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

139. Memorandum of Conversation¹

Panama City, November 2, 1976.

SUBJECT

• Bombings, Economics and Negotiations

PARTICIPANTS

• H.E. Doctor Carlos Lopez-Guevara, Foreign Ministry Treaty Adviser
• Mr. T. Elkin Taylor, Political Counselor, American Embassy, Panama

Our conversation naturally began with the mandatory speculations on the American elections. Soon thereafter it turned to the second most popular political subject in town—the recent bombings in the Canal Zone.² I said that the bombings were unfortunate for two reasons; 1) they were deplorable in themselves—whoever did them, and 2) exacerbated the existing state of mistrust and even hatred between American residents of the Canal Zone and Panamanians. Lopez-Guevara readily agreed, adding that he expected further violence, probably as a form of revenge. He said that he was not alone among Panamanians in expecting an outbreak of bombings in Panama City.

I said that the timing of the bombings was unfortunate in a number of respects. I asked if he were familiar with the remarks which “a certain member of the Panamanian negotiating team” had made with respect to the future of U.S.-Panamanian relations.³ He responded that he was aware that Romulo Escobar Bethancourt had spoken about this subject to members of the American negotiating team, but that Escobar’s remarks had been misinterpreted, he thought. “As I told Bill Jorden last night,” Escobar only informed Morey Bell of his view that the chief negotiators should follow the example of General Dolvin in making proposals, trying them out in Washington and then coming back with new proposals.

I responded that Escobar may indeed have said such things to Minister Bell, but he also indicated that the Panamanian presentation in the most recent round was a lengthy farewell and that the U.S. could now expect trouble. I added that there was a danger that some Americans would add the ‘2’ of Escobar’s statement with the ‘2’ of the bombings in the Zone and come up with a ‘4’ which, however unjustified, could damage the interests of both Panama and the U.S. I noted that several members of the American team had heard Escobar’s remarks on four different occasions, and they all agreed what he had said.

Lopez-Guevara then went into a defense of Escobar. “I used to have personal reasons for disliking Romulo”, but that is now over. It is important for the Panamanian team to continue to have “people like Romulo and Ahumada”. “They have Torrijos’ ear,” he said, and can “make decisions”—something which other negotiators presumably could not.

He asked if I had had any reports on the recent cabinet meetings at which President Lakas raised this general issue of the negotiations. I said I had not. He said that Lakas “supported Aquilino’s position,” i.e., continuation of the negotiations on the same basis they have been taking place. Lopez said that he (Lopez) was of the same mind.

In answer to a question, Lopez said that he is very pessimistic about the progress of the negotiations. He said that both sides need to take a much bolder and imaginative position, reflecting a determination to complete a treaty by the summer of 1977. He expressed contempt for a number of the U.S. proposals in the recent round. He said the “employees’ bill of rights” put forward by the U.S. had already been rejected and furthermore did not respond to the real problems of PanCanal’s employees. I said that I thought that Minister Bell had gotten a good feel for the views of PanCanal employees during his recent visit. Lopez-Guevara also threw cold water on the idea of a new conceptual agreement. “Conceptual agreements never lead anywhere,” he said. “If we get a new conceptual agreement, we are still at kilometer zero.” For example, he said, a conceptual agreement is likely to say something like: “The entity which will run the canal shall be a U.S. Government agency or otherwise.” It is now time to start writing a treaty,” he said. I objected that much of the spadework for difficult and intricate problems such as the functions of the entity and employee rights had not yet been done. He acknowledged this with a shrug.

The conversation turned to the economic situation in Panama. I observed that the situation was not good. Lopez-Guevara added, “And getting worse.” He criticized Minister of Planning and Economic Policy Barletta for “squandering” Panama’s money on long-range high-cost projects of dubious value. He also criticized, though by implication, statist thinking by many leaders of the Panamanian Government.

In summary, Lopez-Guevara is very pessimistic about the future public order situation, the negotiations and the economy.

1. Source: National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiations, Lot 81F1, Box 126, POL 33.–2/Treaty Negotiations, July–Dec 1976. Confidential. Drafted by Taylor on November 5. The meeting took place at the El Panama Hotel.
2. The bombings in the Canal Zone took place on October 31 and November 1. There were no injuries. The first bomb damaged the car of William Drummond, a Panama Canal Zone employee who had filed suit against President Ford and Secretary Kissinger to halt the treaty negotiations. (“Bomb Wrecks Car in Canal Zone; Owner Sued to Bar Canal Deal,” The New York Times, November 1, 1976, p. 4) See also Document 140.
3. See Document 137.