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

129. Memorandum of Conversation¹

Panama City, July 15, 1976, 2:30 p.m.

SUBJECT

• Internal Atmosphere of Panamanian Treaty Negotiating Group

PARTICIPANTS

• Dr. Flavio Velasquez, member of the Panamanian negotiating group and Economic Advisor to the Foreign Ministry
• Dr. Omar Jaen, member of the Panamanian negotiating group, Foreign Ministry
• Mr. Sherman N. Hinson, American Embassy, Panama

Velasquez and Jaen, Panamanian members of the Canal treaty negotiations technical sub-group on lands and waters, requested a private meeting with the reporting officer to discuss their current fact-finding exercise in the Canal Zone and future activities of the sub-group. Their subsequent request, to be held in strictest confidence, that the United States Negotiators invite them to Washington, is reported separately by telegram.²

After outlining this proposal, however, Velasquez said he wished also to describe some additional background on its genesis and some commanding reasons why certain Panamanian officials, of whom he was one, considered it most urgent, in the interests of both sides, that the United States follow this course.

He then spoke of the prevailing general atmosphere in Panama, and of his view of the current government, in terms similar to those which he had used shortly before in conversation with Mr. May (Memcon of July 15)³ but even less qualified and more pessimistic in tone. This government was confronting a host of internal problems which could threaten its very existence but with which it was totally unable to cope. Torrijos had virtually ceased making decisions essential to the country, and no one else seemed capable of doing so. Substantial sectors were aware of the government’s growing incapacity and were increasingly alienated from it; the government itself was aware of this but seemed powerless to arrest or reverse this decline in confidence in its capability to command the support of the population, or to govern effectively.

There was, Velasquez said, a similar public perception of drift regarding the treaty negotiations which had Torrijos, and the “political group” which advised him, in a box. All concerned on the Panamanian side appreciated that it was unrealistic to expect substantial progress at the political level on the remaining issues before the U.S. election. However, there was also a general appreciation that the growing uncertainty in this country about the negotiations, and about the government in general, might therefore result in the government’s running out of time. In this atmosphere, actions by Torrijos and the “political group” could become unpredictable.

We must understand, Velasquez stressed, that there were forces within Panama essentially hostile to the sort of treaty which the U.S. negotiators and at least some of their Panamanian counterparts were seeking to reach, and that at this time these forces were preponderant within the government and in their advice to Torrijos.

COMMENT: Velasquez has frequently stated to Embassy officers his personal belief that Torrijos and some of those around him do not really want a new treaty because the treaty would initiate fundamental changes in the society which Torrijos could no longer control. The reporting officer does not accept this view; but in the context of this conversation, this appears to be a distinction without essential significance. Velasquez’ real point was that the group for whom he represented himself as speaking, identified below, was outclassed by a group with divergent and, in his view, less responsible ideas. END COMMENT.

The Panamanian members of the lands and waters technical sub-group, and other officials involved in the technical aspects of the treaty negotiations, had consistently advised their American counterparts of their sincere desire that technical discussions and progress at this level continue regardless of what might transpire at the political level of the negotiations. Velasquez stated that, after various recent conversations with other officials of similar persuasion, he wished to reiterate their conviction that it was absolutely necessary that discussion of the lands and waters issue at the technical level continue uninterrupted regardless of whatever pauses, coolings or other developments (at one point, he used the word “rupture”) took place at the political level, or even in overall political relations between the two countries.

It was for this reason that he and those of similar persuasion felt so strongly that the United States should respond positively to their suggestion that further technical discussions continue in Washington. At such time as this group had exhausted its ground on the lands and waters issue, he suggested that it might continue to be active by transforming itself into a renewed sub-group (analogous to the one which was briefly active in April 1975) on administration and on transitional steps for Panamanian participation in the operation of the Canal.⁴ Another possibility for technical-level discussions was the vexed question of employees, and still another was the future status of agencies other than PanCanal or the military whose continuation in essentially their present form was not substantially contentious but for whom some arrangements must be worked out. Technical progress on issues such as these was necessary and desirable in itself, Velasquez said, but what was even more important was that the process of technical discussion itself between the two sides continue without interruption.

Toward the end of the conversation, and without prompting by the reporting officer, Velasquez named as among those sharing the general perceptions which he had voiced, his colleague Jaen; lands and waters group leader Edwin Fabrega; treaty adviser Carlos Lopez-Guevara; Panamanian Chief Negotiator Boyd; and President Lakas.

COMMENT: This is the first time recently that Velasquez has been so bluntly pessimistic about the current state of the Panamanian government and its policy toward the negotiations in the presence of another Panamanian official. After completing his exposition, Velasquez referred to the fact that Jaen had said very little during the conversation and characterized him with a slight smile as “un hombre muy prudente”—“maybe more prudent that I am”. Nevertheless, Velasquez said, Jaen shared the opinions he had voiced, and he had spoken on Jaen’s behalf as well. Jaen indicated assent.

It is not at all clear to the reporting officer whether Velasquez was trying to indicate that he knew that something adverse to the negotiations would take place, or that he was simply apprehensive that something, in the current atmosphere, might take place. In either event, the reporting officer interprets him as indicating by this conversation that he and those others whom he named—a group which includes most of the ‘moderates’ with access to Torrijos on the treaty issue—could do little to influence any such developments at this time. Velasquez’ insistence on this group’s perception of need for “technical” discussions during a period in which there may be “political” developments which they may not like would provide at least an appearance of continued movement toward the treaty they want. In addition, however, it smacks of trying to create for themselves a psychological bomb shelter against an adverse contingency which they apparently perceive as possible but also see themselves as unable otherwise to prevent. END COMMENT.

1. Source: National Archives, RG 84, American Embassy, Panama, Lot 81F1, Panama Canal Treaty Negotiation Files, Box 126, POL 33.3–2/Lands & Water, 1976. Secret; Limdis. Drafted by Hinson. The meeting took place in the Panamanian Treaty Advisory Group offices.
2. In telegram 5113 from Panama City, July 22, the Embassy reported that Velasquez and Jaen had requested another round of technical negotiations in Washington “on or about September 10.” (National Archives, RG 59, Central Foreign Policy File, D760282–0777) In an August 16 memorandum to Scowcroft, Lazar recommended a new round of talks in Panama on September 17. Scowcroft disapproved the recommendation and wrote: “Based on what I know now and Torrijos’s behavior at Colombo [at the Non-Aligned Summit] I see no reason to push off to a new round of talks.” (Ford Library, National Security Adviser, NSC Latin American Affairs Staff Files, 1974–77, Box 7, Panama Canal Treaty Negotiations [8]) Telegram 3069 from Colombo, August 18, transmitted the text of Torrijos’ August 17 speech, which was sharply critical of the “colonial enclave” in the “heart of our homeland.” The summit’s final declaration on Panama and the Canal is in telegram 3135 from Colombo, August 21. (National Archives, RG 59, Central Foreign Policy Files, D760317–0206 and D760320–1045)
3. Not found.
4. In telegram 2113 from Panama City, April 14, 1975, the Embassy reported that a joint working group session, lasting from April 7 to April 11 had taken place, involving Fabrega, Velasquez, Jaime Arias, Blacken, Conley, and Smith. The sessions discussed, among other topics, the creation of the post-treaty Canal entity and the administration of the Canal. (National Archives, RG 59, Central Foreign Policy File, D750129–0268)