Foreign Relations of the United States, 1961–1963, Volume XII, American Republics

408. Memorandum of Conversation¹

Washington, November 8, 1962.

SUBJECT

• US-Panama Conversations in Panama on Points of Dissatisfaction Concerning the Canal Zone

PARTICIPANTS:

• A. Guillermo Arango, Panamanian Ambassador to the U.S.
• ARA—Edwin M. Martin, Assistant Secretary
• ARA/OAP—John W. Fisher, Acting Director

Ambassador Arango produced a handwritten personal letter sent to him by President Chiari, parts of which he read in translation to Mr. Martin.

President Chiari’s letter instructed Ambassador Arango to see the Secretary if possible to apprise him of President Chiari’s disappointment in the talks taking place in Panama on points of dissatisfaction concerning the Canal Zone.

President Chiari said that President Kennedy conveyed to him the clear understanding that these talks would proceed rapidly to dispose of Panama’s dissatisfactions under the treaty arrangement between the two countries. However, in the months since he saw President Kennedy, only the question of flying Panamanian flags over civilian installations in the Canal Zone has been settled. There has been no progress in flying Panamanian flags over military installations or on ships transiting the Canal. There had been talk but no agreement on exequaturs, stamps, and labor. President Chiari was not satisfied with the argument that the U.S. must wait about 5 years for studies on a sea level canal to be completed before undertaking revision of the treaties on the Canal. He emphasized the urgency of prompt action, asserting that his people cannot remain patient much longer.

Ambassador Arango added his own view that dangerous pressures are building up in the absence of satisfaction of Panama’s desires concerning the treaty. He referred to the danger of an extremist like Castro getting control of the situation.

Mr. Martin said that President Kennedy made it very clear in his conversation with President Chiari that he would not be able to get the U.S. Senate to agree to changes in basic treaty relations with Panama, such as questions of sovereignty and jurisdiction, perpetuity, etc., at the present time. It would take perhaps five years for the U.S. to prepare itself to make a decision on a sea level canal, which would create a different situation.

Mr. Martin said it had also been made clear in the Washington discussions that the flying of the Panamanian flag on ships transiting the Canal is not an negotiable one. On other questions taken up in the Panama talks, we are now awaiting Panama’s response to our proposals. We made suggestions on exequaturs several weeks ago and are prepared to move forward when Panama desires. We understand that the difficulty has been in the wording of the joint announcement of the exequatur arrangement, although there has been prominent public mention made at various times by representatives of both governments concerning adoption of new exequatur procedures.

We made a proposal several weeks ago on stamps and are awaiting Panama’s response. On October 16, we made some suggestions on labor practices for further discussion at later meetings. We have announced our readiness to transfer a pier to Panama, and to implement income tax deduction procedures and have had no response from the Panama side at all.²

Mr. Martin thought that President Chiari had a political problem which could be better handled by playing up the solid achievements which can result from the current talks, and playing down the point of basic treaty revision, rather than by doing the reverse.

Mr. Martin said that he provides a detailed monthly report on the progress of the talks to President Kennedy.³

1. Source: Department of State, Central Files, 611.19/11-862. Official Use Only. Drafted by Fisher on November 13.
2. An interim joint communiqué concerning the discussions in Panama was issued by the U.S. and Panamanian Governments on January 10, 1963. It stated that it had been agreed that the Panamanian flag would be flown together with the U.S. flag on land in the Canal Zone where the U.S. flag was flown by civilian authorities, that private organizations and persons in the Zone were free to display flags at will over their places of residence or business, and that other aspects of the flag question would be discussed later. The text is printed in Department of State Bulletin, February 4, 1963, pp. 171-172.
3. Monthly reports on actions pertaining to NSAM 152 and NSAM 164, sent from the Department of State to the White House, include brief summaries of the status of the discussions. (Department of State, NSAM Files: Lot 72 D 316, NSAM 152)