Ivg//^:^ f ' "m £S5T } COMMITTEE PEINT A NEW PANAMA CANAL TREATY: A LATIN AMERICA IMPERATIVE REPORT OF A STUDY mission TO PANAMA NOVEMBER 21 I'l R81 N II. KYs. 315 AUTHORIZING THL COMMITTEE Oh INTERNATIONAL relations TO CONDUCT THOROUGH STUDHH AND INVESTIGATIONS OF ALL MATTERS COMING WITHIN THE JURISDICTION OF THE COMMITTEE %*0 FEBR1 AIM 24, 1976 X^*., Printed for tli<> us«> <>f the Committee on International U.S. GOVERNMENT PRINTING 6fl-242 O WASHINGTON : 1976 COMMITTEE ON INTERNATIONAL RELATIONS THOMAS E. MORGAN, CLEMENT J. ZABLOCKI, Wisconsin WAYNE L. HAYS, Ohio L. H. FOUNTAIN, North Carolina DANTE B. FASCELL, Florida CHARLES C. DIGGS, JR., Michigan ROBERT N. C. NIX, Pennsylvania DONALD M. FRASER, Minnesota BENJAMIN S. ROSENTHAL, New York LEE H. HAMILTON, Indiana LESTER L. WOLFF, New York JONATHAN B. BINGHAM, New York GUS YATRON, Pennsylvania ROY A. TAYLOR, North Carolina MICHAEL HARRINGTON, Massachusetts LEO J. RYAN, California DONALD W. RIEGLE, Jr., Michigan CARDISS COLLINS, Illinois STEPHEN J. SOLARZ, New York HELEN S. MEYNER, New Jersey DON BONKER, Washington Pennsylvania, Chairman WILLIAM S. BROOMFIELD, Michigan EDWARD J. DERWINSKI, Illinois PAUL FINDDEY, Illinois JOHN H. BUCHANAN, Jr., Alabama J. HERBERT BURKE, Florida PIERRE S. du PONT, Delaware CHARLES W. WHALEN, Jr., Ohio EDWARD G. BIESTER, Jr., Pennsylvania LARRY WINN, Jr., Kansas BENJAMIN A. GILMAN, New York TENNYSON GUYER, Ohio ROBERT J. LAGOMARSINO, California Marian A. Czarnbcki, Chief of Staff Michael H. Van Dusen, Subcommittee Staff Consultant Melinda Murphy, Staff Assistant (n) FOREWORD House or Rbfresbnta'itto, Commiitik <»\ [hTBRNAtionai, Relations, Washington, I >.('.. February 2 If, 1!)7(>. This report has be6D submitted to the Committee OO International Relations by a special study mission which traveled to Panama dur- ing November 1975 to examine the Panama Canal and the status of treaty negotiations. The observations and findings in this report are those of the study mission and do not necessarily reflect the views of the membership of the full Committee on International Relations. Thomas E. Morgan, Chairmam, (HI) LETTER OF TRANSMITTAL Pun 4Ei M, 1 :■; Hon. THOM KB E. MOBOAN, Chairman, Committei on International R Washington, 1 In u; Mi:. ( iimk.mw: I enclose ■ report on i study mission to the Republic of Panama which I conducted with Congressman David Obey of the Committee on Appropriations from November - J1 ! 1 :»::,. This report deals with the ongoing negotiaJ ions be4 ween the I United States and the Republic «>f Panama to reach an agreement on a draft treaty for the future operation and defense of tlie Panama Canal. We believe this report will be useful to Members of Congress and all persons interested in a background study of an important foreign policy issue confronting the United Sta The findings and recommendations <>f this report are entirely ours. Y<>ur comments and those <>f any of our colleagues would be most welcome. Respectfully submitted. Lb II. Hamilton, irman. Special Subcommittee on Investigate (V) ( ! ( I n ; T E N T s Page Foreword ID Latter of Transmittal * Preface n I. Conclusions 1 II. Recommendations •'? in. Bindings: why M ii< m Panama Oanal Treaty la Deceaearj ."> what are the ooneequencea if negotlatkma bill 8 what are the principal issues in dispute la negotiations for i new treaty 1 7 1. Timetable fur tbc treaty 7 2, Daratloa of treaty 8 ft, Operation of the canal 8 i Defense of the canal s ."> Landl and waters 9 i; Jnrladiction u ~. Bxpanaion of capacity 9 s Oompenaatioa 10 •>. Future operationa. 10 What are l.S. interests in Panama? 1<> Bconomlc mportanca 11 Military Importance 12 D.8. military facilities and presence in Panama 12 The Panama Canal Company and its operations 18 Resultant political interest 14 APPENDIXES 1. Schedule of activities 10 2. Joint Statement of Principles, hy Secretary of State Henry A. Kissinger and His Bxcellency Juan Antonio Tack. Minister of (foreign Affairs of the BepobUc Of Panama 17 'A Address by the Honorable Fllsworth Bunker on December -, 1975, entitled, "The Panama Canal: Popular Myths and Political Realities" 18 1 •'INinama-T'nited States Relations'." A statement by the Administra- tive Hoard of the U.S. Catholic Conference 28 ."». Press release by the Chamber of Commerce of the United States, November 12, 197&, regarding the Panama Canal Treaty 10 8, 1903 Treaty Between the United States and Panama 31 7. Issue Brief on Panama Canal, update of Congressional Research Serv- ice, October 14. IOTB (VII) PREFACE From November 21 to November 28, H*7.*>. we undertook a study mission to the Republic of Panama, the purpose of which was to Learn more aboul the Panama Canal and the status of negotiations tor anew Panamt Canal Treaty. During our visit we talked to SOOreS of Panamanian and American officials and visited the facilities of the ( 'anal. Hue brief study n proi ed beneficial and useful. While some of our colleagues in ( '<> may dissent from the findings and recommendations in this report, we hope that this report will encourage members to examine this Carefully and. if need be, lo travel to Panama. Without dottbt, Con- will soon confront the important foreign policy i- ed by the proposed new treaty. The better acquainted we are with the com- plicated and difficult issues involved, tine better we will undei and promote our Nation's best interest. We were accompanied on this study mission by Michael II. Van Dusen, stall' consultant for the Special Subcommittee on Investiga- taODS of the House International Relations Committee, representative- of the Departments of State and I defense, and a member of the White House National Security Council staff. We wish to acknowledge with appreciation the helpful and unfail- ingly courteous Bupport given to us during our visit to Panama by many Americans, lnrth in the Embassy and in the Canal Zone, and by several Panamanians. Their many efforts on our behalf and their fren- erous gift of time made this study mission successful. We are indebted especially to William .1. Jorden, U.S. Ambassador to Panama, and John I). Blacken, Political Counselor to the Embassy. The findings and recommendations presented here are our own. We hope this report is helpful to our colleagues and will stimulate further interest in this important foreign policy issue. Respectfully submitted, Lbs IT. II\Mir.i< Chairman, S tbcommii David P. 0» Committei on Appropriati Febri \;:v L976. (IX. CO E CO c CO H co Q. c 2 CD S c 3 D- CD O 03 O t n both sides will be forced mto extreme statements which will make the situation more dangerous and the issues more difficult to resolve. (1) 5. A treaty which is mutually beneficial for the United States and for Panama should include the following elements: (a) It should replace the existing 1903 treaty with a new relation- ship which : (1) Gives the United States primary responsibility for the de- fense and the operation of the Canal for an extended period dur- ing which Panamanians will play an increasing role in the opera- tion and, eventually, the defense of the Canal ; (2) Insures the continuation of an open, efficient, and secure Canal which is available for the trade and commerce of all states ; and (3) Gives Panama its appropriate political, economic, and jur- isdictional role in what is now the Panama Canal Zone. (b) A new treaty should guarantee for American residents of the Canal Zone and employees of the Panama Canal Company job security for their working lifetimes and normal benefits thereafter. A treaty should also seek to offer Canal Zone residents a lifestyle comparable to, in as many respects as possible, their current life situation in a region now totally under U.S. jurisdiction. (c) It should acknowledge Panamanian jurisdiction in the Canal Zone (although for the duration of the treaty, it would guarantee and specify the right of the United States to use lands, water, and airspace which mav be necessary for the defense and operation of the Panama Canal). (d) It should provide Panama with a just and equitable share of the benefits derived from the operation of the Canal and any auxiliary services. (e) It should also provide adequate authorities and procedures for making improvements on the Canal, and for determining tolls. It is assumed tolls may increase substantially in the coming years, reflect- ing inflation, increased operation expenses, and abnormally low tolls in the recent past. 6. While the Panama Canal is not as important strategically as it once was, it remains a valuable economic and military asset to the United States. During the Vietnam war, it served as an important logistical artery. Many of the defense functions currently performed in the Canal Zone, however, could either be performed efficiently and effectively else- where, or be eliminated or consolidated. II. RECOMMENDATIONS 1. The debate over a new treaty in the I nited States should concentrate on what is at stake for the United States. Many opponents <>f" I t roaty focus largely on debatable legal aspects of the issue, claiming the Panama Canal is sovereign I .S. territory, just like Alaska or <•! her parts of the I United State-. In fact, t he I United States has neither ownership nor sovereignty in the Panama Canal. Rather, the L908 treaty gave us rights. Those rights arc in jeopardy now because over the last several decades Panamanians havi ingly objected to their country being cut in half by a strij) of land win- fc Americans have exclusive rights and where American law i It is not difficult to imagine how Americans would feel i f t he I United States were forced to tolerate the existence of a 10-mile-wide strip of land on each side of the Mississippi River which was under the juris- diction of a foreign power. We would not tolerate such a part it ion and neither will the Panamanians continue to accept it. Sovereignty and ownership are not at stake tor us in the Panama ('anal. We have never had either. The only sure course to preserve rights in the Canal Zone is to work with the Panamanians to negotiate a new system of relationships which can allow for the continued effi- cient and BCCUre operations of the Canal. The present treaty does not insure either a -a fe or a secure ( anal, given Panamanian opposit ion to the present treaty. 2. While it may not be possible to reach agreement on all sub- stantive issues in a new treaty before the 1976 elections, earnest negotiations should continue in an effort to resolve the major outstanding issues and reach agreement on a draft treaty. Such a course is preferable to waiting and drifting. The real question is whether Panamanians, who are being provoked by ant i- American groups, will patiently await the results of our elections and subsequent ratification of a treaty. 3. Supporters of a new treaty must work to educate the Ameri- can people and Members of Congress about the need for it. To date, most of the discussion has come from opponents to a new- treaty who wisli to preserve the L903 treaty and the rights they feel were guaranteed by it. Three groups must he particularly active in support of a new 1 n ( a ) The executive branch particularly the State Department, Defense Department, and the White 1 1 "use must work to pres the merits of a new treaty. Spokesmen of .ill three grou] - hould leave adequate t [me to discuss t he p ith before the Congress and the American people. (1)) Members of Congress who support a n ed to explain to their colleagues the import including a new- treaty and to indicate why a treaty is needed. (c) Other Americans, especially those with important busi- ness interests in Panama and Latin America, who Bee the need (3) for a mutually beneficial treaty, must become better organized, better led, and more vocal. The recent resolution of the U.S. Chamber of Commerce supporting a treaty should be reinforced by a campaign among those in Congress supportive of the Amer- ican business community's interests. Such an effort should focus on why a treaty is in our political and economic interest. 4. Over the coming months the U.S. military command in the Canal, SOUTH COM, should intensify efforts to consolidate and streamline operations and facilities in the Canal Zone. Many of the present facilities have marginal utility for our current purposes. The Commandant of SOUTHCOM and the Governor of the Canal Zone have begun a process of trying to remove irritants in dealings between Americans and Panamanians in the Canal Zone. These efforts should continue and be expanded in the coming months, as we attempt to move closer to reaching an agreement on a draft treaty. 5. Members of Congress should examine this issue carefully and consider visiting the Republic of Panama and talking with Panamanian officials and Americans working in Panama. A treaty must be considered by the Senate and both Houses of Congress will be asked to approve implementing legislation. Visits to the Republic of Panama and to the Canal Zone offer an excellent opportunity for members to educate themselves on an important for- eign policy issue confronting this country. We suggest that such visits include talks in the Canal Zone with American officials and in Panama with American Embassy officials, Panamanians, and American busi- nessmen who live and do business in Panama. 6. Members of Congress should be aware that their comments on the Canal are closely followed and widely reported in the Panamanian press. We are persuaded that it would be wise to refrain from statements and actions in the next several months that might prejudice negotia- tions and even hamper the ability of our negotiators to insure that our best interests are preserved in any new draft treaty. Both Houses of Congress will have ample time to take action on this issue after the provisions of a draft treaty are presented to them for consideration. To seek to prevent a draft treaty from even being sub- mitted to Congress serves no useful purpose and can only harm our national interest. III. FINDINGS Win \ \ i w Panama Canal Tbbati I- Negbbsabt In L908, the United Stairs and tlir Republic of Panama signed t lit- IIa\ Bunau Varilla Treat) which granted the Qnited State- a strip of land LO-miles wide and 50-milefl long for the purpose of construct- ing, operating, maintaining, and defending a (anal between the At Ian tic and Pacific < teeans and which gave the United State- right "if it were the sovereign' 1 in perpetuity <>n Panamanian soil. Today that treaty and the relationship that it produced is over 72 years old. The treaty led to an engineering miracle, which i the United States and Panama well; it also led to an American ernmental presence on Panamanian territory which now cf 0118 offense to Panamanian.-. While some Americana argue that the L903 treaty has served the test 01 time and there are no good reasons to replace it, the terms of the 1908 accord do not reflect the major changes that have occurred in Panama, the United States and the world. In the LOTO'a no nation can continue to accept a t reaty which permits the exorcise of extensive extraterritorial rights in "perpetuity. M We cannot expect Panama to continue t<> accept what no other state will accept. The reaSOl increasing Panamanian opposition to the present treaty are app and understandable. There are several reasons for negotiating a new treaty. Among the more important at (a) In order for the United States to protect and promote its only crucial national interest in Panama — an open, efficient, and secure Canal — a new treaty is necessary, in part because of the united position of the Panamanians and in part because if we want a secure access to the Canal, wo need a cooperative arrangement with Panama. (b) The Republic of Panama, an important and staunch friend and supporter of the United States, want- a new treaty. Four American Presidents have been on record for 11 year- as wanting to conclude a new treaty relationship. Without a new treaty, con- tinued friendship with Panama will not bo possible. We will be Opfting for confrontation with all the risks that course can | for a safe and open Panama Canal. (e) The major concern of the Panamania? nd to the concept of America having rights in '"perpetuity" in Panama and U.S. jurisdiction over the ('anal Zone. This concern cannot be addressed in any reasonable fashion without a new arrangement. Tf we choose not to deal with it, wo will have a confrontation with Panama. Tf we continue to insist upon our rights in perpetuity in today's world, we are launched on a dangerous, high-risk course. (5) (d) Over the last several months, Panama has obtained im- portant and diversified international support for a new treaty. The strong and unequivocal support of all Latin American nations for Panamanian aspirations, alone, suggests that serious problems in our hemispheric relations will result from a failure to conclude a new treaty. Rejection of a treaty that protects vital U.S. interests will lead to a deterioration of our relations with all Latin Ameri- can nations. (e) The United States has a unique opportunity to obtain a treaty on acceptable terms. If this opportunity is lost and the talks falter, there will likely be another wave of anti-Americanism in Panama and resumption of treaty talks, a few years from now, in an atmosphere less favorable to the United States and less con- ducive to preserving for us the essential that we want, namely re- sponsibility for the operation and defense of the Canal for a speci- fied period of time. In brief, a treaty which satisfies the legitimate interests of both Panama and the United States is a realistic policy, and signifies a positive step toward a mature relationship between the United States and the countries of Latin America. What Are the Consequences if Negotiations Fail? The issue before the United States is not between having a new treaty and continuing the present treaty, but rather between negotia- tions that will lead eventually to a draft treaty and what would be the likely consequences of no new treaty. The treaty of 1903 gave the United States certain rights, not terri- tory and not sovereignty, in Panama. It is those rights that are the subject of the current negotiations. The current uneven pace of negoti- ations has, at times, produced a climate between the L^nited States and Panama that could undermine our rights there in the future. If we fail to reach a treaty that will redefine our relationship and rights for the future, we run the risk of a confrontation that can only reinforce distrust and jeopardize our national interests in the Canal. Such confrontations have occurred in the past because of this issue. They occurred in 1957, 1964, 1975. In 1964, over 20 people died in events relating to Panamanian frustrations over the Canal Zone and its inhabitants. More recently, demonstrations of a large and increas- ingly vocal student population have become a problem. While the students are not united and they represent political organizations across the entire political spectrum, although mainly on the left side, they are united in the view that a new treaty is necessary now. It is a matter of national pride and dignity to all Panamanians. While negotiations have been in progress and there is hope that a new treaty is possible, the Government of Panama has been willing to deal with the more outspoken and violent activities of student groups. But as each month passes the Panamanian Government is under in- creasing pressure to produce tangible signs of progress. If it perceives a complete impasse in the negotiations, the Government might be unwilling to pay the political price for containing demonstrators. Demonstrations mlmih^ the United States last occurred in Septem- ber 1975. At thai time students demonstrated against our Embassy and then proceeded to demonstrate outside the Panamanian Foreign Min- istry, two easy and natural targets for frustrations over the afa of i treaty. Although only minor damage was dona, the message was clear. If we arc unable to draft a mutually acceptable treaty, we run the risk of becoming engulfed in an uncontrollable confrontation between Americans and Panamanians in the Canal Zone. Such a situation could easily produce bloodshed, as it did in 1964. If a confrontation occurs, both Panama and the United States would lose precisely what we lx>th are intent upon preserving— an open, secure, and efficient Canal available for the trade and commerce of all States. What Are the Principal Issues in Dispute in NEGOTIATIONS for a Xkw Tkeati I Our discussions with American and Panamanian officials focused in detail on nine specific issue- involved in efforts to negotiate a new treaty. On some of these issues, differences between the United States and Panama have been resolved and, on others, intensive negotiating is still needed. The nine issues are : 1. TIMETABLE FOR THE TREATY Since 1 ( .m;4. both the United States and the Republic of Panama have been committed to the concept of a new treaty and the necessity of a comprehensive modernization of their relationship. Between 19W and 1!H')7. three draft treaties were ne g oti ated, but none were ever >i«rned by the parties and no effort was made to Seek ratification. In June 1971. another effort to reach a treaty commenced at the request of the TOrrijOfl Government which came to power in L96& However, a new UJS. treaty offer submitted to Panama in December 1 * > 7 1 was rejected. One year later formal negotiations resumed. Little was accomplished in this new round <>f talk> until after Ambassador Ellsworth Bunker was appointed r.S. negotiator in late 1978. Since then, substantial progress has been made. A first Stage of the negotiations ended in February 1074 when S tary of State Henry Kissinger went to Panama (Sty to initial with the Panamanian Foreign Minister a set of eight principles which were to serve as guidelines in working out the details of a new treaty.' The sin grounds where they knew they would get something new. After the delineation of these principle- it was relatively easy for the parties to identify the major issues that would be the subject <»f detailed negotiations. See appendix, p. 17 8 For the past 20 months or so, Ambassador Bunker's team has been meeting periodically with Panamanian negotiators seeking to narrow differences and prepare a draft treaty. These periodic negotiations have resolved some problems but others remain. From the Panamanian viewpoint, these negotiation sessions were not progressing fast enough toward the end of 1975 and little head- way had been made. They saw the negotiations as an extended proc- ess, dating from 1964, with the major issues unresolved. Some Pana- manians question the sincerity and commitment of the United States to a new" treaty. Some Panamanians now appear willing to delay any ratification of a new treaty until after the 1976 Presidential elections in the United States, but they remain uneasy about what lies beyond. The greater the assurance the United States can give that it intends to negotiate earnestly toward the end of 1976, the greater the ability and willing- ness of the Panamanian Government to accept the delays and to deal with the political activists who argue that violence is a better path to achieving Panamanian rights in the Canal Zone. The United States needs to pay particularly close attention to the timing, momentum, and substance of the negotiating process during the coming months. Substance and progress can be given to the talks now without necessarily concluding negotiations and creating polit- ical problems here in the United States. 2. DURATION OF TREATY A key issue confronting United States and Panamanian negotiators is the duration of the new treaty. Panamanian leaders want a fixed duration and oppose any treaty period extending beyond the turn of the century. They object strongly to a 50-year term for the treaty. Some progress has been made on this issue but further clarifications are needed. It remains possible to have a fixed term for the operation of the Canal, and some residual ability beyond that term where the United States could retain certain rights to defend the Canal. 3. OPERATION OF THE CANAL The negotiations will also focus on the rights required for the United States to be able, during the term of the treaty, to operate and main- tain an efficient Canal. During the course of the negotiations to date, considerable progress has been made on this issue. The United States will retain primary re- sponsibility for the operation of the Canal during the term of the new treaty, but as time progresses trained Panamanians will be increas- ingly filling positions. Eetiring American employees can be replaced in an orderly manner by Panamanian citizens. This procedure w^ould minimize loss of jobs and large-scale dislocations of American employees. 4. DEFENSE OF THE CANAL During the course of negotiations, Panamanian officials have ex- pressed appreciation for America's concern about the defense of the TIhv appear willing to grant the I Fnited States primary refipon sibility and necessan rights tor the defense of the Canal during the duration <>f the treat] . Although Panama will be able to part icipate in the defense of the Canal to the extent of its capabilities, the 8,300-man Panamanian National Guard is a small force, incapable of dealing with some of the threats our forces in Panama now are prepared to handle. < hir present military presence numbers about 22,000, counting dependents. Although general progress has been made on this issue, there will peral questions relating to personnel and b - that can only be resolved when negotiations on other substantive i completed. .".. LANDS AND U ATI The size and location of land ami water areas the United States will need to defend and operate the Canal during the term of the treaty remain undetermined in the negotiations. Much of the land in the Canal Zone and some of the facilities are not required for the d< • and operation of the Canal and could be returned to Panamanian jurisdiction. This aspect of the talks may take considerable time, and will involve reduction, elimination and consolidation of some existing facilities, but, if other issues can be resolved, these geographic issues can prob- ably be resolved expeditiously. It is uncertain whether the United State- will seek to retain control over the entire Canal and all areas adjacent to the ( 'anal or whether only isolated area- of cont rol will l>e sufficient. In any event. Panamanian jurisdiction would apply and something like a status-of-forces agreement would provide the for a continued American military presence. J DRI8DI4 TTOH During the course of negotiations, agreement in principle has been reached that jurisdiction over the Canal Zone will pa— to Panama during the term of the t reaty even though the United State- will retain the right t<> use certain areas necessary for the defense and operation of the ( 'anal itself. The major unresolved questions are when and under what pro- cedures current CS. jurisdiction will terminate and what functions, if any, will he performed by the United States after its jurisdiction is terminated. With agreement reached on the principle involved here, which has concerned Panama for decades, the format and technical procedures for transfer can he worked out. CPAN8ION oF CAPA< During the lifetime of tlie treaty there will he a need for additional capital investment in the Canal and for the United States to have normal operating rights for minor improvement-. In the negotiatio solved, among them : TTow would any possible enlargement of the Canal be achieved: who would pay for it": what rights the United State- has to make certain 10 changes; and what will be the procedures for approving any such plans? In addition to the proposal for an alternative sea level Canal at a cost of $5 billion, there are less ambitious major projects that could improve the capacity of the existing Canal. The development of a set of third locks, for example, might cost in the neighborhood of $1.5 billion. However, given recent declines in Canal use and the large cost of any major expansions, small projects to facilitate an increase in the annual number of ship transits to around 26,000, from the present nearly 15,000, might prove more practical since current projections suggest that 26,000 transits will be realized only in 2010. Not enough is known about future patterns and trends in Canal use and what changes in Canal capacity might prove advantageous. The treaty should leave open options for needed alterations in the Canal. 8. COMPENSATION In return for use of the Canal and other privileges in the Canal Zone, the United States has, over the years since 1903, provided economic benefits to Panama. The unresolved questions in the new treaty in the negotiations are the form and the amount of the benefits to Panama. Under terms of the original treaty, Panama was provided with an amount of $250,000 annually, which was raised to $1.9 million in 1955 and has since been adjusted for inflation to $2.3 million. United States and Panamanian officials agree that these amounts do not represent adequate compensation for the future, although recent economic aid levels over $20 million annually make aid to this country of less than 2 million people, on a per capita basis, very high. While no agreement has been reached on this matter, discussions have occurred and, like a few other issues, settlement should be easier when the crucial rights and duration questions are resolved. 9. FUTURE OPERATIONS While the new treaty relates more directly to U.S. rights and priv- ileges for a fixed term of the new treaty, it will be in our interest to define in the treaty, or an annex, a mutually acceptable statement con- cerning the Canal's continued neutrality and nondiscriminatory oper- ation beyond the duration of the new treaty. Such a statement of Pan- amanian intentions for the future, if it can be made with clarity and if a mutually acceptable formula can be found for its articulation, will serve a useful purpose. An open, secure and efficient Panama Canal is as much in Panama's interest as any other state and there are per- suasive reasons for Panama to be specific in defining its long-term objectives. What Are U.S. Interests in Panama? Since the Panama Canal opened in 1914, it has proved an impor- tant economic and strategic asset to the United States and to Panama although its value and significance have varied as the world environ- ment has changed. 11 The real interests <>f the United States in the Canal are to have ■ ( anal thai is open t<> the world's shipping and protected hlmium inter- national disputes, that operates efficiently and profitably, and t defensible. Beyond that, we want fair treatment for the thousand Americans erJ erred faithfully in the Canal Zona. '-MH I. Ml The Panama ("anal lias long been a vital artery for world trade. Of the total cargo tonnage transiting the Canal each year, about 86 percent goes to. or comes from, ports in the United States. Put another that tonnage in aome years has re p r e s ent ed about 17 perc en t of total [J.S. export and import tonnes Panams also ha- benefited economically from the Canal. More than 30 percent of Panama's foreign exchange earnings and roughly 13 percent of its gross national product an- attributable today to the Canal. In recent yearfl the -hare of Panama'- GNP attr ib uta ble di- rectly or- indirectly to the Canal has shrunk, as other -f the Panamanian economy have expanded more rapidly. At one time, for example, over one-third of Panama's GNP vras derived from the Canal. Today the Canal continue- to have significance for the United States, because of the extent to which our Beaborne commerce osi This i- true despite a declining need for the ('anal in intercoastal trade ami the existence of competing modes of transportation. Hut the availability of the Canal for commercial shipping is even more important for several countries in Latin America and Asia whose economies are more dependent than the economy of the United States upon foreign trade. I tospite continuing commercial interests, two factors may affect the continued economic importance of the Canal for world trade First, for the Canal to be economically viable toll- will have to be raised in the future. Tolls for the ('anal, which had remained amazingly con- stant since 1914, were Hi - i by 20 percent in 1074. hut still other increases will be necessary. At some point, it will become mon Domical to use Alternative routes f<>r several commodities that now- transit the Canal. In the United State-, this could mean more trans- continental shipment-. In brief, what may make economic sense for covering Canal Oj tions and generating more income for Panama may not keep Canal business and use at present levels. The number of Canal transiU already decreased in the la-t couple of years, a re.-ult. at leaf part, of the worldwide recession. If tolls are one factor in the future economic importance of the Canal, the sixe of ships is another. Neither- supertankers nor lar^e ships with bulk cargo or containerised commodities can use the Canal. The economics of scale in shipping some commodities may mean that the Canal will become less important in the years ahead. These possibilities, however, do not loosen the continuing economic significance of the Canal. No state knows letter than Panama the im- portance of continuing to have an efficient, economically viabh 12 politically neutral Panama Canal. Any change in the character of the Canal or its closure could cause serious short-term disruptions to world trade and could be a serious blow to Panama. Because so many peoples and nations share this interest, one can be hopeful that barring a calamity, the Canal will remain a valuable asset for years to come, whatever treaty arrangements exist between the United States and Panama. MILITARY IMPORTANCE The Panama Canal is also important to the security interests of the United States. During World War II, the Korean war and the Vietnam war, the Canal made easier the shift of military forces and supplies from the Atlantic to the Pacific Oceans. In recent years some factors have diminished the strategic im- portance of the Canal. Three are worth mentioning : First, over the years the Canal has become more vulnerable to hos- tile attack. In any confrontation or armed conflict, the Canal could easily and quickly be closed for a period of many months by air attack or by sabotage. In an age of arms proliferation, international terrorism and large-scale demonstrations and riots, the Canal is subject to poten- tial disruption by only a few skilled saboteurs. The increasing vulnerability of the Canal has contributed to the development of alternative routes in global contingency plans for shifts of military forces and supplies. The likelihood is that when we would need the Canal most, it is less likely to be available. Second, even though the Canal was originally advocated for reasons of naval mobility, the United States has relied less on naval mobility and more on the development of fleets that could operate separately in the Atlantic and Pacific Oceans. The contribution of the Canal to naval mobility continues, as the Vietnam war demonstrated, but its significance may be less than it once was. Nevertheless, if the Canal became unreliable, or were closed for indefinite periods, significant changes in naval planning and ship requirements could result. A third factor impinging on the importance of the Canal for naval purposes is the growing importance of aircraft carriers and nuclear submarines. Large aircraft carriers cannot use the Canal and nuclear submarines would have to surface during any transit and are there- fore not likely to use the facility under any circumstances. This factor would tend to diminish the importance of the Canal for strategic pur- poses, but not necessarily for logistic flexibility. Despite these considerations, the Canal still represents a facility of considerable military and strategic significance for the United States. U.S. MILITARY FACILITIES AND PRESENCE IN PANAMA The United States also has military forces and facilities in the Canal Zone that form an important part of our overall activities in Panama. 13 There is today in Panama an American military presence of approxi mately 22,000 persons, including dependents. The actual military force. l>oth combat and support, <>f Borne 9,400 is both too large and too small for most military contingencies, either in Panama or in another conn try in the region. It is too small for roost contingencies involving i military invasion in the region or for tin- protection of the entire ( 'anal from hostile fire or sabotage. It is sufficiently large that it has the potential of creating several ■■time problems in our re hit ions with Panama. Our forces in Panama have access t<> an extensive series of facilities in the ('anal Zone several airfields, naval facilities, communications centers and an advanced military t raining school for officers who come to Panama from friendly states throughout South and Central Amer- ica. While many of these facilities are essential for the military to carry out its mandate in Panama of protecting the ("anal, othei not used and appear marginal for our needs. These facilities represent a substantial investment, reaching into the hundred- of millions of dollars. Several of them could l>c consolidated without adversely affect inff out ability to defend the ( 'anal. If under a new treaty, arrangements are made for the close coordi- nation of United States and Panamanian military activities for the defense of the Canal, the military needs of the United States m Panama will be changed dramatically and the character and deploy- ment of D.S. forces in the present zone or a new zone will !*> very di tie rent. While the Panamanian National Guard, Panama's only military or lonstabulatory force, cannot today protect the Canal and perform its various critical functions in Panama, it can. with modernization, de- velop the capability of playing i greater role in the defense of the Canal. It is in our interest to play a major role in the training and development of the national guard. THE PANAMA CANAL COMPANY AND I Is OPEBATD The engineering miracle of the ('anal and its efficient operation are the work, in large part, of the Department of Defense and the Army Corps <>f Engineers. The corps and its senior representative, the Governor, run the Panama Canal Company and administer the Canal Zone. The Panama ("anal Company is responsible for- les< than 4,000 American employees and their roughly 7,000 dependents, nv whom live in the Canal Zone. Some of these employees' families have been residents of the ('anal Zone for almost three generations. Those pers<>n> who maintain this remarkable operation and help run the Canal Zone Government can be proud of their unique achieve- ment. Their efforts have served the national interest of the United States over- a long period of time and under varying and changing circumstances. The interests of these Americans require careful consideration in the current negotiating process. AJbove all. a new treaty should address explicitly the immediate economic and job-security concerns of these citizens who. in some cases, have already given their best and most productive years to the Panama ('anal Company and who fear what may happen to themselves under a new t reaty. 14 These Americans have the right to expect that their best interests will be represented in all discussions between Panama and the United States but they should also recognize that there will be change in the coming years and that the lifestyle they have enjoyed may be altered significantly in the future. Many of the economic and social disparities that currently distin- guish the Canal Zone from Panama will be altered under any new cooperative arrangement, especially at those areas where the Canal Zone presses against, and curtails the normal growth of, Panama's two largest cities, Panama City and Colon. Over the years, the Panama Canal Company and its civilian em- ployees have maintained the Canal. Under any mutually beneficial new treaty, the continued help, expertise and management skills of Amer- ican personnel will be essential for the smooth operation of the facility. The human skills in the Canal Zone are even more important than the facilities themselves. While the percentages of Panamanians in the Panama Canal Company and the number of higher level positions occupied by Panamanians will increase in the coming years, none of the current employees should be dropped without adequate compensa- tion and job alternatives because of a new treaty arrangement. In short, the Panama Canal Company and its employees are an im- portant interest of the United States which should be protected in a new treaty. The Panama Canal Company's employees will be essential in the future to run and maintain the Canal, train qualified Panama- nians for future positions, and preserve our national interest in Panama. At the same time, these Zonians, American residents of the Canal, must realize that our national interest and purpose in Panama today includes a mutually acceptable new treaty for the operation and defense of the Canal and the development of a new and mature rela- tionship with Panama. RESULTANT POLITICAL INTEREST A critical need in protecting our interests in Panama is the pres- ervation of close relations between the United States and Panama based on mutual respect and trust. Over the years, since 1903, the original Panama Canal Treaty has served to undermine gradually American-Panamanian goodwill. We have seen that goodwill erode to the point of brief, hostile, and bloody encounters several times. Each time we run greater risks in protect- ing our interests and friendships in Panama and throughout the Amer- icas. The Panama Canal issue involves, not just the United States and Panama, but all of Latin America, and the shipping countries of the world. The continued operation of the Canal, in many respects, is related to the degree of cooperation or animosity which exists in Panama. A viable Canal operation in the future depends in large part on the confi- dence of Panama in our bilateral relationship. From the Panamanian viewpoint, that trust and confidence will depend on the development of a new treaty. There is, therefore, no reasonable alternative at this time to trying to negotiate a new mutually acceptable treaty for the continued opera- tion and defense of this vital artery. In the process, it is hoped that we develop a more modern and mature relationship with one of our best friends in Latin America. APPENDIX l S( m.Di i.i OF A< tin 11 n - UEMBERS OF DKLKGATION Hi>n. LmE Hamilton, Member of Congress Hon. David h. Obey, m ember of CkMtgreea Dr. Michael II. Van Dusen. StaiT Consultant. Subcommittee OH Investigations. Oommlttee OB International Relations Mr. Bichard B, Howard. Department of Stat*' Mr. Leslie A. .lanka. National Becurltj Council Mr. George m. Andricoa, Department of Defense Friday, November 21, 1975 1:10 p.m. Arrived Tocumen Airport, met by Fmlmssy Control Officer. John D Blacken and Licdo. Fabian Velarde, Information Coordinator for Canal Treaty Negotiations. Office of the Chief of Government 2:40 p.m. Called on Ambassador William J. Jorden. followed by briefing by Kmliassy staff 3:30 p.m.— Staff Briefing, American BmbaSBJ William .1. .lorden, United States Ambassador to Panama Raymond K. Qonsales, Minister-Counselor. Deputy Chief of Mission John D. Blacken. Political Counselor, American Kmbassy Col. Paul P. OoroneOS, Commander United States Military Croup Panama George Rublee. Acting Director, Mission of the United States Agency for International I >evelopment 5:10 p.m. Departed for Ambassador Jorden's Residence f) :30 p.m.— Met with Ambassador .lorden 7:10 p.m. — Departed Ambassador's Residence for Presidential Palace 7:30 p.m. Dinner hosted by President of the Republic. Demitrios B. I.akas P a n a mania n * in Attendance "t Presidential i'n Vebruarj 7. i'.>7», at Panama. The United States of America and the Republic of Panama have been engaged in negotiations to conclude an entirely new treaty respecting the Panama Canal, n ego t iations which arete made possible i»> the .Joint Declaration between the two countries . . f April 8, 1964, agreed to under the ausplcea <»f the Permanent Council of the Organisation of American States acting provisionally aa the Organ <>f Consultation. The new treaty would abrogate the treaty existing since ]'.H)'A and its subsequent amendmenta, eatabliahing the necessary conditions for a modern relationship between the two countries based on the most profound mutual respect Since the end of last November, the authorised representatives <>f the two governments have been holding Important conversations which have jx-r mitted a g r e ement to be reached on ■ set <>f fundamental principles which will serve to guide the negotiator- in tin- effort to conclude a just and equitable treat} eliminating, once and for all. the causes "f conflict between the two countries. The principles to which we bave agreed, on behalf of our respective govern- ments, are at follows : 1. The treaty of 1908 and its amendments will he abrogated by the conclusion of an entirely new interooeanic canal treaty. *J. The concept of perpetuity will be eliminated The new treat\ concerning tin- lock canal shall have a fixed termination date. :\. Termination of United States jurisdiction over Panamanian territory shall take place promptly in accordance with terms sjM-citied in the treaty. 4. The Panamanian territory in which the canal is situated shall he returned to the jurisdiction of the Republic of Panama. The Republic of Panama, in its capacity as territorial sovereign shall arrant to the United States of America, for the duration of the new intenx-eanic canal treaty and in accordance with what that treaty states, the right to use the lands, waters ami airspace which may be Sty for the operation, maintenance, protection and defense of the .anal and the transit of ships .". The Republic "f Panama shall have a just and equitable share of the benefits derived from the operation of the canal in its territory. It is recognized that the geographic position of its territory constitutes the principal resource <>f the Republic of Panama <». The Republic of Panama shall participate in the administration of the canal. in accor d ance with a procedure to be agreed Upon in the treaty. The treaty shall also provide that Panama will assume total responsibility f<>r the operation of the canal uiwm the termination of the treaty. The Republic of Panama shall jrrant to the United States of America the rightfl necessary to rcirulate the transit of ships through the canal and operate, maintain, protect and defend the canal. and to undertake any other specific activity related to those ends, as may be agreed upon in the treaty. 7. The Republic of Panama shall participate with the United States of America in the protection and defense of the canal in accordance with what i- upon in the new treaty 5. The United States of America ami the Republic of Panama, recognising the important services rendered by the interooeanic Panama Canal to international maritime traffic, and bearing in mind the possibility that the present canal could become Inadequate for said traffic, shall agree bilaterally on provisions for new projects which will enlarge canal capacity. Such provisions will be Incorporated in the new treaty in accord with the concepts established in principle 2. «17» APPENDIX 3 The Panama Canal: Popular Myths and Political Realities", Address by the Honorable Ellsworth Bunker, Ambassador at Large, United States of America, Before the Los Angeles World Affairs Council, Los Angeles, Calif., December 2, 1975 I am here today to discuss with you the Panama Canal negotiations. It is a controversial subject that has evoked emotion and opposition. But my travels in the United States, the letters I get from concerned citizens, the articles I read in the press, and my many consultations with Congressmen have convinced me that much of this opposition stems from a number of false impressions about the basis for our presence in the Canal Zone. Because of this, I would like today to talk about the back- ground of the problem we face and comment on some of the myths surrounding the canal treaty and negotiations. And I want to talk about the political realities which make it desirable, in my judgment, to bring the negotiations to an early and satisfactory conclusion. By speaking to you today I am departing from a practice I have long followed. Previously, while serving as a negotiator, I have avoided making public statements. I am here today because this negotiation is unique. No effort to improve our policy concerning the canal can succeed without the full understanding and support of the Con- gress and the American people. Our presence in the canal has a constituency among the American people — but our negotiations to solve our problem there do not. So, if we are to gain support, we must find it through candid and reasonable public discussion. THE EVOLUTION OF THE PROBLEM Our story begins 72 years ago. In 1903 the newly-independent Republic of Panama granted to the United States - in the Hay-Bunau-Varilla Treaty — a strip of land 1 miles wide and 50 miles long for the construc- tion, maintenance, operation and protection of a canal between the Atlantic and Pacific. (18) 1" I he treaty also gave the United States in perpetuity — the righl 10 act within thai strip of land "as it it were the sovereign." It \sjs quickly and widely acknowledged that the treaty favored the United States When Secretary of State John Hay submitted the treaty to the Senate for ratification he said: "We shall have a treaty very satisfactory, vastly advantage- ous to the U.S., and we must confess, not so advantageous to Panama." For many years Panama has considered the treaty to be heavily weighted in our favor. As a result, the level of Panama's consent to our presence has steadily declined. And by Panama, I mean not simply the government, but the Panamanian people. The Panamanians point out: — First, that the existence of the Canal Zone impedes Panama's development. The Canal Zone cuts across the heartland of Panama's ter- ritory, dividing the nation in two. The existence of the Zone curbs the natural growth of Panama's urban areas. It holds, unused, large areas of land vital to Panama's development. It controls all the major deep-water port facilities serving Panama. And it prevents Panamanians from competing with Ameri- can commercial enterprises in the Zone. And for the rights we enjoy on Panamanian territory, we pay Panama only $2.3 million a year. — Second, that the Canal Zone infringes on Panama's nationhood. Panama says the privileges exercised by the United States deprive their country of dignity and, indeed, of full independence. Within the Canal Zone the United States operates a full- fledged government without reference to the Government of Pana- ma, which is its host. 20 It maintains a police force, courts, and jails to enforce United States laws, not only upon Americans, but upon Panaman- ian citizens as well. And, the Panamanians point out, the treaty says the United States can do all these things forever. Panamanian frustration over this situation has increased steadily over the years. In January 1964, demonstrations and riots took place which cost the lives of 21 Panamanians and 3 Americans. Diplomatic relations were broken. As part of the settlement we reached with Panama then, President Johnson, after consultation with Presidents Truman and Eisenhower, committed the United States to negotiate a new treaty. In our negotiations we are attempting to lay the founda- tions for a new — a more modern — relationship which will enlist Panamanian cooperation and better protect our interests. Unless we succeed, I believe that Panama's consent to our presence will continue to decline — and at an ever more rapid rate. Some form of conflict in Panama would seem virtually certain — and it would be the kind of conflict which would be costly for all concerned. ow some have held that the mere mention by United States officials of the possibility of violence over the Canal will help to assure that such violence occurs. I am aware of that concern, but I believe the situation demands candor. It would be irresponsible to fail to point out to the Ameri- can people the possible, indeed the likely, consequences of in- action. It is my firm belief that failure to conclude a reasonable treaty can only work to damage the interests we seek to protect. As we contemplate this situation we should understand that the Canal's physical characteristics make it vulnerable. The Canal is a narrow channel fifty miles long. It operates by the gravity flow of water and depends for its efficient operation on an integrated system of locks, dams and other vital facilities. At best, it is susceptible to interruption. And interruptions would mean not only reduced service to world shipping but lower revenues. •Jl But the most enduring costs of confrontation over the (anal would not be commercial. Our Latin American neighbors see in our handling of the Panama negotiations a test of our political intentions in the hemisphere. Moreovei , the importance of the Canal, and our contribu- tion to it, are recognized throughout the world. It is a measure of our standing and the respect in which we are held that people everywhere — including, I am sure, yourselves — expect the United States to be able to work out an arrangement with Panama that will guarantee the continued operation of the Canal in the ser\ ice oi the world community. Were we to fail - particularly in light of the opportunity created by the negotiations — we would in a sense be betraying America's wider, long-term interests. The plain fact of the matter is that geography, history and the economic and political imperatives of our time compel the United States and Panama to a joint venture in the Panama Canal. We must learn to comport ourselves as partners and friends, — Preserving what is essential to each; — Protecting and making more efficient an important international line of communication; — And, I suggest, creating an example for the world of a small nation and a large one working peacefully and profitably together. Yi sum, we are negotiating because we see a new treaty arrangement as the most practical means of protecting our interests. If we try to maintain the status quo we will face mounting hostility in both Panama and Latin America, — and possible loss of the very interest we want to preserve. But a new arrangement based on partnership promises a greater assurance of safeguarding that interest — a Canal that is open, safe, efficient, and neutral. The real choice before us is not between the existing treaty and a new one but rather between a new treaty and what will hap- pen if we should fail to achieve a new treaty. These, then, are some of the political realities we face in Panama. 22 MYTH AND REALITY: THE VIEW FROM THE UNITED STATES We must face political realities here at home as well. We know that a treaty must receive the advice and consent of two-thirds of the Senate of the United States. And we expect that both Houses of Congress will be asked to approve implementing legislation. There is opposition in Congress to a new treaty; it reflects to a considerable degree the sentiments of many citizens. Our job is to make sure that the public and Congress have the facts they need if they are going to make wise decisions about the Canal. Unfortunately, the basis for our presence in the Zone is widely misunderstood. Indeed, a number of myths have been built up over the years — about Panama's intentions and capabilities, about the need for perpetuity, and — most important — about ownership and sovereignty. We need to replace these myths with an accurate under- standing of the facts. s~ V^irst, there is the matter of Panama's intentions and f^\J~ capabilities — and the suggestion that a new treaty will \^S somehow lead to the Canal's closure and loss. The fact is that Panama's interest in keeping the Canal open is far greater than ours. Panama derives more income from the Canal than from any other single revenue-producing source. Even so, some argue, Canal operations would suffer because Panamanians lack the technical aptitude and the inclina- tion to manage the operation of the Canal. The fact is that Panamanians already comprise over three- fourths of the employees of the Canal enterprise. No one who has been to Panama and seen its increasingly diversified economy can persuasively argue that the Panamanians would not be able to keep the Canal operating effectively and efficiently. These considerations indicate that Panama's participation in the Canal can provide it with a greater incentive to help keep the Canal open and operating efficiently. 23 hi fact, the most likely avenue to the Canal's closure and loss would be to maintain the status quo. Second, there is the notion that the Canal cannot be adequately secured unless the United States' rights there are guaranteed in perpetuity - as stipulated in the 1903 treaty. I can say this: to adhere to the concept of perpetuity in to- day's world is not only unrealistic but dangerous. Our reliance on the exercise of rights in perpetuity has become a source of persistent tension in Panama. And clearly, an international relationship of this nature negotiated more than seventy years ago cannot be expected to last forever without adjustment. Indeed, a relationship of this kind which does not provide for the possibility of periodic mutual revision and adjustment is bound to jeopardize the very interest that perpetuity was designed to protect. Third, and finally, there are two misconceptions that are often discussed together: ownership and sovereignty. Some Americans assert that we own the Canal; that we bought and paid for it, just like Alaska or Louisiana. If we give it away, they say, won't Alaska or Louisiana be next? Others assert that we have sovereignty over the Canal Zone. They say that sovereignty is essential to our needs — that loss of United States sovereignty would impair our control of the Canal and our ability to defend it. I recognize that these thoughts have a basic appeal to a people justly proud of one of our country's great accomplishments. The construction of the Canal was an American achieve- ment where others had failed. It was every bit as great an achievement for its era as send- ing Americans to the moon is for ours. It is an historic success that will always be held to Ameri- ca's credit. But let us look at the truth about ownership and sov- ereignty. The United States does not own the Panama Canal Zone. Contrary to the belief of many Americans, the United States did not purchase the Canal Zone for $ 10 million in 1 903. 24 Rather, the money we gave Panama then was in return for the rights which Panama granted us by the treaty. We bought Louisiana; we bought Alaska. In Panama we* bought not territory, but rights. Sovereignty is perhaps the major issue raised by opponents of a new treaty. It is clear that under law we do not have sovereignty in Panama. The Treaty of 1903 did not confer sovereignty, but speaks of rights the United States would exercisers if it were sovereign." From as early as 1905, United States officials have acknowledged repeatedly that Panama retains at least titular sov- ereignty over the Zone. The 1936 Treaty with Panama actually refers to the Zone as "Territory of the Republic of Panama under the jurisdiction of the United States." Thus, our presence in the Zone is based on treaty rights, not on sovereignty. It is time to stop debating these historical and legal questions. It is time to look to the future, and to find the best means for assuring that our country's real interests in the Canal will be protected. What are our real interests? — We want aCanal that isopen to all the world'sshipping — a Canal that remains neutral and unaffected by international disputes. — We want a Canal that operates efficiently, profitably, and at rates fair to the world's shippers. — We want a Canal that is as secure as possible from sabo- tage or military threat. — And we want full and fair treatment for our citizens who have so ably served in the Canal Zone. The negotiations we are now conducting with Panama for a new treaty will ensure that all these interests of our country are protected. Let me now talk a bit about where we are in the negotia- tions. During the past two years, the negotiations have proceeded step by step through three stages. Stage 1 ended in early 1973 when Secretary of State Kissinger went to Panama to initial with the Panamanian Foreign Minister a set ot eight "Principles." Since then, we have used these principles as guidelines in working out the details of a new treaty. I he best characterization of these principles came from the Chief of Government of Panama. He said they constitute a "philosophy of understanding." Their essence is that: — Panama will grant the United States the rights, facilities and lands necessary to continue operating and defending the Canal; while — The United States will return to Panama jurisdiction over its territory; and arrange for the participation by Panama, over time, in the Canal's operation and defense. It has also been agreed in the "Principles": — That the next treaty shall not be in perpetuity but rather for a fixed period; — That the parties will provide for any expansion of Canal capacity in Panama that may eventually be needed; and — That Panama will get a more equitable share of the bene- fits resulting from the use of its geographic location. Stage 2 involved the identification of the major issues under each of the eight principles. Agreement on the major issues, concurred in by the De- partment of Defense, provided the basis for substantive discussions. Stage 3 began with our meetings in Panama in June of 1974 and continues. For over 1 6 months now we have been discussing the sub- stantive issues involved — again, with the helpful support of the Department of Defense. Indeed, our most senior military officials regard the part- nership we are attempting to form as the most practical means of preserving what is militarily important to our country respecting the Panama Canal. We have reached agreement in principle with the Pana- manians on three major issues: — Jurisdiction: jurisdiction over the Zone area will pass to Panama in a transitional fashion. 26 The United States will retain the right to use those areas necessary for the operation, maintenance and defense of the Canal. — Canal Operation: During the treaty's lifetime the United States will have the primary responsibility for the opera- tion of the Canal. There will be a growing participation of Panamanian na- tionals at all levels in day-to-day operations in preparation for Panama's assumption of responsibility for Canal operation at the treaty's termination. The Panamanian negotiators understand that there are a great many positions for which training will be required over a long period of time, and that the only sensible course is for Pana- manian participation to begin in a modest way and grow gradually. — Canal Defense: Panama recognizes the importance of the Canal for our security. As a result, the United States will have primary responsi- bility for the defense of the Canal during the life of the treaty. Panama will grant the United States "use rights" for de- fending the waterway; and Panama will participate in Canal defense in accordance with its capabilities. Several other issues remain to be resolved. They concern: — The amount of economic benefits to Panama; — The right of the United States to expand the Canal should we wish to do so; — The size and location of the land and water areas we will need for Canal operation and defense; — A mutually acceptable formula for the Canal's neutrality and nondiscriminatory operation of the Canal after the treaty's termination; and — Finally, the duration of the new treaty. Quite obviously, we still have much to do to resolve these issues. Although we have no fixed timetables, we are proceeding with all deliberate speed. We are doing so with the full support of the Department of Defense. While I cannot predict when completion of a draft treaty will be possible, I am persuaded that a new treaty which satisfies our basic interests is attainable. 27 Though a great deal of hard negotiating will be required to complete a satisfactory agreement, we are confident that our ef- forts will produce a treaty which will be judged on its merits and will be approved by the people of both countries. The stakes are large. They involve not only the legitimate interests of both the United States and Panama and the future contribution of this important waterway to the world community. They involve as well our nation's relations with Latin America as a whole and the credibility and reputation of our country as a force for creative leadership. America has always looked to the future. In the Panama Canal negotiations we have the opportunity to do so again: — To revitalize an outmoded relationship; — To solve an international problem before it becomes a crisis; and — To demonstrate the qualities of justice, reason and vision that have made and kept our country great. APPENDIX 4 Panama-United States Relations, Statement by the Administra- tive Board, United States Catholic Conference, February 24, 1975 The United States and the Republic of Panama are currently engaged in active negotiations regarding a treaty involving the Panama Canal. It is a moral imperative — a matter of elemental social justice — that a new and a more just treaty be negotiated. The history of these negotiations spans a seventy-year period, beginning with the original Treaty of 1903 by which the United States assumed virtually sover- eign and perpetual control over the heartland of the Panamanian Isthmus. More recently, in February, 1974, the two nations signed the Kissinger-Tack Agree- ment on Principles, which provides a significant basis for a new treaty. Why is a new treaty imperative? In the first place, the 1903 treaty is, in itself, of dubious moral validity, drafted as it was when international affairs were fre- quently determined by precepts of power. Since that time, and despite the seventy years that have passed in this century in which other peoples have achieved their independence or have established functional control over their territory, this treaty has remained essentially unchanged at the insistence of the more powerful of the two parties. In the second place, a more fundamental issue is the right of every nation to utilize its natural resources for the development of its people. In his 1963 en- cyclical Pacem In Terris, Pope John XXIII emphasized this basic principle of international justice which had been strongly affirmed in the previous year's declaration of the U.N. General Assembly (Resolution 1803, XXVII, December 14, 1962). Nations, the Holy Father stressed, "have the right to play the leading part in the process of their own development" and "no country may unjustly oppress others or unduly meddle in their affairs." The principal natural resource of Panama is and always has been its geo- graphic location and its configuration. The treaty of 1903 established a monopoly, "in perpetuity," in favor of another government over the principal natural re- source of the Republic of Panama. The question, therefore, lies in whether or not we accept the fact that Panama is a free and independent nation. As such, her claims over the Canal area are a simple consequence of her basic right. In other words, if we accept the rights of Panama over her territory, then instead of Panama negotiating with the United States to obtain for herself some compensation for the use of the Canal and the Canal Zone, it might be reasoned that negotiations should be the other way around. The main benefits from the Canal should accrue to Panama, as a nation with principal control over its natural resources, and a fair compensation should accrue to the United States for its investment in Panama. Besides the political, social and cultural consequences of the 1903 treaty that argue strongly for a fundamental revision of U.S.-Panamanian relations, eco- nomic considerations are also considerable. It is worth reviewing, in this regard, some of the main benefits that accrue to each side as recently cited by the Archbishop of Panama, Marcos McGrath, C.S.C. : The Canal Zone, which measures roughly 10 by 50 miles in area, is the heart- land, the most valuable economic area of Panama. Present use represents a significant waste of this natural resource; only 3.6% of the land is occupied by Canal installations ; some 25% is not utilized at all, and 68% is designated for military use. For this entire territory, including 14 military bases established without any negotiations with Panama as to their location, the United States pays an annual $1.9 million, as contrasted, for example, to the $20 million paid annually for three bases in Spain. Since 70% of the goods that transit the Canal come from or go to U.S. ports, the non-commercial fees, frozen until this year at the 1914 level, have represented an annual saving to U.S. commerce of $700 million. In this way, Panama, a poor nation, is subsidizing the richest nation of the world and world commerce in general. (28) 29 n tbC BM Of tbC Canal in fin- sixty its inauguration are calculated in i I I hillion. HM U.S. military IHIWllllfill in the Canal Zm tliaii douhle tin- total civil investment, an expense thai beyond inj notion of men the Canal. In fact, the l.S. Southern Command. located in the Canal Zom training center for military from all over 1-itin America ami a QeZTe of military coniaet throughout the eontinent. Surely military baaei eatabliabed within a nation ahould be the object of negotiation. national income of the Republic of Panama derive- from the ('anal Zone economy, mostly in Indirect form, through lalarii id fall of this income according to flueruat ions in building and other operations within the Canal Zone, factors beyond the control of t; public, has i ttrongly dlatorting effect upon the Panamanian eooB)eeay. since property ami income in the Canal Zone are exempted fn>m Panamanian i lie government of Panama is denied a major source of revenue result, it has m-t been fully ahle to undertake programs of economic infrastruc- tures and ■odO e conomic development, particularly for the impoverished rural areas- While tic ions do not attempt to treat all questions relating to the Panama Canal issue, they do serve to place the question within an overall con text of International social just: I'or peace in the world, which can come only with justice in the world, it is al that We citizens of the United States, Including our elected repr. approach the Panama Canal issue with the same moral sensitivity we would apply to laaoef of justice within our own so. Our national response to the new treaty will be a si-niticant test of that Ivity. Not only the rest of the Americas, hut the whole world will he watch in*. The fundamental rights of the j>eop]e of Panama. M well as the high ideals and long-ranee interests of the United States, require a new and just treaty. It can become a algn of and a significant contribution toward world peace based upon justice and fraternity between peoples. APPENDIX 5 Press Kelease by the Chamber of Commerce of the United States Subject : Panama Canal treaty. Chamber Backs Administration Efforts to Renegotiate Panama Canal Treaty Washington, November 12 — The Chamber of Commerce of the United States today announced its support of the Ford Administration's efforts to renegotiate the Panama Canal Treaty, reserving, however, final judgment until details of the renegotiated treaty are made public. The action came during the meeting of the National Chamber's Board of Directors Nov. 6-7. The Chamber board called on the Administration to adhere to the Statement of Principles signed Feb. 7, 1974 by Secretary of State Henry Kissinger and Juan Antonio Tack, Panama's Minister of Foreign Affairs. The principles state, in part, that Panama is required to grant the United States the rights necessary to regulate the transit of ships through the canal and to operate, maintain, pro- tect and defend the canal. The Chamber board listed the following reasons in support of a renegotiated treaty : 1. Terms of the 1903 Treaty do not reflect changes in Panamanian-U.S. relations which have occurred in the last 72 years, and no longer serve U.S. national interests as well as a modernized treaty which would be based on the concept of partnership ; 2. President Ford is the third consecutive President to support negotia- tions to achieve a modern relationship between the two countries; 3. General George Brown, chairman of the Joint Chiefs of Staff, in his September, 1975, statement clearly expressed support for the current negotia- tions ; and 4. The Association of American Chambers of Commerce in Latin America took a similar position earlier this year. (30) APPENDIX I ITr. \ 181] Construction or \ Shit Canal To Conxboi phi Watkb 01 the A I LAN IK \M» I\\< I hl< ( )« IANS CONVBHTIOI IImwhn i m IMim BtATM 01 A \n ici< \ ami Pah am \ 8igned at Washington, November is. t90S; Ratification adkfisei ''.'/ the Benatt of the i tsUed States, February 22, 1904; Ratified by tm rtveiimi >>f tin United States, February 25, t904; Ratified by Panama Deoembi 1903; Ratifications exchanged at Washington, February i6, t9Q4; i' r '>- claimed t>i/ the President of the i nited States, February id, 1904. {24 Stat. ( /'/ < Notk : Art. I of this convention superseded by art. I of the treaty <>f March 2. B8 BUt i s <»7; T8 '.m.»i; I'.s. rights under art II renounced In part by art. II of tin- L986 treat] j art \' abrogated In part by art. Ill of the treaty of January 2S, I960 (6 rs'i' 2278; tias 8297) ; art. VI modified by art. X of the 1!>.V> treaty: first sentence of art. VII amended and third paragraph Abrogated by art. vi of the 1988 treaty, and s e cond paragraph abrogated by art. l\' and certain I'.S. rlghtfl under the first paragraph relinquished by art. V of the L95S treaty: art IX superseded by art. V of the L936 treaty: art. X modified by art. II Of the 1950 treaty ; art. XIV amended by art. VII of the 1936 treaty and art. I <>f the 196S treaty: certain Panama rights under art. XIX waived by art. IX of the 1!>. _ >.> treaty. | ( By the President of the United states of America i A PROCLAMATION Whereas a Convention between the United states of America and the Etepub- UC of Panama to insure the construction of a ship canal SCrOSS the Isthmus Of Panama to connect the Atlantic and Pacific Oceans, was concluded and Signed by their respective Plenipotentiaries at Washington, On the eighteenth day of No- vember, one thousand nine hundred and three, the original Of which Coin cut ion. being in the Kngllah language, is word for word as folli IsTII MI IN ( ' AN A I < JOIfVl N Hon The United States of America and the Republic of Panama being desll insure the construction of I ship canal across the [sthmUS Of Panama to connect the Atlantic and Pacific oceans, and the Congress of the United States of America having passed an act approved June 28, 1902, In furtherance of that object, by which the President of the United states is authorised to acquire within a reasonable time the control of the necessary territory of the Republic Of Co- lombia, and the sovereignty of such territory being actually vested in the Republic of Panama, the high contracting parties have resolved for that purpose to conclude a convention and have accordingly appointed as their plenipotenti- aries. — The President of the United States of America. John Hay. Secretary of S and The Government of the Republic of Panama. Piuijppk Binm-Vakili a Envoy Extraordinary and Minister Plenipotentiary of the Republic of Panama, there- unto specially empow e red by said government, who are communicating with each (31) 32 other their respective full powers, found to be in good and due form, have agreed upon and concluded the following articles : ARTICLE I The United States guarantees and will maintain the independence of the Republic of Panama. ARTICLE II The Republic 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 : the said zone beginning in the Caribbean Sea three marine miles from mean low water mark and ex- tending to and across the Isthmus of Panama into the Pacific ocean to a distance of 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 within this grant. The Republic of Panama further grants to the United States in perpetuity the use, occupation and control of any other lands and water out- side of the zone above described which may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal or of any auxiliary canals or other works necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said enterprise. 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 addition thereto the group of small islands in the Bay of Panama, named Perico, Naos, Culebra and Flamenco. 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 ex- ercise 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 any such sovereign rights, power or authority. ARTICLE IV As rights subsidiarv to the above grants the Republic of Panama grants in perpetuity to the United States the right to use the rivers, streams, lakes and other bodies of water within its limits for navigation, the supply of water or water-power or other purposes, so far as the use of said rivers, streams, lakes and bodies of water and the waters thereof may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal. ARTICLE v The Republic of Panama grants to the United States in perpetuity a monopoly for the construction, maintenance and operation of any system of communica- tion by means of canal or railroad across its territory between the Caribbean Sea and the Pacific ocean. ARTICLE VI The grants herein contained shall in no manner invalidate the titles or rights of private land holders or owners of private property in the said zone or in or to anv of the lands or waters granted to the United States by the provisions of any Article of this treaty, nor shall they interfere with the rights of way over the public roads passing through the said zone or over any of the said lands or waters unress said lights "of way or private rights shall conflict with rights herein ^ranted to the United States in which case the rights of the United States snail oe super or All ^damages caused to the owners of private lands or private prop- erty of any kin! bv reason of the grants contained in this treaty or by reason or the operations of the United States, its agents or employees or by reason of the construction, maintenance, operation, sanitation and protection of the said Omul ->r of the \\'»rks of sanitatlou :i ml protection herein provided for olnl Conimhudon appointed i>\ the Government* of the UnJ and the Elepublic of Panama, who*** decl damages shall be iinai and whow m to such damage* shall be paid • • i cited States No pan of the work on said Canal r on aii\ auxiliary works relating thereto and authorised by the termi "f thi~ trestj ihall i>»- prevented, delayed <>r Impeded bj or pending such pro... certain .such ti. ie appraisal of said private lands and private propert] and the nnnmsmrnt <»f damages t" them shall be hawed upon their value re the date <»f tins convention. AKIH U MI The Republic of Panama Krauts to the United Btates within the limits of the cities of Panama and Colon and their adjacent harbors and within the territory .lit thereto the right to acquire bj purchase or by the exercise of the right of eminent domain, any Lands, buildinj rights or other pro]- ml convenient for the construction, maintenance, operation and prol of the < 'anal and of anj \\<>rks of sanitation, such as the collection and disposition of sewage and the distribution of water In the said cities of Panama and Colon, which, in the discretion of the United states may be necessary and convenient tot the construction, maintenance, operation, sanitation and protection <>f Us Canal and railroad All soch works of sanitation, collection and disposition of _■ ami distribution of water in the cities of Panams and Colon shall be mad.- at to of the United 9 eminent of the I States shall be authorised to impose and collect water and sewerage rates which shall be sufficient to provide for the payment of interest and the amortization of the principal "I" the COSt Of said works within a ml upon the expiration of said term of fifty years t rs and water works shall revert to and become the properties "f the cities ..!' Panama and Colon respectively, and the Use <>f the water shall he free to the inhabitants of Panama and Colon, except to the extent that water may he neceasary for the operation ami maintenance of said system <»f sewers and water The Republic of Panama agrees that the cities of Panama and Colon shall (••imply in perpetuity With the sanitary ordinances whether of a preventive or curative character prescribed by the United states and in case the Government of Panama is unable <>r fails in its dut\ to enforce this compliance hy the cities of Panama ami Colon with the sanitary ordinances of the Uniti the Re- public of Panama grants to the Unite ie right and authority to enforce the same. The same right and authority are granted to the United States for the niainte name of public order in the cities of Panama and Colon and the territory harhors adjacent thereto in case the Republic of Panama should not he. in the judgment of the l Ie t-. maintain Such order. AKI'ICI.h VIII The Republic of Panama grants to the United States all rights which it now hereafter may acquire to the property of the ■any ami the Panama Railroad Company as a result of the transfer .-f sovereignty from the Republic of Colombis to the Republic of Panama over the Isthr Panama and authorises the New Panama Canal Company to veil and tr to the United states its rights, privileges, properties ami as well as the Panama Railroad and all the share> or part of tC but the public lands situated outside of the zone described in Article II of this treaty now Included in the \a to both said enterprises and not required in the construction or operation of the Canal shall revert to the Republic of Panax) my property now owned hy or in the iwssession ■•: panies within Panama or Colon or the ports or terminals thereof. ARTI- : lli" Unib - that the 'her enframe ..f the Cnnal and the waters thereof, and the Republic o! s that the t mama ami Colon shall l>e free for all time so that there shall not Ih- imp 34 custom house tolls, tonnage, anchorage, lighthouse, wharf, pilot, or quarantine dues or any other charges or taxes of any kind upon any vessel using or passing through the Canal or belonging to or employed by the United States, directly or indirectly, in connection with the construction, maintenance, operation, sanita- tion and protection of the main Canal, or auxiliary works, or upon the cargo, officers, crew, or passengers of any such vessels, except such tolls and charges as may be imposed by the United States for the use of the Canal and other works, and except tolls and charges imposed by the Republic of Panama upon merchan- dise destined to be introduced for the consumption of the rest of the Republic of Panama, and upon vessels touching at the ports of Colon and Panama and which do not cross the Canal. The Government of the Republic of Panama shall have the right to establish in such ports and in the towns of Panama and Colon such houses and guards as it may deem necessary to collect duties on importations destined to other por- tions of Panama and to prevent contraband trade. The United States shall have the right to make use of the towns and harbors of Panama and Colon as places of anchorage, and for making repairs, for loading, unloading, depositing, or transshipping cargoes either in transit or destined for the service of the Canal and for other works pertaining to the Canal. article x The Republic of Panama agrees that there shall not be imposed any taxes, national, municipal, departmental, or of any other class, upon the Canal, the railways and auxiliary works, tugs and other vessels employed in the service of the Canal, store houses, work shops, offices, quarters for laborers, factories of all kinds, warehouses, wharves, machinery and other works, property, and effects appertaining to the Canal or railroad and auxiliary works, or their officers or employees, situated within the cities of Panama and Colon, and that there shall not be imposed contributions or charges of a personal character of any kind upon officers, employees, laborers, and other individuals in the service of the Canal and railroad and auxiliary works. ARTICLE XI The United States agrees that the official dispatches of the Government of the Republic of Panama shall be transmitted over any telegraph lines established for canal purposes and used for public and private business at rates not higher than those required from officials in the service of the United States. ARTICLE XII The Government of the Republic of Panama shall permit the immigration and free access to the lands and workshops of the Canal and its auxiliary works of all employees and workmen of whatever nationality under contract to work upon or seeking employment upon or in any wise connected with the said Canal and its auxiliary works, with their respective families, and all such persons shall be free and exempt from the military service of the Republic of Panama. ARTICLE XIII The United States may import at any time into the said zone and auxiliary lands, free of custom duties, imposts, taxes, or other charges, and without any restrictions, any and all vessels, dredges, engines, cars, machinery, tools, explo- sives, materials, supplies, and other articles necessary and convenient in the construction, maintenance, operation, sanitation and protection of the Canal and auxiliary works, and all provisions, medicines, clothing, supplies and other things necessary and convenient for the officers, employees, workmen and laborers in the service and employ of the United States and for their families. If any such articles are disposed of for use outside of the zone and auxiliary lands granted to the United States and within the territory of the Republic, they shall be subject to the same import or other duties as like articles imported under the laws of the Republic of Panama. ARTICLE xiv As the price or compensation for the rights, powers and privileges granted in this convention by the Republic of Panama to the United States, the Govern- ment of the United Btatea agrees to paj to the Republic of Panama tau <>f ten million dollars ($10,000,000) In gold coin of the United Btatea on the exchange of the ratification of thla convention and alao an annual pajmenl durum the lit"'' of thli convention of two hnndred and flftj thooaand dollar* i.()00) in like Rold win, lieKinning nine year* after the date aforesaid. The proTiaiona of thla article shall be In addition bo all other benefits aaanred to the Republic of Panama nnatat thla conrentioa Bui m<» delaj or difference «>f opinion under thla article <>r anj other proi I of tin- treatj shall affect 01 Interrupl the full operation ami effect <»f tins con- vention in nil other reapecta MCI KM \V The j"int commiaslon referred to in Article vi shall be established aa follow : The President of the United Btatea shall Dominate two persona and the Pre-i dent of the Republic of Panama ahall Dominate two persona and they shall proceed bo I decision : but In case of disagreement <»f the Commission (by reason of their belnf equally divided in conclusion) an umpire shall he appointed by the tu<> GoYernmenta who shall render the decision, in the event <>f the death, ahsence. or incapacity of a Commissioner or rnipire. or of his omitting, declining "r ooaslng to act. his place shall be tilled hv the appoint inent of another person in the manner above indicated. All decision-. I»y a majority of the Gommisslon or by the umpire shall be final. AIM H I I X\l The two Governments shall make adequate provision by future agreement for the pursuit, capture, imprisonment, detention and delivery within snid zone and auxiliary lands to the authorities of the Republic of Panama of persons Charged with the commitment of crimes, felonies or misdemeanors without Bald zone and for the pursuit, capture, imprisonment . detention and delivery without said zone to the authorities of the United States of persons charged with the commitment of crimes, felonies and misdemeanors within said zone and auxiliary lands. flJRIOU XVII The Republic of Panama grants to the United States the use of nil tho ports of the Republic open to commerce as phices of refuge for any vessels employe. 1 in the Canal enterprise, and for all vessel- passing or bound to pass through the ('anal which may be in distress and be driven to seek refUge in said ports. Such vessels shall be exempt from anchorage and tonnage duo on the part of the Republic of Panama. ARTICLE XVIII The Canal, when constructed, and the entrance- thereto shall be neutral in perpetuity! and shall 1h> opened upon the terms provided for by Section I of Article three of. aial in conformity with all the stipulations of, the treaty entered into by the Governments of the United States and Great Britain on November 18, IS01. ARTK I I \l\ The Government of the Republic of Panama shall have the riK'bt to transport over the Canal it- rcSBClfl and it- troops and munitions of war in such rcoocl s at all times without paying charges of an\ kind. The exemption is to be extended to the auxiliary railway for the t ransportation of peTBOtta in the s et f l ee Off the Republic of Panama, or of the police force charged with the preservation of public order outside of said zone, a- well a- to their baggage, munition- of war and BUpplil ARTICLE XX If by virtue of any existing treaty in relation to the territory of the Isthmus of Panama, whereof the obligations shall descend or be assumed by the Republic of Panama, there may be any privilege or concession in favor of the Government or the citizens and subjects of a third power relative to an interoceanic means of communication which in any of its terms may be Incompatible with the terms of the present convention, the Republic of Panama agrees to cancel or modify such treaty in due form, for which purpose it shall give to the said third power the requisite notification within the term of four months from the date of the present convention, and in case the existing treaty contains no clau-e permitting 36 its modifications or annulment, the Republic of Panama agrees to procure its modification or annulment in such form that there shall not exist any conflict with the stipulations of the present convention. ARTICLE XXI The rights and privileges granted by the Republic of Panama to the United States in the preceding Articles are understood to be free of all anterior debts, liens, trusts, or liabilities, or concessions or privileges to other Governments, corporations, syndicates or individuals, and consequently, if there should arise any claims on account of the present concessions and privileges or otherwise, the claimants shall resort to the Government of the Republic of Panama and not to the United States for any indemnity or compromise which may be required. ARTICLE XXII The Republic of Panama renounces and grants to the United States the participation to which it might be entitled in the future earnings of the Canal under Article XV of the Concessionary contract with Lucien X. B. Wyse now owned by the New Panama Canal Company and any and all other rights or claims of a pecuniary nature arising under or relating to said concession, or arising under or relating to the concessions to the Panama Railroad Company or any extension or modification thereof ; and it likewise renounces, confirms and grants to the United States, now and hereafter, all the rights and property reserved in the said concessions which otherwise would belong to Panama at or before the expiration of the terms of ninety-nine years of the concessions granted to or held by the above mentioned party and companies, and all right, title and interest which it now has or may hereafter have, in and to the lands, canals, works, property and rights held by the said companies under said concessions or other- wise, and acquired or to be acquired by the United States from or through the New Panama Canal Company, including any property and rights which might or may in the future either by lapse of time, forfeiture or otherwise, revert to the Republic of Panama under any contracts or concessions, with said Wyse, the Universal Panama Canal Company, the Panama Railroad Company and the New Panama Canal Company. The aforesaid rights and property shall be and are free and released from any present or reversionary interest in or claims of Panama and the title of the United States thereto upon consummation of the contemplated purchase by the United States from the New Panama Canal Company, shall be absolute, so far as concerns the Republic of Panama, excepting always the rights of the Republic specifically secured under this treaty. ARTICLE XXIII If it should become necessary at any time to employ armed forces for the safety or protection of the Canal, or of the ships that make use of the same, or the railways and auxiliary works, the United States shall have the right, at all times and in its discretion, to use its police and its land and naval forces or to establish fortifications for these purposes. ARTICLE XXIV No change either in the Government or in the laws and treaties of the Republic of Panama shall, without the consent of the United States, affect any right of the United States under the present convention, or under any treaty stipulation be- tween the two countries that now exists or may hereafter exist touching the subject matter of this convention. If the Republic of Panama shall hereafter enter as a constituent into any other Government or into any union or confederation of states, so as to merge her sovereignty or independence in such Government, union or confederation, the rights of the United States under this convention shall not be in any respect les- sened or impaired. ARTICLE XXV For the better performance of the engagements of this convention and to the end of the efficient protection of the Canal and the preservation of its neutrality, the Government of the Republic of Panama will sell or lease to the United States nr nav.il in and mi tin Republic .it certain point* upon with the Prexidenl »f the ' \ K I 1 1 I I WW entlon when signed bj 1 1 1« - Plenipotentiaries of the i ties shall be ratified i>> the respective Governments and thi ball be hlngton at the earliest date possible. nth whereof thi e Plenipotentiaries bave signed the , a in duplicate and bave hereunto affixed their r< Don< hlngton the 18th daj of November In the rear of onr Lord nineteen hundred and thr» | -I P. I'.l IfAl \ AKII.I.A Ami whereas the Bald Convention has been dulj ratified on both parts, and the ratifications of the two governments were exchanged In the C11 ogton, on tin- twenty-sixth day of February, one thousand nine hundred and four; Now, therefore, be it known thai F. Theodore Roosevelt, President of the United States of America, have caused the said Convention to be made public, to the •'in! that the same and every article and clause thereof, may be observed and fulfilled with good faith bj the United States and the citizens thei in testimony whereof, I have hereunto set my hand and caused the United States of America to in> :itt Done nt the City of Washington, thi February, in th< nf our Lord one thousand nine hundred and four, and of thi "f the United States the • '"•> hundred and twenty-eighth. [seal] By the President : John Hay. Secretary of State. APPENDIX 7 Panama Canal [Updated October 14, 1975, Issue Brief No. IB74138] i By K. Larry Storrs, Foreign Affairs Division, and Barry Sklar, Foreign Affairs Division of the Library of Congress, Congressional Research Service, Major Issues System) Issue definition The 1903 Convention for the Construction of a Ship Canal between the United States and Panama granted the United States the right to build, operate, and defend a canal across the Isthmus of Panama and to exercise "in perpetuity" sovereign rights and authority within a specified zone contiguous to the canal. Over the years, Panamanian resentment of what it considers the inequitable terms of the treaty has made the canal issue a major irritant in United States- Panamanian relations. On December 18, 1964, President Johnson announced the nation's willingness to negotiate new canal treaties to best accommodate both United States and Panamanian interests. The Nixon-Ford administrations have essentially adopted the same policy. Sentiment in Congress is divided between members who believe that new treaties are essential to the maintenance of good relations with Panama and other Hemisphere nations, sympathetic to the Panamanian cause, and those who oppose any change in the U.S. status in the Canal Zone area on grounds that the rights now retained are essential to national interests. Recent congressional action, however, seems weighted on the "status quo" side. Background and policy analysis The strategic geographical location of the Isthmus of Panama, affording the potential of a short-cut route between the Atlantic and Pacific Oceans, gener- ated United States interest in a canal early in the 19th century. During the period, the United States concluded treaties with various nations to secure a U.S. interest in any canal constructed in the area. While the territory of the Isthmus was still a part of Colombia, the United States concluded a treaty with that nation (the Hay-Herran Treaty, signed in January 1903) providing for U.S. construction and operation of a canal across the Isthmus. After Colombia rejected the treaty, the Panamanians, many of whom had long sought an inde- pendent Panamanian nation proclaimed their independence (November 3, 1903) with U.S. military forces standing by offshore. On December 2, 1903, the new Provisional Government of Panama ratified a canal pact titled the Convention for the Construction of a Ship Canal (Hay- Bunau-Varilla Treaty), based substantially on the rejected Hay-Herran Treaty. Its basic provisions (1) granted to the United States "in perpetuity the use. oc- cupation and control" of a specified zone of land through Panamanian territory for the construction, operation, and defense of a ship canal (Article I) ; (2) afforded the United States "all the rights, power and authority within the zone . . . which the United States would possess and exercise if it were the sovereign of the territory ... to the entire exclusion of the exercise by the Re- public of Panama of any such sovereign rights, power or authority" (Article III) ; and (3) provided for payment of U.S. compensation to Panama of an initial $10 million and a yearly annuity (Article XIV) . Since 1903 treaty's inception, Panamanians have charged that its basic terms involve concessions extracted from an immature new republic under the advice and influence of unscrupulous individuals and foreign interests. The principal Panamanian objections are the terms of Articles I and III. which afford the United States full sovereign rights, control, and governmental jurisdiction over (38) a portion of Panamanian territorj for .1 limitless duration. Other prima] ma Include: (1) the liae of the U.8. military ; ad the military training facilities located in the Canal Zone; <-» the amount .if r.s annultj ii» Panama and allegedly Inequitable sharing of the economic benefits derived from canal operations, and (8) the amounl <>f land aithln the sons unused bj the United States bul not aTailahle for Pan amanlan a The United States, in efforts to Improve it» treatj relationi with Panama, erlodicallj altered prorialona "f th< ■•>. primarll] throogli two additional I 1988 and 1965; bowerer, the sovereignty principla baa remained unchanged. Mounting Panamanian nationalist aentimenl over 1 1 1 « - erupted In serious demonatrationa In i960 and culminated In the rloienl anti-United States flag riota of Januarj 1964. The Incident precipitated ■ major diplomatic crisis between the two nations during which Panama broke relations with the United States and put the United Nations and the f th»> art'Ms that ar»- necessary f<>r these purposes.' 1 Bilateral negotiationa in Januarj 1965, culminating in the joint announcement by the United statc< ami Panama in June 1967 that three new draft treaties had been a g re e d Upon. Action was never taken hy either nation, however, attributable in part to the premature publication "f the treaty terms in the press ■ which touched off considerable op- m in both countries), and to the fact thai both nations were then Involved in major election campaigns in August 1!»th. the government of General Omar Torrijos. in power as a result of a military coup in < October 1968, formally n the draft treaties while indicating willingness to pursue the negotiations Talks resumed in June 1971, and on February 7. 1974, Secretary of State Henry Klaainger and Panamanian Foreign Minister Juan Antonio Tack signed m state- ment of general principles which would serve as guidelines for the new Panama Canal treaties Principal terms include: <1» elimination of the "in perpetuity" provision of the former treaty, with provision for a tixed termination date: nnination of IS sovereignty and jurisdiction in the ("anal Zone, with the United states granted the rights, facilities, ami land necessary for r.s. operation and defense of the canal for the duration of the new treaty: (3) Panamanian participation in the administration and defense of the canal, with provision for the eventual reversion of canal operation and control to Panama upon termina- :' the new treaty: and ill a just and equitable sharing of the economic beneflts derived from the canaL At the present time, negotiations on the specific terms of the treaty are said to he proceeding satisfactorily. The baatc principles at i^u.- in consideration of new Panama Canal tn are whether or not the United States should maintain its current status of un- limited sovereignty and full governmental Jurisdiction within the Canal Zone, and whether the United States should continue to assume full responsibility for operation and defense of the present canal Indefinitely. Since canal negotiations began, r.s. officials have been confident that an accommodation could he n which would meet the reasonable aspirations of Panama while safeguardini vital interests in the canal and Canal Zone and in no way weakening the United ire in the a In the vifw of the United rernment, some members m, and other proponents of new treaties reaching a reasonable and mutually acceptable accord with Panama on this highly sensitive Issue i- essen tial to r.s. foreign policy and security concerns with regard to Panama and to the Latin An ■ region as a whole. They ate the i^sue cast in the context <^f the changing nature of international political relations wherein the Increasing economic ami political Interdependency <>f nations is causing the United States ami other nations to forge new relationships based on mutual equality, cooperation, and respect. Pro- ponents argue that in today's world the 1903 treaty is an anachronism which will continue to serve ,iv a rallying point for Panamanian and other American nationalist sentiment directed against the Unit* In like man- ner, the treaty provides a ready target for elements hostile to the United 8 outside the region. A further factor bearing on the isvim of new ''dure U.S. and world commercial interests and to i'.s. ami allied defense concerns The 40 demands of rapidly increasing world commerce and the advent of modern ship- building technology resulting in vessels of much greater size will require major expansion of the capacity of the present canal and probably eventual construc- tion of a sea-level canal in the area. The United States option to expand and modernize the present canal and to construct a sea-level canal in Panama along the route recommended by the Atlantic and Pacific Interoceanic Canal Study Commission are both issues in the current canal treaty negotiations. Negotiation of new Panama Canal treaties has met substantial opposition in the U.S. Congress, the Department of Defense, and among a variety of interest groups in this country. The principal argument advanced by opponents is that if vital U.S. commercial and strategic interests are to be safeguarded the United States must continue to exercise sole responsibility for the operation, control, and defense of the canal, and must retain sovereignty and U.S. jurisdiction within the Canal Zone area. Also of major concern is United States acceptance of treaty provisions which would limit or reduce the current U.S. military presence in the Canal Zone. Opponents cite the vital strategic function per- formed by the U.S. military in the Canal Zone in terms of protecting U.S. in- terests in the canal directly and in serving as deterrent to the ambitions of powers hostile to the United States, thereby safeguarding national security and hemisphere defense interests as well. Other arguments advanced by opponents of new treaties include: (1) the mandate for permanent U.S. sovereignty and control of the canal and Canal Zone was legally vested in the United States by the 1903 treaty, duly signed and ratified by Panama, and all rights and titles to lands now under United States control were justly purchased by the U.S. Government; (2) under terms of the treaty the United States undertook to construct, and for the past 60 years has continued to effectively maintain, operate, and defend the canal to the benefit of all the world's nations and at a U.S. taxpayers net investment of almost $6 billion: (3) the continued efficient U.S. operation of the canal has resulted in major economic benefits for Panama, providing a major contribution to the Panamanian economy and affording it the highest per capita income in Central America and the fourth highest in Latin America; and (4) Panama's history of political instability and its lack of technical and managerial expertise and other required resources demonstrates that Panama does not possess the capacity to effectively manage, operate, and defend the canal. Congressional and other opponents of new treaties believe that the United States can continue to make adjustments to improve its relationship with Pan- ama under the existing treaty. Concern for U.S. retention of sovereignty and complete jurisdiction and control of the canal and Canal Zone has resulted in the introduction of numerous resolutions in this and prior Congresses calling upon the United States Government to retain the full rights and status which it now enjoys. One legislative approach by opponents of new treaties has been the introduc- tion of legislation to implement an earlier proposal to modernize the existing lock canal in lieu of construction of a sea-level canal through Panamanian territory, one of the chief areas of negotiation in the current treaty talks. They argue that implementation of the Terminal Lakes-Third Locks Plan, a project partially authorized by Congress in 1939, would provide for a major increase of capacity and operational improvement of the existing lock canal under present treaty provisions. Such action, supporters believe, would afford the United States the best operational canal at the least cost. It would also obviate the need for new treaties with Panama, thereby eliminating a confrontation with Panama over demand for major concessions that would almost certainly be made in negotiations for a sea-level canal through its territory. Critics of the existing treaties contend that this approach overlooks the basic issue, which is Panama- nian dissatisfaction with the status quo. Meanwhile, the State Department remains hopeful that the draft of a new treaty can be completed by the fall of 1975. Legislation The following bills are a sample of the many that have been introduced recently on the Panama Canal Treaty issue. S. Con. Res. 78 (McGee) Apr. 1, 1974, 93d Congress : Expresses it to be the sense of the Congress that negotiations for a new Panama Canal Treaty are necessary in the interests of both the Republic of Panama and the United States. Affirms that, with reference to the promulgation n the Congress of the I'm:. ■greed bo by the Unit* mama on i • Panama City. taken mi the Ml] by the Senate < 'ommll tinlis M i; d) ,94th O .in:i Canal Modernisation Act, Direct! the Governor of the Canal under 1 1 1 « - supervision of the Secretary of the Army, to in-. ■ - MU7 to Increase the capacity and Improve the operations "f the Panama 1 through the adaptation of the Third Jecl (Hou 210, 76th tbllahes the Panama Canal Advisory and ins;. rd, compost live members appointed by the President, by and with the advice and c< of the Senate, to study and review plans and designs for the Third Locki set GUves the Board powers to carry <»ut the 1 eqnires the Heard r«» submit an annual rr|H»rt to the President and Con gress on the pragn ozk. 11 K 198 was Introdnced 00 Jan. 14, 1975, and refer r ed to the Bonse Merchant Marine and Fisheries Committee. s. Has '.'7 (Thurmond 1 : Declares it to be the sense of the Senate that : (1) the Government of the United States should maintain and protect its sovereign rights and jurisdiction over the Canal Bone, and should in no way cede, dilute, forfeit, negotiate, or transfer any of these sovereign rights, power, authority. Jurisdiction, territory, or property thai are Indispensably necessary for the protection and security of the United States and the entire Western Hemisphere; (2) there be no relinquishment <»r surrender of any presently vested United states sovereign right, power, authority, or property, tangible or Intangible, except by treat] authorized by the Congress am! duly ratified by the United state- : and i .'{ i there t-e no cession to Panama, or other divestiture of any United ned property, tangible or Intangible, without prior authorization by the Congress (House and Senate 1, as provided in Article IV, Section •".. clause _' of the United states Constitution. s Bea 97 vraa Introduced on Mar. t. p.»7.". and referred to th< oreign Relations Committee. (Similar Thurmond), 93 H..I. Res. 138 and House Resolutions 23, 24, 10, 61, 63, 71. 75, 27, and 128, 94th Congn a Amendment to II. R 8121 1 Snyder) : An amendment to State Dept Appropriations Bill, Sec. 104: "none Of funds appropriated . . . shall he used for the purposes of negotiating the -in or relinquishment of any U.S. rights in the Panama canal Z on .Tune 26, 1975. Tlie Senate struck tlie Snyder amendment from the Appropriations hill which d September 3, I On September I s . 1975, the n te Conference, in Hen of the Snyder amendment, reported a compromise to the effect that : "it la the Bense of the Congress that any new Panama Canal treaty or agreement must protect tl • interests of the United states in the operation, maintenance, property and d< <>f the Panama Canal." The House, on September 24, 1975, failed 1 197 203 > to recede from inent with the Senate and Insisted on the Snyder amendment <>n September 26, 1975, the Senate refused to accept the Snyder amendment and further conference negotiations were scheduled. The House, on October 7, approved (212 201) a second conference compromise stating •) that any new Panama Canal treaty or agreement must protect tin- vital interest- ..f the United States in the Canal Zone and in the operation, main- tenance, property and defense of the Panama Canal.'" The Senate accepted the compromise the following day. H carina* mittee on Appropriations. Subcommittee on the De- partment <>f Transportation and Relatl - Appropriations. Depart- ment of Transportation and Related Appropriations for 1 Hearings, 94th Congress :'rint. off. P>77> Hearings on Panama Canal. Apr. 17. 1!>7.". p. 1 218. !ongres8 House C mmitt bmmniittee on Inter American Affairs. Panama Canal. 1971. Hearings, 92d I sslon, 42 on H. Res. 74, 154, 156, and other resolutions. Sept. 22 [and] 23, 1971. Washington, U.S. Govt. Print. Off., 1971. 173 p. -United States relations with Panama. Hearings, 93d Congress, 1st session. Feb. 20, 1973, Washington. U.S. Govt. Print. Off., 1973. 53 p. U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on Inter- American Affairs and International Organizations and Movements. Com- mittee on Merchant Marine and Fisheries. Subcommittee on Panama Canal. United Nations Security Council meeting in Panama. Hearings, 93d Congress, 1st session. Apr. 3, 1973. Washington, U.S. Govt. Print. Off., 1973. 34 p. U.S. Congress. House. Committee on Merchant Marine and Fisheries. Subcom- mittee on Panama Canal. Panama Canal briefings. Hearings, 93d Congress, 1st session Apr. 13. 1973. Washington, U.S. Govt. Print. Off., 1973. 78 p. Briefings concerning treaty negotiations and current activities of the Panama Canal and Canal Zone. "Serial no. 93-8" Panama Canal treaty negotiations. Hearings, 92d Congress, 1st and 2d sessions on treaties affecting the operations of the Panama Canal. Wash- ington, U.S. Govt. Print. Off.. 1972. 371 p. Hearings held Nov. 29, 30; Dec. 2, 6. 10, 1971; Jan. 17-18; Julv 24; Aug. 10, 1972. "Serial no. 92-30" Panama canal treaty negotiations. Hearings, 92d Congress, 2d session. Washington. U.S. Govt. Print. Off.. 1972. 373-511 p. Addendum to hearings held Nov. 29 . . . Dec. 10, 1971 : Jan. 17 . . . Aug. 10. 1972. Reports and congressional documents U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on Inter- American Affairs. Report on United States relations with Panama . . . pur- suant to H. Res. 113. K6th Congress. 2d session. Washington, U.S. Govt. Print. Off., 1960. 98 p. (86th Congress. 2d session. House. Report no. 2218) Other congressional action According to U.S. legislative procedure, new treaties would be submitted solely to the Senate for ratification ; however, many opponents of new Panama Canal treaties in the House of Representatives have raised the issue that House ap- proval is necessary before any U.S. territory or property under U.S. jurisdiction within the Canal Zone can be ceded to Panama. House members cite as legal justification for their position the United States Constitution, Article IV, Sec- tion 3, Clause 2, which states "The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other prop- erty belonging to the United States." House members who support this position contend that "Congress" must be interpreted as both the Senate and the House of Representatives, and therefore any new canal treaties providing for the dis- posal of U.S.-controlled territories or properties would be invalid unless the required approval of both Houses were obtained. Language to ensure House jurisdiction had been included in House and Senate resolutions recently intro- duced. Furthermore, the issue was examined at length during hearings on December 2, 1971, by the House Merchant Marine and Fisheries Committee's Subcommittee on the Panama Canal concerning "Panama Canal Treaty Nego- tiations" (pp. 95-147). Chronology of events October 7, 1975 — Backing off from efforts to ban funds for Panama Canal nego- tiations, the House approved (212-201) a second conference compromise on State Department appropriations stating the sense of Congress "that any new Panama Canal treaty or agreement must protect the vital interests of the United States in the Canal Zone and in the operation, maintenance, property and defense of the Panama Canal.'' The new compromise added a reference to protecting U.S. vital interests in "the Canal Zone," thus elimi- nating a principal House objection expressed on September 24. The Senate accepted the compromise the following day. State Department officials said they were pleased with the vote removing the cloud over negotiation funding. September 26, 1975 — By voice vote the Senate rejected the House-passed "Snyder amendment" ban on funds for Panama Canal negotiations and asked for new negotiations with the House. •i:; September 24, 1975 Panama's President and the Foreign .Ministry formally apologized i" the is embassy for the Incident of the previous da The 1 1 . . 1 1 - . roted 208 to r.»7 to rejed the House-Senate conference com- promise i department appropriations for Panama Canal negotiations which stated [in- tense of Congress that anj new agreement "most it"- the rital Interests of the United States In the operation, malntenanee, prop- em and defense of the Panama Canal." instead, it reetored the "Snyder amendment,' 1 passed .June •_••;. barring the one of funds to n egot i ate the "surrenderor relinqnishment of an; U.S. rights La the Panama Canal Zone.* 1 Sept em b e r 28, 1975 About v "<> left-wing Panamanian students, demonstrating osl i' s military bases in the Canal Zone, attacked the U.S. embaeay in Panama with rocks and M< >ir »t< >\ cocktails in the moal serious incident since the "flag riots* 1 "f 1964 The U.S. embassy delivered a "strong note" of protest t<- Panama, alleging that the* National Guard hesitated before dispersing the crowd with tea r Sept em ber 20, 1975 Criticising U.8. demands for the right to defend the Canal ••for an indefinite rime, which is tantamount to perpetuity," Panama broke negotiation s e cr ecy and publicly disclosed the divergent positions. The report said the United States accepts Panama's desire for a 'Jo-year limit on a new treaty, however, the U.S. seeks rights to defend the ('anal for 50 year- initially and then for ;i time which is tantamount to perpe tu ity. The United States wishes to retain x.V, of the Zone and all It of the military installa- tions while Panama wants ,i reduction <>f the Zone to LO^j of present stae and three military installations. Both parties were reportedly agreed that I joint administration WOUld replace the Panama Canal Company, and Panamanian police, postal, and judicial jurisdiction would take effect in the Zone three years after the new treaty. September 17. 1975 Ka Ambassador Bunker ended the latest 10-day round of negotiations In Panama, claiming thai Kissinger's remarks had be en "dis- torted and misinterpreted," he gave Foreign Minister Juan Antonio Tack a statement which said "l am sure that the Secretary meant to say that <>nr country could not renounce our right to defend the canal from foreign enemies until we have achieved with Panama effective agreement! for the Canal's defense . . A- we both know, we are working toward I situation in which rim defense of the Panama Canal will be a Joint operation, in which the Panamanian National Guard will play an Important role." Panama announced that "very little progress" had been made in the recent talks September 16, 1975 in response to a question by Governor George Wall the Southern Governors' Conference In Orlando, Florida, Secretary Kissinger state! that "the United States must maintain the ri^ht. unilaterally, to de- fend the Panama Canal for an indefinite future, or for a long future. On the other hand, the United States can ease some of the other conditions in the ('anal Zone." in Panama. Kissinger's remark-, particularly the terms "uni- laterally" and "indefinite." were denounced as completely contrary to the February P>7t jointly agreed principles. Bus and taxi drivers went on strike to protest the remark-. September •"> 1975 senator Harry Byrd also announced he was delaying an at- tempt in the Senate to block funds for negotiations on the Panama Canal in response to a request from state Department officials to wait until bassador Bunker returns from his September 7 trip to Panama for further talks The Washington Post reported that an "internal administration com- promise" bed within the executive branch which essentially will meet Panama's insistence on making the year 'JTW*' the tenninati - authority over the CanaL The Department of Defense had been arguing for extending U.S. authority for 50 more years. There would he continued participation of U.S. force- In the defense of the Canal. In what was inter preted as a symbol of agreement between the Departments ol De fense. Deputy Secretary of Defense elements. Chairman of the Joint Chiefs of Staff General Brown, and Assistant Secretary of state for Latin Amer- ican Affair.s William I >. Rogers left (September 'J' for a one-day visit to September 1, 1975— The New York Times rein.rt.Ml that Amhasf the nation. Jane -*'>. 1967 President Johnson and Panamanian President P unced that agreement had been reached on the "form and content* 1 of three new canal tn g administration of tin- existing canal, tl and neutrality ..f the existing « anal, ami the possible construction level .anal. September "J». l - dent Lyndon Johnson and Panamanian President Mar.ii A Robles [ssoed t Joint statement announcing that thn ..una would be negotiated and outlining certain prind] included in the new treaties (United States and Panamanian net in talks concerning the terms for ■ new Panama Canal treaty in Janui ber 22, 1964— The President signed P L B8 809 authorising the establish- ment of the Atlantic Pacific Interoceanic ('anal study Oommlsslon to in\ llltj of i nn>rc suitable site f«>r the construction of unmlssion members were appointed on April 18, I April .'{. r.Hli The Organization of American States published S joint d' tion of the Governments of Panama and the Unl - In which they agft itabtisfa diplomatic relations and to designate Special Ambt dors to seeJi the prompt elimination of the onflict between the two countries. (Diplomatic relation tablished and the amb appointed on April » 191 February 4 1964 The < >AS i tounctl voted to invoke the Inter- American Tn tprocal Asi Rio Treaty) in the dispute between the Onited Stat.< and Panama (the first time that the regional defense machinery had been utilized in a dispute Involving the United 81 January _".». 1964 The Panamanian Government called upon the Council of the Organisation of American States to take up its charges of aggr< gainst the United States as ,-i result of the Canal /one flag riots January 10, 1964 Panama suspended relations with the United Stab the Unit ession at the United Nations, ami tiled a com- plaint with the Inter-American Peace Committee of the < Irganisation of American states, following rioting over the display of the I Rela- tions were officially broken On January 17. 196 January 16, 1968- United states and Panamanian conferees annoui ment concerning the nag issue in the Canal /.one to the effect that the P manian flag would be flown in the /one at all points where the IS. tlai: is tiown by civilian authorities. June IB, P.Mlii President Kennedy and visiting Panamanian President R chiari issued a joint communique stating that representatives of the two nations would be named to discuss jwiints of dissatisfaction concerning the Una Canal and Canal /one within the perimeters of the existing canal treaties. I Talk- began In July 1962 and ended la July 1961 November i«". 1961 — The Panamanian National Assembly unanimoc ■ resolution Calling for the ahfOgatloa Of canal treaties with the United states and the negotiation of a mw tre aty to Include affirmation of I manian sovere 'I /one an for the turnover of the (anal to Panama. September B, 1961 Panamanian President Roberto Chiari. in a letter t" • lent Kennedy, requested a revision of the Panama Canal tre Chiari formally announced his goveflunesri canal treaty on September 11. 18 Fehruary J. I960 — The House of Repr ntatives passed H < " • ■ 1 1 R pilBWlm the sense t>f Congress that any variance in the traditional inter- pretation of the Panama Canal treat;. illy with resj>ect to ferri- tin": _ ity. should he made only by treaty. Rioting broke out as Panamanian dei empting and time to enter the Camil /one to implant the Panamanian flnp turned hack hy Panamanian and I B Ndv.-iiiIht 24, 1969 -Deputy Und an official mis I that the I 46 that titular sovereignty over the Canal Zone remains in the Government of Panama." November 3, 1959— The Governor of the Canal Zone called for U.S. Armed Forces to quell a riot resulting from Panamanian demonstrators attempting to implant the Panamanian flag within the Zone. September 25, 1959 — The Government of Panama formally requested that the Panamanian flag be flown in the Canal Zone. January 25, 1955 — The United States and Panama signed the Treaty of Mutual Understanding and Cooperation which revised, redefined or renounced cer- tain rights of the United States and Panama provided in the basic 1903 canal treaty and the 1936 treaty, and increased the annual annuity to Panama to $1,930,000. March 2, 1936 — The United States and Panama signed the General Treaty of Friendship and Cooperation which revised, redefined or renounced certain rights of the United States and Panama provided in the original 1903 canal treaty, and increased the annual annuity to Panama to $430,000. March 1, 1922 — The United States and Colombia exchanged ratifications of the Thomson-Urrutia Treaty (signed on April 6, 1914) whereby Colombia recog- nized the exclusive U.S. title to the Panama Canal. August 15, 1914 — The Panama Canal was opened to navigation. April 18, 1906— Secretary of War William H. Taft, in testimony before the Sen- ate Committee on Interoceanic Canals, stated: "(Article III of the Panama Canal treaty) is peculiar in not conferring sovereignty directly upon the United States, but in giving to the United States the powers which it would have if it were sovereign. This gives rise to the obvious implication that a mere titular sovereignty is reserved in the Panamanian Government." February 23, 1904 — The U.S. Senate approved the Hay-Bunau-Varilla Treaty. (The treaty was officially proclaimed by President Roosevelt on February 26, 1903.) January 20, 1904 — Secretary of State John Hay, in a letter to Senator Spooner concerning the Panama Canal treaty, wrote : "We shall have a treaty . . . vastly advantageous to the United States, and, we must confess . . . not so advantageous to Panama. . . . You and I know too well how many points there are in this treaty to which a Panamanian patriot could object." December 2, 1903 — The provisional government of Panama ratified the Hay- Bunau-Varilla Treaty. November 18, 1903 — The United States and Panama signed the Convention for the Construction of a Ship Canal (Hay-Bunau-Varilla Treaty) granting the United States sovereign rights and authority "in perpetuity" over a specified zone of land in Panamanian territory for the construction, operation and protection of a ship canal. November 6, 1903 — The United States recognized the new Republic of Panama, which had declared its independence from Colombia three days earlier. August 12, 1903 — The Colombian Senate unanimously rejected the Hay-Herran Treaty. January 22, 1903— The United States and Colombia signed the Hay-Herran Treaty granting the United States a 100-year lease (with option for renewal) on a specified zone of land across the Isthmus of Panama, with the exclusive right to construct, operate, and protect a ship canal. June 2, 1902 — The U.S. Congress enacted the Spooner Act authorizing the Presi- dent to acquire the assets of the former French canal company and to acquire a specified strip of land and additional rights and territory from Colombia for the construction and operation of a ship canal. November 18, 1901 — The United States and Great Britain signed the Hay- Pauncefote Treaty granting the United States the exclusive right to con- struct, regulate, and manage a ship canal across Central America. 1899 — In 1899 the U.S. Congress passed a law directing the President to name a commission to examine all practical routes for the construction of a ship canal across Central America. 1898 — In 1898 President McKinley, in a message to Congress, stated that a mari- time highway across the Central American isthmus and its control by the United States was indispensable to U.S. commercial interests and territorial expansion. May 18, 1878 — In 1878 a French interoceanic canal company procured a con- cession from the Government of Colombia to build a maritime canal through its territory. (The French canal enterprise collapsed in 1889.) 47 December 12, i s » ,; In i s » ,; the United States and Neu Qranada < < * * ► i « » 1 1 1 1 ► i .- 1 » signed the Trent] of Pence, Amity, Navigation, tnd Commerce innmnteelng the rights Of sovereignty anil projxTt\ possessed l»y ( 'olomhin over the Fsthmus <>f Panama tnd the neutrality "f tin- I f Panama conaider a Joint undertaking to con struct a canal aCTOM the Central American isthmus. A44i$ional n !< n >i<< sow A gathering Btorm over thai other canal. New York times. .Ian. f, ]!i7} pj 1:; :•;; 64, p New BP A Latin American Vietnam. Foreign Service journal, v. .".1. .Ian. 1974: 16 IT LB874 824 Bunker, Blleworth. Panama ami the United states; a design for partnership. Speech before the Center for I liter- America n Relations at New York City, .Mar. 19, 1974. Dept of state bulletin, v. to. Apr. l'!». r.>7i ;:,:: 167. Constitution of Panama. 1972. Washington, Organisation of American State-. 1974 IS p LUST Cox, Robert G. choices for Partnership or Bloodshed in Panama. In Commission on United States-Latin American Relations. The Americans iii a changing world. New York. Quadrangle. P.»7."». p. 182 ISO, Forty-tifth annual report of the work and operation fiscal \ ea r 1978. Communica- tion from President transmitting the 16th annual report . . . purusant to 22 U.S.G 278a, together with a rejH>rt on the research activities of the Qo Memorial lnsitiite Middle America Research I'nit. and the Comptroller General's examination of the financial statements of the Institute for nscaJ years 1972 and P.»7:i. Washington, U.8. Govt Print, off.. 1974 60 p. LRS74 81 16 Georgetown University. Center for Strategic studies. Panama: canal Issues and treaty talks. Washington, Georgetown Univ. The Center for Strategic Studies, Mar. 1!»*;7 (Special Report Series: No. 8) 89 p Ilammarskjold Forums. The Panama canal : background of the sixth Ham- marskjold forum. New York. May 28, 1964 [by] Richard R. Baxter and I»oris Carroll. Dobbfl Ferry. N.Y., Published for the Association of the Bar of the City of New York l-y ( )ceana Publications, 1966. 11 s p. Langley, Fester D. F.S. -Panamanian relations since 1941. Journal of inter- American studies and world affairs, r. 12, July 1970: 889 Lucier, .lames P. Panama Canal: foCUS of power politics. Strategic review, v. •_», spring 1974 34 »:: Panama. NACFA- Latin America and empire report, v. B, Sept 1974 1 16* I.RS7J _ Panamas struggle for Ind e p e ndence, current historv. v. 66, Jan p.'Tf 19 - I.RS7I 96 Panama: the proposed transfer of the Canal and Canal Zone l»y treatv. Georgia journal of international A comparative law. v. .">. winter 1976 196 216 I.RS7 Rising public sector InTestment in Panama -purs many new projects, IMF sur- vey, v. 4, Feh. :•.. 1976: 46-47. LR87 Rosenfeld. Stephen S. The Panama negotiations a dose run thing. Foreign affairs. v . 64, Oct 1976: l 18 Should F.S. yield control of the Panama Canal'.' Con gression a l Quarterly weekly report, v. 32, Mar. 2, 1974 694 681. FRS7I 2784 F.S. Atlantic-Pacific Interoceanic Canal Study Commission. Intero.eani. .anal studies. 1970. Final report of the Atlantic Pacific [nteroceanic Canal Study Commission to the President. Dec 1. P'7<>. a- required by P Congress. (Washington, U.S. Govt Print, off.. 1971, l r. (various 48 U.S. Department of State. Bureau of Public Affairs. Office of Media Services. U.S., Panama agree on principles for canal negotiations; (together with) Back- ground and status of the Panama Canal treaty negotiations. (Washington) U.S., Department of State, News Release, Feb. 7, 1974. 7 p. U.S. Library of Congress. Congressional Research Service. Negotiation of new Panama Canal treaties: background and pros and cons [by] Virginia M. Hagen. [Washington] Nov. 23, 1971. 30 p. Multilith 71-250 F O UNIVERSITY OF FLORIDA I Mill III II I 3 1262 09114 0573