another in this hemisphere for any reason whatsoever. Here we have a treaty right to share with Panama, and also individually, for the protection and development of the Panama Canal. It may be necessary someday for somebody to argue that this is not intervention in the strictest sense, it is something else. So I am not sure we should insist upon that word "intervention". Chairman Zablocki. A very good point. The time of the gentleman has expired. Mr. Fowler. FOREIGN MILITARY SALES CREDITS TO PANAMA Mr. Fowler. I will also associate myself with the remarks of the chairman and Mr. Fascell, and others, about my fellow Georgian and his return to his home State where he continues his public contribution through the private sector. Neither of you gentlemen have spoken this morning about the economic provisions of the treaty, and some of its critics question that portion of the treaty as to the amount of money that the treaty commits to the Government of Panama. I wonder if you could tell us anything about the proposed $50 million in foreign military sales credits that is proposed under the treaty. Are there any restrictions on that? And do you know what type of military sales are contemplated? If you will address the economic factors overall, I don't know how you judge how much is too much, but I know of no two gentlemen that could enlighten me better. Mr. Rusk. Mr. Chairman, do you know in my horaeto\\Ti of Atlanta we are proud of our new Congressman, and I am personally delighted he is a member of this great committee. I am sure you are all going to enjoy working with him. Chairman Zablocki. We already have. Mr. Rusk. It is my understanding, and there are those who can speak more authoritatively on this, that when we get into such things as military sales, guaranteed loans, and Export-Import Bank transac- tions, things of that sort, that that is within the framework of existing general policy in both countries. I would myself hope that those transactions on the military side would be relatively modest, but even modest transactions are fairly expensive these days. But, in any event, it is my understanding they will be governed by existing general policies with respect to such sales, and I am not competent, quite frankly, to speak to those in detail. Mr. Kissinger. My understanding is, in addition to the general policies — not just my understanding, it seems to be mandated by law, that any foreign military sales above a certain amount would have to go before both Houses of the Congress and, therefore, the Congress would have an opportunity to approve sales of any magnitude. Mr. Fowler. Yes, sir. We are having considerable experience with that in other areas now, but I did not know whether in the negotia- 147 tions — I should ask this question of the Ambassadors — there were any specific discussions as to what was anticipated in these foreign sales. Mr. Kissinger. I have no knowledge of this. My experience in this kind of negotiation has been that in the general negotiation you agree on a figure and you do not generally agree on specific item>:, that this is then handled separately as part of another transaction, which then will be separately submitted to the Congress on a yearly basis. PUBLIC REACTION TO THE TREATIES Mr. Fowler. As we are down toward the end of your testimony, I don't want to let an additional opportunity with two capable public philosophers to go by. Dr. Kissinger just described this treaty as one of "our most pressing domestic problems." Why in your opinion has this treaty caused such a ^nsceral response in the country? I don't want to give any of my opinions, I would like for you to give yours. Would the reaction in the country have been different 10 or 20 years ago? What is there about the Panama Canal and the attempts to modernize this treat\' that has made it the top controversy in public policy today? Mr. Kissinger. Well, I have the impression that the Panama Canal in the public consciousness has always been a great American tech- nological achievement, and that has entered the public consciousness as an American possession and, therefore, I think the public never really focuses on the fact that it is located in the territory of another country, so this required an adjustment. But I think fundamentally my impression Is that after the upheavals and the fru^:itrations of the Vietnam period, the American people are tired of being pushed around, and this is one of the first things that comes along of this nature. I consider the reaction itself healthy, and 1 think it i.^ healthy for a country to want to protect its \'ital interests. The administration has now the obligation to educate the public and to make clear that this vital interest is best protected by the measures it is proposing and that this is not yielding to force; this is precisely to avoid the jjossibility of having it adjudicated. But it's a general reaction of feeling that the United States should not con- stantly be on the defensive in the face of foreign or domestic pressures. This is what I interpret some of this visceral reaction to represent. Mr. Rusk. I think there is a procedural point. The debate was launched substantially before the actual texts of the treaties were available. Had the treaties been presented as a basis for the debate, through a fireside chat, or some general exchange of what is in the treaty, my guess is some aspects of the debate would have taken a different direction. I held off any public endorsement of these treaties until I saw the treaties and I think that it was a little unfortunate that the debate generated so much steam before we knew what we were talking about. Chairman Zablocki. Time has expired. Mr. Fountain. Mr. Fountain. Thank j^ou, Mr. Chairman. I want to join my colleagues in welcoming Secretary Rusk and Secretary Kissinger and express my appreciation for the presence of 148 both of yon here today, you who I think have contributed so much to the well-being of America, our own national security, and improved international relations reflecting great credit not only upon yourselves but upon our country. I think we have already seen a demonstration that what you just said. Secretary Rusk, is true: We are doing a lot of debating and talking and speculating before we really know too much about what is involved in the treaty. Frankly, I myself have not yet had a chance to read it word for word and each time I read portions of it questions arise which I want answered, and I can't always find anyone to answer them. I would like to reiterate what Mr. Buchanan said. It is going to take a miracle of some kind, if public opinion is to be followed, to change it in my particular area of the country, from which I am getting so many letters. And not yet have I read one which favors ratification in its present form. Yet I am mindful and I think my constituents are also concerned about all of the things you have said here today, and sensitive to the problems and the need for the conciliation which would be brought about by a mutually acceptable treaty of its kind, and so forth. But I do think w^e ought to be sure what we are doing, and I think the Senate needs to take some time to analyze every provision of the basic treaty and the ancillary treaties and documents thereto. EXPIRATION OF THE TREATIES As I understand it, this treaty terminates December 31, 1999. Is that correct? Mr. Rusk. The first treaty does, yes, sir. Mr. Fountain. When does the second treaty terminate? Mr. Rusk. It has no termination date. Mr. Fountain. What is the second treaty? Mr. Rusk. That is the treaty concerning the permanent neutrality and operation of the Panama Canal. INTERPRETATION OF ARTICLE IV ON NEUTRALITY Mr. Fountain. Article 4, as I remember it, and maybe I can get a response from both of you, on the second treaty which you just re- ferred to says the United States of America and the Republic of Panama agree to maintain the region of neutrality established in this treaty, which shall be maintained in order that the canal shall remain permanently neutral, notwithstanding the termination of any other treaties entered into by the two contracting parties. Can you tell me what that means? Mr. Kissinger. What this means is that the regime of neutrality will continue even after the period of the first treaty — that is to say, after December 31, 1999. This is the provision that extends the applica- bility of the regime of neutrality into the indefinite future. It separates this neutrality provision from the other agreement which has a termination date. 149 MAINTENANCE OF U.S. MILITARY PRESENCE Mr. Fountain. I think we should also make clear, that article 5 says that after the termination of the Panama Canal Treaty, only the Republic of Panama shall operate the canal and maintain military forces, defense sites, and military installations within its national teriitory. So I think it is clear that by 1999 we will no longer have any right for any of our troops, or for a military base within the territory of Panama. Is that right? Mr. Kissinger. Unless we make a new agreement with them of the type, for example, we have with other countries to maintain bases. Mr. Fountain. Under the terms of the treaty Mr. Kissinger. Under the terms of these agreements we cannot maintain military bases in Panama, but under the article 4 we have a right to take what steps may be needed to assure the neutrality of the canal. Mr. Fountain. Article 4 doesn't say it in the language which you are speaking now. It is written in language which seems to me to be very ambiguous, in that respect. It appears to be deliberately written so that, depending upon who they are, Americans or Panamanians, they can take any position they want to. Treaties should not be written and ratified that way. The second question I want to ask you is this: Is there no other necessity for our presence in the Panama Canal under the existing treaty, and such modifications as we have had down through the years, other than to protect and defend the canal? Is there no need for us to have a military base there — something which it seems to me might have been negotiated during the course of this treaty. However small, is there no necessity in the interest of our own national security and the national security of our allies and those to whom we are committed for us to have a military base in Panama? Mr. Kissinger. I think, of course, that Secretary Brown and General Bro\vti should answer this question in terms of the military requirements. To the best of my knowledge, in my experience in the Government we have never thought of the troops in Panama for any other purpose except the defense of the canal. Given the range of other means of communications now I would not think that we need Panama as a staging area for any military operations that might be necessary in the defense of the Western Hemisphere, but at any rate, I do not recall during my period in office that this issue was ever raised. It is, however, an important question to ask of the defense and military advisers. Mr. Rusk. We have had in the Canal Zone a base for training in jungle warfare, for example, and we have had a headquarters there at times that had within the framework of our own military establishment some responsibilities for the hemisphere as a whole. But given the long legs of present militar}- forces I think such considerations diminish very rapidh', and I would think it is clear, as Mr. Kissinger said, that our military bases in Panama are strictly now related to the canal. Mr. Kissinger. And in fact this military headquarters was abolished on the recommendation of the Defense Department, and over the 150 initial opposition of some of us who were concerned about the symbol- ism that this might have for Latin America, and it was abolished for reasons totally unconnected with these treaty negotiations. It was that the Pentagon felt it no longer needed this facility. Mr. Fountain. Of course I have in mind Russian and Cuban in- fluence in Panama after we are out and all of the other things which have taken place in that part of the world which present a potentiality in the future. PUBLIC REACTION TO THE TREATIES Mr. Chairman, let me modify a statement. I said I have not received a letter, in support of ratification. I haven't had a chance to read all of the mail I received within the last 2 weeks. I have been assured by my staff about those letters recently received and they tell me that all oppose it. Mr. Rusk. I am going to write you one so you can't make that statement. Mr. Fountain. I have not read one, of all I received from my con- gressional district, which favors a ratification of this treaty. So there is a big job to be done, if the Senate is expected to approve ratification. SENATE CONSIDERATION OF THE TREATIES Are there any limitations on the time which the U.S. Senate can take to carefully consider this treaty before it takes action on it. Mr. Kissinger. I don't think so. Mr. Fountain. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Guyer. Mr. GuYER. Thank you, Mr. Chairman. Gentlemen, we are happy to have you as you have come many times before on behalf of our country. PUBLIC PRESENTATION OF THE TREATIES I only have one consuming problem, and that is an area in which I have spent most of my life, called public relations. I was PR director for a small company for 20 years and as a public speaker I have been up and down the country most of my life. We have a saying in public relations, "Don't treat the public like you do your relations." Without being facetious, I think the biggest mistake in the whole thing is the time at which it was done. There could not have been a worse time to have made the announcement. The announcement was made when we were on recess. The President said he wanted input from the American people. He didn't ask for it. The poll I had last year indicated that 91 percent of our people think we do own the canal and should not give it up. They are saying **how can 3^ou give up .something you don't have — if they say we don't own it." More importantly, 1 think the job of now making the public aware of the necessity of what we are trying to accomplish is coming a bit too late. We don't celebrate the world series until the games are over. Here we had a big celebration the first day we came back from recess, which to me was very prem.ature, and 1 don't think we should cele- brate anything until such time as we have something certain to celebrate. 151 I think we owe the American people a chance to speak out on this subject. Congress has not been consulted. Most of us have to go back and reread history. What I read is not what I hear today. The skirmish back in 1965 I think had to do with putting a flag on the schoolhouse. These are emotional issues that are going to come out more and more and more, and I am not going to get into a diatribe as to whether we bought something, or didn't own it. The President said during his campaign in 1976 he would in no way give up control of the canal. I don't find a thing in here where we keep any bases. Could you enlighten me on that? Mr. Rusk. In the terms of the treaties we don't keep them be- yond December 31, 1999. Whether any subsequent agreements will emerge if things go well in the canal I don't know. But you are quite right, this does not provide bases beyond December 31, 1999. Mr. GuYER. Wouldn't you agree after we waited 73 years we should have waited a little bit longer to bring this issue to the public, and find out what they were thinking and maybe have a little missionary work done before we make the announcement? I think the flag waving was a little premature. Mr. Rusk. I don't want to sound naive in politics and I am well aware that free advice is worth what you pay for it. But there are some situations where governments find it very difficult to bridge the gap between their two peoples and come to an agreement. For example, in the Middle East these days I doubt that the govern- ments in the area can make the concessions necessary to make peace and survive as governments. I think back to some situations where I am driven to Edmund Burke's exposition of the duty of a Member of Parliament against the wishes of his own constituents. For example, when we demobilized in tumultuous fashion in 1945, by 1946 we did not have a single division of our Army or single group of our Air Force ready for combat. That was the very popular thing to do. We should not have done it. We have been picking up the pieces ever since. My generation of students was led down the garden path into a World War II that could have been prevented, but public opinion reflected pacifism and isolationism and when the Japanese attacked Manchuria ever^'one said it is too far away, it is none of our business. And a few years later I found myself in a uniform in Burma, which was even farther away. There may be moments when a Member of Congress must say to his constituents — please forgive this preaching answer-r-you may have to say to your constituents I had to do what I thought was right for my country-, I hope you will understand that even though you disagree with me. Mr. GuYER. I would not interfere with that because it is a very lonely shelf where a President or head of country has to stand and I can appreciate that when Mr. Truman made the decision on the atom bomb it was a tremendous decision, but I have difficulty representing about 470,000 people, who I think are thoughtful peof3le, to explain to them things Hke how Vietnam came into the United Nations and no mention made of human rights when that was the big issue this year. 152 I am sure you gentlemen are aware of the Freedom House ratings, and Panama rates with Cuba and the Soviet Union, at the very top of the Hst of offenders. In poUtical rights they all rate seven, which is the worst they can rate. That is political rights. Civil rights, sixth. All of them, no freedom. I am sure you can't ignore that. How are we going to go back home and explain you are going to hold the torch up for human rights and compliance for all the world and come back and concede something to a leader who is not trusted by his owtl people? As a matter of fact, the first response we had the other night after the signing was asking a long-time U.S. employee and his wiie what they thought. He said, 'Sve are afraid." I am sure the American people share that concern. Mr. Kissinger. Well, first of all, I would like to express my agree- ment with Secretary Rusk's view and his eloquent advice to the Congress. I think one should make clear to one's constituents that this is not a favor we do to Panama, that this is independent of the merits of the Panamanian Government. This is something we do for ourselves based on a consideration of our long-term interest in the Western Hemisphere and how best to develop our interest and achieve our purposes in a constructive relationship. On balance every Secretary of State, every President since 1963, has come to the conclusion that we need a modernized relationship in our interests, not because Panama deserves it, or because we want to do a favor to it, and regardless of what — what changing constellations we might see there. Mr. GuYER. Dr. Kissinger, I think everyone would agree with you on that. In 1960 this came up again without having a treaty. You remember we brought an equalization of the pay to the Panamanian/ American workmen in the same zone. Every ^lember of Congress, I think, believes we are long overdue in improving relations with the Panamanian people who came from slavery up through the ranks and, as 3'ou know, the entire history of the canal without being an ex- tremist in this issue, I just very, very seriously say it is only lament- able now we could not have men of your caliber. We are going to have the Secretary and Chief of Defense and we had the two Ambas- sadors here if they could have appeared before the signing our job would have been much simpler. Chairman Zablocki. Thank j^ou. Mr. Pease. Mr. Pease. Thank you very much, Mr. Chairman. I am basically- in support of the treaty. I think it was good work done by our negotiators, but the mail I get is similar to that of many other Members of Congress, in opposition. In a way it is a shame that the i)rogram of economic aid was announced and worked out at the same time as the two treaties because even though Ambassadors Bunker and Linowitz have told us that they are not connected, necessarily, it appears in the eyes of the public that we are paying ^345 million to the Panamanians. SHOULD PANAMA PAY FOR THE CANAL? ■ But that aid package aside, the basic question which is raised in many letters written to me is why should not the Panamanians pay us for our investment in the canal. 153 T would appreciate the viewpoint of you two gentlemen as to a reply that can be given to the American people to that question. Air. Kissinger. My friend to my right has very generously given me that question. I must say, incidentally, the mail I receive is very similar to that all of you gentlemen receive. I haven't received a letter in support of the treaty myself but many anguished letters in the opposite direction. Mr. Pease. Perhaps Secretary Rusk would \vrite you a letter, too, so you can have one. Mr. Kissinger. I have to say quite candidly I have not reflected on this particular question. Obviously Panama doesn't have the means to pay us for our original investment and the arrangement that would undoubtedly be made in Panama. We had two generations in which we could set the rates for the canal to serve our own economic interests and the economic interests of other countries in the \Yestern Hemi- sphere. The rates were ridiculously low for a very long period, and the amount that was paid to Panama was very small: and, therefore, I think if this issue were raised we would get into an endless debate about what we owed them for what they would argue was colonial exploitation. I think one should look at the treaty, as I have said on several occasions, as a means of putting our relations to the entire hemisphere on a constructive basis, and at a minimum of removing an issue which can rally all anti-American sentiment. Therefore, we ought to look to the future more than scoring debating points about the past. Mr. Rusk. That is an imj^ortant question and I have spent a good deal of time in m}^ day trying to resist the high charges that other countries have tried to impose upon us ^vith regard to various facilities and bases, and so forth. Mr. Chairman, you might want to have a member of the committee staff take a look at some of the other quid pro quos that we have exchanged with Spain, Ethiopia, Pakistan, Turkey, and some other countries, to see what the going rates on these things seem to be, because in terms of our experience in these matters I think these Panamanian arrangements are really modest, or at least within the ballgame. I also think, Mr. Chairman, I believe you have this in mind, trying to make some assessment on how the canal is to be evaluated because the figures run all the way from $700 million to $9 biUion, depending on what you put into the computation, and the committee could render a useful service in clarifying some of that, if possible. international review of the 1903 treaty with PANAMA Mr. Pease. Secretar}^ Rusk, I was especiall}' interested in your testimon}^ and the scholarl}^ comments 3^ou had about the 1903 treaty, and interested in your comment that a'ou do not believe that we can afford to allow the validity of the 1903 treaty to be tested in the Inter- national Court of Justice. You followed on b}^ sajdng that 3^ou are glad that the treat}^ has not been pursued in the U.N. General Assembly. If the treaty were not to be agreed to b}- the Senate, what are the possibilities that the 1903 treaty would be raised or brought to the International Court of Justice,*^ or to the U.N. General Assembly without our wishing it to be so? 154 Mr. Rusk. Because of the Connally reservation we have reserved the right to determine which questions we are prepared to let go to the International Court of Justice. In that sense we did not, although we did it on the face of it. We did not really accept the compulsory jurisdiction of the International Court, so I don't know any way in which a country can take us before the International Court against our wishes. In terms of the General Assembly, I am sure, I am absolutely certain that if the Senate does not give advise and consent to these two treaties it will go into international bodies immediately and we would have great difficulties. Mr. Pease. Thank you. Thank you ver\^ much, Mr. Chairman. Chairman Zablocki. If there are no further questions, I would like on behalf of the members of the committee, and again on my own, to thank you gentlemen for your excellent statements and the direct answers to the questions. Certainly we are deeply appreciative of the time and the enlightenment you have given us on this complex issue. It must be ver}* gratifying and satisfying to learn that, despite some members who ma}- not agree with your positions, they nevertheless have a high regard, for both of you gentlemen, great public servants of the past and continuing to be so in the interest of our country's national security. We want to thank 3'ou sincerely, and we do hope that your visit wnth us was just as satisfying to you as it was to us. Mr. Rusk. Thank you, Mr. Chairman. Chairman Zablocki. The committee stands adjourned subject to the call of the Chair. [Whereupon, at 12:15 p.m. the committee adjourned.] PROPOSED PANAMA CANAL TREATIES THURSDAY, SEPTEMBER 15, 1977 House of Representatives, Committee on International Relations, Washington, D.C. The committee met at 10:10 a.m., in room 2172, Kayburn House Office Building, Hon. Clement J. Zablocki (chairman of the committee) presiding. Chairman Zablocki. The committee will please come to order. The Chair understands there are other members on their way. We were hopeful a quorum call will not interrupt. We meet this morning to continue the committee's hearings on the proposed Panama Canal treaties and related legislation. Thus far the committee has heard the principal U.S. negotiators, Ambassadors Ellsworth Bunker and Sol Linowitz, and former Secre- taries of State Dean Rusk and Henry Kissinger. Today, we are pleased to have before the committee spokesmen for three of the leading American veterans organizations. Representing the Veterans of Foreign Wars is Dr. John Wasylik, national commander in chief of the VFW. Dr. Wasylik is accompanied by Mr. Cooper T. Holt, executive director of the VFW, Washington office, and Col. Phelps Jones, director of national security and foreign affairs for the VFW. Speaking for the American Legion is William J. Rogers, immediate past national commander. He is accompanied by Dr. Robert P. Foster, chairman of the Legion's National Foreign Relations Com- mission. I understand Mr. Milio Kraja is also present. Appearing for the AMVETS is Mr. Frank D. Ruggiero, national commander. He is accompanied by Mr. C. Dennis McClure, national service and legislative director. Gentlemen, it is my pleasure to welcome you on behalf of the Committee on International Relations. In order to assure that the members may have an opportunity to question all of the witnesses during our limited time this morning, may I suggest that each spokesman present his prepared statement or a summary of his prepared statement, whichever way you prefer, following which the witnesses may be questioned as a panel. Dr. Wasylik, as the spokesman for the oldest of the organizations, would you please begin. STATEMENT OF DR. JOHN WASYLIK, NATIONAL COMMANDER IN CHIEF, VETERANS OF FOREIGN WARS OF THE UNITED STATES Mr. Wasylik. Mr. Chairman and members of this distinguished committee, my name is Dr. John Wasylik, and my home is in (155) 156 Sandusky, Ohio. As national commander in chief of the Veterans of Foreign Wars of the United States, I am pleased and honored to appear before this distinguished body to share with you our views on the proposed treaties affecting the interoceanic canal and its frame- work, the U.S. Canal Zone on the Isthmus of Panama. I am accompanied here today by two of my VFW colleagues, Mr. Cooper T. Holt, executive director of our Washington office and Col. Phelps Jones, U.S. Army (retired), my director of national security and foreign affairs. As j'^ou may be aware, positions in the Veterans of Foreign Wars are arrived at democratically at our annual national conventions. Our 78th national convention was held in Minneapolis, Minn., during the period August 20-26, 1977; 14,000 delegates, representing more than 10,000 VFW posts and 1.8 million members were joined by delegates representing more than 600,000 members of the VFW's Ladies Auxiliary. Our delegates gave respectful attention to arguments supporting the proposed treaty advanced by the Chief of Staff, U.S. Army, Gen. Bernard W. Rogers, U.S. Army, and arguments opposing the treat^^ as set forth by Senator Strom Thurmond. Following these two thoughtful presentations by two patriotic and dedicated Americans on Tuesday, August 23, both the VFW and the Ladies Auxiliary delegates were asked by the Chair for an expression of their views. Both groups of delegates voted unanimously to accept Resolution No. 402, "U.S. Sovereignty Over the 'United States Canal' Located on the Isthmus of Panama." Following this display of solidarity, the Chair gaveled the convention into order and repeatedly asked if there was anyone there present who desired to speak in favor of the treaty and assured the delegates that anyone who so desired would be given a courteous and respectful hearing. No one rose to oppose the unanimous views of the delegates. With the chairman's permission, I would like to read the "Be it resolved" portion of the Resolution No. 402, with the request that the entire resolution be included in the transcript of these hearings. Chairman Zablocki. Without objection, so ordered. [The resolution follows:] Resolution No. 402 U.S. Sovereignty Over the "United States Canal" Located on the Isthmus OF Panama Whereas, Article II of the 1903 Convention between Panama and the United States, modified in part by the 1936 Treaty between the two Governments, states: ARTICLE II "Republic of Panama grants to the United States in perpetuity the use, oc- cupation and control of a zone of land under water for construction, maintenance, operation, sanitation, and protection of said canal of the width of ten miles extending to the distance of five miles on each side of center line of the route of the Canal to be constructed; the said zone beginning in the Caribbean Sea three marine miles from mean low water mark with the proviso that the cities of Panama and Colon and the harbors adjacent to said cities, which are included within the boundaries of the zone above described shall not be included in this grant. * * * "The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the limits of the zone above described and in 157 addition thereto the group of small islands in the Bay of Panama, named Perico, Naos, Culebra and Flamence; and" Whereas, the United States has more than fully met its obligations to Panama under existing treaty arrangements and, moreover, has efficiently and responsibly accommodated a large number of transits and amount of tonnage through the canal; and Whereas, the United States has paid for the Canal and the Canal Zone four times (1) to Panama, (2) to the failed French Consortium, (3) to private citizens of Panama, and, finally, (4) to Colombia; and Whereas, the revolutionary government of Panama, a product of coup d' etat, has since June 1971, under the guise of seeking new canal treaty arrangements, undertaken a bitter and sustained campaign of anti-American propaganda fueled in large part by Cuban and Soviet communists; and Whereas, giv'en the emotionally irrational situation in Panama, a political/psy- chological "timebomb" is being consciously fabricated b}' the revolutionary government of Panama, set to explode to the detriment of the United States and the world shipping community; and Whereas, due largelv to our unswerving V.F.W. support, patriots in the United States Senate, led by\Senators Thurmond (S.C.), Helms (N.C.) and McClellan (Ark.), have gone on record in opposition to the unprincipled "Statement of Principles" signed by former Secretary of State Kissinger and the Panamanians, and a parallel effort is being similarly supported in the House of Representatives, led by Congressman Dan Flood (Pa.) : Now, therefore, be it Resolved, by the 78th National Convention of the Veterans of Foreign Wars of the United States, That: (a) U.S. operation, control and defense of the Canal are non-negotiable; (b) tensions relating to the administration of the Canal Zone be resolved on the spot without disturbing present ti-eaty arrangements; (c) U.S. citizens and employees in the Canal Zone continue to meet their responsibilities under U.S. sovereignty; (d) the foregoing position be again communicated to both the President (who in October 1976 asserted that he would "never give up complete or practical control" of the Canal) and the Congress; (e) the Panama Canal Zone send to the Congi'ess of the United States a dele- gate such as is done in Puerto Rico, the District of Columbia, and the Virgin Islands; and (/) the proposed treaty being put forward by the Carter Administration be defeated in the 9oth Congress. Adopted by the 78th National Convention of the Veterans of Foreign Wars of the United States, held in Minneapolis, Minnesota, August 19 through 26, 1977. Mr. Wasylik. On the canal treaties issue, the heart of our mandate reads: Be it resolved, by the 78th National Convention of the Veterans of Foreign Wars of the United States that: (a) U.S. operation, control and defense of the Canal are nonnegotiable; (6) Tensions relating to the administration of the Canal Zone be resolved on the spot without disturbing present treaty arrangements; (c) U.S. citizens and employees in the Canal Zone continue to meet their responsibilities under U.S. sovereignty; ((/) The foregoing position be again communicated to both the President (who in October, 1976 asserted that he would "never give up complete or practical control" of the canal) and the Congress; (e) The Panama Canal Zone send to the Congress of the United States a delegate such as is done in Puerto Rico, the District of Columbia, and the Virgin Islands; and (/) The proposed treaty being put forward by the Carter Administration be defeated in the 9oth Congress. ^ This is where we stand. Now, why do we hold so resolutely to this view? In the first instance we are totally unpersuaded both by the asump- tions which led to the treaty negotiations and by the proposed treaties which emerged from these negotiations. 158 Since August 1914, the U.S. canal on the Isthmus of Panama has been responsibly operated and defended to the benefit of the United States, the international shipping community, Panama, Central x\merica, and Latin America. The "payaway treaty" clique has fallen back on (1) implied black- mail — "unless we give it to the Panamanians, they may blow it up"; (2) self-fulfilling prophecy — forecasts of Vietnam like guerrilla war- fare; and (3) self-inflicted descriptions of "colonialism." The current ploy of much of the "prestige media" on the canal question is, feigning more disdain than anger, to dismiss all who have stood in steadfast opposition to the proposed "payaway" — an accurate term, "sellout", would imply the Panamanians are seeking to buy our $7 billion canal; they are not — as jingoistic nonreaders of history who are carelessly calling for war. Nothing could be farther from the truth. Long before the canal and the Canal Zone turned into a political issue, the VFW sought to inform the American public of the true nature of the issues involved. There follows arguments advanced by the "payaway apologists" and the relevant VFW response. "Payaway" apologists: How can anyone in 1977 argue for a policy of "colonialism"? VFW response: Colonialism is, definitively, an exploitative ar- rangement wherein a natural resource, that is, cotton, rice, tin, et cetera is farmed, harvested, or mined by an oppressed people for pro- cessing, manufacturing, packaging and sale of the finished product abroad. Panama "oppressed"? Clearly not. Panama (a) has the highest per capita income of any of the seven countries of Central America and stands fourth of 20 nations in all of Latin America; (6) is dependent on the canal and the zone for 30 percent of her foreign currency earnings while 12 percent of her gross national product arises from the same source. Panamanian per capita wealth is about t\nce that of Colombia who, until 1903 was the country of which pre-1903 Panama was a province. Panama oppressed? Tell that to Cambodia. "Payaway" apologists: W^hat is needed is a modern arrangement to replace a treaty — Hay-Bunau-Varilla — now 74 years old, VFW response: Modernity, like beauty rests in the eye of the be- holder. Britain has occupied the Rock of Gibraltar since the 1713 Treaty of Utrecht which ended the War of the Spanish Succession. Sensible people are thankful the British have been on the Rock for the past 264 years. Unlike the canal, Gibraltar has not played any signifi- cant role in Spanish economic growth. Like the Panamanians, the Spanish are unhappy about the status quo. Unlike our State Depart- ment, the British Foreign Office has kept a lid on the situation — to the benefit of us all — for 264 years, not 74. Peihaps we should ask the British Foreign Office to conduct a crash course on how to protect vital national interests for our State De- partment. Payaway apologists: But the Hay-Bunau-Varilla Treaty of 1903 gave the U.S. all rights, powers and authority "as if it [the U.S.] were the sovereign of the territoiy." The words "as if" indicate that it is 159 Panama, and not the United States, which holds either titular or residual sovereignty. VFW response: Those who so happily produce the ''as if" clause conveniently forget to add what follows in this ''in perpetuity" treaty, that is, "to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." The bulk of scholarship of the sovereignty issue supports the VFW view. A family of treaties (a) with "New Granada" in 1846; (6) with Britain in 1901; and (c) with Colombia in 1922, all undergird, and ex- tend the sovereign preeminence of the United States as clearly recognized in the 1903 Treaty of Panama; a treaty, incidentally, deliberately ratified after the signing by the Panamanian Senate. Payaway apologists : Secretary of State John Hay advised President Theodore Roosevelt that the 1903 treaty was advantageous to the United States and disadvantageous to Panama. VFW response. Is there some natural order that mandates that most of all of the treaties entered into by the United States must be dis- advantageous to America; the Paris accords of 1973 bringing "peace" to Southeast Asia comes readily to mind. Hay's view notwithstanding, as earlier indicated, the 1903 treaty has been a success story for all concerned, most specifically including Panama. Payaway apologists : How would you like to see America divided in two by the Mississippi River as the canal divides Panama ? VFW response : Unlike the example of the Mississippi, the construc- tion of the canal and the birth and continued existence of a Panama, independent from Colombia, are inextricably linked. So while the U.S. canal and the U.S. zone, given hmnan nature, may never be objects of popular admiration in Panama, nonetheless, the clear link- age between the U.S. presence and their national existence is there and, we suspect, most Panamanians understand tliis unalterable fact of their nationhood. Payaway apologists : '\Mio wants to fight another Vietnam over the canal ? VFW response : No noninstitutionalized person ever wants (a) any war, or, (h) most especially a Vietnam-type encounter in which we win the battle but not the victory. The warlike language about the canal and the zone arises from oc- casional flights of oratory by General Torrijos — "We will walk the Ho Chi Minli Trail. It is long and exerts a heavy toll in blood" — from various Panamanian student groups, from supportive revolu- tionary rhetoric from Castro, and most disturbingly, by U.S. officials who, I would judge, believed that even an allusion to our defeat in Vietnam would suffice to unnerve the American people in their natural desire to retain our preeminence in the canal. This latter tactic has baclvfired badly, and if anything, has produced an opposite effect. The real question is: Apart from the 1964 student disorders we have had 74 years of peace, stability, and progress in the canal. Can this record be sustained or improved upon by the transparent "partner- ship" with Panama being advocated b^^ the State Department? Remember, once America is meeting her responsibility as a matter of Panamanian sufferance and not unequivocal U.S. rights, we can be asked to pull out overnight. 98-991 — 77 12 160 Payaway apologists: But the canal is especially vulnerable to sabotage. VFW response: It always has been, but it has only been in the last 3 years that this longstanding vulnerabilit}^ has been pointed out to us, often by our own negotiators. Again, how would the pullout of the U.S. garrison enhance the security of the canal from any group or faction seeking to make some irrational Third World point by blowing a lock or draining Gatun Lake? If the Panamanian Government's reply is that they are unable to control their own citizens' actions in the face of a continued U.S. presence in the canal, the question then looms, how reliable a partner would the Government of Panama be in any partnership with the United States in confronting any non-Panamanian, that is, Cuban pressure? Payaway apologists: But the canal and the Canal Zone are Panama's most important natural resource. VFW response : The canal is not a natural resource. It was built over a 10-year period by the Corps of Engineers. It is a quintessentially artificial or manmade enterprise. Second, the weight of history, law, and logic demonstrates that it is ours not theirs. Paj'away apologists : But whatever the merits of the case might have been in the past, aren't we painted into a corner by the February 1974 "Statement of Principles" agreed to by Secretary Kissinger and Foreign Minister Tack and the recent treaty signing extravaganza? VFW response : When you are painted into a corner, you have two basic choices: (a) keep on painting, or (6) use whatever turpentine is on hand to unpaint and get out. In 1967, Panama rejected an initialed draft of a new treaty. Our State Department can well use tliis earlier Panamanian rebuff as a vahd precedent for reexamining the vaUdity of the 1974 "Statement of Principles" and the resultant proposed treaties. Payaway apologists: Have you ever seen the stark contrast between the manicured lawns of the U.S. Canal Zone and the poverty and squalor of Panama over the fence? VFW response: Yes. A ridiculous bit of imagery^ insulting to both the Zonians and the Panamanians, who are placed in the nonsensical position of favoring litter and uncut grass. The Canal Zone is not Grosse Point, Beverly Hills, Tuxedo Park, or Chevj^ Chase. It is — and it should be — a typical American community adjusted for the life of the tropics. The best way to assure that Americans in the zone have a spokesman is to have the Canal Zone send a delegate to the U.S. Congress as does Guam, Puerto Rico, the Virgin Islands, and the District of Columbia. Payaway apologists: But the United States pays an annual rent to Panama. Doesn't this mean that Panama owns the canal? VFW response : It is not rent for land or the canal — we bought the property four times; from Panama, from the individual landowners, from the failed French enterprise, and from Colombia. It is an annuity paid to Panama — as it was earlier to Colombia — for displacing the old Trans-Istlmius Railroad. Not even the U.S. Government is so soft in the head that it pays rent on land that it owns four times over. Pa3'awa3" apologists: What is the matter with the proposed treaties' goals on this issue; that is, "to assure that the canal is operational, I 161 sec\ire, efficient, and open, on a nondiscriminatory basis to world shipping." VFW response: The goals cited above are a precisely accurate de- scription of the present arrangement. In short, why seek goals that have already been achieved? Payaw^ay apologists : Do you mean break off negotiations and there^ by incur the wrath of all of Latin America, bring an abuse of America in the United Nations, and incur, perhaps, the public opposition oi even our NATO allies? VFW response: If we retreat when we are clearly right, we will have surrendered, in advance, all our influence on other and more ambiguous international disagreements. There are 3 or 4 — of 20 — Latin American countries, not of course includmg Panama, that enjoy a significant degree of democratic freedoms. Democratic or authoritarian, many need the canal opera- tion even more than we do. I have neither seen nor heard of any hard intelligence that even suggests an international army drav^ai from Latin American States would either march on the canal or seek to infiltrate the zone in an International Vietnam- type operation. Cuba, of course, having tasted a revolutionary victory in Angola is a separate matter. As for NATO, as the Arab-Israeli Yom Kippur w-ar of 1973 so clearly underscored, our allies do not have concerted policies apart from the defense of the NATO treaty area. I w^ould expect a resolute U.S. stand on the canal w^ould gain the understanding and sujoport of our major European friends. As to the United Nations, we are in a classic no-win posture with the General Assembly and its Third World plus Communist majority. Former Ambassador Pat Moynihan's perception that many Third World countries in wanting to rip off the wealth of others are really calling for "duly sanctioned looting." His view has relevance here. To sum up our total opposition to the proposed treaties: If we wrongfully cave in on the sovereignty issue, we are on the isthmus at the sufferance of the volatile dictatorship of Brigadier General Torrijos. We could be asked to leave overnight. Do we then skulk out or do we stand our ground? The canal is much closer to Cuba than is Angola. Soviet inspired Cuban involvement on the isthmus could well wear a Panamanian cloak. We w^ould undoubtedly agonize, but we would probably acquiesce. The proposed Neutrality Treaty, which, we are told, would permit U.S. military action to defend the canal, is w^affling brought to an art form. The Panamanians have agreed to no such thing in writing or in their rhetoric. The administration may kid itself. It should not be allowed to kid the American people. Panama's wretched record in human rights, as attested to by the January 30, 1977, Freedom House study, needs no amplifica- tion here. The administration seems unembarrassed by this man- ifest hypocrisy. Our President went so far as to embrace, literally. General Torrijos following the signing extravaganza. I mean no disrespect to the Joint Chiefs of Staff", but until late 1975, they w^ere silent upon the treaty negotiations. I will not 162 comment upon their recent shift in view, but the unfettered mil- itary advice of four former chiefs of naval operations calling for continued U.S. preeminence makes the compelling military case. In revie\ving the Panamanian student riots of 1964, I no*te the following prominent Americans were then quoted as follows: Ambassador Ellsworth Bunker: The assault on the Canal Zone had been led by "persons trained in Communist countries for political action of the kind that took place" and that "the Government of Panama instead of attempting to restore order, was through controlled press, television, and radio, inciting the people to attack and to violence." Former President — then Minority Leader — Gerald R. Ford: "With Cuba under the control of the Soviets through its puppet, Castro, and with increased Communist subversion in Latin America, a Communist threat to the Panama Canal is clearly a grave danger. The American people will be shocked by the terms of this [Johnson administration] treaty." Joseph A. Califano, Jr. — current Secretary of HEW, then an Assistant to the Secretary of Defense: "We know that some of the leaders were known and identi- fiable Communists, members of the Communist Party of Panama, and people who belonged to the Vanguard of "National Action" which is openly and proudly the Castro Communist Party in Panama." Now, I realize that 13 years have passed and that people often change their minds over time. My question is: What hard evidence, available to all of us in 1977, caused these three distinguished Americans to change their minds over recent years about the nature of the Communist threat in Panama? We would all profit if they would share their new information with us. In conclusion, what the proposed treaties embody is a slow motion act of strategic self -mutilation. Only 13 of our warships cannot transit the canal today. As Navy ships get smaller even this small number will decrease. The canal and the zone (a) save 8,000 miles and 15 to 30 days; (6) have the only ship repair f acilities within 1,600 miles on the Atlantic side and 2,500 miles on the Pacific side; (c) have, in Howard Air Force Base, the only high performance airl3ase within 1,000 miles; and (d) is the only U.S. logistical base south of the Rio Grande. As to the possibility of violence should the treaties not be ratified, no one in America, especially including the VFW, is threatening anybody. We are being threatened by a Panamanian strong man who seemingly on alternate days, either threatens or abhors it. And this is the man with whom we see a partnership? What then does the VFW propose? (a) A revised U.S. position which would immediately disabuse Panama of any major territorial, defense, control or operational aspirations; that is, America is not running the canal on Panamanian sufferance. (6) Generosity and imagination on real life human grievances — ranging from parking places to job opportunities — where a long term U.S. administration may have needlessly chafed Panamanian citizens; and (c) A major modernization packet to ready the canal for ships now too large for passage and other measures all of which would combine to give a major boost to Panama's diversifying, albeit debt-ridden economy. 163 To conclude, an opinion research poll indicated that Americans favor by 76 to 16 percent, continued tJ.S. sovereignty over the canal and the adjacent zone. Change is an imperative when a given status quo is unworkable. Change does not equal progress when current arrangements not only do a job, but do it superbly The Panamanians want very badly to have their way and far too many in the State Department see it their way, that is, reciting Panamanians perceptions ad nauseam. Our people can, should, and must be brought unapologetically to defend a 74-year record America and the world maritime community have unarguably benefited from. Thank you. Chairman Zablocki. Thank you, Commander Wasylik, for your very forceful presentation of the VFW point of view on the Panama Treaties. There is a rollcall and rather than have the next witness, Comdr. William Rogers be interrupted, the committee will stand in recess and I am hopeful that the chairman of the subcommittee can come back as soon as possible to reopen the hearing. Unfortunately I have a conflict but I will be here as promptly as I can after I meet \\4th the Select Committee on Intelligence. The committee stands adjourned. [A short recess was taken.] Mr. Yatron [presiding]. We will resume our committee hearing and the next gentleman to speak ^^^ll be Mr. William J. Rogers, immediate past national commander. Mr. Rogers. STATEMENT OF WILLIAM J. ROGERS, IMMEDIATE PAST NATIONAL COMMANDER, THE AMERICAN LEGION Mr. Rogers. It is a distinct pleasure for me to appear before you today representing the American Legion. You have met the members of the staff who are with us but I would like to take a point of privilege to introduce our national president of the auxiliary Mr. Yatron. Without objection. Mr. Rogers [continuing]. Mrs. Viola Moltzen from North Dakota. Mrs. Moltzen. Good morning. Mr. Rogers. And the members of the National Security and Foreign Relations Commission of our auxiliary. Needless to say, we are each aware of the thousands of inches of newsprint and the hours of television coverage which have been devoted to the proposed Panama Canal Treaty in the past month. My reason for appearing before j^ou today is twofold : First, to represent the viewpoint and position of the American Legion as adopted by our recently concluded 59th national convention and my observations in traveling during 12 months throughout the United States and Panama. Second, I will spell out — objectively and dispassionately — what our concerns are and why we object to this specific treaty. 164 During these past 12 months, it has been my honor and privilege to visit all of the departments of the American Legion. We have a department in every State and territory making up the United States. At each meeting, without exception, our members were concerned about the possibility that the U.S. Government would relinquish sovereignty of the U.S. Canal Zone and canal. Furthermore, we would give it to a dictatorship in Panama which runs contrary to our natural instincts as .Vmerican citizens. Today, I have to speak for our 4 miUion members of the American Legion and the American Legion Auxiliary. We represent miners in West Virginia, grain growers in Illinois and Iowa, energy producers in Texas, machinery manufacturers in New York; and shipping industry of all States where rivers and harbors open to the sea — altogether we represent a composite and microcosm of the United States. For most of us in the American Legion and all our citizens are either buyers or sellers of commodities passing through the Panama Canal. ^Moreover, all of us are dependent on the protection of the U.S. Navy to control the seas surrounding our country in the center of the Western Hemisphere. Quite frankly, the main thrust from every Legion Post was the same, deep apprehension about the proposed treaty with Panama. Did the United States really intend to abandon its citizens to a dictatorship? If so, what did the United States stand to gain from such a giveaway ? I don't think it will come as a surprise to the members of the com- mittee, but I think it may come as a surprise to certain of our leaders in the executive branch and to certain of our national cartoonists in recent weeks, but the typical Legionnaire, who also happens to be the typical American, understands the Panama Canal situation. The average Legionnaire understands the facts and the realities of standing straight for what is right, and objecting to something which is wrong and not in the American interest. Though we have opposed any treaty which would surrender U.S. .control and ownership since 1960, Legionnaires throughout the country have been given both sides of the picture. In the American Legion magazine, which goes to every member, we invited the top •spokesman for the Republic of Panama, Ambassador Gonzalez Revilla, to state the case for the Panamanian Government. The Am- bassador's position to transfer ownership of the zone and canal to Panama was printed in full in the October 1976 issue of our magazine. Congressman Daniel Flood was invited to state the case for U.S. sovereignty in the same issue. At our national convention recently completed in Denver, we invited Ambassador Sol Linowitz to come and to take as long as he liked to state the case for giving the U.S. zone and canal to Panama. As you know. Ambassador Linowitz is articulate and knowledgeable on all the issues as the U.S. negotiator, and presented the adminis- tration's viewpoint to our Foreign Ilelations Commission for well over an hour. Since this was the major issue to be decided by our National Con- vention in 1977, we decided to set the Panama resolution aside from other foreign policy considerations and vote on it separately, by rollcall department by department if necessary, so we could be sure that the National Convention did not trespass on the will of our members, so we would know the real vote. 165 After the chairman of the Foreign Relations Commission, Dr. Robert P. Foster, seated here beside me, read the resohition, the convention members in a voice of one, called out for a vote. The vote to oppose giving the U.S. zone and canal away was unanimous. Al- though there were over 3,000 delegates representing the 2.7 million members of our organization, there was not one dissenting vote. The silence of the nays was as persuasive as vocal shouts of the yeas. The truth is that the American Legion has expressed its collective judgment. I will now discuss the reservations and objections which we have to this proposed treaty. The first is the strategic and military impor- tance of continued U.S. control of the canal and the Canal Zone. At the onset, we realize that the United States has a one-ocean Navy with a global responsibility. Today, all but 13 of the ships in the U.S. Navy — the exception being the large aircraft carriers — can pass through the canal. More- over, we, along with the Congress, must be ' 'forward looking" and long-range prognosticators regarding the true effects now and in the future of the proposed treaty. As each of you are aware, we have made a national commitment to the minicarrier concept. And, when they come on line in 3 to 5 years, I have been assured by the Navy that they can transverse the canal, making the canal even more important in a military sense in the years ahead. Hanson Baldwin has recently written: It is ironic, indeed, that in an era when the U.S. Navy needs the canal to a greater degree than at any time since the end of World War II, Washington is considering its abandonment. The Navy today is in the same strategic bind it was in prior to World War II. It is a one-ocean Navy (in size and power) with two-ocean responsibilities. We are outnumbered in submarines and surface ships by the Soviet Union and, more than at any period since 1945 the Navy must have a quick transfer capability between Atlantic and Pacific in order to meet sudden crises. Gen. V. H. Krulak, US?kIC (retired), writing in the summer 1976 issue of Strategic Review, summarized the canal's naval importance; "In truth the Pan- ama Canal is an essential link between the naval forces of the United States deploj^ed in the Atlantic and in the Pacific. It is only because of the waterway that we are able to risk having what amounts to a bare bones, one-ocean Navy." During the Vietnam war about 98 percent of all supplies for our forces were shipped by sea; of this total, approximately 33 percent were loaded in east and gulf coast ports and transited the canal. The volume of military sponsored cargo in the 4 years from 1964 to 1968 increased, for dry cargo, by 640 percent and for petroleum products bj^ about 430 percent. And the number of U.S. Government vessels (chiefly naval) transiting the canal increased from 284 in 1966 to more than 1,500 in 1968. Within the military community, and among the retired and active military, there is great diversity of opinion. In addition to the historic letter of four distinguished Chiefs of Naval Operation, including the former Chairman of the Joint Chiefs, Adm. Thomas H. Moorer, saying that the proposed treaty is contrary to the security interests of the United States, we are hearing from many military leaders and the majority of these opinions, like the majority of our citizens, are op- posed to the giveaway of the zone and the canal. From a military viewpoint, a commander never gives away strategic territory which he may have to fight to regain. The U.S. Canal Zone is strategic territory. All the military, both active and retired, agree on that point. 166 From an economic perspective, the canal is vital to U.S. interests. In 1975, approximately 14,000 ships transited the canal of which 45 percent originated in the United States and 23 percent were bound for the United States. No other nation even approaches the invaluable, economic stake which we have in the canal. However, the canal is important to all maritime commercial nations since 96 percent of the world's merchant fleet can transit it. The canal is just this year assuming an additional commercial importance to the United States as Alaskan oil begins to flow. When the Alaskan pipeline reaches its full capacity, it will yield 1.2 million barrels of oil a day. The west coast of the United States can accom- modate only 700,000 barrels a day. This means that approximately 500,000 barrels a day cannot be used on the west coast, and must be transported east. No pipeline has yet been constructed across the United States, and the trip around the Horn, as has been demon- strated, is not economically feasible. Unhindered use of the Panama Canal is critical until an adequate pipeline can be constructed. Moreover, at the present time, the United States has an overall investment in Panama of $7 billion. By the year of our total evacua- tion under the terms of the treaty, that interest will have grown to $9.3 billion. To add insult to injury the treaty proposes that we pay some $50 million per year, plus about $350 milhon in economic and military aid to have the Torrijos group take over the territory and property. Contrary to popular argument, control of the canal by the United States serves the best economic interests of the people of Panama In 1976, U.S. agencies purchased over $29 million worth of goods in Panama, and we paid over $18 million in wages to non-U.S. citizens. U.S. private investments amount to 50 percent of the capital invest- ment in Panama. And U.S. employees spend $39 million there. In the preamble to the American Legion constitution, we pledge to ''safeguard the principles of justice, freedom and democracy" — in 1977 terms this translates into human rights. As this committee is aware, Panama is a dictatorship, or in the words of Ambassador Bunker before Congressman Murphy's committee, an "authoritarian" government. The aspect of the Torrijos government which is most significant, is that it is a repressive dictatorship. Freedom House, the respected organization which ranks countries on the basis of human rights, gives Panama the lowest rating in Latin America. Panama received the same 1977 rating on political and civil liberties as the Soviet Union and was rated even lower than Cuba. General Torrijos came to power in Panama by a coup and is govern- ing without the consent of the people. The truth is that since General Torrijos participated in the overthrow of Panama's constitutional government by gunpoint in 1968, 1.6 million people have lost their human rights. There is no political party except the Communist Party, called the People's Party, El Partito del Pueblo. Further- more, the moneys from Panama Canal annuities do not go directly to the people, the money goes to the Torrijos power group. As you are probably aware, the Panamanian Constitution requires a plebiscite vote of the people for ratification of any new treaty, which will be held on October 23. The sad irony is that the controlled and I 167 censored Panama press — ''guided" in the terms of our chief neg^otia- tor — will never give a full and objective account of the treaty to the Panamanian people. Another concern which we have is the political association and economic stability of the Government of Panama. On the economic side; under Gen. Omar Torrijos, Panama's national debt has grown from $167 million to $1.5 billion. The debt service alone will consume 39 percent of that country's budget this year. Panama's Department of Planning indicates that to refinance loans coming due, together with the $139 million deficit, a total of $323.6 million will be required. Obviously, Panama cannot financially afford to have the treaties rejected either. Politically, Panama's Omar Torrijos has alined himself with the most repressive pro-Communist regimes in this hemisphere — those of Cuba's Fidel Castro, Jamaica's Michael Manley, and Guiana's Forbes Burnham. According to U.S. Information Agency, Torrijos issued a communique last April with pro-Arab terrorist dictator Col. Moammar Qaddafi of Libya denouncing what they called "Zionist aggression by Israel." The communique was issued at the end of a weeklong visit by Torrijos to Libya, for the purpose of creating close economic and political ties between the two countries. Jack Anderson and Les Whitten stated in their nationally syndi- cated column on June 16, that they had evidence that this Torrijos- Qaddafi meeting had also resulted in a secret deal between Libya and Panama to give Arab extremists a foothold in the Americas and to cooperate with the Arab bo3Xott against Jewish manufacturers. Torrijos has also busied himself with making closer political and commercial ties with the Soviet Union. Again, according to the U.S. Information Agency, top officials from the Soviet PoHtiburo and Central Committee of the Soviet Communist Party visited Panama last June. Almost immediately after the Soviet Politiburo team left Panama, a Soviet commercial delegation headed by Nikolai Zinoviev arrived and concluded a major Soviet-Panama commercial agreement with the Torrijos regime. This agreement, according to news reports in the Torrijos controlled newspaper Critica, could result in the opening of a Soviet bank to run Soviet commercial activities through- out Latin America, as well as a series of other multimillion dollar trade and construction projects with Panama. Whether it was a treaty of intent or a pact of infinite promise, we don't know. The treaty was signed by Omar Torrijos' brother-in-law, Marcelino Jaen, and Soviet leader Nikolai Zinoviev who is also listed as a KGB agent. After the signing, Panama's Jaen declared the Soviet treaty — ... is an event of deep historic signing, not only for our country, but for the American continent as well who are always facing strong forces that represent philosphy that is contrary to the destiny of Latin America. Of deepest concern is Torrijos' close ties with Fidel Castro and Cuba. Cuba under Castro continues to aggressively export and pursue Communist domination and control of other nations. Just this past weekend the New York Times reported that 4,000 m.ore Cubans were sent to Angola recenth' to "stabilize the nation's most serious crisis since the 1976 civil war." The 4,000 Cuban troops would increase 168 Cuban troop strength in Angola to 19,000. This to me clearly indicates that Castro hasn't backed off 1 inch from his declared goal of Com- munist domination of the Western Hemisphere and the world. Also of concern is the reliability of the Panamanian dictator to live up to what he signs. Panama has violated the present treaty at least 11 times during the past 2 years. These violations included such mili- tant acts as the Panamanian National Guard taking up positions in December 1975, within the U.S. Zone; attempting to arrest and actual^ shooting a citizen in the U.S. Zone in January 1976; setting off bombs and explosions in the U.S. Zone in October 1976, and capturing a vessel, the Sea Wolf, which was operating inside Canal Zone waters and burning and desecrating our U.S. flag. Our Ambassador has protested such lawless treaty violations, but one must question the wisdom of appeasing and making further concessions to a government whose recent history is pockmarked with deliberate violations of the current treaty. If our current treaty with Panama is being violated on a routine basis, where is the logic that such attitudes and behavior will improve between 1977 and 1999, the magic year when Torrijos is supposed to get everything, lock, stock, and barrel? I would like to turn now to the question of U.S. sovereignty^ Many of the arguments for the switch in sovereignty and much of the con- scious or subconscious motivation for it stem in part from ignorance or distortion of the manner in which the Panama Canal Territory was acquired by the United States and of the wording of the original treaty of 1903. Contrary to these assertions from public officials who should know better, we did not steal the canal, nor does Panama have residual, titular, or any other kind of sovereignty over it. The United States bought the Canal Territory — a strip across the Isthmus of Panama some 50 miles long and 10 miles wide — at a cost to the American tax- payer that far exceeded the cost of the Louisiana Purchase, the Mexican cession, the Florida Purchase, the purchase of Alaska, or any other territorial acquisition. I have toda}' for the committee the actual prints of the purchase price paid by the United States individual by individual as part of the 1903 treaty which I will give to the committee.* Mr. Yatron. Without objection. Mr. Rogers. Thank you. Despite current contentions by the State Department that the 1936 treaty revisions recognized Panama's sovereignty over the Canal Zone, it is clear that in both wording and intent the treaty actually reemphasized the sovereignty, in perpetuity of the United States. History and the law appear to indicate in no uncertain terms that there is no merit whatsoever to the concept that the treaty of 1903 vested so-called titular sovereignty or residual sovereignty in Panama. The wording is clear and unequivocal : The Republic of Panama grants the United States in perpetuity the use, occupation and control. Of the Canal Zone: The Republic of Panama grants to the United States all the rights, power, and authority within the zone mentioned * * * which the United States would 1 Material was retained in committee files. 169 possess and exercise if it were the sovereign * * * to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, powei-, or authorit}'. One cannot transfer sovereignty unless one exercises it. The United States has, and will retain until Congress decides otherwise, complete sovereignty and control of the Canal Zone in perpetuity. Even General Torrijos in his remarks follo\\ing last Wednesday's signing acknowledged U.S. sovereignty and I quote: What nourished the hopes of Panamanians for the recapture of their sovereignty was their feeling that the North American people fundamentally harbored no colonial aspirations, I will now turn to the treaties and the accompanying annex and protocol. This analysis is based upon the limited time in which these treaties have been available to this layman and I urge each member of this committee to scrutinize these documents. (1) Sovereignty is the crucial factor in the new treaties. Both the prologue to the canal treaty, and at least six other times in the docu- ment, Panamanian sovereignty over the U.S. Zone and the canal is acknowledged. As I stated earlier, once Torrijos is granted sovereignty all other questions are irrelevant. (2) According to recent analysis of the treaty, should Panama abro- gate the treaty, the United States would have no legal basis in inter- national law to maintain its position in the former Canal Zone. (3) Article II, section 1, of the Canal Treaty specifies that it should ''be subject to ratification in accordance with the constitutional pro- cedures of the two parties". However, it would appear that the execu- tive branch is seeking ratification of the treaties without seeking enabling legislation from the House of Kepresentatives to transfer real properties, appropriation of funds and perhaps other legislation which is not spelled out, as required by the Constitution of the United States. This is bypassing the House of Representatives and appears to be an usurpation of legal powers which is clearly conveyed to the House by the Constitution. (4) Article XII, section 2(b), states that: During the duration of this treaty the United States of America shall not negotiate with third states for the right to construct an inter-oceanic canal on any other route in the Western Hemisphere, except as the two parties may otherv/ise agree. In plain terms, the United States has surrendered its rights to negotiate for a competing canal elsewhere in the Western Hemisphere unless it has Panama's consent. (5) Article V of the canal treaty directs that employees of the Panama Canal Company, their dependents and other American na- tionals should ''abide by the laws of the Republic of Panama and abstain from any activities in competition with the spirit of this treaty." This article also directs that they abstain from any political acts in the Republic of Panama. As I stated earlier, there are American Legion Posts in the Canal Zone and I am deeply concerned about forcing American citizens to submit to a dictatorship and their surrender of rights as Americans. (6) Article IX, section 3, recognizes the right of ownership of im- provements to realty but does not recognize the right to own real estate. While we do not know how man}^ Americans own propert}' in 170 the Canal Zone, if any, it would appear that article condones or per- haps authorizes expropriation of property by the Panama Government. (7) Article Xlli relates to pa^^ments to Panama for the right to operate the canal. One such payment of $10 million j)er year from profits is cumulative which means there is a possibility that we could, over the 23-year period of the treaty, end up owing the Panama Government $230 million. Additionally, I have strong reservations and objections to the Neutrality Treaty: (1) Only article IV of this treaty bears upon U.S. responsibility concerning the neutrality of the canal and the entire document is so vague as to be virtually meaningless. In my lay reading of the entire neutrality treaty, I find no assurance that the United States can inter- vene to assure the neutrality of that vital area. Dr. Romulo Escobar Bethancourt, the Chief Negotiator on the part of the Panamanians said: "The treaty does not establish that the United States has the right to intervene, that is, send in troops, in Panama", he said. He denied that the treaty gives the United States the right to decide when neutrality is violated or not. Neither, in his view, do U.S. warships have the right of expeditious transit without conditions. (2) Article Ill(e) states that "vessels of war and auxiliary vessels of all nations shall at all times be entitled to transit the canal". This statement assures the passage of warships through the canal of nations which may be at war with the United States. (:]) Article VI, section 1, states that vessels of war and auxiliary ves- sels of the United States and the Republic of Panama "will be entitled to transit the canal expeditiously". The exact meaning of the word "expeditiously" is vague at best. Dr. Escobar said, I refer to the Con- gressional record: referring to the people of the United States, "If their warships say I want to go through first, then that is their problem with the other ships there." Moreover, article VI, section 1, of the Neutrality Treaty appears to be in direct conflict with the protocol accompanying the treaty which states that vessels of all nations will be insured permanent access to the canal "on the basis of entire equality". In brief summary, an evaluation of the facts about the treaty have brought us to the day of the signing September 7, 1977 — a bad day for the United States. U.S. military and national security losses are sufficient to reject the treaty. We are giving up our naval fleet flexibility at a time when we have fewer than 400 ships in the entire U.S. Nav3^ Economic losses of the United States are difficult to calculate, but logic dictates that U.S. consumers and exporters are going to pay the toll increases. Additionally, the cost of the U.S. tax])ayer is in the billions. Moreover, someone will pay the billions of dollars owed international bankers by the Tonijos government. It will not be Panama. The Torrijos government is living on borrowed money and borrowed time. Politically, human rights \mder Torrijos are no better than they were under Hitler during the 1930's and yet by supporting this treaty, our U.S. Government is proj^ping up a dictatorship. Worse yet, our Government is forcing Americans to live under totalitarian rule and abide by its laws and decrees. That is what World War II was all about. 171 The pressures the White House can brine: are enormous as all of us know. The resources at the President's disposal almost defy our collective imagination. The recent treaty signing festivities were an example of Presidential style and substance. We in the Legion, while recognizing the awesome power of the Presidency and the Executive bureaucrac}^ also believe that the ultimate power in the United States resides with the people — with people like our members. I will close with one question — if this treaty is basically good for the United States, why does the administration have to make such an effort to prove to Americans that it is in our national interest? Those of 3'ou in the House who return to your districts every 2 years know what the people back home are thinking. You know the Legion posts and grassroots opinion runs about 80 percent against the give- away. We believe this proposed treaty will ultimately be decided by the people. We believe this is one defeat the United States should avoid. It is a loss we need not accept and you can count on the American Legion posts to stand firm. Thank you. Mr. Yatrox. Thank you very much, Commander Rogers, for an excellent statement. The next speaker will be Commander Frank D. Ruggiero. STATEMENT OF FRANK D. HUGGIERO, NATIONAL COMMANDER, AMVETS Mr. Ruggiero. Thank you, Mr. Chairman. My name is Frank Ruggiero and I represent the AMVETS, the American Veterans of World War II, Korea and Vietnam. I hail from a little town Lynd- hurst, N.J., and I am principal of a school on leave to come here and represent this great organization. To my rear is Dennis McClure, my legislative director for AMVETS, seated. I will say that the convention in Atlantic City embodies the principles and the decisions that were made about the statement I am about to read. Mr. Chairman and honorable members of the committee, AMVETS is grateful for this opportunity to present the views of our organi- zation on such a vital issue as the much publicized and highly con- troversial Panama Canal Treaties. It is our opinion that few matters in recent history have held the importance or portentousness of this fateful issue. In concert with our great brother organizations, AMVETS speaks to this matter in the sense that we, the veterans of our Nation's wars, are of a right and necessity deeply concerned with the future of the U.S. defense posture in general and in the Western Hemisphere specificalh". As do other concerned Americans, we address ourselves also to those issues which affect international and hemispheric com- merce and embrace our national economy. Therefore, the issues in- volved here are directh' germane to our concerns and activities, for what segment of our society has more right to oppose that which we believe threatens the U.S. defense and economic position on the "American landmass." The administration and some Members of Congress have challenged the term "sovereignty" as that term pertains to the Ha3'-Bunau 172 Varilla Treaty of 1903. They claim that the United States was never g:ranted sovereignty over the Canal Zone in the legal sense. We do not argne that point. The dictionary definition of the term sovereignty , is of little importance in this issue as we see it. The fact remains that ' any reduction of American military forces on the Isthmus of Panama and the loss of U.S. control over the Canal Zone could be disastrous. The U.S. defense posture, south of the Rio Grande would be virtually nonexistent. The canal, regardless of its inability at present, to accom- modate the supercarriers and supercargo vessels remains as the single most important waterway on the western half of the globe. I would like to say that American shipping represents approximately 43 per- cent of all traffic transiting the canal. The isthmus itself, the canal notwithstanding, serves as the roadway between all of the Americas and is, in our opinion the crossroads of the hemisphere. This demands American presence and control to insure that communistic or other- wise adverse influences will not choke off North America from South America. The President's concern over human rights can best be served by maintaining our strong position in Panama and preventing the influence of Castro Cuba and other elements from establishing a toehold. Furthermore, we are not convinced that the people of Panama, and we refer to the common people not the pseudointellectuals, are desirous of having the United States pull out of the Canal Zone. Indeed, we have reason to believe that is the last thing they want to see happen. In this regard we quote from an article which appeared in the Chicago Tribune of March 25 by Mr. Ronald Yates: Incredibly and in spite of an almost daily diet of government-inspired anti- American rhetoric in the Panamanian press, the poor and the unemployed of this nation of 1.7 million say they are not ready to run the Americans out of Panama but rather are prepared to fight to keep the canal in United States hands. And Mr. Yates found this to be a typical remark of a Panamanian on the street: You see, the only people in Panama who have ever given the United States trouble are the Communists, rich university students, and parasitic intellectuals who live off the blood and sweat of people like us. He continued: We have nothing against the Americans or the Canal Zone because we know as long as America has control of the Canal, there will be jobs for Panamanians. But as soon as you [America] give it back to Panama, it is going to go all to hell and nobody will have jobs. We fully appreciate that the passage of seven decades would necessitate adjustments in monetary considerations commensurate with today's values. We do not oppose any reasonable arrangements in this connection. Our sole opposition is to any treaty which would dilute or compromise U.S. control of the Canal Zone now, or in the future. General Torrijos was reported to have said : In the event that peaceful negotiations for a phasing out of United States control were closed, a campaign of violence against the 15,000 Americans in the Zone would be inevitable. Two options would be open to me, he continued: "To smash it or to lead it — and I am not going to smash it." If we give in to this threat, 173 how could we guard against sabotage by subversive elements of Panamanian military forces? This prompts other questions: First, If we — the United States — grant the desired concessions to Panama, what guarantee will we have that Panama will live up to its end of the bargain? Second, If communistic influences prevail, such as those we suspect exist currently in the Carribbean area, how will we defend the Canal Zone should Panama succumb to these influences? A strong stand must be made if we are ever to regain the image we once projected abroad. Some would say that by granting the Pana- manian demands the United States would gain the respect of the Third World nations. We think not. We believe that the opposite reaction would take place and that America would be looked upon as a push- over. Respect is given to the strong, the assertive, the fair. Again, we do not oppose a fair financial arrangement, but not in the form of tribute. We are asked if we were in the position to make the decision: ^ 'Would we be willing to go to war in order to retain U.S. control of the Canal Zone?" We ask, in turn : "War with whom?" Are we to believe that Panama by herself or all of the Latin American nations collective- ly would wage war against the United States over this or any other issue? Or do we believe that the Third World and/or the Communist nations including Red China and the Soviet Union would join forces in such an adventure? We believe the possibihties of such an occurrence are too remote to merit consideration. It has been further suggested that should the treaties not be rati- fied, the veterans' organizations and other anti-treaty groups would share collectively the blame for whatever reprisals are taken against American personnel in the Canal Zone. That, in effect, ''their blood would be on our hands." It is, and would be, the responsibility and solemn obligation of the Commander-in-Chief of the U.S. Army, Navy, and Air Force to take whatever measures are necessary, including armed force, to insure the defense of the Canal Zone and the safety of its inhabitants. In conclusion, Mr. Chairman and members, we offer no alternatives to the current status of the United States on the Isthmus of Panama except in the area of more financial equity, and indeed, recognize no need to enter into any further negotiations with the Republic of Panama which would attempt to eliminate or phase out U.S. control of the Canal Zone. Agam, and finally, Mr. Chairman, we thank the committee for this opportunity and will attempt to answer any questions the members may wish to ask at this time or we will be happy to respond in writing, for the record. Mr. Yatron. Thank you very much, Commander Ruggiero, and we thank you and the other gentlemen who have testified as well as the other members of your delegation. I will address this to Dr. Wasylik; perhaps you could respond to this question, or anyone else who wants to respond. TRANSIT RIGHTS OF U.S. WARSHIPS UNDER NEUTRALITY TREATY Do you see any conflict between the regime of neutrality and the right of the U.S. warships to transit the canal? 174 1 Mr. Wasylik. We don't feel that the neutraUty statement is an accurate one; in reading it, it doesn't appear to be neutral. It says the Panamanians are going to have control and if, at a future time, they want to control that canal and sa}^ we can't get through, I don't know of any way we are going to do it except by fighting our way through. U.S. RIGHT TO DEFEND THE CANAL Mr. Yatron. Does the Neutrality Treaty, in your view, stipulate an affirmative U.S. right to intervene in defense of the canal and the canal operations? Mr. Wasyltk. No; it does not say that. In fact, I guess really I gave your second question answer first. I am sorry for that. But^ basically that is our contention, that it does not. MILITARY VALUE OF CANAL TO THE UNITED STATES Mr. Yatron. Well, would you please explain precisely what you feel is the military value of the canal to the United States? Mr. Wasylik. Well, as I said in my prepared statement, it is the only military establishment -sve have south of the Rio Grande. We have ship repair facilities there. We do not have them on the Atlantic side for 1,600 miles from there, and from the Pacific, we would have to go 2,500 miles. We have an Air Force base there. We do not have another Air Force base below the Rio Grande. We have ability to move logistics through that canal that are important, and in time of war, we would not have any other way except to go around South America, which takes so much more time and mileage. Mr. Yatron. At what specific points do you feel our defense pos- ture will be weakened by the treaties if they are ratified? Mr. Wasylik. I feel that they would be weakened the day the treaties are ratified, particularly if General Torrijos was overthrown; then, who do we have an agreement with? It is a dictatorship — you have no elected representatives in Panama, and if he is replaced by another dictator, that person could have the right to say, I didn't sign it, I don't agree with it, and it is null and void. We now have the canal though so we will tell you what to do. Mr. Yatron. Thank you. Mr. Winn. Mr. Winn. Thank you, Mr. Chairman. First, I want to commend you gentlemen for some very fine state- ments and I would like to apologize for the lack of attendance of the members of this committee. This room was packed yesterday with the proponents but when the opponents appear today, we have got very, very few members in attendance. I apologize for that. 1 am particularly interested in the defense and the national security aspects of the Panama Canal and I just wondered if any of you would like to comment whether you think the Panama Canal is more or less militarily important to the United States than it was 25 years ago — that statement has been made — and what you think about the future of the Panama Canal as far as security and defense is concerned 25 years from now? Mr. RuGGiERO. I would like to answer that question, if I may. 175 I believe any base — established base — where we have American defense groups or American defense troops available for distribution among the areas in which it encom]:)asses is important to our defense. You have the naval base at the end of Cuba; you have others around the world that are strategically located, so we can, in the event of aggression by some nation who we find is not favorable to our sets of standards, we would have that available to us, and yet we still have our 43 percent, as we said, of our shipping going through there — and there is an economic factor. Should that be denied us, of course, com- modities would have to go up because we would have to send our ships around the long way, around the Horn. I don't think that would be practical. So I would think that anything that we have that is standard de- fense procedure shouldn't be eliminated at any time unless we feel that we should give this concession to other people, and I think that the American people will not stand for that, sir. Mr. Rogers. When I was in Panama the first of this year I had an opportunity to talk with McAuliffe — General McAuliffe — and the other military people. I think the troops we have in Panama are the finest trained troops that we have. The general stated that every day they are being trained or acting as though this was the day that the problem was coming. It was the area that we trained troops for Vietnam because of the terrain and because of the jungle. I don't know whether the canal could be defended. It is a long 58-mile area. I think if you put men every 2 feet apart you couldn't defend it. One man with a stick of dynamite could put it out of commission but we do have the capability, we do have the troops and the will to defend it down there. Mr. WiNX. I don't know if any of you gentlemen heard the figures that my colleague from California, Mr. Lagomarsino, put in the record yesterday. Pie put some figures in that you would be interested in about the increased use militarily of the canal since 1966. He may care to comment on it when he gets his time. Mr. Rogers, you made a statement on page 8 that either I don't understand or you may know something we don't know. In the last sentence of the first paragraph you said : Furthermore, the money from the Panama Canal annuities do not go directly to the people, the money goes to the Torrijos power group. Mr. Rogers. May I refer that to our expert on Panama for the American Legion who is with us? Mr. Winn. Yes; I would prefer that he identify himself. STATEMENT OF DR. EGBERT P. FOSTER, CHAIRMAN, NATIONAL FOREIGN RELATIONS COMMISSION, THE AMERICAN LEGION Mr. Foster. I am Dr. Robert Foster, chairman of the Foreign Relations Commission. I think it's obvious in our conversation with those who will talk to us in Panama that much of the payment that goes to the so-called structured government, which does not mean that it gets back to the use of the people of Panama. It's interesting, too, to note that there seems such affluence among this particular group and so much poverty among the people. I think it is very significant as to what is taking j^lace. 98-991—77 13 176 U.S. BANK LOAN TO PANAMA Very little has been said about the program that General Torrijos has followed in making loans. I think it's very enlightening to realize that the banks of the United States have loaned tremendous amounts, several hundred milhons of dollars, and I think this is a factor that is often not brought to light or fully understood. Mr. Winn. Well, thank you very much. Panama's ability to maintain the canal Do any of you have any confidence in the ability of the Panaman- ians to maintain the canal when they are on their own? Mr. Rogers. None whatsoever. Mr. Wasylik. That is one of the major problems, they will not have the managerial expertise to run the canal. value of canal during VIETNAM WAR May I also point out with regard to your former question, during the Vietnam war better than 90 percent of our logistics that went to Vietnam went through the Panama Canal. It was very important at that time. Although, of course, I want to stress that we as a panel are not for war, we certainly hope there are no wars and no violence, we all work for the strength of this country in the hopes that through strength, we will have peace. We have been there, we know what war is like, it's terrible, it's bloody, it's horrible. We believe in peace through strength. We believe by continuing to back off, give in and placate our enemies that we are going to place ourselves in a position we may well regret. Mr. WiNN. Thank you very much. That red light means my time is up. Thank you. Mr. Yatron. Time has expired. Mrs. Meyner. Mrs. Meyner. Thank you, Mr. Chairman. Gentlemen, I thank you for your testimonies and as Veterans of ForeigTi Wars and American Legion and Amvets, people who have fought for your country, I can understand your concern over both these new treaties, but I am puzzled by something, and that is that it seems to me that our top military leaders in this country favor this treaty. There hasn't been a hint of opposition from the Joint Chiefs of Staff. support for treaties by joint chiefs of staff Yesterday Gen. George Brown, the Chairman of the Joint Chiefs of Staff, said that without question the United States must prepare for difficulties down there — he meant in Panama — if the treaties aren't ratified. He stated that the Joint Chiefs of Staff are proud — that was the word he used — to have the treaties as negotiated. Now, certainly the Joint Chiefs of Staff are men that know more about the importance of U.S. security interests and about our defense than almost any of the rest of us. 177 Do you think that the Joint Chiefs of Staff, including General Brown, are being dishonest about these treaties, coming out in favor of them? Mr. Wasylik. I wonder if I might refer that question to my security adviser. Col. Phelps Jones, U.S. Army retired Mrs. Meyner. I think this is a question that puzzles us all. \h\ Wasylik [continuing]. Who has fought in three wars, by the -way. STATEMENT OP COL. PHELPS JONES, DIEECTOR OF NATIONAL SECUEITY AND FOREIGN AFFAIES FOU THE VETERANS OF FOREIGN WARS Colonel Jones. Thank you. My nam.e is Phelps Jones, I am from your neighboring State of Connecticut, some years back. I spent 30 years in the Army, all of which were in the infantry, and had the good or bad fortune, depending on the point of view, to have perfect attendance at all these wars. Along the line I have worked for some very distinguished military people. Maxwell Taylor, Gen. George Brown. Our senior military people are the most convinced constitutionalists in this country. I know that. They have been put in, I think, a par- ticularly difficult position here. General Brown said in his press report, which I read this morning, that the Joint Chiefs have been involved in this problem for years. Well, until November 1975, it was on the other side of the problem. At that time, then Deputy Secretary of Defense Clements accom- panied General Brown to the Kepublic of Panama, and following that visit the Chairman then announced the Joint Chiefs' support of the ongoing negotiation. I don't believe along with some critics of the Joint Chiefs of Staff that they are fear ridden little people or w^orried about their jobs. That is cruel, canard, absolutely inappropriate. But the Carter administration has made this their No. 1 foreign polic}^ priority and with convinced constitutionalists, who like the rest of us aren't looking for a narrow precipice of principle to leap off of, I can certainly understand how the Chiefs could be brought on board. W^ORK OF PAST PRESIDENTS ON A NEW CANAL TREATY Mrs. Meyner. Well, thank j^ou for that explanation. Another thing that puzzles me along this same line is that four Presidents, President Johnson, President Nixon, President Ford, and President Carter, have all worked toward this treaty, and I would suppose that they w^ould have the best interests of the United States at heart. Colonel Jones. Of course the3^ do, but I think it would be fair to state with the treaty its incubus was the U.S. Department of State and we are guessing about the nature of the future. Some dedicated people think that this would be a helpful thing, a forthcoming act of sovereign grace, all these other things, but the hard arithmetic, and geography, endure when everybody's rhetoric ends and the military and the security aspect in our judgment are paramount. 178 Mrs. Meyner. Thank you. Mr. Rogers. Could I add something to the Colonel's statement? Mrs. Meyner. Certainly. Mr. Rogers. I last year had an opportunity to visit military bases throughout the world. I visited with many naval, Army people, and, of course, the Panama Canal subject came up because it was of im- portance. I think without question all of the military leaders, as the often referred letter by the four admirals, I think that opinion is shared by them but they are not going to do a General Singlaub, they are going to keep their opinions to themselves. Off the record we have been told what their opinions are. Mr. Ruggiero. I would like to add to that if I may. Mrs. Meyner. Yes. Mr. Ruggiero. There are two discussion periods the Chiefs of Staff make. One is under the control of the President whom they are pledged to serve, and the other is when they make individual analysis as personal privileges. I think j^ou would find that the differential between the two is absolutely astounding. Thank you. HUMAN RIGHTS SITUATION IN PANAMA Mrs. Meyner. Commander Rogers and Commander Was3dik, in your statements you both gave as one of the major reasons for opposing the treaties the human rights situation in Panama. The human rights situation in many countries is not very good. I know it isn't good there, but do you also oppose U.S. defense agree- ments and economic relations with other governments charged with serious human rights violations, such as Korea, Taiwan, the Philip- pines, Indonesia? All of those countries have autocratic men that run them. I mean why do you single out just Panama? Mr. Wasylik. We are not singling out just Panama. We pointed that out to the administration. To the contrary, I should say we should look at administration policy, which seems to single out one area and not another. There are differences of opinion on the part of the administration. They have singled out countries in Latin America, Chile, Argentina, Brazil, from which they have withdrawn economic and military aid, and here they want to give additional economic aid. So I would say let's ask the administration to explain that policy. Mrs. Meyner. Were you aware that Panama has announced that it has invited the OAS Commission on Human Rights to make an onsite inspection of alleged human rights violations? I wondered by any chance if the OAS findings were to show a sub- stantial improvement over the conditions described in the Freedom House report, would such a finding change your standard on the pro- posed treaties? Mr. Wasylik. No; it would not. Mrs. Meyner. Because the OAS did discover and report that the human rights situation wasn't as terrible as we all are led to believe it is. Mr. Wasylik. It would improve our opinion of Panama but it would not change our standard now. i 179 Mr. Rogers. Mrs. Meyner, again in my visit to Panama I had an opportunity at first hand to see what some of the human rights viola- tions were. I, incidentally, had a visit from a gentleman who came in from the United States, a Panamanian, who came to talk and speak before our convention. He was detained at the airport because he had the temerity to address our convention against the treaties. We had people from Panama at our convention this year who stayed just as far away from the press as they could. Mr. Yatron. Time has expired. Mr. Guyer. Mr. Guyer. I thank you and we are sorry, gentlemen, that we have to go vote. We only have 15 minutes to get over there from the time the buzzer sounds. I just want to first of all sa}^ how proud I am that Mr. Wasylik is from my home State. We have been friends a long time and I know that all of our servicemen share my esteem of him. Mr. Wasylik. Thank you. TIMING OF TREATY SIGNING CRITICIZED Mr. Guyer. Commander Rogers also, I sat here yesterday and I am like Mr. Winn, I apologize for the empty seats. Yesterday they had a battery of TV cameras. It seems strange to me in America when we want this new sunshine, outgoing, reach for the people, that Viet- nam came into the United Nations without anybody being consulted, that the Panamanian treaty was signed the day we got back from recess without anybody being here to talk about it. In a poll in my fourth District of Ohio taken last fall when there was no talk of a treaty, my people were 91 percent opposed to it. I am con- vinced that the American people are largeh^ in agreement of what you have said today, and you do speak for about 7 million members. I think that it is a shame that your testimony was not aired across the countr}^ and given the coverage it deserved. One more thing and then I will yield to Mr. Lagomarsino. It has nothing to do with Panama. But 1 think you are aware that so far more than 1,500 deserters have been given a red carpet free ride home from points around the world, and have toll-free numbers they can call, as well as use all the Embassies for that purpose. Yet, my people can't even make a telephone call to a VA hospital free and a Gold Star Mother can't go and visit the grave of her son free, and I think that is outrageous. [Applause.! PRESIDENT carter's POSITION ON CANAL NEGOTIATIONS Mr. Lagomarsino. Dr. Was3dik, you referred to the position of President Carter during the campaign. I happen to have a copy of the statement he made during his debate with President Ford. I think we should read it into the record. This has not been done yet in this proceeding. He was asked about the Panama Canal and he said : Well, here again, the Panamanian question is one that's been confused by Mr. Ford. He had dii-ected his diplomatic representatives to yield to the Panamanians full sovereignty over the Panama Canal Zone at the end of a certain period of time. When Mr. Reagan raised this question in Floi-ida Mr. Ford not only dis- avowed his instructions, but he also even dropped parenthetically the use of the word "detente." 180 I would never give up complete control or practical control of the Panama Canal Zone, but I would continue to negotiate with the Panamanians. When the original treatj' was signed back in the early 1900's, when Theodore Roosevelt was President, Panama retained sovereignt}^ over the Panama Canal Zone. We retained control as though we had sovereignty. Would negotiate: Now I would be willing to go ahead with negotiations. I believe that we could share more fully responsibilities for the Panama Canal Zone with Panama. I would be willing to continue to raise the payment for shipment of goods through the Panama Canal Zone. I might even be willing to reduce to some degree our military emplacements in the Panama Canal Zone, but I would not relinquish practical control of the Panama Canal Zone any time in the foreseeable future. I want to also congratulate you gentlemen on your statements. Mr. Yatron. Mr. Ireland. Mr. Ireland. I want to say I echo what was said and I am proud' and pleased to be one of the people who were here. Mr. Yatron. We thank you gentlemen for appearing here today and we will certainly be in touch with you when we need more informa- tion. [Whereupon, at 12 noon the committee adjourned.] PROPOSED PANAMA CANAL TREATIES TUESDAY, SEPTEMBER 20, 1977 House of Representatives, Committee on International Relations, Washington, D.C. The committee met at 9:45 a.m. in room 2172, Raj^biirn House Office Building, Hon. Clement J. Zablocki (chairman of the com- mittee) presiding. Chairman Zablocki. The committee will please come to order. We meet this morning to continue the committee's hearings on the proposed Panama Canal treaties and related legislation. The first witness is our colleague, Hon. Samuel S. Stratton, a Representative from the State of New York. Congressman Stratton, on behalf of the committee members, I welcome a'ou to the committee. It is my understanding that you must leave to chair another committee meeting at 10 a.m. In order to meet your deadline, may I suggest that you summarize your prepared statement, all of which will of course be included in the record, and then we will proceed with the members' questions. Mr. Stratton. STATEMENT OF HON. SAMUEL S. STRATTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK Mr. Stratton. Thank 3'ou very much, Mr. Chairman. I will try to summarize this if I can. I am not sure that I can sum- marize it exactly, but let me proceed and see how I do on time, and I express my appreciation to you for allowing me to testify here this morning. I appear here in opposition to the treaties, Mr. Chairman, not to the treaties in toto, let me make clear, but as we say in the House, I am o])posed to them in their present form, and that means if I were in the U.S. Senate or were to pass along any recommendations to Members of the Senate I would be supporting several reservations to these treaties which I believe ought to be incorporated in them before they will properly reflect and protect the national mterest and thus be suitable for ratification. To this extent I think you will find that my position differs to some extent from that of other treaty opponents who have previously testified before you. I am not opposed to some adjustment in the existing treaty that governs our ])osition in the canal. I have been to the canal, Panama, myself. I have seen the glaring economic dispar- ities that exist there between those who live in the zone and those that (181) 182 live outside. I recognize the potentiality for civil disturbance and even guerrilla warfare that have been heavily stressed by those who have negotiated these treaties, and I would agree we ought to take steps to eliminate many of the glaring inequities that are more appropriate to an early age. What I object to is the fact that the treaties go too far, Mr. Chair- man, they throw out the baby with the bath. The Panama Canal is a valuable American asset, it is important to our seaborne commerce. That is whj^ we built it and that is why we have paid heavily over the years to maintain it. One might argue that the canal is not quite perhaps as valuable to us today as it was 30 or 40 years ago, and that may be true, but it is still valuable to us and it continues to be valuable to us into the future, especially as it now seems likely that we will begin to ship our new oil supplies from the North Slope of Alaska around to the east coast. Therefore, whatever changes may be made in the operation or the financing of the canal, it is absolutely essential that the canal remain available to us and that control of it be denied to our enemies into the indefinite future, which certainly means well beyond the next 22 years. That is why throughout all of these negotiations the question of the defense of the canal has been a ke}'^ issue in the minds of the American people. The main treaty specifically sj^ells out in article IV our right to defend the canal until the A'ear 2000, and in addition the press state- ments by the canal negotiators and by the administration spokesmen have maintained that the second treaty, the so-called Neutrality Treatv, also gives the United States the right to defend the canal after the year 2000. I cite as an example, Mr. Chairman, a report that appeared in the September 19 issue of the U.S. News & World Report about the canal, ''What it gives up and what it keeps." It saA's that the United States will have the permanent right to share defense of the canal with Panama even after it comes under Panamanian jurisdiction after December 31, 1999. Now that is absolutely not true. The alleged right is supposed to be implicit in the text of article IV of the Neutrality Treaty but the word "defense" never appears in that article. Here is what is says: The United States of America and the Republic of Panama agree to maintain the regime of neutrality established in the treaty which shall be maintained in order that the canal shall remain permanently neutral. Not a single word in there about defense. It only mentions neutral- ity. How do you get defense out of neutrality? In his original press conference President Carter said on this, com- menting on this article: We will have an assurance in perpetuity following the year 2000 that the canal will be neutral, that our ships will have unlimited access to the canal, along with the ships of other nations. We have no constraints on the action that we can take as a nation to guarantee that neutrality. Well, there is a lot of difference between a right of defense and the assumption that there are no restraints since nothing has been men- tioned in the article about any restraints that are placed on the action that we can take to preserve neutrality. 1 I 183 I would point out to the committee that the Panamanian Foreiom Minister, the chief Panamanian negotiator of the treat}-, Dr. Romulo Escobar Bethancourt declared in a news conference in Panama City on August 24, and I quote: The treaty does not establish that the United States has the right to intervene in Panama. So how meaningful is this supposed ''right," when one of the high contracting parties has already- denied that the treaty assures it? If we leave this wording as it is we ^\-ill have to go to the World Court, presumably, for an interpretation before we know whether we can reallv resist an attack on the canal bv aggressive forces after the vear 2000^. So Mr. Chairman, the only possible conclusion is that these treaties are in fact seriously deficient in protecting America's vital interests. They have been pre-ented to the American people under false and misleading color-, as containing what they in fact do not contain. So here is my first reservation to the treaties: They must specifically spell out the right of the United States after the year 2000 to defend the canal from any aggressor hostile action that might close off the watervvay to U.S. ships or render the canal itself inoperable. In these critical days with possible threats that might arise from Soviet or Cuban actions in the Caribbean, we cannot possibly rest our national interests on some abstruse interpretation of vague and ambiguous language in the treaty that has already in fact been repudiated by a leading official of the other signatory power even before the document is signed. Second, Mr. Chairman, this is my second re-ervation, there must be no doubt that this defense right is expressly incorporated in the basic treaty itself. As long as there are two treaties, as we have now, one dealing with before the 3'ear 2000 and the other after, there are going to be disputes as to which is the real treat}- and which ultimately prevails, and on this crucial point of defen-e we can afford no such ambiguity. Therefore, I would propose as my second reservation that this U.S. defen-e right after the year 2000 be incorporated in the basic treaty. As a matter of fact, this is the only way we can make a legally binding contract so that the certain rights and privileges which we are giving up are in consideration for other privileges that are being given up on the other side, and we must make it perfectly clear that in this treaty what we are agreeing to do up to the year 2000, giving them the operating capabihty and giving them all of this additional money is in direct return for the explicit right that we are being guaranteed in Panama after the year 2000. Otherwise the treaty becomes as many of its critics have charged, a mockery and a one-sided giveaway. Finally, Mr. Chairman, I have a third reservation to propose, and I make this from my own experience as a long-time member of the Armed Services Committee. If this right of defense which I propose that Panama must concede to us after the year 2000 is to be mean- ingful, then it is absolutely essential that we have on the spot in Panama itself the means to exercise that right. _ In the present treaties as now drafted we not only have no such right but for all intents and purposes we are exphcith- barred from 184 exercising it, because article V of the Neutrality Treaty forbids us to maintain military forces, defense sites and military installations within the Republic of Panama. Clearly, if we are going to deter or oppose any effort to capture the eanal and close it do\\Ti, we can only exercise that right effectively from a military base located in the vicinity of the canal. Without such a base our defense would be limited to trying to destroy or recapture the canal from Florida or Texas or Guantanamo after an initial assault had already been made on the canal primarily by paratroops or an amphibious landing. Such an attack might come from Cuba. For example, if the Cubans can operate in force in Angola they certainly can mount a surprise attack on the Panama Canal. Once they have taken over physical possession of the canal our defense right would have largely disappeared. In fact, once the Cubans were in possession of the canal territory, one wonders whether the Americans would really be prepared to retaliate in a contested amphibious landing. Mr. Burton, I think, has had some comments to make to his col- leagues on that point. But if our military forces are already in place in Panama, if our defensive radars are working and our patrol planes are on station out of American air bases, then we almost certainly would deter in advance any possibility of attack. So I would propose again in the main treaty, Mr. Chairman, that we require our right of defense, that it involve at least one U.S. military base in Panama which would include an airfield. We already have 14 in the zone, we are going to reduce them, presumably, to zero. But there is no reason under the sun, if the treaty really gives us the right to develop the canal, why we shouldn't retain at least one defense base. It wouldn't be on American soil, it would be on Panamanian soil. We would be there under a treaty to aid in the canal's defense and the Panamanian flag could fly over that field just as the Spanish flag now flies over our Torre j on Base in Madrid. Anything like that would make a sham and mockery of the pretense of American defense rights. Mr. Chairman, I realize that these are reservations, they would require the opening of negotiations, but let me point out that this would never have been necessaiy if the negotiators had made a serious effort to listen to the American people and to the Congress before they began their negotiations rather than after they had wound them up. With these reservations the treaty is, of course, not quite as gen- erous to the Panamanians as it is in its present form, but after all, we are promising to give them not only the canal but to pay them gen- erously to take it away. Surely in return for all of these concessions it would be little enough to ask that we have and maintain a realistic and meaningful right to protect and defend something we built and kept in operation. The American people were led to believe that was what was actually contained in these treaties, but somehow it just never managed to get written in. And so it is up to the Senate and up to our own body in the House to see that these omissions are corrected. Thank you veiy much. [Mr. Stratton's prepared statement follows:] J 1S5 Prepared Statement of Hon. Samuel S. Strattox, a Representative in Congress From the State of New York ]\Ir. Chairman: I appear here this morning in opposition to the Panama Canal treaties — not to the treaties in toto, let me make clear, but, as we say here in the House, I am opposed to them '"in their present form." Which means that if I were in the Senate or was to pass along any advice to the members of the Senate, I would be supporting several major "reservations" or amendments to these treaties which I beUcve must be incorporated in them before they will properly reflect and protect the national interest and tlius be suitable for ratification. To this extent I beheve you will find that my position differs to some extent from that of other treaty opponents who have previously testified before you. I am not opposed to some adjustment in the existing treaty that governs our position in the canal. I have been to Panama. I have seen the glaring economic disparities there between those who live in the Zone and those who live outside. I recognize the potentiahties for civil disturbance and even guerrilla warfare that have all been heavily stressed by those who have negotiated these two new treaties. I would agT'ee that we should take steps to eliminate many of these glaring in- equities that are more appropriate to an earlier age. We ought to turn over more and more of the operation of the canal to the Panamanians, and we ought to make available to them a greater share of the financial benefits of the canal — if, indeed, at this point there are any net financial benefits still left for those who operate and manage the canal. So I do not quarrel with this general thrust of the major treaty. What disturbs me, though, is that these treaties go much too far. They clearly throw out the baby with the bath. The Panama Canal is a valuable American asset. It is important to our sea- borne commerce. That's why we built it, and why we have paid heavily to main- tain it over the years. One might argue, as it has indeed been argued, that the canal is not quite as valuable to us today as it was 30 or 40 years ago. That may well be true. But it is still valuable and it will continue to be valuable into the future, especially, as now seenis likely, wo soon begin to ship our new oil supplies from the North Slope of Alaska around to the East Coast. Therefore, whatever changes may be made in the operation or financing of the canal, it is absolutely essential that the canal remain available to us and that control of it be denied to our enemies into the indefinite future — which certainly means well beyond the next 22 years. That is why throughout all these negotiations the question of the defense of the canal has been a kcj" issue in the minds of Congress and the American people. The main treaty specifically spells out, in Article IV, the right of the United States to defend tlie canal until the year 2000. In addition all of the press statements made by the negotiators themselves, and by Administration spokesmen, have asserted that the second treaty, the so-called neutralitv treaty, also gives the United States the right to defend the canal after the year 2000. Unfortunately, these assertions are simplv not true. This alleged right is sup- posed to be implicit in the text of Article IV of the neutrality treaty. But the word "defense" does not even appear there! All that Article IV says is: "The United States of America and the Republic of Panama agree to maintain the regime of neutrality established in this Treaty, which shall be maintained in order that the Canal shall remain permanently neutral * * *." But this doesn't say a word about defense. It only mentions neutrahty. And how do you get "defense" out of "neatrality"? In his original press conference on the treaty. President Carter, commenting on this Article, said "we will have an assurance in perpetuity following the year 2000 that the Panama Canal will be neutral, that our ships will have unlimited access to the canal, along with the ships of other nations; we have no constraints on the action that we can take as a nation to guarantee that neutrality." But, Mr. Chairman, there is a world of difi'erence between a clearly defined "right" of defense, and "no constraints" placed on the action we can take to preserve neutrality! Indeed the Panamanian Foreign Minister, Dr. Romulo Escobar Bethancourt, declared in a news conference in Panama City on August 2-ith that "The treaty does not establish that the United States has the right to intervene in Panama." So how meaningful is this supposed right when one of the high contracting parties already denies that the treaty assures it? If we leave this wording as it is we will have to go to the World Court for an interpretation, presumably, before we know whether we can legally resist an attack on the canal by aggressive forces. 186 So, Mr. Chairman, the only possible conclusion is that these treaties are in fact seriously deficient in protecting America's vital interests. They have been pre- sented to the American people under false and misleading colors as containing what they do not in fact contain. So here is my first reservation to these treaties: they must specifically spell out the right of the United States, after the year 2000, to defend the canal from any aggression or hostile action that might close off the waterway to United States ships or render the canal itself inoperable. In these critical days, with possible threats that might arise from Soviet or Cuban action in the Caribbean, we cannot possibly rest our national interest on some abstruse interpretation of vague and ambiguous language in the treaty that has already been repudiated by a leading official of the other signatory power even before the document is signed. Secondly, Mr. Chairman, there must be no doubt that this defense right is expressly incorporated in the basic treaty itself. As long as there are two treaties, one before 2000 and the other after, there will always be disputes as to which is the real treaty and which ultimately prevails. On this crucial point of defense we can afford no such ambiguity. Therefore, I would propose as my second reservation that this U.S. defense right after the year 2000 be incorporated in the basic treaty. Only in this way can we make the treaty a legal binding contract which gives certain rights and privileges in consideration of other privileges given up on the other side. We must make it perfectly clear in this treaty that what we are agreeing to do up to the year 2000 is in direct return for the explicit rights that are being guaranteed to us in Panama after the year 2000. Otherwise, the treaty process becomes a mockery, just a one-sided give-away. Finally, Mr. Chairman, I have one third reservation to propose. If this right of defense which I propose that Panama must concede to us after the year 2000 is to be meaningful — and not just mere rhetoric to assuage the American people — then it is absolutely essential that we also have on the spot in Panama itself the means to exercise that right. In the present treaties as now drafted we not only have no such explicit right, but for all intents and purposes we are expressly barred from exercising it because Article V of the Neutrality Treaty forbids us to "maintain military forces, defense sites and military installations" within the Republic of Panama. Clearly, if we are to deter or successfully oppose any effort to capture the canal and close it down we can only exercise that right effectively from a military base located in the vicinity of the canal. Without such a base our "defense" would be limited to trying to destroy or recapture the canal from Florida, Texas, or Guan- tanamo after an initial assault had already been made on the canal — perhaps by paratroopers or amphibious landing. Such an attack could well come from Cuba. If the Cubans can operate in force in Angola, then certainly they can mount a surprise assault on the Panama Canal. And once they take over physical possession of the canal, our defense "right" would have largely disappeared. Once the Cubans were in possession of the canal, would America really be prepared to retake it in a contested amphibious landing? I wonder. But if our forces are already in place, if our defensive radar is working and our patrol planes are on station out of an American air base near Panama City, then we can almost certainly deter any possibility of such an attack well into the future, or, if it did come, wipe it out. So I would propose, again in the main treaty, that we require that our right to defend the canal involve at least one United States military base in Panama, including an airfield. We have 13 or 14 in the Zone already. There is no reason under the sun, if the treaty really does give us the right to defense, why we should not retain at least one U.S. defense base. It would not be American soil, of course; it would be Panamanian soil. And we would be there under treaty to aid in the canal's defense. So the Panamonian flag could fly over the field, just as the Spanish flag now flies over our Torrejon base in Madrid. But anything less than that would make a sham and a mockery of the whole pretense of American defense rights. I realize, Mr. Chairman, that these reservations would require reopening the negotiations. But let me point out that this would never have l)een necessary had the negotiators made a serious effort to Usten to the American people and the Congress before they began their negotiations rather than after they had concluded them. With these reservations the treaty is of course not quite as generous to the Panamanians as in its present form. But after all, we are promising to give them not only the canal, but to pay them generously, perhaps too generously, for taking it away. Surely in return for all these sweeping and expensive concessions, it is 187 little enough to ask that we have a realistic and meaningful right to protect and defend something we built and have kept in operation. The Ameiican people were led to l^elieve that that right was actually contained in these treaties. But somehow it just never managed to get written in. It is up to the Senate and the House to see that these serious omissions are corrected. Chairman Zablocki. Thank you very much, Mr. Stratton, for an excellent statement. U.S. DEFENSE OF THE CANAL Congressman Stratton, in view of President Torrijos' description of the neutrality treaty as one which places the defense of the canal directly under the Pentagon umbrella, and in view of the interpretation of the treaty by our negotiators, which gives this country the right to unilaterally defend the canal, if necessary, after the year 2000, what in ])ractical terms could or should the United States do to further assure the canal's defense? Mr. Stratton. I think I have already answered that question in my remarks, Mr. Chairman, but in the first place the reference you make to General Torrijos' statement is to the one contained in this article that appeared in the U.S. News & World Report. He is talking about the period up to the year 2000. The Pentagon is maintaining that we have a right to defend the canal after the year 2000. The views of our negotiators to the contrary notwithstanding, there is not a single word in that treaty that gives us any such right, and this, as I say, is an absolutely fundamental point. If the treaty means anything, the most fundamental point must be put in there in words of one syllable so that any American can understand it, not have some abstruse interpretation of some second echelon flunky in the State Department, which is what somebody tried to give to me the other day. I said, "where is the word defense contained in these treaties?" He said, ''in Article IV." I said, ''where is it in Article IV?" "Well, it is implied in there." We don't want to rest the protection of a vital interest of ours in an implication. Let it be operated by the Panamanians, I don't care, but we want it maintained open and viable for us. Let's not make that important interest rest upon somebody's interpretation in the State Department when the Foreign Minister of Panama sa^'s that it isn't there. We don't want to have to argue this in the world court. You say what could we do to correct it? Well, I have suggested, I think, we should put in there that the United States shall have the right to de- fend the canal against any country that would take it over or occupy it or deny its use to us after the year 2000, and to carry out that right the United States shall have the right to maintain forces on at least one base in the Republic of Panama from which air and antiaircraft defense, and so forth, can be mounted. I think I would leave up to the Senate the precise wording but if you wanted some specific wording I would be glad to give it to you. Chairman Zablocki. Thank you very much. Congressman Stratton. Mr. Lagomarsino. Mr. Lagomarsino. Thank you, Mr. Chairman. Mr. Stratton, your testimony is excellent, as always, and I think you make several very good points. 188 Let me first of all observe that we don't have ver}^ many members of the committee here today to listen to this side of the story. When Secretary Kissinger was here last week the committee benches were full, the press gallery over here was full, there were so many television cameras that you could hardly get up here. I want to observe that for the record. Mr. Stratton. Some of us apparently are not quite as sex}" a witness as Mr. Kissinger. CLARIFICATION OF THE TREATIES Mr. Lagomarsino. Maybe you are on the wrong side of the issue. In any event, there is a startling contrast in that regard. When Secretary Kissinger was here last week I asked about some of the very specific points you are mentioning now. As a matter of fact, during^ his presentation he expressed some concern and stated that the Senate should make it clear that the United States has the right to inter- vene militarily. He was saying somewhat the same thing you are, although not quite as strongly. I made the point that if this is such an important issue, and certainly it is, and even the President must think it is because he says we do have that right, I don't know why he would say that unless he thought it was important — if that is important, why isn't it spelled out m the treaty? The only answer either he or Secretarj^ Rusk could give to that ques- tion was that the Panamanians wouldn't sign it if it were in the treatj^. M}^ comment to that was if they would not sign it if it is in the treaty^ they certainly aren't going to agree we have that right. In any event, I think it should be spelled out. I asked why didn't we negotiate the right to have a base or bases in the Panama Canal Zone. Again they said because the Panamanians would not agree to that. We have bases all over the world that we have agreed on and we have no particular problems except the traditional problems of how much to pay, what are the rights, whose flag flies, and that sort of thing. It seems to me rather than leave these things to later determination, we should decide them right now^, spell them out clearh'. If we are going to have trouble about interpretations, it is far better to have that trouble now, iron it out, and come to some sort of conclusion than to wait until some later date, in the year 2000 or thereafter, and have to go back and argue about it. I might say also, in my opinion, if we were to adopt the provisions that you recommend, and see that they are actualh^ written into any treaty that is ratified by the Senate, at least with regard to defense and the keeping of the canal open to world trade, there would be an improvement. I think that a lot of our friends in South America could feel a lot better about this treaty than they do now — not better than they do publicly, but better than the3^ do privatel}". Again I commend you for your testimony. Mr. Stratton. Well, I thank the gentleman, very much. As a matter of fact, a^ou have hit on a point that is a very important one. In the first statement that I made on the Panama Canal Treaty, during the recess on the 17th of August, I pomted out that the absence I 189 of any clearcut explanation in the statements that the negotiators were passing out, we still hadn't the actual text of the treat}^, 3'et there they were, tr3'ing to sell it to us, and we hadn't even seen the fine print. I pointed out Secretar}' Kissinger had based his conditional approval of the treat}' on the question of whether it adequately protected our right to defend the canal, and I interpreted his statement as saying that he was going to wait and see the actual text of the treat}' before he made a final decision. Then Mr. Linowitz and Ambassador Bunker visited him and a-p parently won him over without ever seeing the fine print. To me it was just incredible when we finall}' got the fine print that that right simply wasn't there. We were being told something that wasn't true. And I think there is no question but that this right should be incor- porated in the treaty. You say the argument was given that the Panamanians wouldn't sign the treaty with that stipulation. I would remind the committee that the Panamanians up until the last couple of days were insisting on getting — what was it — $5 or $6 billion a year from us in addition to the canal. And then President Carter had them up to the White House and said. Look, this is absolutely impossible. Congress will never pass it; so they prompth^ backed down. I think they will sign; the}- will go for any treaty that would give them a substantial interest in the operation of the canal. All we have got to do is have the Senate say this is what vv-e need in the treaty in order to ratify it, and I am sure the Panamanians would accept. From all I can gather on the negotiations, all we have done is simply to give in, and in spite of the fact that more than a third of the Senate went on record several years ago against this kind of a treaty, the negotiators never bothered to come up here and ask anybody in Congress what they thought really ought to be in the treaty before the negotiations began. Mr. Lagomarsixo. I might sa}' I have talked to some of the Sena- tors who are counted as supporters of the treat}' who have very grave reservations. They would like to have a treaty, they are very much for doing something, they have reservations about some of the provisions, including the provisions you have pointed out. Mr. Strattox. I think, if I may say so, my proposal gives them a middle way. I think a lot of people recognized, perhaps they have been to Panama, that you have a very explosive situation down there, if we just flatly rejected the treaty we probably are going to have trouble. There is no real reason why the Panamanians could not learn how to run a sliip through the canal in 22 years. But we don't want to give away the full responsibility for the protection of that very vital waterway to a country that has very little in the way of a mil- itary defense. Thank you. Chairman Zablocki. Thank you, Mr. Lagomarsino. Mr. NLx. U.S. DEFENSE OF THE CAXAL Mr. Nix. Mr. Stratton, will you state again your reasons for your conviction that the United States has an inherent right to have incor- porated in this treaty a right to defend? How do you morally or logically support that position? 190 Mr. Stratton. Well, I will say to the distinguished gentleman from Pennsylvania, I don't think I maintained that there was any "inherent" right. I am not trying to get into metaphysics in this kind of thing. We are in the ])rocess of a hardnosed negotiation over a treaty. We happen to be in possession of the canal at the moment and we have got a treaty that was negotiated back in 1903 which gives us a great deal of authority there. Although the present Panamanians have forgotten it, their country probably wouldn't be what it is today if the canal weren't there. All I am saying is that if they want us to get out, if they want us to give them a larger share of the operation of the canal, and a larger share of the benefits — if there are any left; I don't know whether there are any left now anyway — then we ought to spell out those things that we think are important in return. In my judgment the one thing that is most important is that we make sure that no outside force comes in and takes over that canal and denies it to us. The whole discussion of defense which I have seen in the papers, from General Brown and a lot of others who ought to know better, is that what they are talking about is defending the canal against the Panamanians. General Brown says we couldn't defend the canal from the enraged Panamanians if we had 100,000 men. But that isn't what we should be talking about. Obviously it is to the benefit of the Panamanians to keep the canal operating. What I am saying is that once the United States pulls out and leaves a small country of 1% milHon people in charge of this very valuable engineering establishment, what is to prevent the Cubans for example, from moving in and taking it over for their friend, the Soviets? And so it seems to me that our major interest is simply to see that there is enough protection down there so that nobody is tempted to move in and take the canal away from the Panamanians. Mr. Nix. Your position, therefore, is that adequate protection of the canal is of vital interest to the United States of America? Mr. Stratton. Absolutely. Mr. Nix. Could you conceive any set of circumstances in which the United States, if it deemed its interests to be threatened, any set of circumstances when the United States would sit idly by, treaty or no treaty, and not move in? Mr. Stratton. Well, a lot has happened since we went into Viet- nam, Mr. Nix, and the interest of Americans in going into areas from which they have already withdrawn is not particularly strong. That is one of the reasons why I have very strong reservations about the President's proposal to pull all of our troops out of Korea. If they are attacked, he says, we will go back in. But I have my doubts. So I think the important thing for us as far as the canal is con- cerned is to deter an attack ahead of time. If we had this right spelled out clearly and had a small force of American soldiers in place and a base in Panama, then I think the Cubans or anybody else would think twice before moving in. Mr. Nix. Well, I appreciate the expression of your opinion. I understand the basis for it. I am in agreement with it to a certain extent. I think, however, that the reality, as you stated it to be, that the United States would never sit supinely by if its interest is ad- versely affected, without taking affirmative action, treaty or no treaty. 191 Mr. Strattox. For example, suppose the Cubans landed on the canal and took it over. The only way we could get it back then would be to go in there and bomb them out. And in the process we would ])robably destroy the canal just the way we destroyed villages in Vietnam in order to ''save" them. That is why I think it is much better for us to be on the spot and deter an attack in advance than to move in afterward because that would damage the canal in the process. Mr. Nix. Sometimes I wonder if there were others saved. Chairman Zablocki. Time has expired. Mr. Fowler. RENEGOTIATION OF THE TREATIES Mr. Fowler. Mr. Stratton, in your very concise and very fine statement citing the need for us to maintain military bases or a mili- tary presence in Panama in order to defend the canal, based on your reading of the treaties, for that to take place would it require renego- tiations of the treaties, the present treaties, or a third treaty, a separate agreement? Mr. Stratton. As I understand it, that would require renego- tiation. Mr. Fowler. You say it would? Mr. Stratton. It would because that would amount to a reserva- tion on the part of the Senate. The Senate would simply have said we will accept the treaties provided that article so and so is amended to read as so and so. And that, of course, would be up to the Panamanians then to accept; or it would require some further negotiation, but this is the normal course for treaties, as I understand it. I haven't been in the Senate. I am just talking from what I have read of their actions over there. position of joint chiefs of staff on the treaties Mr. Fowler. What is your reaction to the statement of the Joint Chiefs of Staff that under the present two treaties we will be able to defend the canal? Mr. Stratton. Well, the Joint Chiefs of Staff, particularly, this year, have been put on notice that they either express the party line or else. General Singlaub's case made that perfectly clear. I don't think we can rely entirely on the Chief's formal statements. But just to make certain we know what they are talking about, we are having them up before our Armed Services Committee to discuss in detail just what defense of the canal they would envisage, especially if our troops are no longer in place down there. But as I mentioned earlier in response to another question, the thing that has disturbed me most in all of these interviews and com- ments, from General BrowTi and others, mostly General Brown, is that the entire attention has been paid to defending the canal from the Panamanians themselves. To me that is not the real problem. Once the Panamanians are part of this operation they are certainly not going to take over the canal and destroy it. What I am thinking about is mostly are the Cubans or somebody else who could come in from the outside. I just don't honestly think that the Joint Chiefs of 98-991—77 14 192 Staff have given that situation any thought or have developed any contingency plans to deal with it. Mr. Fowler. You are not sa\dng, Mr. vStratton, if I understand the first part of your statement, that you as a Member of Congress are doubting — are you sa}4ng that you are doubting the commitment or the veracity of the statements of General Brown and the Joint Chiefs of Staff as to their belief that not only can we defend the canal but our national security is not in jeopardy? Mr. Strattox. Well, ever since Mr. McXamara was Secretary of Defense, Members of Congress have found that it is very difficult to get military uniformed officials to come up here and tell us what they really think. Mr. McNamara insisted that everybody that testified would have to testify on the party line. So Congress made a point of insisting that whenever any military person came up, to testily, if Congress asked him for his personal opinion he would be required to give it. So when you get an official statement these daj^s you can't tell in this particular climate whether it represents the officer's personal views or not. But when a'ou get the Chiefs before a congressional committee and ask them their personal opinion, then they are honor bound to give it to 3^ou. This is what we found out with respect to the Korean troop withdrawal question. General Bro^^^l said he was all in favor of the President's Korean withdrawal plan. We got him before the Armed Services Committee and asked him what the Joint Chiefs of Staff had actualh^ recom- mended. Well, he said, we recommended that by the year 1980 they withdraw 6,000 troops from Korea and then that they wait and see what happens after that. We said, isn't that substantially different from the President's proposal? And he said, yes. Mr. Fowler. Mr. Stratton, if we can not rely, we being Members of Congress, on the Joint Chiefs of Staff in their public declarations, Washington being the way it is, and the Government working the way it does, a^ou know and I know that there are means of discerning the true feelings of those to}) military officials, even if they do not make public the accurate declarations. I certainly hope that this committee can rely on you as a distin- guished senior member of the Congress, and my colleagues from Georgia, Congressman McDonald, both of whom are members of the Armed Services Committee, that if you are not satisfied that they are giving us and the Ameiican ])ublic their true feelings that I know you will be able to determine that either after the meeting or that evening and that if you decide that they are not telling the truth in public you will be back before this committee to tell us. Mr. Strattox. That is absolutely the case. That is precisely why we are trying to get General Brown up before our committee, so we can ask him his personal views and go into some much greater detail on whether the Joint Chiefs of Staff have actually staffed out this whole military problem of a possible invasion of Panama from Cuba, for example. Mr. Fowler. Thank you very much. Mr. Nix [presiding]. Congressman Burke. Mr. Burke. Thank you very much, Mr. Chairman. 193 Congressman Stratton, I want to welcome j'ou here today. I am sorry I wasn't here a Uttle earUer to hear all your testimony but it is good to have you before us. Mr. Strattox. Thank you. INTERPRETATION OF NEUTRALITY TREATY Mr. Burke. One thing that concerns me, and I think conceiTiS you, is the so-called neutrahty provision in the proposed treaty itself which authoiizes Panama to remain neutral in the event we ourselves becom-e involved in a conflict vrith any foreign nation. Now, how would you inteipret the so-called neutrality provision wherein Panama would say to us then we are neutral and therefore would pass any ships that may want to come through the canal even if they may be fighting us and even though we ourselves are com- mitted to protect Panama. Mr. Stratton. Well, I think you have raised a good point. I had debated whether to include one more reseiwation in my remarks, to include in the treaty a pro\-ision that in such an event our ships would have piiority in going thi'ough the canal. I think what they say now is that our ships will be passed through the canal "expeditiously". But that might mean after 25 other ^hips have gone through. It seems to me if we needed to get through rapidly because our own interests were involved, we ought to have a priority right. USE OF THE CANAL BY ENEMY WARSHIPS If it wa- a case of not necessarily wanting our own ships to go through, but rather let's say, of letting Soviet ships go through, then I think the answer would be what somebody has suggested already, that in case of war we will just park ourselves outside of either the Atlantic or Pacific exits of the canal and sink those ships either before they go in or after they have come out. Mr. Burke. I think that ]3robably is a good idea. Would we not then at the same time probably put the canal in the position where it was unusable, because if that was done isn't it more than possible that there would be sabotage at that point to the canal itself? Mr. Stratton. Well, again I can't anticipate everything, but it would seem to me from the point of view of the Panamanians it is to theii' advantage, since they are going to be collecting the tolls, to keep the canal operating. So if the only thing we are concerned about is that they might be letting Russian or Cuban ships through the canal when we didn't want them through, the simplest course for us would be simply to dispose of those enemy ships when they enter the canal, not inside the canal itself, but several miles away. After all, with a ship heading to the canal, you have got a perfect target situation. Xo evasion would be possible when you are headed into a canal. All you need to do is get your torpedo angle correct and you sink the ship. Mr. Burke. That sounds easy. TMiat if the Panamanians themselves gave sanctuary- to them let's say that the\' were ships of a nation that we ourselves are fighting and Panama is a neutral nation. Mr. Stratton. Well, if they were to provide sanctuaiy or something like that, obviously we would have to take whatever action was needed 194 to protect our own interests. I think we would. Mr. Burke. Exactly. Mr. Stratton. We would certainly have an interest in not trying to blow up the canal, if we could help it. Mr. Burke. Congressman Stratton, that is exactly the answer I wanted. Wouldn't it be better then if we protect ourselves in advance under a treaty wherein we ourselves have some protection rather than waiting until some incident occurs where we would have to go to war, perhaps even with Panama, the very same nation we are talking about negotiating with? Mr. Stratton. Well, that is true; but at least if we have the right to defend the canal put in a treaty and in addition we have a base in Panama from which to defend it, we are in a little bit better position. Mr. Burke. I don't mean to be argumentative because we are on the same side, but the idea that you say the right to go in and defend it, defend it against whom? If Panama itself was a neutral nation what would we be defending the Panama Canal against except our own enemies, in which event Panama would object and we would find ourselves in a conflict with Panama at the same time, which to me is a little ironic, since this whole idea, as I understand it, is to make sure that the Panamanians are happy and satisfied. What about our own stake in our future in making them happy? Mr. Stratton. I tried to spell out what I felt was necessary here, that we be in a position to prevent any outside country — and I would think of Cuba as being the most likely — from trying to come in and take over the canal from the Panamanians. They might not think the Panamanians are being tough enough, for example, they could drop paratroops, or they could mount an amphibious landing. It seems to me it is better for us to be down there on the spot in a position to prevent any outside power from taking the canal away from the Panamanians, than to have to go down there afterwards, as Mr. Nix suggested, when we might have to vote on it first under the War Powers Resolution. By the time we got the vote through the Cubans would be in possession of the entire canal, locks and all the rest. Mr. Burke. Well, I feel that the language itself should be made stronger to cover some of the provisions you are talking about. Mr. Stratton. I certainly would agree with you. There are many other weak points. These seem to me to be the most serious. Mr. Burke. Thank you very much. Mr. Nix. Congressman Pease. Mr. Pease. I have no questions, Mr. Chairman. Mr. Nix. Congressman Cavanaugh. Mr. Cavanaugh. No questions. Mr. Nix. Congressman Guyer. Mr. Guyer. Thank you, Mr. Chairman. opposition to the treaties I apologize, Mr. Stratton. We have been in the Veterans Committee and they needed a quorum over there. Senator Goldwater was testifying in behalf of the WASPS. They have never been given any benefit for their services in the war, and I did not get to hear your questioning. But I just want to make a very flat statement that 195 everything I have heard and read and discerned about this whole situation is itself not to our best interests to relinquish what is rightly ours, particularly from a defense standpoint. 1 am sure you have touched on this. We would be in a horrendous situation to come in as a Johnny -come- lately and, as I read the entire treaty, what I have read of it, the great privilege we get is giving them some help if they get in trouble, and that is all we really do have. I understand there are all together about 14 military bases over there, if you count all the various stations, and strategically, par- ticularly when everything else is crumbled now, the war in Vietnam is over, j^et Vietnam came into the U.N. without consulting the American peoj^le. This erosion after erosion has gone on until we have very few friends left in the world or any strategic places in the world. I would feel from the standpoint that has been brought out b}^ much testimony we can't even get oil from the Alaska pipeline to the other side of the United States without the Panama Canal. And more than that, we do buy now 90 percent of all that country's exports, in addition to the $2 billion investment. And having come to their aid this many times, as was given here, they have had 62 Presidents in 63 years. They are far from being stable. I just received a letter yesterday where the claim was made that the present leader of that country ordered the body of a Catholic priest to be dropped from a plane into the ocean, back in 1971 during one of the melees. I can't substantiate that, except to say it reached my desk. It seems to me this is an unwise move, and what I said before Vv^hen the proponents were here, the timing was outrageous, it occurred when we were on recess, without a voice being lifted, or anybody consulted. Just from the standpoint of bad judgment, the whole thing seems to me out of place and out of text. Mr. Strattox. Thank you very much. I agree. Mr. Nix. Congressman Lagomarsino. USE OF GUANTANAMO BASE Mr. Lagomarsino. I wanted to mention that in your statement you say if difficulty should arise in the future that we would have the task of trying to take the canal back from bases in Florida, Texas, or Guantanamo. I wonder if the gentleman really believes with the present state of affairs, the way we are moving to recognize Castro, the way we are taking Vietnam into the United Nations, and so on, that we will still have the Guantanamo Naval Base b}' the year 2000. Mr. Stratton. Well, I ho])e that we will still have it because it seems to me that it is an important base. If by then we have recognized Cuba, maybe the barbed wire fence that separates the base from Cuba now will not be quite so high. But actually in spite of all our troubles with Mr. Castro over the years, there has been a very interest- ing situation at Guantanamo Bay. I was down there, I remember, in 1963 and we discovered that our water in Guantanamo was coming from Cuba and Castro had never made any effort to cut it off. By the same token, several thousand Cuban people came over to work on the base every day and went off every night and took back a lot of American dollars. 196 So, I hope Ave will not be so foolish as to g:ive Guantanamo np, although I understand the pressures the gentleman refers to. But perhaps the administration is beginning to get the feeling of Congress and the American people on those issues and will move a bit more slowly. There was a great deal of pressure several weeks ago, you will remember, when some of the members of this committee sat in on a discussion about normalizing relations with Communist China and abandoning our friends on Taiwan. And then when Secretary Vance went over to China we read in the papers that the administration felt that too much was being done already in terms of withdrawing troops in Korea, turning over the Panama Canal, and recognizing Cuba, and so forth, that maybe they would back away from the proposal to normalize relations with China. So, I hope maybe we Tvill back away from giving away ''Gitmo" as well. ROLE OF THE HOUSE IX APPROVING THE TREATIES Mr. GuYER. One question. In view of the fact the Constitution does have a provision that alludes to the setting of territory as it affects congressional authority, and in view of the fact there is about $350 million in this package which has to be implemented, would you say that it is proper that Congress on this side of the House does actually have a voice in approval of this whole treaty? Mr. Stratton. Absolutely; I think we should have, and I believe we do. That question of whether we can even give away those bases without the approval of the House is still a problematical question, but I would think we certainly do have that authority. The only problem that would bother me under the circumstances is whether we could get a majority in the House. At this point I think we probably could. Mr. GuYER. Thank you. I 3^eld back the balance of my time. WATER SUPPLY FOR GUANTANAMO Mr. BuRKE. I would just like to make a correction, Sam, in a statement you made, because I was there in 1967 or 1968, and Castro did cut off the water. We had to get into a crash program and we now make the water from the ocean water mth a salinity plant we now have there. So we use our own water now. We are not depending on Castro. Mr. Stratton. I know we were getting ready to make our own water if we had to, but I had forgotten he had finally cut it off. Mr. GuYER. In view of the fact Mr. Castro has never given back $2 billion worth of property he seized, I don't think his nature is giving things back. Mr. Nix. Congressman Gilman. U.S. DEFENSE OF THE CANAL Mr. Gilman. Thank you, and I want to commend the gentleman from New York for taking the time and devoting so much attention to this important issue. I am pleased that you raised the defense li 197 concerns that 3'ou have and that man}' ol" us on this connnittee have. The a(hninistration lias been, of course, atlvocating the eventual with- (h'awal of troops statmg that the pohcymakers m defense have indi- cated that there is no need to have troops actually on the soil in Panama. It would seem to me it would cause a great deal of difficulty in bringing the troops in when there is a crisis as compared to having them there on hand when needed. Have you had any discussion with some of the strategists with regard to that issue about whether there is any advantage of actually being there on the soil and being on hand? Mr. Strattox. Xo; I haven't had any discussions on that matter so far, but I indicated earlier in response to a question from Mr. Fowler — I don't think you had come into the room — that the Armed Services Connnittee has invited General Brown to testify before us, in early October on this whole subject of what the Joint Chiefs of Staff plan to do with respect to defense of the Panama Canal, espe- cially after the 3'ear 2000. It seems to me, as I indicated in my statement, the real problem would be one of air and antiaircraft defense, basing planes close enough to the canal so that you can prevent an invasion or a parachute drop. Obviously you can't do that from Florida or even from Guantanamo. You have to be right there on the spot. If we can deter an attack that is infinitely better than having to go back in and try to take the Panama Canal away from some aggressor that has taken it over. USE OF THE CAXAL BY THE I'.S. NAVY Mr. GiLMAX. Of course, there has been a lot of loose language about how the canal is no longer that important to our Navy and that many of our ships can't traverse the canal. When our subcommittee went to the canal recently we found there were only 13 naval ships in our whole fleet that could not go across the canal because of their size or width. I am certain that 3^ou have probably reviewed that aspect \\'ith some of the naval people. I note that four prior naval Chiefs of Staff have indicated their concern about giving up our military position in the canal. Do you have some comment to make about that? Mr. Strattox. I would agree completely. I think you can legiti- mately argue as to whether the canal is as valuable now as it was, let us say, 30 or 40 years ago. But it is still ver}^ valuable and, as you point out, only a verA' small portion of our own fleet can't go through the canal. We have got a lot of other ships that can go through, and we need to have them go through. In addition to that, we have got oil coming down from the Alaskan Slo])e. If we are going to get it over on the east coast so that we can have some of that benefit, it is going to have to go through the canal. So the canal is still a vital interest of ours, and I think our major concern should be to make sure nobody is able to deny that canal to us and to interrupt our use of the canal. Mr. GiLMAX. I thank the gentleman for his comments and for his joining us this morning on this important issue. 198 DEFEI^SE OF THE CANAL Mr. Stratton. I might also say, if I could add one other point — you talked about defense. The thing that has bothered me the most is to read in some of these Time and Newsweek articles and elsewhere that so many ])eople say the canal is indefensible; you can't defend the canal! As I have said before, these comments seem mostly to be addressed to the idea of trying to defend the canal against the Pana- manians. But certainly the canal is defensible against attack from the outside, provided we have the forces in place there to do it. Mr. Oilman. Thank you. Mr. Nix. Thank you, Mr. Stratton. Mr. Stratton. Thank you very much, Mr. Chairman, you have been very generous with your time. Mr. Nix. Thank you very much. The next witnesses are our colleagues, the Honorable Larry Mc- Donald of Georgia and the Honorable Philip M. Crane of Illinois. Congressman Crane is also appearing today in his capacity as chair- man of the American Conservative Union. Gentlemen, welcome to the committee. May I suggest that you both present your statements and then we will have questions. If this procedure is agreeable, we will begin with Congressman McDonald's statement. STATEMENT OF HON. LARRY P. McDONALD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA Mr. McDonald. Thank you very much, Mr. Chairman and mem- bers of the committee. I a])preciate this opportunity of coming before the committee and expressing unbridled opposition to the proposed Panama Canal Treaty, and I will submit for the record, as the chairman has already sug- gested, a complete statement and simply summarize at this time some of the major points that are brought out in the fidl statement. The first point I think that we need to consider as Members of the House of Representatives deals with the question of our involvement with the Panama Canal Treaty. Article 4, section 3, clause 2, makes it very clear to all Members of the Congress and to the American people that it is the full Congress that should have deliberations and take action with regard to ceding of any territory, and I would hope that the House of Representatives would exercise its full authority with hearings going into this matter in de])th, and also to fulfill its special responsibility to the American people, being that body that is closest to the American i)eople, in informing the American people as to the details, the aspects of the treaty, and also the long-tei-m consequences. I think a major point that has not been adequately pursued by the other body has been the question of conflict of interest. When today 40 ]:)ercent of the Panamanian budget is going to service a national debt, with a significant portion of that coming due to New York City banks, you have Mr. Sol Linowitz, one of the negotiators, has been associated with one of those banks, with heavy loans to the Republic of Panama, I think that the whole question of conflict of interest is one that the House should review in depth. 199 There has been much said regarding the strategic importance of the canal. The question of the canal is not as important today as it has been in the past, and yet last year 13,000 shi])s transited the canal. That is twice the number that passed through the canal in 1946. Twenty-four percent of the shipping in the canal begins in U.S. ports, and the canal to me seems to be every bit as strategic today as ])erhaps at any time in the past. And since we do not have fully a two-ocean Nav}', I know that back just prior to the McNamara j^eriod — there were questions we needed a three-ocean Navy. But that option wasn't accepted by the Congress, and today we actually do not have a two- ocean Navy. And if we are going to be able to transfer ships of war in time of need, certainly the canal is going to play an extremely im])ortant part. The defense of the canal has been, I think, covered very well regarding the major deficiencies in the treaty by my colleague Con- gressman Stratton of New York, but the issue of violence or terrorism if the treaty were rejected, in my opinion, the American people and our best interests will face greater problems, violence, terrorism, potentially war, if the treaty is ratified, and I think that beyond that and dealing with the merits of the treaty, it is a bad policy to succumb to blackmail as national policy. Members of the State Department have suggested that if we do not deal ^vith Mr. Torrijos, we may be dealing with our last best chance at a rational leader in Panama, and yet at the same time we realize that once again this is sort of a blackmail situation, if you don't deal with this man he may not be Abraham Lincoln, he might be better than w^hat is coming down the line. Panama has been a country that has been very unstable in the past with rapid changes of government. Mr. Torrijos himself came to power illegally, has disbanded the Panamanian Legislature and shredded the Panamanian Constitution. If he has no regard for his own documents of government, regarding his own country, why are we so foolish to think he is going to pay great heed to any treaty that he signs, and indeed my feeling is, in view of his past performance, that he might view it as Lenin did treaties; namely, the treaties are like pie crusts, made to be broken. The American ])eople are overwhelmingly against this treaty, Mr. Chairman and members of the committee, and as that body of the Congress that is closest to the American people, I would hope that the House of Representatives would very clearly come out and be overwhelmingl}^ against the treaty. We face the very clear matter of history. On page 5 of my statement I quoted from the debate with then President Ford. Former Governor Carter in the debate stated, 'T w^ould never give up complete control or practical control of the Panama Canal Zone." Once again, ''But I would not relinquish practical control of the Panama Canal Zone any time in the foreseeable future." And we are finding out that perhaps the foreseeable future might last less now than 12 months, just as the term ''in perpetuity" seems to last perhaps 74 years. We are being told that in this treaty that we are being guaranteed certain rights and so forth for a lengthy period of time, but looking on the past histories these lengths of time have not been very clear. In the matter of sovereignty I think it is quite clear that the United 200 States does have sovereignty in the Canal Zone, but also if the United States ceases to exercise interest in the zone or in the canal, then it reverts; the reversionary interest then goes, only then, to the Republic of Panama; if not Panama, perhaps to Colombia; if not Colombia, perhaps to Spain. There has been much said by I think members of the State Department that the matter of sovereignty is not involved, that we do not have sovereignty, but the past history is very clear that we do. Thank you, Mr. Chairman, for this opportunity of appearing before the committee and expressing these views which I think overwhelm- ingly represent the views of the American people. [Mr. McDonald's prepared statement follows:] Prepared Statement of Hon. Larry P. McDonald, a Representative in Congress From the State of Georgia Mr. Chaiman, I appreciate the opportunity to appear here today and testify against the proposed Panama Canal Treaty recently signed by President Carter. While the treaty will primarily be dealt with by the Senate, the House can and should have a say in this matter. If the treaty is approved by the Senate, and I hope it is not, the cession of the land and property to Panama has to be approved by the Congress and the term Congress means both bodies. And here, of course, I refer to the United States Constitution, Article IV, Section 3, Clause 2 which states that "The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States." And, while this will be the central point of my testimony, I will also develop other specific reasons why this treaty is not in the best interests of the United States or the Free Workl. As Members of the House are closer to the people than the Senate, it is our special responsibility to inform the people on these matters and reflect their feelings. First of all, there are many unanswered questions as to the motives on the timing of this treaty. It appears to coincide with a very bad point in the Pan- amanian economy wherein a disproportionate amount of the Panamanian budget (40%) is being used up in debt service. And interestingly enough, some of the major loans coming due are to New York City banks. So, my strong feeling is that the Carter Administration needs to explain to the American people the role of these banks in the negotiations and whether the very generous financial terms of the treaty are designed to assure these New York City banks of repaj-ment of their loans. As is well known, our negotiater, Mr. Sol Linowitz, had associations with one of these banks. With Mr. Linowitz operating under a six-month deadline (and avoiding Senate confirmation hearings), how manj- concessions were made to Panama due to this factor? I think the Congress needs an answer to this question. Now the American people are being told that the canal is no longer strategic. This is not so. All of our Navy ships can go through the canal except the large carriers, as the Members here well know. With our present smaller fleet, it is even more vital that our ships have unrestricted access to the canal, as it could become necessary to shift our strength on short notice. In addition, Alaskan oil is now being transported through the canal and this is terribly important to the east coast population. This oil is being offloaded at the western end of the canal onto barges and pushed through the canal and loaded onto tankers at the eastern end. Last year about 13,000 ships transited the canal. Alaskan oil will add 700 more transits a year by 1982, it is felt. This is almost twice the number that used the canal in 1946. The canal can handle 20,000-22,000 transits a year and the volume is l)uilding. The canal can handle 96% of the world's shipping. 42% of all cargo presently going through the canal originates in the United States. 20% of our exports pass through the canal; so much for the canal not being strategic. Certainly one of the most important factors to consider in the treaty is the defense of the canal. The defense of the canal is simply not provided for after the year 2000. If the United States were to re-enter the canal after the year 2000, we would be the "Gringo invaders" such as the French and British were at the Suez in 1956. The so-called "neutrahty protocol" to the treaty is practically worthless in the real world of international law. Dr. Bethancourt, the Panamanian negotiator, denies that the "neutrahty protocol" gives the United States any particular right except to use the canal, the same as any other nation. We are 201 not the guarantor of Panamanian neutrality, according to Bethancourt. If trouble ensues, our State Department would wring its hands and we would send strong notes and then probably offer the Panamanians a loan as a bribe if you follow the present line of how problems are handled at the Department of State these days. Suppose a Panamanian government disagreed with us? These are many definitions of neutrahty today. "What would we do? Go to the World Court? How long would a decision take? Suppose a future Panamanian Government decided to invite Fidel Castro in to protect its interests. Would we go to war with Castro? No, once you leave you are the "invader" if you come back in. No Pana- manian Government could face letting us return except by force and I believe you gentlemen here know it. The next aspect of this problem, I propose to deal with is the threat of violence that has been bandied about. Actually, it seems strange that the main threats seem to be coming from certain persons in high places using this as a clu'o with which to achieve approval of the treaty. If the United States does not have the backbone to defend the canal whether the treaty passes or fails then we have reached a new low. Furthermore, it is the President's duty to defend U.S. hves and property and he should V)e held accountable if he does not move swiftly to do his Constitutional duty if such violence ensues. Certainly, I envision possible trouble if the treaty is not approved, but, I foresee more if it is. The pressures, once it is approved, to move us out with threats and incidents will be overwhelming. With the Soviets and the CuVjans daily increasing their influence in Panama, it would be truly amazing if nothing \-iolent does occur. However, this has nothing to do with the merits of the treaty nor should it. We can and should defend the Canal. It is obvious that with the Canal being a large installation, we could not prevent isolated sabotage and Incidents all over the Canal Zone, but if Torrijos takes this path, then we should take appropriate measures against him, as only Panama could lose in the long run. The State Department has also been instrumental m informing everyone they can that whUe Torrijos may not be an Abraham Lincoln, he would likely be replaced by someone worse. This hardly gives us confidence in the future of Panama. Panama has already had 59 chief executives in 7-5 years and we are told the coming ones are worse. Can you imagine how these future rulers of Panama will adhere to any treaty if they are more radical and to the left of Torrijo-? Now let us look at the present situation m Panama. Freedom House, a non- partisan organization which the State Department cites in its report to the Congress pursuant to the provisions of the Foreign Assistance Act, gives Panama a lower rating on freedom than Chile. Here we have the strange situation of where we are willing to bestow money and the great prize of the Panama Canal on a leftist dictator and yet the Congress enact legislation to keep Chile from even purchasing a spare tire for one of their military aircraft in the United States. Earlier this year, as some of you are aware, we permitted Torrijos to purchase some armored cars for his use. Where is our true concern over human rights? These armored cars have only two possible Immediate uses — one, against his own people or two, against American soldiers In the Canal Zone. Torrijos himself is a long-time admirer of Castro and doubtless this admiration has been a little sulxiued of late out of deference to treaty negotiations. Torrijos was said to have been in a Mandst organization called Young Veraguas m his youth by at least one source, and from his pronouncements, he is still radical. The same source alleges that Torrijos' parents were members of a Communist cell in the same province. There is also the recent Soviet mission to Panama negotiating certain agreements to say nothing of the outstanding loan by the Soviet Narodny Bank system to Panama. As Representatives of the people, we are the body closest to them as I"ve stated before. What do the people of the United State- want? They want to keep the canal. I have here a small samphng of over 50,000 signed petitions I've received against the treaty. My own mail runs about 98 percent against the treaty. We know that even the White House mail is against the treaty. I know of no Meml)er of Congress whose maU favors the treaty. So, I think it is about time that the President and the State Department, for a change, take into account the feelings of the American people. For one, I feel the American people are growing weary of a foreign policy that has been conducted without interruption since World War II giving away other people's land to radicals and Coromunists and now that th»^ pohcymakers have run out of other people's land to give away they want to start giving away U.S. territory. Whatever happened, one might ask, to Presidential candidate Carter, who stated in a debate with Mr. Ford last October: 'T would never give up complete control or practical control of the Panama Canal Zone * * *." ■ • ■- •■- And again: 202 "* * * But I would not relinquish practical control of the Panama Canal Zone any time in the foreseeable future." i']vidently, the foreseeable future lasts about a year with President Carter. Now back to the question of U.S. territory and sovereignty in the Panama Canal. In my strong view, our sovereignty is unquestioned and in this connection, I cite the following: /. Claims to Sovereignly Three U.S.-Panamanian treaties provide the basis for U.S. claims to sover- eignty in the Canal Zone. Hay-Bunau-Yarilla Convention, 1903 ARTICLE II "The RepuV)lic of Panama grants to the United States in perpetuity the use, occupation and control of a zone of land and land under water for the construc- tion, maintenance, operation, sanitation and protection of said Canal of the width of ten miles extending to the distance of five miles on each side of the center line of the route of the Canal to be constructed . . . ." ARTICLE III "The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of anv such sovereign rights, power or authoritv." [U.S. TS 431; 33 Stat. 2234-2235; II Mallov, Trea- ties, etc. (1910) 1322] General Treaty of Friendship of Cooperation, 1903 article i "In view of the official and formal opening of the P?nama Canal on July 12, 1920, the United States of America and the Repulilic of Panama declare that the provisions of the Convention of November 18, 1903, contemplate the use, occupa- tion and control by the United States of America of the Canal Zone and of the additional lands and waters under the jurisdiction of the United States of America for the purposes of the efficient maintenance, operation, sanitation and protection of the Canal and of its auxiliary works." ARTICLE XI "The provisions of this Treaty shall not affect the rights and obligations of either of the two High Contracting Parties under the treaties now in force be- tween the two countries, nor be considered as a limitation, definition, restriction or restrictive interpretation of such rights and obligations, but without prejudice to the full force and effect of any provisions of this Treaty which constitute addition to, modification or abrogation of, or substitution for the provisions of treaties." U.S. TS 945; 53 Stat. 1807, 1808, 1825." The effect of the latter article was to leave the juridical status of the Canal Zone as defined in Article III of the 1903 convention unaltered. i Treaty of ]\Ii:tual Understanding and Cooperation, 1955 The Preamble to this treaty states that both parties recognize that: "... neither the provisions of the Convention signed November 18, 1903, noi- the General Tieaty signed March 2, 1930, nor the present Treatv, may be modified except by mutual consent, . . ." [6 U.S. T.S. 2273; TIAS 3297] //. Sovereignty On pages 2 and 3 of his letter, Mr. Bell discusses the question of whether or not the territory comprising the Canal Zone was transferred from Panamanian to U.S. sovereignty. Ill Hackworth. Dlpest of International Law S09 (1941). 3 Wliiteman, Digest of Inter- national Law 1130 (1964). 203 The United States government has never denied that Panama has retained tituhir sovereignty. The important issue to be faced is, what is the nature of a "titular sovereignty?" Or, can "titular sovereignty" be equated with territorial sovereignty? On page 2 of the letter, Mr. Bell utihzes part of an oft-quoted statement made by Wilham H. Taft, then Secretary of War in President Theodore Roosevelt's cabinet. The portion of the statement Mr. Bell quotes is as follows: "* * * The truth is that while we have all the attributes of sovereignty necessary in the construction, maintenance, and protection of the canal, the very form in which these attiihutes are conferred in the treaty [of 1903] seems to pre- serve the titular sovereignty over the Canal Zone in the Repul)lic of Panama * * *." The conclusion of that statement, which Mr. Bell omits, is also of interest. "* * * and as we have conceded to us complete judicial and police power and control over the Zone and of the two ports at the end of the canal, I can see no reason for creating a resentment on the part of the people of the Isthmus by quarreling over that which is dear to them but which to us is of no real moment whatever." Has the element of titular sovereignty even been construed to limit the powers exercised by the United States in the Zone? The following excerpts from Padel- ford's The Panama Canal in Peace and War 2 describe the response of the United States to such claims. "All contentions of this nature have been forthrightly refuted by the United States, to the extent that thej^ deny, or appear to do so, the right freely to exercise sovereign powers within the zone. Secretary Hay, in the note to Senor de Obaldia already quoted above, insisted that the United States 'cannot concede the question to be open for discussion or the Republic of Panama to possess the right to chal- lenge such exercise of authority,' and he laid much weight upon the words of Article III: 'to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights.' [Secretary Hughes reiterated this in 1923: "The grant to the United States of all the rights, power and authority which it would possess if it were sovereign of the territory described, and to the entire exclusion of the exer- cise by Panama of any such sovereign authority, is conclusive upon the question you raise. The position of this Government upon this point was clearly and defi- nitely set forth in the note of Mr. Hay to Mr. de Obaldia of October 24, 1904." For. ReL, 1923, Vol. II, pp. 638, 653 et seq. In conversation Secretary Hughes said: "This Government would never recede from the position which it had taken in the note of Secretary Ha}^ in 1904. This Government could not and would not enter into any discussion affecting its full right to deal with the Canal Zone under Article III of the Treaty of 1903 as if it were the sovereign of the Canal Zone and to the exclusion of any sovereign rights or authority on the part of Panama. . . . This must be regarded as ending the discussion of that matter." Ibid., p. 684. "[C/. the citation of /. N. Gris v. The New Panama Canal Co., Supreme Court of Panama, in Secretary Hughes' note of Oct. 15, 1923, quoted above, in which that Court said: "The Republic of Panama agreed that the United States should possess and exercise, to the entire exclusion of the Republic, those rights, powers and authority, that is to say, the rights, power and authority that a sovereign alone can have . . ." Ibid., p. 656. ["In a note dated Oct. 13, 1923, the Secretary refused to agree to arbitrate "any question attacking the exercise of sovereign rights of the United States explicitly granted under Article III of the Treatj^ of 1903 with Panama." Ibid., p. 710.] At length in 1923, the Panamanian Minister, in a conversation with Secretary Hughes, 'said that the position taken by the Secretarj^ might be sound from a technical, legal standpoint.' [Ibid., p. 685.] "Secretary of State Hay enunciated the stand of the United States, which has been adhered to since: 'The position of the United States is that the words 'for the construction, maintenance, operation, sanitation and protection of the said canal' were not intended as a limitation on the grant but are a declaration of the inducement prompting the Republic of Panama to make the grant.' Assert- ing that the great object of the United States was to construct and operate the Canal, he added that the right to exercise sovereignty, conferred by Article III, left the United States exclusive right to determine what things should be done in the zone ancillary to the main objective. [For. ReL, 1904, pp. 613-630. This 2 Cited in WMteman at 1142-44. 204 position was strongly sustained by Secretary Hughes in 1923. Ibid., 1923, Vol. II, pp. 652-653.] The successful operation, sanitation, and protection of an enterprise of the magnitude of the Panama Canal, located as it is far from the United States, must entail the provision of many subsidiary services in the Canal Zone. Of the necessity of providing any such services or activities within the Canal Zone the authorities of the United States must be the judges." What then is the net legal effort of the concept of titular sovereignty? Mr. Bell's broad description of U.S. rights ("* * * the most complete transfer of juiisdiction over a territory without its being a cession in the technical inter- national law sense * * *" — pg. 3 of letter, quoting Vali) appears to be correct. In fact, Panama possesses no sovereign powers in the Canal Zone until the U.S. ceases to maintain and operate the canal. (See Treaties of 1903 Art. II and 1906 Art. 1.) Now the Department of State has made much over the two words, "titular sovereignty." Is "titular sovereignty" territorial sovereignty? No, I think not. What is meant is that if the United States ever ceases to exercise its rights over the Canal Zone, Panama has a reversionary interest in the land, and I suppose should Panama evidence no interest in such a case, then Colombia would have such an interest and should Colombia evidence no interest, then Spain would have a reversionary interest etc. Even the State Department has spoken of this as a reversionary interest. Here I have reference to page 421 of the Panama Canal Hearings of the House Committee on Merchant Marine and Fisheries entitled: "Panama Canal Finances" held April 6, 7, and 9, 1976. At that time, Mr. Carl F. Salans, Deputy Legal Advisor to the Department of State, in discussing sov- ereignty said : "That leaves something for Panama and that is something that is a reversionary interest in normal property terms." Therefore, since we do indeed appear to be sovereign, then Article IV, Section 3, Clause 2 of the United States Constitution applies to the present proposed treaty. Clearly, then, this treaty has to come before this body for approval. Cer- tainly, if the House is not permitted to consider the treaty, it should provide no funds and in no way facilitate the implementation of this proposed treaty. Thank you. Mr. Nix. Thank you, Mr. McDonald. PUBLIC ATTITUDE TOWARD THE TREATIES You stated a moment ago the American people were overwhelm- ingly opposed to this treaty. I put this question to you. What and where are they to be found, the figures upon which you base that conclusion? Mr. McDonald. Well, certainly in my own mail I have received over 50,000 responses to an opinion poll on the matter of the canal. My own mail is running about 97, 98 percent against the canal. I know of no Member of Congress that has polled his district in a news- letter poll — I know of no Member of Congress that has received answers coming back where over 50 percent favor relinquishing U.S. control, sovereignty and so forth over the canal and Canal Zone. In the polls, Harris polls, and so forth, have consistently shown the American people have been against giving up U.S. control of the Panama Canal. I know of no poll by Members of Congress that have stated otherwise and certainly my mail shows this. I think the White House has admitted that the White House mail shows this. Senator Talmadge in my State of Georgia has stated in his travels during the August recess that only one person in the entire State expressed agree- ment with turning over the canal to the Panamanians, the Canal Zone to the Panamanians, and yet he was besieged by thousands of individuals that have stated don't give up the Panama Canal. I know that the Members of the Senate in public statements re- turning back from the August recess period in their home areas, even 205 those who have been in favor of the canal treaty, have made very clear that back home there is massive opposition to the treaty. Mr. Nix. Because there are no polls available except your own, is it logical to assume that the American people are inclined to feel that this treaty should not be entered into? Mr. McDonald. Mr. Chairman, as I stated, going far beyond my owii. I know of no Member of Congress who has sent out a news- letter questionnaire and has reported back to the Congress or to any of his colleagues or her colleagues that the questionnaire showed 51 percent were^in favor of the treaty. I know of no Member and yet I laiow innumerable Members of Congress all have stated overwhelming opposition to the treaty. We do have national polls available. We also have other Members of the other body of the Congress, the Senate, who made it very clear in their public statements that the sentiment in their own home town areas is overwhelmingly agamst the treaty. So, fortunateh', we are not dealing with the opinion of just one district, 435, but mstead I think we are dealing with a fact of life, and the administration knows this very clearly, that they have got quite a selling job if they are going to sell this one. Mr. Nix. Before we go into interrogation further of Mr. McDonald, I would like Mr. Crane to give his statement. STATEMENT OE HON. PHILIP M. CRANE. A REPRESENTATIVE IN CONGRESS EROM THE STATE OE ILLINOIS Mr. Crane. Thank you, Mr. Chairman. I would like to request, if I may, that the full text of my remarks this morning be inserted in the record and then I will attempt to summarize for the sake of time. I appreciate the opportunity to appear before the committee. I am here in two capacities. One as a colleague in the House of Representa- tives and the other as chairman of the American Conservative Union, a position that I was elected to in February of this year. The American Conservative Union is probably the largest con- servative organization in the United States with over 100.000 members in the national body and 40 State affiliates. Tlu'ough that organiza- tion we created a special task force on Panama back in the earh^ spring of this year which is chaired by the distinguished Senator from South Carolina, Strom Thurmond. And speaking both as a chairman of that organization and Member of Congress, and I might add as a historian who had a minor in Latin American history and taught Latin American history for several years before coming to Congress, I would like to suggest that one of the paramount concerns in this whole debate is the role of the Panama Canal and the Canal Zone as a symbol. The action that we are contemplating here is one involving the will of the United States to stand up for that which belongs to the United States. I think a retreat in this instance can have far-reaching implications, and it would also appear to coincide vrith. what many have already interpreted as an American retreat from world affairs, as in the case of Vietnam, or even to suggest that we are abandoning our friends in South Korea and Taiwan. Some \\all rationalize this on the grounds that they are not American territory and should not be our concern. 206 But with the Canal Zone, Mr. Chairman, we are deaUncr with a territory that clearl\' and in(hsputabh' belontrs to the United States of America. I say that based upon the history of the transfer of that territory to the U.S. Government in the initial treaty in 1903, but subsequent!}" ratified b^' other treaties with elected governments in Panama. Further, there was a special court challenge in 1907 as to the validity of investing American taxpayers' money for internal improvements in other j^eople's territory and the Supreme Court in Wilson v. Shaw at that time clearly upheld the fact this was a complete conveyance of property and understood as such by the Panamanian Government. Subsequent Supreme Court decisions have upheld that interpretation. In U.S. V. Husband R. Roach in 1972, for example, the Court held that the canal zone was unincorporated territory of the United States; and as such it comes under the plenary authorit}' of Congress. That leads me to another point, one touched upon by other witnesses this morning, and that is the terms under which American territor}'" can be alienated. Based upon Supreme Court interpretations plus precedent because we have had minor territorial alterations with Panama in the past and the House has participated in those altera- tions — the House must participate in any proposed alienation of the zone or canal. The other point I would like to make deals with reassurances by the administration that the neutrality of the canal will be preserved, that the canal will be kept open, that the United States in time of war when our vital interests were threatened would somehow receive some kind of preferential treatment in passage of our vessels through the canal, and, finalh', that the United States will continue to reserve a right to intervene to guarantee the neutrality of the canal. The reason I raise these points is because Dr. Romulo Escobar Bethancourt, who was head of the Panamanian negotiating team, specifically denied every one of these points. He has done so repeatedly in public statements in Panama that have appeared in the Panama- nian press, and I would refer members of the committee specifically to his statements on August 19 of this Aear before the Panamanian National Assembty which were published on August 20 in the Panama- nian newspapers. The only reason I put some stress on this is it seems to me when you comi)are Dr. Escobar's statement as to what he feels is in that treaty and what the treaty itself states, that the treat}' is silent in areas of controversy or the language is sufficiently vague as to be sub- ject to widely varying interpretation and with that, of course, dispute. What this means, in my judgment, is that with the ratification of this treaty and the cession of sovereignty to Panama in that entire area, that when you get into definitions of such words as neutrality, which is not defined in the treaty, that you could have a disagreement on how it will be resolved, and Panama \nll prevail. One can't assume only that Dr. Escobar is stating what he understands to be the meaning of this treaty and, if his understanding prevails, then indeed there is no right on the part of the U.S. Government to intervene. This dis- agreement could open a Pandora's box in terms of what course of action would then be available to us. If we think we have image jiroblems now in the world, I can assure you they i)ale into insignifi- cance with the i)roblems we are going to encounter when we unilat- 207 erally decide to send the U.S. Marines in to enforce our interj)retation in the event of a dispute. That is ^oing to be a vastly more serious matter than anything: that we have encountered to date. The other point I would like to make deals with the point that was made by my distinguished colleague from Georgia. If the unstable dictator in Panama would treat so cavalierly the most precious docu- ment of the Panamanian people, their own Constitution, why is he going to view a treaty with the United States any more seriously? The United Nations has already upheld the ''right" of expropria- tion, and it seems to me that the canal becomes in effect nothing more than a multinational corporation after the treaty is ratified. That being the case, it may very well be that the dictator in Panama, or a succeeding dictator, might view the treaty as a scrap of pa])er and insist he will nationalize the canal. Based ui^on the American expe- rience with Cuba, when Castro did exactly the same thing, I don't think we have the assurances that the United States will act with the a])propriate response to guarantee the neutrality and continued oper- ation of the canal in the best interests of all nations of the world. One argument advanced by proponents of the treaties suggests that somehow we will improve our image with our Latin American neigh- bors if we give the canal to Panama. If you look at ])ast experience, you will find that at the time of the Bay of Pigs fiasco the United State's lack of will to carry that intervention on to a successful con- clusion cost us a great loss of prestige in the eyes of our Latin American neighbors. (3n the other hand, when President Kennedy acted firmly as in the instance of the Cuban missile crisis, as well as when President Johnson did so at the time of the Dominican problems, our po])ularity according to polls soared in the eyes of our Latin American neighbors. In short, what I am suggesting is the Latin Americans don't look with respect upon demonstrations of weakness but rather that strength and firmness are what command the respect of the Latin Americans. And I think further one must realize that it has been a longstanding tradition in Latin American politics to rail against the colossus of the North, and unless one has a chance to talk to many Latin American politicians personall}^ it is hard to distinguish between public declara- tions that are for political consumption at home and what are their true feelings. Yet, another issue deals with the matter of defense of the canal. One of the things I have been puzzled about listening to this debate is the argument that the canal is not defensible, but somehow if we give it to Panama it becomes defensible. That logic eludes me totally. We have been warned about the possibilit}' of sabotage of the canal. I think anyone will concede that there is alwaA^s the possibility of sabotage. But as our distinguished colleague from New York observed, the Panamanians have the least interest in sabotaging the canal. Furthermore, just because it is potentially subject to sabotage is no reason for giving it to the Panamanians much less paying them $70 million a 3'ear on toj) of that. In my testimony I observed that the metro subway here in Wash- ington is equally indefensible, but we would not consider subsidizing the Hanafi Muslims to take it over for that reason. In short, I think that is an irrelevant argument in the whole debate. 98-991 — 77 15 208 One final point, Mr. Chairman; we are contemplating construction right now of smaller aircraft carriers, and of the 480 combat vessels in the U.S. Navy only 13 aircraft carriers cannot transit the canal at the present time, smaller aircraft carriers will be able to transit the canal. Mr. Chairman, on behalf of m^^self and the American Conservati\"» Union, I again would like to express my appreciation for having had the opportunit}' to testify today, I would urge that this committee take a point position on one aspect that I touched upon in my testi- mony, and that is guaranteeing that the House exercise its preroga- tives in any action undertaken to alienate the canal. [Mr. Crane's prepared statement follows:! Prepared Statement of Hon. Philip M. Crane, A Representative in Congress From the State of Illinois Mr. Chairman: I appreciate the indulgence of the committee in permitting me to testify this morning on the proposed Panama Canal treaty. Actually, I am wearing two hats today as I wish not only to express a personal view but to pre- sent the position of the American Conservative Union, of which I am chairman. The American Conservative Union, which has 100,000 members and 40 state afiihates, is the nation's largest conservative organization. As such it has strongly opposed any proposed giveaway of the Panama Canal, going so far as to establish a "Task Force to Save the Panama Canal" headed by the distinguished senior Senator from South CaroUna, Strom Thurmond. It is that task force which has placed the full page ads in a number of newspapers around the country, bringing the canal issue into its proper focus. Speaking as both a representative of ACU and as an historian with a long term interest in Latin American affairs, let me stress that it is not just a physical facility that is at stake here with a book value of over $560 million, a replacement value that has been estimated at S3. 5 billion, and a cost over the years that has totalled roughly $7 billion. What is even more important is the Panama Canal as a symbol — a symbol of America's strength as a free nation and its willpower to act in behalf of its better interests — and those of the free world. If we, as a nation, not only give away a $7 billion investment but pay almost $2 billion more to do it even though we are not the slightest bit obligated, then other nations will rightly wonder if there is anything we think is worth defending. After all, it could be just as easily argued that S7 milUon was a ridiculously low price for Alaska, that we took advantage of the Soviet Union and that, because we al- legedly did so, we should now pay the Soviets to take it back along with all its oil and natural gas. Now, to some, that may seem like a ridiculous analogy but believe me it is not. The Hay-Bunau-Varilla Treaty of 1903 between the U.S. and Panama gives the U.S. rights to the Canal Zone "* * * as if it were sovereign," "in perpetuity" and "* * * to the entire exclusion of the exercise by the Republic of Panama to •t has grown to SI. 7 billion. His inflationary domestic programs and "big spender" practices have priced Panama's exports out of world markets. Interest on the national debt consumes about 40 percent of the annual budget. Refinancing this debt, paying interest coming due, and handling a deficit of $139 million, will require $323. G million that Torrijos does not have. From Torrijos' perspective I can see that he needs the "quick-fix" financial features of the Treaty. But I cannot understand why we should be hurried in concluding this Treaty now, with this dictator, when the agreement will keep such a violator of human rights in power. Wh}^ not let him fall of his own mismanagement of the affairs of Panama? Why be the "Johnny-on-the-spot" savior for this guy? Let him fall and maybe the people of Panama will be free to choose again, a democratically elected government. The next point I would like to make concerns the question of the strange timing of the agreement with the financial needs of Torrijos. As I said before, if the rationale is that we must give away the Canal, and I hasten to say that's not my view, why give Panama all this money to take the Canal? Why did the State Department and our negotiators make this recommendation to the Presi- dent now? I will make no accusations about the apparent stake of U.S. banks in the financial solvency of Panama, but I would suggest that this key committee examine the questions of the relationships of the banks to Panama and the £nancial features of this Treaty. There are suggestions that banks, which have made speculative loans to Torrijos, stand to lose large sums of money if he defaults — that he will not meet these financial obligations without this Treaty. Are these suggestions true? The answer to this question is certainly a key point on the whole Canal Treaty question. Our people deserve to know all the facts iibout the financial arrangements, I will not go into the questions of conflict of interest that have surfaced about persons involved in the negotiations, but these questions should also be examined more closely. These are serious questions. My final point concerns our national security. I cannot overestimate the value ■of a secure Canal to our national defense. As you know I am a member of the Armed Services Committee. There are manj'" self-proclaimed experts saying the Canal is not important. They give the impression that the Canal is hardly used anymore, that our commercial and naval vessels don't use it. These suggestions are not true. Approximateh^ 70 percent of Canal shipping originates or terminates in the United States. The Canal can handle approximately 96 percent of all the world's commercial shipping. W^e have a small, two-ocean navy and 98 percent of our naval vessels can go through the Canal, avoiding 7,700 additional miles and weeks around the Horn. Three former Chiefs of Naval Operations have warned that to give up the Canal would be to "sacrifice the strategic advantages of the Canal." Admiral Tom Moorer, former Chairman of the Joint Chiefs »f StafT, suggests that with the political character of the Torrijos government and the company he likes to keep, "the Canal zone could become a satellite base of an adversary, and the advocates of the 'giveaway' do not appear ta take this factor into account." I accept the judgmeent of these distinguished retired ofiicers who have no personal "ax to grind" in this matter. We developed and have operated the Canal legally and morally. The world needed this waterway. Before we built it, others had failed. We have paid our wa}^ — to the benefit of Panama, Latin America and the world. This is not the time, nor is the present Panamanian dictatorship the party to whom we should relinquish ownership and control of the Canal. And while I do not agree with them, I have listened to the arguments put forth about U.S. colonialism and imperialism. But I cannot understand the line that if we give Panama the Canal, we should pay them to take it. NEED TO RETAIN U.S. BASES IN CANAL ZONE Mr. Fountain. May I ask one further question? During these negotiations was there any discussion of the pro- priety or advisabihty or probabiUty of our desire or need to maintain at least a base in that area just as we are paying for bases all over the world to defend our security and the security o^ the free world. Secretary Brown. I am not aware of it. General Dolvin. It was addressed in the negotiation but there seemed to be a feeling that when you were not operating the canal 274 there was no o^reat deal of military advantage to having troops in Panama and also it was objected to, of course, by the Panamanians because they saw a perpetuity, a continuation of Mr. Fountain. Notmthstanding the fact that from that area you would have access to both the Pacific and the Atlantic. General Dolvin. There is some military advantage to having troops on the ground but it is also unworkable, I believe. General Brown. It would be a military operation. To carry out the responsibilities we accept in article IV, it would be easier if we retained Howard Air Force Base and had some small force there to accept other forces but that is not essential. We can still carry out our responsibilities, given today's equipment, organization, and techniques without a base down there. Mr. Fountain. From where? General Brown. From the United States. Mr. Fountain. Thank you. Chairman Zablocki. Mr. Solarz. Mr. Solarz. Thank you. vulnerability of canal to sabotage Gentlemen, if in fact the canal can be put out of commission rel- atively easily by a saboteur, and I assume equally easily by a well- aimed missile, I am not sure that I understand why it is so terribly important for us to retain the right to send in forces so as to preserve the continued operation of the canal. It would seem to me that if somebody undertakes to deny us its use by putting the canal out of commission, and they are really determined to do it, it is rather doubt- ful that we are going to be able to prevent them even if we station 100,000 troops arm to arm across the canal. So why is this so important? General Brown. Well, first of all, let us get rid of the nuclear ballistic missile attack. Obviously that is possible. I don't think it is a very practical concern. Without question it would put the canal out of commission, but at a terrible cost to everybody. So the practical problem in a real sense is the concern for disruption by a saboteur and that type of thing. That is possible and we feel that that is the more likel}^ threat if Panama is uncooperative, not at ease, but aroused because of the failure of the United States to rectify what they see as colonialism, and to renege now on what has been a promise in good faith by four Presidents to seek to achieve a renegotiation of the treaty. Mr. Solarz. General, I agree that is the argument in favor of the treaty. What I am askmg is a slightly different question. In light of all of the things you point out, what is the value to us in retaining the right to unilaterally intervene in order to preserve the neutrality of the canal, when given the fact, as you point out, and Secretary Brown pointed out, we are more interested in use than ownership. If someone wants to put the thing out of commission so we can't use it, it is practically impossible to prevent anywaj'. General Brown. Well, I think the task that a saboteur could do would be really short term. The most drastic obviously is to break the dam and let the water spill out and it is estimated even after the dams are repaired it would take 2 years to accumulate the water that is needed. 275 But, that is not an easy thing to do. That is not the task which a single saboteur, with all the TNT he can hig up there, can do, that is a rather major undertaking. The type of things an individual could do might have to do with the gears in one of the locks or something like that, and that would be a temporary displacement, short term, relatively short term. Mr. SoLARZ. So what threats is this clause designed to enable us to prevent? This clause which gives us the right to send in the troops? General Brown. I think not an isolated incident but a campaign, if you will, a surge of these things, that determination by some ele- ment to disrupt an open canal available to all users and under those conditions I would hope Panama would handle the problem. If they can't, the United States would have an obligation to do so. Secretary Browx. The alternative is attempted takeover from out- side using activities inside. I am not saying whether we would choose to take action under those circumstances because I don't know. But the right to intervene under such circumstances is worth something. Mr. SoLARz. Let me take one hypothetical example. Let us assume there were a feeling in Colombia which gained strength and force over the years and in the year 2001 they decide to reclaim what had all along in their view been rightfully theirs, and they seized the canal and brought Panama back under their jurisdiction? From their point of view, wouldn't they have ever}^ incentive to keep the canal open and permit us to use it since we are one of the principal users? Secretary Browx. This is consistent with m}" statement. That what we do, would depend on the circumstances. Our interest is in keeping the canal open and neutral and if that neutrality is not threat- ened I think there would be little reason for us to intervene. Mr. SoLARz. I just have the feeling in conclusion, Mr. Secretary, that this clause is designed to deal more with the threat from the vSenate than any realistic threat on the ground to our continued ability to use the canal. Secretar}^ Browx. It comes into effect after the year 1999. I find it difficult to imagine all the contingencies under which its use, its invocation might be suggested and either accepted or rejected. Chairman Zablocki. Thank you. Secretary Brown and thank you General Brown, for your testimony and for the time you have given to the committee. The committee stands adjourned until 9:30 tomorrow morning when we will consider sundry resolutions. [Whereupon, at 12:35 p.m. the committee adjourned, to reconvene at 9:30 a.m., Tuesdav, September 27. 1977.] PROPOSED PANA3IA CANAL TREATIES WEDNESDAY, SEPTEMBER 28, 1977 House of Representatives, Committee on International Relations, Washington, D.C. The committee met at 11:20 a.m. in room 2172, Rayburn House Office Building, Hon. Clement J. Zablocki (chairman of the committee) presiding. Chairman Zablocki. The committee will please come to order. _ The Chair understands that the Democratic Caucus has just adjourned so the members will be coming very shortly. This morning we meet to continue the hearings on the Panama Canal treaties and related legislation. During the course of our hearings one of the major issues of concern, under the terms of the treaty, is the continued ability of the United States to defend the canal. It is this question which we would like ta address this morning. We are privileged to have with us today Adm. Thomas H. floorer, former Chairman of the Joint Chiefs of Staff. Admiral, it is a pleasure to welcome you, once again, to the committee. If it is agreeable with you, we will begin by hearing your prepared statement, after which I am sure the members would like to ask questions. Admiral Moorer, you may proceed. STATEMENT OF ADM. THOMAS H. MOOEER, FORMER CHAIRMAIT OF THE JOINT CHIEFS OF STAFF Admiral Moorer. Thank you, Mr. Chairman. I note I am speaking to an unbalanced line, but nevertheless, I am certainly honored to be here as a witness. I would like to emphasize at the outset that I am not here represent- ing a particular group, an organization, or a political party. Rather, I am here as a concerned citizen who has had far more than average involvement in the Panama Canal as it relates to the vital security of the citizens of these United States. I view this issue of the Panama Canal in global maritime terms. My military experience during the last 12 years of active duty, from 1962 to 1974, offered me some extraordinary and unique opportunities to assess the importance of the Panama Canal to the United States, as well as its value to our allies and friends and, indeed, to all maritime nations. My evaluation of this waterway as an invaluable possession of the United States was intensified in 1962. At that time I was commander^ (277) 278 7th Fleet, operating in the Western Pacific. Frequently my fleet's capabilities depended on the prompt arrival of supplies from the Atlan- tic seaboard, supplies loaded aboard ships which were utilizing the Panama Canal. From the 7th Fleet I went to Commander in Chief, Pacific; from there to Commander in Chief, Atlantic, and NATO's Supreme Allied Commander, Atlantic; from there to Chief of Naval Operations and from there to Chairman of the Joint Chiefs of Staff. Each of these commands provided unique opportunities, and sometimes urgent reasons, to evaluate the Panama Canal. I saw this strategic waterway from many vantage points and under stressful circumstances. As Commander in Chief, Pacific, I recall in some detail the Tonkin Gulf era of 1964. During that period I sa,w the Panama Canal as a conduit for rapid reinforcement from the Atlantic Fleet should the naval forces of the Soviet Union or mainland China become involved in the Vietnamese war. The U.S. high command was never sure during those early phases of the war of the intentions of either the Soviet Union or mainland China. We knew they had the naval and air capabilities to make trouble and therefore we had to draw up con- tingency plans for such eventualities. In order to equalize the wartime exposure and hardship throughout the entire Navy, large numbers of Atlantic Fleet units were continu- ously rotated through the canal to the combat theater in the Pacific. In addition, as the Pacific Fleet Commander I looked to the Atlantic side for rapid logistics support. The U.S. Arm}', the U.S. Air Force, the U.S. Marine Corps, and the U.S. Navy all required a continuous and heavy flow of logistic support; such necessities as fuel, ammunition, spare parts, and food. Our allies fighting with us in Vietnam also required considerable support from the United States. If the Panama Canal had not been open and available, the war in Vietnam would have been much more difficult and costly to conduct. This conclusion is also true for the war in Korea. Going back a few years, there is no question but the availability of the Panama Canal shortened World War II by many months. To give you some idea of the magnitude of the Panama Canal usage and its relationship to military operations, in 1963 there was a total of 300 U.S. Government transits through the Panama Canal. As the Vietnam war escalated, the number of Government ships transiting by 1966 had almost doubled. The records show for the year — 1966 — a total of 591 Government ships transited the canal. Most of these ships were carr3nng critically needed logistics support to the forces operating under m}^ cammand. As Commander in Chief, Atlantic, and NATO's Supreme Allied Commander, I saw the situation at Panama in another perspective. That was for the period 1965 to 1967. The war in Vietnam was still expanding, but now I was looking at the canal not only as a means of sending support to the Commander in Chief, Pacific, but also from the Atlantic perspective. I saw the possible need to reverse the flow of ships through the canal, particularly if the situation deteriorated in the Middle East or in the Caribbean during those volatile months of tension and conflict in both these areas. Both in our U.S. planning and hi our NATO planning we envisioned contingencies calling for reinforcements from the Pacific area to the 279 Atlantic. We clearly foresaw the need for transfer of combatant tonnage, Army and Marine divisions, and in particular we saw the need for transfer of amphibious lift. As Chief of Naval Operations I had to look at the Panama Canal as an essential means of equalizing the strength and providing the balance between the Atlantic and Pacific fleets. The canal made it possible to pre-position certain types and tonnages, but always with the knowledge that the balance could be shifted to meet unforeseen situations. The Panama Canal gives the naval planner much flexi- bility and versatility that he would be deprived of without it. As Chairman of the Joint Chiefs of Staff I became even more sensitive to the strategic value of this U.S. canal as a means of pro- tecting the security of the United States. My job as Chairman involved all of the Armed Forces of the United States — their collective re- quirements — and I was primarily responsible to the President for their ability to carry out their roles and missions as assigned by the Congress. Any Commander in that capacity will immediately per- ceive that it is vital to U.S. interests to retain complete ownership and control of the Panama Canal. In view of the above, I am ver}^ much concerned about the pro- posals to surrender the Panama Canal to a leftist oriented government allied with Cuba. There exists the potential danger for giving this U.S. advantage to a man who might allow or might be persuaded that it was in his best interest to permit Soviet power and influence to prevail by proxy over the canal, in much the same manner as happened in Cuba. I was convinced as Chairman of the JCS — and I remain convinced today — that if the Soviet Union ever gained even proxy sovereignty and control over the U.S. Canal Zone and canal through Cuba, U.S. security as well as U.S. prosperit}^ would be placed in serious jeopardy. The United States would be placed in jeopardy because interocean mobility would be threatened. The mobility of allied commercial shipping and naval forces would face the same threat. The economic lifelines of the entire Western Hemisphere would be needlessly jeopardized, and the point is: There is no point in surrendering this vital interest. Also, by relinquishing control of the Canal Zone and the canal, we would force all those nations who depend on our power and leader- ship to accommodate to the adverse implications of such action on our part. Recent history clearly indicates that the Canal Zone could quickly become the satellite base of an adversary. The advocates of this proposed treaty do not appear to take this factor into account. The Panama Canal is one of the foiu- maritime gateways of the world, together with the Malacca Strait, the Suez Canal, and the Gibraltar Strait. Anyone who reads Soviet literature concerning maritime affairs soon learns that the Soviets fully understand the strategic importance of the Panama Canal, even if some here in Washington do not. In my view, the prime reason for the burdensome support of Cuba by the Soviet Union is related directly to their interest in the canal as they greatly expanded their maritime capabilities, both warships and mer- chant ships. We have in fact a Torrijos-Castro-Moscow Axis. Castro has sent thousands of troops to Africa aboard Soviet ships. He has been to Moscow where he was greeted with open arms. Torrijos has 280 been to Havana where he has been decorated by Castro while both ex- tolled the success of then* respective revolutions. When Ton'ijos overflew Havana on his return from visiting Washing- ton a few days ago, he sent the following message to Castro: On my return trip to my country and flying above the sky of Cuba, I salute you with friendship always. I wish that the Cuban people under your skillful leader- ship, continue its ascendent march toward progress. In Latin America your name is associated with feelings about dignity that have been channeled toward the ending of a shameful period of colonialism. In other words, it is quite clear that there is a very close relationship between Torrijos and Castro and, of course, everyone knows there is a very close relationship between Castro and Moscow. In addition, a large Russian commission has recently visited Panama seeking concessions and offering economic assistance. Mr. Chairman and members of the committee, do not be surprised that if this treaty is ratified in its present form to see a Soviet and/or Cuban presence quickly established in the country of Panama. Such a presence will seriously complicate the exercise of the implied right of the United States — I can find no such specific right contained in the treaty. In any event, any confrontation then becomes one with the vSoviets rather than with the Panamanian guerrillas or terrorists. With the Soviets already on the scene, fighting our way in will not be simple. A permanent U.S. presence on the other hand is the only feasible posture to insure defense of the canal and the Canal Zone. In view of the above, Mr. Chairman, I have yet to hear an}'' justifi- cation advanced as to why the United States should willingly sacrifice the strategic and economic advantages afforded the United States and, for that matter, all the nations in the Western Hemisphere by our exercise of full control of the Panama Canal as provided for in the cur- rent treat}^ In fact, stripped to the essence I have heard only three reasons put forward in support of the proposed treaty: (1) By signing the new treatj^ we will divest ourselves of the stigma of colonialism harped on by Mr. Torrijos and thereafter everyone will love us; (2) If we do not surrender the canal some unknown individuals in the Isthmus of Panama will blow it up; (3) The canal is of not much use am'wa}^ Traffic between oceans is a convenience but not vital. Further, the big ships of the Navy cannot use the canal and only about 10 percent of the merchant ships passing through the canal are U.S.-flag ships. So what is the fuss all about? Let me briefly discuss each of these reasons in turn. First, the United States does not have to apologize to anj'one for its generous outpourings of blood and treasure in an effort to assist the underprivileged and make life more peaceful and more livable for €ver3"one. This great committee has participated and masterminded our aid program for j^ears. However, from observing the verbal attacks on the United States in the United Nations and other places, it is apparent that a great nation such as ours cannot buy aft'ection: One more move in this direction, in my view, will have little or no effect. What we should strive for is not affection but respect. I am seriously concerned about the trends in recent years wherein we have withdrawn from Vietnam, are planning to withdraw from South Korea, have lost considerable 281 influence following the Angola affair, and overall are suffering from a gi'adual change in the perception by the nations of the world of the will and determination of the most powerful democrac}- in the world. Ever since the negotiations were initiated with. Panama in 1964 the rationale has been advanced that if the United States did not divest itself of the canal the Panamanians would sabotage it. To respond to this concept to me would be a retraction under threat. If this is to be our course of action in the future we might as well throw in the international towel. One should note from a practical point of view that the Panama- nians enjoy the highest per capita income of any of the contemporary Latin American countries only because of the presence of the canal. The activities surrounding the presence of the canal contribute about one-third of the employment and one-third of the gross national I^roduct to Panama. If they were to attempt to damage or sabotage the canal they would be doing nothing more than cutting off their nose to spite their fiscal face. Furthermore, the}^ would be the ones who would be committing violence, not the United States. To me a pulling back under threat will simph^ place our country open to additional threats and we will lose the respect of which I spoke. Under such a condition one could expect many of the nations of the world to tilt toward those who they know are willing to take a firm stand in their national and interna- tional interest. So far as the c^uestion of a two-ocean nav}^ and the passage of air- craft carriers through the canal is concerned, let me say first that we do not have a two-ocean navy. In recent years the Navy has been rapidly reduced from over 900 ships to less than 500. This while the Soviets are rapidly building up both warships and merchant ships. Most war plans and contingency plans are infeasible unless one assumes that full use of the canal will be available. With respect to the large carriers, the Navy has only 13 of these ships. The vast majority — well in excess of 90 percent — of the ships of the Navy can transit the canal and will be required to transit the canal. I should note that the other alternative, namely, going around Cape Horn will add 8,000 miles, 25 to 30 days and a considerable increase in the cost of fuel to naval operations. It will add $93 million to the cost of our exports and S583 million to the cost of our imports, a cost which will be borne by the American consumer. And certainly in wartime the 30 days around the Horn could very well be vital. As far as the merchant ships are concerned, it is true that only about 10 percent of the ships flying the U.S. flag transit the canal. But that is not the point. It is well known that the United States has a very small merchant marine and that the shipping interests in our country, for various legal and fiscal reasons, resort to what is known as a flag of convenience. What really counts is the tonnage which transits the canal en route to and from ports in the United States. It so happens that out of about 14,000 ships that transit the canal, 8,000 are either en route from or bound for U.S. ports. So much for these three reasons. ^ Finally, Mr. Chairman, there are several questions somewhat out- side my purview, but troublesome nevertheless, and I will simply list them for vou. 282 One : Do the negotiators for Panama and the United States have the same perception as to the real meaning of the language of the proposed treaty? PubUc statements by both sides subsequent to the negotia- tions seem to indicate otherwise. Certainly this matter should be cleared up without delay. Let me give you a few examples of what I am talking about. First, with respect to the right of unilateral military intervention which has been testified to over and over. This is implied in article IV imder the treaty concerning the permanent neutrality and operation of the Panama Canal, but nothing in this article guarantees the United States a right to unilaterally intervene, although the pro- ponents say we have this right in perpetuity. In a radio broadcast on August 24, Mr. Bethancourt, the Pana- manian negotiator, said and I quote: This pact does not establish that the United States has a right to intervene in Panama. The word was discussed and eliminated. The neutrality pact does not provide that the United States will say when neutrality has been violated. Again, with respect to the guaranteeing of U.S.-flag ships having priority passage through the canal, article VI only guarantees U.S. ships expeditious, not priority passage. Again, Mr. Escobar disagrees with the interpretation testified to by our negotiators and he says, and I quote: Expeditious passage does not mean privileged passage. As a matter of fact, the concept of privileged passage was rejected. If after examining the provisioa the gringos — that is us — say I want to go through first, then that is their problem with the other ships waiting there. We cannot go that far. Mr. Chairman, in my view, the wide divergence in the inter- pretation of the meaning of the treaty concerning neutrality between the two sides is cause for grave concern. If not cleared up in advance the Neutrality Treaty does not solve problems, it makes them, and big ones at that. Coming back to some more questions: (2) If the OAvS nations so strongly support the treaty, how do we account for the absence of the Presidents of the two largest and most influential countries at the signing ceremonies in Washington a couple of weeks ago? I refer, of course, to Brazil and Mexico. (3) What will Panama do with a 2,000-percent increase over the $2.3 million she received last year as income from the canal? To me that appears to be a fantastic amount for a country with a population not much larger than Detroit. Where will the money really go? (4) In the event that the tolls are raised 30 percent — which I think Mr. Linowitz testified to at one time — resulting in serious impact on the economies of the other Latin American countries — particularly those on the west coast of South America — will these countries con- tinue their strong su})port of the proposed treaty or will in the final analysis the U.S. taxpayer be asked to foot the bill in order to make certain that everyone loves us? There are other questions which concern me, Mr. Chairman, but I think I will simply close by saying that regarding the question of control and ownership of the U.S. Canal Zone and the canal I am satisfied with the Supreme Court's decision in the famous Wilson v. 283 Shaw case to the effect that the United States does in fact have legal control and ownership as if she has sovereignty for the purposes enumerated in the treaty of 1903. This ruling was reaffii-med as recently as 1972. Also, our Con- stitution states in article IV, section 3, clause 2, that only Congress has the authority to clis])ose of U.S. territory and other property of the United States. The language in the Supreme Court's decision of 1907 is quite precise. It is not ambiguous. So is the language in our Constitution. Since the Supreme Court's decision of 1907 still stands, it has never been overruled — and since the Constitution in my opinion is still the soundest governing document in existence, I can only conclude that we would be well advised to abide by such documents in our negotiations with other countries. Thank you very much, Mr. Chairman. Chairman Zablocki. Thank you. Admiral Moorer, for your forceful, effective statement in support of your view of the advisability of the treaties. NEED TO REVISE CURRENT PANAMA CANAL TREATY Admiral, do you believe that the treaty of 1903 should be revised or stand as a treaty for the indefinite future? Admiral Moorer. I think certain aspects of it should be modernized in order to provide to the Panamanians more assistance. They are victims of inflation like everyone else and certainly in the administra- tive aspects of it I think some revisions might be in order, but I do not think that the United States should pick up and leave. Now, many people suggest that after all it is going to be 23 years. Well, I think that, of course, in 30 months the Panamanians are going to assume administration and jurisdiction. I don't think that is long enough time and I think some kind of arrangement is mandatory in my view to maintain a presence in the Panama Canal. I do not con- sider this, I think I said before, a simple treaty between the United States and a small country in the Isthmus of Panama. I consider this to have global ramifications associated with the entire stability of the free world and consequently since the United States is a maritime power — we have long coastlines on two of the largest oceans in the world — it is vital for us to maintain and guarantee that we can transfer warships as well as merchant ships back and forth from one ocean into another in an expeditious way. DISAGREEMENT BETWEEN ADMIRAL MOORER AND GENERAL BROWN ON TREATIES Chairman Zablocki. Admiral Moorer, we had before the committee Secretary of Defense Brown and the Chairman of the Joint Chiefs of Staff, General Brown. I asked them to respond to charges that they had "Singlaubed" on the Panama Canal Treaty, that they were under the gun from the President and could not express their true opinion of the treaties. They both categorically denied such charges and pointed out on recent issues, for example, U.S. troop withdrawal from Korea and construction of the B-1 bomber, they indeed had disagreed publicly with the President. They further pointed out that the Penta- gon has been involved in negotiations over the treaties and they were primarily responsible for the treaty on neutrality. 284 "What is your evaluation of the situation? IIow do j'ou account for the differences of opinion between those current!}^ responsible for the U.S. national security and certain retired military officials who are opposed to the treaties? Admiral Moorer. First, Mr. Chairman, the treaty on neutrality which 3-0U mentioned as having been the responsibility of the Defense Department contains the two items that I just listed which Escobar Bethancourt does not accept. But to get down to your basic question, I think this is not the first time that I have disagreed with a contem- porary in uniform. xVgain I want to repeat that I am looking at this from the context of the worldwide global maritime aspect rather than a simple treaty between the United States and a small country in the Isthmus of Panama. I can't answer your question as to why they disagi'ee with me. What I tried to do in my statement is to put forward the reasons why I disagree with them. NEED TO MAINTAIN A U.S. TROOP PRESENCE Chairman Zaelocki. Admiral, if article IV of the Neutrality Treaty before being ratified by the other body, includes some reservation or more decisive language, would this satisfy A^our concern about the permanent neutrality of the canal and the tJ.S. ability to maintain not only the regime of neutrality but the security of the canal? Admiral Moorer. You are referring to article IV in the treat}' concerning the permanent neutrality and operation of the canal, Mr. Chairman. I come back to what I said before, as now written it does not guarantee the right for the United States to intervene and Mr. Bethancourt said absolutely not. The point I want to make is that an}^ intervention by the United States is far more difficult if we have to fight our way in, and there is another aspect of the treaty that sajs only Panamanian forces -will be stationed in Panama, and that part I do not agree with. I think that the United States should maintain a military presence in Panama and this treaty forbids that and so, no. Chairman Zablocki. After the year 2000? Admiral Moorer. Yes, sir, Mr. Chairman, 2000 is right around the corner. As the electronic people would say, it is a nona second in overall history. It will be here before aou know it, and what we are doing by zeroing in on the 3'ear 2000 is simply passing the buck down to our children. admiral MOOREr's suggested AMENDMENTS TO CURRENT TREATY Chairman Zablicki. Admiral, would you share with the committee- how you would suggest that the current treaty be amended? Admiral Moorer. Yes, sir, I would have simply, as I said, provided for additional economic assistance and I would have provided for additional training of the Panamanians in the technical aspects of the operation of the canal so hopefully they could augment their emploATnent. However, I would insist on the right to intervene. Of course, in the real world if the United States is in a major war I don't think that the American people would stand for us getting permission from Panama to intervene if we had that kind of confrontation going. 285 The other thing I think that certainl}^ we must demand is priority passage. In wartime time it is of the essence. If we are going to do, as Mr. Bethancoiirt suggests, if he says again: If after examining provisions the gringos say I Avant to go through first, then that is their problem with the other ships waiting there. I think that the United States should have absokite and total priority to go through the canal. POSSIBILITY OF U.S. TROOP PRESENCE IN CANAL AFTER THE YEAR 200O Chairman Zablocki. Admiral, your understanding of the treaty is that it prohibits U.S. forces after the j^ear 2000. It is my understanding the treaty does not foreclose the possibility that an agreement can be reached on use of U.S. forces after the 3^ear 2000. Is it possible in your view, that an agreement can be reached with Panama to permit U.S. forces in Panama after the year 2000? Admiral Moorer. Well, I can only go hj what the Panamanian negotiators say, and I quote again: ''The pact does not establish that the United States has the right to intervene in Panama" period. And so are we going to get their permission to intervene in an emer- gency or major war? That is what I don't think the American people would stand for. The point here is — again I come back to the global aspects and the relationships being Torrijos, Castro, and Moscow — the mmute 3^ou permit the Soviets either by proxy with the Cubans or with their o^vn people — the^^ just had a Commission down there — to establish a presence in Panama, any confrontation that comes about down there becomes then a confrontation between the United States and the Soviet Union, not between the United States and Panama. That is why I think this is far dijfferent from a treaty that the United States might make with Guatemala, Nicaragua, or Costa Rica. PANAMANIAN QUALIFICATIONS TO ADMINISTER THE CANAL Chairman Zablocki. As I understand your position, the 1903 treaty should have been renegotiated with additional economic as- sistance provided to Panama but the United States should not to have gone as far as it did in the transfer of the administration of the canal and the securit}^ of the canal? Admiral Moorer. Yes, sir, it is my understanding that there are only two Panamanians qualified as pilots, Mr. Chairman, and very few can operate the complex machinery. I think when you have a small, weak, unstable country, as I said, about the size of Detroit, Mich., charged with responsibility of operating and maintaining a complex operation, that as far as the Panama Canal is concerned, you run the grave risk of having either the canal slowed do^\Ti or being completely interrupted by one reason or another. I call your attention to Egypt's acquisition of the Suez Canal. First, we got into a problem. Egypt denied the use of the canal by the Israelis. Then the Israelis blocked the canal completel}^. It was blocked for 6 yeais. It would still be blocked if the United States hadn't gone over there. Eg3^pt could never unblock it. And you can get the same situation on the Panama Canal. I repeat that the Malacca Strait, Suez Canal, Strait of Gibralter, and the Panama 28G Canal are the maritime belt around the world and when any one of those are stopped all countries suffer. I don't think Panama has the capability derived from 1.6 million people, or whatever it is, to guarantee that that canal is always going to be open, and I think that is a must. I might point out we already had our first ship come through the canal with Alaskan oil going to refineries on the east coast. That is another aspect of the utility of the canal that I think is going to impact on the U.S. security and economy. Chairman Zablocki. Thank you. I believe my time has expired. Mr. Winn. Mr. Winn. Thank you, Mr. Chairman. Admiral, I want to compliment you on a very strong statement. TIME REQUIRED TO REINTRODUCE TROOPS TO THE CANAL AREA While we are speculating, after the year 2000, if we withdrew all of our troops, from a military standpoint, if for some reason we had to go bnck in there, how long would it take us to get troops back in there and how many would we have to take back in there to protect the Panama Canal? Admiral Moorer. Well, sir, that would depend on (a) what the situation was insofar as the combat posture of the moment and, (6) what the opposition happened to be. Mr. WiNN. Look at it from the worst situation. Let's say that it is the Russians. Admiral Moorer. Well, if the Russians were firmly established in there with their aircraft and so on, even if you fight your way in there would be so much destruction the canal would not be available for many months. This is why I insist that it is necessary for us to maintain a military presense in the Canal Zone at all times, because if we come out 100 percent I would predict you would have the same thing you have with Wheelis Air Force Base in Libya. The Russians are now using that air field with their Mig's and the first thing you know the Cubans are going to be using Howard ^Vir Force base in Panama and maybe the Russians, too. I wouldn't be surprised to see a Russian maritime aircraft hopping over from Havana. Why not come down to Panama. You get a slow infiltration and when you get a presence like that it makes fighting your way in far more difficult than it would be if we were already on the scene with communications and air bases. LIKELIHOOD OF CONGRESSIONAL APPROVAL OF FUNDS TO SEND TROOPS TO PANAMA QUESTIONED Mr. WiNN. In view of our past performance in Vietnam, somewhat the same in Angola and some other places, do you think Congress would vote the funds to send troops back into Panama after we are already out? Admiral Moorer. Well, I think that the American people, of course, are somewhat unpredictable. I happened to visit Japan at the end of World War II to determine as best we could as to why the Japanese attacked Pearl Harbor. They said it was very simple, they 287 said the Congress only passed a draft law by one vote, the Congress refused to fortify Wake and Guam, and the U.S. Army was in Lou- isiana with wooden guns. The Japanese were walking up and down the Ginza shaking their heads, they could not understand how we could vote that way one day and a little over a month later declare war unanimously. Orientals would never do that. I won't predict. I will tell you when the American people get aroused, they would definitely go back into the canal. Why put ourselves in that kind of position? Why make a problem for our children or for the future, because I think there is another point here. The zone didn't get created because of Panama, Panama was created because of the zone. And it was recognized at that time as vital to have a link between the Atlantic and Pacific Oceans. That necessity is just as vital today as it was then, because of the fact the Soviets are shifting from purely a land power to a very powerful sea power. Mr. Winn. Do you read anything into the method that was used by the executive branch in not consulting Members of Congress or Congress as a whole before this treaty signing celebration took place? Admiral Moorer. Well, I would have thought, particularly in view of the resolution that was previously passed by the Senate, that there would have been a very careful rollcall made on the Congress first. But I am not privy as to why this sudden ceremony was set up. FINANCIAL ASPECTS OF TREATY Mr. Winn. Admiral, you say on page 8, I believe it is, it appears to be a fantastic amount for a country with a population not larger than Detroit; where will the money really go? That is the question you ask. Where do you think it is going to go? Admiral Moorer. I don't know what they are going to do with all that money except that they have a national debt of over $1 billion and it requires 40 percent of their income to carry it. They have been continuously borrowing money from banks in the United States. But I think that that is a question that the Congress should determine the answer to. I don't know where the money is going, but I do know it is a fabulous increase. Mr. Winn. Do you think the little people, the people in the fields and the streets, are going to see much of that money? Admiral Moorer. I doubt it seriously. Mr. Winn. Under that type of government? Admiral Moorer. Having watched the administration of several countries like Panama, if I was the little people 1 wouldn't be very optimistic. Mr. Winn. Thank you. Admiral. Thank you, Mr. Chairman. Chairman Zablocki. Mrs. Meyner. Mrs. Meyner. Thank you, Mr. Chairman. ROLE OF PAST ADMINISTRATIONS IN CANAL NEGOTIATIONS Admiral Moorer, as we know, these negotiations have been going on for 13 years since, as you point out in your testimony, 1964. That means that four Presidents of the United States have worked hard and pushed on these negotiations. Were they just being naive, in »8-991^ — 77 20 288 your opinion? Why would they have worked hard , President Johnson, President NLxon, President Ford, and more recently President Carter, on something if they felt it was selling the United States down the river, so to speak? Admiral Moorer. Well, Mrs. Meyner, I think the fact it took 14 years is indicative of part of the problem. As you may know, there was a riot in Panama in 1964, At that time we were just getting in- volved in Vietnam, The last thing that President Johnson v/anted to happen was to have these diversionary activities going on, Wlien the Pueblo was seized by the North Koreans we essentially overlooked it because we were so submerged in Vietnam. So the solution was to send negotiators doNMi to Panama and they have been there ever since. In 1967 or 1968, I have forgotten exactly which year, Mr, Johnson came forward with a treaty and it was sent up then and the Senate said there was no way that it could be ratified and it never was really submitted; and so it is true that efforts have been made to remove the threat of sabotage and terrorism and I think that was the basic objective because of the turbulence and so on in the sixties. But in my opinion, this threat goes too far, because again I don't look at it as a situation similar to having riots in Chicago, I think it impacts on the entire world military balance, because this happens to link the Pacific and Atlantic Oceans, and so for the reasons I have given, I think that the treaty in its present form is inimical to the national interests and security and prosperity of the United States. Mrs. Meyner. Thank you. SECURITY IMPLICATIONS OF DISAPPROVAL OF THE TREATIES I would like to just discuss for just a moment the security implica- tions of not approving these treaties. A 1976 report by the Ford administration to Senator Clark suggested that about 100,000 troops might be needed to adequately defend the canal against a determined military attack. Is that a fair statement and could you describe just briefly for us the military situation we would confront in Panama if we tried to retain complete control indefinitely? Do you think that is a concern? Admiral Moorer, In answer to your first question about the 100,000, I wdll refer you to General Brown's testimony of Sept, 26, because that was really a number taken out of context from a reply he made to a question, and he was speaking in terms of a certain situation that was set up by the question. Certainly I do not think it would take 100,000 men to defend Panama, Let me sa}^ that the defense should be looked on, in my view, in two aspects. One, when we are in fact in a world war III and we have to concern ourselves not only about the canal itself but also about enemy ships and aircraft approaching either side of the canal. You may not know the Japanese, for instance, actually dispatched submarines with kami- kaze aircraft aboard with orders to kamikaze locks and they were intercepted. So you have the problem of defending the approaches in a war against organized military forces. The other problem is what I would call internal security against sabotage and terrorist activity. Well, I am not saying you can't set off a single charge. As a matter of fact, we have been unable to defend 289 the ladies' washroom in the Capitol. If somebody wants to go and set off a bomb here they can do that. Mrs. Meyner. It is now more difficult because bags and parcels are inspected as people enter the Capitol and House Office Buildings. Admiral Moorer. Yes. They recently blew up La Guardia and set off two explosives in downtown Washington a short time ago. Mrs. Meyner. It can be done. Admiral Moorer. That will not interfere with the canal. For instance, to breach the dam, the lake, that supplies the water for the locks would take a terrific engineering effort, and so I think with an adequate security patrol it can be well protected against that kind of attack. But I point out to you once again — why would the Panamanians want to do that, because without the canal they are in abject poverty and I don't think they have the slightest idea of destroying the canal. That has always been brought up. As I said in my statement, people say that if we don't give it to them they are going to blow it up. But that is a threat and I think we ought to tell them, all right, go ahead and blow it up, because they are the ones that will really suffer. But I don't think they are going to do it and I think it can be adequately patroled. Mrs. Meyner. Thank you. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Lagomarsino. Mr. Lagomarsino. Thank you, Mr. Chairman. NEUTRALITY TREATY PROVISIONS WITH RESPECT TO MILITARY FORCES Admiral, I want to compliment you also on your statement, and in furtherance of your colloquy with the chairman about what happens after the year 2000, I would like to mention article V of the Neutrality Treaty. It says after the termination of the Panama Canal Treaty only the Republic of Panama shall operate the canal and maintain military forces, defense sites, and military installations within its national territory. So the treaty makes it very plain that we are not allowed, at least by treaty, to have any troops in Panama after the year 2000. I think if we want to have troops there after that year, we had better decide that now and not rely on some change in the future. Admiral, I take it you w^ould agree with, then candidate Carter, w^ho said in the second televised debate with then President Ford, when he said ''I would never give up complete or practical control of the Panama Canal Zone." Admiral Moorer. Yes; we have a perfect meeting of the minds on that one. Mr. Lagomarsino. At that time? Admiral Moorer. Yes, sir. U.S. RIGHT OF EXPEDITIOUS PASSAGE Mr. Lagomarsino. You quoted Mr. Escobar Bethancourt, who was the chief Panamanian negotiator, in his statements on neutrality, on the question of privileged as against preferred passage, or expeditious passage through the canal. 290 You might not be aware of a statement that General Torrijos made in Panama on September 15. This was a speech by Gen. Omar Torrijos at the opening of the 10th Congress of the Panamanian Students Federation at the Augusto Samuel Boyd National Agricultural In- stitute in Divisa, Herrera Provmce, Panama, and wherein said: I am not afraid nor am I denying that we signed a clause which if misinterpreted by future U.S. generations could give rise to intervention, but I am not afraid. I know the youth we are producing, and in order for there to be intervention there must be a people willing to accept intervention, and these people have no intention of accepting it. Then it says "applause." So I think you are perfectly correct in pointing out that there is at least a very gi'eat ambiguity about what even the President and your successors claim is the most important part of this treaty. There is ambiguity about it and I think it is absolutely imperative that that be cleared up and not just b}^ some further statement made by the Panamanians. I think if we are going to have a treaty there should be a reservation to the treaty or the treaty should be renegotiated to take care of that point specifically. NEED FOR A UNITED STATES-PANAMA BASE RIGHTS AGREEMENT TO PROTECT THE CANAL Admiral, do you think perhaps a bases agreement like we now have with Spain would take care of the problem of not having a base there in the future, assuming that the base agreement would be made either part of the treaty or negotiated at the same time? Admiral Moorer. Yes, Sir, I think something of that kind would, as I said, be certainly in order to give the Panamanians economic assis- tance, but again, I would delete completely article V ^^'ith respect to withdrawal of U.S. forces. Mr. Lagomarsino. Eight. Admiral Moorer. And there is no way you can get around it. The canal is far more vital to the security of the United States than it is to the security of Panama. It is vital for the economic well being of Panama. It has nothing to do with the defense of Panama as a country, but it is vital to the security of the United States and it contributes heavily to the prosperity of the United States. Mr. Lagomarsino. When asked to comment on the letter that you and the other admirals sent to President Carter on June 8, 1977, Gen. George Brown and Secretar>" of Defense Harold BrowTi replied that they agreed with some of what you wrote; however, they said the fact that it was written before the treaty, before the treaty t^rms were revealed, indicates that the concerns raised were made without your having read the treaties and the assurances that they contain. Now that you have had a chance to read the treaties, do they pro- vide the assurances that you feel are needed for the concerns you expressed in that letter? Admiral Moorer. Well, sir, in view of article V, in view of the statements by Mr. Escobar Bethancourt, in view of the statements vou just read from Torrijos, I have not in any way changed my mind Decause of the contents of the treaty. As I say, my basic problem has to do with maritime aspects of flobal warfare and I just don't agree with the idea of the United tates completely withdrawing and leaving the control and operation 291 of that vital link between the two major oceans totally to a little country, x^nd I am not saying this in disrespect, but Panama is a little country, as I said, the size of Detroit, Mich. I don't think the cit}^ of Detroit can operate and insure that the canal be open all the time. And certainly in Panama where the technical capabilities are far less than they are in Detroit, I am convinced I know they can't operate it. Mr. Lagomarsino. Thank you. Admiral. Chairman Zablocki. Mr. Pease. Mr. Pease. Thank you, Mr. Chairman. EXISTENCE OF A ''tORRIJOS-CASTRO-MOSCOW AXIS" QUESTIONED Admiral, on page 5 of your statement you flatly state that, "We have in fact a Torrijos-Castro-Moscow axis." I would like to have you amplify your statement. In other words, what evidence do you have other than contacts not unlike our own recent efforts to normalize relations with Cuba, or to establish detente with Russia, that such a Torrijos-Castro-Moscow axis does exist? Admiral Moorer. Well, I think the behavior of Castro and Torrijos is clear indication of such an axis. I will ask you this question: Who would have thought wdien we had the Cuban crisis in 1962 — I said at that time that it would have been much better if the United States had left the missiles in Cuba and taken the Russians out — who would have thought at that time that a few years later the Cubans were going to send 12,000 troops to South Africa at the insistence of the Russians? That to me is clear proof that the Russians are using the Cubans by proxy. The Russians have just visited Panama, a big com- mission. ^Ir. Torrijos has been to Havana and Libya. He waved at Mr. Castro as he went by v/hen he left Washington. He didn't call any other Latin American chief of state, he just talked to Mr. Castro. I don't see how you can have any doubt that there is a very close rapport among this axis that I mentioned. Mr. Pease. Thank you very much. ADEQUACY OF CURRENT LEVEL OF U.S. FORCES IN PANAMA Given the relationship which you see between Castro, Torrijos, and Moscow, is the current level of U.S. forces in Panama adequate to protect the canal, or should it increase? Admiral Moorer. Well, I believe there are 9,000 or 10,000 men in Panama. I think under the present climate, Mr. Pease, they are ade- quate. But that is the kind of thing that has to be watched in terms of increase in tensions or predicted movements, and I would hope that the Pentagon — I never have quite found out who that is — that the Pentagon will respond to an increase in the threat. But obviously it is going along right now satisfactorily. I mean, we have to watch it over a period of years. I do know that the Soviet intelligence system is firmly established in Cuba and is working in other places like Trinidad, Puerto Rico, and the South American countries, and we are very naive if we don't think that the Soviets have a very intense interest in the Caribbean and Panama Canal. Mr. Pease. Well, I think it is understandable they would have their intelligence people working there, presumably as we also have our intelligence people working around the world. 292 ABILITY OF SOVIET UNION TO INTRODUCE TROOPS TO PANAMA Let me ask you : In your opinion is there anything: that would bar riofht now under the old treaty, the Panama Government from welcoming So^-iet troops or bases to their territory? Admiral Moorer. Well, I would think that they certainly cannot welcome them to inside the zone. Mr. Pease. I mean outside the zone. Admiral Moorer. I guess technically they could invite Soviets to build an airbase outside the zone, although I don't think that is a very practical approach. I don't know of any legal reason whv they can't do it. Mr. Pease. What would be impractical about that? You mentioned you didn't think it was practical. Admiral Moorer. Well, I think that the United States would react rather strongly to that. Mr. Pease. Don't you also feel that the United States would react rather strongly if after the year 2000 and the treaty of neutrality were in force, the Soviets tried to put a base or troops in Panama? Admiral Moorer. I would hope so. But I tried to explain before that the problem of reacting strongly with U.S. forces completely ^^'ithd^awn is far different from being able to react strongly if we already have a militarv' presence in the zone. Mr. Pease. I would doubt if that is true at the beginning of the move to put in the Soviets. It certainly would be after the Soviets were well established. But I would think that under the terms of the treaty of neutraUty that the U.S. Government would not stand by with that treaty in effect and allow the So^*iets to put bases or troops into Panama. That in itself would be interpreted as a violation of the treaty of neutrality. Admiral Moorer. Mr. Pease. I think the action by the United States should be determined regardless of whether you have a neutral- ity treaty or not. I don't think that has anything to do with what action we would take if the Russians established a base in Panama. Under those conditions this countr\- would be faced vrith. a dire threat and I don't think the United States would pay any attention to any kind of treaty under those circumstances. importance of world opinion on the canal issue Mr. Pease. Let me turn for just a moment to one other subject. I am curious to know, Admiral, what your feeling is as to how the United States ought to react to world opinion? Secretaries of State, two of them, former ones and one present one, have come before us and said that they believe it is imperative to ratify these treaties because of our whole relationship with the nations of Latin America and the less-developed countries of the world. If it were true — I am not saying it is — if it were true that the world opinion in two-thirds of the world, three-fourths of the world, would be opposed to our maintaining our current position in Panama, would it be your feeling we should ignore that? Admiral Moorer. WeU, I tried to touch on this in my statement. I think there have been efforts on the part of the L^nited States since World War II to purchase affection and this committee has approved 293 many, many aid programs throughout the world. One should view what i< said about us throughout the world, the votes in the United Nations and so on. I think this is a little late to worrv' about what everybody thinks about us, and I don't think you can buy that kind of approval. So my personal opinion, and I certainly am not Secretarv' of State, but. nevertheless, I don't think that the nations as a whole, the other nations feel so strongly about the canal. As a matter of fact, there was an article in the Xew York Time- this morning that points out that their enthusiasm is waninsr. Mr. Pease. As I understand it, your position would be that if the world opinion would be rather solidly against our staying there, it would be to your position we should ignore that. Admiral ^looRER. Absolutely. Mr. Pease. Thank you. Admiral Moorer. Because I don't think we are running a popularity contest. We are tr\*ing to survive in a very difficult world. Chairman Zablocki. The Chair would like some gnidance from the members. The House is in the process of a quorum call. If the Admiral would be willing we would adjourn for 10 minutes and come back. How is your time? Admiral Moorer. That is fine. I have until 2 o'clock. Chairman Zablocki. The committee will stand in recess for 10 minutes. [Whereupon, a short recess was taken.] Chairman Zablocki. The committee will resume the hearing. I want to apologize. Admiral, and to my colleagues. I was detained on the floor on another matter. Admiral Moorer. All right, sir. Chairman Zablocki. Mr. Buchanan. Mr. Buchanan. Thank you, Mr. Chairman. Admiral, you have made your usual forceful and effective pres- entation and it is a pleasure to have you before our committee again. Mr. Chairman, we are ven.* proud of this distinguished son of our State of Alabama for the leadership he has given our country through many years. Admiral Moorer. Thank you. SUPPORT OF TREATY BY CURRENT JOINT CHIEFS CHAIRMAN Mr. Buchanan. Admiral, ye-terday in his testimony m the other body. General Brown seemed to rather firmly answer questions per- tainmg to whether or not this was his owm honest opinion and not one he was required to take because of his position as Chairman of the Joint Chiefs of Staff. For example, he said that he had worked for 4 years himself to get a treaty. He said that when a person m his position was asked a direct question by Members of Congress it was his obligation to answer as to his o\\Ti position, and that this had taken place in the case of the B-1 bomber, m the case of the Korean troop \WthdrawaL and in those instances he had m fact spoken out publicly his reservations and they had been met by the administration. Now, I will go into with you what is to most of us a crucial question, and that is, do these views reflect the honest, good faith opinion of the present Defense Department people, or is there substantial pres- 294 sure on a person in a position of General Brown to conform to a Presi- dential decision regardless of his personal judgment. Also, does he have the freedom to speak out as he indicates he did do on the B-1 and Korea? Admiral Moorer. Well, Mr. Buchanan, I can't answer for General Bro\\Ti. I think, though, that the Pentagon focused on the treat}^ in terms again of the treaty between two countries, a very small country and a big country, looking at the primary possibility of sabotage. But I believe the issue should be viewed in the context of global maritime problems and I, of course, was over there at the peak of a big war. That war disappeared, not because I left but when I left. [Laughter.] So perhaps General Bro\vni has a different perception than I do. Mr. BucHAXAX. Excuse me, sir. Would it be 3'our appraisal of the situation that it is more an honest difference of opinion than a position he is forced to take. Do you perceive this as simply an honest difference of opinion between j^ourselves? Admiral Moorer. I certainly would saA' nothing else, but that because I don't know what kind of conversations General Bro\\Ti has had with others about his position and I wouldn't speculate about something like that. Generally speaking, in an executive pjTamid, whether it is in the executive branch of the Government or whether it is in General Motors or what-have-you, the way it should vrork is that the sub- ordinates certainly should be allowed to express their opinion. Having done so, if the Chief said, I hear you, but I am going to do it another way, then the subordinates are obligated to support the Chief. There is a difference, however. There is a fine point between supporting a Chief and agreeing with a Chief. But certainly after the Chief has made his decision there is no useful purpose in the subordinates continuing to peck away at it. I certainly, having been Chief several times, took a dim view of anyone working for me that after I had told him in no uncertain terms what the course of action was to be, he set about to pull the rug from under me. He wouldn't stay around very long. Mr. Buchanan. I wonder what you would do, feeling as strong as you do, if you were Chairman of the Joint Chiefs of Staff and I asked, as I did ask General Brown, if there was an}" equivocation in your position, if in your personal judgment this was clearly in the interest of our country. You might have a problem with that. Admiral Moorer. Well, so far as I am concerned, I would not equivocate because the President alwa3-s has the option of dismissing the individual or sa^^g that despite the fact he disagrees, I am going to take this action am^way. Mr. Buchanan. I want to thank you again for your testimony. I see my time is about to expire. I have a question on a questionnaire I am about to send out to my constituents in Birmingham. Based on the knowledge you possess, do you support President Carter's Panama Canal Treaty? This is one I know what the response is going to be. I gather your response is clearly no. Admiral Moorer. I don't think the treaty in its present form is in the best interests of the United States either from a security or economic point of view. Mr. Bucpianan. Thank you. 295 REACTION OF PANAMA AND OTHER LATIN AMERICAN STATES TO A REJECTION OF THE TREATIES Chairman Zablocki. Admiral, I have two "if^y" questions on which I would hke to have your opinion. What would happen in Panama if there is no treaty and the present status quo is maintained? In your opinion, what would happen? Admiral Moorer. If, in other words, we just continue? I don't think anything would happen. Chairman Zablocki. You don't think there would be any reaction at all from some of our sister states in Latin America. Admiral Moorer. No. In the first place, there is an article in the New York Times this morning indicating that the support in some cases was cosmetic in nature and is waning. As I said in my statement, the South American countries are going to take a very dim view of a 30-percent increase in their tolls. They are not going to look with favor on pouring money, their mone}', into Panama. As I remember, the OAS States have passed a resolution objecting to any arrangement which raises the tolls. So I think to answer your question, that if the treaty was not ratified, or if the Congress in its wisdom votes amend- ments to it and which generate additional negotiations. I don't think anything would happen. SIMILARITY BET^'EEN THE SUEZ AND PANAMA CANAL DISPUTES Chairman Zablocki. Admiral, you mentioned the Suez Canal. Y"ou don't maintain that Great Britain turned over the Suez Canal volun- tarily? Apparently public opinion played a role in the decision on the part of Great Britain to relinquish control of the Suez Canal. Do you think Great Britain should have kept the control and operation of the Suez Canal in light of world opinion? Admiral Moorer. Yes, sir, I do, because the Egyptians demon- strated that they could not defend it. It was denied to the entire world for 6 years. I don't think that would have happened if the British had maintained it. As you recall, Mr. Chairman, that was a nip-and-tuck proposition. For instance, the commander of the 6th Fleet was queried at that time when the United States took the opposite position from the British and French. He got a message from the Pentagon asking him, "Ai-e you read}'?" His reply was, 'T am ready, but whose side am I on?" That was a kind of shaky situation. But the main point I am trying to make about the Suez, is that it is a far simpler operation. It is a sea level canal. But the Eg}'ptians were unable to keep it open. The historical fact is that it was closed for 6 years. So I am saying Panama, regardless of why it is closed, unilater- ally does not have the know-how, the technical know-how or the ability to keep the canal open by themselves. Chairman Zablocki. Did 3^ou take a position publicly at the time in opposition to the turnover of the Suez Canal to Eg>'pt? Admiral Moorer. Well, of course, in those days — that was quite a while ago — no one was very much concerned about my position, public or private. Chairman Zablocki. What was your private view? 296 Admiral Moorer. I did not think that it was in the interest of the world at large. Chairman Zablocki. I had better go to my other "iffy" question. Perhaps this is an unfair one. IMPLEMENTATION OF TREATIES Admiral, should the other body ratify the treaty, what is your ad- vice to this committee and to the House of Representatives on im- plementation of the treaties? Admiral Moorer. Well, I believe that according to the Constitu- tion the House of Representatives is definitely involved in the con- ditions set forth in this treaty, and since I am opposed to the treaty I hope 51 percent of the Congressmen would be opposed. Chairman Zablocki. But my question is once the treaties are ratified, legislation will be necessary to implement the treaties. Should then the Congress, nevertheless, even though the treaties are ratified, withhold necessary authorization and funding, for example, to imple- ment the treaties? Admiral Moorer. Mr. Chairman, I am not a parliamentarian. I would hope that the leadership in the Congress wouldn't permit themselves to get in that box and that there could be sufficient discus- sion back and forth to avoid that situation. I think that would be an undesirable situation to permit to arise. Chairman Zablocki. If the treaties are ratified, the Congress really has no alternative but to authorize legislation to implement the treaties. Do you agree? Admiral Moorer. Well, I would hope that there would be a large number of amendments appended that would somewhat ease what I consider to be the undesirable aspects of this treaty. Chairman Zablocki. We may have to call upon you. Admiral, when we get to that point. Admiral Moorer. Mr. Chairman, I am ready. Chairman Zablocki. Whose side are you on? [Laughter.] Are there any other questions? Admiral, again thank you. You have been an excellent witness. I think you have ^ven some additional insight on a very difficult, emo- tionally charged issue. We thank you sincerely. Admiral Moorer. Mr. Chairman, I would like to emphasize I am a total stoic; there is no emotion involved in this whatever. Chairman Zablocki. I didn't mean the reference to emotion on your part. The committee stands adjourned, subject to the call of the Chair. [Whereupon, at 1:10 p.m., the committee adjourned, subject to the call of the Chair.] PROPOSED PANAMA CANAL TREATIES TUESDAY, OCTOBER 11, 1977 House of Representatives, Committee ox International Relations, Washington, D.C. The committee met at 9:50 a.m., in room 2172, Rayburn House Office Building, Hon. Clement J. Zablocki, chairman of the commit- tee, presiding. Chairman Zablocki. The committee will please come to order. It is my understanding that members are on their way. We meet this morning to continue the committee's hearings on the Panama Canal Treaties and related legislation. Our first scheduled mtness was Hon. John M. Murphy, chairman of the House Committee on Merchant Marine and Fisheries. Unfortu- nately, due to a scheduling conflict. Chairman Murphy will be unable to present his testimony in person. Without objection, however, his prepared statement will be included in the record of today's hearing. Is there any objection to including Congressman Murphy's state- ment in the record? The Chair hears none. It is so ordered. [The statement of Chairman Murphy follows:] Statement of Hon. John M. Murphy, Chairman, House Committee on Merchant Marine and Fisheries Mr. Chairman, members of the committee, thank you for giving me the oppor- tunity to present my views on the proposed Panama Canal treaties and a major constitutional issue that is connected with the treaties^congressional power to dispose of U.S. property and territory. At the outset, let me state that the proposed Panama Canal treaties should be accepted or rejected on the basis of whether they serve the best interests of the United States, not on the basis of who is supporting or opposing them, not on the basis of party, or region. The only question to be considered is whether the pro- posed treaties are good for the United States, or whether they would be better amended, or rejected in favor of the present treaty relationship. As chairman of the House Committee on Merchant Marine and Fisheries, I do favor the concept of a new treaty relationship with the RepubHc of Panama with respect to the Panama Canal. For example, I indicated as long as 7 years ago, when I chaired the House Subcommittee on the Panama Canal, that real estate adjust- ments can be made in canal zone boundaries. I also think we can find a way to bring additional economic benefits to Panama from the canal, although we cannot demean the gigantic benefits that Panama has reaped from the waterway over the years. Further, every assistance should be afforded to Panamanian private enter- prise to take advantage of the economic opportunities which the canal zone offers. While I agree with President Carter that there is a need for a new treaty relationship, the haste and self-imposed deadline that characterized the most recent phase of the negotiations has resulted in defective treaties which do not achieve the objectives they sought to attain — "an open, safe, efficient, and neutral canal" under a treaty relationship which "protects the national security interests (297) 298 of the United States." Neither will the said treaties help to endear us with our Latin American neighbors, nor will they better protect the canal against sabotage. I want to make clear that my observations on the treaties today are not meant to reflect in any way on the dedication and patriotism of our fine negotiators, Ambassadors Bunker and Linowitz. They worked hard in attempting to resolve one of the most difficult foreign policy questions that has ever faced this Nation. Perhaps they have come up with as good a set of documents as could be per- mitted by the time limitations that were imposed by Ambassador Linowitz's 6-month appointment, but I submit that such haste and failure to seek the assistance and guidance of many Members of Congress has resulted in fatally defective treaties which will create more problems than they will solve. In this statement, I will briefly outline some of the defects in these treaties which make them unacceptable in present form, and then discuss those matters with respect to the documents which, in my view, are in need of special analysis. I will also address the overstatements and inaccuracies that have unfortunately served as somewhat faulty premises for adoption of the proposed treaties. The circumstances which attended negotiations in recent times have led to the following flaws in the Panama Canal treatj'^ and the treaty for permanent neutrality of the canal: 1. The attempt to circumvent the House of Representatives in the matter of disposal of U.S. property and territory; 2. The attempt to circumvent the House in the matter of appropriations; 3. The absence of clear and unequivocal language to allow U.S. action to protect the canal in times of hostility; 4. The absurd prohibition until the year 2000 precluding the United States from negotiating for a new sea level canal Avith any country other than Panama, a prohibition which places the United States in a totally dependent position without any logic or reason; 5. The formulation of an over-generous economic compensation package which will likely ruin the economic viability of the canal as a self-sustaining operation and result in enormous U.S. subsidies to run the canal in future years; 6. The location of many key items with respect to control of the canal in accompanying executive agreements rather than in the body of the treaties, thus allowing for piecemeal erosion of the tenuous and limited rights found in the treaties themselves ; 7. The failure of the treaties to address the disposition of other relevant canal agreements such as the United States- Great Britain Hay-Pauncefote Treaty of 1901 which sets forth the international obligations in connection with the neutral operations of the canal, and the Thomson-Urrutia Treaty of 1914, which gives to Colombia certain privileged rights with respect to transit. 8. The pervasiveness of vague and ambiguous language and, in fact, the absence of language, with respect to man}'- important subject areas, including: (a) The U.S. rights of invervention; (b) The boundaries of the properties being immediately taken over by Panama; (c) The taxation of canal properties by Panama; (d) The obligation to turn over the canal to Panama in the year 2000 free from debt and in good operating condition; (e) The Panamanian takeover and the U.S. use of docks, housing, railroad, et cetera. (/) The rights of passage for U.S. vessels of war and auxiliary vessels. In terms of precedents, the most harmful aspect of the entire treaty process could be the circumvention of the House of Representatives in disposing of the properties belonging to the United States in the Panama Canal and Canal Zone. This circumvention results from the administration's incorrect interpretation of what should be the appropriate constitutional process in this matter. Administration officials have repeatedly stated that the congressional power to dispose of U.S. territory and property is a concurrent constitutional power that does not override the treaty-making powers of the President, and that the power of the Congress to legislate for the Canal Zone does not preclude the dis- posal of this territory by treatj^ The support for this view is based on cases in- volving Indian treaties, boundary treaties and a few instances of congressional acquiescence which are fundamentally different from the transfer of Canal Zone pz'operties comprising a major U.S. territory and a $7 billion investment. Cases Involving Indian treaties are fundamentally diflerent from the disposal of the Canal Zone because: 1. They involve a recognition of the existing Indian rights over the particular territory. 299 2. In each instance the Indian tribes conveyed by treaty to the United States enormous tracts of land and selected members of the tribe were allowed to retain small reservations for their own use. Thus, it could be readily argued that there was no disposition of U.S. property. 3. The United States retained residual rights in connection with the lands re- served to the Indians and, of course, maintained its rights of eminent domain. 4. Even if such reservations could be deemed disposals, the Congress authorized the same and acquiesced to executive action over a long period of time. 5. More than a century has passed since Congress withdrew its acquiescence to transfers of property by treaty, and the Senate concurred. 6. The status of the American Indians' interest in land in the United States is unique and entirely different from that which would entail a transfer of the canal property to a foreign sovereign. The boundary treaties which are put forward as one of the chief precedents for the disposal of the Canal Zone by treaty are distinguishable by reason of the fact that they involved property that, for purposes of jurisdiction, was in dispute and entailed an exchange of, rather than a disposition of, property. If the practice of disposing of U.S. territory and property has followed various procedures, as the executive contends, then past practice with respect to the dis- position of canal property and Canal Zone territory ought to be the key to a decision with respect to relinquishing the Canal Zone. The past practice is clear. The House of Representatives has tenaciously asserted its role, and the general rule has been that the disposal of property is accomplished only by a legislative enactment of Congress. In 1932, 1937, 1942, and 1955, property was transferred to Panama after the House and Senate authorized it. If the House as well as the Senate plaj^ed a key role in the process of divestment of relativelj^ minor assets in the Canal Zone, it seems only logical to obtain House Approval in the determination of the fate of the entire Canal Zone and Panama Canal and the disposition of billions of dollars of U.S. properties. The case for the involvement of Congress under the property clause in the Constitution (article IV, section 3, clause 2) rests, of course, upon U.S. property interests in the Canal Zone. It is indisputalile that we do have such property in- terest. On August 17, Ambassador Bunker acknowledged that interest before the committee I chair. It is sufficient for our purposes here to state that the United States holds much of the land in the Canal Zone in fee simple, that deeds to such lands were obtained, and that Panama ceded even reversionary rights to the French Canal Company assets and property purchased by the United States. All of the U.S. -owned property with respect to the Panama Canal and the Canal Zone constitute property interests of the United States within the purview of the congressional powers vested under article IV of the Constitution. Such ownership, of course, includes the waterway, appurtenant installations, 1)uildings and other structures in the zone, as well as the assets of the Panama Canal organization and militarj^ departm.ents and U.S. Government agencies in the zone. With all due deference to the Honorable Griffin Bell, I should like to respond 1 briefly to the statements made by him on September 29 before the Senate Foreign Relations Committee. Attorney General Bell places great emphasis on some selected references to the constitutional debates which indicate that territorial disposal rights were of major concern in connection with treaties. This, of course, begs the question, since it could be argued that the insertion of article IV, section 3, clause 2 in the Constitu- tion giving such powers of disposal to the Congress obviated the concern of author- izing the President to dismember the republic by treaty. In "Elliot's Debates"', p. 501, James ]\Iadison responded to Patrick Henry's concern that two-thirds of a quorum could make a treaty and "relinquish and alienate territorial rights." iVIr. Madison stated: "He thinks that, by the power of making treaties, the Empire may be dismem- bered in time of peace. The King of Great. Britain has the power of making peace, but he has no power of dismembering the Empire, or alienating any part of it. Nay, the King of France has no right of alienating part of his dominions to any power whatsoever. The power of making treaties does not involve a right of dis- membering the Union." Article IV, section 3, clause 2 of the Constitution gives to the Congress not only the "power" to dispose of, but also the power to make "all needful rules and regulations respecting the territory or other property belonging to the United States***." The use of the word "all" clearly indicates that such power is exclusive. 3oa The Pcrcheman case, cited at page 10 of the Attorney General's statement before the Senate Committee on Foreign Relations, involved an attempt to confirm title to property claimed ])y virtue of a grant from Spain in 1815 before the 1819 treaty in which Florida was ceded to the United States. The court held that the cession of property from one sovereign to another cannot interfere with private property. It does not explicitly or implicitly stand for the proposition that Congress' power to make all rules and regulations respecting American ten-itory could be implemented by self-executing treat3\ Nor did the court rule that power to be concurrent. The case involved statutory construction — not constitutional interpretation. Moreover, Congress did act in connection with the 1819 treaty with Spain and authorized the President to take possession of the Spanish cessions and to provide rules for their government. By implication, it is obvious that by expressly accepting the territories of Florida, the Congress also acquiesced in the fixing of the boundary line between the two countries to the east and west of the Mississippi. Furthermore, we are again dealing with an adjustment of a boundary line dispute which, even absent congressional approval, would be quite different from the proposed transfer to Panama. The Congress has limited the President's power under the Panama Canal Zone code to acquisition of additional land or exchange of land. No authority was granted by Congress to the President to dispose of land in the zone and prior practice in connection with property disposals in the Canal Zone clearly indicate that no such authority was ever intended. It would also appear that the treaty provisions for transfer of property of the United States without congressional approval runs counter to the language contained in the last sentence of article IV, section 3, clause 2, namely: "* * * nothing in this constitution shall be so construed as to prejudice any claims of the United States." Clearly, the United States has "claims" in the Panama Canal Zone and the treaty clause should not and must not be construed to preju- dice such claims. Governor Randolph, during the debate in the 1788 Virginia Convention, in specifying the limitations and restraints of the President and the Senate under the treaty-making authority, stated: "* * * will not the last clause of the 4th article of the Constitution secure against dismemberment? It provides that 'nothing in this Constitution shall be construed as to prejudice any claims of the United States, or of any particular State.' And if this did not constitute security, it follows from the nature of civil association, that no particular part shall sacrifice the whole." ("Elliot's Debates," pp. 504-5) Attorney General Bell shrugs off the fact that the U.S. Supreme Court has consistently, in literally dozens of cases over two centuries, ruled that the power of the Congress under article IV, section 3, clause 2 is exclusive. Because these cases related to the authority of the executive and judicial branches does not diminish the relevance or impact of such clearly established authority just because "none of them dealt with the * * * power of the treaty-making authority to make such disposition." The fact is that that the Supreme Court has never held that the powers of Congress under articles IV are not exclusive and certainly none of the decisions dealing with Indian treaties could be so construed. The dictum of Holden v. Joy is not controlling because of its irrelevance to the case as stated by the Court in its opinion " * * * But it is not necessary to decide the question in this case, as the treaty in question has been fully canied into effect, and its provisions have been repeatedly recognized by Congress as valid." Furthermore, the decision of the Supreme Court in a much more recent case, Sioux Tribe of Indians v. United States (316 U.S. 317) (1942) appears to be con- trolling. In that case the Court stated: "Section 3 of Article IV of the Constitution confers upon Congress exclusively 'the power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States' * * * . "Concededly, where lands have been reserved for the use and occupation of an Indian Tribe by the terms of a treaty or statute, the tribe must be compensated if the lands are subsequently taken from them. * * * "Since the Constitution places the authority to dispose of public lands exclusive- ly in Congress, the Executive's power to convey any interest in these lands must be traced to Congressional delegation of its authority." (316 U.S. 317, at 342) In Youngstown Sheet and Tube Company v. Sawyer (343 U.S. 579) Mr. Justice Jackson noted that opinions of Attorney Generals are partisan comments. Justice Jackson was, of course, a former Attorney General fully aware of the atmosphere 301 in which the Attorney General opinions are written. The Attorney General is, in fact, the President's lawyer. But, if we are to look to opinions of Attorneys General in this matter, then may I refer you to an extract from an opinion rendered by Attorney General Harlan Stone in 1924 to the Secretary of the Navy: "The Constitution (Art. IV, Sec. 3, CI. 2) gives to Congress the power to 'dispose of * * * property belonging to the United States' and Mr. Justice Thompson, sitting in Circuit in U.S. v. Nicoll 27 Fed. Case 15879 (pp. 149-50) said: " 'No pubUc property can therefore, be disposed of without the authority of law either by an express act of Congress for that purpose, or by giving the authority to some department of the government, or subordinate agent.' "It follows then that property once acquired by the Government may not be sold, or title otherwise disposed of, except under the authority of the Congress, and in the manner provided by law, and this prohibition extends to any attempt to alienate a part of the property or in general, in any manner to limit or restrict the full and exclusive ownership of the United States therein. * * * " (34 Op. Att. Gen. 320, 322) In summary, the text and history of the Constitution, case law, and prior practice in connection with disposal of property in Panama all support the proposi- tion that the disposal of territory and property belonging to the United States, requires congressional approval. The 1903 treaty with Panama was entered into by virtue of the powers granted by Congress (the Spooner Act of 1902). No less than full congressional approval should be required for the annulment of this historic treaty. I hope that this committee would agree with the view that one of the chairmen of the Senate Foreign Relations Committee took in 1942 when, concerning a dispute over the role of the House in disposing of canal property, Senator Connally, then chairman of that committee, said: "The Constitution itself confers on Congress specific authority to transfer territory or lands belonging to the United States. So, if we had a formal treaty before us and if it should be ratified, it still would be necessary for the Congress to pass an act vesting in the Repubhc of Panama the title to the particular tracts of land; because 'the Congress' means both bodies. The House of Representatives has a right to a vote as to whether any transfer of real estate or other property shall be made either under treaty or otherwise." (88 Cong. Rec. at 9257) I was delighted, while testifying before the Senate Foreign Relations Committee on October 5, to hear Chairman Sparkman say that his committee's continued poUcy is to recognize the necessity for House concurrence in this vital matter of transferring canal property to the Republic of Panama. I wish to summarize on one important point: We, as Members of Congress are trustees for the powers vested in us by the Framers of the Constitution, and as such, have the duty to preserve and protect such powers. For the committee's consideration and with your permission, Mr. Chairman, I would like to submit for the record several documents, including a memorandum of law, which more fully discuss the interpretation of article IV, section 3, clause 2 of the Constitution. Also, if the committee wishes to make inquiry into the boundary treaties, the Indian treaties, or other contentions with respect to the property clause, I will be happy to address those matters. There is another constitutional question here of great importance — and that involves the constitutional requirement that "no money shall be drawn from the Treasury, except in consequence of appropriations" (Article I, Section 9, Clause 7). In spite of these requirements, the proposed treaty requires the payment of billions of dollars to Panama without specific approval by the House of Representatives. The provisions of the proposed treaty for payment to Panama "out of canal operating revenues" are appropriations of public funds that under the Constitution require prior action by the Congress. The proposed Panama Canal Treaty provides that the United States will operate the canal "by means of a United States Government agency called "The Panama Canal Commission" which shall be constituted by and in conformity with the laws of the United States." The functions to be assigned to the new agency are now performed by the Panama Canal Company and by the Canal Zone Government. The treaty does not purport to further specify the form of the government agency to be established for the indicated purpose and the Congress might well establish the agency either as a government corporation, such as the Panama Canal Company, or as a noncorporate establishment, such as the Canal Zone 302 Government. In either case, the canal operating agency would be subject to the laws of the United States applicable to the disbursement of public funds, and payments of expenses by the new agency, including the payments to Panama, would have to be provided by appropriations. Provision for such payments out of canal operating revenues without appropriation by the Congress is clearl}' in contravention of article I, section 9, clause 7 of the Constitution. In addition to the paramount constitutional questions, I must, as chairman of the House committee which oversees canal operations, voice my concern as to the economic compensation package provided in the Panama Canal Treaty. The Panama Canal's commercial value rests upon the provision of efficient service at reasonable toll rates. As one financial expert said, the reliability of user charges and open disclosure of financial results are the key to the financial worth of the canal. The increase in tolls of approximately 40 percent or more that will be required immediately under the new treaty, and the inflationary indices that will cause future toll increases, will inevitably result in diversion of traffic from the canal and strike a mortal blow at the concept of operation of the canal on a self-sustaining basis. The required toll increases will simply be beyond the ca- pacity of the canal to handle. Incidentally, I find it difficult to understand how we can aggressively pursue minimizing tolls at the St. Lawrence Seaway through various congressional actions, such as the creation of a toUs advisory committee, while at the same time maximizing toUs at the Panama Canal, which is at least of equal importance to U.S. commerce. The United States will be forced inevitably to directly subsidize the operation of the canal through appropriations under the proposed treaties. This result, of course, does not comport with the frequently-made assertion that there will be no additional burden on the taxpayer as a result of these treaties. The discon- tinuance of the payment to the treasury of interest on the investment of the United States in the canal, which is implicit in holding a toUs increase to 40 per- cent, will itself diminish the treasury of the United States by a half -billion dollars by the year 2000, and in effect, result in payment to Panama of interest on funds invested by the United States. In summary, the abrupt changes in canal finances that will result from the pro- posed treaty will have irreversible consequences that will pose a threat to use of the canal and the economies of the United States, our allies, and nations in Latin America. With respect to the important question of the prohibition to the year 2000 on U.S. construction of an interoceanic canal in any location other than Panama, it has been stated that there is a quid pro quo in that Panama is precluded from negotiating with anyone else for the construction of an interoceanic canal. That is not so. In fact, we do not even have a right of first refusal. The language only gives us a right to negotiate. It is not an exclusive right. The treaty, however, makes it clear that the United States is precluded from negotiating with third- party states. While my testimony to this point has addressed the organic defects of the proposed treaties, it is clear that the underlying premises for these treaties are a major part of the on-going debate. In very brief fashion, I would like to address the three premises upon which approval of the treaties is suggested. All three of the premises have been so overstated or inaccurately drawn that the}' often bear little resemblance to reality. It is said that the Panama Canal is of diminishing and minor importance to the United States both commercially and militarily. This is incorrect. Commer- cially the canal is of major and continuing importance to the United States and militarily the Panama Canal and Canal Zone remain major military assets of our country, and in essence, constitute the southern flank of our defenses. There are many statistics which point to an increasing rather than decreasing role for the canal in our commerce and security. I have appended som^e of those statistics to this statement and ask permission that they be inserted for the record. It has also been said that should the treaties fail to gain approval there will be violence and sabotage of the canal. Selling these or any treaties that must endure for generations on the ba.«;is of response to a threat of violence does great injury to the conduct of our foreign relations. This issue is not a proper one for consid- eration. Threats always cut two ways. If we are going to respond to threats, could that provoke disgruntled canal employees or fanatic siiperpat riots to proclaim they will sabotage the Panama Canal if the United States can no longer own and control it? The general U.S. policy to resist threats from terrorists has worked well. We must apply it in this debate on the treaties. To support or oppose a treaty because one side or another is more prone to violence is most unwise. 303 The Piinama Canal is only one of many major facilities that are vulnerable. The U.S. Capitol was vulnerable to the Weathermen several j'ears ago. Finally, it is said that the Panama Canal Treaties are the top issue on the Latin American agenda, and that the United States would face hostility from Latin America if the treaties are rejected. This overstatement is contradicted by the experience of many of our officials in Latin America. None of us can believe that the countries on the west coast of South America or the countries in Central America will be happy about the tolls increase that is implicit in the treaty. In fact, at the gathering of the Organization of American States in Grenada this year, that organization voted 19 to (the United States abstained, Panama did not vote) for a resolution stating that canal tolls should reflect only the actual operating costs of the waterway. The success that Panama has had in garnering support in Latin America should be juxtaposed against the fact that Panama has consistently failed to obtain the degree of Latin American support she has sought for her position in reference to the Panama Canal. With respect to the treaties themselves, in September, despite some pressure salesmanship from the United States, the Latin countries refused to endorse the agreements and signed only a watered-down resolution. In conclusion, a properly conceived treaty arrangement may serve United States and Panamanian interests, but I do not believe the treaties should be accepted, at least in their present form. Above all, I think we should be realistic enough to recognize that because of the manner in which these treaties were negotiated, an atmosphere has been created in which violence or stoppage of the canal will probably occur regardless of approval or disapproval of the treaties. Thank you. Data in Support of the Contention of the Continuing Importance of the Panama Canal and Canal Zone commercially The Panama Canal is a U.S.-oriented Canal because two-thirds of the vessels transiting have a port in the U.S. as a point of origin or destination. The Maritime Administration estimates that by the year 2000 U.S. exports through the Canal will have doubled and U.S. exports will be at 2)'% times today's levels. The percentage of the total dollar value of U.S. ocean foreign trade transiting the Panama Canal has steadily increased in the last generation, and is expected to increase in the future. 96 percent of the U.S. fleet and 92 percent of the world's merchant fleet can transit the Canal today. The great majority of those supertankers which cannot transit the Canal were built for trade routes which do not come near the Isthmus of Panama. 70 percent of all the cargo that has transited the Canal has done so in the last 25 years. MILITARILY The lack of a true two-ocean navy while the U.S. has commitments in five oceans makes the Canal's availability for transit ever more important. 98 percent of our naval fleet can transit the Canal. Only our Nimitz class aircraft carriers cannot transit. The trend toward naval ship design is toward a smalller and faster vessel. The Canal has been a major resource in hostilities and confrontations that occurred in World War II, Korea, the Cuban Missile Crisis, and Vietnam. The Canal Zone has the only major ship repair facilities within 1,600 miles on the Atlantic side and 2,500 miles on the Pacific side. The Canal Zone also has the only U.S. -controlled air base within 1,000 miles, and it is a miUtary and communications crossroads of the hemisphere. The only existing trans-Isthmian pipeUne for ship bunker oil and aviation fuel are in the Zone. The lack of adequate West Coast port facilities for the loading of supplies and ammunition makes the Canal crucial to U.S. military efforts, especially those in the Pacific theater. Chairman Zablocki. The remaining witnesses appearing before the committee today will address the role played by the human rights issue in the debate over the Panama Canal Treaties. 98-991—77 21 304 We will first welcome to the committee Mr. William P. Stedman, Senior Deputy Assistant Secretary of State for Inter-American Affairs. Mr. Stedman, you may proceed. STATEMENT OF WILLIAM P. STEDMAN, DEPUTY ASSISTANT SECRETARY OF STATE FOR INTER-AMERICAN AFFAIRS Mr. Stedman. Thank you, sir. I do have a brief statement I would like to read. Mr. Chairman, I am pleased to be here today to discuss with you and the members of this committee the human rights situation in the Republic of Panama. President Carter has stated that human rights is a central component of our foreign policy. We have an inter- est in the observance of basic human rights in all countries of the world. If we are to be true to the best and most deeply held traditions and beliefs of our Nation, expressed in our Declaration of Independ- ence and Constitution, then we must infuse our foreign policy with our convictions. We believe that the human rights situation in Panama should be viewed in this context and for these reasons the Department of State has followed the human rights situation in Panama closely. I would like to state at the beginning that one of the tests of a commitment to human rights which can be applied to any government is its receptivity and willingness to receive outside observers genuinely concerned about human rights. It is therefore gratifying that on September 13, 1977, the Panamanian Government invited the Inter- American Human Rights Commission to visit Panama to investi- gate the various charges of human rights violations which have been made and to report its findings. Torrijos promised that if any political prisoners were found, they would be released. Another positive indi- cation of the Government's attitude toward human rights in Panama is that in Ma}^ 1977, in response to criticism from a Venezuelan youth group, Copei Juventud, General Torrijos personally invited the group to visit Panama "to see for themselves" what the state of human rights is in Panama. The group has not yet acted on that invitation. The Government has also invited the Secretary- General of the United Nations and several Latin American and United States universities to observe the national plebiscite on October 23, on whether to ratify the proposed Panama Canal Treaties. We welcome these invitations because of the charges that have arisen and expect that these visits and the resultant studies and observations will provide an objective standard against which to test the accusations regarding conditions there. We further welcome it as an indication that Panama takes its obligations seriously. Our o^Ti assessment at the present time is that Panama is neither a model open society, a traditional liberal democracy, nor a repressive totalitarian government. I should say candidly that this assessment differs with those of some other reports. At this time Panama is ruled by an authoritarian government, but its control of Panama is by no means total or heavyhanded. Amnesty International's International Report for 1975-76 did not have a section on Panama. Occasional police brutality does arise as a problem as it does in many countries. 305 There is a reasonable guarantee of a fair, public trial. In certain cases involving state security when the Government does not desire a trial, the accused may be interrogated, judged, and sentenced without due process as we understand it. Instead the procedure is administra- tive. The Government does not take this kind of action often. Exile has been the most commonly used measure to deal with cer- tain dissent that the Government did not wish to tolerate, despite the fact that expatriation is prohibited under article 29 of the 1972 Pana- manian Constitution. In 1976 there was a case of multiple exilings. It involved 14 men who were exiled by the Government in January after public antigovernment activity. After a short detention, in all cases a matter of a few hours, they were sent to Ecuador without any trial. Many of these men were conservatives; some were leftists. The Gov- ernment charged at the time that most of them had been engaged in an active conspiracy with exiled opponents of Torrijos to overthrow the regime. In addition, during the student demonstrations and riots of Sep- tember 1976 in Panama City, three more people left Panama under duress. We know of no incidents of forced exile in 1977. To the best of our knowledge, the Government has not expropriated any property belonging to these men. Nor has it stripped them of their Panamanian citizenship. The Panamanian Government has allowed 5 of the 14 people exiled in January 1976 to return to their country. In addition, it has pub- lished a list of 82 exiles, mostly lesser known individuals from the politically turbulent period of 1968 to 1972, who are now permitted to return if they choose to do so. Worship, internal movement, foreign travel, emigration, and the import and export of currency are entirely free. Freedom of assembly is limited, and rallies or open meetings of those opposed to the Gov- ernment have not generally been permitted. However, it is note- worthy that, for the debate on the proposed treaties in Panama, many of these controls have been relaxed. Political parties are banned, although this is not strictly enforced. They have maintained their organizational identities and structures, and operate informally as movements or under the camouflage of business, labor, or trade groups. The Panamanian Communist Party, the Partido del Pueblo (PdP), may operate semiopenly, but only on the condition that it support the Government. The Government monitors the party's ac- tivities and harasses them from time to time to the extent necessary to keep the PdP in line. Students are permitted more leeway, and on many occasions the student demonstrators have criticized government policies and offi- cials sharply. Such public criticism of specific government policies often occurs at public meetings of interest groups such as business or labor. In the past several weeks, controls over political activity have been significantly reduced in order to allow free debate of the proposed Panama Canal Treaties. The Liberal and Panamenista Parties have held public meetings which have been reported freely in the press. There have also been calls for full restoration of political and civil rights and a return to full democracy. 306 Regardless of the context or the speaker, however sharp, dh'ect criticism of General Torrijos, or pubhc attack on the legitimacy of his government is not accepted. The press and broadcast news media, while not subject to prior government censorship, practice self-censorship. Periodically, the government cautions them. The media avoid direct criticism of the top-level officers of the national guard and sensitive topics which might tend to disturb public order. Despite an overall caution, on occasion the media, particularly radio and television, do discuss con- troversial issues. The most celebrated recent example w^as a television panel discussion, in unusually frank terms, of human rights in Pan- ama on May 26 of this year. Follo\\dng this, there was a fair amount of discussion in the press regarding the existence of racial prejudice in Panama, in which existence of such prejudice in Panamanian society was discussed ^^ith considerable frankness. The country's present eco- nomic slump has been frequently discussed. The Torrijos government has made major strides in extending eco- nomic and social benefits to its people. It is expanding economic development to those areas of the country previously outside the nation's economic life. The government is also expanding educational benefits, medical facilities and services, and economic development projects to wide sectors of the population which had been previously ignored. Panama is goverened by the Constitution of 1972. Under that charter, there is a National Assembly of Community Representa- tives, whose 505 members were elected by popular vote in 1972 for 6- 3'ear terms. The executive and legislative organs of the Government, which hold the real power in Panama (Presidencj^, Cabinet, Judiciary and National Legislative Commission) are either elected indirectly or appointed. Under the terms of the constitution, General Torrijos holds special temporary powers as Supreme Chief of the Revolution for a 6-year period which will end in 1978. General Torrijos is clearly the leader of the Panamanian Govern- ment. When he chooses to make decisions, his will prevails. However, he does not involve himself in all areas of the Government, and the President and cabinet exercise considerable influence of their own. Only one member of the Cabinet is a military man. The rest are civil- ians, many educated in the United States. The National Assembly of Community Representatives was in- tended to foment greater grassroots participation in national political life. The Assembly does not reflect the one-man-one-vote philosophy, but is skewed to favor the rural population, whose interests were poorly represented in the past. The assembly serves and is intended to serve primarily as a consultative mechanism; its affirmative powers are limited to election of the President and Vice President, approval of treaties and international agreements, and passing nonbinding reso- lutions on the activities of the Government. The Government also normall}^ consults with a broad range of sectoral groups and associations during the formulation of policy initiatives. These groups are more or less analogous to our National Association of Manufacturers, Chambers of Commerce, and AFL- CIO, but they also pla}' a limited political role partially comparable to political parties. 307 In terms of democratic participation, therefore, tlie results are mixed. There are elected representatives, but with little influence on major national policy formulation. There is broad consultation and major opportunities for participation on political issues at a local level for a broad segment of the populace previousl}' uninvolved in politics of any sort. I would be remiss, Mr. Chairman, if I did not comment on the effect of the administration's human rights polic3\ We believe that our policy has reaped benefits in Panama. In 1976, in the aftermath of the January and September exilings, we indicated our concern to the Government about its actions. Since September 1976 there have been no further cases of exile. Our policy has also set a tone internationally which individual Panamanians have assured us has led to a mild gen- eral relaxation politicalh"^ in Panama. Specifically, many Panamanians have credited our human rights policy for the May 26 televised dis- cussion of human rights to which I referred earlier. We believe our influence has been positive. We feel that Panama's human rights situation has improved during the past year and hope it wdll continue to do so. Mr. Chairman, I have given you the Department of State's evalua- tion of the human rights situation in Panama at this time in broad terms. As I have pointed out, the Panamanian Government has offered to open the country to the Inter-American Human Rights Com- mission, which has the abilit}- to make a thorough, impartial stud}' in the country-. We believe this to be an important step forward in demon- strating Panama's own interest and in fact openness in receiving an objective and impartial report on the human rights situation in that country. Thank you, Mr. Chairman. STATE DEPAKTZVIEXT AXD ''FREEDOM HOUSE" RATIXG OF PANAMA ON HUMAN RIGHTS Chairman Zablocki. Thank you, Mr. Secretary. Mr. Secretary, the most recent executive branch report on human rights in Panama made pursuant to section 502(b) of the Foreign Assistance Act, gives the Government of Panama a comparatively favorable rating and does not recommend that Government assistance to Panama be terminated or limited in any way due to human rights violations. On the other hand, the organization called Freedom House rates Panama below both Cuba and the Soviet Union ^^ith respect to human rights guidelines. [The report referred to follows :] Freedom House Human Rights Rating in Panama i. political situation Panama is a republic governed under the provisions of a constitution which entered into force October 11, 1972. The present government came into power in 1968 following a coup. Organized opposition by political parties is not permitted. A transitory provision of the 1972 Constitution grants General Omar Torrijos broad powers as Chief of Government for a six-year period. Torrijos has based his government on broad support within Panama, and has made a number of consessions to both the left and the right to assure the con- tinuation of this support. 308 II. LEGAL SITUATION The Constitution guarantees equality before the law. It guarantees a hearing before a competent authority within 24 hours of detention, and writ of habeas corpus. Warrants are required before a search can be undertaken. The Constitution also guarantees freedom of movement, religion, assembly and expression. These guarantees are generally observed. Justice is generally administered fairly and without regard to race, social class or wealth. III. OBSERVANCE OF INTERNATIONALLY RECOGNIZED HUMAN RIGHTS A. Integrity of the Person Article 3. — Panamanians enjoy the guarantee of life, libert}', and security of person. A very few exceptions have occurred where individuals engage in political activities which the Government considers inimical. Nearly all of the exceptions involving arbitrary imprisonment occurred prior to 1972. The noteworthy excep- tions in recent years occurred when 14 participants in the January 1976 political protests and three persons who allegedly fomented riots in September 1976 were exiled. Article 5. — There is no evidence that the Panamanian Government makes a practice of arbitrary imprisonment, torture, or murder for political purposes. A "Panamanian Committee for Human Rights" has published an anonymously- authored pamphlet alleging brutality on the part of the Government. There is no independent corroboration of the allegations and it appears that nearly all of the alleged incidents are believed to have occurred during the 1968-71 period. Article 8. — In general, Panamanians can obtain an effective remedy from the courts if their rights are violated. Exceptions to this are more frequent for political opponents of the Government. Article 9. — The Government has exiled opponents who it felt threatened its existence. This occurred most recently in January and September 1976, when the government summarily exiled 17 prominent Panamanians. Although this latest group was composed primarily of lawj^ers and businessmen, opponents who have been exiled represent the full political spectrum including radicals on the left and leaders of the Communist party (PDP). Some exiled persons have been permitted to return to Panama after a time. Article 10. — The practice of amparo (habeas corpus), which requires that a hearing to determine charges and rights be held within twenty-four hours after arrest, is generally observed in Panama Article 11. — Panamanians have reasonable assurance of obtaining a fair trial in the vast majority of civil and criminal cases. The guarantee of a fair trial might not be observed in a case with important political considerations, however. B. Other Important Freedoms The Government does not condone discrimination although some evidence of it remains in Panama's raciallj^-mixed population. In general, Panamanians can move freely within the country and ma}'^ travel abroad without restrictions. Property rights are respected. There is freedom of religion. Freedom of assembly is observed. However, political organization and activity are limited. Organized open political opposition is not tolerated. The media are monitored by the government. While strict censorship is not imposed, editors and others in positions of responsibility are made aware of what will be tolerated by the government; and editors of one newspaper chain, which is owned primarily by high officials of the GOP, take guidance from the Government. While radio criticism of the GOP has occasionally been sharp, criticism appearing in the press is aimed primarily at low-level officials and at failures in the implementation of policies rather than broadside attacks on top leadership. IV. OTHER HUMAN RIGHTS REPORTING The "Amnesty International Report on Torture," published in 1973, states that the most serious allegations of torture in Panama date from before 1970, but notes allegations of single instances in 1971 and 1972. The "Amnesty Inter- national Report 1975-76" does not contain a section on Panama. Freedom House describes Panama as "not free." Chairman Zablocki. Would you please comment on those apparent divergent conclusions? 309 Mr. Stedman. Mr. Chairman, the Department's report is as you have characterized it, and it does differ from that of the Freedom House report. The Freedom House report, however, does not give us enough narrative to be able to determine on what they base their statistical findings of the various elements that they have used to measure the human rights situation. So I am not really able to make any kind of profound analysis of why they reach their conclusion because I don't have a statement such as the one that we have pre- pared and submitted to the Congress. IMPACT OF CONGRESSIONAL REJECTION OF TREATIES ON HUMAN RIGHTS IN PANAMA Chairman Zablocki. Mr. Secretary, would congi*essional dis- approval of the proposed treaties affect the human rights situation in Panama and in what way? Mr. Stedman. This is a matter of speculation and analysis. It is our view that the existence of tension in Panama now to a consider- able extent arises from an unsatisfactory treaty relationship, and we would believe, therefore, that successful resolution of this situation would alleviate some tensions in Panama and conceivably, therefore, could create an environment in which there would be some easing in the human rights situation. IMPACT OF TREATY APPROVAL ON HUMAN RIGHTS IN PANAMA Chairman Zablocki. What assurances have we that if the treaties are ratified that Panama will not go back to some of its former prac- tices of allowing the violation of human rights to persist? Mr. Stedman. I think one can be encouraged from the trends which are currently visible. That is to say, there has been very wide and open discussion in Panama of the treaties themselves with the op- position being given the freedom to make its voice heard. It would be our hope, therefore, that these treaties, with the alleviation of the tension that I think exists because of the unsatisfactory treaty re- lationship now, would give us some hope matters would continue along this trend line. Absolute assurances or guarantees would not be possible to make, but it is our interest in Panama, as it is in all other countries, to con- tinue to take a ver^- careful interest in the human rights situation, and we would follow the situation there just as we follow it elsewhere after the termination of the treaties. POSITIONS OF PANAMANIAN POLITICAL PARTIES ON TREATIES Chairman Zablocki. Secretary Stedman, in your statement on page 5 you say that controls over political activity have been relaxed in order to permit debate on the Panama Canal treaties and that the Liberal and Panamenista Parties have held public meetings on the treaties. What are their positions on the treaties? Mr. Stedman. With the assistance of m}^ ofl&cers here behind me, sir, their positions are not formall}^ yet decided and they have formed commissions to produce their defiidtive position, but I must say that at this time there are student groups and lawyer groups who have voiced very strong opposition to the treaties so that this relaxation 310 and the permitting of groups to express themselves has brought out some opposition to the canal in Panama. Chairman Zablocki. If the treaties were not ratified by the United States would it be interpreted in Panama by these groups that we are unwilling to renegotiate the 1903 treaty unless is was to our benefit; is that true? Mr. Stedman. That is correct. Chairman Zablocki. Mr. Lagomarsino. FREEDOM HOUSE REPORT Mr. Lagomarsino. Mr. Stedman, let's refer back to Freedom House. I think it would be appropriate to point out for the record — this has been done before — that there are two members of the admin- istration, who should be very influential in this entire situation, Mr. Brzezinski, the President's security adviser, and Gale McGee, who, of course, is the Ambassador to the Organization of American States, who are on the Board of Trustees of Freedom House. So it would seem to me that inasmuch as Freedom House has described Panama as the worst country in the Western Hemisphere with regard to human rights the State Department would make an effort to find out why. Has that been done? Mr. Stedman. I am not aware of direct communication with Freedom House to find the basis for their judgment, sir. But I think that you do move me to say something which I had neglected to say and that is that Freedom House is a respected organization and its people are genuine and sincere. Therefore, I did not wish to Mr. Lagomarsino. No; I didn't understand it that way. I just wanted to underscore that for the record for people who didn't know what Freedom House is and tell them that it is a respectable organiza- tion. Mr. Stedman. I neglected to say that. Mr. Lagomarsino. My understanding was that the State Depart- ment in making its human rights analyses in various countries takes into consideration the findings of Freedom House? Mr. Stedman. We do and I think, as a matter of law, bring into our report, which we submit to the Congress, the conclusion of Free- dom House, as we do with Amnesty International, that is correct. But I am not aware that we have asked Freedom House to go behind its categorization of "free," "partly free" or "not free" to give us a detailed accounting of how they arrive at those conclusions. Mr. Lagomarsino. Don't you think that w^ould be a good idea? Mr. Stedman. It sounds like a reasonable proposition to me. [The information subsequently supplied by the Department of State follows:] Freedom House's Formula for Determining Its Ratings We have attached a copy of Freedom House's description of its general meth- odology as it appeared in that organization's magazine Freedom at Issue dated January-February 1977. In order to learn how Freedom House determined its ratings of freedoms in Panama, Ambassador Gale McGee, a member of Freedom House's board of Note. — Despite Freedom House's low ratinj^s of freedoms in Panama, the organization endorses the proposed Panama Canal treaties. A copy of its announcement is attached. 311 trustees, contacted the organization. Freedom House's representative stated that they found the exilings of Torrijos' pohtical opponents without trial and in contravention of the Panamanian constitution to be especially obnoxious. Beyond this, Freedom House referred back to its Freedom at Issue dated Janu- ary-February 1977. Attachment : RANKINGS FOR POLITICAL AND CIVIL RIGHTS In the Survey, states are ranked in terms of their political and civil rights on separate seven-point scales, from (1), most free, to (7), least free. The numbers by which the ranks are identified do not represent quantities, nor can they be simply calculated from other quantities. A numbered ranking simply indicates that the state in question seems to fall within a grouping of states at a certain point along an arbitrarily divided continuum from free to unfr(;e. Ratings are now based on the comparison of ratings on a check list of political and civil rights. Ideally, for each item on the list each country is given a rating of high, medium, low, or very low. There is no attempt to mathematically compute the results, but the patterns of those states which enjoy more freedom must obviously lie to the high side of those which are less free. To achieve a high ranking (1 or 2) in political rights a country must have the critical rights provided by a fully operative electoral procedure, generally includ- ing an electoral confrontation of multiple parties with a significant opposition vote, and those elected must receive the great preponderance of political power. A state ranked (1) will also be strong in subsidiary indicators, such as a recent change of government from one party to another, lack of foreign domination, decentralized political power, or a broad informal consensus that allows all seg- ments of society de facto power. A state at (2) must have a high rating for most critical rights, and a relatively strong position elsewhere. Viclence, foreign dom- ination, high illiteracy, or extreme poverty are environmental conditions that may cause a ranking of (2) instead cf (1). States ranked at (3) and (4) generally have competitive voting procedures, but these may be marred by the banning of opposition parties, unfair electoral procedures, or elimination from the rolls of large portions of the population. States at (5) have poor, if any, electoral pro- cedures, but significant opposition may be allowed to organize — for example, through legal opposition parties. Alternatively, such states may strive for a broad consensus among segments of the population, or accept a high degree of decentral- ization. Regimes at (6) have merely a facade voting procedure (outcomes generally 95 to 99.9 percent favorable to the government), or none at all, but they show some responsiveness to common public pressures, have some claim to consensual support, or provide a voting procedure that allows limited choice among selected individuals. At (7) political competition is narrowly restricted to in-fighting within party hiei archies, and all other attempts to influence policy or personnel are considered illegitimate. In general a low civil-rights score will reduce political rights — although not vice versa. An election without a right to express opinion puV)licly is hardly free. States are also reduced by one point on political rights by a less than high rating on freedom from foreign control. Foreign control is defined for this purpose rather narrowly, emphasizing the extent to which the government and people of a state are free to publicly criticize a hypotheticall}^ dominating state, or how much the government is allowed to diverge from the dominating state's position in inter- national consultations and organizations. In civil rights we consider four critical rights: freedom from political censor- ship, open public discussion, the maintenance of a rule of law (especially as sig- nified by the ability of the courts to decide against the government), and freedom from government terror (for example, freedom from imprisonment or torture for political reasons). Here also, foreign control may impede rights, especially the first two. In addition to these four, we consider two types of suppoiting or sub- sidiary freedoms. First are those from totalitarianism: economic independence of the media from government, and freedom of individuals to move al)out, choose among educational systems and occupations, obtain private property, operate in the market freely, or organize and join private organizations of choice. These latter freedoms include freedom of religion, as well as freedom to organize and join unions. Civil rights are also affected by the presence or absence of nongovern- mental, environmental inadequacies, such as ilhteracy and debilitating poverty. In this second category of subsidiary freedoms we also place losses to freedom occasioned by private forces such as bosses, landlords, or labor leaders (and, at 312 the extreme, private slave-holders). Questions of illiteracy and poverty bring us hack, of course, to the positive rights which we argued above should be outside our concern. Yet they must be taken into account in so far as they afiFect a popu- lation's ability to express opinion or vote effectively. (In passing it should be noted that evaluating the effects of such factors needs a great deal more study.) A country ranked (1) in civil rights must rank high on all critical rights, and medium or higher on nearly all other rights. In this consideration the most im- portant subsidiary rights are those to individual movement, choice of occupation and organizational affiliations, and freedom from private terror (especially as related to political opinion). Level ( 1) countries must also not have very low levels of poverty or illiteracy (although this is much less important in very small coun- tries). Rank (2) in civil rights generally implies a high ranking on three of the four critical rights, and not more than two lows in the subsidiar}- rights. Successively lower patterns are then attached to succeeding rankings, until rank (7) implies "a very low score on all critical rights and low scores on most of the other check list items. In considering these rankings it is well to remember that the foregoing patterns are highly generalized. There are special situations in which one or a few consid- erations override the general picture, or in which lack of information forces reliance on only a portion of the full spectrum of evidence that should be considered. An example of both of these problems is Lebanon. This formerly free country is now split into areas with widely varying local and foreign leadership and security conditions, and must for the time being be very roughly estimated for the pur- poses of the Survey. Press Release From Freedom House "Urges Approval of Canal Treaties Despite Panama's 'Deplorable' Human Rights Record," Dated November 17, 1977 New York, November 17 — John Richardson, Jr., president of Freedom House, today released a board advisory calling upon the United States Senate to ratify the Panama Canal treaties, despite "the deplorable record on human rights of the present regime in Panama." Ratification, said the human rights group, "would best protect American interests and maintain the security of the Canal." The organization released a 1,000-word analysis and advisory on the treaties. "This advisory was approved by the Board of Trustees of Freedom House after extensive study and review, and an overwhelmingly favorable vote," declared Mr. Richardson. "Expressing their views to their colleagues on our board were some of the principal supporters and an opponent of the treaties," said Mr. Richardson, until January an assistant secretary of state. "Zbigniew Brzezinski, national security advisor to President Carter, on leave from our board, expressed his views to us, as did Gale McGee, U.S. ambassador to the Organization of American States. Both supported the treaties. We also received an extensive opposition memorandum from our colleague, Karl R. Bendetsen, former under secretarj^ of the army and chairman of the Panama Canal Company, which presently controls the canal zone," Mr. Richardson added. The advisory said that if the treaties are not ratified, "the immediate winners will be the communist parties of Latin America and the Caribbean, and Marxist regimes throughout the Third World." The cry of "Yankee imperialism" would be raised again, Freedom House predicted. It noted that "South American com- munists as well as North American conservatives oppose the treaties." The organization declared that the "proclaimed U.S. concern for human rights will have been disavowed by our refusing to restore rights in the canal area to the sovereign." Freedom House acknowledged that it is supporting the treaties despite the organization's "frequent analyses and reporting of the deplorable record on human rights of the present regime in Panama." The organization conducts year-round surveys of human rights in every country. Its latest finding reveals a "recent improvement attributable to the national referendum on the treaties." Freedom House concluded, however, that "the level of political rights and civil liberties in Panama is still low." The advisory added that "most Panamanian governments, however, regardless of ideology or political or civil practices, have sought a new treaty with the United States." In considering ratification, the United States does not now face 313 "a real choice," if it is "to recognize the severe losses we would almost certainly suffer from rejecting thirteen years of responsible negotiations by both Panama and the United States." The advisory said that by ratifying the treaties "we will demonstrate that we not only support a higher world order based on the advancement of human rights and collaborative international agreements, but that we act on those moral commitments." This action, the statement continued, would "also demonstrate that a major power can negotiate as an equal with a smaller nation, yield to the latter those rights which were inherently its own, and yet retain for the large power the fundamental advantages which it is in their mutual interest to reinforce." The treaties, signed by President Carter and Brig. Gen. Omar Torrijos, have been approved by a national referendum in Panama but must be ratified, pre- sumably in January, by two-thirds of the U.S. Senate. Under the treaties, Panama would immediately share control of Canal Zone facilities and services. The U.S. would have primary responsibility to protect the Canal until the year 2,000. After that, the United States would indefinitely have the right to defend the Canal's neutraUty, with "expeditious" use of the waterway assured. The organization maintained that the United States "is not yielding what it owns, as would be the case with Alaska or Louisiana." The government of Panama "has been the sovereign over the Canal and the surrounding zone" since 1903, said the statement. A FREEDOM HOUSE ADVISORY IN SUPPORT OF PROMPT RATIFICATION OF THE TREATIES RELATING TO THE PANAMA CANAL The Relevant History Since the United States built the Panama Canal in 1903 the government of Panama has been the sovereign — over the Canal and the surrounding zone. Under terms of the earher treaty, the Canal Zone and the waterway became "territory of the Republic of Panama under the jurisdiction of the United States." The U.S. Supreme Court in 1948 described the Canal Zone as "territory over which we do net have sovereignty." The United States, therefore, is not yielding what it owns — as would be the case with Alaska or Louisiana. Instead, this country in a mature, indeed wise decision in 1964 — since renewed by three successive administrations — recognized that policies acceptablt^ for a major power at the turn of the century were no longer defensible, morally or even militarily. The Security of the Canal The present status of the Canal increasingly has generated disapproval through- out Latin America and the Caribbean. The Canal has become the fecal point of political attacks and fourteen years ago, anti-U.S. riots which resulted in the (if-ath of 20 Panamanians and four Americans. Negotiations culminating in the present treaties began shortly thereafter, and there has been relative calm since the treaty talks opened. Some attacks on the American presence may have been exacer})ated and exploited by foreign or domestic communists. Antipathy to the American presence, however, was rooted in incontrovertible facts: 1. Panamanians long resented the splitting of their country in two, and the carving out of .5.50 square miles on which to maintain a foreign enclave. 2. No Panamanian ever signed the 1903 treaty. 3. Under that treaty, in exercising U.S. jurisdiction in the Canal Zone, the LT.S. operates the schools, courts, prisons and police force. 4. Though the tide of anti-U.S. feeling has el)l)ed and flowed throughout Latin Am.erica and the Caril)bean,, the Canal has always been a symbol of North American intrusion into the sovereignty and affairs of southern America. By the manner in which the L^nlted States secured and retained control of the area, the considerable technological and medical achievements of the United States in constructing and operating the Canal have been overshadowed. We continue to perform a great service to the international maritime and trading communities. That service should not be diminished by anachronistic political arrangements. For indeed the old poHtical arrangements, continuing into this era, serve to undermine rather than bolster the security essential to the protection of the canal. 314 There have been negotiated two agreements. The Panama Canal Treaty sets forth the terms for a new political relationship between Panama and the United States, and describes new operating procedures. For the remainder of this century, the United States shall have primary responsibility to protect and defend the Canal. After the year 2000, the second treaty — on the Permanent Neutrality and Operation of the Panama Canal — will give the United States the right to continue to defend indefinitely the Canal's neutrality. The treaty also guarantees U.S. warships "expeditious" use of the waterway. Neutrahty of the Canal — certainly in the best interest of America and of all maritime nations — is explicitly defined in the treaty. No limit is set on the means the U.S. can use to guarantee the Canal's neutrality. We are free to interpret unilaterally when the Canal's neu- trality is violated or threatened. Will the Canal Function as Efficiently? The basic treaty provides for the training of Panamanian specialists and administrators. They would move into responsible positions and ultimately operate Canal installations. If both countries agree, a new sea-level canal or a third lane of locks may be constructed to expand the present facilities. Approx- imately $60 to $70 million in revenues will be paid Panama at the onset. The proper, uninterrupted operation of the Canal is patently in Panama's national interest. Revenues from the Canal will become a mainstay of Panama's economy. The Dangers of Non-Ratification Without question, if the present Canal treaties are not ratified by the U.S. Senate the immediate winners will be the communist parties of Latin America and the Caribbean, and the Marxist regimes throughout the Third World. The cry of "Yankee imperialism!" will once again be raised. Curiously, South American communists as well as North American conservatives oppose the treaties. The proclaimed U.S. concern for human rights will have been disavowed by our refusing to restore rights in the Canal area to the sovereign. We support the ratification of the treaties despite Freedom House's frequent anal3^sis and reporting of the deplorable record on human rights of the present regime in Panama. Despite a recent improvement attributable to the national referendum on these treaties, the level of political rights and civil liberties in Panama is still low. Most Panamanian governments, however, regardless of ideology or political or civil practices, have sought a new treaty with the United States. Does the U.S. Face a Real Choice? If we are to recognize the severe losses we would almost certainly suffer from rejecting thirteen years of responsible negotiation by both Panama and the United States, we do not now face a real choice. The gains in ratifying the treaties promptly are, we believe, apparent: We will demonstrate that we not only support a higher world order based on the advancement of human rights and collaborative international agreements — but that we act on those moral commitments. We will also demonstrate that a major power can negotiate as an equal with a smaller nation, yield to the latter those rights which were inherentlj^ its own, and yet retain for the large power the fundamental advantages which it is in their mutual interest to reinforce. Because we are convinced that these treaties would best protect American interests and maintain the security of the Canal, we warn against any Senatorial recommendations that would force the reopening of negotiations, a return to an uncertain status quo, and thereby fuel political and paramilitary attacks on the American presence in the Canal area. Freedom House believes that the U.S. Senate, after full and careful study of the history of the Panama Canal, the extensive negotiating process, and the texts of the agreements already signed, should act promptly to ratify the Panama Canal treaties now before it. PROPOSED RESERVATION TO TREATY ON HUMAN RIGHTS Mr. Laqomarsino. I understand Senator Dole has proposed a reservation to the treaty, that Panama should improve its human rights situation. What would be the State Department's position on that? 315 Mr. Stedman. Would you repeat that, please? Mr. Lagomarsino. I don't have the exact language before me, but I understand Senator Dole has proposed that there be a reservation to the treaty that would require Panama to improve its human rights situation. Mr. Stedman. We would not want to see such reservations attached. I think that our position is that we would like to see the treaty approved in its present form and that the human rights situation would be treated separately and apart as it is a matter of great concern to us as it is in other countries. But the negotiation of the treaty in our own interests should be a matter kept separate from the human rights performance in Panama. VIEWS OF INDIVIDUAL PANAMANIANS ON TREATIES Mr. Lagomarsino. In March several members of this committee and the Subcommittee on Inter- American Affairs made a trip to Panama. We talked to a number of people, officials of the Panamanian Government, our Government, business people, bankers, church people, and so on. My assistant and I talked to them privately and they told us 95 percent of the people want a new treaty but not with General Torrijos. Is this, in your opinion, an accurate statement of feeling in Panama? Mr. Stedman. I don't know whether we can find out the exact percentage of Panamanians who want a new treaty, but I think we could say it would be 95 percent or almost closer to 100 percent. I don't think lumping the other part of the sentence; that is to say, not with Torrijos would be 95 percent. I think I would turn it around and say virtually all Panamanians, less many who are in exile, or who are opposed to General Torrijos, which I would say is a tin}^ minority. Mr. Lagomarsino. You say the people opposed to Torrijos are a minority? Mr. Stedman. I think they are. Mr. Lagomarsino. You said a tin}^ minority? Mr, Stedman. I think it would be a ver}' small number, I think the major point I was trying to get at, even those who have feelings against Torrijos except for a small number favor having a new treaty with the United States. Chairman Zablocki. Mrs. Pettis. Mrs. Pettis. Thank you, Mr. Chairman. impact of U.S. military aid on human rights in PANAMA I am wondering about your assessment of U.S. militar\' aid vis-a- vis Panama as it would relate to the Government's human rights situation? Mr. Stedman. Are you suggesting that for the future if we are considering military assistance activities we should consider the human rights concerns in the future? Mrs. Pettis. Yes; I am. Mr. Stedman. In our Latin American Bureau, which is the only Bureau I can speak for, we now closely monitor all forms of economic and military assistance in the formulation stages with countries in 316 Latin America, and whether b3^ law or not, take into account the human rights situations and in making poHc}' determinations we consider that the economic and mihtary assistance and the human rights activities' performance in the country are all matters we should consider seriously. I think it is fair to say that in the future if the Panamanian record w^ere to be that of the constant pattern of outrageous performance, it W'ould have a bearing on our military and economic assistance activities. Mrs. Pettis. Could you define "outrageous performance" for me? Mr. Stedman. I guess the word is "egregious" — I am thinking of the law, it is a constant pattern of gross violations. That is a very difficult subject to get into, but I w^ould characterize it as mass torture, the frequent use of arrests, prolonged detention, torture in jail, in- human treatment of persons arrested, and other matters of this sort. Mrs. Pettis. Thank you. RELATIONSHIP BETWEEN TORRIJOS AND QADHAFI OF LIBYA I am also curious as to what you perceive the relationship between Torrijos and Libya's leader al-Qadhafi to be? What was the meaning of the Panama-Libyan pacts between the two nations in April of this year? Mr. Stedman. I am not myself personally familiar with that. If I might take that question and supply infoiTuation Mrs. Pettis. We would be happy if you supplied information for the record. [The information follows :] Relationship Between Torrijos and Qadhafi of Libya Panama and Libya have not had close ties. There is a Libyan Embassy in Panama, but no Ambassador has been accredited. No Panamanian Ambassador to Libya has been named either. On April 1977, the Panamanian Chief of Government, General Omar Torrijos visited Libya at the invitation extended by Lib3-an leader Muammar Kaddafi at the 1976 Non-Aligned Conference in Sri Lanka. The visit served Panama's con- tinuing objective of seeking broader international support in its efforts to negotiate a new canal treaty with the United States. It also provided Torrijos an opportunity to seek Libyan financing for Panamanian development projects. Three agreements — on general cooperation, cultural affairs, and economic and trade matters — were signed during the visit. In addition, Panama offered to make available to Libya one hectare of land in the Colon Free Zone, a duty-free ware- housing, light manufacturing, and distribution center used by many international trading enterprises. There were also reports that Libya was given the opportunity to establish a bank in Panama (which is a significant international banking center) and to invest in Panama. However, to date, Libya had not acted on these offers. Moreover, there has been no confirmation of any agreement of financial assistance by Libya to Panama. We believe that the results of the visit were marginal. This may have been because of General Torrijos' unwillingness to abandon Panama's longstanding policy of support for Israel as evidenced by its vote against the Zionism-racism resolution in the United Nations General Assembly. The Panamanian communique issued at the close of Torrijos' visit neither responded to nor endorsed a Libyan statement assailing Zionist aggression. Anti-Semitism has never been strong in Panama. In fact, Torrijos' wife is of Jewish descent. We believe that Panama's relations with Libya have recently become strained because of Torrijos' visit to Israel between September 27 and 30 of this year. Mrs. Pettis. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Oilman. Mr. Oilman. Thank you, Mr. Chairman. 317 GOVERNMENT CONTROL OF ELECTRONIC AND PRINT NEWS MEDIA IN PANAMA I notice in your statement that you mention that the ])ress and broadcast news media are not subject to Government censorship but impose upon themselves self-censorship. Yet, I note in the statement b}" the Panamanian Committee for Human Rights, a reference to decree 343 which is used to control radio and television by imposing rigid self-censorship and it is seldom violated. In January 1974 the committee observed that the Government prohibited the publication of the newspaper Quibo even before the first edition came out and confiscated its equipment and arrested the editors. They also note the same decree was used in 1976 to close radio station Impacto which was expressing dissenting opinions. According to the decree, all radio and television stations are required to tape their programs and submit them to the Government. It sounds like more than self-censorship. What is your information? Mr. Stedman. The information we have is not in accord with that final procedure there, sir. We do not know of this procedure of Gov- ernment prior censorship of all the — I think you said radio broad- casting. It is true, though, that the self-censorship practiced by the media is such that they know limits to which they can or can't go and attacking the revolution per se it would provoke reprisals from the Government. Mr. GiLMAN. What did you base today's statement upon? Did you communicate with any individuals representing the news media in Panama? Mr. Stedman. I have not. I am basing this on Embassy analysis of the situation. Mr. GiLMAN. Did the Embassy note the Quibo incident, or the Radio Impacto incident in their report? Mr. Stedman. I would have to consult whether there was knowl- edge of that incident here. I personally am not aware of this. Mr. GiLMAN. I think the gentleman behind you has information. Mr. Stedman. Apparently these incidents have been reported and so this has been part of the Embassy reporting. Mr. GiLMAN. Taking those incidents into account and, if it is true according to decree 343, if all radio stations are required to deliver their program tapes to the Government, would you say that is state censorship or self-imposed censorship? Mr. Stedman. The terms are clearly censorship but our people are saying the stations are not dehvering tapes of the programs Mr. GiLMAN. Do you know that to be a fact? Mr. Stedman. I don't know that personally, but the Embassy believes that. Mr. GiLMAN. I would appreciate it if you would clarify that. With your permission, Mr. Chairman, could we leave the record open for clarification? Chairman Zablocki. Without objection. [The clarification follows:] Clarification of Cabinet Decree No. 3-J3 — Self-Censorship of the Panamanian Media The mechanism of "self-censorship" in Panama is based on Cabinet Decree No. 343 of October 31, 1969, which reads: "The expression of opinions and, in general, the public transmission of thought, orally, in writing or by any other medium, is not subject to prior censorship, but. 31S the exercise of freedom of expression engenders the responsibihties which this Cabinet Decree establishes when through any of these media an attempt is made against the reputation or the honor of persons or against the security of society or puljlic order." The Office of the National Director of Communications Media of the Ministry of Government is legally responsible for the enforcement of Decree No. 343, but actual enforcement is informal. Strict control is unnecessary because, since 1969, the media have usually chosen to err on the safe side of the Decree rather than risk being sanctioned. Editors tend to shy away from controversial issues unless they receive prior clearance from the government. Three of the five Pana- manian newspapers are government controlled, receiving direct government guidance. Radio and television censorship are normally handled through the Ministry of Government. Radio stations are expected to record their broadcasts and, on request, to supply tapes afterwards to the Ministry. Television stations must record the audio portions of their programs. Note. — On November 12, 1977, during a visit to Panama V^y a group of Senators led by Majority Leader Robert Byrd, General Torrijos promised to review Decree 343 in order to liberalize it and remove those provisions which restricted freedom of expression. To this end, he promised to discuss the Decree with the journalists' union. This meeting took place on December 20. Legislation is now in preparation to replace Decree 343 and to protect against libel and slander in the media. OFFICIAL U.S. GOVERNMENT POSITION ON HUMAN RIGHTS IN PANAMA Mr. GiLMAN. A respected sjTidicated columnist for the Los Angeles Times wrote that Mr. Todman, the State Department's top official for Latin American affairs said: "Of course, we are not going to chal- lenge human rights in Panama because we want a treaty." Is that State Department policy? Mr. Stedman. No, sir, we are treating the human rights situation in Panama as we would elsewhere and we have made representations to the Panamanian Government about incidents, including the exiles in 1976. So we want to keep a close eye on the situation there as we would in other countries. Mr. GiLMAN. Would you consider Mr. Todman one of the policy- makers in the Department? Mr. Stedman. Certainly. Mr. GiLMAN. This is from the L.A. Times, Tuesday, August 7, 1977, paragraph written bv Geogieanne A. Geyer. She wrote: "Secretary for Latin America, Terence Todman, told me with admirable candor, 'of course, we are not going to challenge human rights in Panama because we want the treaty'." Mr. Stedman. I am not familiar with the quote and have not had a chance to talk with Assistant Secretary Todman about the remarks. Mr. GiLA^iAN. Could you tell us what the relationship between Torrijos and Libyan's leader al-Qadhafi is? We have heard there have been some pacts signed between the two nations. What are your thoughts on that relationship? Mr. STED^L^N. In response to Mrs. Pettis' question similar to that I have indicated I would like to take the question and supply some- thing for the record.^ ALLEGED ANTISEMITISM IN PANAMA Mr. GiLMAN. There have been also prior comments there was growing antisemitism in Panama. Can you teU us to what extent those reports are accurate? ^ The Information appears on p. 316. 319 Mr. Stedman, I think we have some information on that. Our opinion, sir, is that there is very Httle antisemitism in Panama. If I may read this answer: ''The Jews have played an active role in Panama's politics. Torrijos is married to a Jewish woman and there are good relations between the Panamanian and gentile communities." ^Ir. Oilman. There has been inserted into the Congressional Record not too long ago, by Mr. Rosenthal I believe, information in regard to antisemitism in Panama. Have you had an opportunity to read that? Mr. Stedman. I personally have not. Mr. Oilman. I believe Mr. Cutter is handing you a copy of that. Mr. Stedman. This is a communique from the Embassy of Panama dated June 9, 1977. If it is of interest, I could read it. Mr. Oilman. I would welcome hearing the contents. Mr. Stedman [reading]. No anti-semitic policies or sentiments exists in Panama. On the contrary, Jews residing or born in Panama constitute part of the community same as other people who are part of the national life, in commerce, industry, the professions. The position of the Government of Panama on the question of Israel has been very clear and definitive; wherein: First: Panama voted affirmatively for the creation of the State of Israel. Second: Panama opposed and voted against the resolution equating Zionism with racism. Third: Panama voted and voiced opposition when becoming a member of the Organization of Non-Ahgned Countries, at Lima, Peru, to resolutions directed against Israel. Panama and Israel actually maintain verj^ fruitful relations, with frequent exchanges of technical, cultural and youth relations. The Panama-Israel Friendship Institute has operated in Panama for many years, with many distinguished Panamanians among its members, including high officials in the Revolutionary Government. We would Uke to emphatically state that any statement considered anti- Semitic, made by an}' citizen on his own, does not have the approval and does not represent the sentiments of either the Government or the people of Panama. This is signed by Oeorge Fisher, Press Attache at the Embassy of Panama. NO EVIDENCE OF ACTION AGAINST PANAMANIAN EXILES Mr. Oilman. One last question. Is there any evidence the Torrijos government has ever taken any action against the Panamanian exiles living in this country? Mr. Stedman. Not that I am aware of, sir. Mr. Oilman. Thank you. Thank you, Mr. Chairman. Chairman Zablocki. Any further questions? Thank you. Secretary Stedman. We will now hear from a panel composed of the following witnesses : Dr. Winston Robles, assistant professor of political science at Florida International University and the founder and director of Panamanian Committee for Human Rights; Mrs. Rose Marie Aragon, who "v\'ill also speak for the Panamanian Committee for Human Rights; and Father Leo Mahon of St. Victor's Parish in Calumet, 111., and a former parish priest in Panama, May I welcome you to the committee and may I suggest you either read or summarize j^our statements in succession and we will then proceed to questions. 98-991—77 22 320 We will be^n with Dr. Robles, who will be followed by Mrs. Aragon and then Father Mahon. Mr. Robles. Mr. Chairman, Mrs. Aragon prefers to start her testimony first if you don't have any objection. Chairman Zablocki. You would prefer that Mrs. Aragon start? Mr. Robles. She prefers. Chairman Zablocki. We alwaj^s defer to the ladies. STATEMENT OF ROSE MARIE ARAGON, SPEAKING ON BEHALF OF THE PANAMANIAN COMMITTEE FOR HUMAN RIGHTS Mrs. Aragon. Mr. Chairman, I deep]}- appreciate the opportunity of appearing before this committee. I am Rose Marie Aragon, born in Argentina, a naturalized citizen and the widow of the Leopoldo Aragon wdio immolated himself last month before the American Embassy in Stockholm protesting the violations of human rights in Panama and the signing of a treaty with the Torrijos dictatorship. Gentlemen, I sometimes think that the blessings of freedom and democracy are more appreciated and more precious to a naturalized citizen. Some of you in this prestigious chamber may w^elj remember those feelings expressed by your own parents. With deep personal pain, I will describe the jailing without trial, the torture and imprisonment of m}^ late husband, Leopoldo Aragon, in the infamous penal colony of Coiba, the Devils Island of Panama. I will tell of, and offer documentation of the systematic and con- tinuing pattern of gross violations of internationally recognized human rights by Panama's dictator, Omar Torrijos. Until now, Panama's flagrant violations of human rights has been one of Washington's best-kept secrets. This September 9; the Wash- ington Post editorial page article raised questions : First, the reasons for State Department's coverup of the true nature of the Torrijos regime; Second, the reasons State Department devised elaborate falsehoods to deny my husband a visitor's visa to accompany his American w^ife and American daughters to the United States this past August. I look to the Members of Congress to explore these implications. I met and married Leopoldo Aragon, a Panamanian international journalist when he was assigned to Washington. He had received his law degree in the United States and completed graduate studies in international law and journalism in Spain and France. Our tw^n daughters, now attending college in the United States were also born here. Leopoldo covered the White House, State Department and the Organization of American States for several Latin American and European newspapers. His first book, in Spanish, "The Kennedy Era-Inside Washington" was published then. At that time I worked for State Department with a top secret clearance. Later I worked with the Organization of American States. I have long been deeply involved with civil liberties and civil rights as my husband was de- voted to the cause of human rights. In 1967 my husband was assigned to Czechoslovakia by Interpress Service. We, our twin daughters and I, went with him. After 9 months he was summarily given 48 hours to leave the countr}'. He had written too many truths about communism. 321 In 1971 Leopoldo was assigned to Panama. For the first time since our marriage we went to make our home in his native land. He was to set up Interpress Service. He also wrote articles for the local press and later developed a daily news analysis program for Radio Impacto. At first he viewed the political scene with a hopeful and open mind. As his views developed he began to express them privately and then publicly. As a working journalist, he was shown a Corps of Engineers draft position paper dated February 16, 1968. That paper, according to notes my husband gave me to carry to the United States, noted that popular opposition had rejected the 1967 proposed canal treaties that the Panamanian democratic government had negotiated with the United States. The paper concluded that a new treaty could not be passed in Panama except under a strong military dictatorship. By the way, Mr. Dean Rusk said almost word by word the same thing. This U.S. paper recommended Torrijos as the likeliest man to do the job. At that time, my husband told me about this in Panama, but suggested it was better that I not know further details. At the end of July 1972 Leopoldo, on his return trip from a short assignment in Mexico, stopped in Costa Rica at the invitation of Gonzalo Facio, Minister of Foreign Affairs. At the dinner that evening there was also President Figueres. They held a frank conversation about the situation in Panama. These were the subjects on which Leopoldo was later interrogated. The next day, on his arrival at the Panama International Airport, Leopoldo was arrested by the G-2, the security arm of the national guard. His arrest was witnessed b}^ a friend who informed the famity. But the guard headquarters told me they knew nothing about my husband. After 4 days G-2 admitted to a lawyer friend that the}?- were holding Leopoldo, but warned him not to take the case. The lawyer suggested another who had worked for other political prisoners. This Mr. Faundes agreed to present to a writ of habeas corpus though he accurately predicted no result. Through his contacts he learned that my husband was charged with possession of marihuana. He advised me to see the attorney general. After many long days of waiting, I was told they were questioning my husband on drug charges. I protested it was absurd and that no civilized country held a per- son on vague charges, denied counsel and ignored a writ of habeas corpus. He replied, 'Tn other countries, not in Panama." I began to contact journalists throughout the world and Amnesty International, the International Committee on Human Rights and International Organizations. My lawyer advised me to see Minister of Justice Alaterno Vasquez. For 10 days, day after day, from morning till night, I sat and I waited. When finally the minister admitted me, it was only to say that Leo- poldo was held for subversion of public order. Repeatedly I begged to see my husband. The minister relented. I went to the jail only to be told they had received no orders. This con- tinued for days. At last the doors of the prison opened for me and I talked with my husband after more than 4 weeks. He had been kept 322 incommunicado for 4 weeks while tortures were inflicted on him which he later told us were : * * * Ijlows with a rubber hose ; fist blows to stomach and chest, * * * long questioning under strong lights without sleep, * * * electric shocks to the vital parts of the Viody, the ears, genital organs, and the anus that made him feel his insides were bursting, * * * hanging by the wrists and acted out executions with l^lank cartridges so that each time he did not know whether he was alive or dead. My daughters and I, having had the mental torture of not knowing whether he was dead or alive and imagining what they might be doing to him, were to start on a new stage in our anguish. I extract from the journal of my daughter, Yarmila; which she writes now for one of her classes: Reading other people's journals of high school romances, marijuana smoking, spaced out, partying * * * I feel rather young and inexperienced. Though other experiences, I suppose, will make up for the lack of those. Like waiting in line in the torrrential tropical rains or scorching sun for an hour or more outside the 'Model Prison' * * * most infamous place * * * where men whose ideas are too liberal and criticism too out spoken are thrown in among common crim- inals and tortured, most often to death * * * only waiting to catch a fleeting ghmpse of a father's ravaged but beloved face. My lawyer and I kept demanding that my husband be brought to trial. Instead, in December 1972 he was condemned, by simple writ, to 5 years in prison, and one day while standing in line to bring food and bedding to him we were told he was no longer there. He had been sent to the penal colony on the island of Coiba. Reverend Mahon. I will read the excerpts from Leopoldo's doc- ument [reading]. The prisoners are driven to Pier 18 in the Canal Zone port of Balboa under American jurisdiction, because Panama has no deep water port and are loaded into the boat. If the trip to Coiba is hellish, it is worse if one tries to escape as I did at Pier 18 bj' jumping into the water. It had been my hope that by doing so, I would be taken by American police who might be persuaded to take me to the hospital for injuries resulting from by torture. The shooting at me by the guards attracted a large number of American police. The shooting stopped and I shouted of my condition. The Americans agreed to take me to the hospital and so I surrendered. Then there, in front of the passive Americans I was given a severe beating with clubs, fists, rifle butts and kicks by the Panamanian guards. They handcuff"ed my hands behind my back. They heaved me toward the boat, but they missed. I fell into the water. I dove under the ship and made it to the underside of another pier. But I was spotted there b}^ an American policeman. Recaptured I was turned over to the Panamanian guards who again beat me.. Half drowned, I was hanged from the handcuffs to a mast for several hours. When darkness came I was chained to a ring on the deck * * * Luckily the crammed conditions prevented the guards from kicking me as hard as they might have wished. It was dusk of the next afternoon when the boat tied up to the jetty at the southern tip of Coiba. There were some 20 guards waiting with clubs and whips * * * someone gave me a kick that sent me reeling over the jetty into the water * * * my delay in reaching the beach saved me from one of the most bestial practices of Coiba; the running of the gauntlet of the prisoners from the jetty to the central yard. The other prisoners were running like cattle under the whips and savage cries of the guards. These were swinging their clubs, rushing the prisoners to gallop, prodding them to run faster. The guards would run ahead of them, among them, and from behind, hitting and skipping in a happy demoniacal frenzy. If someone fell, several guards would converge on him, kick him, whip him, beat him and screaming louder, drag him to his feet, forcing him to sprint like crazy, the remainder of the 300-yard distance * * *. Slumped on the ground, I watched from a distance. At first, the whole spectable was incomprehensible because I did not grasp what was going on. It was a strange 323 state of mind * * * The black night in the background and the lights illuminating the goings on, sort of transported me to the environment of a theater. The play- would soon be over and one would walk out with friends, have dinner or a drink and discuss the play. I felt no part of it * * *. Then suddenly I reaHzed with terror that the thing was real. I was in it, at the receiving end like the others. The Captain's welcoming speech was short and to the point: "You just got the Coiba shock treatment. You will get it any time you are lazy or don't figure out what we want. In Coiba there is no God, no law, no nothing, only what is for our pleasure." Mrs. Aragon. I will continue now. Thank you, Father Mahon. The horrors continue. At Coiba, Leopoldo was told how Floyd Britton another of the political prisoners had died there. The Govern- ment had announced he suffered a heart attack. The truth as Leopoldo recounted it was: "With his hands handcuffed behind his back, he was placed on a stool. Guards surrounded him and clubbed him until his brains flew out." My husband stayed in Coiba for 6 months. Our appeals to the international human rights organizations and to important friends of Leopoldo in other countries bore fruit. Leopoldo was brought back to the city prison hospital. Although there are about 1,500 prisoners in Coiba, there is no medical facility. He was urinating blood and had Meniere's disease from beatings. His physical condition was terrible. Though I was told Leopoldo would be exiled, he was sent back to Coiba. Again we almost went mad. Finally in December 1973, I was ordered to buy him a one-way ticket to Sweden and he was placed on a plane to Stockholm * * * where he spent 2 months in Karolinska hospital, recuperating from the physical and psychological tortures. He gave several press interviews until G-2 gave me a message: "Tell Leopoldo to keep quiet. While you are still in Panama there are ways of making him come back." I had to stay to complete the teaching jobs I had taken to support us. I, too, had a severe weight loss and was emotionally drained. When we finally left Panama they made trouble at the airport, even dela3dng the plane, but we had many witnesses with us. While my husband was in prison he asked me to notify the American consul of at least two Americans detained for no apparent reason. One was a graduate student, writing his thesis on Panama, who had come to watch the so-called election of "Corregidores" (Justices of the Peace). He was picked up and denied access to the consul. Another American almost died of a beating in the cellars of the jail. U.S. consul, Dodson's letter of resignation substantiates the U.S. passivity and the 1977 case of American citizen David Mendelson (with no political involvement) beaten and exiled, brings these cases into the present. (State Department and Senator Sparkman have documen- tation.) "Let my people decide freely" was Leopoldo Aragon's dying plea. His act of sacrifice, he said, was to "call attention to the enormity of the deprivation of human rights and political freedoms under the Torrijos dictatorship." The exile or release of those who have been cruelly imprisoned and tortured is not the end of the stor}^ The person changes. Psycho- logical changes have now been recognized and a commission has been formed in Norway to study the effects of imprisonment and torture. I saw change take place in my husband. He immersed himself com- pletely in the movement to restore human rights and democracy in 324 Panama. Despite his dedication he did not isolate himself and had a multitude of friends. He corresponded with his colleagues who speak and write of his warm human qualities. One, at the New York Times in a personal note to me, spoke of him as "a man of great character passionately devoted to a cause of extreme importance." He was a loving husband and devoted companion to his daughters. Others remark that he was a consistent and rational man. This con- sistencA' and rationality was demonstrated in his methodical planning for his final sacrifice for his high ideals. Twelve j^ears ago he wrote of another ''To immolate oneself is to sacrifice oneself for others — for an ideal — for a conviction. It is an individual decision which doesn't involve or harm another." In a letter I received on September 2 he had sent from Stockholm: 'T know what I have to do to be faithful to my destiny. I feel it wdth all the depth of conviction that a man can have * * * and I am going to do something that can be instinctively understood and appreciated." On September 1, in front of the American Embassy in Stockholm he immolated himseK. In his last personal message he asked me to con- tinue the struggle, "your battle post is there." I am here to carry on. I am here as one who has also suffered the tortures of Torrijos, tortures that continue. But mine is onl}^ one story, the only one you will hear in detail today. It started in 1972.* * * The many cases of others each year since then are documented in the volumes of the Panamanian Committee for Human Rights. Yet Ambassador Bunker has repeated in the Congress and else- where what I quote from his national television interview on "Meet the Press" of August 14. The transcript reads : "What is your impression of the record of the Torrijos government in the area of human rights?" Ambassador Bunker answered : Well, there have been some violations of human rights by the Torrijos govern- ment. Most of those occurred prior to 1970 when he was consolidating his position. Amnesty International in 1973, I think, did report that most of those violations had occurred in the early j^ears of the regime. A year ago, they did exile some 13 people of the right and left who had been accused of subversion. Those, I think have all since returned to Panama. General Torrijos recently has received back nearly 100 exiles. In our report which the administration made this spring to the Congress, as required by law, the report stated that there was no evidence of any systematic abuse of human rights. Whenever there have been, we have called it to the attention of the Panamanian Government and have expressed our views about it. The President of the International League for Human Rights, Attorney Jerome J. Shesteck gave the Panama human rights report as an example of State Department's inaccuracies and lack of candor. What actually happened in 1976 or that which is known: January 30 — Thirteen professionals, businessmen and farmers, at least in the United States this does not place them either on the right or the left. In addition, an Argentinian-born British subject, who had served the United States as a parachutist medic in Vietnam, was arrested, held incommunicado, tortured, and then deported. February — A Panamanian professor, a self-described Trotskyite was picked up at the airport on his return to Panama and planed to Ecuador to join the 13 exiles. 325 May — Marlene Mendizabal, a high school student of humble country family, and her fiance, Jorge E. Falconet, an engineering student disap])eared. Her body was found and autopsy prevented by the National Guard. Falconet was never found. September — ^ittorney Eusebio Marchosky w^as arrested, tortured, and exiled to Miami. Blanca de Marchosky, Alma Robles de Samos, Fulvia Morales are imprisoned and maltreated, but later released. Querube de Carles was exiled. Three men, one an American employed in the Canal Zone were arbitraril}- arrested on trumped up charges of fomenting riots for the CIA. A formal protest was lodged with the U.S. Embassy, but later withdra\vn * * * Carlos Gonzales de la Lastra, an executive, and Humberto Lopez, a student, escape arrest and are exiled to Venezuela. More than 150 students are arrested and tortured, according to a letter wiitten by Rev. Fernando Guardia Jean, S.J., in the Panama Archiodese monthl}^ publication. Following the January exiles there were a series of five mysterious bombings at the places of business or homes of the exiles or their associates. The bombs were all of the same t^^pe. At the end of October and on November 1, a series of similar bombs exploded in the Canal Zone, damaging Government property and automobiles owned by American critics of the dictatorship and treaty negotiations. On November 29, a similar bomb was exploded in the Volkswagen of Jorge Rodriquez, seriousl}^ wounding his wife Gilma, but leaving untouched in the rear seat Dolores Montoto. On December 23, 1976, an official press release of the Panama Embassy in Washington makes public a letter from Torrijos protesting that the U.S. Ambassador in Panama had told Torrijos that "certain members of the National Guard are involved in terrorist activities which have taken place in the Panama Canal Zone in connection with explosions which last October destroyed six automobiles and damaged certain buildings * * * that the U.S. authorities had proof of their assertions." Let us sum up the 1976 human rights violations listed here, which are only a small part of the known violations by Torrijos in 1976. Exiled 18 Arbitrarily arrested 3 Arbitrarily arrested and maltreated 3 Arrested and tortured 151 Bombings (1 person seriously injured) 12 Imprisoned without trial 3 Murdered 1 Disappeared 2 Returning to Mr. Bunker's assertions. Of the January 13 exiles four only have returned. Ambassador Bunker says also that Torrijos has recently received back nearly 100 exiles. This is simply untrue. Let us look at the numbers. In one year 181 persons are known to have had their human rights violated in Panama's tiny population of 1.7 milhon — as opposed to heavily populated Chile, Brazil, or Argen- tina. Translating that number of the U.S. population is the equivalent of human rights violations of more than 21,000 citizens. Gentlemen, I think it is abundantly clear that Panama shows a consistent pattern of gross violations of internationally recognized human rights. I 326 These are the submissions for the appendix: 1. Article entitled "The Panamanian who died in Stockholm," Steven S. Rosenfield, from the Washington Post of September 9, 1977. 2. Leopoldo Aragon, biographical sketch. 3. Jerry L. Dodson, U.S. Consul in Panama, letter ofjresignation June 1969. 4. Miami Herald, August 20, 1969, "Military!' Aid Policy Suffers a New Bruise," and April 5 hearing before a subcommittee of the Com- mittee on Appropriations, part 3, 1977, pages 337, 338, 339, 340. 5. Statement of Jerome Shestack, president of International League for Human Rights. 6. Congressional presentation, fiscal year 1978. "Security Assistance Program Reports on Human Rights Practices." 7. Embassy of Panama, press release of December 1976.^ Mr. Chairman, I would ask you, if possible, Mr. Carliner, my attorney is here with me today, if he could add a few words to my testimony. STATEMENT OF DAVID CARLINER, ATTORNEY FOR ROSE MARIE ARAGON Mr. Carliner. Thank 3'ou, Mr. Chairman. My name is David Carliner. I am an attorney at law practicing in Washington, D.C. I am here for two reasons: one, I represented Mr. Aragon in an effort before the U.S. State Department to secure a nonimmigrant visa, a visitors visa for him to come to the United States. As you have learned, Mrs. Aragon is a citizen of the United States. Mrs. Aragon has twin daughters who are also citizens of the the United States and are now attending college. During the month of August, or a little earlier, Mr. Aragon applied before the U.S. Consul in Stockholm for a visa to come to this country to visit his family and also as a leading Panamanian journalist to be able to meet with colleagues with whom he had previously served in the United States and in order to engage in public discussion regarding the Panama Treaty. Mr. Aragon was refused a visa under section 212(A) (27) of the Immigi'ation and Naturalization Act which had a catchall phrase which provides that persons may not be given visas if their admission to the United States is contrary to the pubhc interest, security or welfare of the United States. As Mr. Aragon's attorney, I was m communication with the State Department to request a reconsideration of the decision and to ascer- tain if possible the grounds upon which Mr. Aragon was refused a visa. The Visa Office in the State Department, in accordance with its virtually universal practice, declined to give me or Mr. Aragon any statement of reasons and it reaffirmed as late as August 28 or 29 its decision to deny Mr. Aragon a visa. To my considerable surprise I read in the Washington Post of September 9 a column by Mr. Stephen Rosenfeld in which at that time after Mr. Aragon's death, the State Department is quoted as stating that Mr. Aragon was refused a visa because he had "Commu- nist links." 1 The material submitted by Rose Marie Aragon for the appendix Is retained In the committee files. 327 I am here to urge upon this committee that a report of this episode be requested of the State Department. It is singularly inappropriate to describe a person in pejorative terms after his death to a newspaper journalist in the context of a previous refusal to give the applicant himself any information regarding the grounds for the refusal and to say things about him which he is no longer able to refute. His life history shows he is not a Communist. He was expelled from Czechoslo- vakia. He was an esteemed journalist and he belonged to the Social Democratic Party in Panama. Significantly that party seems to be opposed to the Panamanian treaty. While the Panamanian Communist Party is in favor of the Treaty and supports the present government. We have no definitive evidence of the grounds upon which the State Department refused to give Mr. Aragon a visa; we surmise that the principal reason was that Mr. Aragon was a leading Panamanian journalist, an effective spokesman for his cause. The Panamanian treaty was at issue and to have one more opponent was not in the State Department's interests. As an attorney dealing in this subject matter for years, I am left to wonder why one individual with no apparent connection, or even secret, could be so powerful as to terrify this country while citizens of Soviet countries can come in by the hundreds through the United Nations or as representatives of their governments. From my own experience, I believe that when the State Department excludes people, it is done as much for political reasons as it is done for reasons which truly affect the national security of the United States. I am impelled to ask this committee to ask for a report on this episode because it appears to be contradictory of the policies of the administration and to the Helsinki Treaty in that the United States should be open to persons with whatever views. If persons are really spies, they can be placed under surveillance by appropriate agencies of the U.S. Government. Keeping people out of this country, I would suggest, is counterproductive. It doesn't prevent espionage; it serves more to give the impression the U.S. Government is curbing opposition views than it does to protect true interests of the United States. The second reason I appear before this committee is that, as an individual who has been associated with civil liberties and civil rights movements, I have been sympathetically aware of the pronouncements by the President and the State Department that human rights are a goal that this administration seeks to pursue in implementation of its foreign policy. Mr. Stedman, in his statement before this committee this morning states, If we are to be true to the best and most deeply held traditions and beliefs of our Nation, expressed in our Declaration of Independence and Constitution, then we must infuse our foreign policy with our convictions. I don't seek to express any views either for myself or as an attorney on behalf of Mrs. Aragon on the ratification of the Panamanian treaty, but I must say that the evidence which has been produced before the various committees of the Congress relating to the violations of human rights in Panama, has not been adequately reported to this committee by the State Department. 328 In Mr. Stedman's testimony, he seems to be looking for reasons to downplay the violations of human rights and the terror in Panama. The fact that the Commission on Inter-American Human Rights is to be allowed to visit Panama and the suggestion that the Panamanian Government, therefore, is an open Government and has nothing to hide is not sufficient. The Commission went to Chile but it did not decide that Chile was an open society. Allowing the Commission to go to Panama is commendable but it is early to anticipate its report. Nor is the fact that Amnesty Inter- national did not include any reference to Panama in its current report conclusive evidence of what is happening in Panama. Amnesty has indicated that their next report will contain evidence of violation of human rights in Panama. The evidence before this committee from witnesses appearing here and from materials appearing in the public press indicates that there are gross violations of human reghts in Panama and significantly that the violations have been accomplished through the actions of the National Guard of Panama which has been financed, supported, and kept in power in large part by the assistance of the U.S. Government. So I believe it is especially appropriate for this committee to look to the conduct, the operations, and policies of the State Department, of AID, and other agencies to make certain that none of our programs are being used to assist the violations of human rights in Panama as well as in other countries. Mr. Lagomarsino. Could I interrupt at this point? In Mrs. Aragon's statement and Mr. Carliner's statement which he just made, they both referred to asking the State Department to report to us on the circumstances surrounding the refusal to grant Mr. Aragon his visa. I think it is appropriate to do that and I ask the com- mittee to make such a request. Chairman Zablocki. We will make such a request and I will advise there is a representative of the State Department here. Mrs. Aragon, your testimony on page 4, where Father Mahon read Mr. Aragon's statement and he is quoted as having been beaten by the Panamanian police and the Americans watched passively, is there documentation of this incident? Does the State Department have documentation? Have any of the Americans involved been identified? For the record, I would ask that representatives of the State De- partment, I believe Mr. Cutter, if the Department has any information on these incidents, you will provide it for the record or you may com- ment now if you are prepared. STATEMENT OF CURTIS CUTTER, LEGISLATIVE OFFICER, CONGRESSIONAL RELATIONS, DEPARTMENT OF STATE Mr. Cutter. We do not have documentation on that particular incident with us here now, but if we have any, we will supply it for the record. [Material supplied by Department of State follows :J VisA; Case of Leopoldo Aragon Escalona — Department of State The Department originally determined Leopoldo Aragon Escalona to be ineligible for a visa under Section 212(a) (28) of the INAin January of 1978. The refusal was based on information contained in a confidential report. S29 A chronological listing of the Visa Office's actions in processing Aragon's case when he appUed for a visa during June 1977 at our Embassy in Stockholm follows below : July 12. — ^Visa Office, Department of State, received cable from our Embassy in Stockholm requesting us to complete a security name check and to render a security advisory opinion on Aragon's eligibility to receive a visa. July IS. — Visa Office requested name checks from the Washington intelligence community. July 14. — Visa Office informed Stockholm by cable that we could not complete the processing in time to permit Aragon to travel on schedule. July 15. — ^Visa Office sent cable to our Embassy in Panama requesting the post to verify Aragon's imprisonment from 1972 to 1973 and subsequent deporta- tion to Sweden. July 19. — Department was requested by FBI that Aragon be denied a visa under Sections 212(a) (27) and (29) of the INA. July 26. — Department informed our Embassies in Stockholm and Panama that FBI had requested Aragon be refused a visa under Sections 212(a) (27) and (29) of the INA. July 27. — Our Embassy in Panama reported the results of its name check on Aragon. August 3. — Department determined that it would not be in the public interest to seek a 212(d)(3)(A) waiver of visa inehgibility for Aragon. August 4- — Department informed Stockholm and Panama that Aragon was ineligible to receive a visa under Section 212(a) (28) and the Department would not recommend a 212(d)(3)(A) waiver of Aragon's visa ineligibility. We also instructed Stockholm to advise Aragon that he was ineligible under 212(a) (28). August 15. — After further review of Aragon's case, Department informed Stockholm and Panama that he was ineligible under Sections 212(a) (27) and (28) of the INA. August 25. — Mr. David Carliner, an immigration attorney, informed the Visa Office that Mr. Aragon was his client and asked for a status report on Mr. Aragon's case. August 26. — Department called Mr. Carliner back and informed him that Mr. Aragon's case was under active review. September 1. — Stockholm reported self-immolation attempt by Aragon and provided press guidance. September 2. — Department provided additional press guidance for our Embassy in Stockholm. September 6. — Stockholm cabled a wrap-up report on the tragic episode and described the efforts of the Embassy staff who attempted to assist Aragon after he had set himself on fire. The Canal Zone Police Involvement in the Capture and Beating of Leopoldo Aragon It should be noted that Mrs. Aragon's testimony is vague with respect to various dates when certain events allegedly occurred, and the descriptions of the events themselves lack specificity. Nevertheless, using her narration as a general point of departure, we have been able to ascertain that the National Guard apparently transferred Leopoldo Aragon across Canal Zone piers fcr trips to Coiba on two separate occasions. With respect to the first transfer, a search of the files of the Canal Zone Police disclosed that an incident involving the transfer of prisoners by the National Guard occurred in the Canal Zone on February 23, 1973. According to the report, a prisoner identified as "Aravan" jumped into the water in an attempt to escape while being transferred to a National Guard launch at Dock 17 in Balboa. The entry further indicates that two members of the National Guard entered the water and apprehended the prisoner uuder.Dock 16 and placed him aboard the launch without further incident. Two Canal Zone Police officers who were on duty on February 23, 1973, were located and interviewed. The first officer, who arrived at Dock 17 as the transfer of prisoners was taking place, recalled that at one point a commotion broke out and -that one of the National Guardsmen at the scene leaned over the edge of the Dock and fired his carbine into the water. The guard ceased firing when 330 he was onlorod to do so by the Canal Zone policeman. The policeman then observed two other National Guardsmen enter the water and retrieve a prisoner (appar- ently Mr. Aragon). After a l^rief struggle, the prisoner was handcuffed, placed aboard the launch and tied to the mast. The National Guard launch departed approximately two minutes later. The Canal Zone policeman stated that in his opinion no more force than necessary was used to subdue the prisoner. The second officer interviewed was sent to Dock 17 in response to a report that one of the prisoners had attempted to escape. He recalled that the prisoner in question had l>een apprehended and was on the launch when he arrived at Dock 17. The officer stated he did not see the prisoner being mistreated, but learned from his folk.w officers at the scene that the prisoner had been struck once or twice by the National Guard while being put on the launch, l)ut, again, that no excessive force had been used. This officer added that he himself observed the prisoner from al^out ten feet awaj^ and saw no visible signs of mistreatment. Both officers indicated that, to the best of their knowledge, the prisoner never requested Canal Zone Police intervention nor did he try to reach the Canal Zone Police at the scene while attempting to escape. The second transfer occurred on September 15, 1973. After about two-thirds of the prisoners had departed the buses which had brought them to Dock 17 and had boarded the National Guard launch, the two Canal Zone policemen present went down onto Dock 17 and, while standing there, noted a bearded white male standing in the center of the launch. He was the only prisoner that was handcuffed. The prisoner called to one of the Canal Zone policemen and said in perfect English, "I want political asylum. I am a political prisoner, not a common crim- inal." The poHceman ignored the prisoner for several minutes, but finally asked him his name. He replied, "My name is Leopcldo Aragon. I'm a Panamanian and a graduate cf Stanford University in San Francisco, California, and I'm a doctor of law." He also stated, "The American Embassy would like to know of my plight. They are involved in this and would like to know of my arrest." He further stated, "You can arrest me as your prisoner because I have committed a misde- meanor. I have a book in my possession from the Canal Zone Library, and I admit that I stole it." The policeman informed Mr. Aragon that he could not help him, as he was a prisoner of the Panamanian government and was in the custody of the Panamanian authorities. At this time, the launch began departing the Dock, and Mr. Aragon began cursing the Canal Zone policemen, calling them Com- munist gringos, stupid s , etc. Mr. Aragon was handcuffed behind his back and just prior to the launch's depaiture, a National Guardsman who appeared to be guarding only Mr. Aragon removed the right handcuff and attached it to an object aboard the launch. Chairman Zablocki. On page 6, Mrs. Aragon also mentions documentation provided to the State Department and Senator Allen. The committee wovdd appreciate it if that information were made available to the committee as a part of the record at this point, without objection. Mr. Cutter. We also have some documentation on the case of Mr. David Mendelson, which is mentioned. I can supply for the record a copy of a letter we sent to Senator Allen in response to a query from him which sets forth our views, what our investigations have produced on that case and some attachments in addition to a response from Senator Allen. [.The information to be furnished follows:] DOCUMENTATIOX OX THE CaSE OF Mb. DAVID MENDELSON Department of State, Washington, D.C., June 24, 1977, Hon. James B. Allen, U.S. Senate. Dear Senator Allen: I would like to amplifj- on my previous letter to j'ou about the case of Mr. David Mendelson. Since learning about the complaint of Mr. Mendelson, the Department of State has tried to obtain additional facts and information and to render Mr. Mendelson 331 all appropriate assistance. It has requested and obtained from the Panamanian National Guard (the combined police and arm,v in Panama) reports of the in- cident (Enclosures 1 and 2). The United States Consul in Panama has also talked to Mr. MendeLsou's wife, Omaira Judith ("Mayin") Correa de Mendelson, and submitted a report (Enclosure 3). When Mr. Mendelson first contacted the Department soon after his arrival in Miami on April 4, we strongly recommended that he prepare a sworn statement and send it to us and that he immediately consult a physician who could confirm his allegations of physical mistreatment by the National Guard. On April 5, Mr. Mendelson completed his statement and had it notarized (Enclosure 4). In it, Mr. Mendelson claims that on April 3 he was moving his j)ossessions from the apartment he shared with his wife to another apartment where he was going to live during their separation. At the time of his apprehen- sion, he was seated on the tailgate of the moving van at his new apartment. While in the National Guard's custody he alleges he was punched with fists, hit with a rubber hose, denied access to lavatory facilities, denied food and water, denied permission to take medication prescribed by a physician for a previously existing condition, denied permission to call the United States Embassy or a friend, and threatened. At 3:30 a.m. on the following morning, after ten hours of detention, he was put on a Braniff Airlines flight for Miami. Mr. Mendelson's version of the incident is contradicted by some official reports and records of the Panamanian authorities. The reports of the detaining officer flated April 3, 1977, states that the police intervened at the request of Mrs. Mendelson for assistance because Mr. Mendelson was destroying property inside and outside the apartment and allegedly was striking his wife and her son and Ijrandishing a small firearm. According to the police report, it was Mrs, Mendelson who requested that he not be sent to jail but, instead, be sent to the United States because of a psychiatric condition for which reason he would not be able to withstand the stresses of incarceration. The report states that Mr. Mendelson concurred with this arrangement and purchased his own ticket to Miami with a check given to him by his wife. This account was confirmed by the policeman's commander Lieutenant Colonel Manuel A. Noriega, in a report to the United States Consul. We have also learned that the National Guard would have charged Mr. Mendelson with illegal possession of a firearm, assault with a deadly weapon and battery, breaking and entering and possession of marijuana. Mrs. Mendelson told the United States Consul that as a result of a domestic argument, they had decided to separate. He agreed to vacate their apartment by Tuesday, April 5. In the meantime, Mrs. Mendelson stayed with a friend. On Sunday, April 3, her son returned to her and her husband's apartment and found Mr. Mendelson emptying the apartment of all its furnishings. She also claims that Mr. Mendelson struck her son. As a result, she called the National Guard and had her husband detained. Because she feared that her husband could not hold up to the pressures of incarceration, she prevailed on the National Guard to send Mr. Mendelson to the United States. As we compared and analyzed the three versions of the events, we realized that they contained strongly conflicting accounts of the same incident. The Department is not, at this time, in a position to verify either Mr. Mendelson's version of the incident, the statement of his wife, or the statements of the Pan- amanian authorities. It was apparent, however, that the cause of the incident was the domestic dif- ferences between the Mendelsons. Mr. Mendelson told a Department desk officer that "99%" of his troubles were his "wife's hatred" for him. The National Guard detained Mr. Mendelson at his wife's request. His wife paid for his flight to the United States; she prevailed on the National Guard to send him back to the United States; and, according to Mr. Mendelson, she is in possession of most, if not all, of his personal property. The Department also found that the National Guard apparently did not ob- serve certain procedures in Mr. Mendelson's case. During his detention, the Panamanian government had an obhgation under the provisions of the Vienna Convention on Consular Relations to inform the United States Embassy in Panama that he was being held. We have no record of any such notification being made. The Department of State did not learn of Mr. Mendelson's plight until he arrived in the United States. In the absence of any mitigating circumstances, the Department would take a serious view of this aspect of the case which denied 332 Mr. Mendelson protection under the Vienna Convention. We requested an ex- planation from the Panamanians. We have not yet taken any further action on this particular matter in order not to jeopardize our Consul's efforts with Mrs. Mendelson and the National Guard to have Mr. Mendelson's property sent to Jhim. Mr. Mendelson claimed that he was physically mistreated by the Panamanian National Guard. From the first the Department strongly recommended that Mr. Mendelson see a physician and even tried unsuccessfully to arrange an appoint- ment for him. However, Mr. Mendelson was reluctant to see a doctor. He told a Department desk officer on both Monday and Tuesday, April 4 and 5, that he had no bruises or other marks on his body. On Tuesday, he told the desk officer that he had had a good night's sleep and felt "pretty good." However, on Wednes- day, April 6, he claimed to feel some pain and went to the Veterans Hospital for an examination. On April 7, he was admitted to the Veterans Hospital for tests for a possible kidney contusion and psychiatric consultation. He was released on April 12. The Department requested a copy of the medical records of his hos- pitalization and his permission to consult with the doctors who treated him. He sent us the records and his permission to consult. Physicians in the Department of State examined the records and consulted with his doctors in Miami. They found no evidence that Mr. Mendelson had suffered a kidney contusion or any other injury during his detention by the National Guard. Mr. Mendelson has requested the State Department to perform certain actions for him. To the extent that it has been able, the Department has complied. Mr. Mendelson asked the Department to arrange for the removal of his personal property from Panama. We contacted Mrs. Mendelson, who states that she had sent some items, mainly clothing, to Mr. Mendelson's parent's home in MobUe, Alabama, by air freight. Mr. Mendelson also prepared a list of his possessions (Enclosure 5) with a total value of $43,370. Included on the list were a car valued at $4,000 which Mr. Mendelson had asked his wife to liquidate for $3,500 in a separate letter, and a bank account in his wife's name for approximately $3,000. Mrs. Mendelson, on the other hand, claimed that her husband owed her sums of money and that she would deduct what he owed her from whatever amount she sent him. Even though a property settlement would olDviously be a disputed matter, the Department is doing everything it can to see that JMr. Mendelson's property is returned to him. We have also suggested to Mr. Mendelson that he hire an attorney or find a friend to act as an intermediary between him and his wife to the extent permitted by Panamanian law. We understand that Mr. Men- delson did contact a mutual friend of his and his wife. Mr. Mendelson has also asked the Department to consider espousing and inter- posing his claim for maltreatment against the Panamanian government. The burden is upon him to present to the Department a clear legal case supported by convincing evidence. He must show that he has exhausted the administrative and legal remedies available in Panama in seeking redress, and that he has sustained a denial of justice as that term is normally understood in international law. At this time, the available record does not contain sufficient information and e\ddence of any probative value to enable the Department to pass judgment on the merits of Mr. Mendelson's case. To facilitate Mr. Mendelson's legal actions, the Department sent him a list of attorneys in Panama. He has written to seven attorneys asking if they "would please represent me in a suit against the Republic of Panama." Mr. Mendelson has also made several other inquiries for legal information, which the Department has answered to the extent that it can. However, many of his questions should be discussed with an attorney. The remainder of the issues involved are part of the private dispute between Mr. and Mrs. Mendelson and as such must be settled by them. The Department of State has quite properly not involved itself in their personal aflfairs. If you have further questions, please contact Mr. David G. Wagner in our Inter-American Affairs Bureau, on 632-2060. Sincerely, Douglas J. Bennet, Jr., Assistant Secretary for Congressional Relations. Enclosures; 333 (Enclosure 1) National Guard's Report Department of State, Division of Language Services, Panama, April 8, 1977. No. 810-G2-77 Mr. Blaine C. Tueller, U .S. Consul General, Panama, Republic of Panama. Republic of Panama — Military Intelligence, G-2 GUARDIA NACIONAL Dear Sir: As you requested I herewith transmit the report made by the units of the Pohce Division of the Guardia Nacional, Patrol Section, which investigated the case of Airs. Mayin Correa Mendelson involving differences with her husband and request of protection for her physical safety. The particulars are as follows: 1. Mrs. Mayin Correa requested Guardia Nacional protection because she was being threatened by her husband, United States citizen David Dale Mendelson, 2. The Patrol Section of the Police Division, led by Lieutenant Ricardo Corcho investigated the case. 3. United States citizen David Dale Mendelson, who had destroyed the apart- ment and was holding their minor son at the point of a Browning .25 caliber pistol, was disarmed. 4. At his wife's request, he was not jailed or brought to court, and it was Mendel son's own decision to use his wife's money to buy a ticket to Miami. 5. Mendelson's wife said that he was under psychiatric treatment and had been previously reported for drug addiction. A search uncovered marijuana cigarettes which the attending police officers reported as belonging to Mendelson. The foregoing information was set forth in the report submitted by Lieutenant Ricardo Corcho of the Police Division of the Guardia Nacional. Sincerely, Lt. Col. Manuel A. Noriega, G~2, Guardia Nacional Headquarters. Enclosure 2 (Policeman's Report) Department of State, Division of Language Services, Panama, April 3, 1977. LS No. 61720-6 To: Lt. Col, Manuel A. Noriega, Departmental Chief. Subject: Case report. Sir: Today at 6:40 p.m. a call was received on line 104, the patrol extension, from a woman who identified herself as journalist Mayin Correa and requested that a unit be sent to her residence since her husband was destroying everything in the home and had struck her and their son like a madman. She asked me to handle this request for assistance and I went to her home immediately. Upon arriving at the scene of the incident, I could see that someone was destroying everything inside and outside the residence. I saw a boy about 17 years of age whose face bore signs of physical abuse. A hammer and a screwdriver were in the home. Living room furniture and other things were damaged, A man, who appeared to be a foreigner, was brandishing a small firearm, I warned him to hand over the firearm after I had sufficiently convinced him and calmed him down. In my opinion, he reacted in a normal manner, I took the firearm, which t rned out to be a Browning 25 caliber pistol, and one box of 50 of the same caliber cartrid es. When I detained the subject and saw the excited and nervous look on his face, his expression seemed strange and, thinking that he might have another weapon. 334 I ordered a search of his car where various marijuana cigarettes were found (verified by laboratory test). The car l)elonged to United States citizen David ]^ale Mendelson, the husband of the woman making the complaint. Mr. Mendelson should have been brought to Headquarters to answer to charges of illegal posses- sion of drugs. However, his wife requested that he not l^e put in jail since he was under psychiatric treatment with Dr. Herndn Higuero and Dr. Bdez. Mrs. Correa, Mendelson's wife, requested that he not be jailed and instead .sent to his country of origin, since sending him to jail would aggravate his psychi- atric condition. Mendelson concurred with this. After a report was made to the Departmental Chief, Mendelson was permitted to leave the country with money in the form of a check given him by his wife, with which he purchased a Braniff ticket to Miami. He left Panama without difficulty. I afterward completed my duty without further incident. Lt. RiCHARDO CORCHO, Police Division. Enclosure 3 MRS. mendelson's VERSION OF THE EVENTS OF APRIL 3, 1977 On April 5, the United States Consul in Panama had a lengthy talk with Mrs. Omaira Judith ("Mayin") Correa de Mendelson. She told him that she and her husband had been having marital problems since shortly after their marriage three years ago. Both of them had been seeing doctors and marriage counselors for more than two years. About two weeks before Mr. Mendelson's detention, their troubles had come to a head after he had been particularly violent and upset. Mrs. Mendelson engaged a lawyer to work out a separation agreement, and Mr. Mendelson was to move to a separate apartment on April .5. On Sunday, April 3, her son found Mr. Mendelson with a moving van at their apartment in the process of removing the entire contents of the apartment, which was not part of the agreement. She states that Mr. Mendelson struck her son ; so she called the National Guard who arrested him. According to Mrs. Mendelson, the National Guard officer found that Mr. Mendelson had a pistol in his possession for which he had no permit. Con- sequently, the National Guard was ready to arrest him on charges of illegal possession of a weapon and theft of household goods. However, Mrs. Mendelson did not want to press charges because she knew that in his emotional condition he could not endure the rigors of local jail. Therefore she made arrangements with the Guard officer to have him sent to the United States on the first available flight. The Consular Officer questioned Mrs. Mendelson about her husband's treat- ment by the National Guard. She stated that she did not see him from the time he was detained until he left on the BranifF flight at 4:30 a.m. on April 4 for Miami. She did call the Guard who were holding him at Tocumen Airport and inquired agout his condition. She was told he was all right, but she declined the Guard's invitation to speak to him. Enclosure 4 MR. mendelson's STATEMENT My name is David Mendelson, American citizen, born in Mt. Pleasant, Tex., July 15, 1940. I have lived the last 6 to 7 years in and about Latin and South America. I have lived the last 2 j'ears and 11 months in Panama City, Republic of Panama. I am married to a Panamanian citizen whose name is Omaria Judith Correa who is commonly called Mayin Correa. We, mj'- wife and I, have been having matrimonial difficulties for about 2 j^ears. I have no political connections nor have I had any political connections in or about Latin or South America. This past Friday, April 1, 1977, my wife called a Dr. Adolgenis Arosemena to come to our house to properly discuss separation of properties that she and I had accumu- lated before and during our marriage. A list of properties was made and agreed upon by my wife and I. It was also agreed upon that I should stay in the house until Tuesday, April 5, at which time Dr. Arosemena would supervise the mov- ing of my furniture and personal belongings from where we were living to my own apartment. The address where we were living is called El Congrejo Calle F Edificio La Fuente, apt. No. 1. I was moving to the following address El Congrejo Calle J, apt. No. 13 to which a contract had been signed by myself and Mr. Abadi, owner 335 of the l^uilding. Friday night, April 1, my wife stayed with her relatives in Panama Citj' and I stayed at our residence in Edificio La Fuente. Saturday, April 2, I spent the day buj-ing appliances such as refrigerator, stove, washing machine, dryer for the apartment at Calle J, apt. No. 13. I spent the night in the residence at Calle F Edificio La Fuenta. Sunday morning, April 3, I left my residence to make further purchases for my new apartment. When I returned around 2 p.m. on April 3, I found that my keys did not fit the door of the building and I realized that my wife had stolen my house keys or harl the door lock changed. On the outside of the door of the building there was a note saying that my personal belongings were in the basement. I Vv'cnt to the basement and had the groundskeeper op>en the door and I saw that mj' wife had moved all of my personal clothing possessions to the basement. I then had the groundskeeper open the door of the building for me with his key and paid him $5 to move all my personal clothing possession back into the apartment. I then proceeded to the apartment, opened the iron door of our apartment to which I found I had the key still on my keychain. After opening the door I found that she had turned the automatic alarm system on and when I looked for my kej' to turn off the alarm I found it was missing from my keychain. I then proceeded to try to open the wooden door "principal door" of the house to which I found none of the keys on my keychain to fit the lock. I forced the door open with my shoulder and the alarm system was turned on; I then ran to the kitchen and turned it off. The groundskeeper then moved all my personal be- longings back into the apartment during which time I tried to locate my wife by telephone by calling all of her relatives in Panama City, none of which could give me an answer to her whereabouts or had seen her. I then tried to call the attorney. Dr. Arosemena, the same as mentioned, but there was no answer on the telephone, I then decided to call a moving van company and move out the same day or 2 days earlier than agreed upon. The moving van company arrived and I mov^ed only the possessions that were agreed upon by my wife, Dr. Arosemena and myself; that is to say moving these possessions to my new address on Calle J, apt. No. 13. The moving v^an company arrived about 2:30 p.m. or 2:45 p.m. I directed them to move only certain items that were on the list that were previously mentioned. We then drove to ni}- new residence on Calle J, apt. No. 13 and proceeded to unload. While the moving companj^ was unloading I was sitting in the back of the truck and a police van and several civilian automobiles drove up and ev^ery- one jumped out of the cars and police van at one time. Immediately they asked the moving van chief where these possessions were coming from, he told them they were coming from Calle F Edificio La Fuente. As soon as this information was made known I was immediately apprehended forcibly by three civilians who showed me no identification or said to me whom they were, what they were doing, or anything. I was then physically, roughly searched, all my possessions were taken from me — my money, credit cards and kej's: Then I was forcibly pushed into a station wagon with my arms twisted behind my back. When I asked what was happening I was struck in the face by a rubber hose and punched in the shoulders several times by their fists then one of the men told me if I don't like it I could keep on talking so I kept my mouth shut and said no more for the time being. Five men entered the station wagon with me, drove me to the old address where I previously moved from J, Edificio La Fuenete where they also directed the moving van to return; I then saw my wife for the first time. I tried to ask her what was going on and she said don't worry you are getting what you deserve. I was detained at the old address for approximately 1 hour being pushed around whenever the men felt like and calling me violent names in front of everyone there. They then drove me in the same car with hand cuff's behind my back to the G-2 headquarters where we stayed for about 10 minutes. Then without leaving the car they took the hand cuffs off and put on thumb cuffs which were verv' tightly fitted and drove me to Toqumen "Tocumen" Airport where they took me to the investigation department inside the airport and they took off the thumb cuffs. The personnel who had driven me to the air- port had roughened me up, beat me on my arms and legs with rubber hoses then left. As soon as they left I asked to make a telephone call which was denied. I asked for a drink of water which was denied. I asked to go to the men's room and that also was denied. I was cursed at and flpoken to very violently that if I dared moved they would beat the hell out of me. Then, approximately 2 hours later a man who I did not recognize, took me from the investigation department in the airport to a military installation on 98-991—77 23 336 foot surrounded by 8-10 ft. hurricane fence with strands of barb wire at the top of the fence. We were permitted to enter by a guard who carried a rifle. I was then taken to a room where there were several other people in civihan clothes sitting in chairs against the wall. In the same room there were three armed military officials. I don't know their ranks or grades but I asked one of the civil- ians who was in charge and he pointed out one man. I raised my arm to ask permission to ask a question. The man said "what do you want," I said "I would like to call the American Embassy or make a telephone call to my friend in Panama City" he said "no calls are permitted." By the way, various times during the course of the evening I had consistently asked to make a telephone call and on all occasions I was struck with a rubber hose and told no telephone calls were permitted nor was anyone permitted to speak with me. I was not allowed to have any water nor was I allowed to go the the rest room. I tried to explain to the man in charge that I was on medication and that they had taken my medication away from me and would they please return it but this was declined. I was left waiting in this chair unmolested until approximately 3:30 a.m. April 4, when I was then escorted through the immi- gration in the airport to the Braniff Terminal. At this time again I asked if I could make a telephone call and they said I was not allowed a telephone call nor was anyone permitted to speak to me. I asked if my baggage was going to be on the airplane with my personal clothing belongings yes. I then asked how many baggages they were giving me and they answered four. I then asked for the bag- gage claim checks they told me that the captain of the airplane had the claim checks in his possession. I waited outside of the airplane under guard when I saw the captain of the air- plane approaching I went to him and asked him if he had any baggage claim checks, He said of course not why should I have your claim checks. I was then escorted aboard the airplane; my passport was then given to the main steward of Braniff who was told to give my passport to the Braniff agent in charge at Miami International Airport. Upon arriving in Miami I immediately contacted a friend of mine who allowed me to stay at his apartment and allowed me to use his telephone. I looked in the Miami directory looking for information of how to contact the State Department and I contacted Mr. Hugh Culverhouse who in turn told me to contact the Panamanian Affairs Office whom I called and spoke with Mr. John Becker. All of the abovementioned was taken place on April 4. I then went to the Chase Manhattan International Bank to try to retrieve my funds from the bank in Panama. They gave me directions on Tuesday, April 5. A David Wagner from the Panamanian Affairs Office called me and asked to make this report and to go and have a doctors examination and told me that the Federal Investigation Bureau would be in contact with me. On this 5th day of April 1977 before me appeared David Mendelson a citizen of the United States, who swears that all of the above statements are true. I Marvin Steele do hereby swear that the signature appearing below is that of David Mendelson as it appears in his American passport Z1766017. David Mendelson. Marvin Steele. April 5, 1977. Enclosure 5 MR. MENDELSON's LIST OF POSESSSIONS 1 1975 Silver Grey 4 Door 5 shift Fiat 131 excellent condition $4, 000 1 19" Zenith Col6r TV 400 1 Morantz Amplifier w/2 speakers 800 1 Morantz Turntable, 25 records 2 Refrigerators 250 1 4 Burner Gas Stove 100 1 Vacuum Cleaner 50 1 White Bar open both sides w/4 doors & locks stocked 200 1 Standup Bar (brown) 50 1 Coffee Pot 10 2 Tables 1 meter XI meter white w/glass tops 250 2 Tables 5-2 meter X)^ meter white w/glass tops 150 3 Rugs, 1 red & orange 2 meters X 1 meter 300 2 Rugs, Equadorian 2 meters X 2 meters ■.- 500 2 A/C Units, one 9000 BTU one 11,000 BTU 300 1 White King Size Bed w/Head Board, Box Springs & Mattress 500 ^7 2 Night Tables matching above bed 100 1 Men's Valet white 25 1 Credenza walnut w/4 doors 150 1 Set Dishes (12 place setting) 300 1 Chrome overhead lamp 12 bulbs 150 1 Chrome Swing Lamp 12 Bulbs 150 1 Chrome Standing Spiral Lamp 8-9 bulbs , 150 1 Large Sofa 2 meters XI meter feather filled covered in wool 1, 500 4 Largo Matching Chairs 1, 000 4 Large Cushions filled w/feathers 400 1 Dining Table Octagon w/6 arm chairs 500 Jewelry: 1 Ladies Emerald Ring w/Diamonds 6, 000 1 Ladies Emerald Ring 6-8 stones uncut in rough 6, 000 1 Diamond Ring Yellow Gold old fashion style 1, 500 1 Emerald 1 ct. & 1 diamond 1 ct 1, 500 1 Emerald single stone 2.5 cts 1, 200 1 Emerald & Diamond Bracelet 1, 500 1 Set Emerald Earings 200 Business: 1 Executive Desk in wood 300 1 Executive Swivel Chair black leather 150 1 Pile Cabinet 4 drawer legal size 135 1 Safe 3'X2'X2' color grey 250 1 IBM Selectric Electric Typewriter 700 Various personal items, pictures, puzzles, etc 300 Washing Machine & Dryer 400 Total 32, 670 Bank Account in the name of Omaira C. De Mendelson with Chase-Manhattan 120 Via Espania with a balance of approximately $3,000.00. Bank Account in the name of DiDi Em. S. A., same bank as above with a balance of about $900.00. Banco Nacional, Bonds, $5,000.00. Banks 8,900 Personal items, furniture, all listed page 1 32, 670 Loan: Dora Afre: Owes 1800.00 plus Interest 1, 800 Grand total 43, 370 Senator James B. Allen's Letter to the Department of State U.S. Senate, Committee on the Judiciary, Washington, D.C., July 14, 1977. Mr. Douglas J. Bennet, Jr., Assistant Secretary for Congressional Relations, Department of State, Washington, D.C. Dear Mr. Bennet: Thank you very much for your letter of June 24, 1977, in which you report in some detail on the case of Mr. David Mendelson, formerly a resident of the Republic of Panama. I found the report you rendered on the Mendelson matter quite thorough, and I appreciate very much the obvious extra effort that you and others at the Depart- ment of State have given in seeking to investigate and establish the facts. I com- mend you for this particularly fine work, and I thank you for your willing co- operation in helping me to advise my constituent. With kindest regards, I am Very truly yours, James B. Allen. Chairman Zablocki. Dr. Robles. 338 STATEMENT OE WINSTON ROBLES, ASSISTANT PROFESSOR OF POLITIGAL SCIENCE, FLORIDA INTERNATIONAL UNIVERSITY, AND DIRECTOR OF THE PANAMANIAN COMMITTEE FOR HUMAN RIGHTS Mr. RoBLES. Thank you, Mr. Chairman, for the opportunity to express the opinions here that I am not allowed to express in my own country. I am a citizen of Panama and was forcibly exiled from my country. In 1968, through a military coup, for the first time in their history, Panamanians found themselves under the brutal rule of one of the most corrupt and arbitrary dictatorships of Latin America. Since then, prison, torture, expatriation, and murder have become the common procedure used by the Government to deal with dissi- dent opinion. Following the coup, the University of Panama was closed for 1 year. All political parties were banned. Newspapers and radio stations were seized and all the independent media controlled. Many Pan- amanians were tortured, incarcerated, murdered, or simply disap- peared, many were forcibly expatriated. Today Panamanians live in constant fear, telephones are tapped, mail intercepted, houses searched in the dark of night, people arbi- trarily arrested, and the population intimidated by an organization of paid informers. Arrests are made on the grounds of "insults to the General" or "disrespect of the authorities" because of private conversations in which there was criticism of the Government or its officers. From time to time the Government-controlled press publishes special Government telephone numbers to which "citizens should call to denounce counterrevolutionary practices." The Government, using every imaginable resource — intimidation, blackmail, bribery — to name a few — maintains strict control over labor unions, professional associations, farmers organizations, and other organized groups. The very few organizations that at one time or another have ex- pressed criticism of Government policies or practices have been subjected to harassment, threats, and reprisals. The instinct for self- preservation forces conformity. The Government, its ofl&cers and its friends are involved in all kinds of legal and illegal businesses. The involvement of high-ranking officers in drug trafl&c is well known. Before the coup, Panama maintained for many years the highest sustained rate of economic growth in Latin America and one of the highest in the world. Today, the military are the social, political, and economic aristocracy of a country in bankruptcy. There was a negative, 1 -percent growth in 1976, and unemployment was the highest in the history of the country. All governments that come to power by force try to give legitimacy to their origins and legality to their malpractices. In 1972 the Torrijos dictatorship called elections for a "constitutional assembly." With all political parties and activities proscribed, except the Government 339 party "Movimiento Niievo Panama" and the "Partido Del Pueblo" — Moscow oriented Communist party — and absolute control of news- papers, television and radio stations, it was not surprising that the Government won 504 of the 505 carefully screened "representatives." This selected, rather than elected, assembly held its first meeting October 1, 1972. A week later the "new constitution" was approved without discussion and the "constitutional assembly, even to the sur- prise of its members, found itself transformed into a "Legislative Assembly" — but one without power to legislate. The new constitution subordinates the legislative, executive and judicial power to the national guard. It eliminates the separation of ])owers and places the legislative power in a "legislative council" composed of the Cabinet Ministers and any number of members ap- pointed by Torrijos. It also states that Torrijos is the "Maximum Leader." His constitutional powers are illustrated by a literal transla- tion of article 277 : General Omar Torrijos Herrera, Commander-in-Chief of the National Guard is hereby recognized as the Maximum Leader of the Panamanian Revolution. As a consequence and to guarantee the fullfiUment of the objectives of the revolu- tionary process, General Torrijos is hereby granted, for a term of six years, the following powers: To coordinate all the work of the Pubhc Administration; appoint and remove freely all Cabinet Ministers, member of the Legislative Com- mission, the Comptroller General, and the Sub-Comptroller General of the Republic, the general Directors of all Autonomous and Semi-Autonomous Insti- tutions and the Magistrates of the Electoral Court to be named by the Executive Branch according to this Constitution and the law; to appoint the Commanders and officers of the Armed Forces, according to this Constitution, the law, and the military hierarchy; to appoint, with the approval of the Cabinet, all the Justices of the Supreme Court, the Attorney General, Attorney of the Administration and their respective alternates; to approve government contracts, negotiation of Government loans and conduct the foreign relations. General Omar Torrijos will have, in addition power to participate with the right to be heard and to vote in all the meetings of the Cabinet, the Legislative Commission, the National Assembly of Representatives, the Provincial Councils of Coordination, and the Communal Committees. The new constitution subordinates everything to Torrijos as the "Maximum Leader," and subjecting all powers to him except for those exercised by people he may, at will, appoint and remove. Despite the dictatorial nature of the constitution, it gi'ants the individual greater human and civil rights than even the United Na- tions Human Eights Declaration and the American Convention on Human Hights. However, the unlimited powers of the dictator effec- tively denies these rights in practice. This concentration of dictatorial powers, without parallel in the constitutions of any other Latin American country, do not give, how- ever, a complete idea of the real power that the dictator and the national guard exercise. Despite the dictatorial nature of the 1972 constitution, the indi- vidual and civil rights are broader than even the United Nations Human Rights Declaration and the American Convention on Human Rights. However, the constitution does not limit the powers of the dictatorship and the freedoms and rights recognized in theory, are constantly denied in daily practices. 340 Thus, the constitution exists only for "cosmetic" reasons and does not impose in practice any limits to the use and abuse of the govern- mental powers. For example, the 'article 29 of the constitution pro- hibits expatriation, but several hundred Panamanians live in exile and are not allowed to return to their country. In 1969 the Government promulgated the Cabinet decrees 341, 342, and 343. Under these decrees, the exercise of the rights of peaceful assembly is a crime against the state, dissident opinions are subversive and all political activities are counterrevolutionary. Decree 341, "guarantees the right of peaceful assembly, but pro- hibits public meetings in the cities of Panama and Colon, where more than half of the Panamanians live." Decree 342 authorizes administrative authorities to impose up to 15 years of prison terms without the right to a hearing, without due process of law, without defense, without appeal, and without inter- vention of the courts. The decree is so vaguely written that it could be and has been applied to punish all kinds of activities "against the security of the state," including such "criminal" acts as written or verbal criticism against the Government. A recent case illustrates the procedures under decree 342: On November 1976 a bomb exploded in a car driven by Jorge Rodriguez, a well-known opponent of the Government. Rodriguez was slightly injured and his wife was badly hurt. The third passenger, Dolores Montoto, was unharmed. The G-2 men arrested the three persons, but due to the delicate condition of Gilma Rodriguez, she was hos- pitalized. Four weeks later the controlled press published an admin- istrative resolution condemning to prison Rodriguez, his wife — at that time still in critical condition in the hospital — and Dolores Montoto to 15, 7, and 5 years respectively. None of them had legal counsel and they never had an opportunity to answer the charges against them. Since then, nobody knows where Mr. Rodriguez is imprisoned. On January 1977 the Panamanian Committee for Human Rights sent a letter to Amnesty International requesting their inter- vention in this case. Decree 343 is used to control newspapers, radio, and television by imposing a rigid self-censorship seldom violated. On January 1974 the Govermiient prohibited the publication of the newspaper Quibo — -What's Happening — even before the first edition came out, confiscating the equipment and arresting the editors. The same thing happened in March 1975 when the Government pro- hibited the pubhcation of La Opinion Publica — The Pubhc Opinion. The same decree was used in 1976 to close "Radio Impacto," a radio station that expressed independent opinions. The equipment of the station was confiscated and its owner, forcibly expatriated. According to the decree, all radio and television stations are forced to tape their programs and deliver them to the Ministry of Govern- ment and Justice. Obviously the decrees contradict the constitution and violate the United Nations Declaration on Human Rights, but, nevertheless, they are systematically enforced by the dictatorship. As far as we know, no other Latin American dictatorships have a legislation more repressive and which violates all internationally recognized standards on human rights. Human rights violations are documented in volume I and II published by the Panamanian 341 Committee for Human Rights, and in the testimony presented March 30 of this year before the Foreign Operations and Related Agen- cies Subcommittee of the Committee on Appropriations of the House of Representatives. I would like to knov/ if there is something more consistent than a law, than legislation that violates human rights. Since 1968 Panama is listed by the Inter- American Press Association as a country in which, "freedom of the press does not exist." Amnesty International has made reports on human rights violations during the early years of the regime. Freedom House lists Panama in 1976 as a, "not free country." By contrast, Brazil is hsted as a "partially free" country. Yet, the U.S. State Department, with an unbehevable lack of in- formation or selective standards of ethics that give little honor to the moral commitments of President Carter's administration, has denied that human rights in Panama are an area of concern, and the Inter- national League for Human Rights has criticized the State Depart- ment reports. In Panama the rule of law does not exist. Since the inception of the dictatorship, judiciary members can be removed freely and no justice or judge has dared to resolve a case against the military wishes. The dictatorship often violates its owti laws. On several occasions the then Minister of Government and Justice, Matemo Vasquez, declared to the press that, "the interest of the State is above the law." This man is now Chief Justice of Panama's Supreme Court and recently signed on behalf of Panama, "The American Con- vention of Human Rights." Frequently the courts' decisions as well as the orders of civil au- thorities are ignored by the military. The writ of "habeas corpus" is useless in political cases and severely limited in cases of common arbitrary detentions, because the courts do not have the authority to enforce their decisions. In all cases, a national guard officer exercises an overriding decision on the decisions of the courts. On the other hand, the members of the national guard are personally above the rule of law and the citizens do not dare to initiate criminal or civil procedures against them. Since 1968 hundreds of Panamanians have been murdered and not even one case of political assassination has been successful!}' solved. In many cases the national guard refuses to deliver the body to the family or to allow the identification of the victims. National guard members have earned the reputation of, "shoot first and ask questions later." The securit}^ of the person does not exist. People are arrested without formalities of any kind. Often people are detained and the national guard refuses to acknowledge their detention. Under these conditions the courts cannot offer effective remedy against the frequent abuses of the authorities. Political freedom can be defined as the right to participate in, modif}^, or change a government. None of those possibilities are within the reach of the Panamanian people. The only elected representatives are the members of the As- sembly cf District Representatives, a powerless body without an}^ significant role in the Government. 342 Although the right to organize poHtical parties is recognized in the constitution, the poUtical parties were extinguished by decree in 1968 and, since then, the dictatorship systematically has denied the right to carry on political activities of any kind. The only exception to this rule is the, 'Tartido del Pueblo" — People's Party — a Communist Moscow-oriented party which has complete freedom since 1969, when the party decided to support the dictatorship. In 1970 the government tried to organize a one-party political system the, "Movimiento Nuevo Panama." After 2 years of great effort and propaganda, using all the resources of the government, public opinion would not accept it. The whole idea was abandoned after one use. Thus, today the onl};^ officially allowed party is that of the Moscow/Castro Communists. The most prominent Panamanian politician. Dr. Amulfo Arias, who was overthrown 11 days after his inauguration as President, elected by the overwhelming majority of votes, lives in exile and is not allowed to return to Panama. Hundreds of other Panamanians also live in exile because of their political beliefs. Your committee has called these hearings to stud}^ the Panama Canal Treaties — it is appropriate to explore the parallel process of the other signatory. The Panama Constitution provides that any Canal Treaty must be submitted to a national plebiscite. However, there is a confusion. The plebiscite does not have any binding effect because the power to approve a treaty belongs to the Assembly of District Representatives — (Article 141 of the Constitu- tion. The plebiscite is an expedient to give the treaty the appearance of a popular approval. How^ever, what kind of a plebiscite can be held without a free press, without freedom of assembly, and without free- dom of thought and expression? What is the value of a plebiscite under the constant manipulation of information by the government-con- trolled press, radio, and television? In 1975, 100 Panamanians signed a document stating that without freedom of speech and assembly to discuss the Canal Treaty, a plebiscite on the pact, "will be neither legitimate or authentic." Since then, 15 of the persons who signed the statement have been expatriated, others incarcerated, and all of them slandered by the press and harassed by the Government. The lack of freedom has been so criticized that, after the signing of the treaty, the dictatorship has deemed it necessary to allow a care- fully controlled degree of freedom to discuss the new treaty. However, the Government is rushing the plebiscite in order to limit discussion. The plebiscite will be held on October 23, despite the protest of many groups that demand more time to study and discuss the canal pacts. The farce of the plebiscite is so evident, that today, less than 2 weeks from the plebiscite, the Government has still not approved the law that is supposed to establish the voting procedures. The negotia- tors of both countries have contradictory views of major points of the treaties. With some precedent, many Panamanians define the plebiscite as a procedure that gives the people the freedom to choose between voting "yes" or being expatriated. 343 Even under the assumption that a plebiscite would be held with all the necessary rights and freedoms guaranteed, it is impossible to thmk seriously that a dictator who obtained and maintained his power by sheer force, against the will of the people, is going to respect their vote in an essential matter for the survival of the dictatorship. The plebiscite is a simple problem for the Panamanian Government. It does not matter how many vote yes or no. What matters is who is going to count the votes. The State Department knows ver}^ well that the plebiscite is a farce. Mr. John L. Jackley prepared ''A Study of the Impact of a New Canal Treaty" for the U.S. Embassy in Panama and, among other things, he wrote, A lot of good press would be essential for success; in this situation we could make good use of the controlled press situation of the Isthmus. If it doesn't work, no propaganda would sell it. But it can be given at least an initial breath of promise through skillful manipulation of the available media. Many Americans express concern about a military dictatorship in Panama that consistently violates the most elemental human and poli- tical rights of its citizens, but — they argue — that is a fact and the United States must deal with reality. The argument neglects the most important side of the problem : the dictatorship remains in power because it is continually armed, gen- erously financed, politically supported, and morally approved by the United States. The officers of the National Guard — including Torrijos — were trained by the United States under the military assistance program. Since the inception of the dictatorship, Panama ''has been No. 1 in terms of per capita aid" and has received more economic aid than all pre\aous Governments of Panama together. In fact, this very month, AID transmitted a notice to Congress of an increase in the funding level of the proposed fiscal year 1977 program in Panama. Recently, Ambassador Bunker told a congi-essional committee that Panama does not have a dictatorship, but an ''authoritarian regime." However, the negotiators of the Canal Treaty do not seem to be so sure of the Panamanian Government's respect for human rights, because the treaty contains elaborate provisions to protect American citizens rights when those citizens are arrested by Panamanian authorities. Ironically, the Panamanians in their owtl land are going to have less rights than Americans. A few days ago. President Carter acknowledged that Torrijos is a dictator, but praised him as an "enlightened" man who works for the good of his people. Constantly, the State Department denies that human rights are violated in Panama despite the fact that the Department's interven- tion is often requested by American citizens that have been beaten, tortured, and arbitrarily jailed by Panamanian authorities. The United States is alienating Panamanians who cannot under- stand why the champions of democracy in their own land advocate, defend, and justify a dictatorship in Panama. To the Panamanian, it is clear that the dictatorship, without U.S. support, would have fallen many years ago by the weight of its errors and the democratic efforts of the people. Thus, the argument that the United States has to deal with reality is not a valid one, when that reality is a direct consequence of a foreign 344 policy oriented to support a dictatorship under the shortsighted prem- ise that a strong military rule is easier to deal with, and, for that reason, more convenient for U.S. interests. Latin American intellectuals observe that U.S. support of dictator- ships strengthens anti-American sentiment in the area. History shows the result of that support. For example, in the Dominican Repubhc, the United States found it necessary to intervene militarily. In Cuba, the opening was made for Fidel Castro's revolution. Panamanians are not radical. But the U.S. policy of unconditional support to the dictatorship is pushing us in that direction. Panamanians do not want U.S. intervention in their country. Pan- amanians want their freedom to fulfill their national aspirations, without any foreign power — not the United States, nor Cuba, nor Russia imposing a corrupt, dishonest, and brutal dictatorship, which is a tragedy for their country and shames any civilized political standard. Since 1903, all Panamanians have wanted a new treaty to replace the one that was signed by a foreigner on behalf of Panama and im- posed under the threat of losing the independence of the newborn Republic. But Panamanians do not want to replace a bad treaty with a worse one that is going to be imposed with Torrijos playing the same role that Bunau-Varilla played in 1903. The new treaty does not solve ''the causes of conflict" between the two countries. On the contrary, it adds a few new ones, as, I am sure, many Members of Congress are already aware. Among other things, it is going to condemn future generations of Panamanians to live under a dictatorship as permanent as the interventionistic rule that the U.S. negotiators state the new treaties give the United States. However, in this ever-changing world, permanent does not mean eternal. Sooner or later, the dictator will fall. Then the treaty is going to be rejected by the Panamanians and their Government and all the resentment against the dictatorship will be reflected in the future relations between Panama and the United States. Thank you, Mr. Chairman. Chairman Zablocki. Father Mahon. STATEMENT OF REV. LEO T. MAHON, ST. VICTOR'S PARISH, CALU- MET, ILL.; FORMER PRIEST IN PANAMA Reverend Mahon. Mr. Chairman and members of the subcona- mittee, my name is Leo Mahon. I am a priest of the Roman Catholic Archdiocese of Chicago. After 11 years of work, first among the blacks, later among Spanish-speaking people in Chicago, I was sent in 1962 to the Republic of Panama. Together with, two other priests, I founded an experimental mission in the area adjacent to Panama City which is called San Miguelito. The area, largely a "squattersville," had a population in 1962 of 22,000 but now has grown to almost 200,000 people. There we worked to establish a sense of dignity and justice as well as faith, not only in God but also in themselves as a people. It is impossible to live even aj'-earin Panama without coming to feel the impact of the American presence and the depth of the Pananaanian feeling about the Canal Zone. Panamanians, perhaps, paradoxically, 345 are vastly pro-American. Yet almost to a person, they feel so very hurt by what we did in 1903 — in their mind, a great injustice which they claim the United States, up until recently, has refused to admit or redress. I was raised in the United States on the popular American version of how the treat}^ was effected and how the canal was built. I was surprised to find out that ''our" version left out some very pertinent facts, facts known by every single Panamanian but b}' ver}' few Ameri- cans. I then began to study the whole affair, the 1903 treaty, and the various later attempts to revise it. I witnessed the anti-American riots in 1964 when the smoldering resentment against the United States broke out into open violence. I have followed the protracted negotiations over the years. I have talked to the men who have sat on both sides of the conference table. At one point, I was invited to be an interpreter at those negotiations. I truly believe that I know the issue well, that I know how I feel as an enlightened American, that I know how Panamanians feel, especially the poor with whom I lived for 12 years. I shall presume that the honorable gentlemen on this committee have been adequately briefed on all the historical data so necessary to understand the making of the original treaty, the contract which enabled the United States to build the canal and operate it ever since. I presume, in particular, that 3^ou know: First, that no Panamanian ever signed the treaty of 1903. Second, that the American side could hardly believe its "luck" in getting a deal so favorable to the United States. Third, that the treaty has been an open wound in the body politic of Panama ever since and a scandal to Latin American and to other nations. Fifth, that, finalh', the entire issue has become a test in the eyes of many, of our willingness and ability to deal equitably with the poor, developing nations of the world, countries which do not come any way near matching our military, economic, and technical might. Since the focus of this hearing is the issue of human rights, in Panama, I shall confine myself to the issue of justice. It is indubitably the obligation of every human being, of every nation to seek after justice. Our Nation was founded on that principle. We fought the Revolutionary War to defend our right as a people to rid ourselves of foreign domination, to govern ourselves without outside interference, to possess our territory as sovereign and independent. People after people followed our example and began to throw off the yoke. We became the beacon of liberty and the proof of the viability of modem democracy. One of the peoples inspired by our insights, our courage and by our success was the people living on the Isthmus of Panama. They rose several times in the 19th century to rebel, first against Spain and then against Colombia, but each time theA^ failed and had to return to the rule of foreigners. Another opportunity presented itself when in 1903 Philippe Bunau- VariUa, representing the French Canal stockholders, brokered a deal whereby the United States obtained the right to build a canal in return for the recognition of Panama as an independent and sovereign nation. One might have thought that this historic encounter* between the first of modem revolutionary democratic republics and the people of 346 Panama would have resulted in a fair and just arrangement satisfac- tory to both countries. But, no, it did not. Panama was saddled with an outrageously unjust treaty while the United States gleefully accepted an arrangement with something of the feeling we get when we pay for an article with a dollar bill and get change for $10.00. Wh\^ did the nation, which a little over 100 years before had cham- pioned the right of peoples to declare their independence and sover- eignty, ever sign a treaty which gave it the right to use another country's territory in perpetuity and to act "as though it were sover- eign in that land?" One answer, I submit, lies in the fact that in 1903 the United States was no longer the 3^oung revolutionary republic that it was in 1803. It had undergone a change — a "change of life" one might call it — whereby it took on the posture of an imperial power. It began excursions into Cuba, Santo Domingo, Puerto Rico, the Philippines, Panama and then highly disappointed those people when the United States turned out to be not the champion of independence and of inalienable rights — rights which cannot be bartered awa}^ — but rather the newest imperialistic power to arrive on the international scene. Thus, it was that the United States had contracted for far more than the right to build and operate a passagewa}^ between the seas — it had established an empire-colony relationship and failed to see the contradictions therein contained. I am convinced, that the first and overriding issue of this treaty is justice. Let us, first of all, be just to ourselves, to the principles of our Nation, to the men like Adams and Paine who founded the republic, to the generations who are to come. We rebelled against the British Empire and fought to defend the sacred rights of sovereignty and independence. If we have stra3^ed from those principles, let us admit our aberration and return to the practice of justice and integrity. How can we proclaim inalienable rights for ourselves and then deny them to the people of another land? It is impossible to imagine our signing over the Mississippi River and 10 miles territory on both sides of it to a foreign power in perpetuity with the corresponding right to fl}^ its flag, maintain a miJitar}^ and police force there, issue postal stamps, and maintain a penitentiary? No ; of course not, no American Government or party would dare even speak of such a treaty or giveaway. Suppose in 1776 our Government because of weakness had signed such a treaty with France. Would w^e not have risen in anger and shame to demand its abrogation? And if France refused to change the treat}^, would we not have done it even with force? The present treaties, in my judgment, while not perfect, offer the United States a chance to do justice to its own ideals, an opportunity to be just with another nation. The violation of human rights in Panama has been brought up as a reason for not ratifying these treaties. I wonder why the violation of human rights in the United States has not been brought up as an obligation. Have there been such violations in Panama? Yes; more at the beginning of the present regime but even yet people are exiled from Panama Tvdthout due process of law. Even now prison conditions are reported to be deplorable. The issue of human rights within a given country is, of course, an important matter. I endorse and applaud President Carter's state- 347 ments about human rights. His words we in Panama would love to have heard seveial years ago. Some say that words are not enough, that more must be done. I presume they mean force. I submit that the right words are often enough, especially when they correspond with and speak to the deepest desires and loftiest ideals of a given people. A man named Jesus spoke powerful words long ago and al- though he eschewed the use of force, those same words have done more for human rights than armies, treaties, or even laws. Yes; we should continue to speak out in favor of human rights. By so doing, we stand for justice and human dignity everywhere. We thereby open ourselves to criticism for our own violation of human rights and declare ourselves willing to correct such things. The issue of human rights in the Panama treaties: Who is raising the issue? First of all, Panamanian exiles, some of whom are in this chamber this morning. They are friends of mine, my heart goes out to them. I am consoled by the fact that my country has offered them asylum and so they join the other victims of socio-political change and injustice: Cubans, Chinese, Chileans, Hungarians — and before that WTiite Russians, et cetera. The fact remains, however, bitter for them and also for us, that their peoples are governed and represented by de facto governments with whom we must deal and at times make treaties. There are also good, honest Americans who are concerned by the violation of human rights anywhere, any time. I admire them but I also wish to remind them that in this case, justice is the overriding issue. If I owe a man $100 then I may not say to him, 'T shall repay my debt if you stop abusing your wife." I may wish to scold him but I may not in justice withhold that which I owe him. Last, it seems to me that there are those who violently oppose the treaty and use whatever auxiliary issue to defeat its ratification. Aren't these some of the people who claimed ''States rights" and tried to deny the right of the Federal Government to intervene in a State which was denying civic and human rights to some of its citizens? Would these people ever, ever grant another country the right to intervene in ours? Why then do we demand that right in the case of Panama? We the United States have not been free of sins against human rights. Look what we have done to the Indian and to the black. Look at what, it has been revealed recently, our Government has done to its citizens through the CIA, the FBI, and the Plumbers. Do we wish to say to the world that our own penal system is never in violation of human rights? No; if such violations are the "conditio sine qua non" of interna- tional treaties, then we could never sign a SALT treaty with the Soviet Union, nor could any other nation sign a treaty with us. I plead with you as representatives of this Nation to expedite the ratification of these treaties. They aren't perfect. I wish the}^ could be better. But apparently it is the most we are willing to offer a tin}^ friendly nation. Dare we now say that it is too much? In the 1770's His Majesty King George's government refused to recognize the just aspirations of the American colonies. Some Members of Parliament rose to accuse the government of intransigence and ^varn of its consequences; armed rebellion. A somewhat comparable situation is now with us. If we say that we will not change radically 348 the treaty of 1903 then we are saying that we insist upon maintaining our colonial policy toward Panama and that means now as it did in the 1776 war. We can plead with Panama to improve its human rights posture and we can denounce such violations strongly and publicly. But if we declare that we have the right to intervene and force Panamanians to be just to one another, then we are declaring ourselves father, policeman and judge for Panama. That kind of policy is offensive, patronizing and demeaning. That's the kind of language the British used on us 200 years ago and our reply was "that means war." Our national motto is 'Tn God We Trust." It is God who says ''love what is right and seek after justice." Let us do that, no matter what others do and we shall have the protection of the ''God of Freedom" and the self-respect of a people which seeks justice and peace when it is rislsy, even when it conflicts with some of our lesser interests and our baser instincts. In conclusion I would like to say the issue of human rights has been a burning one since 1968. I regret the issue is raised only now by Congress. If it is raised only as an excuse not to do justice by giving a new treaty, I think it is a specious issue. Thank j^ou, Mr. Chairman. [Reverend Mahon's prepared statement follows:! Prepared Statement of Rev. Leo T. Mahon, St. Victor's Parish, Calumet, III., Former Parish Priest in Panama My name is Leo Mahon. I am a priest of the Roman Catholic Archdiocese of Chicago. After eleven years of work first among the blacks, later among Spanish- speaking people in Chicago, I was sent in 1962 to the Republic of Panama. Together with two other priests, I founded an experimental mission in the area adjacent to Panama City which is called San Miguelito. The area, largely a squattersville had a population in 1962 of 22,000 but has noAv grown to almost 200,000 people. There we worked to estabhsh a sense of dignity and justice as well as faith, not only in God but also in themselves as a people. It is impossible to hve even a year in Panama without coming to feel the impact of the American presence and the depth of the Panamanian feeling about the Canal Zone. Panamanians, perhaps, paradoxically, are vastly pro-American. Yet almost to a person, they feel so very hurt by what we did in 1903 — in their mind a great injustice which they claim the United States up until recently has refused to admit or redress. I was raised in the United States on the popular American version of how the treaty was effected and how the canal was built. I was surprised to find out that "our" version left out some very pertinent facts, facts known by every single Panamanian but by very few Americans. I then began to study the whole affair, the 1903 treaty and the various later attempts to revise it. I witnessed the anti- American riots in 1964 when the smoldering resentment against the United States broke out into open violence. I have followed the protracted negotiations over the years. I have talked to the men who have sat on both sides of the conference table. I was at one point invited to be an interpreter at those negotiations. I truly be- lieve that I know the issue well — that I know how I feel as an enlightened American, that I know how Panamanians feel, especially the poor with whom I hved for 12 years. I shall presume that the honorable gentlemen on this committee have been adequately briefed on all the historical data so necessary to understand the making of the original treaty — the contract which enabled the United States to build the canal and operate it ever since. I presume in particular that you know: (1) That no Panamanian ever signed the treaty of 1903; (2) That the American side could hardly believe its "luck" in getting a deal so favorable to the United States; (3) That the treaty has been an open wound in the body politic of Panama ever since and a scandal to Latin America and to other nations; (4) That the United States has had several opportunities to amend the original treaty but has never risen to the challenge; and 349 (5) That, finall}", the entire issue has become a test in the eyes of manj-^, of our willingness and abihty to deal equitably with the poor, develoi)ing na- tions of the world, countries which do not come any way near matching our military, economic, and technical might. Since the focus of this hearing is the issue of human rights in Panama, I shall confine myself to the issue of justice. It is indubitably the obligation of every human being, of every nation to seek after justice. Our nation Avas founded on that principle. We fought the Revolutionary War to defend our right as a people to rid ourselves of foreign domination, to govern ourselves without outside inter- ference, to possess our territory as sovereign and independent. People after people followed our example and began to throw off the yoke. We became the beacon of liberty and the proof of the viability of modern democracy. One of the peoples inspired by our insights, our courage and by our success was the people living on the Isthmus of Panama. They rose several times in the 19th century to rebel, first against Spain and then against Colombia, but each time they failed and had to return to the rule of foreigners. Another opportunity presented itself when in 1903 Philippe Bunau-Varilla, representing the French Canal stockholders, brokered a deal whereby the United States obtained the right to build a canal in return for the recognition of Panama as an independent and sovereign nation. One might have thought that this historic encounter between the first of the modern revolutionary democratic republics and the people of Panama would have resulted in a fair and just arrangement satisfactory to both countries. But no, it did not! Panama was saddled with an outrageously unjust treaty while the United States gleefully accepted an arrangement with something of the feeling we get when we pay for an article with a dollar bill and get change for $10.00. Why did the nations which a little over a hundred years before had. championed the right of peoples to declare their independence and sovereignty ever sign a treaty which gave it the right to use another country's territory in perpetuity and to act "as though it were sovereign in that land?" One answer, I submit, lies in the fact that in 1903 the United States was no longer the young revolutionary republic that it was in 1803. It had undergone a change (a "change of life'' one might call it) whereby it took on the posture of an imperial power. It began excursions into Cuba, Santo Domingo, Puerto Rico, the Philippines, Panama and then hugely disappointed those peoples when the United States turned out to be not the champion of independence and of inalienable rights (rights which cannot be bartered away) but rather the newest imperialistic power to arrive on the international scene. Thus it was that the United States had contracted for far more than the right to build and operate a passageway between the seas — it had established an empire-colonj' relationship and failed to see the contradictions therein contained. I am convinced, that the first and over-riding issue of this treaty is justice. Let us, first of all, be just to ourselves, to the principles of our nation, to the men like Adams and Paine who founded the republic, to the generations who are to come. We rebelled against the British Empire and fought to defend the sacred rights of sovereignt}^ and independence. If we have strayed from those principles, let us admit our aberration and return to the practice of justice and integrity. How can we proclaim inalienable rights for ourselves and then deny them to the people of another land? Is it possible to imagine our signing over the Mississippi River and 10 miles of territory on both sides of it to a foreign power in perpetuity with the corre- sponding right to fly its flag, maintain a military and poHce force there, issue postal stamps, and maintain a penitentiary? No, of course not, no American government or party would dare even to speak of such a treaty or give-away! Suppose in 1776 our government, because of weakness, had signed such a treaty with France. Would we not have risen in anger and shame to demand its abroga- tion? And if France refused to change the treaty, would we not have done it, even with force? The present treaties, in my judgment, while not perfect, offer the United States a chance to do justice to its own ideals, an opportunity to be just with another nation. The violation of human rights in Panama has been brought up as a reason for not ratifying these treaties. (I wonder why the violation of human rights in the United States has not been brought up as an objection.) Have there been such violations in Panama? Yes, more at the beginning of the present regime but even yet people are exiled from Panama without due process of law. Even now prison conditions are reported to be deplorable. 350 The issue of human rights within a given country is, of course, an important matter. I endorse and applaud President Carter's statements about human rights. His words we in Panama would love to have heard several years ago. Some say that words are not enough, that more must be done, I presume they mean force. I submit that the right words are often enough, especially when they correspond with and speak to the deepest desires and loftiest ideals of a given people. A man named Jesus spoke powerful words long ago and although he eschewed the use of force, those same words have done more for human rights than armies, treaties or even laws. Yes, we should continue to speak out in favor of human rights. By so doing, we stand for justice and human dignity everywhere. We thereby open ourselves to criticism for our own violation of human rights and declare ourselves wilhng to correct such wrongs. The issue of human rights re the Panama treaties: who is raising the issue? First of all. Panamanian exiles, some of whom are in this chamber this morning. They are friends of mine, my heart goes out to them. I am consoled by the fact that my country has offered them asylum and so they join the other victims of socio-political change and injustice: Cubans, Chinese, Chileans, Hungarians — and before that White Russians, etc. The fact remains, however, bitter for them and also for us, that their peoples are governed and represented by de facto govern- ments with whom we must deal and at times make treaties. There are also good, honest Americans who are concerned by the violation of human rights anywhere, anytime. I admire them but I also wish to remind them that in this case, justice is the over-riding issue. If I owe a man a hundred dollars, then 1 may not say to him "I shall repay my debt if you stop abusing your wife". I may wish to scold him but I may not in justice withhold that which I owe him. Lastly it seems to me that there are those who violently oppose the treaty and use whatever auxiliary issue to defeat its ratification. Aren't these some of the people who claimed "states' rights" and tried to deny the right of the federal government to intervene in a state which was denying civic and human rights to some of its citizens? Would these people ever, ever grant another country the right to intervene in ours? Why then do we demand that right in the case of Panama? We the United States have not been free of sins against human rights. Look what we have done to the Indians and to the black! Look at what, it has been revealed recently, our government has done to its citizens through the C.I. A., the F.B.I, and the plumbers! Do we wish to say to the world that our own penal system is never in violation of human rights? No, if such violations are the "Conditio sine qua non" of international treaties, then we could never sign a Salt treaty with the Soviet Union, nor could any other nation sign a treaty with us. I plead with you as representatives of this nation to expedite the ratification of these treaties. They are not perfect. I wish they could be better. But apparently it is the most we are willing to offer a tiny, friendly nation. Dare we now say that it is too much? In the 1770's His Majesty King George's government refused to recognize the just aspirations of the American colonies. Some members of Parhament rose to accuse the government of intransigence and warn of its consequences: armed rebel- lion. A somewhat comparable situation is with us now. If we say that we will not change radically the treaty of 1903 then we are saying that we insist upon main- taining our colonial policy towards Panama and that means now as it did in 1776, war. We can plead with Panama to improve its human rights posture and we can denounce such violations strongly and publicly. But if we declare that we have the right to intervene and force Panamanians to be just to one another, then we are declaring ourselves father, policeman, and judge for Panama. That kind of policy is offensive, patronizing and demeaning. That's the kind of language the British used on us 200 j'^ears ago and our reply was "that means war". Our national motto is "In God We Trust". It is God who says "love what is right and seek after justice". Let us do that, no matter what others do and we shall have the protection of the God of Freedom and the self-respect of a people which seeks justice and peace even when it is risky, even when it conflicts with some of our lesser interests and our baser instincts. Chairman Zablocki. I presume all the witnesses wish to have their statements in toto with the comments they made during testimony a part of the record. Without objection, it is so ordered. I 351 I want to thank all three of you for your thoughtful statements. I have already referred to some of the quotations in the testiony of Mrs. Aragon and now 1 would like to ask Dr. Robles at this time, on page 5 of your statement you say, ''The International League for Human Rights has criticized the State Department reports." Can you supply that criticism for the record? Mr. Robles. Certainly, the State Department has it in testimony of April 5, 1977 before Chairman Long's subcommittee. [The document to be furnished follows :] Excerpts From the Testimony of Jerome J. Shestack, President of the j International League for Human Rights Before the Subcommittee on Foreign Operations and Related Agencies, House Committee on j Appropriations, April 5, 1977 ( * * * But, what I would like to suggest is that the reports you are getting i still are not very accurate in many cases, and that some of the Carter candor has not yet seeped through to levels of the State Department where these re- ! ports are prepared. ♦ *»♦♦•♦ j In Panama, for example. State Department reports say that violations of ! human rights occurred before 1971, and they have not been substantiated. But, [ the Panamanian Committee on Human Rights can offer ample substantiation : of numerous violations, including violations in 1976 and 1977. That committee's ' reports are available for the Department. Chairman Zablocki. And does the State Department have the in- formation of the International League for Human Rights; if so, can we have that? Mr. Robles. Certainly. [The letter follows:] November 28, 1977. Re Panama Mr. Charles Moyer, 1 7iter- American Commission on Human Rights, Organization of American States, Washington, D.C. Dear Mr. Moyer: I am an attorney at law and a member of the Lawyers Com- mittee for International Human Rights. I am sending this letter on behalf of the International League for Human Rights. We have reviewed a considerable amount of material and have conferred with several individuals who are familiar with the human rights situation in Panama. Based upon the foregoing, we have reason to believe that there are violations of human rights in Panama which warrant investigations by the mission which your organization will be sending to Panama. What follows is a brief summary of those alleged violations, together with copies of several supporting documents and I references to other printed materials which are not annexed but which can be furnished at j^our request. On the island of Coiba it is reported that there exists a penal colony where I prisoners are allegedly subjected to inhumane treatment. In Panama City is Carcelo Modolo, where prisoners are detained after arrest. j Conditions there are reportedly brutal. Torture is reported to be practiced there ' as a matter of routine, particularly upon political prisoners. The National Guard appears to be beyond the roach of the law. Arbitrary arrest, torture and illegal detention by the National Guard appear to prevail throughout the country. Political prisoners can be held without trial for a period of 15 years. With the exception of the recent dcl^ates preceding the plelnscite which ratified the Treaty, public assembly has been severely curtailed. Political parties and professional and labor organizations which oppose the government are prohibited. News dissemination is sul^ject to government approval, and in some instances broadcasts have been interrupted and newspapers closed down for presenting anti-government views. Many political opponents cf the government have ]>een exil'^d. Some have reportedly been assassinated; others have disappoared without explanation. 9S-991 — 77 24 \ 852 The constitution adopted in 1972 guarantees most basic freedoms and due process of law. In practice, none of the constitutional guarantees applies ta political prisoners. Article 277 of the constitution establishes General Torrijos as the "maximum leader" giving him full power for six years to make all major executive, judicial and military appointments. Three cabinet decrees promulgated in 19G9 are applied independently of the constitution. Decree 341 prohiljits public meetings in Panama City and Colon. Decree 342 authorizes detention without trial for 1.5 years. In a recent statement made on November 12, 1977, the President cf Panama publicly admitted that this practice is "not right." (New York Times November 13, 1977). Decree 343 imposes self-censorship upon all forms of media. In support of the foregoing, I have annexed copies of the following documents which should be studied carefully for factual details not fully set forth in this letter: 1. Manuscript of Leopoldo Aragon describing conditions at Coiba. 2. Statement of Leopoldo Aragon of his intention to immolate himse' in protest against violations of human rights in Panama. 3. Letter dated September 20, 1977 from Rose M. Aragon. 4. Letter (undated) from the Panamanian Committee for Human Righ to Amnesty International. n. Statement of Antonio Poore dated September 15, 1976. 6. Resolution of the Inter- American Press Association (dated October 1977)' and Report of its Committee on Freedom of the Press and Information concerning Panama. 7. Excerpt from New York Times article (November 13, 1977 p. 1) con- taining an admission by General Torrijos that holding political prisoners Avithout trial is "not right." Reference is made to Volumes I and II published by the Panamanian Committee for Human Rights in 197(i particulary Chapters 1 and 5. Reference is also made to the testimony of Rose Marie Aragon and Winston Robles before the Senate Foreign Relations Committee on October 12, 1977^ and the testimony of Winston Robles and Eusebia Marchosky before the House Subcommittee on Foreign Operations of the Committee on Appropriations on March 30, 1977. This testimony is quite detailed and informative as to alleged human rights violations which have occurred and reportedly continue. We are still endeavoring to obtain further relevant information. If successful, we will forward such information to you. It is respectfully requested that the onsite investigation to be conducted in; Panama be directed to the reported violations referred to herein. Very truly yours, Richard Nadelman, Lawyers Committee. U.S. SUPPORT FOR TORRIJOS GOVERNMENT AND MILITARY ASSISTANCE. Chairman Zablocki. Dr. Robles, you said on page 8 : To the Panamanians it is clear that the dictatorship, without United States support would have fallen many years ago bj' its errors and the democratic- efforts of the people. The authoritarian or dictatorial policy, if you wish to use that term, of the Government in Panama now, if the United States did not give assistance, in your opinion, would Torrijos turn to the Soviet Union? Mr. Robles. I don't think it is feasible for Torrijos to make that decision, not now at least. I don't think the international circum- stances are going to allow Torrijos to make that decision. Chairman Zablocki. I gathered from your statement he is Com- munist oriented. Mr. Robles. If not him, at least the Communist Party is collab- orating with the Government and many of the high officers in the- Government also. 353 Chairman Zablocki. Wouldn't he be tempted to seek assistance from the Soviet Union if the United States did not give economic aid, mihtary assistance? Mr. RoBLEs. He is ah-eadj^ receiving assistance from the Com- munist countries. The National Guard of Cuba is training the guard of Torrijos. Chairman Zablocki. Should some come from us or all from the Russians? Mr. RoBLEs. I am talking about the military assistance the United States provides the National Guard. Chairman Zablocki. Are you opposed to the assistance that the United States is giving Panama? Mr. RoBLEs. The military aid, the military assistance given to Panama. Chairman Zablocki. Let me ask a final question, then I will ask Father Mahon some questions. CONSEQUENCES OF PANAMANIAN REJECTION OF TREATY Of your closing sentence : Then the treaty is going to be rejected by the Panamanians and their Govern- ment and all the resentment against the dictatorship will be reflected in the future relations between Panama and the United States. That is when the dictator will fall because you say permanent does not mean eternal. What will the new government or the government that will replace Torrijos demand, since it is going to reject the treaty? Mr. RoBLEs. Father Mahon used a beautiful word ''justice" and I don't think the new treaties do justice to Panama. The new treaties do not solve the causes of conflict between the two countries and the new treaties are worse than the ones the United States offered Panama in 1967 and the Panamanians refused. Chairman Zablocki. Father Mahon also said it is necessary these treaties be ratified, because although they are not perfect, they are a step in the right direction for justice. Mr. RoBLEs. Father Mahon is a North American. He cannot speak for the Panamanian people. I, as a Panamanian, can never accept these treaties. Chairman Zablocki. There is a difference, I must agree, but I am sure Father Mahon also had experiences in Panama. Mr. Robles. Certainl}^, but i don't think Father Mahon made the necessary research of the new treaties and what the new treaties really mean to Panama. RELIGIOUS FREEDOM IN PANAMA Chairman Zablocki. Father Mahon, what is the state of religious freedom in Panama? Is it possible church groups have not spoken out against the new treaties because of Government reprisals? Reverend Mahon. I have been out of Panama except for visits since March of 1975. Church groups had to live under the regime so they had to be very careful what they said, especially if they go against the Government policy. 354 Chairman Zablocki. But there is rehgious freedom? Reverend Mahon. To worship, yes. Chairman Zablocki. And to gather? Reverend Mahon. Yes. IMPACT OF DISAPPROVAL OF THE TREATY ^ Chairman Zablocki. Father, what, in your opinion, would be the impact of disapproval of the treaty with respect to the situation in Panama, from the point of view of a North American? Reverend Mahon. If it were disapproved and was not fair to Panama, that would be all right. If it is disapproved because it is giving too much to Panama — the Panamanians hear that 'give- away" — I think it will have a bad effect. Chairman Zablocki. There is no doubt in your mind those who are opposing the treaty are saying ''giveaway.'"' Reverend Mahon. That is right. Chairman Zablocki. Mr. Gihnan. exile of MR. ROBLES FROM PANAMA Mr. Oilman. Mr. Robles, as one who has been personally affected by the human rights situation in Panama, would 3"ou share with this committee the events that led to your exile from Panama? Mr. RoBLES. I don't understand the question. Mr. Oilman. Could you share with this committee the events that led to your exile from Panama? Mr. Robles. I was personally affected, but it is not my personal situation that worried me. I certainly share the concern about human rights in Panama and ever;\^where else. I have been fighting for human rights long before I was expatriated. I was expatriated because I fought for human rights in Panama. Mr. Oilman. What year was that you were asked to leave the coun- try? Mr. Robles. In 1976. Mr. Oilman. Was that because of the statements you were making in the press? Mr. Robles. Not in the press, but in the University of Panama of which I was a professor, and any other public opportunities. Mr. Oilman, Would 3^ou be permitted to return to Panama today? Mr. Robles. No, certainly not. Torrijos speaks very clear, there are some Panamanians that never are going to be allowed to return and I am included among those. Mr. Oilman. He made a list of those Panamanians? Mr. Robles. Not by name, but he said that the Panamanians that are in Miami fighting against the treaty, they are not allowed to return. But I w^ant to make something clear, w^e are against that treaty because it is not a good treaty for us. PANAMANIAN CENSORSHIP Mr. Oilman. Is there censorship today with regard to freedom of expression in Panama b}^ individuals who speak out against the Government? 355 Mr. RoBLES. I would like to clarify something. It is true that the radio stations and television stations have to send the tapes to the Ministry of Government but they have to do it after the program, not prior to the program. Mr. GiLiMAN. I see. What about the freedom of expression in public places, is there some severe censorship with regard to speeches and lectures? Mr. RoBLES. There are man}^ wa3'S to exercise that censorship. For example, in 1975 we wanted to discuss publicly some of the negotia- tions of the treaty. The Government did not allow us to obtain any public place, not even paying for it, in which we could speak. On the other hand, sometimes it is possible m private meetings to express 3-our opinion, but then 3^ou alwa^'S are taking a risk. Mr. GiLMAN. A risk of arrest? •Mr. RoBLEs. Or something worse. HUMAN RIGHTS VIOLATIONS Mr. GiLMAN. Mrs. Aragon, in your statement you list some 181 violations of human rights in 1976 alone. Has the documentation of those violations been provided to the State Department and to this committee? Mrs. Aragon. With the State Department it has been very hard to deal. My husband wrote constantly to them bringing this to their attention. I had tried to contact the State Department when I came, not only about my husband, but also the violations of human rights. I could never talk to Mrs. Patt Derian or to Mr. Schneider. I was finally referred to Miss Bova to whom I wrote a letter and I also accompanied some documentation. That letter was never replied to until just a week ago and although I wrote, I believe it was the 25th or 26th of August, Miss Bova says in her letter she received it on the 6th of September. She says she is very sorry about what happened to my husband, she had not been able to do anything for him about the visa. But she says nothing about what I wrote about human rights. Mr. Oilman. Then up to this point you have not had an oppor- tunity to present your documentation? Mrs. Aragon. No. Mr. GiLiMAN. I am going to ask, Mr. Chairman, with your per- mission, if State Department representatives would arrange for a reception for Mrs. Aragon so that she could present to the State Department the list of violations for their information. Could you also present such a list to our committee? Mrs. Aragon. Yes, sir. Mr. Oilman. Mr. Chairman, with your permission, I request that that be made a part of the record. Chairman Zablocki. Without objection, it will be made a part of the record.^ CONCERN BY RELIGIOUS GROUPS FOR THE TREATIES Mr. Oilman. Father Mahon, we had an opportunity to meet with the college while we were in Panama a few months ago and we met with several representatives, also of the Catholic church and other ^ Material retained in the committee flies. \ 356 religious groups in Panama who expressed their concern about the treaty. I apj)reciate your coming to the committee to express yourself, but 1 am concerned, you referred to historic wounds that the 190.) treaty caused to the Panamanian people because one man negotiated such a treaty and apparently you feel he did not represent the think- ing of that country. Aren't we faced with somewhat the same situation today with the Torrijos regime imposing itself upon the ])eople and the lack of freedom of expression in the plebiscite where they may not have the opportunity to truly and freely express themselves. Would not this lead to Panama once again having a treaty imposed upon them and not having freedom of expression? As Mr. Robles suggested, if the Tor- rijos regime was thrown out, the people might not then accept such a treaty if they had freedom of expression. What are your thoughts with regard to that? Reverend Mahon. It would seem to me the United States, particu- larly through its State Department, would have to say we refuse to deal with this dictatorship, give any aid, militarily or economically, until you give human rights to the people in order to do justice to the people. It is an interesting position. Mr. Oilman. Do we have to go that far in interfering with their internal affairs. We are talking about a document that is going to affect us for a long period of time and I am looking at the United States interests now as well as the Panamanian interests. If the Torrijos regime is unstable and the people are not supportive of the treaty — and I don't think we will learn their true feelings under this proposed plebiscite — I can see some problems down the road. What are your thoughts about that? Reverend A'Iahon. Would you ask specifically the question? Mr. Oilman. I am asking you do you feel that because Torrijos strongly supports the treaty and there is some question about whether the Panamanian people truly support the treaty, do you feel the United States is doing the best thing in negotiating and signing a treaty at this time without true support of the people? Reverend Mahon. My opinion is it would be very dangerous for the United States to affect, even with this government, a far more just treaty unless it made clear to the people that is why it was not being done. Mr. Oilman. Do you think it is necessary to go as far as we have in the renegotiation of our arrangements with Panama, giving up all our rights in the canal and walking away in the year 2000? Reverend Mahon. Oh, yes, it belongs to the nation of Panama. I think the only way we can really, humanly sj)eaking, make a treat}" honest, in the Canal Zone, those are inalienable rights of the country. Building and operation of the canal we can make a treaty on that, but the other things we have no right to bargain. By my own sense of justice, we can't bargain those away, we can't ask the people for those. We are just doing justice. Mr. Oilman. Under the terms of the proposal we are agreeing to walk away from the whole situation in the year 2000, turning it over to the Panamanians, giving up all sovereignty and giving it to the Panamanians. Reverend Mahon. The Canal Zone, and giving up the rights to the canal itself. 357 Mr. Oilman. The whole works, lock, stock, and barrel. Reverend Mahon. I think it is fair, yes, sir, it is the prime resource •of that country, the reason for the country being formed, at least from our end of it. Mr. Oilman. No further questions, Mr. Chairman. Chairman Zablocki. Mrs. Pettis. Mrs. Pettis. Thank you, Mr. Chairman. BENEFIT OF THE TREATIES TO PANAMA I was particularly moved by your testimony, Mrs. Aragon. I hope that we can at least for the record get some of these facts before the American public. Mrs. Aragox. Thank you. Mrs. Pettis. Mr. Robles, why specifically do you consider the treaties not to be good for the Panamanians? Do you feel we are not giving enough? Mr. Robles. That is a very complex subject. Mrs. Pettis. I understand that. Mr. Robles. I am going to mention only one point. In 1967 the United States and Panama negotiated a treaty that was rejected by the Panamanians because it was not fair enough. However, that treaty had an arbitration clause that these treaties do not have. Panamanian people are not Avilling to accept any treaty without an arbitration clause because we are a very small country and in negotiating of any •controversies or differences between the two countries, we are always in an unfair position. So we need an arbitration clause. We are not asking you to give awa}^ an^^thing. We are only asking for a reasonable procedure to solve the future differences. Mrs. Pettis. Do you feel then that the reasonable procedure is inherent in the clause? Mr. Robles. In 1967 they provided a good arbitration clause. That is the type of thing bothering the Panamanians. Mrs. Pettis. Would you be willing to go back to the 1967 treaty? Mr. Robles. No, because there are also other reasons in those treaties that make them unacceptable. But I would like to make a point here. The Panamanians believe that the treaty is imposed by the United States and the only ])urpose of the support of the Torrijo's ■dictatorship is to pass the treaties so the Panamanians are looking at the treaties as something against them, not in favor of them. Mrs. Pettis. That is just the reverse reaction. Mr. Robles. Right. mismanagement of Panama's economy by torrijos government Mrs. Pettis. Many people have claimed because of mismanagement there is personal gain and political payoff, the Torrijos government has taken the Panamanian economy into crisis. Would you. Reverend Mahon and Mr. Robles care to comment on your knowledge of such charges? Reverend Mahon. I would say in large measure, that is true, in my opinion. Mr. Robles. To give you an idea, before 1968 Panama was the country with the highest per capita growth in Latin America and 358 one of the highest in the world. Today, Panama's economic growth is negative, minus 1 percent. f ILLEGAL ACTIVITIES BY TORRIJOS GOVERNMENT Mrs. Pettis. Do you have any knowledge of the charges that have been made that Torrijos' government has been involved in illegalj actions such as illicit narcotics traffic, prostitution, smuggling? Mr. RoBLES. I am aware of those charges, primarily because about it in the U.S. press. Mrs. Pettis. Thank you very much, Mr. Chairman. ARBITRATION CLAUSE NOT INCLUDED IN TREATY illegali I readl Chairman Zablocki. Doctor, you have stated that one reason you oppose the treaties is because it does not have an arbitration clause,! It is my understanding all Latin American countries reject any inter-' national arbitration clauses as intervention. I must ask you would the Panamanians be different in this respect and would they accept an international clause and not agree that it is intervention? Mr. RoBLES. No, because the arbitration clause as was drafted in 1967, for example, only provides that each party would have to appoint an arbitrator and both parties have to agree to appoint a third one; if they do not agree then the International Courts of Justice would have to appoint a third one or the OAS. That is not intervention for us. That would not mean intervention in our internal affairs. That is a ver}^ common procedure in international law. Chairman Zablocki. Nevertheless, the other Latin American coimtries do not agree to such a procedure, it is my understanding. Mr. RoBLES. Well, in many treaties, many Latin American coun- tries accept to resolve their differences through arbitration. Particular- ly in confhcts dealing with borders it has been a very common pro- cedure. Chairman Zablocki. You had responded to a question of Mrs. Pettis that "It is not a good treaty for us." But, do you fully under- stand that if the treaty is negotiated it would be as good for you as for Panama, it would be acceptable to you that it would not be ratified by us. Mr. Robles. I certainly think this one is going to be worse because the conflicts between the two countries are not eliminated, the}^ are maintained and new ones are going to emerge. Mr? Chairman, the treaties still are not approved and already the Panamanian negotiators and the North American negotiators dis- agree. What is going to happen tomorrow when these treaties are in effect? Chairman Zablocki. There are a number of questions as to the interpretation of the protocol, but in this regard, it was intended to clarify before the treaties are indeed ratified by each government, or each peoples. But let's go to another question, if I may. INSPECTION by OAS OF HUMAN RIGHTS SITUATION IN PANAMA Mrs. Aragon and Dr. Robles, you are aware that the Panama Government has invited the OAS Human Rights Commission to 359 insi:)ect the situation in Panama, on the spot and indeed the referendum is to be observed. What conchisions do you draw from the Panaman- ian Government agreeing to somethhig hke this if your statements say that they have other poUcies? Mr. RoBLEs. Well, in the first place, Panamanians have very little time to study the treaties. The plebiscite is going to be held the 23d of this month. I don't think this is a reasonable time for the study of such complex a treaty. Chairman Zablocki. My question is, why would the GAS Human Rights Commission be invited to inspect the situation? How do you interpret that? Mr. RoBLES. Because Torrijos wants to appear as a benevolent dictator or the enlightened man that President Carter believes he is. Chairman Zablocki. If the situation were as you have and Mrs. Aragon advised us in Panama now, he wouldn't invite the GAS for them to observe and see what is happening with the conditions? Mr. RoBLES. I don't know. I don't sec why not. They could allow the people to speak for 1 week, for 2 weeks, when those observers are there, and after that what is going to happen? Mrs. Aragon. As far as human rights violation, it is very eas}^ to do some cosmetic work, let's say in the jail. What about the penal colony? How many people knew about it until I brought it up today? HUMAN RIGHTS VIOLATIONS Chairman Zablocki. Well, let me unequivocally abhor any viola- tions of human rights. As Father Mahon said, not necessarily should the human rights question be brought into this as far as ratifying the treaties. But on the issue of human rights, Dr. Robles and Mrs. Aragon's experience has shown that in seme cases when the United States has taken punitive action against another government on human rights grounds, the efl'ect was to worsen the human rights situation in the country in question. Gne example of such a rule is the impact of the Jackson-Vanik amendment on the migration of Soviet Jewry. impact on human rights in PANAMA OP U.S. DISAPPROVAL OF TREATIES Is it not possible that the U.S. disapproval of the treaties on the basis of human rights could have a negative impact on the human rights situation in Panama? Mr. RoBLEs. I don't think the treaties should be rejected on the basis of human 7'ights. Those are separate issues. I think the treaties could be rejected for any other reason but not that one. But I don't think either that the United States has to remain silent on human rights violations in Panama because of the treat3^ Those are separate issues. Mrs. Aragon. We tried to do so, but the State Department has brought them together Chairman Zablocki. In the testimony toda}'-, some of the reasons given by you, Mrs. Aragon, and at least I give this interpretation, and you, Dr. Robles, that the treaty should not be ratified because of human rights in Panama. Mrs. Aragon. We had tried to keep the issues separate. Human 360 rights is one thing, the canal treaty is something different. But the statements by Mr. Bunker and others have brought them together; therefore, we have kept them together also. Chairman Zablocki. I believe, however, to set the record straight, it was only because Ambassador Bunker and other witnesses from the executive branch who were asked the question of the violation of human rights by Members of Congress when they testified before this committee. They didn't bring it together. I think the issue of human rights was on the basis of questions and they, of course, had to respond and give their judgment. I don't think they brought it in cf their own volition in the testimony. DIVERGENCE OF OPINIONS ON HUMAN RIGHTS IN PANAMA But my final question of you, Dr. Robles and Mrs. Aragon, if the Torrijos Government had not been condemned on human rights by high church sources, by the International Commission of Jurists, Amnesty International, the U.N. or OAS, how do you account for this divergence of opinion between you and these various organiza- tions interested in human rights? Mr. RoBLES. Did you really believe that the OAS Commission is impartial? To the OAS belong some of the worst violators of human rights of this continent, Chile, Argentina. Those are countries repre- sented on the OAS. The fact that Amnesty International did not rate Panama in 1976 does not mxcan that there aren't violations in Panama. Amnesty International is going to report next year and the International Commission of Jurists is investigating already a few violations, but all those organizations lack the researchers to investi- gate every country and Panama is a very tiny countr}^ We were de- nouncing human rights violations all these years but nobody wants to listen. Now, because of the treaty issue, everybod}^ is interested in the human rights issue in order to go against or in favor of a treaty. That is not our fault. Chairman Zablocki. Well, let me say from my vantage point I want to clearly divide the two issues, the issue of the treaties, on the basis of giving justice, albeit, totally satisfactory, and the violation of human rights separately, and I don't think they should be inter- mingled because j^ou don't mix apples and oranges Mr. RoBLEs. I agree. Chairman Zablocki. So we are of equal agreement on that. Mr. RoBLES. I agree. Chairman Zablocki. Thank you ver}'^ much. Any further questions? clarification of position of PANAMANIAN COMMITTEE FOR HUMAN RIGHTS Mr. Oilman. Just one question for clarification. Is it the position of the Panamanian Committee for Human Rights that the human rights issue should be considered as a major part of the treaty con- siderations? Mr. RoBLES. Well, the negotiators of the United States are really concerned about human rights because the treaty contained elaborate provisions to protect the human rights of the American citizens. In 361 fact, with the treaty the American citizens are going to enjoy in Panama more human rights than the Panamanians. So, in certain ways it is impossible to separate the things when the negotiators are already introducing the human rights issue in the treaty. There is a whole chapter about human rights there. ROLE OF HU.MAN RIGHTS VIOLATIOXS IN COXSIDERING THE TREATY Mr. GiLMAX. Well, I wanted to be quite clear, and I think this committee welcomes your clarification. You cited numerous violations of human rights by the Panamanian Government. Are you asking the Congress to take those violations into consideration in making a determination on the treat}^? Mr. RoBLEs. Only up to the extent which those violations could affect the opinion of the Panamanians about the treaty. I mean, the public freedoms, the freedom of speech, freedom of expression, the freedom of the press, I think those issues are important because without those freedoms the Panamanians cannot freely decide if they want or do not want the treaty. I think it is important for the United States to know what the Panamanian people think about it. Mr. GiLMAx. Mrs. Aragon, would you care to comment on my question? Mrs. Aragox. Yes. I think it is correct. This was my husband's position. He wanted freedom of expression. He wanted all the exiles to be able to return and express themselves as to these treaties and he asked for at least 3 months of free discussions before a plebiscite. PANAMANIAN SUPPORT FOR THE TREATY Mr. GiLMAN. What is 3'our feeling? Do you feel the Panamanian people would support or not support this treat^^? Mrs. Aragox. I feel that the Panamanian people will not support these treaties. I feel that these treaties will bring in new conflicts if you sign these treaties, and now I am thinking also of the United States with the dictator, tomorrow he goes, and m}' husband brought this to the attention of Mr. Kissinger when he was in Stockholm, he said the only way you will have a valid treat}' is when that treaty is signed by a democratic government which expresses the vnW of the people of Panama. Mr. Gil:\iax. Father Mahon, have you been in Panama recently? Reverend Mahox. Yes, sir. Mr. GiLMAx. What do you feel is the tenor of the thinking of the people? Would they be supportive or not supportive? Reverend Mahox. I would hesitate to answer that question, Congressman. I would say that I think it is a confused thing. If there is a negative vote in the plebiscite, the question might arise whether it was a vote of discontent with their Government rather than against the treat}^ So I think those two issues are mixed there also. I would hesitate to comment or try to answer your question. Mr. GiLMAx. I thank the panel for'^their opinions. Thank you, Mr. Chairman. Chairman Zablocki. Thank vou, Dr. Robles. 362 RELIGIOUS LIBERTY IN PANAMA •f Reverend Mahon. May I say that since the Torrijos regime took over, there was a major conflict between the CathoUc Church and Torrijos until the case of the murder of a priest which has never been solved, and this tension still exists between the church and other issues, but that one in particular. Chairman Zablocki. But as a result of that issue, is religious hberty in any jeopardy? Reverend Mahon. If religious liberty means having mass on Sunday, religious liberties include speaking out against injustice, then it doesn't. Chairman Zablocki. Can you give any homily you desire to pro- vide without government interference? Reverend Mahon. No, no, my phones were tapped for years. G2 agents took down every word I said in the homily. That went on for years. So, if you talk about the purely religious, other world matters, if you talk about anything injust, there is a very definite problem, and priests have been exiled for speaking out. Mr. Oilman. Exiled from Panama? Reverend Mahon. Yes, sir. Mr. Oilman. How many priests were exiled? Reverend Mahon. Two, three that I know of. Mr. Oilman. While preaching you had to be concerned about what you said? Reverend Mahon. Oh, certainly. Chairman Zablocki. I think that would be, Mr. Oilman, a practice in many countries ruled by authoritarian governments. I can't think of many countries ruled by authoritarian governments where a man of the cloth, just because he is a religious man, is free to say whatever he pleases, if in the opinion of the government his statements were placing the security of that government in jeopardy. Mr. RoBLES. Mr. Chairman, may I observe something? Chairman Zablocki. Yes. Mr. RoBLEs. The words of Father Mahon are especially valuable because he was a personal friend of Oeneral Torrijos in the early years. Chairman Zablocki. Was he tr^'ing to convert him? Mr. RoBLES. Ask him. Chairman Zablocki. That is his job. If you are going to win over the confidence and convert them, you have to go sometimes to certain extremes. Reverend Mahon. The friendship ended rather abruptly. Chairman Zablocki. Thank you. Dr. Robles, Mrs. Aragon, and Father Mahon for your testimony. The committee stands adjourned, subject to call. [Whereupon, at 12 noon, the committee adjourned, subject to the call of the Chair.l PANAMA CANAL TREATIES AND RELATED LEGISLATION THURSDAY, OCTOBER 20, 1977 House of Representatives, Committee on International Relations, Washington, D.C. The committee met at 10:50 a.m. in room 2172, Rayburn House Office Building, Hon. Clement J. Zablocki (chairman of the com- mittee) presiding. Chairman Zablocki. The committee will please come to order. We meet this morning to conclude the committee's initial series of hearings on the Panama Canal Treaties and related legislation. Appearing before the committee today is Hon. Cyrus R. Vanca, Secretary of State. Secretary Vance is accompanied by Hon. Ellsworth Bunker and Hon. Sol \[. Linowitz, conegotiators for fha Panama Canal Treaties. committee hearing on salt Immediately following the hearing on the treaties, Secretary Vance has agreed to brief the committee on the status of the Strategic Arms Limitations Talks. Due to the sensitive nature of the information to be discussed in the briefing, it will be necessary to conduct that portion of the meeting in executive session. Since a quorum is not present, a vote will be taken when a quorum is present. Mr. Derwinski. Parliamentary inquirv^ Mr. Chairman. Due to the late start I am fearful we may not get to the point where the Secretary will be able to give us a briefing on the SALT negotia- tions. I wonder if it will be possible at some point before we adjourn, that is, before Congress adjourns, that we would be able to have the Secretary back with proper timing? Secretary Vance. Yes; I would be delighted to come back at a time that would be convenient to you if we cannot get through the SALT discussion in an adequate fashion. Chairman Zablocki. I don't know what the Secretaiy's schedule is for this afternoon. Secretary Vance. I have to have lunch with Mr. Tinderman and his Foreign Minister at 1 o'clock. That will probably last until about 2:15. I could probably be back over here around 2:30 if that would be adequate. Chairman Zablocki. I think we ought to give the Secretary a little more time. That would be pretty tight to come back at 2 :30. If he is amendable and it is possible, the committee would meet at 3 o'clock in H-236 in the Capitol. (363) 364 Secretary Vance. All right. PANAMA CANAL TREATIES Chairman Zablocki. Mr. Secretary, Ambassador Bunker, and Ambassador Linowitz, on behalf of all of the members, let me welcome you to the committee. Since Ambassadors Bunker and Linowitz appeared before the com- mittee in September, we have heard from a wide range of public and private witnesses who both support and oppose the ratification of the treaties. In the course of our hearings, a number of questions have been raised relating to the rights of the United States under the Neutrality Treatj^ and other issues. The purpose of today's hearings is to clarify these issues. We are confident, Mr. Secretary, you will be able to clarify these issues. You may proceed. STATEMENT OE HON. CYEUS VANCE, SECRETARY OE STATE Secretary Vance. I thank you for your confidence, Mr. Chairman. I have a prepared statement which I would like to open with which I think answers a number of the questions which this committee and others would like to have answered. Mr. Chairman and members of the committee, let me thank you for the opportunity to meet with you today to review the Panama Canal Treaties and to answer your questions. As the Members of Congress and the American people listen to the treaty arguments — pro and con — consider them, and reach a judg- ment, I believe they will conclude, as have four successive American Presidents, that a new treaty reflecting present-day realities serves our best interest, and that the status quo does not. The treaties will make the canal easier to operate and easier to defend. They better assure for us continued access to the canal — for both military and commercial purposes. They advance our position throughout Latin America and, in important respects, throughout the world. And they fulfill the expectations of every American that this country will continue to act as a world leader should. ■ The status quo promises tension, instability, and growing animosity I in Panama toward the United States. ■ Ambassadors Bunker and Linowitz have already presented to this committee the basic facts about the treaties. I would like to address some of the questions raised in early stages of these and other hearings on the canal. They are questions on the minds of the American people. There is a good answer to every one of them. Some have asked if we are not surrendering our sovereignty over the canal. After all, we built it, we paid for it, why shouldn't we keep it? The simple fact is that we didn't obtain sovereignty over the Canal Zone when we negotiated the existing treaty and we don't have it now. In 1903, we acquired certain rights, similar to those exercised by a sovereign, but nonetheless rights, not sovereignty. This principle was recognized by the American Government at that time. It has been recognized by our Government since. We have never considered the 365 Canal Zone as being lil^e Alaska, which we bought from the Russians, or Louisiana, which we bought from the French. Our interest today is the same as in 1903 — not sovereignty over territory deep in Central America, but use of the canal. These treaties do not prejudice that interest; they protect it, by enhancing the shared interest of the United States and Panama in keeping the canal open and efficiently operated. The Panamanian people want the right to call their country their own and they want a fair share of the canal revenues. The time has come to recognize their legitimate interest in both. We want to use the canal — now and for the indefinite future — and to make sure it will stay open, secure and neutral. The treaties give us those assurances. They reconcile our interests and Panama's interests and that is the best guarantee of the canal's future. What about the security of the canal? Isn't it necessary for the United States to maintain control over the canal in order to protect it from attack? The fact is that our military interests are better protected under these treaties than under the existing arrangement. In the first instance, we must look to our Joint Chiefs of Staff for their judgment. They participated in these negotiations on a regular basis. The treaties reflect their judgment on what is needed to defend the canal. As a result, these treaties have the full support of the Joint Chiefs. In their view — from the perspective of those who are initially charged with protecting our military interests — these treaties advance our defense. I share that feeling. Until the end of this centur}^, we will continue to control the opera- tion of the canal. We will have primary responsibility for defending it. Our troops will remain there. After the year 2000, the Neutrality Treaty affords us the rights we need to assure that the canal remains open to vessels of all nations at all times. Our interpretation of those rights is the same as the Panamanians. The statement of understanding issued on October 14 makes clear that each of the two countries — the United States and Panama — will have the permanent right to act against any aggression or threat directed against the canal or against the peaceful transit of vessels through the canal. The statement also confirms that in case of need or emergency, American ships of war will go through the canal as quickly as possible — if necessary at the head of the line. The treaties do not give the United States, nor do we seek the right to intervene in the internal affairs of Panama. The statement makes clear that the U.S. action solely for the purpose of insuring that the canal remains open, secure, and accessible will not constitute action against the territorial mtegiity or the political independence of Panama. There is a third objection raised by some to the treaties, also connected with security. Some have suggested that the treaties are a sign of withdrawal, of giving up our position as a great power in the world. Others have asked whether the treaties wdll create a power vacuum in the Caribbean which can be exploited by Cuba or the Soviet Union. In fact, the treaties have just the opposite effect. They vnil increase our influence in this hemisphere. It is the status quo which could be exploited by others. The treaties lessen this danger by remo^Tng a major source of anti- American feeling throughout Latin America. 366 K| It is the unanimous conviction of Latin American nations that the original treaty needs to be changed. Some of our closest friends in this hemisphere — the democratic governments of Venezuela, Costa Rica, Colombia, Mexico, and Jamaica — issued a joint communique in August urging the United States and Panama to conclude the new treaties. Through the years of these negotiations, the people of Latin America have looked forward to the peaceful resolution of this troublesome issue. The treaties do not settle the other important issues on the agendas of the United States and the nations of Latin America — issues in- volving trade and development, regional peace and human rights. But they do enable us to approach those issues with a fresh spirit of cooperation, unemcumbered by the suspicion and resentment that accompanied the existing canal arrangement. To all nations in the world, the treaties demonstrate that we will use our power in the manner that takes full account not only of our security interests, but also our interest in reducing world tensions, dealing with othei' nations with mutual understanding, and helping all the peoples of the world to better themselves and to hve in self- respect. What about our commercial interests in the canal? Are we jeopard- izing our interests? The fact is that the commercial importance of the canal has diminished as world trade patterns and shipping technology have changed. Today, only about 8 percent of our waterborne trade goes through the canal. Nonetheless, we must protect our commercial interests in the canal. The most important objective for our commerce is that the canal remain open, secure and efficient. Until the year 2000, operation of the canal will remain our responsibility. The canal work force already is over 70 percent Panamanian. And Panama will take over after 20 years of increasing involvement in canal operations. Panamanians will have moved into all levels of those operations and they will be fully capable of running it effectively. We nave a continuing basis, under the Neutrality Treaty, for assuring that the canal remains open to our trade as well as our warships after the year 2000. Beyond the legal rights afforded by the treaties, we are insured that the canal will remain open and efficiently operated because Panama's stake in the canal is enhanced. Panama derives approximately 12 percent of its gross domestic product and 18 percent of its foreign exchange earnings from canal-related activities and this proportion of earnings will increase in the future. If trade were shut off by closing the canal, the biggest loser would be Panama. Another concern is the alleged cost of these treaties. We are asked — why should we pay Panama to take it? The answer is that we are not. We insisted during the negotiations that payments to Panama for its contribution to the canal enterprise be drawn entirely from canal revenues. Panama initially sought much larger payments, which far exceeded what could be financed from the canal's earnings. Our view prevailed. Under the treaties, Panama will receive payments that more nearl}^ reflect the fact that it is making available its major national resource — its territory. But the treaties should not require new appropriations of our taxpayers' money. We have agreed, outside the treaty, to seek certain arrangements which will assist the general economic development of Panama and enhance its stability. These are loans, guarantees and credits. All of I 367 these loans must be repaid. They are not grants. And they will be used largely to help Panama finance U.S. trade and U.S. investment. Of these only $5 million of foreign military sales credits will require an appropriation and this will ultimately be paid back and will help strengthen Panama's ability to defend the canal. Another question asked is whether we are laying ourselves open to political instability in Panama. What — we are asked — will prevent a future government, perhaps under Communist leadership, from seizing the canal and barring our ships? The first point to remember is that there is little Communist influ- ence in Panama today — and that the most likely way to create an atomosphere in which such influences could grow would be continued disagreement with Panama over the canal. Throughout the negotia- tions, Panama's closest friends have been its democratic neighbors — ■ Venezuela, Colombia, Mexico, and Costa Rica. We should also remember that for the next 23 years, we will retain control over the Panama Canal's operations and maintain our forces in Panama. Thereafter, we will be in a position to assure and protect the continu- ing openness, security, and neutrality of the canal. Moreover, the Neutrality Treaty insures that after we leave Panama at the end of the century, no foreign power may come in to operate the canal or garrison troops in Panama or maintain bases there. But there is a more important fact to keep in mind. The Pana- manians have lived up to their basic commitments under the 1903 treaty, even though they have considered it onerous. By eliminating the causes for resentment and enhancing Panama's stake in the canal, we are creating an arrangement that reflects the aspirations of the Panamanian people. They will have their own firm interest in keeping the canal open. I will be happy to address any other questions you may have in the questioning that will follow my statement. These treaties are controversial. They arouse strong emotions. They call upon us to change with changing times, and that is never easy. When all is said and done, however, I don't believe that an issue which we all agree is of great importance to this Nation is going to be decided on the basis of emotion or partisanship or simple slogans. I believe that the Members of Congress and the American people are going to decide based upon their judgment of what is best for America. These treaties serve America's interests. They fully protect our ability to defend the canal and they make it less likely that an American life will ever be lost defending it. They fully meet our commercial needs. There is another aspect as well. The Panama Canal has always had an important symbolic dimen- sion, quite apart from its basic commercial and security value. When it was first built, it quickly came to symbolize the ingenuity and perseverance of a j^oung and emerging America. In the years since, we have demonstrated those qualities time and time again. The monuments to our imagination surround us. In the years since the original treaty was signed, the canal became a symbol of another kind. To Panama, it was a symbol of unfulfilled nationhood. 98-991—77 25 368 4 With ratification and implementation of these treaties, the canal can take on a new sjTiibolic meaning: A symbol of our continuing ability to recognize when it is time for change and to seize the opportunity — for the sake of our future interests as well as our current ones; A sumbol of our desire to work with other nations of this hemisphere on the basis of mutual trust and respect ; and Of our commitment to use our power, not to prove we are powerful, but to lessen the dangers of violence and conflict throughout the world. Thank you, Mr. Chairman. [Attachments to the statement follow:] [Press Release of the Office of the White House Press Secretary, Oct. 14, 1977] Statement of Understanding Under the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal (the Neutrality Treaty), Panama and the United States have the responsibility to assure that the Panama Canal will remain open and secure to ships of all nations. The correct interpretation of this principle is that each of the two countries shall, in accordance with their respective constitutional processes, defend the Canal against any threat to the regime of neutrality, and consequently shall have the right to act against any aggression or threat directed against the Canal or against the peaceful transit of vessels through the Canal. This does not mean, nor shall it be interpreted as a right of intervention of the United States in the internal affairs of Panama. Any United States action will be directed at insuring that the Canal will remain open, secure and accessible, and it shall never be directed against the territorial integrity or political independence of Panama. The Neutrality Treaty provides that the vessels of war and auxiliary vessels of the United States and Panama will be entitled to transit the Canal expeditiously. This is intended, and it shall so be interpreted, to assure the transit of such vessels through the Canal as quickly as possible, without any impediment, with expedited treatment, and in case of need or emergency, to go to the head of the line of vessels in order to transit the Canal rapidly. [Telegram] From U.S. Embassy in Panama to Secretary of State September 29, 1977. Subject: Negotiator's concern over hearings. 1. The political counselor called Carlos Lopez Guevara on another matter this morning and found him disturbed over some of the testimony before the Senate Foreign Relations Committee — particularly the first day. Two matters seemed to trouble him most: (a) Interpretation of the expeditious-passage clause that U.S. war vessels get "preferential" treatment or that they may "go to the head of the line". Lopez Guevara said that Royo and Escobar tentatively accepted preferential treatment for U.S. and Panamanian war vessels, but in a latter session this was specifically rejected by Panama and the word "expeditiously" was substituted. (6) Assertions that the treaty gives the U.S. any right to "intervene" in Panama. He said that Article IV means nothing more than it says. "Inter- vention is simply forbidden by international law," he said. "Panama cannot agree to the right of the U.S. to intervene." He urged that U.S. officials stop using the term "intervention" in describing its rights under the treaty. He also expressed the view that those testifying before the committee on Monday had made too much of General Torrijos' statement that Panama was under the umbrella of the Pentagon. "The general was stating a fact, not giving the U.S. any right to intervene." He said he had no way of knowing what Torrijos thought of the testimony, but he, Lopez, personally was disturbed with many of our interpretations. He promised to "set the record straight" in a speech he is to make tonight. 369 2. The political counselor pointed out some statements which Panamanian negotiators had made which do not accord with our understanding of the neutrality agreement. He said that, on balance, the positions on neutrality given by Escobar and Royo, while not identical with our interpretation, were moderate in the Panamanian context. However, certain statements taken by themselves and out of the overall context, have proved difficult to explain to skeptical Senators. He pointed out that most of the difficulties in the Senate so far have come from un- committed Senators such as Baker and Stone, rather than hardline treaty oppo- nents. He suggested that it might be useful if the Panamanians would establish a standard position, rather than speak extemporaneously on this dehcate question. 3. Lopez Guevara said he understood the difficulties which U.S. negotiators face and asked for copies of some of the offending remarks. However, he cautioned that, no matter how necessary in the American process, there were some things that no Panamanian Government could accept. 4. Comment: As the negotiators are aware, Lopez Guevara, though a moderate and reasonable man, is relatively inflexible on some questions. As he pointed out, he was at the head of those who did not accept the concept of priority passage for U.S. war vessels. He is considered a technician within the government, but he is influential. As we talk with other negotiators and officials who are campaigning for the treaty here, we will urge caution on any statement concerning U.S. rights under the neutrality treaty. But we are likely to be faced with increasing irritation over — and perhaps public disavowals of — our interpretations. Any assertion which seems to claim a right to intervene in Panama's domestic affairs is almost sure to be challenged here. Gonzalez. [Telegram] Department of State, October 1, 1977. Panama: Escobar Tells Press of Carter-Torrijos Meeting Opening remarks by Panamanian negotiator Romulo Escobar Bethancourt at news conference held at journalists' house — Live. Good afternoon, distinguished journalists. We have called this news conference on instructions from General Torrijos and the national government, the purpose being to provide information on the meeting held in Washington between President Carter and General Torrijos. While General Torrijos was on his tour of Israel and West Europe he was invited by President Carter to stop over in Washington on his return trip to have a talk. President Carter was interested in two things: First, to exchange views with General Torrijos on his tour of Israel and West Europe and to obtain the reaction of those countries or their rulers regarding the treaties signed between Panama and the United States. The second point was for the two heads of state to meet to clarify some matters which were causing confusion in Panama as well as in the United States. Specifically, this referred to two points, both of which are part of the Canal Neutrality Treaty. In Washington the two heads of State first held a private meeting during which they discussed the General's trip to Israel and Europe. Subsequently, they held a broader meeting — President Carter and his advisers and General Torrijos and his advisers. The following matters arose at this meeting: President Carter pointed out that, in spite of the fact that both he and General Torrijos clearly understood the points concerning the Neutrality Treaty, the following had occurred: The U.S. Senate Foreign Affairs Committee was interpreting Articles IV and VI of the Neutrality Treaty in a manner diff'erent or contrary to the way it was being interpreted in Panama by us, the government's spokesmen, and that this was causing confusion in both countries. General Torrijos expressed the same view and said he was very pleased to hold that meeting because if a concrete interpretation was to be forthcoming on these problems, he wanted the interpretation to be made before 23 October, the date of the plebiscite in Panama. The two heads of state, with the participation of their respective advisers, continued the meeting and went right into the items in question. The first of these topics was Article IV of the Neutrality Treaty, which states that both Panama and the United States pledge to maintain the neutrality (of the canal — FBIS) in order that the Canal may remain open peacefully and in a 370 nondiscriminatory manner to all ships. This language had been perfectly under- stood by the negotiators and the rulers of both countries, but the confusion arose- with regard to the following: whether or not the United States had the clear and indisputable right to defend the Canal in order to keep it open to the world's ships, on the one hand, and whether, on the other hand, this involved the right to intervene in the domestic affairs of the Republic of Panama. Why did the problem arise? Because some Senators in the United States main- tained that the language used in Article IV effectively gave the United States the right of defense against attacks on the Panama Canal in violation of the Neu- trality Treaty. Thoy extended this to mean that, as a consequence of this right of defense, thej'- had the right to intervene in the Republic of Panama. On the other hand, ever since the first public and official explanation in our country on 19 August, to the Assembly of Corregimiento Representatives, we said that the intent of Article IV was to point out that, in effect, Panama and the United States had the right to defend the Canal against attack in order to keep it open for transit by all the world's nations, but that the scope of this right of defense at no time could be extended to mean the right to intervene within the Republic of Panama. After the two heads of state managed to define these basic facts, we were able- to divide the problem in such a way as to be able to clarifj^ it. Because the objec- tions being made in the Foreign Relations Committee of the U.S. Senate, on the one hand, and the objections in Panama, on the other, would have no reason to exist once the two heads of state managed to develop this thinking and this com- mon interpretation. During the talks between President Carter and General Torrijos and at the meeting, the U.S. President reiterated that at no time had his country interpreted Article IV to mean the right of intervention in Panama's internal affairs; that it had always interpreted this as a right of defense against any attacks on the Canal in violation of the Neutrality Treaty; and that the U.S. interest was fundamen- tally based on the fact and need that the Canal must remain peacefully and per- manently open to traffic by all ships of all nations of the world. In this sense the Panama Canal constitutes an interoceanic waterway that is vital not only to U.S. commerce and shipping but to many countries of the world as well. Therefore, this was President Carter's reasoning. In addition, he very wisely pointed out that his country was not currently in a position to engage in inter- vention because it already has had experience with intervention in the internal affairs of other countries. General Torrijos recognized in President Carter a very moral stance regarding the political conduct of his government and of the United States, based precisely on the criterion that, although his country is a great power, it is turning away from the type of intervention that it carried out in the past in Vietnam, Santo Domingo, and a number of other places in the world. We honestly believe that the two heads of state developed a stronger under- standing at this meeting, not only in regard to settling the negotiation and treaty issue, but also in regard to the political conception of the new relations that must prevail between our two countries and between the United States and the other countries on the American Continent. A single interpretation was then agreed upon so that no conflicting interpreta- tion or standard would be expressed in the United States and Panama regarding Article IV. The two heads of state agree that the correct interpretation of Article IV is based on two facts: That attacks or acts of aggression against the Panama Canal grant to Panama and to the United States the right to defend it, in order to prevent such attacks, and so that the Canal may remain neutral, open and peaceful for all nations. In addition, at no time does such defense involve, refer to or grant to the United States the right to intervene in Panama's internal affairs. On the initiative of General Torrijos and President Carter to clarify the con- cept further, it was even pointed out that, in addition, anj' action taken by the United States to maintain the Canal open to all nations would never be an action aimed against the territorial integrity or the political independence of the Repub- lic of Panama. We believe that in this way, through the unification of this stand, a real separation is made between the problem of the Canal's defense against attacks and acts of aggression and the act of intervention which we Panamanians have always rejected and which we have said was never embodied in the Neutrality Treaty. This position has now been strengthened with the unified interpretation by the two heads of state on this problem. 371 In this regard this becomes specific, since President Carter said this textually. "^Vhat I am going to do here is repeat how this stand was reached to prevent -continued confusion in Panama and in the United States with regard to the -scope of Article IV of tlie Neutralitj' Treaty. According to the Treaty on Permanent Neutrality and the operation of the Panama Canal — in parentheses, the Neutrality Treaty — Panama and the United States have the responsibility of insuring that the Canal will remain secure and open to ships of all nations. The correct interpretation of this principle is that >each of the two countries, according to its respective constitutional procedures, will defend the Canal against any threat to its neutrality and consequent!}' will have the right to act in case of aggression or threat directed against the Canal or against the peaceful transit of ships through the Canal. You can see that this first part specifically states the right to defend the Canal "by Panama and by the United States, specificalh' to keep the Canal open, and to prevent any ob^'truction of the transit of ships. The unified interpretation con- tinues in the following manner: It does not mean and will not be interpreted as meaning a U.S. right to intervene in Panama's internal affairs. Any action by the United States will be directed at insuring that the Canal remains open, secure and accessible and will never be directed against the territorial integrity or political independence of Panama. You can see that in this specific case, the two heads of state managed to unifj'- their stands regarding the true scope of Article IV, that is, to defend the Canal against attacks or aggression directed at closing it or at obstructing the passage of ships. The actions which Panama or the United States could take are directed toward this specific purpose. But in the case of the United States, no action can •ever be directed toward the territorial integrity or political independence of Panama, which is precisely what we Panamanians are defending and have been maintaining since the signing of the Torrijos-Carter Treaty. On the second point — in this case related to Article IV of the NeutralityTreaty — the transit of U.S. and Panamanian warships in an expeditious manner through the Canal, the two heads of state clearly stated what exactly was meant by ex- peditious passage through the Canal by U.S. and Panamanian warships. They discussed this problem and pointed out that, fundamentally, expeditious passage means quick transit, without obstacles, with the least possible processing. In addition, it was pointed out that in case of an emergency or necessity, in such specific cases expeditious passage would permit the warships of both countries — but naturally primarily those of the United States, because we do not yet have warships — to go to the head of the line of ships awaiting transit, the purpose being to go through the Canal quickly. General Torrijos said yes, he did consider this necessary and appropriate because one of the things he did not agree with was the warships should spend too much time in Panamanian territorial waters, much less in cases of emergencies or neces- sity. Why? Because a prolonged delay could make that ship an object of reprisal within our territorial waters. Therefore, the sooner it left, the more secure our country would be. Second, warships which would remain for a long time in our country's territorial waters would have negative social consequences because they generally carry large crews and a large number of soldiers, and a prolonged i stay would disrupt normal life in our cities. Those who are old enough to remember what occurred in Panama during World War II will understand exactly what kind of problem is caused by a prolonged presence of foreign troops in our territory — social problems, problems of disrespect for women, drunkenness, fights, scandals and so forth. Therefore, in the case of j necessity or in the event of war, having warships go through the canal quickly ' not only fulfills an aspiration of the United States — which, naturally, in an emer- gency wants its ships to transit the Canal quickly — but also is to the advantage of Panama, which does not want such ships to remain in its territorial waters. On this basis, therefore, a uniform interpretation of the true meaning of expeditious pas'^age through the Canal was achieved. It is unified in the following manner: The neutrality treaty provides that U.S. and Panamanian warships and auxihary vessels will have the right to transit the Canal in an expeditious manner. The intention is, and it will be so interpreted, to insure the transit of those ships through the Canal as quickly as possible, without obstacles, with simplified processing and in case of necessity or emergency, to go to the head of the line in order to transit the Canal quickly. 372 This is therefore the meaning which the two rulers have now accepted as the single interpretation of the expenditious transit of warships of the United States and Panama. Besides — and this is most important — since the General was returning from his tour of Israel and West European States, he consulted the various chiefs of state on the scope of this problem of expeditious passage and how it could affect these Nations' support of the Neutrality Treaty. In this respect, those whom ho con- sulted told him that they were not concerned about this; that the problem would arise only if the Canal were closed; that U.S. warships would pass first was no problem; that the serious problem, they reiterated, was if the Canal were closed because a large percentage of those Nations' economies are based on the transit of their vessels through the Panama Canal; that one of the reasons wh}^ they con- gratulated Panama and the United States for having reached a peaceful settlement was not merely because of their solidarity with our country's just cause, but also because of their great concern that the Canal remain permanently open, as their economies would be seriously affected otherwise. Consequently, we can tell this distinguished group of journalists that as a result of the meeting between President Carter and General Torrijos in Washington, we have made it possible for the contents of Article IV of the Neutrality Treaty to be specifically interpreted by the two chiefs of government who signed the treaties. I believe an important step has been taken in really clarifying what had become cause for great concern to us Panamanians and the U.S. Senators. To us, the vital part is clearly explained and reiterated by President Carter (when he said — FBIS) that the article neither had been interpreted, nor would be interpreted, and cannot be interpreted, as a U.S. right of intervention in our internal affairs and, that U.S. actions cannot affect our territorial integrity and political independence. Later I am going to distribute this same sheet, although you already know its contents since it was published recently in the papers. I wanted to hold this news conference to explain to you how this unification of positions was reached and, in addition, to answer any questions you may want to ask. [Telegram] Department of State, October 1, 1977. Panama: Escobar Betancourt Holds Press Conference I Question. My question is very brief. Is it a fact, as U.S. news agencies have reported, that a joint communique had been signed? Answer. No, there was no joint communique. What I am reading to you is an interpretation reached by the two Presidents, It is, however, an interpretation which neither one signed because it was not deemed necessarj^ since they had signed the treaty. As signers of the treaty and as Chiefs of State, they were merely giving their interpretation of two articles of the Neutrality Treaty. When Gen- eral Torrijos said he had not signed a single autograph, he meant just that since no document was signed. In these negotiations there is nothing that is secret. If the}' had signed something, such a signed document would have been released immediately to the Panamanian press for publication. When we speak of an interpretation by the two signers of the treaty we merely mean that the two Chiefs of Government are saying: What we signed means this. They do not have to sign a statement saying we interpret it in this manner simply because the document which includes the text of the articles was signed by them. In fact, it is just as President Carter had said previously, that when the United States says it can defend the canal against attacks and aggressions and when Panama says that this did not mean the right of intervention, they are both actuall}^ speaking about the same thing (as heard) as being certain. What, they did now was to meet for him to confirm to his Senate, his people and we, to our people, the interpretation of what they had signed. Question. Some Senators are asking that the interpretation be included as part of the treaty, as they consider it important to understanding the scope of the text. Would Panama accept this 5 days before the plebiscite? Answer. That would be a decision for the General (Torrijos — FBIS) to make. However, we cannot abide by what the Senators want because they have their own problems and procedures there, their own legal system. In fact, I believe they have already concluded the period of hearings. Nevertheless, we cannot adapt our procedures to that of the U.S. Senate. Each country has its own procedure, and ours is through a plebiscite which is scheduled to be held on 23 October, When II •373 General Torrijos met with President Carter on this specific issue, they were not adding anything at all to the treaty; they were merely confirming an interpretation which the two countries had already made in Article 4 of the Neutrality Treaty but which, in both countries, did not seem to be very clear. Question. Latin America is a region of political instability. Article 4 of the Neutrality Treaty guarantees the defense of the Canal by Panama and the United States. HoAvever, if a government should emerge which is hostile toward the United States as a result of the Canal, do you believe that the United States would intervene in Panama to put down the violent nature of such a government? Answer. No. That is precisely why the interpretation points out the political independence, that this will not affect the political independence. This means that the Republic of Panama could have governments which are friendly or hostile toward the United States in the future, which we cannot know. But the com- mitment of Panama as a state with regard to the United States and in relation to all the other countries of the world and those that adhere (to the neutrality treaty — FBIS) is to keep the Canal open. It does not mean to be friendly toward any particular country. It means that it must keep the Canal open even if it is an enemy of that country. This is the real meaning of the concept of neutrality. Therefore, regardless of the kind of political regime which emerges in Panama, it can never close the Canal, not just in the case of the United States; it cannot close the Canal to any of the other countries. I would sa}^ that it cannot close the Canal even if it wanted to since Panama's necessity in the case of the Canal is precisely that it remain open. Otherwise, the ships would not transit the Canal and would not pay tolls. Therefore, one cannot make the Neutrality Treaty dependent on the type of political regime that may exist in Panama or in the United States. The regimen of neutrality demands that the Canal remain open not only to the U.S. flag, but to all flags of the world, without discrimination. Question. My question refers to next Sunday's plebiscite. AVhat percentage of the people will vote yes, in the opinion of the government? Answer. I can not answer that because I have not really consulted the govern- ment concerning such a percentage. However, based on my very personal opinion, starting with the fact that everyone who votes yes will be voting for a new treaty and that everyone who votes no will be voting for keeping the Haj-Bunau-Varilla Treaty, I believe that a large percentage of our people will vote yes. Naturally, I am not a prophet and cannot tell you exactly what that percentage will be. Question. Comrade, I would like to know why the Republic of Panama in Article VII says: the Republic of Panama will adopt the measures necessary to insure that no other use of the land and water of the Canal basin will exhaust the supply of water necessary for the continuous and efficient management, functioning and maintenance of the Canal and will not interfere with the U.S. rights to use the waters of the Canal basin. Panama needs water for its people to live. The Pan- amanian pays his for water. The Panamanian needs electricty. Why does Panama subsidize a country, which I respect but which is the world's largest economic power, and why do we give it our water? Answer. I am going to divide your question into tv.'O parts, the one about the Panamanian people needing water and the other concerning why we took the decision not to deforest or not to interfere with the waters for use in the Canal. First of all, the two points are not contradictor}^ because the maintenance of the hydrographic basin is important to provide water for our people and for the oper- ation of the Canal. Second, we must protect the hydrographic basin in this case, in relation to the Canal, because otherwise we would have to close it. If there is no water, the Canal must be closed. That is a great truth. And it is not a question of subsidizing the United States in that respect. The fact is that the Canal constitutes, according to our geographic position, one of our resources, part of our wealth, to develop our country. That is why we are struggling to put a termination date on the treaty with the United States, so that the Canal will become our property. This is also the reason why during the 23-year period we have agreed with the United States to receive approximately $80 million a year instead of the present ridiculous sum of $2.6 million. Since it is an economic resource, we must first maintain that economic resource, take care of that economic resource, and obtain the greatest possible benefit for our country and our people. If, according to your theory, we deforest the hydro- graphic basin, that would be tantamount to Venezuela setting fire to its oil wells. If Venezuela sets fire to its oil wells, it would destroy one of the principal sources of its wealth. 374 That measure is directed at conserving sufficient water for the operation of the Canal, not just now that the United States has it, but also after it is turned over to us. Furthermore, it would be absurd for us to deforest the hydrographic basin, for us to alter the water situation, or not to try to better the water situation because then we would not only have no water for the Canal, but we would not have water for our country. For instance, take the case of Panama, so as not to talk about other countries. What has happened in certain regions of our country? Indiscriminate deforest- ation, the felling of trees, the turning of places which years ago had abundant vegetation into barren areas has resulted in diminished rainwater reserves and a decrease in our water levels. It has resulted in an alteration of our annual rain levels to the point that last year we had one of our country's worst droughts. By protecting our hydrographic basin, we are not engaging in anything blasphe- mous or doing this because the gringo's have such pretty faces. We are not inter- ested in having the Canal close down. We are interested in seeing it function and in having the Canal. . . . Question. But then why do they not pay for the water? It says here that theyj will use the water free of charge. How come we have to pay for it? Answer. We pay for its consumption. Question. That should be free of charge because they consume it too. Answer. For its consumption, we pay for its comsumption. the water. Question. They consume it too. . . . Answer. Enough. Question in English. You told us about how you thought Panamanians would vote in the Plebiscite. I would like your reading on whether or not you think the U.S. Senate will ratify the treaty, and I also want to know if you still feel the way 3^ou felt in August, when you said that if it does not ratify the treaty, Panama will take a course of violence, a road to violence. Answer. When I am asked questions connected with the negotiations, I like them to be asked in Spanish. Unidentified person in English. Ann Susie, Ann Susie, would you be so kind to say that in Spanish, please? Question in English. I can't. (Words indistinct.) Unidentified person in English. If you make that question a little shorter, I will try. Questioner repeats question, unidentified person in the group translates into Spanish. Answer. Regarding your question about whether the U.S. Senate will or will not ratify the treaty, Susie, I cannot answer that because I am not a Senator, and since I am not a Senator, I cannot determine what the U.S. Senate's decision will be. I do believe that President Carter's administration, several Senators, as well as various civic and labor organizations in the United States are making a major effort to convince the Senators of the advisability of reaching a negotiated solution with Panama in connection with the treaty. Regarding your question about whether Panama will choose the path of vio- lence if the Senate does not ratify the treaty, I cannot answer that either for a very simple reason: one cannot predict the future. One does not know what the fate of the people is. We do know that the Panamanian people want to be liberated, but we also know that the Panamanian people and government have always sought the peaceful path in this process of liberation. They have always used peaceful means. They have always tried to reach an agreement that is mutually acceptable to our two countries. We cannot say that Panama will choose the path of violence because if we did we would be guessing. We believe that in this new relationship, it is more feasible to seek the path of negotiations than the path of violence. Question. Dr. Bethancourt, I would simply like to get this clear: Has the text of the articles which motivated the meeting between Carter and Torrijos been in any way altered after their talks? Answer. Which articles? Question. Article IV of the Neutrality Treaty. Answer. Oh, I see. No, no, they have not been altered in any way. Those articles have not been touched, those articles retain their wording, those articles are included in the Neutrality Treaty. The problem here regarding what you have asked is that, in connection with Articles IV and VI, the two leaders have said: This Article IV and this Article VI mean the following. ... In other words, the method of interpretation of the articles, not their alteration. 375 Furthermore, what they have said is what has been said all along. The only difference is that now they got together to say it in order to unify the interpreta- tion of the two articles in both countries. Question. Dr. Bethancourt, there is great concern — concern which I share with all Panamanians — regarding which country in the future will interpret or decide if neutrality has been violated or has been or is being threatened, par- ticularly because of the interventionist nature of the United States in the past, a history of intervention which Panama itself has suffered from, as we are an occu- pied country. Only today the newspaper La Republica reported that U.S. troops and advisers are in Nicaragua fighting the Sandinist Front guerrillas. We would like to know if there are any mechanisms or if there will be any method of con- sultation between the two countries in such an event. In other words, has this been foreseen, has this been discussed, or is this written down anywhere in the treaty? Answer. There is no exact method of interpretation on how violations of the Neutrality Treaty will be determined. Generally, in these treaties one cannot go into a multitude of juridical details. In this case they would be procedural details concerned with juridical procedures. If one did this, one would never conclude a treaty. One would have to draft several codes. Therefore, it cannot be specifically indicated in the Neutrality Treaty that the method of interpretation will be this way or that. The general treaty includes an article which states that in case of a discrepancy between the two sides concerning the interpretation of an article, they will reach an agreement between themselves or, if necessary, they will appoint an arbiter to decide the issue. This is the general way these situations are handled. For instance, the violation of neutrality or the determination of the violation of neutrality has an established juridical basis regarding the scope of the neutrality concept. This is indicated in the Neutrality Treaty itself. It is stated there that Panama declares its neutrality for the purpose of maintaining the Canal open to all ships sailing under all flags of the world and so that the Canal and the Isthmus of Panama will not become objects of reprisals by other countries in case of war. That is the basic principle. On this basis Panama concluded a treaty with the United States, after that unilateral declaration, a treaty which reiterates the maintenance of neutrality. But this is not an ambiguous neutrality. It is the neutrality specifically mentioned there. Therefore, if something were to occur in Daiien, for example, this would have nothing to do with the Canal. Thousands of things could occur on the Isthmus of Panama, as in all other countries of the world. The Neutrality Treaty indicates a specific situation. It applies to the Canal. So as to make it possible for ships to transit. If, for example, in Darien or in some part of the country the government of the Republic of Panama should stop a ship for A, B or C reason, this is some- thing which has absolutely nothing to do with the Panama Canal. What Panama will not do, under the Neutrality Treat 3^, is prevent a ship that is coming exclu- sively to transit the Canal from doing so. This is the meaning (of the neutrality treaty— FBIS). Therefore, in order to discuss violations of the concept of neutrality established in this treaty one has to look directly at the objective on which the treaty is based; that is, to keep the Canal from being closed, thus preventing the passage of ships, and to prevent any hindrances to the passage of ships which come to transit the Canal. This is the key to how the scope of the concept of neutrality is measured. But this is not outlined in the treaty concerning the Canal. If we used the method you mentioned, we would have to add to each article the pro- cedure by which the article would be implemented. This would be highly impos- sible. This is not done even in codes. You see, for example, that the penal code lists the crimes, the criminals and the subjects. It is another code, the judicial code, which indicates what procedures are used to judge crimes and apply the corresponding punishment. If the penal code, in addition to defining crimes and criminals, were to include the procedures, it would not be a functional code. The same thing applies to treaties. Treaties indicate the points of agreement — the subject, the substance of this subject. The procedures (interrupts sentence — FBIS). For example, here in these treaties you will see that many of these things are developed by different procedures: For example, procedures to be developed by the Commission which will administer the Panama Canal, procedures to be developed by the joint board for the defense of the Canal. But these procedures are not specifically outlined. What the treaties give is the subject matter which is being agreed upon by the two countries and the clause which I mentioned to you concerning what procedures are followed for (sentence left unfinished — FBIS). 376 1 Question indistinct. Answer. Those are different problems. One thing has nothing to do with the other. As far as the expiration date is concerned, it is clearly established. It is known to be 31 December 1999, at noon, Panama time. There is an article which states this and which cannot be disputed. The other article concerns the date of expiration on which the canal is returned to Panama, with no cost, except as agreed upon by the two parties. (Sentence as heard — FBIS). Why (The Phrase — FBIS) except as agreed upon by the two parties? Because, let us suppose that in 1996 or in 1999, with 1 or 2 years remain- ing before the treaty between Panama and the United States expires — this is a hypothetical case — that is, 2 years before the treaty expires, there should be the need to make an investment for X, Y or Z reasons related to the functioning of the Canal. Then the United States could say to Panama: Well 1 year remains before our administration ends, but in this year it will be necessary to invest, let us say, $5 million and we believe that to make such an investment now, when we have a year to go, is absurd from the point of view of our economy. Panama could then decide to say: Go ahead and invest the So million and when you turn over the Canal, we will recognize this debt of $5 million. This is a hypo- thetical case. That is why one says except as agreed upon by the two parties, because the matter is not closed, because one does not know what contingencies may occur. However, one says except as agreed upon by the two parties because if they do not agree on anything, then the Canal has to be returned free of costs to the Republic of Panama. If Panama were to say: No, do not make the invest- ment, or if you do it will be at your expense because we are not going to recognize this sum, then there would be no agreement. When one stipulates except as agreed upon by the two parties, this means that the two parties must reach an agreement in this regard. But this has nothing to do with the treaty termination date. Because as to the treaty termination date, if it were not a fixed date or if it weie a fixed date but with the possibility of extension, this would appear in this article and it would say 31 December 1999, except for whatever the parties might otherwise agree upon. It would say so there, but it does not say so because the termination of U.S. control is emphatic with regard to U.S. presence here in Panama: At noon on 31 December 1999, Panama time period, nothing else is said. The other refers rather to a problem of an economic nature, a problem of some investment that might have to be made at the last minute when there is only a short time left before Panama recovers the Canal. In this case the two parties will have to agree on whether Panama agrees to assume the debt or not. That would be a problem between the two countries. However, about wanting to take w^hat one article states and give it a meaning in another article, this does not make sense. This does not make sense because they are different subjects and each article contains w^hat one wants it to contain. When that article is related to another article, it is so stated. You can see this in the treaty. When administra- tion or defense is mentioned, reference is made to the schedules. You have to refer to the schedules because the articles state that these schedules will expand on the contents of that article. When one article is related to another, it is stated that the article is related to another article. In law practice we cannot prevent attempts at all kinds of interpretations. This cannot be prevented. Furthermore, the lawyer always has a tendency to do this. This is w^hy we have courts where, when a prisoner is being tried, one lawyer is accusing him and another is defending him over the same issue. However, there is another matter, which is commonsense. Commonsense is superior to law. Commonsense is what tells you when something is clear. Common- sense cannot be twisted or changed, no matter how much you argue against it. For example, if you hit an egg with a hammer and the egg breaks, there is no lawyer in the world who can deny it. Nevertheless, commonsense will tell you that if you hit it with a hamm.er, the egg will break. Therefore, this problem must be clear with regard to the fact that these docu- ments are open to many interpretations. However, we do have commonsense and this indicates to you that there is a termination date in this treaty. It is clearly stated in one of its articles which is devoted to, and even has as its title, the termi- nation date. This article says that it expires on 31 December 1999 at noon Panama time and nothing else. It docs not say that it is related to another article, or that one has to look in an annex for more information, or that one has to seek an exchange of notes to explain it, or that one has to seek a subsequent agreement or a subsequent interpretation. This article shows that it can stand on its own, that it does not need interpolations or another article to indicate whether or not it applies. 377 What is occurring now is an attempt to sock interpretations in order to create uncertainty — to create uncertainty with regard to this problem, so that people will think: is it true or not that it expires on 31 December 1999? That is the aim, because we are 3 or 4 days away from the Plebiscite. There are lawyers who have said that the Hay-Bunau-Varilla Treaty is better than this one. They have said this, but they have not taken the Haj'-Bunau-Varilla Treaty and read it to the people article by article. They have not done this. They have said the Hay- Bunau-Varilla Treaty is better than this. Let us keep that one. Moreover, this is degrading, but they have gone that far. And worse things will happen. However, one thing is being forgotten. They are forgetting — in an attempt to think of themselves as very intelligent, or in believing that one can play with all kinds of ideas — one important thing, which is the common man. The common man is used to living with commonsense daily, and he cannot be deceived. He cannot be asked the kind of question which Plato asked in attacking Sophists, such as, tell me the meaning of a man who is not a man, who is sitting in a tree which is not a tree and hitting the tree with a stone which is not a stone. This is for the Sophists, this is not for the common man. Chairman Zablocki. Thank you, Mr. Secretary, for your eloquent statement. VOTE ON CLOSING COMMITTEE SESSION ON SALT Before asking questions, as the chairman announced at the beginning of the session, the committee mil meet at 3 p.m. in room H-236 in the Capitol to receive a brieling on SALT II negotiations. The Chair notices a quorum is now present and, in order to have an executive session under the rules of the House, a motion would be in order that we go into executive session and a rollcall is required. The gentleman from. Illinois moves that the committee when it reconvenes at 3 p.m. this afternoon will meet in executive session. All those in favor signify by saying "aye," those opposed, ''no." The chief of staff mil call the roll. Mr. Brady. Chairman Zablocki. Chairman Zablocki. Aye. Mr. Brady. Mr. Fountain. . Mr. Fountain. Aye. Mr. Brady. Mr. Fascell. [No response. 1 Mr. Brady. Mr. Diggs. [No response.] Mr. Brady. Mr. Nix. : Mr. Nix. Aye. Mr. Brady. Mr. Fraser. Mr. Fraser. Aye. Mr. Brady. Mr. Rosenthal. [No response.] Mr. Brady. Mr. Hamilton. i\Ir. Hamilton. Aye. Mr. Brady. Mr. Wolff. [No response.] Mr. Brady. Mr. Bingham. [No response.] Mr. Brady. Mr. Yatron. Mr. Yatron. Aye. Mr. Brady. Mr. Harrington. Mr. Harrington. No. 378 Mr. Brady. Mr. Ryan. [No response.] Mr. Brady. Mrs. Collins. [No response.] Mr. Brady. Mr. Solarz. Mr. Solarz. Aye. Mr. Brady. Mrs. Meyner. Mrs. Meyner. Aye. Mr. Brady. Mr. Bonker. [No response.] Mr. Brady. Mr. Studds. Mr. Studds. Aye. Mr. Brady. Mr. Ireland. [No response.] Mr. Brady. Mr. Pease. Mr. Pease. Aye. Mr. Brady. Mr. Beilenson. Mr. Beilenson. Aye. Mr. Brady. Mr. Fowler. [No response.] Mr. Brady. Mr. de la Garza. [No response.] Mr. Brady. Mr. Danielson. Mr. Danielson. Aye. Mr. Brady. Mr. Cavanaugh. Mr. Cavanaugh. Aye. Mr. Brady. Mr. Broomfield. [No response.] Mr. Brady. Mr. Derwdnski. Mr. Derwinski. Aye. Mr. Brady. Mr. Findley. Mr. Findley. Aye. Mr. Brady. Mr. Buchanan. Mr. Buchanan. Aye. Mr. Brady. Mr. Burke. Mr. Burke. Aye. Mr. Brady. Mr. Whalen. [No response.] Mr. Brady. Mr. Winn. Mr. Winn. Aye. Mr. Brady. Mr. Oilman. Mr. Oilman. Aye. Mr. Brady. Mr. Ouyer. [No response.] Mr. Brady. Mr. Lagomarsino. Mr. Lagomarsino. Aye. Mr. Brady. Mr. Ooodling. Mr. Ooodling. Aye. Mr. Brady. Mrs. Pettis. Mrs. Pettis. Aye. Chairman Zablocki. The chief of staff will announce the vote. Mr. Brady. On this vote, 22 ayes and 1 nay. Chairman Zablocki. The committee reconvenes at 3 o'clock or thereabouts and we will meet in executive session as a result of the vote. 379 I would further like to advise the members that the Secretary has a very important luncheon and, knowing how direct and fully he responds to questions, I am sure on his part he will cooperate and I would hope the members would likewise cooperate by asking brief questions and not making speeches. Now, I will meet that request immediately. INTERPRETATION OF THE NEUTRALITY TREATY ]Mr. Secretary, as you have clearly indicated in your statement, perhaps the most crucial issue which has arisen involving the treaties is the interpretation of those provisions of the Neutrality Treaty re- lating to the rights of the United States to defend the canal and to obtain expeditious passage of U.S. war vessels. You have referred specifically to that point on page 4 of your prepared testimony. But as you know, Mr. Secretary, Senator Dole made public the confidential Department of State cable which reported a member of the Panamanian negotiating team disputed the U. S. interpretation regarding canal defense rights and priority passage. As you noted in your statement of October 14, President Carter and General Torrijos met in Washington and released a statement clarifying those two issues. A copy of each of the two documents is before the members. I might further add, when I asked Ambassadors Bunker and Lino- witz in September whether the Neutrality Treaty gave the United States the right to unilaterally act to defend the neutrality of the canal, the answer was ''Absolutely." Subsequently, Secretary of Defense Brown and Chairman of the Joint Chiefs of Staff General Brown agreed with that interpretation. For the record, Mr. Secretary, does this interpretation still stand in light of the statement of understanding? Secretary Vance. Yes, sir, it does. Chairman Zablocki. Was the statement of understanding signed by the two parties? Secretary Vance. It was not signed, it was issued by them as a statement of understanding to which they both subscribed and to which they both agreed. It does not have to be signed. Yesterday, either yesterday or the day before, the head negotiator, Mr. Escobar, held a press conference at which he released the state- ment and described the fact that it was a statement of joint under- standing between the two heads of government and that it accurately reflected their views to the meaning of the treat3^ Chairman Zablocki. The question arises as to whether it is binding or not. When we had an agreement for the extension of SALT I, the Vladivostok agreement, we interpreted that agreement with the Soviet Union as not binding. We have an agreement between two chiefs of state not signed and we normally would agree that such an agreement would be binding. Secretary Vance. There is a great difference between the two. What was said with respect to the SALT agreement was that it was the intention of the United States to continue not to take any action which would be inconsistent with the SALT I agreement so long as the Soviet Union did not take a contrary position. 380 The Soviet Union declared the same to be the case on their part. That is not an agreement, it is merely a statement of intention and either can change their intention in the future. Here you have something different. You have both the heads of government saying this is what the treaty means and they are saying it in advance of the ratification. So it is a totally different situation. Chairman Zablocki. We are happy to have that clarification. Will the statement of understanding be submitted as a protocol or as an annex to the treaties? Secretary Vance. It would be, I assume, filed along with the treaties as a statement of joint understanding. I do not think it is necessary to have either a construction or a reservation because this clearly reflects the understanding of the parties in advance of ratification. POSITION OF PANAMA CANAL ZONE LABOR GROUPS Chairman Zablocki. Mr. Secretary, on September 20 this com- mittee heard testimony from Mr. William Drummond, chairman of the Legislative Committee of the Canal Zone Central Labor Union — Metal Trades Council. In his testimony and in a letter to the com- mittee, Mr. Drummond asserts the Department of State attempted to prevent him from coming to testify before this committee. Is this allegation true? Secretary Vance. False. Chairman Zablocki. I would like to read into the record a letter I received as chairman on October 17 from Mr. J. R. Williams, president of the Panama Canal Pilots Association, asserting that Mr. Graham's and Mr. Drummond's testimony does not represent the views of the majority of Panama Canal workers. If there is no objection, the Chair would ask unanimous consent that the letter be incorporated in the record at this point. The Chair hears no objection. It is so ordered. [The letter follows:] I Panama Canal Pilots Association, 1 Balboa, Canal Zone, October 6, 1977. 1 Hon. Clement J. Zablocki, Chairman, Committee on International Relations, Washington, D.C. Dear Congressman Zablocki: We have noted in a recent copy of the Congres- sional Record the testimony of Mr. Alfred J. Graham, who was Mr. George Meany's representative to the U.S. Treaty negotiators. The Panama Canal Pilots Association wishes you to be informed that, although Mr. Graham represented the AFL/CIO and Mr. Meany, pursuant to his duties, his Treaty statements before your committee represent only the views of the Canal Zone Central Labor Union/Metal Trades Council. To further place Mr. Graham's statements in more precise perspective, of the 13,500 Panama Canal employees, he represents approximately 1,500, mostly U.S. citizens. The remaining 11,000 (2,000 U.S. and 9,000 Panamanian) have differing representation and certainly a different point of view. Sincerel}'^, J. R. Williams. Chairman Zablocki. Mr. Secretary, could you or Ambassadors Bunker or Linowitz clarify the role played by the union in the ne- gotiating process? Are the unions satisfied with the treaties as they impact on the Canal Zone employees? I 381 STATEMENT OE HON. ELLSWORTH BUNKER, CONEGOTIATOR FOR THE PANAMA CANAL TREATIES Mr. Bunker. We had an adviser from the unions as a negotiator to Panama appointed by the AFL-CIO. Their views were taken into consideration throughout the negotiations. We referred those to Mr. Wilhams, chairman of the Pilots Association, so labor's views were adequately represented and taken into consideration in the course of negotiations. Chairman Zablocki. Thank you. Ambassador. Mr. Fraser. Mr. Derwinski. Mr. Derwinski. Thank you, Mr. Chairman. INTERPRETATION OF NEUTRALITY TREATY Mr. Secretary, the statement that was drawn after the meeting between the two Presidents last week includes language that states the United States shall never take action directly against the territorial integrity of Panama. Now, after the year 2000 the canal becomes a part of the territory of Panama. The Canal Zone, as such, is abolished. If so, how can we act to defend it without involving the territorial integrity of Panama? Secretary Vance. I think this is clearly answered in the paragraph of the statement of understanding. The statement of understanding says very clearly the following: The correct interpretation of this principle is that each of the two countries shall, in accordance with their respective constitutional processes, defend the canal against any threat to the regime of neutraltiy, and consequently shall have the right to act against any aggression or threat directed against the canal or against the peaceful transit of vessels through the canal. Then it goes on to say that this does not mean it shall be inter- preted as a right to intervene in the internal affairs. So I think there is a very clear distinction as long as the action taken, the unilateral action is to defend the canal and to insure that it remains open and secure and neutral, then there is an absolute right. HUMAN RIGHTS IN PANAMA Mr. Derwinski. Now, another subject. This will be my last question. The President has dramatized his interest in human rights throughout the world. There have been questions raised over the human rights record in Panama. Is there any consideration, discussion, or impact on these treaties of the human rights situation in Panama? Secretary Vance. The United States has followed the human rights situation in Panama as it has in a number of man}^, many other countries. It did not affect the actual negotiation of the treaty. How- ever, that does not mean that the United States does not have concern about human rights conditions in Panama as well as in other countries. Panamanians do enjoy the guarantees of life, liberty, and security of the person. However, opposition which appears aimed at over- throwing the Government has not been permitted and Panama has been on occasion guilty of occasional abuses of authority. 382 I think it was in 1976 that some 16 people were expelled from the country because of opposition views and we made very clear our concern about that action. But specifically to answer your question, the answer is no, it did not affect the negotiation of the treaties. STATEMENT OP HON. SOL M. LINOWITZ, CONEGOTIATOR FOR THE] PANAMA CANAL TREATIES Mr. LiNowiTZ. I wonder if I might add a point to that? Secretary Vance. Please do. Mr. LiNowiTz. In the first place, we made known our concern and interest in the whole human rights issue. The Government of Panama has invited the OAS rights organization to come to Panama and view the human rights situation. PUBLIC PRESENTATION OF THE TREATIES Mr. Derwinski. I would like the Secretary and Ambassadoi Lmowitz to know I concur in the points you made in your statement, that these treaties address the present-day realities in Latin America. But I think it is obvious that you are not convincing the American public that this is the case. So any controversy adds to your headache. So while you may be logical in the world of diplomacy, the ability to communicate with the American public has to be substantially improved. Secretary Vance. Yes, sir. Mr. Derwinski. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Yatron. Mr. Yatron. Thank you, Mr. Chairman. OCTOBER 14 UNDERSTANDING OF THE NEUTRALITY TREATY Mr. Secretary, what role in the ratification of the treaties do you see in the Carter-Torrijos statements of October 14? Secretary Vance. It, I think, clears up once and for all two ques- tions which have been very troubling to the Members of Congress and to the American people. Therefore, I think it plays a very import- ant role because it makes it crystal clear that we have a single inter- pretation of what the treaty means on these two critically important issues. Mr. Yatron. What legal weight would the statement carry if it was embodied in the language of the resolution of ratification? Secretary Vance. I do not think it is necessary, as I indicated, for it to be put into the form of a reservation or, indeed, even in the form of an interpretation as those two terms are used legally. I think it would be sufficient merely to file along with the papers the state- ment of interpretation and that that would be sufficient. Mr. Yatron. Does the language in the Carter-Torrijos statement permit the United States to take military action against the nation of Panama to assure that the canal remains open and secure to all ships of all nations? Secretary Vance. The statement makes it very clear that either the United States or Panama can take whatever action is requiredj to keep the canal open, free and neutral to all nations. i Mr. Yatron. Mr. Secretary, how do you interpret the phrase "any U.S. action shall never be directed ag:ainst the territorial in- tegrity of political independence of Panama," in that context? Secretary Vance. I interpret that, as I indicated a little while ago, as relating to the question of intervention in their internal affairs, but it does not affect the fundamental issue and the fundamental issue is, do we have the right to take action if there is anything jeopardizing the openness and the freedom of access to the canal? Under those circumstances we can take military action to insure that the canal stays open and secure and neutral so that all nations of the world can use it. Mr. Yatron. Thank you, Mr. Secretary. Chairman Zablocki. The members will note that the House is in the process of a quorum call. The Chair would suggest we continue for another few minutes and then we will probably have to recess for 5 to 7 minutes, Mrs. Meyner. Mrs. Meyner. Thank you, Mr. Chairman. LEGISLATION REQUIRED TO IMPLEMENT THE TREATIES There has been a good deal of discussion around here on whether the House of Representatives has a constitutional duty to approve or disapprove the disposition of American property in the Canal Zone as a consequence of these treaties. Lawyers differ on the ques- tion and I believe the administration has said no to that. Have you heard anything up here on the Hill that would change your opinion or the President's opinion on this issue and what sort of implementing legislation do you envision following the ratification of the treaty? Secretary Vance. I would be delighted to answer both those questions. Nothing has come up to cause us to change our mind on our original position. It is well established that the treaty power extends to all areas within the legislative authority of the Congress, which are not reserved exclusively to the jurisdiction of the Congress. It is also clear from the drafting history of the Constitution that the framers intended that U.S. territory and property could be dis- posed of by treaty and that implementing legislation was not required. This is an opinion of the Attorney General to that effect which I know has been given to the Senate Foreign Relations Committee and I am not sure whether it has been given to this committee. If it has not, it should be. So, I think there really is no question on that as long as the treaty itself is executed insofar as the property and lands are concerned. That is perfectly proper and correct under constitutional law. Now, however, there is a role for the Congress and the House to play in this. There is legislation which has to be passed. That legisla- tion has to be drafted and is currently at the Office of Management and Budget. It relates to several things. First, it relates to the creation of a new Panama Canal Commission which would take the place of the current two authorities which run the Panama Canal. Second, there is the necessary legislation which would deal with the question of tolls and revenues. -991 O - 78 - 26 384 ^ Third, there is the necessary legislation which will deal with a series of labor matters which are provided for in the treaty and which need to be implemented by le^slation. And, fourth, it deals with certain diplomatic matters which are of lesser moment but which should be taken care of. STATEMENT OF UNDERSTANDING OF THE NEUTRALITY TREATY Mrs. Meyner. Mr. Secretary, just one final question. It is my understanding that the Senate Foreign Relations Commit- tee has been divided on the question of whether to put the text of the Carter-Torrijos statement of understanding into the full text of the treaty or merely into the instrument of ratification. What is the practi- cal difference between these two methods and the third choice of letting the statement of understanding stand on its own? Would it really matter legally or practically? Secretary Vance. Yes; I think it does make a difference. First, if it is put in the form of a reservation, then that means that in effect the treaty has to be opened up again for negotiation and that you have to have formal action taken with respect to that. Once you open it up for one piece, there is a likelihood that other pieces might be opened up. If it were done in the form of an interpretation, it would not mean the treaty would be opened up, it would be merely a reflection of the understanding of the Congress in ratifjang the treaty. The third way of doing it would be merely to rely upon the state- ment of understanding as such and file that with the papers. I believe that the latter is the satisfactory way to do it. Mrs. Meyner. Thank you, Mr. Secretary. Thank you, Mr. Chairman. Chairman Zablocki The committee will be in recess until a quarter of 12. [Whereupon, a short recess was taken.] Chairman Zablocki. The committee will resume the hearings. Mr. Findley. Mr. Findley. Mr. Secretary, Ambassadors Bunker and Linowitz, I want to make a couple of statements before I raise a question in order to hopefully cast my position in these foreign policy matters. I strongly support the Panama Canal Treaties and I am going to do the best I can to create public understanding and support for the treaties wherever I go. I think it is vitally important. I have come to the conclusion our military problems would be far greater if the| treaties are rejected than if they are approved. SALT NEGOTIATIONS But I also want to voice my concern about the other subject matter of your appearance here today, the SALT agreements. In order to perhaps cast my concern, and again in a nonpartisan role, I would like to call your attention to a letter of March 3, 1976, to President Ford, a copy of which I furnished to you just a few moments ago. This letter was signed by 10 Republican members of the Inter- national Relations Committee. All but one are still on the committee. 385 That one is now the Governor of Delaware. I ask unanimous consent, Mr. Chairman, to place the letter in the record at this point. Chairman Zablocki. Without objection, so ordered. [The letter follows:] Committee on International Relations, House of Representatives, Washington, D.C., March 3, 1976. Hon. Gerald R. Ford, President of the United States Washington, D.C. Dear Mr. President: We write to you as concerned Members of the House International Relations Committee, Republicans and friends. The object of our concern is the military balance between the Soviet Union and the United wStates and the impact of the on-going SALT negotiations on that balance. We are troubled by several things: First, by the continued toughening of the Soviet nego- tiating position and the steady erosion of our own; secondly, by the ambiguous but unsettling record of past Soviet behavior in SALT and in international affairs generally; and finally, by the dangers that would result from exposing any SALT agreement to the supercharged atmosphere of election year politics. To begin with, though, we draw your attention to remarks on SALT which were quoted in Time Magazine (Februarv 16) and attributed variously to the Secretary of State and "a senior U.S. official." Articles such as this one — in which "a senior U.S. official" openly derides the American cruise missile and lends support to the Soviet rationale on the Backfire bomber — are damaging to our position in SALT and deprive us of much needed negotiating strength. Moreover, in the midst of sensitive negotiations, a senior official's disagreement with key elements in the U.S. position is intelligence information of a high order. Press "backgrounders" of this sort make it impossible for the Soviet leaders to take our position seriously, much less to extend themselves in the interest of accommodation. This is most unfortunate because important national issues are at stake with regard to the two principal systems being discussed — the cruise missile and the Soviet Backfire bomber. As you are well aware, the Backfire has an impressive capability for striking targets across the continental United States. Some down- play this capability by saying that one-way unrefueled missions with bomber recovery in third countries are impracticable. Yet the mainstay of our own stra- tegic bomber force, the B-52, would have to flly similar one-way missions due to the heavy fuel loss incurred as a result of low-altitude penetration. The thought arises: Why should our B-52's count, but not the Soviet Backfire? Some of the suggested "solutions" on Backfire make little sense. Because the Soviets already have a tanker capability and can rapidly relocate the Backfire in times of crisis, Soviet "assurances" on these matters do nothing to moderate the Backfire threat. We have even graver concerns about the fate of the American cruise missile in the SALT negotiations. In our judgment, the long-term military utility of this system appears to be high. And yet it may be impossible even to research this system seriously if SALT severely constrains its range or the numbers that can be deployed. Congressionsl support for developing this technology will be diflScult to obtain if its most interesting possibilities are prohibited by SALT. This is particularly distressing in view of the many potential advantages of the cruise missile for meeting our national security and arms control objectives. For example, the missile is relatively cheap, thereby making it possible for us to procure an efficient force with a lower drain on national economic resources. It would be most unfortunate if SALT forces us to procure more expensive rather than less expensive systems. Secondly, the accuracy of the cruise missile could reduce collateral damage and provide our political decision-makers with a wider range of options than just mutual suicide. Potentially, this accuracy also could make possible the substitu- tion of conventional warheads for nuclear ones, thus raising the nuclear threshold. Last but not least important, the cruise missile should enable us to shore up our European defense structure, while possibly replacing many of our more vul- nerable and antiquated tactical nuclear weapons. Why should we throw away the opportunity of exploiting these benefits? What do we get in return? Moreover, it seems to us presumptuous, if not incredible, that the Russians are proposing to ban U.S. cruise missiles with ranges over 375 miles when their existing cruise missile ranges can go much farther than that. 386 Equally amazing is the fact that at proposed Russian ranges their cruise missiles would be able to hit a significant percentage of important U.S. targets, while we, given Russian geography, would be unable to do likewise. It must be said, too, that we find the Secretary of State's description of the benefits of an agreement to be unpersuasive. The envisioned agreement will not noticeably affect or constrain the massive Soviet build-up that is already under- way. The Soviets already allocate so much to military spending that it is difficult to imagine how they could increase. Here in the U.S., on the other hand, a too- hasty agreement could foster harmful illusions about the magnitude and nature of the threat we face. Regardless of where one comes down on the substantive questions, one fact seems indisputable : A complex arms control agreement which afifects our strategic capability for the next 10 years cannot be concluded in an election year without incurring great and probably unacceptable risks. Even the best possible agreement is likely to come under attack. An agreement as ambiguous as the one now under discussion inevitably will be exposed to withering blasts from all sides — some reasoned but many not. One has only to compare the problems of cruise missile verification with current allegations about Soviet compliance to understand how crushing and hostile the public reaction may become. Massive public assaults on the agreement will undermine confidence in sensible arms control. Prudence demands that we take these factors into account. We have given great thought to these matters and hope that you will give our views serious consideration. Respectfully, we would ask for an opportunity to visit with you at some point in the near future to discuss this subject in greater detail. Sincerely yours, William S. Broomfield, Edward J. Derwinski, Paul Findley, John H. Buchanan, J. Herbert Burke, Pierre S. duPont, Larry Winn, Jr., Benjamin A. Oilman, Tennyson Ouyer, Robert J. Lagomarsino, Minority members of the House International Relations Committee. Mr. Findley. In that letter we expressed our deep concern about what we perceived to be wrongful concessions in the SALT proposals that were then under consideration back in March of 1976. But the proposals that were then before our Government and the Soviet Union were considerably less damaging to U.S. security needs and to international stability than those that are now pending between these two governments. Therefore, I hope you will keep in mind that background of our concern as we proceed with questions this afternoon. I think there is justification for the executive branch giving close attention to the views of the House of Representatives because, under the Arms Control Act of 1961, there is the opportunity for involving both Houses of Congress and not just by the Senate through the ratification process. I can easily cite the law if you like. It is section 33 of the Arms Control Act of 1961 . 1 will read that portion to you. It says : No action shall be taken under this or any other law that will obligate the United States to disarm or to reduce or limit the Armed Forces or armaments of the United States except subsequent to the treatymaking power of the President under the Constitution or unless authorized by further affirmative legislation by the Congress of the United States. I would like to remind you as well that the House was involved in approving the SALT I agreement. A resolution favoring the agreement was deliberated in the House and approved by this body. 387 Therefore, I think you should be as closely concerned with House viewpoints as with Senate viewpoints. I say that further out of concern for our position as a member of the NATO alliance. We just had a meeting with the Prime Minister of Belgium and a topic of discussion was the cruise missile question and the protocol in the SALT agreement which would set aside for 3 years any sharing of cruise missile technology with our allies. This is but one of the aspects — you are shaking your head. Would you like to respond to that point? Secretary Vance. Why don't you finish? There are several things I would like to comment very briefly on. Mr. FiNDLEY. I will make it very concise. Our concern arises first of all as to the constraints placed on cruise missile technology limits in the "3-year protocol and restrictions on our ability to share cruise missile technology with our allies, and, second, the throwweight issue. At that point I will stop and be glad to hear any response you make. Chairman Zablocki. Mr. Findley, we will have a SALT discussion this afternoon. Mr. Findley. I realize that and do not expect him to make much of a response. Secretary Vance. I would like to make a brief response to what Mr. Findley said. I do not want to go into any detail in public because this is still a delicate matter under negotiation, but there are one or two general comments. First, I welcome the letter and we will study it. Second, you made reference to the proposals which were on the table at the time you wrote this letter were much harder from the U.S. standpoint than current ones. I do not agree with that and I will tell you why and think I can convince you when we are in closed session. With respect to the question of cruise missiles, I think that when we get a chance to discuss this in detail you will agree we are, although putting constraints on cruise missiles, keeping the various options open through the protocol device and, finally, I think the other point that you made with respect to cruise missiles was — let me see, I tried to make a note of it here Mr. Findley. The range limits, sharing technology. Secretary Vance. Sharing technology, yes, that is the other point. On the sharing of technology, we would be precluded from sharing technology about things which we are prohibited from doing under the treaty. We are not prohibited from sharing technology about things we are permitted to do under the treaty. I want to make that clarifi- cation. Mr. Findley. We can detail our concerns this afternoon. Thank you, Mr. Chairman. Chairman Zablocki. The Chair would Hke to announce that under the 5-minute rule that those who have been here since the beginning of the session will be recognized first. Mr. Findley. May I ask unanimous request, Mr. Winn can't be here and he asks that four questions be answered in the record? Chairman Zablocki. Without objection, it is so ordered. [The questions and responses follow:] 388 Questions Submitted by Hon. Larry Winn, Jr., and Responses by the Department of State Department of State, Washington, B.C., October 31, 1977. Hon. Clement J. Zablocki, Chairman, Committee on International Relations, House of Representatives. Dear Mr. Chairman: During the appearance of Secretary Vance before your Committee on October 20, Congressman Larry Winn submitted several written questions for response from the Department. I am pleased to enclose a copy of Congressman Winn's questions with our responses. With best wishes, Sincerely, Douglas J. Bennet, Jr., Assistant Secretary for Congressional Relations. Question 1. It is my understanding that the Congress can, in line with the Government Corporation Control Act, limit the use or expenditure of revenues by the existing Panama Canal Company. The new Panama Canal Commission proposed in Article III of the treaty would be a U.S. Government Agency, not merely a wholly-owned corporation. Will the Congress have at least as much authority to restrict payments from the new Commission's account in the Treasury? Answer. In implementing legislation to be submitted to the Congress, the Executive will propose that the Panama Canal Commission, like the present Panama Canal Company, be subject to the Government Corporation Control Act. Accordingly, with regard to the Panama Canal Commission, the Congi-ess will have the same authority as it now has over the Panama Canal Company to make available and limit expenditures for administrative and operating purposes. Question 2. I believe that under the present circumstances U.S. warships do not actually pay tolls for using the Canal. Article XIII of the treaty states that Panama will receive 30 cents per Panama Canal net ton for "each vessel" transiting the Canal. Won't U.S. warships have to pay this toll under the new treaty? How much would this cost the U.S.? Answer. All U.S. Government vessels, including warships, currently pay tolls for using the Panama Canal and will continue to do so under the new treaties. Under the present system the toll payment is made in the form of a credit to the Treasury account of the Panama Canal Companv. In fiscal year 1976, credits for tolls paid by U.S. Government vessels totalled $726,000. Question 3. I understand, that a draft environmental impact statement (EIS) regarding the effect of an increase in the Canal tolls was published for comment at the end of August. I believe that EIS spoke in terms of the necessity of a 25 percent to 35 percent increase in tolls to cover the cost of the Canal's operation after the new treaty goes into effect. Other reliable sources have estimated that as much as a 45 percent increase could easily be required. (a) What is the status of the draft EIS? Has a copy been made available to this committee? (6) What is the potential effect of such a substantial increase on the United States? (c) Have the governments of Latin American countries whose economies rely heavily on use of the Canal been furnished copies of the EIS to help them evaluate the effect of such large toll increases on their countries and the corresponding advantages and disadvantages of the new treaty to them? Answer, (a) Public comments have been received on the draft Environmental Impact Statement (EIS), and the Department is now preparing the final EIS, which should be issued in early November. Copies of the draft EIS were sent to all Members of the Congress as well as to the House International Relations Committee. (6) We estimate that a toll increase in the neighborhood of 30 percent \vill be required once the new treaty goes into effect, with the exact level of an initial toll increase dependent on Canal traffic projections at the time. A study on Canal traffic and revenue projections is now under preparation and should be available early next year. We do not foresee a toll increase as large as 45 percent. A toll increase of 30 or even 45 percent would have a minimal impact on the United States economy because Panama Canal traffic is sensitive to the cost of nlternative supply and transportation modes and routes available to buyers. sellers, and shiDoers of each commodity transiting: the Canal. In the case of some commodities, cheaper alternatives to the Canal will be practicable, thereby moderatine the effect of a toll increase. For other commodities, which continue to find the Canal the most practicable transportation alternative, the impact of toll increases will depend on the availability of alternative markets or substitute commodities. In anv event, we do not foresee an adverse impact on those United States export commodities such as coal or grains for which the United States is the major supplier, since a toll increase of 30-45 percent would not affect the U.S. competitive position and could be shifted to the importers of these commodities. It is also important to note that although a 30 percent toll increase might cause some commodities to be diverted from the Canal, it would not result in a decrease in Canal revenues and would therefore not adversely affect the financial viability of the Canal. (c) The draft EIS is available to anyone upon request. However, Panama is the only foreign government to which we have so far furnished the study. Question 4- Have any of the countries who signed the protocol to the neutrality treaty officially acknowledged or stated their agreement with the apparent U.S. position that we have the right to take unilateral military action to defend the neutrality of the Canal? In other words, is the U.S. the only country to construe the Neutrality Treaty in this way? Answer. Our interpretation oif the Neutrality Treaty is shared also by Panama. In the October 1977 statement of understanding issued by both the United States and Panama, it was stated that: "Under the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal (the Neutrality Treaty), Panama and the United States have the responsibility to assure that the Panama Canal will remain open and secure to ships of all nations. The correct interpretation of this principle is that each of the two countries shall, in accordance with their respective constitutional proc- esses, defend the Canal against any threat to the regime of neutrality, and consequently shall have the right to act against any aggression or threat directed against the Canal or agoinst the peaceful transit of vessels through the Canal." The Protocol to the Neutrality Treaty will be available for signature following ratification of the Treaty by both the United States and Panama. We are aware of no statement by a Latin American or other government concerning its attitude toward Article 4 of the Neutrality Treaty — which establishes the responsibility of the United States and Panama to maintain the Canal's neutrality. Chairman Zablocki. Congressman Lagomarsino. Mr. Lagomarsino. Thank you, Mr. Chairman. Mr. Chairman, I would Hke, inasmuch as many of the members are not here, to ask permission for questions to be submitted for the record. Chairman Zablocki. Without objection, it is so ordered. Mr. Lagomarsino. Mr. Secretary, I think I understand the posi- tion of the administration with regard to the lack of necessity for having the statement of understanding that was reached between the President and General Torrijos made a part of the treaty by reserva- tion or by amendment, but what I don't understand is what would be wrong with doing that? What would be the problem with doing that? Secretary Vance. If you take the reservation route then you open up the whole question of negotiation and I think that is a major problem because you then throw the whole thing open again. If you take the interpretation route, that problem is not created. All I am saying is I don't think it is necessar}^ to do that because you can accomplish the same thing by filing the memorandum along with the treaty. Mr. Lagomarsino. What happens if we have a successor to General Torrijos who does not agree with this interpretation? Secretary Vance. As long as it were filed as one of the documents with it and it was the joint understanding, it would be binding upon the parties. 390 OUTSIDE INPUT INTO U.S. NEGOTIATION POSITION Mr. Lagomarsino. When mention was made earlier of the labor input into the negotiations and when Mr. Graham, who was the labor negotiator, or labor adviser, as he described it, to our negotiators, was here and testified, one of the things he said — I congratulated him for having an input into the treaties and pointed out that was more than I knew any other groups had had. This is one of the problems why we were asked not to advertise my presence there. The shipping lobby and others would be interested also in having advisers. My question is. Why weren't other groups given that same con- sideration? Mr. Bunker. I am not aware of other groups that asked to be part of the negotiating team. We have consulted with the merchant ship- ping people, but I can't recall their having requested to be part of the team. Mr. Lagomarsino. Were any Members of Congress given that opportunity? Mr. LiNowiTZ. Consultation. Mr. Lagomarsino. In the sense the labor negotiators or advisers were. Mr. LiNOwiTZ. Not as designated advisers, but we consulted ex- tensively with Members of the Senate during the course of the negotiations. Mr. Lagomarsino. How about Members of the House? Mr. LiNOwiTz. Some of the Members of the House, yes, sir. HUMAN RIGHTS Mr. Lagomarsino. Mr, Secretary, I notice in your prepared state- ment you made no mention of the subject of human rights. Is that significant or is it just that you didn't feel it necessary? Secretary Vance. No, it was not significant. I think I covered that in the questioning. I spoke to that question when I testified before the Senate Foreign Relations Committee. I think the position of the United States is very clear on this issue and I tried to avoid repeating what I had stated before the Senate to deal with questions specifically that had not been answered. Mr. Lagomarsino. There was a representative of the State De- partment either last week or the week before who spoke specifically about the human rights issue and he seemed to be unaware of the Freedom House survey that was issued in January of this year. It is my understanding that one of the organizations that the State De- partment relies on in making its human rights determinations is Freedom House; is that correct? Secretary Vance. That is correct. Mr. Lagomarsino. I am sure you are aware then that Freedom House at least gives Panama a very, very low rating, in fact, the lowest rating in the Western Hemisphere. Were you aware of that? Secretary Vance. I have read what has been said, I think, by all of the various groups at one time or another on this issue insofar as they are concerned. I can't remember the details of it now. Perhaps one of my colleagues might speak to it. 391 Mr. LiNOWiTz. We are, of course, familiar with the reports of the Freedom House. The fact is they have a report on civil rights in which Panama was given a very low rating. It did not address itself to the human rights situation, which I think your question is directed at. But we have looked at the survey and are struck by the fact that the human rights bodies, such as the United Nations, and Amnesty International do not show that evaluation. Chairman Zablocki. The time of the gentleman has expired. Mr. LiNOwiTz. Ambassador Bunker's point is we have no informa- tion as to where Freedom House got their information. Chairman Zablocki. Mr. Goodling. Mr. Goodling. Thank you, Mr. Chairman. First of all, Mr. Secretary, I would like to congratulate you on this statement. Secretary Vance. Thank you. PRESENCE OF FOREIGN TROOPS IN PANAMA Mr. Goodling. You have said what I believe, put in writing what I believe, much better than I have been able to do up to this point. So I assure you your memorandum will be used. I have two questions I would like to ask. In your statement you say no foreign power could operate the canal or garrison troops or have bases stationed there. I am assuming you are saying any place in Panama. Secretary Vance. Yes, sir. Mr. Goodling. In other words, that is part of the agreement I was not familar with. Secretary Vance. Let me get out my copy of the agreement. I think it is article VI of the Neutrality Treaty — I am sorry, article V. After termination of the Panama Canal Treaty only the Republic of Panama shall operate the canal, maintain military forces, defense sites and maintain military forces within its territories. Mr. Goodling. Not just the Canal Zone? Secretary Vance. No. impact of the treaties on U.S. employees in the zone Mr. Goodling. The second question. I wish you would walk through with me exactly what does happen with American employees in the Canal Zone. Secretary Vance. I would have to ask one of my colleagues to do this because it gets very complicated and I think it would be better to ask one of them who has been through all of the detail in the nego- tiation to do that. Would you care to do that. Ambassador? Mr. Bunker. The conditions of employment will continue under the new Commission as they are now. In other words, employees will retain the rights they have now and will certainly have rights in gen- eral no less favorable than employees elsewhere in the world. Mr. Goodling. That is up to the year 2000? Mr. Bunker. Up to the year 2000, yes, sir. That is correct. There is a provision in the treaty which will provide earlier retirement which 392 they were very anxious to have assured. New employees in general will be rotated every 5 years when the treaty goes into effect so that there will not be a vested interest in the situation. ] Mr. GooDLiNG. In other words, if they want to stay as employees i and don't want to take early retirement, even though you are going ij to increase the number of Panamanians and decrease the number of ll Americans ' Mr. Bunker. There will be a gradual increase in Panamanian employees and a consequent decrease of American employees. The i treaty provides that within the first 5 years there would be 20 percent I less American employees than there are at the beginning. This is, ' of course, taken care of through attrition and resignation which aver- age about 400 a year. Mr. LiNOWiTZ. Just to add a word to that, in effect they are as- sured of their jobs with the Canal Commission until their retirement, as Ambassador Bunker said, or unless their employment is terminated for any other reason. During that period they are assured maintenance of the schools and most of the privileges they now enjoy including APO and PX and commissary for the first 5 years. If they leave the company they are entitled to preference for another Government job some place else. Mr. GoODLiNG. One final statement. From the beginning I felt you were moving in the right direction. And I feel strongly now the treaty is good. I cannot see how anyone can oppose the treaty on the basis we are going to spread communism through the area, or impose a dictatorship, because our statements of policy and our negotiators have done a good job in keeping democracy spreading in that area and helping not to bring in communism. So I wholeheartedly support your effort. Secretary Vance. Thank you. U.S. RESPONSIBILITY FOR PANAMANIAN EMPLOYEES Mr, Burke. Would you yield? Why is it necessary we guarantee jobs to the Panamanians if they are citizens of Panama and Panama will operate the canal? Mr. LiNOWiTZ. We were talking of American citizens. Mr. Burke. Don't we assume the responsibility of the Panamanian employees after the treaty goes into effect to find new jobs for them or to guarantee their status and aren't they being paid by the United States? Mr. LiNOWiTZ. The Panamanian Government is responsible for what happens to the Panamanian employees. Mr. Burke. I don't mean to be argumentative, but I will find it, there was a statement made here before the committee before when I asked the question or in a statement I have before me, that indicates that the Panamanians — and there are 1,000 some of them^ — will be transferred and their jobs will be guaranteed, I presume, by us. Mr. LiNOWiTZ. I don't know where that reference would be, sir. Mr. Burke. Maybe I can find it before you leave. Chairman Zablocki. The time of the gentlemen from Pennsylvania has expired. Mrs. Pettis. Mrs. Pettis. Thank you, Mr. Chairman. 393 CANAL REVENUES AND EXPENSES Mr. Secretary, since the Panama Canal has been running at a deficit for the last few years and the new treaty is not providing new appro- priations from Congress, where will the money to pay the increased payments come from? Secretary Vance. Let me comment in general terms and then ask Ambassador Bunker to comment more specifically. There will have to be increases in the canal tolls in order to get the increased funds which are necessary and that will be done. The treaty does provide that the tolls and other charges shall be just and reason- able, but it does not say that you can't increase the tolls when necessary. It will be necessary to increase the tolls and perhaps Ambassador Bunker will expand on what I am saying. Mr. Bunker. As the Secretary said, some increase in tolls will be necessary. How much, it is difficult to tell at this moment until we know particularly what the increased traffic will be from Alaskan oil. Depending on that, there may be an increase of somewhere around 25 to 30 percent. I think you mentioned the deficit that has occurred in the canal operations. That was due in part to some falling off in traffic due to the worldwide depression and opening of the Suez Canal and the fact the tolls have not been raised to keep abreast of inflation. It happens they were raised, and the indications are, the estimates are, that the operations will show a surplus this year. Mrs. Pettis. Thank you. IMPACT OF INCREASED TOLLS Since we have established then that tolls must be raised, what effect will the economic terms of the treaty and the need for these increased tolls have on our Latin American neighbors who are the most critical users of the Panama Canal? Mr. Bunker. Raising the tolls to the extent mentioned will not affect appreciably the traffic of the canal or the Panamanian canal users, all of whom are supporting the treaty. Mr. LiNowiTz. Let me add a word on this question, if I may, so it is clearly on the record. We think there are two other sources for additional funds for making payments to Panama. There will be a construction in the Panama Canal that we think will be a savings and be available for these payments. Second, there have been payments of $20 million a year interest to the United States on the original investments in the canal. If need be, that $20 million reserve could be used for Panama if other funds were not available. It is a combination of the three, the tolls savings and the $20 million hitherto designated as interest. We believe it will be possible to avoid coming to Congress for appropriations. Mr. Oilman. Will the gentlelad}- yield? Assuming there is not an increase in canal traffic as a result of the Alaskan oil and, thus, these other funds are not available and assuming that you do have these additional capital improvements needed in the next 20 or 30 years, and that there are other continuing necessities that arise, will you then have to go to Congress for additional appro- priations if the contingency funds do not meet the needs? 394 Mr. LiNowiTZ. The capitalization has been made without plannin^: to increase the funds from Alaskan oil. The capitalization assumes there will be enougrh funds coming from the canal. Mr. Oilman. The Secretary suggested he did not anticipate in- creased utilization of the canal and you are saying you are depending on increased utilization of the canal. Isn't there an inconsistency in these statements? Secretary Vance. I do not know whether there will or will not be increased utiHzation from Alaskan oil. That remains to be seen. What I said is that we had — the amounts we used the canal had decreased so it was only about 8 percent of our total shipping now as compared to a higher figure in the past. Chairman Zablocki. The gentlelady may retrieve her time. Mr. Oilman. I thank the gentlelady for a jdelding. IMPACT OF TREATIES ON CANAL OPERATIONS Mrs. Pettis. In one of your statements you predicted the treaties will make the canal easier to operate. If there is one aspect of our in- volvement with the Panama Canal without a critic it has been our unbiased, efficient and economic record in the canal. How will this record be improved by these treaties? Secretary Vance. With the time that we will have during the remain- ing period of years up until the year 2000 to train additional Pana- manian employees, I think we can expect that they will be adequately trained and, therefore, will be able co carry on with the same degree of efficiency that we have in the past. I think in terms of the atmosphere that will exist in terms of the stake, the enhanced stake the Pana- manians will have, it will assure that a climate will exist which will indeed make it easier to operate in the future, because it will be in the interest of the Panamanians to see that it does operate both efficiently and in a way that will be acceptable to all the people. Mr. Pettis. Thank you, Mr. Secretary. Thank you, Mr. Chairman. I have no further questions. Chairman Zablocki. Mr. Bingham. Mr. Bingham. Thank you, Mr. Chairman. SUPPORT FOR THE TREATIES I just have one question, but before I ask that question I would like to say that I think that our negotiators, Ambassador Bunker and Am- bassador Linowitz have performed a great national service. I think that those who are interested in preserving the availability of the Panama Canal for this country to use in future years are terribly misguided in thinking they will serve that interest if they resist the ratification of these treaties. I think only by these treaties can we preserve the availability of the canal for the United States and its allies. In fact, to be sure of it under any circumstances, but we have a better chance to know it will be open to us and our friends if these treaties are ratified. COMMUNIST influence IN PANAMA One question. Mr. Secretary, on page 8 of your statement you say there is littlp Communist influence in Panama today. Earlier during 3% these hearings a former Chairman of the Joint Chiefs, Admiral Moorer asserted: "There is now a Castro-Torrijos-Moscow axis." Would you care to comment on that statement and is there any evidence of a formal or informal alliance of that kind? What is the extent of Cuban and Soviet presence in Panama? Secretary Vance. I have a great deal of respect for Admiral Moorer, but disagree with him on this. As far as the Soviet Union is concerned they have neither diplomatic or trade relations with Panama at this time. They did indeed send a trade mission of some five people down recently to talk about the possibilities of opening up trade in the future. We trade with the Soviet Union. To me this is not a matter of major concern that indicates any axis between the Soviet Union and Panama. Insofar as Cuba is concerned, Cuba is a Caribbean nation which does have relations with many other countries in the Caribbean. I don't think there is any basis I know of to indicate that they have any special influence insofar as Panama is concerned, indeed, quite to the contrary. Mr. Bingham. Thank you. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Harrington. Mr. Harrington. Thank you, Mr. Chairman. ROLE OF INTELLIGENCE AGENCIES IN THE NEGOTIATIONS This is addressed to any one of you who cares to respond to it. One of the drearier episodes, or at least one I read in the press as to what is ongoing and is something that should never have happened, that has been referred to is that of the National Security Agency being a part of what was employed by this Government as a resource in the lengthy conduct of negotiations with the Panamanians over the last few years. I don't know of the total lack of statements made, one attributed to the NSA recently by Jack Anderson, but I would like you to address it in terms of what damage that could have in terms of what your broader objective is, some effort of dealing with increasing nationalism in the rest of the Western Hemisphere. If so, is that sort of thing needed and justifiable? Secretary Vance. I don't know what Mr. Anderson said. I took a quick look at the column this morning. Mr. Harrington. It is not so much what he said this morning, but the reference to the NSA or in some fashion other agencies. Secretary Vance. I really believe it would be inappropriate for me to comment about intelligence matters in an open session, Mr. Harrington, or Mr. Chairman. Mr. Harrington. If you have responded to them elsewhere, I am perfectly willing to look at that record. I have not gotten the impres- sion that has been the case. Secretary Vance. I think there has been testimony on this before other committees. I would be glad to testify in closed session or ask one of my colleagues who has testified before another committee with respect to this issue, to do so here. Mr. LiNowiTz. Both Ambassador Bunker and I did appear before the Senate Intelligence Committee which undertook to investigate allegations there had been bugging or tapping involved in the negotia- tions. The findings of that committee, as you know, was that there 396 was no evidence or any reason to believe that any such activities in any way affected the results of these negotiations. So it is quite clear if there were such activities they had no effect on these negotiations. Mr. Harrington. My concern was not so much as to whether they would have affected the negotiations. It was in fact the broader issue imposed by the levels of integrity, using this country as one example and other countries as another, when you begin to put that sort of information in order, people who have anticipated this in a variety of roles. I would like someone to address that apparent dichotomy of what we say we are and what often is the case in this instance. Secretary Vance. I would prefer to discuss that in a closed session. Mr. Harrington. Thank you, Mr. Chairman. Chairman Zablocki. Mr. Burke. Mr. Burke. Thank you, Mr. Chairman. SEA LEVEL CANAL Mr. Secretary, I am rather surprised that you didn't in your state- ment touch on the fact that you have precluded the United States from negotiating at any time for a sea level canal I presume you are looking forward to in the possible future. Could you tell me why this was not touched upon in detail? Secretary Vance. High-level canal? Mr. Burke. Sea level canal. Secretary Vance. The sea level canal was covered in the negotia- tions. Mr. Burke. I am talking about your statement, because that is something the American people, I believe, would like to know. Why are we precluded as a nation from negotiating with any other country in Latin America should another canal be necessary. Secretary Vance. Let me respond and then ask one of my colleagues to expand on what I have said. The subject was discussed in the nego- tiations. It was covered. There was provision made in the treaty, as you know, for a study to be made as to whether or not it would be desirable to have a sea level canal. Depending upon the results of that study, there will be consultation between ourselves and Panama. Mr. Burke. Yes, but the point is, and I am aware of that, but the treaty also provides that Panama can veto any conclusion that we might make. Secretary Vance. And we have precluded them in the treaty from building any new interoceanic canal in the territory of Panama except in accordance with the provisions of this treaty agreement, which means it has to be done with us and if we don't agree with it they can't do it. In return for that they asked for a quid pro quo and the quid pro quo was that we not build anywhere else during this period of time. I would add in addition we have done surveys on the best place to build a canal. They were done as recently as 1975 and they showed Panama was the best place to put in a sea level canal. Mr. Burke. I thought Lyndon Johnson said it should be in Colom- bia. Secretary Vance. No ; he did not. 397 Chairman Zablockt. The Chair would hke to announce there is a vote on the floor. The committee will remain in session while other members go and then I will go vote when other members return from voting. You may continue, Mr. Burke. IMPACT OF THE TREATIES ON OPERATION AND DEFENSE OF THE CANAL Mr. Burke. Mrs. Pettis touched on this. You said the treaty makes it easier to operate and defend the canal. When you use the word "easier," what conclusions and what comparison did you make to reach those conclusions? Secretary Vance. I think if we do not get a new canal, it will be- come increasingly difficult to operate the canal because of the dis- satisfaction that exists and will continue to increase in the future. With a new treaty, a new base, I think it will be easier to operate a canal. In terms of the defense of the canal, it is clearly provided that we have the responsibility for the defense of the canal through the year 2000. Thereafter we have a clear right to defend the canal in the event that there is any jeopardy to the openness of the canal. Finally, I would add that because Panama has a stake in the canal, an increased stake, I think it is very, very clear that the coop- eration that one can expect from simple, practical self-interest will be much greater. CANAL revenues Mr. Burke. Let me ask one more question. On page 7 of your statement you state that the U.S. view prevails under the treaties. Panama will receive payments that more nearly reflect the fact that it is making available its major natural resource, its territory, but the treaties should not — I emphasize should not require new appropria- tions of tax money. Secretary Vance. Yes, sir. Mr. Burke. I sense the canal has been running at a deficit for the past number of years. How do you propose we raise the money and who will guarantee it for Panama? Secretary Vance. As Mr. Linowitz indicated earlier, it will be coming from basically two sources, and the two sources are increased revenues through increased tolls and, second, through increased efficiency of operation by spinning off some of the parts that were inefficiently operated. Mr. Burke. Presently it has been a deficit and if suggested raises are not sufficient how Secretary Vance. We will have to deal with that at the time it comes. Mr. Burke. How would you deal with it? Wouldn't it come from the taxpayer? Secretary Vance. You might have to further increase the tolls. That is one way you could deal with it. I cannot, you know, say that under no circumstances, forever would there be no possibility of an appropriation. What I am saying, and I think I was quite careful in the words I chose there on page 7, I said should not require, rather than would not. 398 Chairman Zablocki. The Chair would like to advise that the committee will be in recess very briefly until the return of Congress- man Bingham who will assume the Chair and the hearing will continue. We will recess the meeting until after he votes. The hearing is in suspension. [Whereupon, a brief recess was taken.] Mr. Bingham [presiding]. The committee will resume its session. Mr. Solarz. SUPPORT FOR THE TREATIES Mr. Solarz. As you know, it is popular among politicians, some- times even among Congressmen, to keep their options open. However, I would like to come out of the political closet, as it were, at least on this one, and say that I think this treaty is a great achievement, I think you and Ambassadors Bunker and Linowitz can take great pride from it. I am somewhat amazed that you have gotten much more criticism than compliments with respect to the treaty because I think it really does recognize the prevailing realities, adjusts our relationship with Panama and the rest of Latin America, and preserves our inter- ests in the Panama Canal. As my good friend said eariier, you have not yet convinced the major- ity of the American people as to the good of the treaty. I think according to the polls that is true. I think what my good friend neglected to say is, it is not your job alone to convince them. I think those of us here who followed this closely and understand the enormous problems to be created for our country if the treaties were not ratified have the obligation to go back to our people and explain the facts of life to them. If I have any complaints about this treaty, it is the fact Ambassadors Bunker and Linowitz did too good a job in representing our interests and from the aspect of the Panamanian this may not look like such a good deal. This leads to my first question. PANAMANIAN REFERENDUM To v/hat extent is the treaty in trouble in Panama? They have a system whereby it is supposed to be ratified by referendum. It would be a peculiar and paradoxical situation if, after all we have gone through here, it were rejected over there. Secretary Vance. Let me respond to that and thank you for what you have said, Mr. Solarz. They are shortly to have their referendum on the treaty. I believe it is on the 23d. It is our best information that it will receive approval by the Panamanian people. It would be fool- hardy of me to try and speculate on what that vote might be, but I can say it is our best information that the Panamanian Government expects approval by the ratification vote, mainly in the referendum vote. Mr. Linowitz. It should be noted in connection with the plebiscite there has been fuller debate and discussion in Panama than there has been in the last decade. The opposition has mounted a strong stand and been given freedom of the press to express its position. Quite clearly there will be a sizable indication of opposition and also the United Nations has agreed to send observers to the plebiscite 399 and some of the OAS Americans have been invited to attend to assure that the Panamanians are allowed to express their opinions. Mr. SoLARZ. Has the referendum been phrased in the terms of a yes or no proposition — that is, are the Panamanians being asked whether they approve or disapprove the treaty, by voting yes or no? Secretary Vance. It is yes or no. Mr. SoLARz. Has the President loaned General Torrijos the services of Pat Cadell to assure that they are fair in that sense? In the negotiations you did not persuade the Panamanians to take over Gowands Canal in Brooklyn Mr. LiNOWiTZ. We have had similar offers from U.S. MILITARY PRESENCE IN PANAMA Mr. SoLARz. Mr. Secretary, I was struck in reading the Israeli press by a number of prominent figures in Israel saying that if the Panamanian treaty insists on the right to maintain a military presence in Panama for the next 23 years, why shouldn't Israel be entitled to maintain a presence on the West Bank for the next 23 years, partic- ularly in light of the fact the West Bank is far more closely related to the security of Israel than the Panama Canal is to the security of the United States. I wonder if you see an analogy in this question and how would you respond ? Secretary Vance. I would respond by saying that is a question to be negotiated by the parties when they get to Geneva. Mr. SoLARz. Perhaps we could loan Ambassadors Linowitz and Bunker to the U.S. delegation. If they could do for them what they have done here, we would not have any problem in the least. Mr. Bingham. Mr. Gilman. Mr. GiLMAN. Thank you. reservations on the treaties Mr. Secretary, I want to compliment you on your efforts to educate this Nation concerning the benefits to accrue from acceptance of this treaty; and wish similarly to compliment your two colleagues who have been so diligently involved in the negotiations. Frankly, I have some serious reservations about the administia- tion's canal policies and the proposed treaties relating to the canal. While I fully appreciate the needs for a revision of existing terms for providing for more reasonable financial return to Panama, for the return of possibly some of the excess land in the Canal Zone and for providing for a higher pioportion of Panamanians who are involved in the operation of the canal I am not convinced of the need or the wisdom of walking away from the canal entirely by the year 2000. I think we should have explored some other options, some options of possibly providing for continual revision of terms, and extending the treaty and not the proposed termination by the year 2000, of U.S. authority in the Canal Zone. I think that we have yielded to the threat of civil disorder too readily. I believe we have important economic and strategic interests in the canal which should be preserved and protected. 98-991 O - 78 - 27 400 ECONOMIC IMPORTANCE OF THE CANAL For example, I would like to explore with you the economic sigjnif- icance of the canal to which today you attributed a diminishirg importance. I think you stated in your earlier testimony that the cominercial importance of the canal has diminished as world patterns in shipping and technology have changed. With the current transit rate of approximately some 13,000 ships per year, the future usage projections indicate an increase of up to 26,000 transits by the year 2000. The economic benefits from the canal usage as opposed to the added 18,000 mile trip around the cape is certainly still a significant factor. It has been estimated that of all the cargo that transits the canal in ships of all nations, about 60 or 70 percent are bound to U.S. ports and well over half of all the ships using the canal are coming or going from the United States. I think it is difficult to downplay the economic importance to the United States at a time when Alaskan oil has begun to flow south. When the Alaskan pipeline reaches its fullest capacity, the west coast will be unable to accommodate the entire volume, and it is estimated that by the year 1980, 45 percent of our Alaskan oil will be shipped through the canal to the east coast. The added commerce will result in more than 700 added transits of oil by 1982. I think the treaty has sprung from an overemphasis of a diminution of the canal's economic importance and I believe the canal treaty leaves a lot to be desired. I think it will become more and more important to us, and I would ask you to comment on that aspect. Secretary Vance. I commented first in my statement on the facts and the facts are that the commercial importance of the canal has dimin- ished as of this moment as compared with the past insofar as we are concerned. I went on to say "Nonetheless we must protect our com- mercial interests in the canal," and I went on to describe what those interests were and how we were going to continue to protect them. The most important thing in protecting them is to keep the canal open and secure and efficiently operated for the indefinite future. And I think by achieving the new treaty we have made a major step forward in assuring that this is going to be true in terms of our com- mercial interests for the future. The commercial interests of our country I think are fully protected and if, as we all hope but don't know, the traffic in the canal increases, so much the better. That would be splendid. I do not want to diminish in any way the importance of the canal as an important commercial interest of the United States, nor do I want to diminish the importance of it from the standpoint of security interests. They are important. What I am saying is I think our main task is to be sure that that canal remains open and secure through the future and I think what we have done with these two treaties is to accomplish that. Mr. GiLMAN. I think, too, you have said in the past, and we con- tinually keep hearing the argument, that this treaty improves our image in Latin America. Other Latin Americans perceive this as an extremely important issue. Secretary Vance. I have, yes, sir. 401 LATIN AMERICAN SUPPORT FOR THE TREATIES Mr. Oilman. In your statement, it is the oripdnal treaty that has to be changed. And you talk about some of our closest friends having: endorsed this. You point out some five nations, Venezuela, Costa Rica, Colombia, Mexico, and Jamaica have endorsed the treaty in August. Wasn't it true we invited all nations to participate and some 20 declined the invitation? Secretary Vance. No. Mr. Oilman. What was the situation? I was informed other nations were invited and many refused to take part. Secretary Vance. What you are talking about, those nations all participated in a special meeting in Bogota and they all appeared and at that time met with the Panamanians and issued a statement which I have referred to there. At the time of the canal signing when we signed the treaties we invited the various nations and all but about one from the whole area came and participated. We had a chance to talk with the leaders of each one of those countries and they were unanimous in stressing the importance of a new treaty and commended the fact that we had been able to negotiate these new treaties. Mr. Oilman. My time is up. Thank you, Mr. Secretary. Thank you. Mr. Chairman. Chairman Zablocki. As I stated at the beginning of the meeting, the Secretary has a very important engagement that he has to attend at 1 o'clock. We are deeply grateful, Mr. Secretary, Ambassador Bunker, and Ambassador Linowitz, for your testimony before the committee today. It was most helpful. We look forward to the replies you will provide to questions from members who were unable to be here and those that time would not permit for them to ask. Those will be provided for the record. Thank you again. The committee stands adjourned, subject to the call of the Chair. [Whereupon, at 12:47 p.m., the committee adjourned, subject to the call of the Chair.] APPENDIX 1 Staff Summary of the Issues, Pro and Con on the Panama Canal Treaties The following is a summary of the major issues involving the Panama Canal Treaties as propounded by the proponents and opponents of the Treaties "•■•i testimony before the Committee on International Relations on September 8, 14, 15, 20, 26, 28, and October 11 and 20, 1977. The summary is not intended to represent a judgment or conclusion with respect to each of the issues nor is it intended to represent a position for or against the Treaties. The purpose of the summary is to provide Members of Congress and the public in general a concise analysis of the issues as developed in the committee hearings and to provide information preparatory to the consideration by Congress of legislation to implement the Treaties assuming their approval in the Senate. (403) 404 OVERVIEW Proponents - U.S. interests in the Panama Canal are manifested in assuring that the Canal remain secure and open to the United States and its trading partners and allies on a neutral and non-discriminatory basis: that is, in its use, not in its ownership. The Treaties will protect these interests in the long run better than the current arrangement. Opponents - Only continued direct U.S. control of the Canal can provide adequately for the protection of U.S. economic and national security interests in the Canal. SECURITY ASPECTS OF THE CANAL Importance to U.S. National Defense Opponents - The Panama Canal remains an important link in the U.S. national defense chain. It was a crucial part of U.S. military supply during both World Wars, the Korean War, and during the Vietnam War. The Canal saves approximately 8,000 miles and 25-30 days transit time between the Atlantic and Pacific Oceans. During the Vietnam War, military vessels transiting the Canal reached a high of 1,504 in 1968. Such access for U.S. warships and supply vessels can only be maintained with the United States in complete control of Canal operations. Admiral Thomas E. Moorer, former Chairman of the Joint Chiefs of Staff, testified that the United States no longer has a "two-ocean" Navy since the number of ships in active commission has been 405 reduced from over 900 to fewer than 500. He noted that, in contrast, the Soviets have rapidly expanded their fleet of warships as well as merchant ships. He argued that a large part of U.S. war and contingency plans are not feasible unless the full use of the Canal is assured. He pointed out that over 90 percent of the Navy's ships can transit the Canal . Proponents - Treaty supporters do not dispute the Canal's im- portance to U.S. military requirements but maintain that the Treaties provide the best guarantee that the Canal will be available for U.S. military use if the movement of forces and supplies becomes necessary in the future. However, proponents argue that the magnitude of the Canal's military importance has diminished in recent years. They cite the recent reductions in U.S. international commitments, particularly since the end of the war in Vietnam. Treaty proponents also point to the fact that naval task forces located in various parts of the world can respond rapidly to trouble spots without using the Canal, and that, while the Canal is still important to the Navy's mobility, it cannot accommodate 13 attack and 4 anti-submarine aircraft carriers nor can nuclear submarines transit the Canal without surfacing. Finally, Treaty supporters contend that, because of the Canal's extreme vulnerability to rocket or missile attack, the Canal cannot be realistically relied upon as an indispensible military asset during wartime. 406 Defense of the Canal Opponents - The Treaty requirement that the United States remove its military bases and personnel from the Canal Zone by the year 2000 would severely restrict U.S. ability to defend the Canal. It is far better to have forces on the ground in the Canal Zone than to be forced to retake the Canal with an expeditionary force. U.S. forces are better trained and equipped and are more experienced than their Panamanian counterparts with respect to the defense of the Canal. Any action under the Treaties would place the United States in the position of "invader" thereby subjecting it to adverse international opinion. Proponents - It is almost impossible to defend the Canal against certain types of attack of sabotage even with the U.S. military forces presently stationed in the Canal Zone. Until the year 2000, the United States has the primary responsibility for the defense of the Canal, and is not precluded under the Treaties from reaching an agreement with Panama to continue a U.S. military presence there- after. While prepositioned U.S. forces would be an asset in any defense of the Canal, they are not essential. Moreover, the United States is perfectly capable of transporting troops from the United States to Panama in adequate numbers and in sufficient strength to defend the Canal. In any event, the current U.S. military complement of about 9,000 troops would require a substantial augmentation from the United States if a major defense is necessary. 407 U.S. Rights Under the Neutrality Treaty Opponents - The Neutrality Treaty is vague and does not speci- fically state that the United States has the right to independently defend the Canal against all actions which would threaten its neutrality. As for the Statement of Understanding, the document was not signed by either party and is not a part of the Treaty. As such, it represents only the views of the present Panamanian leadership and could be disavowed by some future Panamanian Government. Finally, neither the Neutrality Treaty nor the Statement of Understanding is clear with respect to the right of the United States to defend the neutrality of the Canal in the event that Panama itself were to be the aggressor. Proponents - Under the terms of Articles IV and VI of the Neutrality Treaty, the United States and Panama agree to maintain the neutrality of the Canal and to permit U.S. military and auxiliary vessels to transit the Canal expeditiously. A subsequent "Statement of Understanding" reached between President Carter and President Torrijos on October 14, 1977 clarifies the Neutrality Treaty as giving both the United States and Panama the right to: "...defend the Canal against any threat to the regime of neutrality, and consequently shall have the right to act against any aggression or threat directed against the Canal or against the peaceful transit of vessels through the Canal. 408 "This does not mean, nor shall it be interpreted as a right of intervention of the United States in the internal affairs of Panama. Any United States action will be directed at insuring that the Canal will remain open, secure and accessible, and it shall never be directed against the territorial integrity or political independence of Panama." ■ With respect to the right of expeditious passage of U.S. military vessels, the Statement of Understanding provides that such vessels shall transit the Canal "as quickly as possible, without any impediment, with expedited treatment, and in case of need of emergency, to go to the head of the line of vessels in order to transit the Canal rapidly." According to U.S. negotiators, the terms of the Neutrality Treaty together with the Statement of Understanding clearly sets forth the right of the United States to take appropriate actions, unilaterally if necessary, to defend the neutrality of the Canal. The Statement of Understanding will be filed as an ancillary document to the Treaty and, as such, is binding on both governments. Internal Security Opponents - Under the existing Treaty, U.S. troops and Canal Zone police protect the internal security of the Canal. The Treaties require the removal of such forces, leaving the security of the Canal in the hands of the Panamanian National Guard. The Guard may not be capable of defending the Canal and, for political reasons, cannot be 409 trusted to maintain the Canal's neutral status. While it is true that the Canal's vulnerability to some forms of attack and sabotage is the same under the current arrangement as it would be under the Treaties, it is clearly more advantageous to have U.S. security forces in place to protect the Canal. Proponents - Defense Secretary Harold Brown, and other experts in the national security community are of the opinion that the Panamanian National Guard will be capable of defending the internal security of the Canal as this responsibility is transferred to Panama. The current U.S. security assistance program for Panama is designed to provide the National Guard the wherewithal to defend the Canal. In conjunction with the treaty negotiations, the United States pledged its best efforts to provide Panama $50 million in foreign military sales credits over a ten year period in order to insure that the National Guard is adequately euqipped to maintain the Canal's security. Moreover, proponents contend that the atmosphere which would result from the acceptance of the Treaties would make acts of terror and sabotage against the Canal far less likely than they would be if the status quo were to continue. Access Opponents - The U.S. must maintain control of the Canal in order to be able to assure access to the Canal for itself and its allies and to be able to deny access to enemy nations in time of war. 410 Proponents - In past hostilities, the U.S. has never actually denied access to the Canal to vessels of enemy nations. The ability of the U.S. to sink hostile enemy ships at either end of the Canal has kept them from using the Canal. The Neutrality Treaty, under which the U.S. and Panama -- and all signatory states -- guarantee the neutrality of the Canal, adequately assures the United States and its allies access to the Canal. ECONOMIC ISSUES Opponents - The Panama Canal is still of vital economic importance to the United States. In spite of the fact that in 1976 only 9% of all transits were by U.S. flag vessels, 66% of the tonnage was transiting to or from U.S. ports. Some 921 U.S. merchant ships (96% of the total) can transit the Canal, and some 25,000 of the total world fleet of some 27,000 vessels of 1,000 or more gross tons can transit the Canal. The Canal's economic importance to the U.S. is actually increasing because it is currently the only means of transporting surplus Alaskan oil to the East Coast. The current transit rate is approximately some 13,000 ships per year, and it is projected that the rate will reach 26,000 ships by the year 2000. The United States has a responsibility to 411 ensure that Latin American neighbors continue to have a neutral, open, and economical Canal since their economics depend far more on the Canal. Canal economics have high impact on regional and state economies not reflected in the U.S. average. The Canal is much more important, for example, to Texas and Nevada, two states whose tonnage percentage is much higher than the national average. Proponents - No one questions that the Panama Canal is important to the economic interests of the United States. However, it is not as important as it once was. For example, 8% of U.S. foreign trade was transported through the canal in 1976, compared to 13% in 1949, and 4% of U.S. intercoastal trade transits the Canal. Notwithstanding this decrease in activity, the Canal is of important economic value to the United States and its closure would increase transportation costs to U.S. trade. The Treaties should be supported, not because of the declining U.S. economic interests in the Canal, but because they are the best means of protecting those economic interests. Sea Level Canal Opponents - The Treaties prohibit the United States from building a sea level canal elsewhere in the hemisphere without the consent of Panama and provide no rights to build one in Panama, but merely provide for the right to jointly study the feasibility with Panama. Since current economics would not encourage a sea level canal, why restrict 412 U.S. options that could be a lever in any future negotiations. Under the Treaties, U.S. hands are completely tied from any alternatives that may present themselves for the next 23 years. Proponents - The Treaties also give the U.S. a veto over any decision by Panama to construct another canal with the assistance of a third nation. Further, this provision is not as restrictive as it may appear given the following considerations: (1) the current transit rate of the Panama Canal is 34 vessels a day, while it could handle over 45 vessels a day; (2) the construction of another Pacific-to-Atlantic canal seems unlikely in the next several decades; and (3) feasibility studies have indicated that Panama would be the best location to con- struct a sea level canal. NATURE OF THE PANAMANIAN GOVERNMENT Dictatorship Opponents - The Government of General Omar Torrijos Herrera is a dictatorship which cannot claim to represent the Panamanian people. How do we know a future government, representative of the people, will not disavow the Treaties? Current treaty problems came about because the treaty claim was not a product of the people of Panama, but one man. Future generations can make the same argument about the proposed Treaties, 413 Proponents - The nature of the government is irrelevant to the issue of the Treaties. Given current international political realities, if the United Stated did not enter into treaties with governments be- cause of their authoritarian nature, the U.S. would be party to very few treaties and agreements. The Treaties will be binding on any future government, no matter whit its composition. Past Panamanian Governments have abided by the 1903 Treaty, a treaty much less favorable to Panama, so there is no reason to believe some future government will not abide by the proposed Treaties. Human Rights Opponents - The Torrijos Government has violated human rights. Panamanian exiles, in testimony to the Committee, contended that political rights in Panama are severely limited and that torture is practiced in Panamanian jails. The January 1977 Freedom House report judges Panama to be among the worst violators of human rights in Latin America, placing it behind Chile and Cuba. Proponents - There is no question that the Torrijos Government has a history of human rights violations. However, the most serious vio- lations in question occurred mainly before 1970 and have not been of the magnitude found in several other Latin American nations. Freedom House, despite its rating of Panama, has endorsed the treaties as fair 414 and just. Other organizations concerned with human rights, such as Amnesty International, have not listed Panama in recent years as one of the serious violators of human rights, and the OAS Inter-American Commission on Human Rights has been invited by Torrijos to investigate the human rights situation on site in Panama. Furthermore, the issue of human rights is irrelevant to the Treaties. As expressed in testimony before the International Realtions Committee by the Reverend Leo T. Mahon, who lived and worked in Panama from 1962 to 1974: "The issue of human rights re the Panama treaties: who is raising the issue? First of all, Panamanian exiles, some of whom are in this chamber this morning. They are friends of mine, my heart goes out to them. I am consoled by the fact that my country has offered them asylum and so they join the other victims of socio-political change and injustice: Cubans, Chinese, Chileans, Hungarians - and before that White Russians, etc. The fact remains however, bitter for them and also for us, that their peoples are governed and represented by de facto governments with whom we must deal and at times make treaties." "There are also good, honest Americans who are concerned by the violation of human rights anywhere, anytime. I admire that but I also wish to remind them that in this case, justice is the overriding issue. If I owe a man a hundred dollars, then I may not say to him 'I shall repay my debt if you stop abusing your wife.' I may wish to scold him but I may not in justice withhold that which I owe him. "Lastly, it seems to me that there are those who violently oppose the treaty and use whatever ansiliary issue to defeat its ratifi- cation. Aren't these some of the people who claimed 'states' rights' and tried to deny the right of the federal government to intervene in a state which was denying civic and human rights to some of its citizens? Would these people ever, ever grant another country the right to intervene in ours? Why then do we demand that right in the case of Panama?" 415 OPERATIONS OF THE CANAL Capability Opponents - Panama is a small, unstable country which lacks the ability to either operate the Canal efficiently or insure its continued protection without U.S. support. There are not enough skilled Pana- manians qualified to operate the Canal. Panamanian operation would subject the Canal to political operation that could result in diversion of needed funds and to deal with domestic social or political pressures in Panama. One aspect of past operations that is without a critic is the record of U.S. management of the Canal in insuring open, economical, and non-discriminatory use by all. Proponents - Panama is one of the more stable countries in Latin America, and with U.S. economic and military assistance over the next 23 years it will gain the ability to maintain the Canal on its own. The U.S. will retain the right to protect the Canal if its neutrality is endangered. Seventy percent of the Canal work force currently is Panamanian; with the proper training over the next two decades, Pana- manians will be able to operate the Canal. The present lack of qualified Panamaians is the result of U.S. administration that has prevented Panamanian participation. Tolls Opponents - Panamanians are likely either to let the Canal run down so as to endanger its continued functioning or raise tolls so high as to make its use uneconomic. Latin American countries passed 98-991 O - 78 - 28 416 an OAS resolution this year against the toll structure Panama is seeking. Moreover, U.S. customers will pay hidden taxes from toll increases on Alaskan oil transit costs and other consumer products. Proponents - The Canal is Panama's economic lifeline, so the Panamanian Government is unlikely to allow it to fall into disrepair; competing means of transportation -- the U.S. landbridge, supertankers sailing around South America -- are not much more expensive now than using the Canal, so there is a comparatively low economic ceiling on the amount by which tolls can be raised. Furthermore, the U.S. controls tolls until the year 2000. Communist Influence Opponents - Several witnesses based their opposition to the Treaties on alleged pro-Communist orientation of the Panamanian Government and the existence of a "Torri jos-Castro-Moscow Axis", as evidenced by Torri jos' visit to Cuba in 1976 and by the recent visit of a Soviet trade mission to Panama. As stated by Admiral Thomas Moorer, "do not be surprised that is this treaty is ratified in its present form to see a Soviet and/or Cuban presence quickly established in the country of Panama." Proponents - Proponents of the Treaties, including two former Secretaries of State and the current Secretary of Defense, deny the existence of any undue Communist presence or influence in Panama. 417 Soviet relations with Panama are similar to trade and diplomatic relations between the U.S.S.R. and the United States. Many American political leaders have visited Cuba, and, during his visit, Torrijos said that: "Communism is not for Panama." According to Secretary of State Cyrus Vance, "The first point to remember is that there is little communist influence in Panama today -- and that the most likely way to create an atmosphere in which such influences could grow would be continued disagreement with Panama over the Canal." Former Secretary of State Henry Kissinger made the same point in stating: "I don't know of any better or quicker way to radicalize politics in Panama or in some other countries in the hemisphere than for use to reject these two treaties." NATURE OF CURRENT ARRANGEMENT Sovereignty Opponents - The Hay-Bunau-Varilla Treaty of 1903 and subsequent legal precedents recognize U.S. sovereignty over the Panama Canal Zone and there is no legal basis requiring the United States to give up this territory. The U.S. bought the Zone the same way it bought Alaska and the Louisiana Purchase -- no one is suggesting we would return them to their original owners. The United States owns the land free and clear. 418 The United States paid for it fourt times over including purchase from individual land owners of fee simple title to the land. The 1903 Treaty extends all rights and privileges to the U.S. "to the total exclusion of Panama. " Proponents - The 1903 Treaty "... grants to the United States all the rights, power and authority within the (Canal) Zone ... which the United States would possess and exercise if it were the sovereign of the territory...". The Treaty does not grant the U.S. sovereignty over the Zone, it only grants it the powers as_ vf it were sovereign. Furthermore, the U.S. pays Panama an annuity for the Zone -- rent for use of the territory -- while in cases of acquiring title to terriroty it has paid an initial purchase price and no subsequent rent. If the U.S. had held sovereignty over the Canal Zone, it would not have entered into agreements with Panama altering its "rights" in 1936 and 1955. Validity of Hay-Bunau-Varilla Treaty Opponents - The U.S. has operated the Panama Canal Zone under the Hay-Bunau-Varilla Treaty for more than seventy years. It has been recognized by U.S. courts and by international law in general and con- tinues to be an adequate basis for the protection of U.S. interests in the Canal . 419 Proponents - According to former Secretary of State Dean Rusk, two principles of law -- rebus sic stantibus (fundamental change of circumstances) and jus congens (preeminence of new international legal norms over former ones) — make it questionable whether the 1903 Treaty could be successfully defended before the International Court of Justice. Furthermore, the Treaty probably conflicts with the Pre- amble of the U.N. Charter, which recognizes "the equal rights ... of nations large and small." Moral Considerations Opponents - The Canal has benefitted Panamanians as well as Americans. Panama has the highest per capita income in Central Americ and fourth highest in all Latin America. U.S. presence through troops and employees adds millions more. Alteration of the current arrangement will simply put more money in the hands of the government rather than in the hands of the people. Proponents - As expressed by former Secretary Rusk, the Hay-Bunau- Varilla Treaty, negotiated for the new Panamanian nation by a Frenchman with direct economic interests in the Treaty, is reminiscent of the "unequal treaties" imposed on China by Western powers during the 19th century. In the age of decolonization, the current treaty is simply untenable. The U.S. should be proud of what it built in the Panama Canal, but it should also adapt to changed international circumstances. 420 Opponents - The American presence has benefitted Panama's security and financial well being, and the U.S. has nothing of which to be ashamed. Proponents - The glaring economic disparities between those living in the Canal Zone and those living outside it require that the current arrangement be altered. The Zone divides the country, and smacks of colonialism. Symbol Opponents - The Treaties are a further sign of the retreat of U.S. power. According to Representative Phillip Crane: "The Panama Canal is a symbol -- a symbol of America's strength as a free nation and its willpower to act in behalf of its better interests." The United States cannot yield to Third World pressure or blackmail as the major reason to accept new treaties. Any weakness will be used as the example for future U.S. treaties or relations. Proponents - Rather than the Treaties symbolizing a U.S. retreat, former Secretary of State Kissinger testified that, "It is not a question of 'giving' the Canal to Panama, it is a question of the United States ability to distinguish between symbol and reality, to plan for our future needs and to preserve and, in fact, enhance our basic interest in the accessbility, neutrality and security of the Canal. 421 International Diplomacy Opponents - Failure to ratify the Treaties will not measurably affect U.S. -Latin American relations. Some of those nations are not in favor of the U.S. turning over the canal to Panama -- because they are concerned that Panama will not manage the Canal properly -- and the other nations will oppose our interests no matter what we do. Proponents - Failure to ratify the Treaties will poison U.S. relations with the entire southern part of the hemisphere and will totally isolate the U.S. from its South American neighbors. It will affect all other aspects of U.S. -Latin American relations. ' OTHER ASPECTS OF THE PANAMA CANAL TREATIES Transfer of U.S. Property by Treaty * Opponents - Article IV, Section 3, Clause 2 of the Consitution grants to "Congress" the power to dispose of property belonging to the United States, so the Treaties cannot do so without the approval of the House of Representatives. This section supercedes any other provision of law. Opinions to the contrary by the Department of State and Attorney General should be viewed in light of their position as Executive branch representatives. * Both sides cite precedents to bolster their arguments. Two suits are pending currently in federal district court contesting the legality of the Treaties in this regard. 422 Proponents - This constitutional provision exists along with the Treaty power of Article II of the Constitution, under which the dis- position of property belonging to the United States may be concluded by treaty signed by the President and ratified by the Senate. The Attorney General and Department of State have concluded opinions in support of this Presidential power. EMPLOYEES' RIGHTS Opponents - The Treaties will result in the displacement of many U.S. employees and their families. Proponents - The Treaties and ancillary agreements provide for the reduction in U.S. employees in a manner whereby most of the reduction will occur through attrition or early retirement, and job location assistance will be provided to any others displaced. Employee benefits are protected under the Treaties. Opponents - The Treaties will result in U.S. employees being sub- jected to the capricious nature of Panamanian law and the Panamanian police and the loss of U.S. protection of civil and political rights. Proponents - In the Annex to the Treaties, Article VI on Criminal Jurisdiction goes into great detail assuring the legal protection for U.S. citizens, including certain areas in which the U.S. can exercise criminal jurisdiction, prompt notification of arrest, and visitation rights. 423 FINANCIAL ASPECTS Opponents - Panama should at least pay for the U.S. investment in the Canal. Total investment is over $7 billion, including defense and other related costs. At the year 2000, the U.S. will give up the Canal without one cent in return for its investment that will have reached over $9 billion including massive aid and payments to Panama. Proponents - The U.S. has very little net investment in the Canal. U.S. gross investments (payments made by the U.S. Treasury) are $1,974 billion, $1,915 billion of which has been recovered, leaving unrecovered investment in the Canal of $58.1 million. The Canal's book value is $561.5 million. The U.S. could have easily amortized the Canal with higher tolls; instead, the Canal Company held tolls to a minimum to benefit world and U.S. commerce. No one can deny that in over sixty years the U.S. has more than gotten its money's worth from this investment. Opponents - Not only do the Treaties give Panama the Canal, they pay for that privilege by providing Panama $60 to $80 million annually as follows: (1) a $10 million annual payment; (2) $0.30 per ton transiting the Canal; (3) revenues permitting, another $10 million apyment and (4) an annual fee of $10 million for services rendered. Payments, while not direct U.S. funds, will be paid for in higher tolls and indirect tax on goods to and from the Canal. 424 proponents - First, these payments will come from the U.S. taxpayer, they will come fron canal revenues. Second, the U.S. has been paying Panama an annual annuity of only $2.3 million. Justice requires that Panama receive greater financial benefit from the Canal. The Treaties provide such benefit at no cost to the taxpayer. Third, the $10 million for services rendered represents services such as fire and police protection, street maintenance, and lighting, and garbage collection -- all of which is currently being paid for from Canal Company revenues. Opponents - Current Canal Compay revenues are inadequate to cover these expenses. Either increased tolls will be required, which will reduce traffic, or Congressional appropriates will make up the shortfall Panama has stated it is under no obligation to keep the canal open if it is losing money. Proponents - It is estimated that a 25% gradual increase in tolls will cover the payments mandated by the Treaties, without significantly reducing traffic. In the unlikely event that tolls are insufficient, the Treaties do not require the U.S. Government to make up the short- fall. r 425 Economic Assistance to Panama Opponents - The Treaties are accompanied by an economic package under which the U.S. has agreed to provide Panama with $200 million in Export/ Import Bank credits over five years, up to $75 million in Housing Investment Guarantees, a $20 million OPIC loan guarantee to COFINA, and $50 million in foreign military sales credits over ten years. First, the U.S. gives Panama the Canal, then pays that country to take it, in a way that circumvents the Congress. While not a part of the Treaties, they are nonetheless a vital part of agreements which cannot succeed without these funds. Proponents - First, the economic package is not part of the Treaties; it is separate from the Treaties and could go ahead without ratification or could be rejected or modified without affecting the Treaties. It represents a U.S. pledge to make its best effort to secure this economic assistance for Panama, subject to the proper Congressional and Administrative procedures. Second, the purpose of the economic package is to promote the economic and military development of Panama to insure that it is capable of operating and protecting the Canal. A strong and viable Panama is in the U.S. national interest, and that is the purpose of the proposed economic assistance package. L APPENDIX 2 Texts of Treaties Relating to the Panama Canal I PANAMA CANAL TREATY ii The United States of America and the Re- public of Panama, Acting in the spirit of the Joint Declai"ation j of April 3, 1964, by the Representatives of the Governments of the United States of America and the Republic of Panama, and of the Joint i Statement of Principles of February 7, 1974, initialed by the Secretary of State of the United I States of America and the Foreign Minister of the Republic of Panama, and Acknowledging the Republic of Panama's sovereignty over its territory, Have decided to terminate the prior Treaties pertaining to the Panama Canal and to con- clude a new Treaty to serve as the basis for a new relationship between them and, accord- ingly, have agreed upon the following : Article I Abrogation of Prior Treaties and Establishment of a New Relationship 1. Upon its entry into force, this Treaty ter- minates and supersedes : (a) The Isthmian Canal Convention be- tween the United States of America and the Republic of Panama, signed at Washington, November 18, 1903 ; (b) The Treaty of Friendship and Coop- eration signed at Washington, March 2, 1936, and the Treaty of Mutual Understanding and Cooperation and the related Memorandum of Understandings Reached, signed at Panama, January 25, 1955, between the United States of America and the Republic of Panama ; (c) All other treaties, conventions, agree- ments and exchanges of notes between the United States of Ameiica and the Republic of Panama concerning the Panama Canal which were in force prior to the entry into force of this Treaty ; and (d) Provisions concerning the Panama Canal which appear in other treaties, conven- tions, agreements and exchanges of notes be- tween the United States of America and the Republic of Panama which were in force prior to the entry into force of this Treaty. 2. In accordance with the terms of this Treaty and related agreements, the Republic of Panama, as territorial sovereign, grants to the United States of America, for the dui-ation of this Treaty, the rights necessary to regulate the transit of ships through the Panama Canal, and to manage, operate, maintain, improve, protect and defend the Canal. The Republic of Panama guarantees to the United States of America the peaceful use of the land and water areas which it has been granted the rights to use for such purposes pursuant to this Treaty and related agreements. 3. The Republic of Panama shall participate increasingly in the management and protection and defense of the Canal, as provided in this Treaty. 4. In view of the special relationship estab- lished by this Treaty, the United States of America and the Republic of Panama shall co- operate to assure the unintemipted and efficient operation of the Panama Canal. (427) 428 Article U Ratification, Entry Into Force, AND TeRKINATION 1. This Treaty sliall be subject to ratification in accordance with the constitutional proce- thu-es of the two Parties. The instruments of ratification of this Treaty sliall be exchanged at Panama at the Siinie time as the instruments of ratification of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, signed this date, arc exchanged. This Treaty shall enter into force, simultane- ously with the Treaty Concerning the Perma- nent Neutrality and Operation of the Panama Canal, six calendar months from the date of the exchange of the instruments of ratification. 2. This Treaty shall terminate at noon, Pan- ama time, December 31, 1999. Article III Canal Operation and Management 1. The Republic of Panama, as territorial sovereign, grants to the United States of Amer- ica the rights to manage, operate, and maintain the Panama. Canal, its complementary works, installations and equipment and to provide for the orderly transit of vessels through the Pan- ama Canal. The United States of America ac- cepts the grant of such rights and undertakes to exercise them in accoi-dance with this Treaty and related agreements. 2. In carrying out the foregoing responsi- bilities, the -United States of America may : (a) Use for the aforementioned pur- poses, without cost except as provided in this Treaty, the various installations and areas (in- cluding the Panama Canal) and waters, de- scribed in the Agreement in Implementation of this Article, signed this date, as well as such other areas and installations as are made avail- able to the United States of America under this Treaty and related agreements, and take the measures necessary to ensure sanitation of such areas; (b) Make such improvements and altera- tions to the aforesaid installations and areas as it deems appropriate, consistent with the terms of this Treaty ; (c) Make and enforce all rules pertaining to the passage of vessels through the Canal and other rules with respect to navigation and mari- time matters, in accordance with this Treaty and related agreements. The Republic of Pan- ama will lend its cooperation, when necessary, in the enforcement of such rules ; (d) Establish, modify, collect and retain tolls for the use of the Panama Canal, and other charges, and establish and modify meth- ods of their assessment ; (e) Regulate relations with employees of the United States Government ; (f) Provide supporting services to facili- tate the performance of its responsibilities under this Article ; (g) Issue and enfoix^ regulations for the effective exercise of the rights and responsibili- ties of the United States of America under this Treaty and related agreements. The Republic of Panama will lend its cooperation, when necessai-y, in the enforcement of such rules; and (h) Exercise any other right granted under this Treaty, or otherwise agreed upon between the two Parties. 3. Pursuant to the foregoing grant of rights, the United States of America shall, in accord- ance with the terms of this Treaty and the pro- visions of United States law, carry out its responsibilities by means of a United States Government agency called the Panama Canal Commission, which shall be constituted by and in conformity with the laws of the United States of America. (a) The Panama Canal Commission shall be supervised by a Board composed of nine members, five of whom shall be nationals of the United States of America, and four of whom shall be Panamanian nationals proposed by the Republic of Panama for appointment to such positions by the United States of America in a timely manner. (b) Should the Republic of Panama re- quest the United States of America to remove a Panamanian national from membership on the Board, the United States of America shall agree to such request. In that event, the Re- public of Panama shall propose another Pan- amanian national for appointment by the United States of America to such position in a timely manner. In case of removal of a Pana- manian member of the Board at the initiative of the United States of America, both Parties will consult in advance in order to reach agreement concerning such removal, and the Republic of 429 Panama shall pi-opose another Panamanian national for appointment by the United States of America in his stead. (c) The United States of America shall employ a iiational of the United States of America as Administrator of the Panama Canal Commission, and a Panamanian national as Deputy Administrator, tluough December 31, 1989. Bef:;inning January 1, 1990, a Panamanian national shall be employed as the Administrator and a national of the United States of America shall occupy the position of Deputy Adminis- trator. Such Pajiamanian nationals shall be proposed to the United States of America by the Republic of Panama for appointment to such positions by the United States of America. (d) Should the United States of America remove the Panamanian national from his posi- tion as Deputy Administrator, or Administra- tor, the Republic of Panama shall propose another Panamanian national for appointment to such position by the United States of America. 4. An illustrative description of the activities the Panama Canal Commission will perform in carrying out the responsibilities and rights of the United States of America under this Article is set forth at the Annex. Also set forth in the Annex ai-e procedures for the discontinuance or transfer of those activities peiformed prior to the entiT into foix:6 of this Treaty by the Panama Canal Company or the Canal Zone Government which are not to be carried out by the Panama Canal Commission. 5. The Panama Canal Commission shall re- imbui-se the Republic of Panama for the costs incurred by the Republic of Panama in pro- viding the following public services in the Canal operating areas and in housing areas set forth in the Agreement in Implementation of Article III of this Treaty and occupied by both United States and Panamanian citizen employ- ees of the Panama Canal Commission : police, fire protection, street maintenance, street light- ing, street cleaning, traffic management and garbage collection. The Panama Canal Commis- sion shall pay the Republic of Panama the sum of ten million United States dollai-s ($10,000,- 000) per annum for the foregoing services. It is agreed that every three years from the date that this Treaty enters into force, the costs involved in fumishing said services shall be reexamined to determine whether adjustment of the annual payment should be made because of inflation and other relevant factors affecting the cost of such services. 6. The Republic of Panama shall be respon- sible for providing, in all areas comprising the former Canal Zone, services of a general juris- dictional nature such as customs and immigra- tion, postal services, courts and licensing, in accordance with this Treaty and related agreements. 7. The United States of America and the Re- public of Panama shall establish a Panama Canal Consultative Committee, composed of an equal number of high-level representatives of the United States of America and the Republic of Panama, and which may appoint such sub- committees as it may deem appropriate. This Committee shall advise the United States of America and the Republic of Panama on mat- ters of policy affecting the Canal's operation. In view of both Parties' special interest in the continuity and efficiency of the Canal operation in the future, the Committee shall advise on matters such as general tolls policy, employment and training policies to increase the participa- tion of Panamanian nationals in the operation of the Canal, and international policies on matters concerning the Canal. The Committee's recommendations shall be transmitted to the two Governments, which shall give such recommen- dations full consideration in the formulation of such policy decisions. 8. In addition to the participation of Pana- manian nationals at high management levels of the Panama Canal Commission, as provided for in paragraph 3 of this Article, there shall be gi-owing participation of Panamanian nationals at all other levels and areas of employment in the aforesaid commission, with the objective of preparing, in an orderly and efficient fashion, for the assumption by the Republic of Panama of full responsibility for the management, oper- ation and maintenance of the Canal upon the termination of this Treaty. 9. The use of the areas, waters and installa- tions with respect to which the United States of America is granted rights pursuant to this Article, and the rights and legal status of United States Government agencies and em- ployees operating in the Republic of Panama pursuant to this Article, shall be governed by the Agreement in Implementation of tliis Article, signed this date. 430 10. Upon entry into force of this Treaty, the United States (lovemmcnt agencies known as the Panama Canal Company and the Canal Zone Government shall cease to operate within the territory of the Republic of Panama that formerly constituted the Canal Zone. Articue IV Protection and Defense 1. The United States of America and the Re- public of Panama commit themselves to protect and defend the Panama Canal. Each Party shall act, in accordance with its constitutional processes, to meet the danger resulting from an armed attack or other actions which threaten the security of the Panama Canal or of ships transiting it. 2. For the duration of this Treaty, the United States of America shall have primary respon- sibility to protect and defend the Canal. The rights of the United States of America to sta- tion, train, and move military forces within the Republic of Panama are described in the Agree- ment in Implementation of this Article, signed this date. The use of areas and installations and the legal status of the armed forces of the United States of America in the Republic of Panama ^all be governed by the aforesaid Agreement. 3. In order to facilitate the participation and cooperation of the armed forces of both Parties in the protection and defense of the Canal, the United States of America and the Republic of Panama shall establish a Combined Board com- prised of an equal number of senior military representatives of each Party. These representa- tives shall be charged by their respective governments with consulting and cooperating on all matters pertaining to the protection and defense of the Canal, and with planning for actions to be taken in concert for that purpose. Such combined protection and defense arrange- ments shall not inhibit the identity or lines of authority of the armed forces of the United States of America or the Republic of Panama. The Combined Board shall provide for coordi- nation and cooperation concemii^ such matters as: (a) The preparation of contingency plans for the protection and defense of the Canal based upon the cooperative efforts of the armed forces of both Parties ; (b) The planning and conduct of combined military exercises ; and (c) The conduct of United States and Pan- amanian military operations with respect to the protection and defense of the Canal. 4. The Combined Board shall, at five-year intervals throughout the duration of this Treaty, review the resources being made avail- able by the two Parties for the protection and defense of the Canal. Also, the Combined Board shall make appropriate recommendations to the two Governments respecting projected require- ments, the efficient utilization of available resources of the two Parties, and other matters of mutual interest with respect to the protec- tion and defense of the Canal. 5. To the extent possible consistent with its primary responsibility for the protection and defense of the Panama Canal, the United States of America will endeavor to maintain its armed forces in the Republic of Panama in normal times at a level not in excess of that of the armed forces of the United States of America in the territory of the former Canal 2>one immediately prior to the entry into force of this Treaty. Article V Principle of Non- Intervention Employees of the Panama Canal Commission, their dependents and designated contractors of the Panama Canal Commission, who are na- tionals of the United States of America, shall respect the laws of the Republic of Panama and shall abstain from any activity incompwitible with the spirit of this Treaty. Accordingly, they shall abstain from any political activity in the Republic of Panama as well as from any intervention in the internal affairs of the Repub- lic of Panama. The United States of America shall take all measures within its authority to ensure that the provisions of this Article are fulfilled. Article VI Protection of the Environment 1. The United States of America and the Re- public of Panama commit themselves to imple- ment this Treaty in a manner consistent with the protection of the natural environment of the 431 Republic of Panama. To this end, they shall consult and cooperate wi'^n each other in all appropriate ways to ensure that they shall give due regard to the protection and conservation of the environment. 2. A Joint Commission on the Environment shall be established with equal repn»sentation from the United States of America and the Re- public of Panama, which shall periwlically re- view the implementation of this Treaty and shall recommend as appropriate to the two Gov- ernments ways to avoid or, should this not be possible, to mitigate the adverse environmental impacts which might result from their respec- tive actions p\irsuant to the Treaty. 3. The United States of America and the Re- public of Panama shall furnish the Joint Commission on the Environment complete in- formation on any action taken in accordance with this Treaty which, in the judgment of both, might have a significant effect on the environ- ment. Such information shall be made avail- able to the Commission as far in advance of the contemplated action as possible to facilitate the study by the Commission of any potential environmental problems and to allow for con- sideration of the recommendation of the Com- mission before the contemplated action is carried out. Article VII Flags ARTlCLXi VIII Privileges and iMMUNmES 1. The installations owned or used by the agencies or instrumentalities of the United States of America operating in the Republic of Panama pursuant to this Treaty and related agreements, and their official archives and docu- ments, shall be inviolable. The two Parties shall agree on procedures to be followed in the con- duct of any criminal investigation at such loca- tions by the Republic of Panama. 2. Agencies and instrumentalities of the Gov- ernment of the United States of America operating in the Republic of Panama pursuant to this Treaty and related agreements shall be immune from the jurisdiction of the Republic of Panama. 3. In addition to such other privileges and immunities as are afforded to employees of the United States Government and their dependents pursuant to this Treaty, the I'nited States of America may designate up to twenty officials of the Panama Canal Commission who, along with their dependents, shall enjoy the privileges and immunities accorded to diplomatic agents and their dependents under international law and practice. The United States of America shall furnish to the Republic of Panama a list of the names of said officials and their dependents, identifying the positions they occupy in the Government of the United States of America, and shall keep such list current at all times. 1. The entire territory of the Republic of Panama, including the areas the use of which the Republic of Panama makes available to the United States of America pursuant to this j Treaty and related agreements, shall be under I the flag of the Republic of Panama, and conse- quently such flag always shall occupy the posi- tion of honor. 2. The flag of the United States of America may be displayed, together with the flag of the Republic of Panama, at the headquarters of the Panama Canal Commission, at the site of the Combined Board, and as provided in the Agree- ment in Implementation of Article IV of this Treaty. 3. The flag of the United States of America also may be displayed at other places and on some occasions, as agreed by both Parties. Article IX Applicable Laws and Law Enforcement 1. In accordance with the provisions of this Treaty and related agreements, the law of the Republic of Panama shall apply in the areas made available for the use of the L^nited States of America pursuant to this Treaty. The law of the Republic of Panama shall be applied to mat- ters or events which occurred in the former Canal Zone prior to the entry into force of this Treaty only to the extent specifically provided in prior treaties and agreements. 2. Natural or juridical persons who, on the date of entry into force of this Treaty, are en- gaged in business or non-profit activities at lo- cations in the former Canal Zone may continue such business or activities at those locations I 98-991 O - 78 - 29 432 under the same terms and conditions prevailing prior to the entry into force of this Treaty for a thirty-month transition period from its entry into force. The Republic of Panama shall main- tain the same operating conditions as those ap- plicable to the aforementioned enterprises prior to the entry into force of this Treaty in order that they may receive licenses to do business in the Republic of Panama subject to their compliance with the requirements of its law. Thereafter, such persons shall receive the same treatment under the law of the Republic of Panama as similar enterprises already estab- lished in the rest of the territory of the Republic of Panama without discrimination. 3. The rights of ownership, as recognized by the United States of America, enjoyed by natu- ral or juridical private persons in buildings and other improvements to real property lo- cated in the former Canal 2k)ne shall be recog- nized by the Republic of Panama in conformity with its laws. 4. With respect to buildings and other im- provements to real property located in the Canal operating areas, housing areas or other areas subject to the licensing procedure estab- lished in Article IV of the Agreement in Imple- mentation of Article III of this Treaty, the owners shall be authorized to continue using the land upon which their property is located in accordance with the procedures established in that Article. 5. With respect to buildings and other im- provements to real property located in areas of the former Canal Zone to which the aforesaid licensing procedure is not applicable, or may cease to be applicable during the lifetime or upon termination of this Treaty, the owners may continue to use the land upon which their prop- erty is located, subject to the payment of a reasonable charge to the Republic of Panama. Should the Republic of Panama decide to sell such land, the owners of the buildings or other improvements located thereon shall be offered a first option to purchase such land at a reason- able cost. In the case of non-profit enterprises, such as churches and fraternal organizations, the cost of purchase will be nominal in accord- ance with the prevailing practice in the rest of the territory of the Republic of Panama. 6. If any of the aforementioned persons are required by the Republic of Panama to dis- cobtinue their activities or vacate their property for public purposes, they shall be compensated at fair market value by the Republic of Panama, 7. The provisions of paragraphs 2-6 above shall apply to natural or juridical persons who have been engaged in business or non-profit ac- tivities at locations in the former Canal Zone for at least six montlis prior to the date of sig- nature of this Treaty. 8. The Republic of Panama shall not issue, adopt or enforce any law, decree, regulation, or international agreement or take any other ac- tion which purports to regulate or would other- wise interfere with the exercise on the part of the United States of America of any right granted under this Treaty or related agreements. 9. Vessels transiting the Canal, and cargo, passengers and crews carried on such vessels shall be exempt from any taxes, fees, or other charges by the Republic of Panama. However, in the event such vessels call at a Panamanian port, they may be assessed charges incident thereto, such as charges for services provided to the vessel. The Republic of Panama may also require the passengers and crew disembarking from such vessels to pay such taxes, fees and charges as are established under Panamanian law for persons entering its territory'. Such taxes, fees and charges shall be assessed on a nondiscriminatory basis. 10. The United States of America and the Republic of Panama will cooperate in taking such steps as may from time to time be neces- sary to guarantee the security of the Panama Canal Commission, its property, its employees and their dependents, and their property, the Forces of the United States of America and the members thereof, the civilian component of the United States Forces, the dependents of mem- bers of the Forces and the civilian component, and their property, and the contractors of the Panama Canal Commission and of the United States Forces, their dependents, and their prop- erty. The Rejnablic of Panama will seek from its Legislative Branch such legislation as may bo needed to carry out the foregoing purposes and to punish any offenders. 11. The Parties shall conclude an agreement whereby nationals of either State, who arc sentenced by the couits of the other State, and who are not domiciled therein, may elect to 433 serve their sentences in their State of nationality. Abticle X Employment With the Panama Canal Commission 1. In exercising its riglits and fulfilling its responsibilities as tlie employer, the United States of America shall establish employment and labor regulations which shall contain the terms, conditions and prerequisites for all cate- gories of employees of the Panama Canal Com- mission. These regulations shall be provided to the Republic of Panama prior to their entry into force. 2. (a) The regulations shall establish a sys- tem of preference when hiring employees, for Panamanian applicants possessing the skills and qualifications required for employment by the Panama Canal Commission. The United States of America shall endeavor to ensure that the number of Panamanian nationals employed by the Panama Canal Commission in i-elation to the total number of its employees will conform to the proportion established for foreign enter- prises imder the law of the Republic of Panama. (b) The terras and conditions of employ- ment to be established will in general be no less favorable to persons already employed by the Panama Canal Company or Canal Zone Gov- ernment prior to the entr>' into force of this Treaty, than those in effect immediately prior to that date. 3. (a) The United States of America shall establish an employment policy for the Panama i Canal Commission that shall generally limit the recruitment of personnel outside the Republic of Panama to pei-sons possessing requisite skills and qualifications which are not available in the Republic of Panama. (b) The United States of America will I establish training programs for Panamaniaji employees and apprentices in order to increase tlie number of Panamanian nationals qualified to assume positions with the Panama Canal Comniission, as positions become available. (c) Within fivi' years from the entry into force of this Treaty, the number of United States nationals employed by the Panama Canal Commission who wei-e previously employed by the Pananui Canal Company shall be at least twenty percent less than the total number of United States nationals working for the Panama Canal Company immediately prior to the entry into force of this Treaty. (d) The United States of America shall periodically infonn the Republic of Panama, through tlie Coordinating Committee, estab- lished pui-suant to the Agreement in Implemen- tation of Article III of tliis Treaty, of available positions within the Panama Canal Commis- sion. The Republic of Panama shall similarly provide the United States of America any in- formation it may have as to the availability of Panamanian nationals claiming to have skills and qualifications that might be i-equired by the Panama Canal Commission, in order that tlie United States of America may take this infor- mation into account. 4. The United States of America will estab- lish qualification standards for skills, training and experience i-equired by the Panama Canal Commission. In establishing such standards, to the extent they include a requirement for a pro- fessional license, the United States of America, without piTJudicc to its right to require addi- tional professional skills and qualifications, shall recognize the professional licenses issued by the Republic of Panama. ."). The United State? of America shall estab- lish a policy for the periodic i-otation, at a maximum of eveiy five yeai-s. of United States citizen employees and other non-Panamanian employees, hired after the entiy into force of this Ti-eaty. It is recognized that certain ex- ceptions to the said policy of i-otatioii nmy be made for sound administrative i-easons. such as in the case of employees holding positions requiring certain non-ti-ansferablc or non- recruitable skills. 6. With i-egard to wages and fringe benefits, there shall be no discrimination on the basis of nationality, sex, or i-ace. Payments by the Pan- ama Canal Commission of additional i-emunera- tion. or the provision of other benefits, such as home leave benefits, to United States nationals employed prior to entry into force of this Treaty, or to i>ei-sons of any mitionality. includ- ing Panamanian nationals who are thereafter recruited outside of the Republic of Panama and who change theii- place of residence, shall not be considered to be discrimination for the purpose of this paragraph. 7. Persons employed by the Panannv Canal Company or Canal Zone Govcnnnent prior to 434 the entry into force of this Treaty, who are displaced from their employment as a result of the discontinuance by the United States of America of certain activities pursuant to this Treaty, will be placed by the United States of America, to the maximum extent feasible, in other appropriate jobs with the Government of the Unitetl States in accoi-dance with United States Civil Service regulations. For such per- sons who are not United States nationals, place- ment efforts will be confined to United States Govermnent activities located within the Ec- public of Panajna. Likewise, pci-sons previ- ously employe-stem whereby the Panama Canal Commission may. if deemed mutually convenient or desirable by the two Parties, assign certain employees of the Panama Canal Commission, for a limited pe- riod of time, to assist in the operation of activi- ties transferred to the responsibility of the Republic of Panama as a result of this Treaty or related agreements. The salaries and other costs of employment of any such persons as- signed to provide such assistance shall be reim- bursed to the United States of America by the Republic of Panama. 9. (a) The right of employees to negotiate collective contracts with the Panama Canal Commission is recognized. Labor relations with employees of the Panama Canal Commission shall be conducted in accordance with forms of collective bargaining established by the United States of America after consultation with em- ployee unions. (b) Employee unions shall have the right to affiliate with international labor organiza- tions. 10. The United States of America will pro- vide an appropriate early optional retirement l)rognim for all jiersons employed by the Panama Canal Compsuiy or Canal Zone Gov- orniuent immediately prior to the entry into force of this Tix'aty. In tliis regai-d, taking into accoiuit the unique circumstances created by the pi-ovisions of this Treaty, including its dura- tion, and their effect upon such employees, the United States of America shall, with respect to them: (a) determine that conditions exist which invoke applicable United States law permitting early retirement annuities and apply such law for a substantial period of the duration of the Treaty; (b) seek special legislation to provide more liberal entitlement to. and calculation of. retire- ment annuities than is currently provided for by law. Article XI Provisioxs for the Transition Period 1. The Republic of Panama shall reassume plenary jurisdiction over the former Canal Zone upon entry into force of this Treaty and in accordance with its terms. In order to provide for an orderly transition to the full application of the jurisdictional arrangements established by this Treaty and related agreements, the pro- \nsions of this Article shall become applicable upon the date this Treaty enters into force, and shall remain in effect for thirty calendar months. The authority granted in this Article to the United States of America for this transi- tion period shall supplement, and is not in- tended to limit, the full application and effect of the rights and authority granted to the United States of America elsewhere in this Treaty and in related agreements. 2. During this transition period, the criminal and civil laws of the United States of America 435 shall apply concurrently with those of the Re- public of Panama in certain of the areas and installations made available for the use of the United States of America pursuant to this Treaty, in accordance with the following provisions : (a) The Republic of Panama permits the authorities of the United States of America to have the primary right to exercise criminal jurisdiction over United States citizen em- ployees of the Panama Canal Commission and their dependents, and members of the United States Forces and civilian component and their dependents, in the following cases: ( i ) for any offense committed during the transition period within such areas and installa- tions, and (ii) for any offense committed prior to that period in the former Canal Zone. The Republic of Panama shall have the pri- mary right to exercise jurisdiction over all other offenses committed by such persons, except as otherwise provided in this Treaty and related ! agreements or as may be otherwise agreed. ' (b) Either Party may waive its primary I right to exercise jurisdiction in a specific case or I category of cases. 3. Tlie United States of America shall retain I the right to exercise jurisdiction in criminal cases relating to offenses committed prior to the i enti-y into force of this Treaty in violation of I the laws applicable in the former Canal Zone. ' 4. For the transition period, the United States ■ of America shall retain police authority and , maintain a police force in the aforementioned I areas and installations. In such areas, the police : authorities of the United States of America may [ take into custody any person not subject to their I primary jurisdiction if such person is believed I to have committed or to be committing an of- ' fense against applicable laws or regulations. and shall promptly transfer custody to the police authorities of the Republic of Panama. The United States of America and the Republic of Panama shall establish joint police patrols in ' agreed areas. Any arrests conducted by a joint patrol shall be the responsibility of the patrol member or members representing the Party having primary jurisdiction over the person or ' persons arrested. ."). The courts of the United States of America and related personnel, functioning in the former ("anal Zone immediately prior to the entry into force of this Treaty, may continue to function during the transition period for the judicial en- forcement of the jurisdiction to be exercised by the United States of America in accordance with this Article. 6. In civil cases, the civilian courts of the United States of America in the Republic of Panama shall have no jurisdiction over new cases of a private civil nature, but shall retain full jurisdiction during the transition period to dispose of any civil cases, including admiralty cases, already instituted and pending before the courts prior to the entry into force of this Treaty. 7. The laws, regulations, and administrative autjiority of the United States of America ap- plicable in the former Canal Zone immediately prior to the entrj- into force of this Treaty shall, to the extent not inconsistent with this Treaty and related agreements, continue in force for the purpose of the exercise by the United States of America of law enforcement and judicial juris- diction only during the transition period. The United States of America may amend, repeal or otherwise change such laws, regulations and administrative authority. The two Parties shall consult concerning procedural and substantive matters relative to the implementation of this Article, including the disposition of cases pend- ing at the end of the transition period and, in this respect, may enter into appropriate agree- ments by an exchange of notes or other instrument. 8. During this transition period, the United States of America may continue to incarcerate individuals in the areas and installations made available for the use of the United States of America by the Republic of Panama pursuant to this Treaty and related agreements, or to transfer them to penal facilities in the United States of America to serve their sentences. Article XII A Sea-Level Canal or a Thibd Lane of Locks 1. The United States of America and the Republic of Panama recognize that a sea-level canal may be important for international navi- gation in the future. Consequently, during the duration of this Treaty, both Parties commit themselves to study jointly the feasibility of a 436 sea-level canal in the Republic of Panama, and in the event they determine that such a water- way is necessary, they shall neojotiatc terms, agreeable to both Parties, for its constriction. 2. Tiie United States of America and the Republic of Panama agree on the following : (a) No new interoceanic canal shall be constructed in the territory of the Republic of Panama during the duration of this Treaty, except in accordance with the provisions of this Treaty, or as the two Parties may otherwise agree ; and (b) During the duration of this Treaty, the United States of America shall not negoti- ate with third States for the right to construct an interoceanic canal on any other route in the Western Hemisphere, except as the two Parties may otherwise agree. 3. The Republic of Panama grants to the United States of America the right to add a third lane of locks to the existing Panama Canal. This right may be exercised at any time during the duration of this Treaty, provided that the United States of America lias delivered to the Republic of Panama copies of the plans for such construction. 4. In the eVent the United States of America exercises the right granted in paragraph 3 above, it may use for that purpose, in addition to the areas otherwise made available to the United States of America pursuant to this Treaty, such other areas as the two Parties may agree upon. The terms and conditions applicable to Canal operating areas made available by the Republic of. Panama for the use of tlie United States of America pursuant to Article III of this Treaty shall apply in a similar manner to such additional areas. 5. In the construction of the aforesaid works, the United States of America shall not use nu- clear excavation techniques without the previous consent of the Republic of Panama. ARncr£ XIII Property Tr,\xsfer and Ecoxonc Participation- by the Republic ok Panama 1. Upon termination of this Treaty, the Re- public of Panama shall assume total responsi- bility for the management, operation, and main- tenance of the Panama Canal, which shall be turned over in operating condition and free of liens and debts, except as the two Parties may otherwise agree. 2. The United States of America transfers, without charge, to the Republic of Panama all right, title and interest the United States of America may have with respect to all real prop- erty, including non-removable improvements thereon, as set forth below : (a) Upon the entry into force of this Treaty, the Panama Railroad and such property that was located in the former Canal 2ione but tliat is not within the land and water areas the use of which is made available to the United States of America pursuant to this Treaty. However, it is agi-eed that the transfer on such date shall not include buildings and other facili- ties, except housing, the use of wiiich is retained by the United States of America pursuant to this Treaty and related agreements, outside such areas; (b) Such property located in an area or a portion theieof at such time as the use by the United States of America of such area or por- tion thereof ceases pursuant to agreement between the two Parties. (c) Housing units made available for occu- pancy by membei-s of the Armed Forces of the Republic of Panama in accordance with para- grapli ')(h) of Annex B to the Agreement in Implcj.nentation of Article IV of this Treaty at such time as such units are made available to the Republic of Panama. (d) Upon termination of this Treaty, all real property and non-removable improvements tiiat were used by tlic United States of America for the purposes of this Treaty and related agreements and equipment related to the man- agement, operation and maintenance of the Canal remaining in the Republic of Panama. 3. The Republic of Panama agrees to hold the United States of America harmless with respect to any claims which may be made by third parties relating to rights, title and inter- est in such property. 4. The Republic of Panama shall receive, in addition, from the Panama Canal Commission a just and equitable return on the national re- sources which it has dedicated to the efficient management, operation, maintenance, protec- tion and defense of the Panama Canal, in ac- cordance with the following : (a) An annual amount to be paid out of Canal operating revenues computed at a rate of 437 thirty liiindredths of a United States dollar ($0.80) per Panama Canal net ton, or its equivalency, for each vessel transiting; the Canal after the entry into force of this Treaty, for wljich tolls are charjjed. The rate of thirty hundredths of a United States dollar ($0.30) per Panama Canal net ton, or its equivalency, will be adjusted to reflect changes in the United States wholesale price index for total manu- factui-ed goods during biennial periods. The first adjustment shall take place five years after entry into force of this Treaty, taking into ac- coimt the changes that occurred in such price index during the pi-eceding two years. There- after, successive adjustmentvS shall take place at the end of each biennial period. If the United States of America should decide that another indexing method is preferable, such method shall be proposed to the Republic of Panama and applied if mutually agreed. (b) A fixed annuity of ten million United States dollars ($10,000,000) to be paid out of Canal operating revenues. This amount shall constitute a fixed expense of the Panama Canal Commission. (c) An annual amount of up to ten million United States dollars ($10,000,000) per year, to he. paid out of Car.al operating revenues to the extent that such revenues exceed expendi- tures of the Panama Canal Commission includ- ing amounts paid pursuant to this Treaty. In the event Canal operating revenues in any year do not piTiduce a surplus sufficient to cover this payment, the unpaid balance shall be paid from operating surpluses in future years in a manner to be mutually agreed. AimcLE XIV Settlement of Disputes In the event that any question should arise between the Parties concerning the interpreta- tion of this Treaty or related agreements, they shall make every effort to resolve the matter through consultation in the appropriate com- mittees established pursuant to this Treaty and related agreements, or, if appropriate, through diplomatic channels. In the event the Parties are unable to resolve a particular matter through such means, they may, in appropriate cases, agree to submit the matter to conciliation, mediation', arbitration, or such other procedure for the peaceful settlement of the dispute as they may mutually deem appropriate. DOXE at Washington, this 7th day of Sep- tember, 1977, in duplicate, in the English and Spanish languages, both texts being equally authentic. Annex Procedukes for the Cessation or Transfer OF Activities Carried Out by the Panama Canal Company and the Caxal Zonk Goverxment and Illustrative List of the Functions That May Bk PERForMEO BY the Panama Canal Commission 1. The laws of the Republic of Panama shall regulate the exercise of private economic activi- ties within the areas made available by the Re- public of Panama for the use of the United States of America pursuant to this Treaty. Natural or juridical persons who, at least six months prior to the date of signature of this Treaty, were legally established and engaged in the exercise of economic activities in the former Canal Zone, may continue such activities h\ a^.'- cordaiice with tlie provisions of paragraphs 2-7 of Article IX of this Treaty. 2. The Panama Canal Commission shall not perform governmental or commercial functions as stipulated in paragraph 4 of this Annex, provided, however, that this sliall not be deemed to limit in any way the right of the United States of America to perform those functions that may be necessary for the efficient manage- ment, operation and maintenance of the Canal. 3. It is undei-stood that the Panama Canal Conmiission. in the exercise of the rights of the United States of America with respect to the management, operation and maintenance of the Canal, may perform functions such as are set forth below by way of illustration: -a. Management of the Canal enteiijrise. b. Aids to navigation in Canal waters and in proximity thereto. c. Control of vessel movement. d. Operation and maintenance of th.e locks. 438 e. Tug service for the ti-ansit of vessels and dredgiiig for the piei-s and docks of the Panama Canal Commission. f. Control of the water levels in Gatun, Alajuela (Madden) and Mii-aflores Lakes. g. Non-commercial transpoitation seivices in Canal waters. h. Meteorological and hydrographic serv- ices. i. Admeasurement. j. \on-commercial motor transport and maintenance. k. Industrial security through the use of watchmen. 1. Procurement and warehousing. m. Telecommunications. n. Protection of the environment by pre- venting and controlling the spillage of oil and substances harmful to human or animal life and of the ecological equilibrium in areas used in operation of the Canal and the anchorages. o. Non-commercial vessel repair. p. Air conditioning services in Canal installations. q. Industrial sanitation and health services. r. Engineering design, construction and maintenance of Panama Canal Commission installations. s. Dredging of the Canal channel, terminal ports and adjacent waters. t. Control of the banks and stabilizing of the slopes of the Canal. u. Non-conmiercial handling of cargo on the piers and docks of the Panama Canal Commission. v. Maintenance of public areas of the Pan- ama Canal Commis.sion, such as parks and gardens. w. Generation of electric power. X. Purification and supply of water. y. Marine salvage in Canal waters. z. Such other functions as may be neces- sary or appropriate to carry out, in conformity with this Treaty and related agreements, the rights and responsibilities of the United States of America with respect to the management, operation and maintenance of the Panama Canal. 4. The following activitie,s and operations carried out by the Panama Canal Company and the Canal Zone Government shall not be car- ried out by the Panama Canal Commission, effective upon the dates indicated herein: (a) Upon the date of entry into force of this Treaty : (i) Wholesale and r-*iil sales, includ- ing those through commissaries, food stores, department stoi-es, optical shops and pastry shops ; (ii) The production of food and drink, including milk products and bakerj- products; (iii) The operation of public restaurants and cafeterias and the sale of articles through vending machines ; (iv) The operation of movie theaters, bowling alleys, pool rooms and other recrea- tional and amiisement facilities for the use of which a charge is payable ; (v) The operation of laundry and dry cleaning plants other than those operated for official use; (vi) The repair and service of privately owned automobiles or the sale of petroleum or lubricants thereto, including the operation of gasoline stations, repair garages and tire, repair and recapping facilities, and the repair and service of other privately owned property, in- cluding appliances, electronic devices, boats, motors, and furniture ; (vii) The operation of cold storage and freezer plants other than those operated for official use; (viii) The operation of freight houses other than those operatexl for official use; (ix) The operation of commercial serv- ices to and supply of privately owned and oper- ated vessels, including the construction of ves- sels, the sale of petroleoim and lubricants and the provision of water, tug services not related to the Canal or other United States Government operations, and repair of such vessels, except in situations where repairs may be necessarj' to remove disables! vessels from the Canal ; (x) Printing services other than for official use; (xi) Maritime transportation for the use of the general public ; (xii) Health and medical services pro- vided to individuals, including hospitals, lepro- sariums, veterinar>', mortuary and cemetery (xiii) Educational services not for pro- fessional training, including schools and libraries; 439 (xiv) Postal sei-vices ; (xv) Immigi-ation, customs and quaran- tine controls, except those inpas\ires nece&sary to ensure the sanitation of tlie Canal ; (xvi) Commercial pier and dock services, such as the handling of cargo and passengers; and (xvii) Any other commercial activity of a similar nature, not related to the management, operation or maintenance of the Canal. (b) Within thirty calendar months from the date of entr\' into foree of this Treaty, gov- ernmental services such as : (i) Police; (ii) Courts; and (iii) Prison system, f). (a) With respect to those activities or functions described in paragraph 4 above, or otherwise agreed upon by the two Parties, which are to be assumed by the Government of the Republic of Panama or by private persons sub- ject to its authority, the two Pai-ties shall con- sult prior to the discontinuance of such activities or functions by the Panama Canal Commission to develop appropriate arrangements for the orderly transfer a)id continued efficient opera- tion or conduct thereof. (b) In the event that appropriate arrange- ments cannot be arrived at to ensure the con- tinued performance of a particular activity or function described in paragraph 4 above which is necessary to the efficient management, opera- tion or maintenance of the Canal, the Panama Canal Commission may. to the extent consistent with the other provisions of this Treaty and related agreements, continue to perform such :-ctivity or function until such arrangements can be made. TREATY CONCERNING THE PERMANENT NEUTRALITY AND OPERATION OF THE PANAMA CANAL The United States of America and the Re- public of Panama have agreed upon the following : Articij: I The Republic of Panama declares that the Canal, as an international transit waterway, shall be permanently neutral in accordance with the regime established in this Treaty. The same regime of neutrality shall apply to any other international waterway that may be built either partially or wholly in the territory of the Re- public of Panama, j Article II I The Republic of Panama declares the neutral- ity of the Canal in order that both in time of peace and in time of war it shall remain secure and open to peaceful transit by the \-es.sels of all nations on terms of entire equality, so that there will be no discrimination against any nation. or its citizens or subjects, concerning the condi- tions or charges of transit, or for any other reason, and so that the Canal, and therefore the Isthmus of Panama, shall not bo. the target of reprisals in any armed cr)nflict between other nations of the world. The foregoing shall be subject to the following requirements : (a) Payment of tolls and other charges for transit and ancillary services, provided they have been fixed in conformity with the provi- sions of .\rticle III(c) ; (b) Compliance with applicable niles and rejrulations. provided such rules and regulations are applied in conformity with the provisions of Article III : (c) The requirement that transiting vessels commit no acts of hostility while in the Canal ; and (d) Such other conditions and restrictions as are established by this Treaty. Articlk III 1. For purposes of the security, efficiency and proper maintenance of the Canal the following rules shall apply : 440 (a) The Canal shall be operated efficiently in accordance with conditions of transit through the Canal, and rules and regulations that shall be just, equitable and reasonable, and limited to tliosc necessary for safe navigation and efficient, sanitary operation of the Canal ; (b) Ancillary services necessary for transit through the Canal shall be provided; (c) Tolls and other charges for transit and ancillary services shall be just, reasonable, equi- table and consistent with the principles of inter- national law ; (d) As a pre-condition of transit, vessels may be required to establish clearly the financial responsibility and guarantees for payment of reasonable and adequate indemnification, con- sistent with international practice and stand- ards, for damages resulting from acts or omis- sions of such vessels when passing through the Canal. In the case of vessels owned or operated by a State or for which it has acknowledged responsibility, a ceitification by that State that it shall observe its obligations under interna- tional law to pay for damages resulting from the act or omission of such vessels when passing through the Canal shall be deemed sufficient to establish such financial respoiisibility ; (e) Vessels of war and auxiliary vessels of all nations shall at all times be entitled to transit the Canal, irrespective of their internal operation, means of propulsion, origin, destina- tion or annament, Avithout being subjected, as a condition of transit, to inspection, search or sur- veillance. However, such Acssels may be required to certify that they have complied Avith all appli- cable health, sanitation and quarantine regula- tions. In addition, sucli vessels shall be entitled to refuse to disclose tlicir interiial operation, origin, armament, caigo or destination. How- ever, auxiliary vessels may be required to present written assurances, certified by an official at a high level of the govermnent of the State re- questing tlie exemption, that they are owned or operated by that government and in this case are being used only on government non-commer- cial service. 2. For tlie puiposes of this Treaty, the terms "Canal," "vessel of Avai-," "auxiliary vessel," "in- ternal operation," "armament" and "inspection" shall have the meanings assigned them in Annex A to this Treaty. Article IV The United States of America and the Repub- lic of Panama agree to maintain the regime of neutrality established in this Tieaty, which shall be maintained in order that the Canal shall remain permanently neutral, notAvithstanding the termination of any other treaties entered into by the tAvo Contracting Parties. Article V After the termination of the Panama Canal Treaty, only the Republic of Panama shall operate the Canal and maintain military forces, defense sites and military installations Avithin its national territory. Articlk VI 1. In recognition of the important contribu- tions of the United States of America and of the Republic of Panama to the construction, opera- tion, maintenance, and protection and defense, of the Canal, vessels of Avar and auxiliary vessels of tliosc nations shall, notAvitlistanding any other provisions of this Ti-eaty, be entitled to transit the Canal irrcspectix'e of their internal operation, means of propulsion, origin, desti- nation, armament or cargo carried. Such vessels of Avar and auxiliary vessels Avill be entitled to transit the Canal expeditiously. 2. The United States of America, so long as it has responsibility for the operation of the Canal, may contimic to provide the Republic of Colombia toll-free transit tlnough the Canal foi- its ti-oops, vessels and materials of Avar. Tliereafter, the Republic of Panama may pro- vide the Republic of Colombia and the Repub- lic of Costa Rica Avith the right of toll-free transit. Article VII 1. The United States of America and the Re- public of Panama shall jointly sponsor a resolu- tion in the Organization of American States opening to accessicm by all nations of the Avorld the Protocol to this Treaty whereby all the signatories Avill adhere to the objectives of this Treaty, agreeing to re.si>ect the regime of neu- trality set forth herein. 441 2. The Organization of American States shall act as the depositary for this Treaty and related instruments. Akticle VHI This Treaty shall be subject to ratification in accordance with the constitutional procedures of the two Parties. The instruments of ratifica- tion of this Treaty shall be exchanged at Pan- ama at the same time as the instruments of ratification of the Panama Canal Treaty, signed this date, are exchanged. This Treaty shall enter into force, simultaneously with the Pan- ama Canal Treaty, six calendar months from the date of the exchange of the instnmients of ratification. DONE at Washington, this 7th day of Sep- tember, 1977, in the English and Spanish lan- guages, both texts being equally authentic. Annex A 1. "Canal" includes the existing Panama Canal, the entrances thereto and the territorial seas of the Republic of Panama adjacent thereto, as defined on the map annexed hereto (Annex B), and any other interoceanic waterway in which the United States of America is a par- ticipant or in which the United States of Amer- ica has participated in connection with the construction or financing, that may be operated wholly or partially within the territory of the Eepublic of Panama, the entrances thereto and the territorial seas adjacent thereto. 2. "Vessel of w?r" means a ship belonging to the naval forces of a State, and bearing the external marks distinguishing warships of its nationality, under the command of an officer duly commissioned by the government and whose name appears in the Navy List, and manned by a crew which is under regular naval discipline. 3. "Auxiliary vessel" means any ship, not a vessel of war, that is owned or operated by a State and used, for the time being, exclusively on government non-commercial service. 4. "Internal operation" encompasses all ma- chinery and propulsion systems, as well as the management and control of the vessel, including its crew. It does not include the measures neces- sary to transit vessels under the control of pilots while such vessels are in the Canal. 5. "Armament" means arms, ammunitions, implements of war and other equipment of a vessel which possesses characteristics appro- priate for use for warlike purposes. 6. "Inspection" includes on-board examina- tion of vessel structure, cargo, armament and internal operation. It does not include those measures strictly necessary for admeasurement, nor those measures strictly necessary to assure safe, sanitary transit and navigation, including examination of deck and visual navigation equipment, nor in the case of live cargoes, such as cattle or other livestock, that may carry com- municable diseases, those measures necessary to assure that health and sanitation requirements are satisfied. 442 443 o z X LU 1— H|5 X Q£ -7 uj £ ^ Z Q- O Z uj 5 < X < H^ ^ 5i; H Z O Z Z Q _; i ^ ^ < t= ^ 5 < < ^ ^ S l!< t— < Q- < -) "7 < ^ m < ^ ^ Z S 88 o o in i« _, < _j _, LU _i LU UJ Q Q Q < < O UJ tr )< ^ ^ ^ Hl2i< 2i Qi — ' -J X o W X 2 U 2 2 < < 444 445 Protocol to the Treaty Coxcerning the Permanent Neutralitt and Operation of the Panama Canal Wfiereas the maintenance of the neutrality of the Panama Canal is important not only to the comnietxje and security of the United States of America and the Republic of Panama, but to the peace and security of the Western Hemi- sphere and to the interests of world commerce as well ; Whereas the regime of neutrality which the United States of America and the Republic of Panama have agreed to maintain will ensure permanent access to the Canal by vessels of all nations on the basis of entire equality ; and Whereas the said regime of effective neutral- ity shall constitute the best protection for the j Canal and shall ensure the absence of any .hostile act against it ; j The Contracting Parties to this Protocol have agreed upon the following : Article I The Contracting Parties hereby acknowledge the regime of permanent neutrality for the Canal established in the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal and associate themselves with its objectives. Abticle II The Contracting Parties agree to observe and respect the regime of permanent neutrality of the Canal in time of war as in time of peace, and to ensure that vessels of their registry strictly observe the applicable rules. Article III This Protocol shall be open to accession by all States of the world, and shall enter into force for each State at the time of deposit of its instrument of accession with the Secretary General of the Organization of American States. APPENDIX 3 Agreement in Implementation of Article III of the Panama Canal Treaty, Signed September 7, 1977 Whereas , pursuant to Article III of th6 Panama Canal Treaty, signed this date, the Republic of Panama, as terri- torial sovereign, grants to the United States of America the rights necessary to manage, operate, and maintain the Panama Canal, The United States of America and the Republic of Panama have agreed upon the following: (446) 447 ARTICLE I DEFINITIONS For the purposes of this Agreement it shall be understood that: 1. "Panama Canal Commission" (hereinafter referred to as "the Commission") means the agency or agencies of the Government of the United States responsible for carrying out the responsibilities and rights of the United States under the Panama Canal Treaty with respect to the management, operation, and maintenance of the Panama Canal. 2. "United States citizen employees" means (a) na- tionals of the United States, to whom United States pass- I ports have been issued, who are employed by the Commission I I and assigned for duty in the Republic of Panama (including ] employees of other civilian agencies of the United States 1 who are on temporary duty with the Commission or are other- il I wise visiting the area on official business of the United ji States) , and (b) other categories of persons which may be agreed upon by the two Parties. 3. "Dependents" means the spouse and children of United States citizen employees, and other relatives who depend on them for their subsistence and who habitually live with them under the same roof. 448 ARTICLE II COORDINATING COMMITTEE 1. A Coordinating Committee shall be established upon the entry into force of this Agreement to be composed of one representative of the United States and one represen- tative of the Republic of Panama, of equal authority within the Committee , each of whom may have one or more deputies , on a parity basis. 2. The Coordinating Committee shall perform the func- tions specifically indicated by the provisions of this Agreement, and others entrusted to it by both Governments concerning implementation of this Agreement. 3. The Coordinating Committee shall establish its rules of procedure within the spirit of this Agreement and may designate such subcommittees as it may deem necessary for the fulfillment of its functions. 4. The Coordinating Committee shall be organized so that it may meet promptly and at any time upon request of the representative of the United States or of the Republic of Panama. The Coordinating Committee shall send periodic reports on its activities to the Governments of the United States and the Republic of Panama. 5. The Coordinating Committee shall refer any matters which it has not been able to resolve to the two Governments for their consideration through appropriate channels. 449 ARTICLE III USE OF LAND AND WATER AREAS 1. Canal Operating Areas : With respect to the areas and installations described in paragraph 1 of Annex A of this Agreement (hereinafter referred to as the "Canal oper- ating areas"), the following provisions will be applicable; Ca) The United States shall have the right to use such areas and installations for the purposes of ex- ercising its rights and fulfilling its responsibilities, under the Panama Canal Treaty and related agreements, concerning the management, operation and maintenance of the Panama Canal, and for such other purposes as the two , Parties may agree upon. I Cb) The United States shall have the right to I use any portion of the Canal operating areas for military training, when such use is determined by the United States to be compatible with continued efficient operation of the Panama Canal. 2. Housing Areas : The areas and installations set forth in paragraph 2 of Annex A of this Agreement (herein- after referred to as "housing areas") shall be dedicated to the primary purpose of housing United States citizen employees and dependents. The housing areas shalT be administered in accordance with the regime of civil coord- ination established in Article VI of this Agreement. 450 M 3. Accessory Facilities and Installations : The United States may continue to use those accessory facilities or in- stallations used in connection with the management, operation and maintenance of the Canal on the date this Agreement enters into force, but which are located outside the areas and in- stallations otherwise made available for the use of the United States pursuant to the Panama Canal Treaty. A de- scription of such facilities is set forth in paragraph 3 of Annex A to this Agreement. The United States, at its expense, may maintain, improve, replace, expand or remove these facilities and installations. The United States shall have unimpeded access to these and all other facilities and installations used in connection with the management, oper- ation, or maintenance of the Canal. 4. Anchorages : The United States shall have free and unimpeded access to and use of the anchorages described in paragraph 4 of Annex A, for the purposes of exercising its rights and fulfilling its responsibilities concerning the movement and anchoring of vessels under the Panama Canal Treaty and related agreements. The United States may own, use, operate, inspect, maintain or replace equipment, facili- ties and navigational aids in these areas. The United States shall have the right to increase the size of the anchorages as may be necessary or convenient, within the areas described in paragraph 5 of Annex A. 451 5. Special Areas : Those additional land and water areas set forth in paragraph 6 of Annex A are subject to the procedures set forth in Article IV of this Agreement in order that activities incompatible with the efficient management, operation, or maintenance of the Canal shall be precluded. 6. Annex A of this Agreement shall be examined every five years or by agreement between the two Parties, and shall be revised by exchange of notes or other instrument to reflect any agreed elimination or change in areas. The United States may notify the Republic of Panama at any time that the use of an area, or of a specified portion thereof, or other right granted by the Republic of Panama, is no longer required. Under such circumstances, such use or other right shall cease on the date determined by the two Parties. 7. (a) The United States may, at any time, remove from the Republic of Panama, or, in accordance with such conditions as may be agreed upon by the two Parties, dispose of in the Republic of Panama, any equipment, material, supplies or other removable property brought into, acquired or constructed in the Republic of Panama by or for the Commission. In case of disposal within the Republic of Panama, preference will be given to the Government of the Republic of Panama. (b) All equipment, installations, material, supplies or removable property left by the United States in an area made available under this Agreement beyond 90 days from the date the use of such area by the United States ceases 452 shall, unless agreed otherwise by the two Parties, become the property of the Republic of Panama. 8. The Commission may employ watchmen to protect the security of selected installations within the areas made available for the use of the United States under this Agree- ment, it being understood that such installations do not include housing or other installations not devoted to the management, operation or maintenance of the Panama Canal. Such watchmen shall not have powers of arrest or other gen- eral police powers. They may, however, temporarily detain persons believed to be committing or to have just committed an offense against applicable laws or regulations, and shall promptly transfer custody to the appropriate police authori- ties. The Commission shall provide to the authorities of the Republic of Panama through the Coordinating Committee a list identifying the individuals employed by it as watch- men, and shall promptly notify the Republic of Panama of any changes in such list. In the performance of their duties such watchmen shall not bear firearms except handguns. 9. The Coordinating Committee shall constitute the means of communication and information between the two Parties with regard to matters pertaining to the imple- mentation of this Article. 453 ARTICLE IV LICENSING OF OTHER LAND USES 1. Without prejudice to the rights of the United States concerning use of areas and installations within the Republic of Panama under the Panama Canal Treaty and related agreements, the areas and installations set forth in Annex A may be used for other purposes compatible with the con- tinuous efficient management, operation and maintenance of the Panama Canal, under land use licenses to be issued by the Republic of Panama in accordance with the following procedure: (a) The Republic of Panama shall refer to the Coordinating Committee any requests it may receive from private concerns, or from agencies of the Republic of Panama, to undertake specific activities within the areas subject to this procedure. (b) If the United States and the Republic of Panama, acting through the Coordinating Committee, deter- mine that the proposed use, including its terms and condi- tions, is compatible with the continuous efficient manage- ment, operation and maintenance of the Panama Canal, the Republic of Panama shall issue a revocable land license for the specific use agreed upon. The United States must approve the license, in writing, before it becomes effec- tive. 2. The Republic of Panama may terminate the land license for reasons arising under its laws. 454 3. At any time that the United States decides that a licensed land use is no longer compatible with the con- tinuous efficient management, operation, or maintenance of the Panama Canal, or that the licensed area is necessary for a Panama Canal Treaty-related purpose, it may withdraw its concurrence in the land license, at which time the Republic of Panama shall cause the license to be terminated. 4. In the event that the United States withdraws its concurrence in a land license issued under the procedure established in this Article, the Republic of Panama shall take all measures necessary to ensure that the area is promptly vacated, in accordance with such rules as may be established by the two Parties through the Coordinating Committee. 5. The provisions of this Article shall not limit in any manner the authority of the United States to use the areas made available for its use under this Agreement, or to permit their use by its contractors, in the exercise of its rights and the fulfillment of its responsibilities under the Panama Canal Treaty and related Agreements. 455 ARTICLE V BALBOA AND CRISTOBAL PORTS AND THE PANAMA RAILROAD 1. As provided in Article XIII of the Panama Canal Treaty, all right, title and interest of the United States in property, installations and equipment in the Ports of Balboa and Cristobal, the boundaries of which are set forth in paragraph 1 of Annex B of this Agreement, is transferred without charge to the Republic of Panama. 2. The Republic of Panama shall have the responsibility for the management, operation and maintenance of the Ports of Balboa and Cristobal, subject, however, to the following terms i and -conditions: (a) The Republic of Panama shall exercise its juris- dictional rights over vessels within the lands and waters areas of the Ports of Balboa and Cristobal. Movement of vessels to or from the piers and docks of the Ports of Balboa and Cristo- bal shall be subject to appropriate approval by the port au- thorities of the Republic of Panama. (b) The Republic of Panama grants to the United [States the following technical powers: the authority and ! ^.responsibility for marine traffic control within the waters of the Canal operating areas and defense sites and within the Ports of Balboa and Cristobal and to or from and within 456 the anchorages and emergency beaching areas. Such author- ity and responsibility of the United States includes the right to require that vessels moving in such waters be under the direction of Commission pilots. (c) The United States may use, for . e management, operation, maintenance, protection and defense of the Canal, those port installations and equipment managed, operated, and maintained by the Republic of Panama which are described in paragraph 2 of Annex B of this Agreement. The Republic of Panama shall maintain such port installations and equip- ment in efficient operating condition. (d). The United States is guaranteed use of the Port installations described in paragraph 3 of Annex B of this Agreement for normal maintenance of its equipment, in accordance with schedules established by the Commission or, when necessary for emergency repairs, at any time. The United States may use its employees to perform services in such installations. United States use of such installations and equipment shall be free of cost other than reimbursement for labor and services provided to the United States at rates which shall not exceed those charged the most favored customer on a commercial basis. (e) In order to facilitate the optimum scheduling of vessel transits, the Republic of Panama shall ensure that vessels transiting the Canal receive port services at Balboa and Cristobal on a priority basis. 457 (f) The Republic of Panama shall control and supervise the activities to be carried out under its respon- sibility in the Ports of Balboa and Cristobal to ensure that such activities are compatible with the efficient manage- ment, operation, maintenance, protection and defense of the Canal. The Republic of Panama shall take the measures necessary to prevent, or to terminate, any activity that is incompatible with such purposes. Cg) In the event of emergencies relating to the protection and defense of the Canal, the Republic of Panama shall, at the request of the United States, make the installa- tions and equipment of the Naval Industrial Reserve Shipyard available, without delay, to the United States for as long as may be necessary. In any such case, the United States shall reimburse the Republic of Panama for labor or services pro- vided to it at rates which shall not exceed those charged the most favored customer on a commercial basis. 3. As provided in Article XIII of the Panama Canal Treaty, all right, title and .interest of the United States in the property, installations and equipment of the Panama Railroad is transferred without charge to the Republic of Panama. 4. The Republic of Panama shall have the responsibility for the management, operation, and maintenance of the Panama Railroad (hereinafter referred to as "the Railroad"), subject, however, to the following terms and conditions: 458 (a) The Republic of Panama shall maintain the Railroad in efficient operating condition. The Railroad will continue to provide the levels and frequency of service necessary for efficient management, operation, and mainten- ance, and effective protection and defense of the Canal. (b) The United States shall have the right to use and maintain the existing installations, including the 44KV electrical transmission lines and towers, and to construct, use and maintain additional installations along the Railroad right of way, and may have access thereto for such purposes. (c) The Republic of Panama shall permit the United States to use the Railroad and its equipment, on a priority basis, for the purpos^js of maintaining such trans- mission lines and other installations, and of transporting equipment, supplies and personnel related to the management, operation, maintenance, or protection and defense of the Canal. The United States shall pay the costs resulting from such use in accordance with rates which shall not exceed those charged by the Railroad to its most favored customer on a commercial basis. (d) Spur tracks, sidings and related equipment serving the installations in areas made available to the United States pursuant to the Panama Canal Treaty shall remain the responsibility of the United States. Railroad access to such trackage shall be subject to the approval of the responsible United States authorities. I 459 (e) If the Republic of Panama decides, at any time, that its continued operation of the Railroad at the minimum levels of service agreed upon by the two Parties is no longer viable, the United States shall have the right to reassume management and operation of the Railroad. 5. A Ports and Railroad Committee, to be estab- lished as a subcommittee of the Coordinating Committee in accordance with paragraph 3 of Article II of this Agree- ment and composed of an equal number of representatives of each Party, shall be responsible inter alia for coord- ination of the activities of the Panama Canal Commission and the National Port Authority of the Republic of Panama concerning the operation of the Ports of Balboa and Cristobal and the Panama Railroad, and shall have the following functions (a) To consider and, upon agreement, to coordinate the termination of United States rights with respect to the use of areas or installations in, or in the vicinity of, the Ports of Balboa and Cristobal which the Republic of Panama might desire to use for port activities, or with respect to the use of areas and installations appertaining to the Railroad. 460 (b) To consider and, upon agreement, to coordinate any change in the use of lands or waters in the Ports of Bal- boa and Cristobal or in areas or installations appertaining to the Railroad, or any initiation of, change in, or termin- ation of Port or Railroad services. Consequently, changes in the use of such lands and waters and the initiation of, changes in, or termination of such services shall occur only in accordance with the decisions reached by the Ports and Railroad Committee. Until such time as the Committee agrees upon new levels and frequency of Railroad services, the levels and frequency of service scheduled for 1977 shall be maintained. (c) To maintain adequate standards of safety, fire prevention and oil pollution. Until such time as the Committee issues new regulations, the safety, fire preven- tion and oil pollution standards in force prior to the entry into force of this Agreement shall remain in force. Cd) To establish procedures and mechanisms to facilitate the movement of vessels in accordance with the rights and responsibilities of the Parties set forth in paragraph 2 above. (e) To coordinate the use by the Uniuad States of those installations specified in paragraph 3 of Annex B that are located within the Ports of Balboa and Cristobal and the activities of the National Port Authority of the Republic of Panama in these Ports. f 461 In considering these matters, the representatives of the two Parties on the Ports and Railroad Committee shall be guided by the principle that the operation of the Ports and Railroad shall be consistent with the continued effi- cient management, operation, maintenance, protection and defense of the Canal. 462 ARTICLE VI REGIME OF CIVIL COORDINATION FOR HOUSING AREAS 1. As provided in Article XIII of the Panama Canal Treaty, title to all housing within the housing areas, owned by the Panama Canal Company immediately prior to the entry into force of this Agreement, is transferred to the Republic of Panama. The housing areas shall, how- ever, continue to be dedicated, for the duration of this Agreement, to the primary purpose of housing employees of the Commission in accordance with the provisions of this Article. 2. The Republic of Panama hereby places at the disposal of the United States, without cost, the use of such housing, within the housing areas, as the United States may deem nec- essary for United States citizen employees and dependents throughout the duration of this Agreement. The United States may continue to manage, maintain, improve, rent and assign such housing for United States citizen employees and depend- ents. 3. The use of housing units beyond those required by the United States for housing United States citizen employ- ees and dependents at the date of entry into force of this Agreement, shall pass to the Republic of Panama on that date. Within five years from the entry into force of this Agree- ment, the use of at least twenty percent of the housing units located in the former Canal Zone, formerly owned by the Panama Canal Company, shall have passed to the Republic 463 of Panama. Thereafter, the use of additional units shall pass to the Republic of Panama in accordance with the following schedule: (a) Within ten years from the entry into force of this Agreement, the use of a total of at least thirty percent of such units shall have passed. (b) Within fifteen years, the use of a total of at least forty-five percent shall have passed. (c) Within twenty years, the use of a total of at least sixty percent shall have passed. 4. In order to protect the interests and welfare of employees of the United States who are not United States citizen employees and who, on the date of entry into force of this Agreement, are occupying housing units, the use of which is transferred to the Republic of Panama, the Repub- lic of Panama shall give such persons the following special treatment: (a) The opportunity to occupy, by lease or rental, or in the event the Republic of Panama decides to sell, to acquire by purchase at reasonable prices, the units which they are occupying on the date of entry into force of this Agreement; 98-991 O - 78 - 31 464 (b) In cases of purchase, the opportunity to obtain long-term financing arrangements. (c) In cases where continued occupancy of a particular housing unit is not feasible, the opportunity to obtain other adequate housing within such areas at rea- sonable cost, on a preferential or priority basis. 5. In addition to housing its United States citizen employees and dependents, the United States may use the housing areas for other purposes related to the management, operation and maintenance of the Canal. The housing areas may also be used for other activities complementary to or compatible with the primary purpose of housing employees of the Commission under revocable land licenses to be issued in accordance with the procedures set forth in Article IV of this Agreement. 6. In coordination with the appropriate authorities of the Republic of Panama, the Commission may continue to pro- vide public services such as maintenance of streets, side- walks and other public areas within the housing areas. Since the utilities systems in the housing areas are fully integrated with those of the Canal, the Commission shall, on behalf of the utilities agencies of the Repub- lic of Panama, continue to provide utilities such as power, water, and sewers to industrial and commercial enterprises and other persons in the area, other than 465 United States citizen employees and dependents. The utilities agencies of the Republic of Panama shall be responsible for setting rates for and billing such cus- tomers, and shall reimburse the Commission for its cost in providing such services. 7. The Coordinating Committee shall serve as the channel for consultation and coordination between the two Parties with respect to matters arising under the regime of civil coordination established in this Article. 466 ARTICLE VII WATER RIGHTS 1. The United States shall have unimpaired use, free of cost, of the waters of the Canal and of Alajuela (Madden) , Gatun and Miraf lores Lakes, and of the waters of their tribu- tary streams, for the purposes of the management, operation and maintenance of the Panama Canal, including the generation of electric power, spilling to provide flood or pollution control, and the supplying of potable water, taking into account the needs of the Republic of Panama for potable water 2. The United States may: (a) Raise the surface of Alajuela (Madden) Lake to 260 feet above precise level datum (PLD) and of Gatun Lake to 100 feet above PLD, and lower the surfaces of these lakes down to elevations of 190 feet and 76 feet, respect- ively, for the purposes stated in paragraph 1 of this Article. The Parties shall consult and coordinate con- cerning the measures necessary to assure the supply of potable water to the Republic of Panama. (b) Erect, operate, maintain, improve, expand, remove and replace rainfall and river gauging stations in the watersheds of the lakes and their tributaries, the data and information obtained from which shall be made available promptly to the Republic of Panama. 467 (c) Maintain and improve the saddle dams serving Gatun, Miraf lores and Alajuela (Madden) Lakes and any new impoundment areas. The Republic of Panama agrees to take the necessary measures to prevent any activity that might endanger the stability of the saddle dams. (d) Apply herbicides and conduct other water weed control and sanitation programs in the lakes, their watershed and tributaries. In the conduct of these programs the United States shall take into account the environmental protection and water standards of the Republic of Panama to the extent feasible and consistent with the efficient management, operation and maintenance of the Canal. (e) Conduct flood control operations, to include periodic flushing of the rivers, and a routine maintenance program up to the 100 foot contour line along the Chagres River between Gamboa and Madden Dam, and up to the 3 foot contour line along the Chagres River between Gatun Dam and the Caribbean Sea. (f) Use such land and water areas as may be neces- sary for the purpose of constructing new dams, including the proposed Trinidad, Manguito Point, and Panama Railroad Cause- way dams, and impounding such water as may be required to develop and regulate the water supply of the Canal for the purposes stated in paragraph 1 of this Article. If new dams are constructed in accordance with this Agreement, any genera- tion of electric power in connection with such dams shall be 468 the prerogative of the Republic of Panama in the manner agreed upon between the two Parties. 3. The Republic of Panama shall take the necessary measures to ensure that any other land or water use of the Canal's watershed will not deplete the water supply neces- sary for the continuous efficient management, operation or maintenance of the Canal, and shall not interfere with the water use rights of the United States in the Canal's water- shed. 46^ ARTICLE VIII SOCIAL SECURITY 1. Concerning Social Security and retirement benefits applicable to employees of the Commission who are not United States citizen employees, the following provisions shall apply: (a) Such persons who are employed by the Commission subsequent to the entry into force of this Agreement shall, as of their date of employment, be covered by the Social Security System of the Republic of Panama. (b) Such persons who were employed prior to the entry into force of this Agreeits^nt by the Panama Canal Company or Canal Zone Government and who were covered under the Civil Service Retirement System of the United States shall continue to be covered by that system until their retirement or until the termination of their employment with the Commission for any other reason. (c) The Commission shall collect and transfer in a timely manner to the Social Security System of the Re- public of Panama the employer's and employees' contributions for those of its employees who are covered by the Social Security System of the Republic of Panama. 2. Concerning health benefits applicable to employees of the Commission who are not United States citizen em- ployees and who are covered by the Civil Service Retirement System of the United States the following provisions shall apply: 470 (a) For the duration of a transitional period of thirty calendar months following the entry into force of this Agreement, all such persons shall continue to be provided health insurance and medical benefits under tii. same general arrangements in effect prior to the entry into , orce of this Agreement. Cb) At the termination of the aforementioned transitional period, none of the abovementioned persons shall be eligible to receive health or medical benefits from facilities operated by the United States in the Re- public of Panama. (c) Such persons shall have the rigk^, during the aforementioned transitional period, to elect either to continue their coverage under the Federal Employees' Health Benefits Plan or to terminate their coverage under that program and enroll in the Health and Maternity Bene- fits Program under the Social Security System of the Re- public of Panama, effective upon the termination of the transitional period. (d) The Commission shall collect and transfer in a timely manner to the Social Security System of the Republic of Panama the employer's and employees' contri- butions to the Health and Maternity Benefits Program of that institution for such persons who enroll in that program. 471 The employer's contribution shall be equal to that which the employer would have paid had the employee continued under the Federal Employees Health Benefits Plan. 3. (a) Following the entry into force of this Agree- ment, employees of the Panama Canal Company or Canal Zone Government, regardless of their nationality, who become employees of the Republic of Panama as the result either of a transfer of a function or activity to the Republic of Panama from the Panama Canal Company or Canal Zone Government or through job placement efforts of the Commission or the Republic of Panama, shall be covered by the Social Security System of the Republic of Panama through a special regime identical in eligibility requirements, benefits, and employer/employee contributions to the United States Civil Service Retirement System in which the employee was pre- viously enrolled. (b) In those instances in which an employee has been separated from employment with the Commission and is due a refund of his contributions to the Civil Service Retirement System of the United States, said refund shall, upon the written request of the employee, be transferred by the Civil Service authorities of the United States to the Social Security System of the Republic of Panama for the purpose of the employee's purchase of an equity, which shall be financially equal to the total of the amounts trans- ferred. 472 (c) When such employee of the Panama Canal Company or Canal Zone Government, regardless of his nation- ality, is separated from his employment with the Commission as the result of the implementation of the Panama Canal Treaty and becomes an employee of the Republic of Panama as the result either of a transfer of a function or activity to the Republic of Panama from the Panama Canal Company or the Canal Zone Government or through a job placement assist- ance program, and elects to purchase an equity in the Social Security System of the Republic of Panama, through a special regime identical in requirements for eligibility, benefits, and employer/employee contributions to the Civil Service Retirement System of the United States in which the employ- ee was previously enrolled, the United States shall provide an equal sum to assist the employee in acquiring such an equity, provided, however, that: (i) The employee is not eligible for an immediate retirement annuity under the United States Civil Service Retirement System. (ii) The employee has not elected a deferred annuity under the United States Civil Service Retirement System. (iii) The employee has been credited with at least five years of Federal service under the United States Civil Service Retirement System. 473 (iv) The employee elects to withdraw the entire amount of his capitalized contributions to the Civil Service Retirement System of the United States and transfer them to the Social Security System of the Republic of Panama . (v) The contribution provided by the United States shall be the same as the amount withdrawn by the em- ployee from the United States Civil Service Retirement Fund and contributed by the employee to the Panamanian Social Security System. (d) Employees eligible for an immediate annuity under the Civil Service Retirement System of the United States shall begin to receive retirement pay at the time of their termination of their employment by the Government of the United States. 4. Except as otherwise provided in the Panama Canal Treaty or this Agreement, there shall be no loss or limitation of rights, options and benefits to which em- ployees of the Commission who were employed by the Panama Canal Company or the Canal Zone Government may be entitled under applicable laws and regulations of the United States as a result of their participation in the Civil Service Retirement System of the United States. These rights, options and benefits include the rights, where appropriate under applicable laws and regulations of the United States, to optional or voluntary retirement, discontinued service retirement following involuntary separation, disability retirement, and deferred retirement. ^n 5. Non-United States citizen employees of the Panama Canal Commission who were, prior to the entry into force of this Agreement, employed by the Panama Canal Company or the Canal Zone Government, and who continue to be covered by the United States Civil Service Retirement System, shall continue to be covered by United States Workmen's Compensation and may, if they so desire, continue their coverage under the Federal Employees' Group Life Insurance program in the same manner as prior to the entry into force of this Agreement. 475 ARTICLE IX ACQUISITION OF PANAMANIAN SUPPLIES AND SERVICES 1. In procuring supplies and services, the Commission shall give preference to those obtainable in the Republic of Panama. Such preference shall apply to the maximum ex- tent possible when such supplies and services are available as required, and are comparable in quality and price to those which may be obtained from other sources. For the comparison of prices there shall be taken into account the cost of transport to the Republic of Panama, including freight, insurance and handling, of the supplies and serv- ices which compete with Panamanian supplies and services. In the acquisition of goods in the Republic of Panama, preference shall be given to goods having a larger per- centage of components of Panamanian origin. 2. Any regulations which may be necessary to carry out this preference shall be agreed upon in the Coordin- ating Committee. 47§ ARTICLE X TELECOMMUNICATIONS 1. The Republic of Panama, in the exercise of its sovereign power over telecoininunications , authorizes the United States, for the duration of this Agreement, to use communications networks and communications-electronics installations within the Canal operating areas, and the radio frequencies authorized or in use, and transportable equipment in use, immediately prior to the entry into force of this Agreement and as may be necessary for its require- ments, in order to accomplish the purposes of the management, operation and maintenance of the Canal, and as the two Parties may otherwise agree. The Coordinating Committee may adopt regulations to govern the use of such transportable equip- ment outside of such areas. 2. The Republic of Panama also authorizes the United States to use installations such as those described in the preceding paragraph already existing outside the Canal operating areas, including those operated and maintained by the United States Forces or by contractors, which serve to accomplish the purposes of the management, operation or maintenance of the Canal, and as the two Parties may otherwise agree. The United States authorities shall have access to such installations for appropriate operation, maintenance and replacement. 477 3. Upon the termination of this Agreement, all tele- communication equipment and facilities necessary for purposes of operation of the Canal, which are the property of the United States, shall be transferred to the Republic of Panama The United States, after consultation with the Republic of Panama, will institute a program to train Panamanian na- tionals to operate and maintain such telecommunications equipment, including ship-to-shore facilities. 4. Provided that they are available and suitable for the purpose, the Commission shall use, to the maximum extent practicable, the telecommunications services of public or private enterprise in the Republic of Panama in order to meet its growth needs, but the applicable rates shall be no less favorable than those charged to governmental agencies of the Republic of Panama. 5. The United States shall provide the Republic of Panama a list of all frequencies authorized or in use by it pursuant to this Article. This list shall be submitted through the Coordinating Committee in ascending frequency order and shall contain as a minimum information concerning the power, bandwidth, and type of emission being used in those frequencies. 6. The Republic of Panama undertakes not to authorize the use of any frequency which would interfere with those in use by or for the Commission or which it may use in the future in accordance with the Panama Canal Treaty and this Agreement. 478 7. All provisions regarding telecommunications in this Article shall be in accordance with the obligations of both Parties as members of the International Telecommunica- tion Union and with the various relevant international agreements to which both are parties. 8. Any communication with the International Telecommuni- cation Union regarding the subject matter of this Article shall be effected exclusively by the Republic of Panama. 9. The Coordinating Committee may adopt any further regulations as may be necessary to implement the provisions of this Article, including necessary technical coordination. 479 ARTICLE XI CONTRACTORS AND CONTRACTORS' PERSONNEL 1. Whenever the Commission enters into contracts for the performance of services or the procurement of supplies, it shall adhere to the preferences for Panamanian sources set forth in Article IX of this Agreement. 2. Whenever contracts are awarded by the Commission to natural persons who are nationals or permanent residents of the United States or to corporations or other legal entities organized under the lav/s of the United States and under the effective control of such persons, such contractors shall be so designated by the United States and such designations shall be communicated to the authorities of the Republic of Panama through the Coordinating Committee. Designated contractors shall be subject to the laws and regulations of the Repub- lic of Panama except with respect to the special regime established by this Agreement, which includes the following obligations and benefits: (a) The contractor must engage exclusively in activities related to the execution of the work for which he has been contracted by the Commission or related to other works or activities authorized by the Republic of Panama. 98-991 O - 78 - 32 480 (b) The contractor must refrain from carrying out practices which may constitute violations of the laws of the Republic of Panama. (c) The contractor shall enter and depart from the territory of the Republic of Panama in accordance with procedures prescribed for United States citizen employees in Article XII of this Agreement. (d) The contractor must obtain a document indi- cating his identity as a contractor which the proper author- ities of the United States shall issue when they are satisfied he is duly qualified. This certificate shall be sufficient to permit him to operate under Panamanian law as a contractor of the United States. Nevertheless, the authorities of the Re- public of Panama may require the registration of the appro- priate documents to establish juridical presence in the Re- public of Panama. (e) The contractor shall not be obliged to pay any tax or other assessment to the Republic of Panama on income derived under a contract with the Commission, so long as he is taxed in the United States at a rate substan- tially equivalent to the corresponding taxes and assessments of the Republic of Panama. (f) The contractor may move freely within the Republic of Panama, and shall have exemptions from customs duties and other charges, as provided for United States citizen employees in Articles XIV and XVI of .this Agreement. 481 (g) The contractor may use public services and installations in accordance with the terms and conditions of Article XIII of this Agreement and, on a non-discriminatory basis, shall pay the Republic of Panama highway tolls and taxes on plates for private vehicles. (h) The contractor shall be exempt from any taxes imposed on depreciable assets belonging to him, other than real estate, which are used exclusively for the execution of contracts with the United States. (i) The contractor may use the services and facilities provided for in Articles X and XVIII of the Agreement in Implementation of Article IV of the Panama Canal Treaty, signed this date, to the extent such use is authorized by the United States; provided, however, that after five years from the entry into force of this Agreement, the use of military postal services by such contractors shall be limited to that related to the execution of contracts with the United States. 3. The Commission shall withdraw the designation of a contractor when any of the following circumstances occur: (a) Completion or termination of the contracts with the Commission. (b) Proof that during the life of the contract such contractors have engaged in the Republic of Panama in business activities not related to their contracts with the 482 United States nor authorized by the Republic of Panama. (c) Proof that such contractors are engaged in practices which in the view of the Republic of Panama constitute serious violations of the laws of the Republic of Panama . 4. The authorities of the United States shall notify the authorities of the Republic of Panama whenever the designation of a contractor has been withdrawn. If, within sixty days after notification of the withdrawal of the designation of a contractor who entered the territory of the Republic of Panama in the capacity of a contractor, the authorities of the Republic of Panama require such contractor to leave its territory, the United States shall ensure that the Republic of Panama shall not incur any expense due to the cost of transportation. 5. The provisions of this Article shall similarly apply to the subcontractors and to the employees of the contractors and subcontractors and their dependents who are nationals or residents of the United States. These employees and dependents shall not be subject to the Panamanian Social Security system. 483 ARTICLE XII ENTRY AND DEPARTURE 1. The United States may bring into the terri- tory of the Republic of Panama United States citi- zen employees and dependents for the specific pur- poses of the Panama Canal Treaty and as the two Parties may agree upon. 2. In order to enter or leave the territory of the Republic of Panama, such persons shall be required to bear only a valid passport and a special entry/exit permit issued by the Republic of Panama. Such documen- tation, upon entry into or departure from the territory of the Republic of Panama, shall be presented to the appropriate authorities of the Republic of Panama. 3. Such entry/exit permits shall authorize the bearer an unlimited number of entries into and exits from the territory of the Republic of Panama for the duration of the employment or other duties with the Commission of the bearer, or of his sponsor. Such permits shall remain valid until such time as United States authorities notify the appropriate authorities of the Republic of Panama of the termination of the 484 employment or duties with the Commission of the bearer, or of his sponsor. 4. The Republic of Panama agrees to issue such special entry/exit permits to the persons described in paragraph 1 of this Article, upon written request by the authorities of the United States, and to implement special procedures to ensure such expeditious issuance. 5. Whenever the status of any person described in paragraph 1 of this Article is altered so that he is no longer entitled to remain in the territory of the Republic of Panama, the authorities of the United States shall promptly notify the authorities of the Republic of Panama, and shall ensure that the special entry/exit per- mit in question is returned to the Republic of Panama. If requested by the Republic of Panama within a period of sixty days following such notice, the authorities of the United States shall ensure that transportation of any such person from the Republic of Panama will be provided at no cost to the Republic of Panama. 6. The persons described in paragraph 1 of this Article shall be exempted from fiscal charges relating 485 to their entry, stay in, or departure from the terri- tory of the Republic of Panama, except for non- discriminatory charges established or which may be es- tablished for use of airports. Similarly, they shall be exempted from obligatory services established in favor of the Republic of Panama. They shall not acquire any right to permanent residence or domicile in the Re- public of Panama. 7. United States citizen employees who enter the Republic of Panama to execute professional services exclusively for the United States, or on its behalf, shall not be subject to the licensing regimes of the Republic of Panama, but their professional activity shall be limited to such services with the United States for the specific purposes of the Panama Canal Treaty, or as the two Parties mav otherwise agree. 486 ARTICLE XIII SERVICES AND INSTALLATIONS 1. The Commission, its United States citizen employees and dependents may use the public services and installations belonging to or regulated by the Republic of Panama, and the terms and conditions of use, prices, rates and tariffs and priorities shall not be unfavorable in relation to those charged other users . 2. The Commission may use the facilities and services of the United States Forces for official purposes and may establish and operate the supporting services and facilities it requires within the areas used under this Agreement, and exceptionally, with the authorization of the Republic of Panama, outside such areas. 3. The United States may furnish to United States citizen employees and dependents the services provided for in Article XVIII of the Agreement in Implementation of Article IV of the Panama Canal Treaty signed this date, and authorize their use of the facilities pro- vided for in Article X and Article XI of that Agreement 487 provided, however, that their use of military postal services, commissaries, and military exchanges may not be authorized after five years from the entry into force of this Agreement. 4. The facilities and services of the Commission may be made available, exclusively for official pur- poses, to other agencies of the Government of the United States operating in the Republic of Panama, including the United States Forces. 488 ARTICLE XIV • MOVEMENT, LICENSES, AND REGISTRATION OF VESSELS, AIRCRAFT AND VEHICLE S 1. Ca) When in the performance of official duties, the vessels and aircraft operated by or for the Commission may move freely through Panamanian air space and waters, without the obligation of payment of taxes, tolls, landing or pier charges or other charges to the Republic of Panama except for re- imbursement for specific services requested and received and without any other impediment. (b) Such vessels and aircraft shall be exempt from customs inspections or other inspections. Whenever they carry cargo, crews or passengers who are not entitled to the exemptions provided for in this Agreement, timely notice shall be given to the appro- priate authorities of the Republic of Panama. Both Parties shall adopt procedures to ensure that the customs laws and regulations of the Republic of Panama are not violated. 2. (a) (i) Similarly, the vehicles and equip- ment of the Commission may, when in the performance of official duties, move freely in the Republic of Panama, without the obligation of payment of taxes, 489 tolls or other charges to the Republic of Panama and without any other impediment. Such vehicles and equip- ment shall be exempt from mechanical or other inspection, (ii) Claims arising from damage caused by the Commission to the Panamanian road network outside the Canal operating areas, in excess of the usual wear and tear by reason of time and its appropriate use, shall be settled as provided for in Article XVIII of this Agreement. (b) Such vehicles and equipment of the Com- mission shall not be assessed any license or registra- tion fees. These vehicles shall bear means of identifi- cation as may be agreed upon by the Coordinating Com- mittee, to be issued under the authority of said Coord- inating Committee and distributed by the Commission. 3. (a) The plates, individual marks and regis- tration documents issued by the United States for vehicles, trailers, vessels and aircraft which are the property of the Commission shall be accepted by the Republic of Panama. (b) The Republic of Panama shall recog- nize as sufficient the valid licenses, permits, cer- tificates or other official classifications from the United States, possessed by operators of vehicles. 490 vessels and aircraft which are property of the United States. 4. (a) The vehicles, trailers, vessels and aircraft belonging to the United States citizen employ- ees or dependents shall also move freely within the Republic of Panama, in compliance with the traffic regu- lations and those regarding the annual mechanical in- spection. The license plate fee and other obligations shall not be discriminatory. (b) The Republic of Panama shall issue the appropriate documents of title and registration of ve- hicles, trailers, vessels and aircraft which are the property of United States citizen employees or depen- dents when the latter present title and registration issued by the federal or state authorities of the United States or by the authorities of the former Canal Zone. Applicants may retain such documents provided they leave with the authorities of the Republic of Panama a copy authenticated by the Commission, duly translated into Spanish. While the corresponding request is being processed and within a term which may not exceed ninety days after entry into force of this Agreement or after the arrival of the means of transportation men- tioned above in the Republic of Panama, it may be operated with the plates or distinctive marks issued by the federal 491 or state authorities of the United States or by the authorities of the former Canal Zone. (c) United States citizen employees J and dependents who bear valid documents such as i drivers' licenses, vessel operators' permits, amateur I radio licenses, or licenses and classifications of I air pilots issued by the federal or state authorities [ of the United States or by the authorities of the ! former Canal Zone, shall receive equivalent Panamanian ■ licenses, permits and classifications without being subjected to new tests or payments of new fees. The applicants may retain the licenses, permits and classi- fications of the United States or the former Canal Zone provided that they leave with the authorities of the Republic of Panama a copy authenticated by the Commission and duly translated into Spanish. United States citizen employees and dependents shall be permitted to drive vehicles, vessels or aircraft in the Republic of Panama with such licenses, permits and classifications during the ninety days following the entry into force of this Agreement or their first arrival in the Republic of Panama. During this period the processing of the 492 application in the Republic of Panama for a driver's license, vessel operator's permit, or license and classi- fication as an air pilot shall be completed. (d) The Panamanian licenses, permits or classifications shall be valid for the period of time indicated in the Panamanian law and, during the continuous presence of the bearer in the Republic of Panama, shall, to preserve their validity, be renewed in accordance with Panamanian laws. Whenever Panamanian laws require medical certifications for the renewal of licenses, permits or classifications, the Republic of Panama shall accept the certifications issued by the medical services of the United States, provided that said certifications are submitted in Spanish translation. (e) The Republic of Panama shall issue driv- ers' licenses, vessel operators' permits, and licenses and other classifications of. air pilots to United States citizen employees and dependents when they do not possess valid documents. If any test is required as a prerequi- site for the issuance of the documents mentioned, the republic of Panama shall permit the interested persons to take the examination in Spanish or in English. Any 493 material which the Republic of Panama may generally issue in preparation for such examinations shall be furnished, in Spanish or in English, as the applicant may request. The fees for such documents shall not be discriminatory . 5. The Coordinating Committee may agree on rules and procedures that may be necessary to implement this Article. 494 ARTICLE XV TAXATION 1. By virtue of this Agreement, the Commission, its contractors and subcontractors, are exempt from pay- ment in the Republic of Panama of all taxes, fees or other charges on their activities or property. 2. United States citizen employees and dependents shall be exempt from any taxes, fees, or other charges on income received as a result of their work for the Commission. Similarly, they shall be exempt from pay- ment of taxes, fees or other charges on income derived from sources outside the Republic of Panama. 3. United States citizen employees and dependents shall be exempt from taxes, fees or other charges on gifts or inheritance or on personal property, the presence of which within the territory of the Repub- lic of Panama is due solely to the stay therein of such persons on account of their or their sponsor's work with the Commission. 4. The Coordinating Committee may establish such regulations as may be appropriate for the implementation of this Article. L 495 ARTICLE XVI IMPORT DUTIES 1. Except for the exemptions provided for in this Agreement, United States citizen employees and dependents shall be subject to the customs laws and regulations of the Republic of Panama. 2. All property imported for the official use or benefit of the Commission, including that imported by its contractors or subcontractors in connection with the various activities authorized under this Agreement, shall be exempt from the payment of all customs duties or other import taxes and charges and from all license requirements. The Commission shall issue a certificate, following the form adopted l)y the Coordinating Committee, stating that the property being imported is for these purposes. 3. Property consigned to or imported for the personal use of United States citizen employees or dependents shall be subject to the payment of import duties or other import taxes, except for the following 496 (a) Furniture, household goods and personal effects imported by such persons for their private use within six months following their first arrival in the Republic of Panama. (b) Vehicles imported by such persons for their private use. The Coordinating Committee shall establish the limitations on the quantity and frequency of additional imports of vehicles and shall authorize such importation of at least one vehicle every two years. (c) A reasonable quantity of articles for the private use of such persons, imported as personal baggage or sent into the Republic of Panama through the mails. (d)- Such other imports as may be expressly au- thorized by the competent authorities of the Republic of Panama at the request of the Commission. 4. The exemptions granted in paragraph 3 of this Article shall apply only to cases involving the impor- tation of articles exempted at the time of entry and shall not be construed as obligating the Republic of Panama to reimburse customs duties and domestic taxes collected by the Republic of Panama in connection with purchases of goods from Panamanian sources subsequent to their importation. L 497 5. Customs inspections shall not be made in the following cases: (a) United States citizen employees travelling on official business who enter or depart from the Repub- lic of Panama; (b) Official documents under official seal, and mail sent through the military postal channels of the United States; (c) Cargo consigned to the Commission. 6. Property imported under this Article and sub- sequently transferred to a person who is not entitled to duty-free importation shall be subject to the pay- ment of import duties and other taxes according to the laws and regulations of the Republic of Panama. 7. All property imported in the Republic of Panama free of customs duties and other taxes pursuant to paragraphs 2 and 3 of this Article may be exported free of customs duties, export permits, export taxes, and other assessments. All property acquired in the Republic of Panama by, or in the name of, the Commis- sion, or acquired by United States citizen employees or dependents for their private use, may be exported free of customs duties, export licenses, and other export taxes or charges. 498 8. The authorities of the United States agree to cooperate with the authorities of the Republic of Panama and shall take, within their legal authority, all steps necessary to prevent the abuse of the privi- leges granted under this Article to United States citi- zen employees or dependents, which measures may include dismissal of such employees. 9. In order to prevent violations of the customs laws and regulations of the Republic of Panama, the two Parties agree as follows: (a) The competent authorities of the United States and the authorities of the Republic of Panama shall mutually assist one another in the conduct of investigations and the collection of evidence. (b) The authorities of the United States shall take, within their legal authority, all nec- essary measures to ensure that articles subject to seizure by or in the name of the customs authorities of the Republic of Panama are delivered to these authorities 499 (c) The authorities of the United States shall take, within their legal authority, all necessary measures to ensure the payment by United States citizen employees, and dependents, of such import duties, taxes, and fines as may be duly determined by the authorities of the Republic of Panama. 10. Vehicles and articles belonging to the Com- mission that are seized from a person by the authorities of the Republic of Panama in connection with a violation of its customs or tax laws or regulations shall be delivered to the competent authorities of the Commission 11. The Coordinating Committee v/ill constitute the means of communication and information between the two Parties with regard to matters pertaining to the implementation of this Article. 500 ARTICLE XVII SURVEYS The United States may carry out topographic, hydro- graphic, agrologic and other surveys (including the taking of aerial photographs) within the areas made available for the use of the United States pursuant to this Agreement and within the watershed basin of Gatun, Alajuela (Madden) and Miraf lores Lakes. Surveys in other areas of the Republic of Panama shall require authorization from the Republic of Panama and shall be carried out in the manner agreed upon in the Coordin- ating Committee. The Republic of Panama shall, at its option, designate a representative to be present during such surveys. The United States shall furnish a copy of the data resulting from such surveys to the Repub- lic of Panama at no cost. 501 ARTICLE XVIII CLAIMS 1. (a) Each Party shall settle claims against it for damage to any property owned and used by the other Party in the following circumstances: (i) If the damage was caused by an employee of the Government, against which the claim is made, in the performance of his official duties; or (ii) If the damage arose from the use of any vehicle, vessel or aircraft owned and used by the said Government, provided either that the vehicle vessel or aircraft causing the damage was being used for official purposes, or that the daimage was caused to property being so used. (b) If it is not settled in due course, the claim may be pursued through diplomatic channels. Both Parties hereby waive the collection of any claims for an amount less than B/. 1400 or $1400 U.S. whichever may be the currency of greater value. 2. In cases of maritime salvage, each Party waives its claims against the other if the vessel or cargo salved was the property of the other Party and was used for official purposes. 502 3. For the purposes of this Article, any vessel chartered, requisitioned or seized in prize by a Party shall be considered its property (except to the extent that the risk of loss or liability is assumed by some other person than such Party) . 4. United States citizen employees shall be sub- ject to the jurisdiction of the civil courts of the Republic of Panama except in matters which arise from the performance of their official duty. In cases in which payment has been accepted in full satisfaction of the claim, the civil courts of the Republic of Panama shall dismiss any proceeding concerning such matter. 5. Non-contractual claims arising from damages caused in the performance of their official duties by employees of the Commission to third parties shall be presented by the injured party through the Coordinating Committee to the appropriate authorities of the Commis- sion for settlement. The authorities of the Republic of Panama may submit advice and recommendations on Panamanian law to the claims authorities of the Commis- sion for their use in evaluating liability and amount of damages. The Commission shall assure payment of the appropriate damages, if any are due. 503 6. Contractual claims against the Commission shall be settled in accordance with the dispute clause of the contracts, and in the absence of such clause, through presentation of claims to the Commission. 7. The Commission shall require contractors and subcontractors referred to in Article XI of this Agree- ment to obtain appropriate insurance to cover the civil liabilities that may be incurred in the territory of the Republic of Panama as a result of acts or omissions done in the performance of official duty by their employees. The Coordinating Committee shall establish the general standards for such insurance. 8. The authorities of both Parties shall cooperate in the investigation and procurement of evidence for a fair disposition of claims under this Article. 504 ARTICLE XIX CRIMINAL JURISDICTION 1. The Republic of Panama shall exercise, in the manner herein indicated, its jurisdiction over United States citizen employees and dependents with respect to all offenses arising from acts or omissions committed by them within the territory of the Republic of Panama and punishable under the laws of the Republic of Panama. 2. Concerning offenses committed by United States citizen employees or dependents that are punishable under the laws of both Parties, the authorities of the United States may request the Republic of Panama to waive its jurisdiction in favor of the authorities of the United States. Said authorities shall, in their request, state the reasons therefor, and the Republic of Panama shall give favorable consideration to such re- quests in the following cases: (a) If the offense arises out of an act or omission done in the performance of official duty. In such cases, when requested by the authorities of the Re- public of Panama or when the authorities of the United States 505 may deem it necessary, the latter shall issue a certificate establishing that the offense originated from an act or omission occurring in the performance of official duty. The Republic of Panama shall consider this certificate as sufficient proof for the purposes of this paragraph, or shall request a review by the Coordinating Committe, within ten days of the date of receipt of the certificate. The Coordinating Committee shall complete its review within ten days from the date of receipt of the re- quest, except when more thorough consideration may be necessary, in which case the Coordinating Committee shall complete its review within thirty days. A substantial deviation from the duties v/hich a person is required to perform in a specific mission shall generally indicate an act or omission not occurring in the performance of official duty and, consequently, the authorities of the United States will not consider it necessary to issue a certificate of official duty. (b) If the offense is solely against the property or security of the United States and is committed in a Canal operating area or in a housing area. It is understood that offenses against the 506 security of the United States include: treason or sabotage against the United States, espionage or vio- lation of any law relating to official secrets of the United States or to secrets relating to the na- tional defense of the United States. 3. In any case in which the authorities of the Republic of Panama waive jurisdiction to the United States, or in cases in which the offense constitutes a crime under the laws of the United States, but not under the laws of the Republic of Panama, the accused United States citizen employee or dependent shall be tried outside of the territory of the Repub- lic of Panama. 4. (a) The authorities of the Republic of Panama shall notify the authorities of the United States as promptly as possible of the arrest of any United States citizen employee or dependent. (b) The following procedures shall govern the custody of an accused United States citizen em- ployee or dependent over whom the Republic of Panama is to exercise its jurisdiction: 507 (i) If the accused is detained by the authorities of the Republic of Panama he shall, ex- cept when charged with murder, rape, robbery with vio- lence, trafficking in drugs, or crimes against the security of the Panamanian State, be handed over on request to the authorities of the United States in whose custody he shall remain until completion of all judicial proceedings and thereafter until custody is requested by authorities of the Republic of Panama for the execution of a sentence. (ii) When charged with murder, rape, robbery with violence, trafficking in drugs, or crimes against the security of the Panamanian State, the accused will remain in the custody of the authorities of the Republic of Panama. In these cases, the authoriti< of the Republic of Panama shall give sympathetic con- sideration to requests for custody by the authorities of the United States. 5. (a) The authorities of the United States shall give full consideration to special requests made by the authorities of the Republic of Panama regarding conditions of custody of any detainee in the custody of the United States. 508 (b) When the accused is in the custody of the authorities of the United States, he must, upon request by the authorities of the Republic of Panama, be made available to them for the purposes of investi- gation and trial. This obligation of the United States to ensure the appearance of an accused United States citizen employee, or dependent shall be deemed to satisfy the bail requirement set by the laws of the Republic of Panama. 6. (a) The authorities of the United States and of the Republic of Panama shall assist each other in carrying out all necessary investigations of offenses and in the collection and production of evidence, including the seizure and, in proper cases, the delivery of objects connected with an offense and the appearance of witnesses as necessary. (b) The authorities of the United States and of the Republic of Panama shall, upon request by the other Party, inform each other of the status of cases referred to under the provisions of this Article. 7. As is provided in the laws of the Republic of Panama, a United States citizen employee or a 509 dependent who has been convicted by a Panamanian court shall not be subject to the death penalty or to any form of cruel and unusual punishment or treatment. 8. When an accused United States citizen employee or dependent has been tried in accordance with the pro- visions of this Article by the authorities of the United States or by the authorities of the Republic of Panama and has been acquitted, or has been convicted and is serving, or has served, his sentence, or has been par- doned, he shall not be tried again for the same offense within the territory of the Republic of Panama. 9. Whenever an accused United States citizen em- ployee or a dependent is tried by the authorities of the Republic of Panama he shall be entitled to the pro- cedural guarantees listed in Annex C of this Agreement. 10. During the detention by the authorities of the Republic of Panama of a United States citizen em- ployee or a dependent the authorities of the Republic of Panama shall permit members of his immediate family to visit him weekly. Material and medical assistance (such as food, clothing and comfort items) which the authorities of the United States and members of his immediate family may consider desirable, and any other 510 assistance which is in accordance with or allowed by Panamanian prison regulations, may be provided to him on such visits. 11. The Coordinating Committee will constitute the channel of communication and information between the two Parties with regard to matters pertaining to the implementation of this Article. 511 ARTICLE XX GENERAL PROVISIONS 1. The activities of the United States in the Republic of Panama shall be carried out with adequate attention to public health and safety, and consequently, within the areas made available for the use of the United States under this Agreement, the authorities of the United States shall have the right to take appropriate sanitation measures. The authorities of the United States shall cooperate with the authorities of the Republic of Panama for these purposes. 2. United States citizen employees and dependents may bear private arms in accordance with applicable Panamanian laws and regulations. 3. The Commission shall establish regulations to provide for the handling of matters under its competence in the English and Spanish languages, as appropriate. O - 78 - 34 512 ARTICLE XXI DURATION This Agreement shall enter into force simultane- ously with the entry into force of the Panama Canal Treaty, signed this date, and shall remain in force throughout the period that the aforesaid Treaty re- mains in force. IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed this Agreement. DONE at Washington, this 7th day of September, 1977, in duplicate, in the English and Spanish lan- guages, both being equally authentic. APPENDIX 4 Agreement in Implementation of Article IV of the Panama Canal Treaty, Signed September 7, 1977 Whereas, the Republic of Panama and the United States of America have signed on this date the "Panama Canal Treaty" to regulate the system pertaining to the operation, maintenance, administration, protection and defense of the Panama Canal in harmony with the Charter of the United Nations; Whereas, the Republic of Panama shall permit the United States to use certain parts of its territory for the protection and defense of the Panama Canal, with the participation of the Panamanian Armed Forces as is established under Article IV of the "Panama Canal Treaty" subscribed on this date; Whereas, in order to determine the system applicable to the Armed Forces of the United States, the civilian component, and dependents, accompanying them during their stay in the Republic of Panama for the specific purposes of the Panama Canal Treaty, and as the two Governments may otherwise agree, and for the purpose of regulating the use of the defense sites; Pursuant to the "Panama Canal Treaty/' the following has been agreed upon: (513) 514 ARTICLE I DEFINITIONS (1) Defense Sites : Those areas , and the installations within them, which the Republic of Panama by this Agreement permits the United States Forces to use for the specific purposes of the Panama Canal Treaty, and as the two Governments may otherwise agree , a list of which is set forth in paragraph (1) of Annex A of this Agreement. (2) United States Forces : The land, sea and air armed services of the United States of America. (3) Members of the Forces : The military personnel of the United States Forces on active duty who are in the Republic of Panama for the specific purposes of the Panama Canal Treaty, and as the two Governments may otherwise agree. This term includes those military personnel of the United States Forces on active duty and present in the Republic of Panama on temporary duty from other stations, or on board aircraft or vessels of the United States Forces which are in transit or visiting on official business. Solely for purposes of the privileges authorized under Articles X, XI, and XVIII of this Agreement, this term also includes those military personnel of the United States Forces on active duty, assigned to other stations and present in the Republic of Panama on official leave. 515 (4) Members of the civilian component : (a) Nationals of the United States, to whom United States passports have been issued, who are employed by the United States Forces and assigned to the defense sites in the Republic of Panama. (b) Nationals of third countries employed by the United States Forces, who are assigned to the defense sites and who are not habitual residents of the Republic of Panama. (c) Other categories of persons which could be agreed upon as exceptions by the two Governments. This term includes personnel on temporary duty and civilian crew members of aircraft and vessels of the United States Forces which are in transit or visiting on official business. For the purpose of this definition, presence in connection with employment by the United States Forces shall not be considered as residence in the Republic of Panama. (.5) Dependents : The spouse and children of members of the Forces or of the civilian component, and other relatives who depend on them for their subsistence and who habitually live with them under the same roof. M^ ARTICLE n NON-INTERVENTION PRINCIPLE The members of the Forces or the civilian component . dependents . and designated contractors of the United States Forces shall respect the laws of the Republic of Panama and shall refrain from any activity inconsistent with the spirit of this Agreement. Especially, they shall abstain from all political activity in the Republic of Panama as well as from any interference in the internal affairs of the Republic. The United States shall take all measures within its authority to ensure that the provisions of this Article are fulfilled. 517 ARTICLE m JOINT COMMITTEE (1) A Joint Committee shall be established which shall start to function upon the entry into force of this Agreement and which shall be composed of a representative of the Republic of Panama and of the United States of America at the level and rank to be agreed upon by both Governments , and who may have one or more deputies, on a parity basis. (2) The Joint Committee shall perform the functions specifically indicated by the provisions of this Agreement, and others entrusted to it by both Governments concerning the implementation of this Agreement. (3) The Joint Committee shall determine its rules of procedixre within the spirit of this Agreement and may designate the subcommittees it may deem necessary for the fulfillment of its functions. (4) The Joint Committee shall be organized in such a manner that it may meet promptly and at any time upon request of the representative of the Republic of Panama or of the United States . The Joint Committee shall send a monthly report on its activities to the Governments of the Republic of Panama and the United States. (5) The Joint Committee shall refer to the two Governments, for their consideration through appropriate channels, any matters which it has not been able to resolve. 518 ARTICLE IV USE OF DEFENSE SITES (1) The United States Forces may use the defense sites listed in paragraph (2) of Annex A of this Agreement. Moreover, Annex A includes a list of military areas of coordination which may be used by the Armed Forces of both Governments in accordance with Annex B of this Atreement. (2) Annex A of this Agreement shall be examined every two years or upon the request of either Government, and shall be re- vised to reflect any agreed elimination or change in areas. The United States Forces may notify the Republic of Panama at any time that the use of a defense site or a military area of coordination or of a specified portion thereof, or other right granted by the Republic of Panama is no longer required. Under such circumstances, said use or other right shall cease on the date determined by the two Governments. (3) The United States Government may, at any time, remove from the Republic of Panama, or dispose of in the Republic of Panama in accordance with conditions to be agreed upon by the two Governments, all equipment, installations, material, supplies or other removable property brought into, acquired or constructed in the Republic of Panama by or for the United States Forces. Property left by the United States in a defense site after the date the use of such site by United States Forces ceases shall, unless agreed otherwise by the two Governments, become the property of the Republic of Panama. 519 (4) At the termination of any activities or operations under this Agreement, the United States shall be obligated to take all measures to ensure insofar as may be practicable that every hazard to human life, health and safety is removed from any defense sitf? or a military area of coordination or a-v portion^^thereof , on the date the llniterJ States Forces are no longer authorized to use such site. Prior to the transfer of any installation, the two Governments will consult concerning: (a) its conditions, including removal of hazards to human life, health and safety; and (b) compensation for Its residual value, if any exists. (5) The United States Forces shall have responsibility for control of entry to the defense sites. The Republic of Panama may share in the exercise of this control, in a manner to be agreed upon in the Joint Committee. Necessary signs, in Spanish and English, requested by the United States Forces through the Joint Conmittee will be erected outside the defense sites, expressing that the sign is erected under the authority of the Republic of Panama. (6) Since the Republic of Panama is a signatory to the Latin American Denuclearization Treaty (Tlatelolco), the United States shall emplace no type of nuclear armament on Panamanian territory. (7) The Joint Committee will constitute the means of communi- cation and information between the two Governments with regard to matters pertaining to the implementation of this Article. 520 ARTICLE V FLAGS (1) All of the territory of the Republic of Panama , including the defense sites , shall be under the flag of the Republic of Panama and . consequently , within such sites the Panamanian flag shall always occupy the position of honor . Within the defense sites , the flag of the United States shall also be flown jointly with the Panamanian flag. The Joint Committee shall determine the manner of displaying the flags. (2) At the entrances , outside the defense sites , only the flag of the Republic of Panama will be flown. 521 ARTICLE VI CRIMINAL JURISDICTION (1) The authorities of the Republic of Panama shall have jurisdiction over members of the Forces or the civilian component, and dependents, with respect to offenses arising from acts or omissions committed in the Republic of Panama and punishable under the laws of the Republic of Panama . Nevertheless , the Republic pf Panama permits the authorities of the United States to exercise cripiinal jurisdiction within defense sites , and, consequently, to have the primary right to exercise jurisdiction over acts which are criminal acts according to United States law , and which are committed within such sites by members of the Forces or the civilian component, or dependents. (2) The Republic of Panama also permits the authorities of the United States to have the primary right to exercise criminal jurisdiction over members of the Forces or the civilian component, and dependents, for any offense committed outside the defense sites, in the following cases: (a) If the offense is solely against the property or security of the United States . It is understood that offenses against the security of the United States include: treason or sabotage against the United ates , espionage or violation of any law relating to official secrets of the United States or to secrets relating to the national defense of the United States . (b) If the offense is solely against the person or property of a member of the Forces or the civilian component, or a dependent. 522 (c) If the offense arises out of an act or omission done in the performance of official duty, in which case, when requested by the Panamanian authorities or when the military authorities of the United States may deem it necessary , the military authorities of the United States shall issue a certificate establishing that the offense originated from an act or omission occurring in the performance of official duty, Panama shall consider this certificate as sufficient proof for the purposes of this paragraph, or shall request a review by the Joint Committee within ten days from the receipt of the certificate. The Joint Committee shall complete its review within ten days from the receipt of the request, except when more thorough consideration is required, in which case the Joint Committee shall complete its review within thirty days. A substantial deviation from the duties which a person is required to perform in a specific mission shall generally indicate an act or omission not occurring in the performance of official duty , and , consequently . the military authorities of the United States will not consider it necessary to issue a certificate of official duty. (3) The provisions of this Article notwithstanding , the Republic of Panama shall always reserve the right to exercise jurisdiction over members of the civilian component and dependents who are Panamanian nationals or habitual residents of Panama . 523 (4) The authorities of the Government having the primary right to exercise jurisdiction over an offense shall give sympathetic consideration to any request from the authorities of the other Government for permission to exercise jurisdiction. Such requests may be discussed in the Joint Committee. (5) (a) The appropriate authorities of the Republic of Panama and of the United States shall assist each other in the arrest of members of the Forces or the civilian component, and dependents, and in their delivery to the authority which is to have custody in accordance with the provisions of this Article . (b) The authorities of the Republic of Panama shall notify the authorities of the United States as promptly as possible of the arrest of any member of the Forces or the civilian component, or a dependent. (c) The following procedure shall govern the custody of an accused member of the Forces or the civilian component, or a dependent, over whom the Republic of Panama is to exercise jurisdiction: (i) If the accused is detained by the United States authorities , he shall, except when charged with murder, rape, robbery with violence, trafficking in drugs , or crimes against the security of the Panamanian State , remain with such authorities pending the conclusion of all judicial proceedings and thereafter until custody is requested by the authorities of the Republic of Panama for the execution of a sentence . 524 (ii) If the accused is detained by the authorities of the Republic of Panama he shall, except when charged with murder, rape, robbery with violence , trafficking in drugs , or crimes against the security of the Panamaniein State, be handed over on request to the United States authorities in whose custody he shall remeiin until completion of all judicial proceedings and thereafter until custody is requested by authorities of the Republic of Panama for the execution of a sentence. (iii) When charged with murder, rape, robbery with violence, trafficking in drugs, or crimes against the security of the Panamanian State, the accused shall be handed over to Panamanian authorities upon their request, or if already in their custody, shall remain with them. In these cases the authorities of the Republic of Panama shall give sympathetic consideration to requests for custody by the United States authorities. (6) (a) The United States authorities shall eive full consideration to special requests regarding conditions of custody made by the authorities of the Republic of Panama. (b) When the accused is in the custody or has been delivered into the custody of the United States authorities he must, upon request by the authorities of the Republic of Panama, be made available to them for the purposes of investigation and trial. This obligation of the United States to ensure the appearance of an accused member of the Forces or the civilian component, or a dependent, will be deemed to satisfy the bail requirement set by the laws of the Republic of Panama. 525 (7) (a) The authorities of the Republic of Panama and the United States shall assist each other in carrying out all necessary investigations of offenses and in the collection and production of evidence, including the seizure and, in proper cases , the delivery of objects connected with an offense and the appearance of witnesses as necessary, (b) The authorities of the Republic of Panama and the United States shall, upon request by the other Government, inform each other of the status of cases referred to under the provisions of this Article. (8) The authorities of the United States shall not carry out a death sentence in the Republic of Panama. As is provided in the laws of the Republic of Panama, a member of the Forces or the civilian component, or a dependent, who has been convicted by a Panamanian court shall not be subject to the death penalty or to any form of cruel and unusual punishment or treatment. (9) When an accused member of the Forces or the civilian component, or a dependent , has been tried in accordance with the provisions of this Article by the authorities of the Republic of Panama or by the authorities of the United States and has been acquitted, or has been convicted and is serving, or has served, his sentence, or has been pardoned, he shall not be tried again for the same offense within the territory of the Republic of Panama. However, nothing in this paragraph shall prevent the military authorities of the United States from trying a member of the Forces for any violation of rules of discipline arising from an act or omission which constituted an offense for which he was tried by the authorities of the Republic of Panama. 526 ClO) Whenever a member of the Forces or the civilian compo- nent, or a dependent, is tried by the Panamanian authorities, he shall be entitled to the procedural guarantees listed in Annex D of this Agreement. 01) At any time during the detention by the authorities of the Republic of Panama of a member of the Forces or the civilian component, or a dependent, the Panamanian authorities shall permit the military authorities of the United States to visit said member or dependent. Members of his immediate family may visit him weekly. Material and medical assistance (such as food, clothing and comfort items) which the United States authorities and members of his immediate family may consider desirable, and any other assistance which is in accordance with or allowed by Panamanian prison regula- tions, may be provided to him on such visits. 02) The Joint Committee will constitute the means of conmunication and information between the two Governments with regard to matters pertaining to the implementation of this Article. 527 ARTICLE VII CIVILIAN EMPLOYMENT The following principles shall govern cdviUan employment by the United States Forces: (1) In order to set forth their rights and obligations as, the employer , the United States Forces shall draw up regulations which shall contain the terms , conditions and prerequisites for all categories of their civilian employees . These regulations shall be provided to the Republic of Panama through the Joint Committee . (2) In conformity with the principles of the labor laws of the Republic of Panama , such regulations shall establish employment preferences in all levels for Panamanian applicants possessing the requisite skills and qualifications. Accordingly, the United States Forces shall endeavor to ensure that the number of Panamanian nationals employed by them in relation to the total number of civilian employees will conform to the proportion established under Panamanian law. Similarly, the terms, conditions and prerequisites for the employment of Panamanian personnel shall conform with the general principles contained in the labor laws of the Republic of Panama. (3) All civilian employees of the United States Forces , except those who are nationals of the Republic of Panama or who have obtained permanent resident status therein, shall be subject to a system of periodic rotation which will limit their period of employment by the United States Forces in the Republic of Panama. The regulations providing for such rotation shall be provided to the Republic of Panama through the Joint Committee. -991 O - 78 - 35 528 (4) With regard to wages , there shall be no discriininatlon on the basis of nationality, sex or race. Payments by the United States Forces of additional remunerations to persons of any nationality , including Panamanian citizens , who are recruited outside of Panama and must there- fore change their place of residence . shall not be considered to be discrimination for the purposes of tliis Article. (5) The United States Forces shall take the measures called for under the laws of the Republic of Panama with regard to the application of the tax and social security laws to their employees who are subject to Panama's taxation and social security system, including withholding of tax or social security payments from their salaries . 529 ARTICLE VIII ACQUISITION OF PANAMANIAN SUPPLIES AND SERVICES (1) The United States Forces shall give preference to the procurement of supplies and services obtainable in the Republic of Panama. Such preference shall apply to the maximum extent possible when such supplies and services are available as required, and are comparable in quality and price to those which may be obtained from other sources. For the comparison of prices there will be taken into account the cost of transport to the Republic of Panama , including freight, insurance and handling, of the supplies and services which compete with Panamanian supplies and services . In the acquisition of goods in the Republic of Panama, preference shall be given to goods having a larger percentage of components of Panamanian origin. (2) Any regulations which may be necessary to carry out this preference shall be agreed upon in the Joint Committee, 530 ARTICLE IX TELECOMMUNICATIONS (1) The Republic of Panama , in the exercise of its sovereign power over its telecommunications, authorizes the United States Forces to use the communications networks and communications-electronics installations within the defense sites , and to use the radio frequencies and transportable equipment as may be necessary for their requirements , in order to accomplish the specific purposes ot the defense of the Canal, and as the two Governments may otherwise agree. The Joint Committee may adopt regulations to govern the use of such transportable equipment outside of the defense sites. Any use presently being exercised of such networks , installations , frequencies and equipment, for purposes other than those herein authorized, shall be subject to the provisions contained in the Panama Canal Treaty, including those relating to any separation of non-military telecomm.unications that may be deemed necessary. (2) The Republic of Panama also authorizes the United States Forces to use installations such as those described in the preceding paragraph already existing outside the defense sites, which serve to accomplish the purposes of the defense of the Canal , and as the two Governments may other- wise agree. 531 Those already existing installations outside the defense sites may be guarded by authorities of the Republic of Panama. The United States Forces shall have access to such installations for appropriate operation, maintenance, and replacement. (3) Provided that they are available and suitable for the purpose, the United States Forces shall use, to the maximum extent possible, the telecommunications services of the Republic of Panama in order to meet their needs , but the applicable rates shall be no less favorable than those charged to governmental agencies of the Republic of Panama. (4) The United States Forces shall provide the Government of the Republic of Panama a list of all frequencies registered or in use by the United States Forces . This list shall be submitted through the Joint Committee in ascending frequency order and shall contain as a minimum the power, bandwidth, and type of emission. (5) Any future request for assignment, change, or elimination of radio frequencies by the United States Forces, or utihzation of any frequency by Panama, or any changes regarding installations outside of the defense sites shall be coordinated and granted through the Joint Committee. (6) The Republic of Panama authorizes the United States Forces to use codes, ciphers, and other secure cryptographic means necessary for the specific purposes of the defense of the Panama Canal , and as the two Governments may otherwise agree. 532 (7) All provisions regarding telecommunications in this Article shall be in accordance with the obligations of both Governments as members of the International Tele commtini cation Union and the various relevant international agreements to which both Governments are signatories. (8) Any communication with the International Telecommunication Union regarding the subject matter of this Article shall be effected exclusively by the Republic of Panama. (9) The radio and television services of the United States Forces operating within the Republic of Panama, will: (a) Announce at the start and termination of each day's broadcast that the emissions are authorized by the Republic of Panama; and (b) In television programs originating locally , not use announcers appearing in military uniform . (10) The Joint Committee may adopt any further regulations as may be necessary to implement the provisions of this Article , including necessary technical coordination. 533 ARTICLE X MILITARY POST OFFICES (1) The United States may establish, maintain and operate, within the defense sites, military post offices for the exclusive use of the United States Forces , the members of the Forces or the civilian component, and dependents, and for the use of such other persons and agencies as may be agreed upon as exceptions by the two Governments through the Joint Committee. Such post offices shall transmit mail only between themselves or between themselves and other United States post offices. (2) The United States Forces shall take all necessary measures to prevent the unauthorized use of the military post offices. The Panamanian authorities shall periodically inform the authorities of the United States , through the Joint Committee , of all applicable provisions of Panamanian laws, and the United States Forces shall, within their legal capacity, ensure that such provisions are complied with. (3) The military post offices in the Republic of Panama shall not have direct representation before any international postal organization. (4) The Republic of Panama may establish post offices within the defense sites , the location of which shall be agreed upon in the Joint Committee , for the transmission of mail between the defense sites and any other areas not authorized to the military post offices by this Agreement. 534 ARTICLE XI COMMISSARIES. MILITARY EXCHANGES AND OTHER SERVICE INSTALLATIONS (1) The United States may establish , regulate and iise within the defense sites , commissaries , military exchanges , military banking facilities , credit unions , recreational , social and athletic facilities , schools , sanitation and medical facilities , and other categories of service facilities cis may be periodically agreed upon by the two Governments through the Joint Committee , for the exclusive use of the members of the Forces or the civilian component, and deoendents , and for such other persons as may be agreed upon by the two Governments as exceptions through the Joint Committee. These service facilities and their activities, such as the import, purchase, sale and distribution of merchandise , medicine and services, shall be free of taxes , duties , liens , licenses , fees and other charges imposed by the Republic of Panama or any of its political subdivisions . In order to take advantage of existing installations , the United States Forces may continue to use those installations already in existence outside of the defense sites , which are specified in paragraph (3) of Annex A. (2) The military banking facilities shall be branches or agencies of banking entities duly authorized to engage in the banking business in Panama. The Government of the Republic of Panama may authorize the II 535 installation and operation within the defense sites , at locations agreed upon by the Joint Committee , of branches or agencies of Banco Nacional or other official banking entities of the Republic of Panama. (3) It is the express objective and purpose of both Governments that the articles and services sold or provided at the commissaries and military exchanges be for the exclusive use of authorized persons. To that end the United States Forces shall, upon request, inform the Panamanian authorities, through the Joint Committee, as to the classification, nature and quantity of certain articles and services sold or provided at such establishments. (4) With respect to the preceding paragraph , the Republic of Panama and the United States shall jointly take all the necessary measures to prevent the unauthorized use of such activities and the abuse by those who are authorized. Such measures shall include the obtaining of pertinent information and the carrying out of any verifications that may be necessary by Panamanian authorities . The procedure to be followed for these purposes shall be agreed upon by the Joint Committee. (5) The Government of the United States shall apply appropriate disciplinary sanctions to the members of the Forces or the civilian component, and dependents, or other persons authorized as exceptions who abuse the privileges granted in this Article and commit violations in that respect. In such cases , the United States authorities shall give sympathetic consideration to requests from the Panamanian Government to exercise jurisdiction. (6) The service facilities referred to in this Article shall grant to Panamanian supplies and services the preference referred to in Article VIII. 536 ARTICLE XII CONTRACTORS AND CONTRACTORS' PERSONNEL (1) Whenever contracts are required by the United States Forces for the performance of services or the procurement of supplies , the United States Forces shall adhere to the preferences for Panamanian sources set forth in Article Vin of this Agreement. (2) Whenever contracts are awarded by the United States Forces to natural persons who are nationals or permanent residents of the United States or to corporations or other legal entities organized under the laws of the United States and under the effective control of such persons , such contractors shall be so designated by the United States Forces and such designations shall be communicated to the Panamanian authorities through the Joint Committee. Such contractors shall be subject to the laws and regulations of the Republic of Panama except with respect to the special regime established by this Agreement, which includes the following obligations and benefits: (a) The contractor must engage exclusively in activities related to the execution of the work for which he has been contracted by the United States Forces , or related to other works or activities authorized by the Republic of Panama. (b) The contractor must refrain from carrying out practices which may constitute violations of the laws of the Republic of Panama. 1 537 (c) The contractor shall enter and depart from the territory of the Republic of Panama in accordance with procedures prescribed for members of the civilian component in Article Xni of this Agreement. (d) The contractor must obtain a certificate of professional identity which the proper authorities of the United States Forces shall issue when they are satisfied he is duly qualified . This certificate shall be sufficient to permit him to operate under Panamanian law as a contractor of the Forces . Nevertheless , the Panamanian authorities may require the registration of the appropriate documents to establish juridical presence in the Republic of Panama. (e) The contractor shall not be obliged to pay any tax or other assessment to the Republic of Panama on income derived under a contract with the United States Forces as long as he is taxed at a substantially equivalent rate in the United States . (f) The contractor may move freely within the Republic of Panama, and shall have exemptions from customs duties and other charges, as provided for members of the civilian component in Articles XV and XVII of this Agreement. (g) The contractor may use public services and installations in accordance with the terms and conditions of Article XTV of this Agreement, but shall pay non-discriminatory highway tolls and taxes on plates for private vehicles. 538 (h) The contractor shall be exempt from any taxes imposed on depreciable assets belonging to him, other than real estate, which are used exclusively for the execution of contracts with the United States Forces. (i) The contractor may use the services and facilities provided for in Articles X and XVIII of this Agreement to the extent such use is authorized by the United States Forces. (3) The United States Forces shall withdraw the designation of a contractor when any of the following circumstances occur: (a) Upon completion or termination of the contracts with the United States Forces. (b) Upon proof that such contractors are engaged in business activities in the Republic of Panama other than those pertaining to the United States Forces , without authorization of the Republic of Panama. (c) Upon proof that such contractors are engaged in practices which in the view of the Republic of Panama constitute serious violations of the applicable laws of the Republic of Panama. (4) The authorities of the United States shall notify the authorities of the Republic of Panama whenever the designation of a contractor has been withdrawn. If, within sixty days after notification of the withdrawal of the designation of a contractor who entered Panama in the capacity of a contractor the authorities of the Republic of Panama require such contractor to leave its territory, the United States Government shall ensure that the Republic of Panama shall not incur any expense due to the cost of transportation. 539 (5) The provisions of this Article shall similarly apply to the sub- contractors and to the employees of the contractors and subcontractors and their dependents who are nationals or residents of the United States. These employees and dependents shall not be subject to the Panamanian Social Security system. 540 ARTICLE XIII ENTRY AND DEPARTURE (1) The United States may bring into the territory of the Republic of Panama members of the Forces or the civilian component , and dependents , for the specific purposes of the Panama Canal Treaty, and as the two Governments may otherwise agree. (2) (a) In order to enter or leave the territory of the Republic of Panama, the members of the Forces shall be obligated to bear only a personal identity card and individual or collective travel documentation issued by the military authorities of the United States. Such documentation must be presented to the Panamanian authorities. The two Governments shall establish through the Joint Committee the procedure to be followed in exceptional cases . (b) To enter or leave the territory of the Republic of Panama , the members of the civilian component and dependents must possess, in acfdition to the travel documentation issued by the United States military authorities, a valid passport. Such documentation shall be presented to the appropriate authorities of the Republic of Panama, (c) The United States Forces shall furnish each member of the Forces or the civilian component, and dependent, who remains in the Republic of Panama for longer than thirty days, an identity card which shall be issued under the authority of the Joint Committee in Spanish and English. Children under the age of ten years may be included on the 541 identity card of a parent at the option of the parent. These identity cards shall be shown to the appropriate authorities of the Republic of Panama upon request. The authorities of the Republic of Panama may request information concerning the number of such cards outstanding and the validity of any particular card. The Joint Committee and the United States Forces shall provide such information. (3) Whenever the status of any member of the Forces or the civilian component, or dependent, is altered so that, at the time of such alteration, he is no longer entitled to remain in the Republic of Panama, the United States Forces shall promptly notify the Panamanian authorities, and shall, if requested within a period of sixty days thereafter, ensure that transportation from the Republic of Panama will be provided at no cost to the Government of the Republic of Panama. (4) (a) The members of the Forces or the civilian component, and dependents, shall be exempted from fiscal charges relating to their entry, stay in, or departure from the territory of the Republic of Panama.. Similarly they will be exempted from obligatory services established in favor of the Republic of Panama. They shall not acquire any right to permanent residence or domicile in the Republic of Panama. (b) Members of the Forces or the civilian component who enter the Republic of Panama to execute professional services exclusively for the 542 United States Forces , or in its behalf, shall not be subject to the licensing regimes of the Republic of Panama, but they shall limit their professional activity to such services with the United States Forces for the specific purposes of the Panama Canal Treaty, or as the two Governments may otherwise agree . 543 ARTICLE XIV SERVICES AND INSTALLATIONS (1) The United States Forces , members of the Forces or civihan component, and dependents , may use the public services and installations belonging to or regulated by the Government of the Republic of Panama , but the terms and conditions of use, prices, rates and tariffs and priorities shall not be unfavorable in relation to those charged other users. (2) For the use of public services and installations made available through a plant acquired or constructed, or equipment furnished, by the United States Government and subsequently transferred free to the Government of the Republic of Panama, preferential charges shall be granted to the United States Forces taking these circumstances into account. (3) The United States Forces may establish and operate the supporting services and facilities it requires within the defense sites, and exceptionally, with the authorization of the Government of the Republic of Panama , outside stSch sites . (4) The Republic of Panama will permit the United States Forces to continue to use in an adequate manner , accessory facilities , such as pipelines , communications , sanitation services and utilities , which serve the defense sites and are installed on land outside the defense sites. The United States Forces shall, at their cost, maintain and repair these facilities as necessary, in coordination with the proper entities of the Republic of Panama. Detailed S-991 O - 78 - 36 544 identification of such facilities shall be made through the Joint Committee, within a period of six months from the entry into force of this Agreement unless extended by the Joint Committee for exceptional circumstances. The two Governments shall agree, through the Joint Committee, upon procedures to govern the appropriate use , access , maintenance and repair of these facilities. Similarly, procedures shall be agreed upon for coordination between the United States Forces and the competent Panamanian entities , concerning the use , access , maintenance and repair of such facilities as may serve the Republic of Panama and are situated within the defense sites. 545 ARTICLE XV MOVEMENT, LICENSES AND REGISTRATION OF VESSELS, AIRCRAFT AND VEHICLES (1) (a) When in the performance of official duties, the vessels and aircraft operated by or for the United States Forces may move freely through Panamanian air space and waters , without the obligation of payment of taxes , tolls , landing or pier charges or other charges to the Republic of Panama and without any other impediment. (b) Such vessels and aircraft shall be exempt from customs inspections or other inspections . Whenever the same carry freight , crews or passengers who are not entitled to the exemptions provided for in this Agreement, prior notice shall be given to the appropriate Panamanian authorities . Both Governments shall adopt procedures to ensure that the laws and regulations of the Republic of Panama are not violated. (2) (a) Similarly , the vehicles and equipment of the United States Forces may, when in the performance of official duties, move freely in the Republic of Panama , without the obligation of payment of taxes , tolls or other charges to the Republic of Panama and without any other impediment. These vehicles and equipment shall be exempt from mechanical or other inspection. Claims arising from damage caused by the United States Forces to the Panamanian road network outside the defense sites , in excess of the usual wear and tear by reason of time and its appropriate use, shall be settled as provided for in Article XX. 546 (b) Such official vehicles and equipment shall not be assessed any license or registration fees . These vehicles shall bear their customary United States military identification marks and an additional means of identification as may be agreed upon by the Joint Committee , to be issued under the authority of said Joint Committee and distributed by the United States Forces . (c) In connection with the movement of any military convoys, or any large number of vehicles as a single unit, outside of the defense sites, the United States Forces shall consult with the Combined Military Board so that, if time and circumstances permit, proper traffic arrangements will be made, including accompaniment by Panamanian traffic patrols. (3) (a) The plates, individual marks and registration documents issued by the United States for vehicles, trailers, vessels and aircraft which are the property of the United States Forces shall be accepted by the Republic of Panama . (b) The Republic of Panama shall recognize as sufficient, the valid licenses , permits , certificates or other official classifications from the United States Government, possessed by operators of vehicles, vessels and aircraft which are property of the United States Government. (4) (a) The vehicles, trailers, vessels and aircraft belonging to the members of the Forces or the civilian component, or dependents, shall also move freely within the Republic of Panama, in compliance with the traffic 54: regulations and those regarding the annual mechanical inspection. The license plate fee and other obligations shall not be discriminatory. (b) The Republic of Panama shall issue , in accordance with its laws, the appropriate documents of title and registration of vehicles, trailers, vessels and aircraft which are the propertv' of the members of the Forces or the civilian component, or dependents, when the latter present title and registration, issued by the federal or state authorities of the United States or by the authorities of the former Canal Zone . Applicants may retain such documents provided they leave with the Panamanian authorities a copy authenticated by the United States Forces , duly translated into Spanish. While the corresponding request is being processed and within a term which may not exceed thirty days after its arrival in the Republic of Panama, the means of transportation mentioned above may be operated with the Dlates or distinctive marks issued by the United States federal or state authorities . (c) The members of the Forces or the civilian component, and dependents, who bear drivers' licenses, vessel operators' perm.its , or licenses and classifications of air pilots issued by the federal or state authorities of the United States or by the authorities of the former Canal Zone, shall receive equivalent Panamanian licenses, permits and classifications without being subjected to new tests or paym,ents of new fees . The 548 applicants may retain the licenses , permits and classifications of the United States or the former Canal Zone provided that they leave with the Panamanian authorities a copy authenticated by the United States Forces and duly translated into Spanish . Members of the Forces or the civilian component , and dependents , shall be permitted to drive vehicles , vessels or aircraft in the Republic of Panama with such licenses , permits and classifications during the thirty days following their first arrival in the Republic of Panama and during the subsequent period necessary for the processing of the application in Panama for a driver's license, vessel operator's permit, or license and classification as an air pilot. (d) The Panamcinian licenses , permits or classifications shall be valid for the period of time indicated in the Panamanian law and, during the continuous presence of the bearer in Panama, shall, to preserve their validity , be renewed in accordance with Panamanian laws . Whenever Panamanian laws may require medical certifications for the f enewal of licenses , permits or classifications the Republic of Panama shall accept the certifications issued by the medical services of the United States Forces, provided that said certifications are issued in Spanish. (e) The Republic of Panama shall issue , in accordance with its laws, drivers' licenses, vessel operators' permits, and licenses and other classifications of air pilots to members of the Forces or the civilian component, and dependents, when they do not possess such documents. 549 If any test is required as a prerequisite for the issuance of the documents mentioned, Panama shall permit the interested persons to take the examination in Spanish or English. Any material which the Republic of Panama may generally issue in preparation for such examinations shall be furnished, in Spanish or English, as the applicant may request. (5) Aircraft other than those of Panama and the United States may use the runways of the defense sites only after obtaining appropriate authorization from the Republic of Panama. When deemed convenient, the two Governments shall adopt, through the Joint Committee, regulations governing the use by such aircraft. (6) The installation, change of position or alteration of lights and other signal installations to assist in navigation of aircraft , placed or established in the defense sites or in their surroundings , shall be subject to previous consultation between the appropriate authorities of both Governments. (7) The Republic of Panama shall adopt such measures as may be appropriate to coordinate air traffic in the Republic of Panama, so that, in a manner consistent with the mission of the United States Forces, .maximum safety shall be offered to civil and military air navigation. All systems of control and coordination of military air traffic shall be developed jointly as needed for the fulfillment of the specific purposes of this Agreement. The procedures needed to bring about this coordination shall be agreed upon by the appointed authorities of both Governments, respecting always the sovereignty of the Republic of Panama over all its air space. 550 The Republic of Panama agrees that, for security reasons, at the request of the United States Forces it shall restrict overflights of certain of the defense sites. (8) The Joint Committee may agree on rules and procedures that may be necessary to implement this Article. 551 ARTICLE XVI TAXATION (1) By virtue of this Agreement, the United States Forces are exempt from payment in the Republic of Panama of all taxes , fees or other charges on their activities or property, including those imposed through contractors or subcontractors . (2) Members of the Forces or the civilian component, and dependents, shall be exempt from any taxes , fees , or other charges on income received as a result of their work for the United States Forces or for any of the service fecilities referred to in Articles XI or XVIII of this Agreement. Similarly, as is provided by Panamanian law , they shall be exempt from payment of taxes, fees or other charges on income derived from sources outside the Republic of Panama . (3) Members of the Forces or the civihan component, and dependents, shall be exempt from taxes, fees or other charges on gifts or inheritance of on personal property, the presence of which within the territory of the Republic of Panama is due solely to the stay therein of such persons on account of their or their sponsor's work with the United States Forces. (4) The Joint Committee may establish such regulations as may be appropriate for the implementation of this Article. 552 ARTICLE XVII IMPORT DUTIES (1) Except for the exemptions provided for in this Agreement, the members of the Forces or the civilian component , and dependents shall be subject to the laws and regulations administered by the customs authorities of the Republic of Panama . (2) All property imported for the official use or benefit of the United States Forces, including that imported by their contractors or subcontractors, in connection with the various activities authorized under this Agreement, shall be exempt from the payment of all customs duties or other import taxes and charges and from all license requirements. The United States Forces shall issue a certificate , following the , form adopted by the Joint Committee, stating that the property being imported is for these purposes . (3) Property consigned to or imported for the personal use of the members of the Forces or the civilian component, or dependents shall be subject to the payment of import duties or other import taxes , except for the following: (a) Furniture , household goods and personal effects imported by such persons for their private use within six months following their first arrival in the Republic of Panama. In the case of persons who are unable to obtain adequate housing when they first arrive in the Republic of Panama, an additional period of six months from the time they obtain 553 adequate housing shall be granted them for the importation of such articles , provided that the United States Forces issue a certificate stating that the person concerned has not accomplished such importation and indicating the date upon which he obtained adequate housing and its address; (b) Vehicles imported by such persons for their private use , and the spare parts required for proper maintenance of such vehicles. The Joint Committee shall establish the limitations on the quantity eind frequency of imports of such vehicles and parts; (c) A reasonable quantity of articles for the private use of such persons , imported as personal baggage or sent into the Republic of Panama through the military post offices of the United States; (d) Such other imports as may be expressly authorized by the competent authorities of the Republic of Panama at the request of the United States Forces . (4) The exemptions granted in paragraph (3) of tMs Article shall apply only to cases involving the importation of articles exempted at the time of entry and shall not be construed as obligating the Republic of Panama to reimburse customs duties and domestic taxes collected by the Republic of Panama in connection with purchases of goods from Panamanian sources subsequent to their importation . 554 (5) Customs inspections shall not be made in the following cases: (a) Members of the Forces traveling under orders, other than leave orders, who enter or depart from the Republic of Panama; (b) Official documents under official seal and mail sent through the military postal channels of the United States; (c) Cargo consigned to the United States Forces. (6) Property imported under this Article and subsequently transferred to a person who is not entitled to duty-free importation shall be subject to the payment of import duties and other taxes according to the laws and regulations of the Republic of Panama. Such sales shall not be permitted when they are motivated by commercial purposes. (7) All property imported into the Republic of Panama free of customs duties and other taxes pursuant to paragraphs (2) and (3) of this Article may be exported free of customs duties , export permits, or other export taxes and assessments. All property acquired in the Republic of Panama by, or in the name of, the United States Forces, or acquired by members of the Forces or the civilian component, or dependents, for their private use may be exported free of customs duties , export licenses or other export taxes and charges. (8) The authorities of the United States agree to cooperate with the authorities of the Republic of Panama and shall take , within their legal authority, all such steps as may be necessary to prevent the abuse of the 555 privileges granted under this Article to the members of the Forces or the civilian component, or dependents. (9) In order to prevent violations of the laws and regulations administered by the customs authorities of the Republic of Panama, the two Governments agree as follows: (a) The authorities of the Republic of Panama and the competent authorities of the United States shall mutually assist one another in the conduct of investigations and the collection of evidence. (b) The authorities of the United States shall take , within their legal authority, all necessary measures to ensure that articles subject to seizure by or in the name of the customs authorities of the Republic of Panama are delivered to these authorities. (c) The authorities of the United States shall take, within their legal authority , all necessary measures to ensure the payment by members of the Forces or the civihan component, and dependents, of such import duties , taxes , and fines as may be duly determined by the Panamanian authorities . (10) Vehicles and articles belonging to the United States Forces that are seized from a person by the authorities of the Republic of Panama in connection with a violation of its customs or tax laws or regulations shall be delivered to the competent authorities of the United States Forces . (11) The Joint Committee will constitute the means of communication and information between the two Governments with regard to matters pertaining to the implementation of this Article. 556 ARTICLE XVIII HEALTH, SANITATION AND EDUCATION (1) The United States Forces may furnish educational, sanitary and medical services , including veterinary services , to the members of the Forces or the civilian component, and dependents, and other persons as may be agreed upon as exceptions by the two Governments through the Joint Committee. (2) Matters of mutual interest relative to the control and prevention of diseases cind the coordination of other public health, quarantine, sanitation and education services shall be the subject of coordination in the Joint Committee . (3) The RepubUc of Panama authorizes the United States Forces, in rendering such health, sanitation and education services, to apply its own regulations . 557 ARTICLE XDC SURVEYS The United States may carry out topographic, hydrographic, agrologic and other surveys (including taking of aerial photographs) within the defense sites . Surveys in other areas of the Republic of Panama shall require authorization from the Republic of Panama , in the manner agreed upon in the Joint Committee , and the Republic of Panama shall , at its option, designate a representative to be present. The United States shall furnish a copy of the data resulting from such surveys to the Republic of Panama at no cost. 558 ARTICLE XX CLAIMS (1) Each Government waives its claims against the other Government for damage to any property owned by it and used by its land, sea or air armed services , in the following drcvmistances : (a) If the damage was caused by a member or an employee of the armed services of the other Government , in the performance of his official duties; or, (b) If the damage arose from the use of any vehicle, vessel or aircraft owned by the other Government and used by its armed services , provided either that the vehicle, vessel or aircraft causing the damage was being used for official purposes , or that the damage was caused to property being so used. (2) In the case of damage caused or arising as stated in paragraph (1) , to other property owned by either Government and located in the Republic of Panama, the claims shall be settled by the Government against which the claim is made. If it is not settled in due course, the claim may be pursued through diplomatic channels. Both Governments hereby waive the collection of any claims for an amount less than $1,400 U.S. or B/. 1,400 which are of equal value. (3) In cases of maritime salvage, each Government waives its claims against the other if the vessel or cargo salved was the property of the other Government and was used by its armed services for official purposes. 559 (4) For the purposes of this Article, any vessel chartered, requisitioned or seized in prize by a Government shall be considered its property (except to the extent that the risk of loss or lia- bility is assumea oy some ocner person than such Government) • (5) Each Government waives its claims against the other Government for injury or death suffered by any member of its armed services while said member was engaged in the performance of his official duties. (6) The members of the Forces and the civilian employees of the United States Forces shall be subject to the jurisdiction of the civil courts of the Republic of Panama except in matters which arise from the performance of their official duty. In cases where payment has been accepted in full satisfaction of the claim, the civil courts of the Republic of Panama shall dismiss any proceeding concerning the matter. (7) When personal private property subject to seizure or attachment by order of a competent authority under Panamanian law is within the defense sites, the United States authorities shall render, upon request of the Panamanian authorities , all assistance within their power in order that such property is turned over promptly to the Panamanian authorities. This paragraph shall not apply to personal property which, although privately owned, is in use by or on behalf of the United States Forces. 98-991 O - 78 - 37 560 (3) Non- contractual claims arising from damages caused in the performance of their official duties by members or civilian employees of the United States Forces to third parties other than the two Governments shall be presented by the injured party through the Joint Committee to the appropriate authorities of the United States Forces for settlement. The authorities of the Republic of Panama may submit advice and recommendations on Peinamanian law to the claim authorities of the United States for their use in evaluating liability and amount of damages. (9) For other non-contractual claims against the members of the Forces or the civilian component , the authorities of the United States , following consultation with the appropriate authorities of the Government of Panama , shall consider the claim and, if appropriate, offer an ex gratia payment. (10) The authorities of both Governments shall cooperate in the investigation and procurement of evidence for a fair disposition of claims under this Article . (11) Contractual claims against the United States Forces shall be settled in accordance with the dispute clause of the contracts, and in the absence of such clause , through presentation of claims to the United States authorities through the appropriate channels. (12) The United States Government shall require contractors and sub- contractors referred to in Article XII of this Agreement to obtain appropriate insurance to cover the civil liabilities that may be incurred in Panamanian territory as a result of acts or omissions done in the performance of official duty by their employees. The Joint Committee shall establish the general standards for such insurance. 561 ARTICLE XXI GENERAL PROVISIONS (1) The activities and operations of the United States Government shall be carried out with adequate attention to public health and safety in the Republic of Panama. Within the defense sites , whose use Panama makes available to the United States by virtue of this Agreement, the United States authorities shall adopt all the appropriate measures to cooperate for these purposes with the authorities of the Republic of Panama. (2) When required by their official duties , members of the Forces or the civilian component may possess and carry official arms and they will conform to any standards which the Joint Committee establishes. The members of the Forces or the civilian component, and dependents, may bear private arms in accordance with applicable Panamanian laws and regulations , and regulations of the United States Forces . (3) The members of the Forces shall be obliged to observe proper conduct in accordance with the order and discipline required by Panamanian laws and the military laws and regulations of the United States. The authorities of the Republic of Panama shall maintain vigilance that Panamanian laws and regulations shall be observed at all times. When the order and discipline referred to in this paragraph should be breached by members of the Forces outside the defense sites , and the authorities of the Republic of Panama , for reasons of language differences 562 or other circumstances , consider it convenient , they may request the presence of personnel of the police of the United States Forces to cooperate in the re- establishment of order and discipline, and, in such cases, the United States Forces shall be obliged to send them. Within the defense sites , the police function shall be primarily exercised by the police of the United States Forces. The Panamanian authorities shall cooperate with the United States Forces in the fulfillment of this fiHiction, for which purpose they may locate members of the Panamanian police within the defense sites at the headquarters of the police of the United States Forces or as the Joint Committee agrees. Such cooperation shall be rendered particularly in those cases involving Panamanian nationals. The Joint Committee may also agree on a procedure so that members of the Panamanian police and the police of the United States Forces may jointly conduct routine inspections for the maintenance of order and discipline in those places where vigilance is especially required. (4) The United States Forces shall restrict, to the maximum extent possible , the wearing of military uniforms so that they will be worn only when necessary. The Joint Committee shall adopt standards regarding the wearing of military uniforms in other cajes , as exceptions. I 563 ARTICLE XXII DURATION This Agreement shall enter into force when the Panama Canal Treaty signed on this date enters into force and shall terminate at noon, Panama time, on December 31, 1999. IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed this Agreement. DONE at Washington, this 7th day of September, 1977, in duplicate in the English and Spanish languages, both being equally authentic. APPENDIX 5 Statement of Understanding Between the United States and Panama Regarding the Neutrality Treaty Under the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal (the neutrality treaty), Panama and the United States have the responsibility to assure that the Panama Canal will remain open and secure to ships of all nations. The correct interpretation of this principle is that each of the two countries shall, in accordance with their respective constitutional processes, defenrl the canal against any threat to the regime cf neutrality, and consequently shall have the canal or against the peaceful transit of vessels through the canal. This does not mean, nor shall it be interpreted as a right of intervention of the United States in the internal affairs of Panama. Any U.S. action will l)e directed at insuring that the canal will remain open, secure, and accessil)le, and it shall never be directed against the territorial integrity cr political independence of Panama. The neutrality treaty provides that the vessels of war and auxiliary vessels of the United States and Panama will be entitled to transit the canal expeditiously. This is intended, and it shall so be interpreted, to assure the transit of such vessels through the canal as quickly as possible, without any impediment, with expedited treatment, and in case of need or emergency, to go to the head of the line of vessels in order to transit the canal rapidly. (564) APPENDIX 6 Remarks of Dr. Rontulo Bethancourt Before Panamanian National Assembly From the American Conservative Union News, Dated wSeptember 7, 1977 Washington, D.C. — At a rally on the U.S. Capitol steps today, American Conservative Union Chairman Rep. Philip M. Crane (R. 111.) released a summary of remarks by the head of the Panamanian Negotiating Team on the Panama Canal Treaty which Crane said sharply contradicted the White House explana- tion of the proposed treaties. Crane referred to a speech by Dr. Romulo Escobar Bethancourt before the Panamanian National Assembly on August 19. Escobar's speech was reported in the Panamanian newspaper Matutino on August 20. Crane stated that "Dr. Escobar specifically refuted President Carter's con- tention that the terms of the treaty insure the Canal's neutrality, the expeditious passage of U.S. warships, a guarantee by Panama that the Canal would not be closed and the right of the U.S. to intervene to defend the Canal if necessary." In his speech before the Panamanian National Assembly, Escobar summed up the neutrahty aspect of the treaty: "This is the reaUty of the facts, that with the neutrality pact, we are not giving the United States the right of intervention. What we are giving is an assurance that the Canal will he permanently neutral, that we are not going to close the Canal so that their ships will not go through, or that this ship will not go through or this other ship." (Emphasis added.) Speaking of Escobar's remarks. Crane states, "Mr. Escobar's explanation of the treaty's provisions raises the real possibihty of double dealing on the part of the Carter administration. The President owes the American people a full and immediate explanation of the discrepancy between his interpretation and Mr. Escobar's." A brief summary of some of the points made by Escobar include: 1. The United States originally proposed a military pact that would operate after the year 2000. Panama opposed this proposal and the United States withdrew the idea of a military pact. 2. The United States originally proposed a bilateral declaration between Panama and the United States to declare the neutrality of the Canal with the United States as guarantor of the neutrality. Panama opposed this proposal and the United States withdrew the idea of a bilateral agreement with the United States as guarantor. 3. The United States originally proposed that Panama be obliged to keep the Canal permanently open and neutral. Panama opposed keeping it open in the case of natural causes (an earthquake), temporary causes (a landslide), and in the case the Canal was not making money. The United States accepted the first two reasons, but in the case of the third proposed that if the Canal was not making money Panama could ask for funds from the United States or some other coun- tries. Panama opposed this proposal and the United States agreed to eliminate the article about keeping the Canal open, thus eliminating that obligation for Panama. 4. The United States originally proposed that the Neutrahty Pact be between Panama and the United States and no one else. Panama opposed this proposal. The United States changed the proposal to be only between the United States and the OAS countries, but not Cuba. Panama opposed, saying that all countries of the world including any communist country that wished should be invited to join the Pact. The Uniteid States changed and agreed that all countries of the world, including communist countries, could join the Pact. 5. Panama proposed that the United Nations be the depositor of the Pact. The United States opposed and proposed instead that the OAS be the depositor. Panama accepted provided that the OAS have nothing to say about who could or could not join the pact. (565) 566 6. The United States asked for preferential right of way for U.S. warships in time of war and in time of peace. Panama opposed this proposal. The United States changed and asked for preferential treatment at least in time of war. Panama opposed. The Unites States changed and asked for at least expeditious passage (as prompt and rapid passage as possible). Panama accepted saying that, in any case it would want to give as prompt and rapid passage to any warships from any country, (i.e., U.S. gets no preferential rights.) 7. The United States originally proposed a bilateral declaration of neutrality. Panama opposed this and proposed a unilateral declaration by Panama only. The United States changed and accepted that Panama only would make a declaration of neutrality. 8. The United States originally proposed that the declaration of neutrality be for the Panama Canal only. Panama opposed and said that neutrality had to be for the whole country of Panama including the Panama Canal. The United States changed and agreed that it would be for the whole country of Panama. 9. The United States originally proposed that it be the guarantor of the neu- trality. Panama opposed, and said that all the nations signing the Pact act as guarantors with no special role for the United States. The United States withdrew its proposal and agreed that all the nations signing the Pact act as guarantors. 10. The United States originally proposed that the neutrality be upheld in all circumstances. Panama opposed saying that it could not uphold the neutrality of the Canal in the case of internal disorder in the country of Panama, or in the case of a third country attacking the Canal. The United States withdrew its pro- posal so as to avoid an article saying Panama would not uphold the neutrality in the case of internal disorder in Panama. 11. The United States originally proposed that Panama have an option to build a sea-level canal with a date and commit herself so that the United States would have the exclusive right to construct a sea-level canal in Panama. Panama opposed with the support of the countries participating in the Bogota Conference. The United States withdrew its proposal and accepted Panama's proposal that the two countries agree only to study the possibility of a sea-level canal. A full copy of the Spanish and English text is available on request. I Outline of Neutrality Pact Negotiations Between the United States AND THE Republic of Panama [As summarized from a speech given by Dr. Romulo Bethancourt before the Panamanian National Assembly, August 19, 1977] (1) United States proposed a militarv pact that would operate after the year 2000. Panama opposed. United States withdrew the idea of a military pact. (2) United States proposed a bilateral declaration between Panama and the United States to declare neutrality of the Canal with United States as guarantor of the neutrality. Panama opposed. United States withdrew the idea of a bilateral agreement with the United States as guarantor. (3) United States proposed that Panama be obliged to keep the Canal per- manently open and neutral. Panama opposed keeping it open in the case of natural causes (an earthquake), temporary causes (a landside), and in the case the Canal was not making money. United States accepted the first 2 reasons, but in the case of the third proposed that if the Canal was not making money Panama could ask for funds from the United States or some other countries. Panama opposed. United States agreed to eliminate the article about keeping the Canal open, eliminating that obligation for Panama. (4) United States proposed that the Neutrality Pact be between Panama and the United States and no one else. Panama opposed. United States changed proposal to be only between the United States and the OAS countries, but not Cuba. 567 Panama opposed saying that all countries of the world including any com- munist country that wished should be invited to join the pact. United States changed and agreed that all countries of the world including communist countries could join the Pact. (5) Panama proposed that the United Nations be the depositor of the Pact. United States opposed and proposed instead that the OAS be the depositor. Panama accepted provided that the OAS have nothing to say about who could or could not join the pact. (6) United States asked for preferential right of way for United States war- ships in time of war and in time of peace. Panama opposed. United States changed and asked for preferential treatment at least in time of war. Panama opposed. United States changed and asked for at least expeditious passage (as prompt and rapid passage as possible). Panama accepted saying that in any case it would want to give as prompt and rapid passage to any warships from any country. (I.e., United States gets no preferential rights.) (7) United States proposed a bilateral declaration of neutrality. Panama opposed. Proposed a unilateral declaration by Panama only. United States changed and accepted that Panama, only, would make a declara- tion of neutrality. (8) United States proposed that the declaration of neutrality be for the Panama Canal only. Panama opposed and said that it had to be for the whole country of Panama including the Panama Canal. United States changed and agreed that it would be for the whole country of Panama. (9) United States proposed that it be the guarantor of the neutrality. Panama opposed, and said that all the nations signing the pact act as guarantors with no special role for the United States. United States withdrew its proposal and agreed that all the nations signing the Pact act as guarantors. (10) United States proposed that the neutrality be upheld in all circumstances. Panama opposed saying that it could not uphold the neutrality of the Canal in the case of internal disorder in the country of Panama, or in the case of a third country attacking the Canal. United States withdrew its proposal so as to avoid an article saying Panama would not uphold the neutrality in the case of internal disorder in Panama. (11) United States proposed that Panama have an option to build a sea-level canal with a date, and commit herself so that the United States have the exclusive right to construct a sea-level canal in Panama. Panama opposed with the support of the countries participating in the Bogota Conference. United States withdrew its proposal and accepted Panama's proposal that the two countries agree only to study the possibility of a sea-level canal. Address of Dr. Romulo Bethancourt, Head of the Panamanian Negoti- ating Team Before the National Assembly of Panama Concerning THE Neutrality Pact With the United States, August 19, 1977. Originally it was proposed that to reach a negotiation with Panama there had to be a neutrality pact between the two countries and a military pact. The military pact would be made before the end of this century and it would operate after the year 2000. This kept the negotiations stalled for a long time because Panama opposed the enactment of a military pact. Panama's opposition to the military pact involved two things: first of all, it was opposed to the military presence of the United States in Panama, after the end of the present treaty (2000) and secondly, the United States as a great power is a country that frequently is involved in wars in other parts of the world and we did not want that because of a military pact, the future youth of our country would have to go fight at the scenes of war of the United States with the excuse that it was engaged in order to defend the Panama Canal. This was a position that Panama maintained until the United States withdrew the idea of a military pact, and we then went into the discussion of the neutrality pact only. 568 In the neutrality pact, the following situation arose : The United States raised the question if Panama was in disagreement with the Canal being neutral. We told them no, that on the contrary, a long-standing aspiration Panama had had been that the Panama Canal would ])e neutral. They said that they wanted that the Panama Canal be neutral and we said we entirely agreed with them. The difference occurred in what they understood by neutrality and what we under- stood by neutrality. They proposed that Panama and the United States declare that the Canal was neutral and that the United States would guarantee that neutrality. Panama was opposed to this concept explaining that we did not want that with the excuse of neutrality, the United States would maintain a guarantee over the State of Panama. This was another cause of discussion that kept the negotiations detained until the United States gave up on the idea of its having a guarantee of neutrality over the Canal. Another of the issues that they presented was that Panama must agree to maintain the Canal permanently neutral and permanently open. We told them that Panama could oblige herself to maintain the Canal permanently neutral because that was her wish. Panama has no interest in other than a neutral Canal, the Panama Canal, because otherwise the Isthmus of Panama would change into a scene of war. But we said Panama could not promise to maintain the Canal permanently open for three reasons: 1) for natuial causes. We explained that an earthquake could happen for instance, that would close the Canal and Panama could not be with the obligation of keeping it open. Also, we explained that for temporary causes, that there could be landslides and it would have to be closed in order to correct these landslides, and thirdly, it could happen that the Canal was not producing (making money) for Panama and that then Panama would not have the obligation to keep open a canal that did not give them money. They (United States negotiators) accepted the first two reasons, the natural causes and the temporary causes but they did not accept the third cause, the lack of profitability. This also kept the negotiations stalled for a long time. They proposed that in case that it were not profitable, Panama could get money from the United States in order to keep it open or from the other countries who use the Canal. We told them that when the new treaty with the United States ended, we did not want that Panama would have either the direct or indirect obligation to turn to the United States to request money or to any other country to keep the Canal open. The position of the two countries remained firmly un- changeable until we reached the following agreement: They said, we can't present to our Congress an article that states you will close the Canal for lack of profit. And we said that we could not present an article in which we are obliged to per- manently keep a Canal open when we did not know if the Canal someday would yield no profit. We came to the agreement of eliminating that article, so Panama got rid of that obligation to maintain the Canal permanently open. The negoti- ations then went exclusively to the problem of neutrality. The United States proposed then, that there should be made a neutrality pact between Panama and the United States and no one else. They did not want that either the Russians, or the Cubans nor the Chinese, (they said this verbatim) to intervene in the neutrality of the Panama Canal. Our position was that the neutral- ity didn't make any sense if it was only limited to two countries by making a pact between the United States and Panama. We opposed that the rest of the countries did not have the right to join that pact. They changed their position and said that they accepted that only the countries of the American continent (except for Cuba) could join. We said no, that it had no meaning because in case of a war between them (the United States) and Russia or China, if those countries were not part of the neutrality pact, they would have no commitment to respect the Canal nor the Isthmus of Panama. That was another reason for much discussion until they ended up accepting that all the countries of the world could join the neutrality pact. Later, the problem arose of where the joining of the countries of the world could be done. We said that it had to be in the United Nations. They responded that they were not in favor of the idea of the United Nations very much because they have a lot of problems with the non-aligned countries, the Third World, the Arabs, etc. They proposed the O.A.S. We said that we did not disagree that it was the O.A.S. provided that this body would be only the receiver of the pact and the rest of the countries would go there to register, and that the O.A.S. would have no participation as far as accepting or refusing the countries that would like to join. This was another cause of discussion. It was solved by making a protocol of neutrality, that famous protocol that gives the United States the 569 right to intervene in Panama because those who attack it apparently read this in a Miami newspaper. This protocol is only a note ^ in which the existence of the neutrality act is indicated. It says what it consists of and sets down consequently, which country will join. That is the famous protocol. The same neutrality pact but in a protocol (that is what it is called) and the O.A.S. is the depositor. Another problem was the preferential passage of the American warships through the Canal. They said that they had two problems. First that they had to please Pentagon, they had to present them something that they liked so that they would support the treaty, and secondly, that at least after the treaty ended, since they were going from there, that they were left even (at least) with that, because they had constructed it. We pointed out that we recognized that indeed, they had constructed the Canal, but writing in the neutrality pact that the United States warships would have preferential right of way over the rest of the vessels violated the pact of neutrality and that was contrary to the objective of the pact we are negotiating. This was another cause of lengthy discussions and much analysis. They searching for their books and we searching for ours, they invoking their treaty writers, we invoking ours. This is how these discussions are carried out. They changed their position and said that at least they should be given preferential right when the United States was at war (originally they wanted it in times of peace and war) and this right should be given simply at the request of the ship's captain. We said no — that in time of war was the time when least the preferential passage should be given because the neutrality would be vio- lated. They, after discussing this, very much accepted that they could not have a preferential right for the warships of the United States. Then both countries devoted themselves to looking for a formula that would not mean preferential right and we came to the agreement that the warships of the United States in times of peace or in times of war, (and the ships of Panama that we still don't have but that for the year 2000 maybe we will have [laughing]) will have the right to prompt passage through the Canal. This means that they will have the right to as rapid a passage as possible. In that, we agreed because it's not suitable for any country that the warships of another country linger for a long time in its territorial waters; therefore, the faster they go through, the better. Another of the issues in the neutrality pact that we were, rather, this is the true picture of what the neutrality pact consists: According to these indications, also we did not accept from them that the United States and Panama together declare the neutrality of the Canal. We said that declaration of the neutrality of the Canal was an act of sovereignty of Panama and that this had to be a uni- lateral declaration. After much discussion, they accepted that th'^ declaration be made only by Panama; in other words, that Panama is the one who declares that the Canal is permanently neutral. These other indications were made, that the neutrality they proposed in the declaration that we were to make, should be for the Panama Canal so that it not become a scene of war. They wanted to separate the canal from the rest of the Isthmus. We told them that we couldn't; that the Canal was part of our Isthmus and that our neutrality made sense only if it was for the Canal and for the rest of the country because we didn't gain anything if they don't throw a bomb in the canal, but they do throw it, for ex- ample, in Ocu or in Santiago. They accepted that the neutrality be declared so that neither the Canal nor all of the territory (country of Panama) of the Isthmus of Panama could be object to reprisal in conflicts that another power could have. Another point in the concept of neutrality is that it is not a neutrality so only the United States ships travel through peacefully, but that it is a neutrality so that all ships of all the flags in the world travel through peacefully, independent of what country it may be, if it is a communist country, if it is a fascist, if it is a monarchy, that we were not interested in that it had to be a democratic country for the peaceful passage of all the ships in the world. And finally, that the pact was made between the two countries and it is declared there that Panama declares the neutrality of the Canal (in the manner that I already explained to you) after Panama having made the neutrality pact, based on that declaration with the United States of America and that the countries commit themselves to maintain this neutrality. This concept of upholding the neutrality was the concept that replaced their original position that they would guarantee the neutrality. The upholding of the neutrality is indicated within the pact, and in the protocol the rest of the countries are signing this protocol. ' The meaning of "note" is not clear. It could mean a note of explanation or a small piece of paper. 570 Then came the discussion because I proposed originally that both countries would be committed to uphold this neutrality in all circumstances. We said that if the phrase "in all circumstances" was written down, we would have to make two possible exceptions, the first one — that provided that those circumstances were not of internal order because those circumstances of internal order were of our country or our National Guard; and secondly, we had to point out that it was an attack to the Isthmus or the Panama Canal by a third country. This was a cause of much discussion and they then preferred not to present this phrase so that we wouldn't present the exception. We also pointed out that within the neutrality pact it had to be clearly established that from the 31 of December 1999 at 12 o'clock noon or at 12 noon as Edwin (Edwin Fabrega) says or at 12 midnight as Ahumada (Adolfo Ahumada) says, that from that date on, the American troops could not be in Panama. They, after much discussion said, we don't like that phrase — that there could be Russian troops or Cuban troops. Then the proposal to change the phrase rose up and that it could be said that from the 31 of December 1999 on, in Panama there could only be Panamanian troops with which they were happy because they were thinking more or less that we are going to call the Russians and we were happy because one of our aspirations is precisely that our troops be the only ones here. So this is the "wrong" of the neutrality pact. (Sarcastic) The criticisms that are made to it, some that you have already heard or have read by a various people that like to be exceedingly particular in that we give the United States the right to intervene in our country after the year 2000. These people think that the rights of intervention are given. To the great powers, no one gives the right of inter- vention; they intervene whenever they feel like it with or without a pact. When they landed in Santo Domingo, they had no military pact with Santo Domingo, nor had any right of intervention in Santo Domingo and landed as they pleased. But there are people here who think that it is the articles of a code (law code) that tell a country if they have the right to intervene or not, and they don't know that it is the bayonets, the guns, and the atomic bomb that give the force in order for a country to intervene. And then a country such as the United States can land in Panama whenever they feel like it after the year 2000 without there existing any neutrality pact or the neutrality pact. But it cannot land, for example, in Russia even if Russia tells them to land. This is the reality of the facts, such that with the neutrality pact, we are not giving the United States the right of intervention. What we are giving is an assurance that the Canal will be perma- nently neutral, that we are not going to close the Canal so that their ships will not go through, or that this ship will not go through or this other ship. Why this neutrality pact? Because they are thinking maybe by the year 2000 this country (Panama) may become socialist and then become our (US) enemies and we now want to make sure that even if they become socialist, they cannot close our passage. And frankly speaking, they do not need this neutrality pact to intervene or not. They need it to present it to their Congress, to tell their Congress, "But look, we are giving the Canal to these Panamanians but we always have the right to watch it so that they behave themselves." That's the truth. It's their internal policy, they are resolving an internal problem with a Congress that has a great opposition to these negotiations and that has, in additon, other members that have not been elected by the American people but that they have turned into members of the United States Congress with pleasure and these are the Panamanians that are here and others in Miami, (n.b. Referring to exiled people opposed to Torrijos' government.) So about the neutrality pact, this is its real content, distinguished Representa- tives. This was a very debated matter, as you can see by all that I have been explaining. This was the manner in which it was worked over, until it came to this form, and by the way, we feel very proud of the way it has been resolved. You should have seen the original form as they presented it together with the military pact. This would have been shameful, I would not have dared to sit at this table now to give any type of explanation to you if I would have had to present myself with the military pact and the neutrality pact that they presented originally. The other problem was the option for the construction of the sea level canal. Two months ago coinciding with the inauguration of the oil pipeline of Alaska, President Carter delivered a speech in which he said that his government was deeply interested in the construction of a sea level canal either through Panama or through any other spot in Central America, and right after President Carter's speech the American negotiators brought this problem of the option to the nego- tiation table. In the previous negotiations of 66 and 68, this was, indeed, a very debated problem by the negotiators of that time, Doctor Diogenes de La Rosa 1 571 and others. At that time they were making the studies. And they actually did make them and were rushing the possible construction. But in these negotiations it seems they had put the problem aside until now when President Carter's speech and the oil of Alaska appeared. And thus the discussion of the option began. We talked about this about two times and we arrived at no conclusion, and the Bogota conference came. There, the problem of the option really made a crisis because a very complete proposal between all the presidents, Carter through the negotiators Linowitz and Bunker and through our Chancellor, Gonzalez Revilla and our negotiators was established. They (United States) proposed that Panama have an option to make a sea level canal without a date, and secondly, that Panama committed herself that no other country could construct a sea level canal. They presented that proposal in Bogota, we read it to the Presidents. It was the proposal that the negotiators had brought and we read it to them and the negotiations between the two countries were practically broken. The General said in his comment that we had come to this conference of Bogota to celebrate the day of a new treaty and it turns out that on the other hand, we came to a vigil over the deceased. There, the struggle between the two countries began, Bogota, between both, because the other presidents meddled as if they were Panamanians too. There was no way to reach an agreement in what they proposed, Panama's representation wrote a plan that everyone thought fine. Read word for word, it is more or less like this: Article 3 — The possibility of constructing a third set of locks or a sea level canal. 1 . The Republic of Panama and the United States agree that a sea level canal could be important in the future or for the international relations. Consequently, after it is approved, it will arrange for its construction. The option doesn't even exist. That option is for study. To sit down and study with the United States if it is feasible. If it is, the two countries will do it during the course of 10 or 15 years. The future generations will be much more prepared. We aren't giving you a copy of the treaty because its pending the announcement of President Carter and of General Torrijos and it's becoming an official document. We will publish it wholly when it does become (official), we will debate it publicly. The ones who cannot prove that this treaty is better than the one of 1903, that the perpetuity is better, will have the problem. That the two million dollars is better than what is proposed now. We don't care if they say that General Torrijos is a dictator; those who are opposed and say that we are not revolutionaries may they grab their knapsack and their grenade and go prove it with deeds. o ' UNIVERSITY OF FLORIDA llillllllll 3 1262 09116 4805 n