Foreign Relations of the United States, 1969–1976, Volume XXII, Panama, 1973–1976

118. Memorandum of Conversation¹

Panama City, April 11, 1976.

SUBJECT

• Canal Treaty Negotiations—Political Background

PARTICIPANTS

• Dr. Flavio Velasquez, Advisor on Treaty Negotiations, Ministry of Foreign Relations
• Mr. John D. Blacken, Political Counselor, American Embassy, Panama

Following a discussion in which the Panamanians went over with me their notes of the last two sub-group’s sessions on lands and waters during the previous week, Velasquez asked if I could meet him later for a drink at his apartment. After my arrival at his home he said he was concerned about political developments and the negotiations. He was not going to talk, he said, about Panama’s nationalistic feelings concerning the Canal nor the need for United States to enter into a treaty. These things he knew I understood. He wanted to talk, however, about a much, much broader political panorama and of the future.

Velasquez said that he and many other educated Panamanians recognized that the United States has a fundamental interest in defending the Western Hemisphere. It has worldwide commercial responsibilities and special responsibilities concerning the efficiency and availability of the Panama Canal to the world. Two key elements in this are good management and protection of the Canal. The United States is the main user and has the responsibility for carrying out these guarantees. Other nations expect the United States to exercise these responsibilities.

The negotiations with Panama have been an instrument for the United States to develop and improve the political and moral basis for exercising these responsibilities. The negotiations have been therefore a necessity for the United States, but for Panama, treaty negotiation is a much more profound matter. Negotiation is not only aimed at perfecting Panama’s national independence and restoring Panama’s national dignity. More importantly, the treaty will be a way for Panama to assume many of the responsibilities that the United States carries out. Thus the treaty is the means of modernizing Panama.

Velasquez continued, saying that Panamanians have a much broader concept of developing and using the Canal than does the U.S. True, we will probably not run it as well in a very specific fashion, however, Panamanians love the Canal and would use many Americans in its operation at least initially. The initial plans discussed at the technical level would mean to build double channels to the locks, provide more tugs, and thus increase traffic capacity considerably.

But the negotiations are failing as a means of achieving a treaty designed to modernize Panama because of the way in which they are being conducted by the GOP. It is not planning for modernization of the country. It is thinking in much shorter-term political objectives. Torrijos is afraid of modernization. The National Guard General Staff is already afraid things have gone too far. They will find ways to obstruct this process. The reason for their fear is that modernization would mean a shift of power in Panama from Torrijos and the present National Guard General Staff to “technicians” (i.e., executives, engineers, economists, young GN officers, etc.) who would assume responsibilities in cooperation with the United States for operating the Canal and developing a complex economy associated with Panama’s role as a transit and service center.

The balance of political power in Panama is very fluid. The GN’s top level, including Torrijos and the National Guard General Staff, is nervous. The United States’ negotiators will need a good deal of understanding and public relations skill to deal with such “ignorant people”.

Torrijos believes the United States is weak. He believes there are many centers of power in the United States which affect the negotiations. In his view, one power group is in the ascendancy one weekend, and the next week it is replaced by another. He also does not believe that the United States will support Panama’s nationalistic goals which meted [looked?] towards greater independence from the United States. The United States must try to somehow educate him into a better perception of its goals, its power, and its way of doing things. He simply does not understand how the U.S. Government and society functions.

The idea of unilateral concessions is a disaster. Torrijos is seeking them as a way of avoiding taking decisions on the major issues in the negotiations. His technicians have advised him not to waste time on them, but he has ignored their advice.

Velasquez then mentioned the relationship between Lopez-Guevara and Torrijos. While Torrijos respects Lopez-Guevara they have a reserved relationship. Lopez-Guevara is a “technician” who is extremely intelligent and sophisticated. Torrijos does not understand complex ideas and is uneasy in the company of intelligent men.

Velasquez argued that the United States in the negotiations should try to stimulate the interests of the GN General Staff in “things,” that is houses, military technology and other rather specific concepts. They will then feel they are participating in the negotiations and will see benefits for themselves. Panama is far from having reached the stage that Iran and Egypt have reached, that is, the stage in which they recognize that their natural ties and interests lie with the United States. Velasquez is avowedly pro-American. The challenge for the United States therefore, said Velasquez, is not only to modernize the treaty relationship but also to negotiate a treaty that will modernize Panama. Panama must be careful to negotiate a treaty that is not limited to the rectification of the problems and resentments of the past but would also lead to the modernization of attitudes and the maturing of Panama. Such a treaty would shift responsibilities to Panamanians in an orderly fashion. Velasquez said the U.S. negotiators would have to do this because, through design or inadvertency, Torrijos and the National Guard will not negotiate such a treaty.

Velasquez stressed that when General Dolvin meets General Torrijos during his next visit to Panama, he should stress that there is one man, Ambassador Bunker, in charge of the negotiations and that we are operating with unity. Dolvin has the prestige to impress upon Torrijos the necessity of working in a systematic manner toward a new relationship. Panamanians regard him as a very skillful and positive factor in the negotiations.

President Lakas must be taken into account and used in helping to develop the new relationship with Panama. The banks trust him, and the economic structure of Panama is depending upon the banking sector, upon commerce and upon the Panama Canal. If Torrijos does not affect these three things Panama will survive. Lakas is a defender of this system. Vice President Gonzalez must be regarded as an impediment to the new relationship.

Torrijos destroyed Tack’s influence over the period of a year and a half by gradually cutting back his authority and humiliating him. The Panamanian negotiators are now working without instructions. They have no coherent instructions on which to go to the next level in the negotiations; therefore, the U.S. initiative must be intelligent and forceful. Tack was a representative of the technicians. He was of humble (“popular”) origin and had been building a nationalistic political base. The Security Council meeting here in March of 1973 was the peak of his political influence. He had presidential ambitions. Torrijos recognized this, and therefore he placed his brother Marden Torrijos in the Foreign Ministry to watch Tack and to obstruct him. After Marden left the Ministry, Darien Ayala was placed in the Ministry for the same purpose. Ayala was generally stupid, but he followed instructions. Essentially his role was to obstruct the professionals. Tack has learned that it was dangerous to be intelligent. There is persecution against intellectuals.

The National Guard is not informed concerning the state of the negotiations. Lopez-Guevara and others are concerned over this. Prior to the last set of discussions at the subgroup level on lands and waters, Lopez-Guevara sent a message to Torrijos through Lt. Col. Roberto Diaz Herrera, the GN Executive Secretary, suggesting that a National Guard officer be designated to participate in the talks. Although there was plenty of time for a response, none came. Finally, through Noriega, Lopez-Guevara secured the presence of Major Guillermo Ferrufino of the G–2 staff who attended the final day of the meetings.

COMMENT: Velasquez’ view of the Torrijos Government is shared by a number of young well-educated men in the middle levels of government who look with disdain on the political game that is carried on by Torrijos and the General Staff. They regard the “politicians” as ignorant and capable of actions damaging to Panama. Velasquez and Omar Jaen believe that the U.S. is ready to negotiate a satisfactory treaty with Panama. They want both sides to ensure that the treaty does not merely eliminate the political problems and grievances of the past and present, but that it structure a future living relationship in which the Canal and the U.S. presence are used to modernize Panama. They fear Torrijos would sacrifice this for short-term political gains.

1. Source: National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiation Files, Lot 81F1, Box 126, POL 33.3–2/Canal Treaty Negotiations/General, Jan–June 1976. Confidential. Drafted by Blacken. The meeting was held in Velasquez’ apartment.