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

138. Memorandum From the Deputy Negotiator from the Department of Defense (Dolvin) to the Deputy Secretary of Defense (Clements), the Secretary of the Army (Hoffmann), the Chairman of the Joint Chiefs of Staff (Brown) and the Assistant Secretary of Defense for International Security Affairs (McAuliffe)¹

Washington, October 27, 1976.

SUBJECT

• October 1976 Negotiating Round, Panama Canal Treaty Negotiations

1. General. During the period 19–26 October 1976, I traveled to Panama with the United States negotiating team for the purpose of resuming discussions with the Panamanians on the unresolved issues in the negotiations. There were, in all, three meetings of the two full teams, along with several technical-level meetings on the issue of lands and waters.²

2. Negotiating Sessions

a. At the first negotiating session the Panamanian team presented a lengthy statement of their positions on the major issues. In this statement the Panamanian team reiterated their insistence on the year 2000 as the termination date “for all purposes” of the new treaty.³ They acknowledged that the United States team was not in a position to address the issue of duration and expressed their willingness to proceed with discussions on other issues but only with the understanding that anything Panama might propose or accept in principle would be subject to ultimate agreement by the United States that the treaty will have a term of no longer than the year 2000. The United States team merely accepted the statement without substantive comment.

b. At the second negotiating session the United States team did not comment on the details of the Panamanian statement. Rather, the United States team offered only a general response. In addition, the issues of canal employees and non-military activities were discussed.

(1) Response to Panama’s Statement. The United States team emphasized that the platforms of both political parties in the United States supported the negotiations, that the next move in the process of seeking a formula for accommodation rests with the United States, that at the next round the United States team hopes to present their views on how the interests of both nations can be accommodated, and that it should not be inferred from the response of the United States team that the United States accepts the critical component of Panama’s statement—which was termination of the new treaty for all purposes at the year 2000. The United States team then turned the meeting to a discussion of two issues—the status and rights of United States national employees of the new entity and certain non-military activities that are presently conducted in the Canal Zone.

(2) Canal Employees. On the issue of canal employees, the United States team urged early resolution of this issue in the negotiations in order that certain meaningful assurances could be made to present employees of the Panama Canal Company/Canal Zone Government concerning their future situation under a new treaty with Panama. In this connection, the United States team presented its position on this issue, which is that United States national employees of the entity should enjoy the same rights and privileges as the civilian component under the initialed Status of Forces Agreement—to include the area of primary rights to exercise criminal jurisdiction. This represented a hardening of the position the negotiators had presented since November 1975⁴ and a return to the position presented by the United States team on this issue in September 1975.⁵ The Panamanian team agreed to address this issue on a priority basis, and, in this connection, the United States team presented two sets of draft threshold agreement language that embodied its position for Panama’s consideration. In addition, the United States team presented to the Panamanian negotiators a list of assurances designed for canal employees, for Panama’s consideration, and asked that Panama agree to these assurances in order that they could be made public as soon as possible. Panama accepted all three papers and agreed to consider them carefully and respond at the next round.

(3) Non-Military Activities. On the issue of non-military activities, which are those activities of the United States Government presently performed in the Canal Zone and other than Panama Canal Company/Canal Zone Government and military activities, the United States team proposed that the question of these activities be addressed by a technical group composed of one member from the United States Embassy in Panama and one or more Government of Panama representatives. This technical group would begin meeting as soon as possible to review the special circumstances and problems posed for each individual agency by a new Canal treaty that eliminates the Canal Zone and thus those agencies’ legal basis for operating. The Panamanians agreed that such a step would be desirable and the United States team presented a draft of the terms of reference for such a technical group for Panama’s consideration.

c. The unofficial negotiators lands and waters position was presented to the Panamanian team on 25 October at the final negotiating session. The package provided the Panamanians consisted of: (1) a map; (2) a description of each land and waters parcel; (3) terms for administration of the military areas of coordination; and (4) United States land and water use rights for the operation, maintenance, and sanitation of the Canal.

d. The United States team presented a detailed briefing on the land and waters position to the full Panamanian team. General Dolvin’s briefing emphasized the following fundamental aspects of the United States position:

(1) The position is “what if”, does not represent any approved United States position, and goes beyond our Government’s guidance and the negotiators’ authority.

(2) This position represents a major concession for the United States.

(3) Ambassador Bunker will expect corresponding accommodations by Panama on issues the United States negotiators feel are important.

(4) Without such concessions, it will not be approved in Washington.

(5) This position assumes that the defense of the Canal will be carried out jointly by Panamanian and United States Forces from whatever areas are required in the Republic of Panama.

After a two-hour description of the package, General Dolvin concluded by suggesting a careful review of the position followed by technical level meetings in Panama. Minister Boyd’s response was noncommittal. He did ask a number of specific questions, some of which appeared to be politically motivated.

3. Summary. The attitude of the Panamanians was cool and completely official in contrast to a more relaxed, informal attitude during previous negotiating sessions. In part, this reflects the serious economic situation in Panama. The Panamanians consider progress on a new treaty as an essential ingredient for investor confidence needed to improve the economy.⁶

Welborn G. Dolvin Lieutenant General, USA (Ret) Deputy Negotiator from the Department of Defense for the Panama Canal Negotiations

1. Source: National Archives, RG 218, Papers of George Brown, Box 48, 820 (Panama) Bulky Jan 1976–31 May 1977. Confidential. The memorandum was forwarded to the addressees on October 27 by Lippert who briefly summarized it. A note in an unknown hand next to Brown’s on Lippert’s memorandum name reads: “has been briefed.” (Ibid.)
2. See footnote 1, Document 137.
3. See footnote 2, Document 137.
4. See Documents 104 and 105.
5. See Document 99.
6. Bell and Jorden sent their appraisal of the Panamanian perspective on the October round of negotiations in telegram 7438 from Panama City, October 40. (National Archives, RG 59, Central Foreign Policy File, D760405–0813)