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

145. Briefing Memorandum From Ambassador at Large Bunker and the Assistant Secretary of State for Inter-American Affairs (Shlaudeman) to Secretary Kissinger ¹

Washington, December 21, 1976.

Panama—The Latest Negotiating Round

Bunker returned on December 18 from his most recent negotiating round in Panama. The round met your limited purposes—it produced no surprises and yielded some progress in “clearing away the underbrush”.

The Panamanians were clearly pleased by the team’s presence. Indeed, in their eyes the process of meeting was perhaps the most important accomplishment of the round.

During the talks Panama displayed a flexibility, not apparent for some time, that is perhaps bred of its current economic and fiscal problems and consequent desire for a prompt treaty.

Bunker and other members of the team received strong signals that we would get what we wanted concerning a neutrality guarantee, long term protection of our security interests in the Canal and other US requirements if we could accept a treaty termination by the year 2000. Panama indicated a flexibility and willingness to accommodate our desires in other areas:

—They accepted our post-round draft communiqué (attachment)² in place of theirs with no real change.

—They accepted our October lands and waters position³ as the basis for further work on that issue. (The next step will be a technical team visit to Washington beginning January 10.)

—They appeared receptive to our informal ideas concerning the process for treaty drafting which would start at some still undetermined date.

—They agreed to begin technical discussions on two new subjects—functions which the canal operating entity will perform, and the treatment of selected non-military activities such as the Federal Aviation Agency and the Smithsonian Institute.

—They accepted most of our position concerning rights and privileges for Canal employees, but declined to join in a joint statement of reassurance for current employees.

Bunker judges that once we have gotten an affirmative signal from the President-elect we should rather quickly seize the opportunity presented by this apparent flexibility and present a package offer that covers all remaining issues.

1. Source: National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiation Files, Lot 81F1, Box 126, POL 33.3–2/Treaty Negotiations, July–Dec 1976. Confidential. Drafted by Wyrough.
2. Dated December 19; not printed.
3. See Document 138.