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109. Memorandum for the Record1

SUBJECT

  • Panama Canal Negotiations

1. On 14 January 1976 Mr. Clements hosted a lunch for Ambassador Bunker, General Brown and General Dolvin. Three matters affecting the Panama Canal Negotiations were discussed. These were: (1) the pace of the negotiations; (2) the continuing defense considerations; and (3) relations with Congress.

2. Mr. Clements referred to a message from Ambassador Jorden in which Ambassador Jorden described his conversation with General Torrijos on the pace of the Panama Canal Negotiations. Mr. Clements stated that he read into this message a possible speed-up of the negotiations greater than planned or desirable.2 Ambassador Bunker stated that in retrospect perhaps Ambassador Jorden had come on a little too strong. What was desired, however, was to cause the Panamanians to come forth with some concrete proposals. Ambassador Bunker stated that the Panamanians had considered the US positions in both the September and November sessions as exceedingly hard. This had caused them to feel that the US was not serious in trying to move forward in the negotiations. We wanted to make clear this was not so, that we were prepared to move ahead, but that we wanted some response by Panama to our proposals. However, in the December negotiating sessions, some progress was made.3 Ambassador Bunker emphasized that much work needed to be done before even a conceptual agreement could be reached. He stated that, as a practical matter, it would take at least a year before we could possibly settle on treaty language. Mr. Clements indicated that he was satisfied with the pace of the negotiations.

3. Mr. Clements next raised the question of residual defense. Ambassador Bunker commented that the difficulty in this area was the Panamanian fear of disguised perpetuity. However, he felt that the matter might be adequately handled through some type of neutrality agreement. He suggested that we could possibly work out an arrangement where Panama would guarantee the neutrality of the Canal to [Page 295]the U.S. If this guarantee was not fulfilled, the U.S. would have the right, by treaty, to intervene. This type of neutrality guarantee, coupled with a flexible defense arrangement, could possibly satisfy our requirements.

4. General Brown suggested the possibility that we might not want a defense commitment beyond the time that we were responsible for operating the Canal. He stated that when we turned over the Canal, perhaps we should lower our flag and return home. Mr. Clements indicated that this was an interesting possibility which we should consider. General Brown stated that we could, under these conditions, have some type of flexible defense arrangement not necessarily involving any troops on the ground. Mr. Clements indicated interest in this suggestion. Additionally, General Brown said that he was having a study made on the relative value of the Canal which he would pass around.4 Initial indications are that this study will show that the overall value of the Canal is not too great from a military standpoint.

5. Mr. Clements raised the question of the desirability of Congressional visits to Panama. In ensuing discussion, Ambassador Bunker stated that visits to Panama to date have been worthwhile. However, in answer to Mr. Clements’ question as to whether or not we should actively encourage both proponents and opponents of the treaty negotiations to go to Panama, Ambassador Bunker stated that he thought we should not do so at this time. Instead, we should low-key Congressional visits for the time being. However, if members of Congress wish to visit Panama we should not dissuade them.

6. In summarizing, Mr. Clements stated that he thought there were two essential objectives to be achieved by the negotiations: (1) we should insure that the Canal can continue to be operated efficiently without any breakdown when we turned it over to the Panamanians. This should be achieved whatever the time required to prepare the Panamanians to run the Canal. (2) We should have some guarantee of continued neutrality of the Canal. He felt that if these two objectives were achieved, the rest would be relatively unimportant. Without attainment of these two objectives he was sure Congressional approval could not be obtained.

7. Mr. Clements referred again to General Brown’s suggestion concerning a simultaneous termination of operations and defense commitment and asked Ambassador Bunker whether he had in mind asking for a revision of the Presidential guidelines if we were to follow this course. Ambassador Bunker said he would have in mind doing so.

  1. Source: National Archives, RG 59, Inter-American Country Files, Lot 92D281, Box 2, Panama Canal Neg. Lands and Areas (Waters). Confidential. Drafted by Dolvin. Copies were sent to Bunker and Bell.
  2. Possibly a reference to Document 107.
  3. See Document 108.
  4. Not found.