The Panamanian Mission has completed the presentation of their proposals.
This has been done in the form of 21 documents, a synopsis of which is
attached (Tab A).
It appears that we will be able to meet at least to a degree the desires
expressed in several of these documents without derogating from our
fundamental treaty position.
Position papers outlining this Government’s position on these proposals
are now being prepared in collaboration with representatives of the
Armed Forces and the Panama Canal Company. These papers will be
submitted for your consideration in due course.
The majority of the proposals will have to be rejected in whole or in
part. Some, for example Document U, would affect our fundamental rights
and others, for example Document H, are clearly unjust or
impractical.
[Tab A]
Synopsis of Proposals Presented by Panamanian
Mission September, October 1953
Document A
Restriction on right to import into Zone, Panama to have privileged
position regarding sales to Zone, limitation on operations of
commissaries; restriction on manufacturing, processing, etc., in
Zone; sales of surplus materials only to Panamanian Government;
privileged position for Panama regarding sales to ships and ship
repairs.
[Page 1424]
This is in line with basic Panamanian contention that U.S. Government
sponsored economic activities in the Canal Zone have stifled the
development of Panamanian agriculture, trade, and commerce and that
Panama has been deprived of the benefits it should enjoy from its
geographic situation.
Document B
Panamanian citizens employed by Zone agencies to be guaranteed
treatment in all respects equal to U.S. citizens, i.e., equal pay,
promotion opportunities, leave, pensions, etc.
Document C
Panama to have right to levy taxes on Panamanian employees of Zone
agencies who reside in Panama or who reside in Zone; also to tax
private enterprise in Zone.
Document D
Panamanian flag to fly alongside U.S. flag in Zone, and on commercial
vessels transiting Canal; Spanish and English to be official
languages in Zone.
Document E
Panama Railroad Company activities to cease in Panama; its
properties, assets and other rights in Panama and those of any other
agency of the United States to become property of Panama (except
Madden Dam).
Document F
Formation of Mixed Commission to formulate plans and take measures
for civil defense throughout the Isthmus—i.e., Canal Zone and
Panama. All costs, except salaries of Panamanian members, to be
borne by the United States.
Document G
United States to cease issuing consular exequaturs. Panamanian
exequaturs to be recognized in Zone.
Document H
United States to grant duty-free import quotas on 11 Panamanian
products, namely:
a) refined cane sugar, b) alcohol and liquors (derived from
sugar cane), c) coffee, d) meat, e) hides, f) shrimp, g)
cacao, h) vegetable oils, i) copra, j) vegetable fibers, k)
cashew nuts.
Most of these products are not now in production sufficient to permit
export. This is obviously an effort to gain an assured market in
advance of increasing production.
[Page 1425]
Document I
Annual payment of 20% of gross toll receipts, with guaranteed minimum
of $5,000,000.
Document J
Construction of port and docks at Colon for benefit of Panama.
Thereafter all cargo transshipments to be made through these
facilities.
Document K
Full access to Canal Zone docks, lower wharfage costs, elimination of
travel tax and any discount enjoyed by any U.S. Government agency
from any ship line operating to or from Panama, development of Free
Zone and exemption from U.S. taxes for any U.S. company operating
therein, and stimulation of tourist traffic ($500 duty
exemption).
Document L
Stimulation of U.S. private investment in Panama by exempting profits
of U.S. investors from U.S. taxes.
Document M
Elimination of 1903 Treaty restriction on construction of
inter-oceanic railways and highways by Panama.
Document N
United States to construct, within 5 years, bridges or tunnels at
Atlantic and Pacific ends of Canal and to afford corridors in those
regions to Panama—corridors and bridges or tunnels to be under
Panamanian jurisdiction.
Document O
Establishment of Mixed Tribunals to handle civil cases in Zone
involving Panamanians.
Document P
United States to give up present treaty right to prescribe sanitary
ordinances in Panama City and Colon and, if necessary, to enforce
compliance therewith; limitation of such authority to Canal Zone and
Madden Dam area. United States to furnish water for Panama City and
Colon at fixed rate.
Document Q
Use of Panamanian postage stamps in Zone, to be purchased at
discount.
Document R
Panamanian customs authorities to have free access to vessels
arriving at Zone to examine persons and cargo destined for Panama;
jurisdiction over Panama registered ships arriving at Canal;
construction of customs houses in Zone for Panamanian customs and
immigration officials use.
[Page 1426]
Document S
Recognition by the United States that treaties concerning Canal Zone
do not affect Panamanian sovereignty over that territory.
Document T
Reference of controversies respecting any and all U.S.–Panama
treaties to International Court of Justice.
Document U
Termination of present treaties 99 years from date of this agreement.
Thereupon, new treaty to be drawn up under which Panama will
recognize the United States as concessionary of the Canal.
