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

18. Memorandum From the Special Representative for Panama Canal Treaty Negotiations (Ward) to Ambassador at Large Bunker¹

Washington, August 23, 1973.

SUBJECT

• Panama Canal Treaty Negotiations

The attached intelligence report is in tune with what we have been seeing in Panama for 18 months.² Paragraph 2 indicates that in the next round of negotiations Panama intends to reiterate its basic position which is the same as, or harder than, the position which was taken at the start. This reflects Foreign Minister Tack’s views and a reluctance of officials in Panama to take the responsibility for recommending any concessions on the Panamanian side. Throughout the negotiations, in fact, despite several changes of position by the US, Panama has never definitively changed its position except in trivial respects.³

After giving us a drubbing at the Security Council meeting the Panamanians may have expected us to buckle under the pressure and offer them a number of concessions which we had theretofore refused to give. Until Secretary Roger’s letter of August 6, however, we did not even reply to their suggestions about further negotiations and they have recently become rather nervous about the situation. Nonetheless they will approach the new round of the negotiations with the hope that we will have changed our offer in their favor and they have made public statements that this may occur. Some reports suggest that they believe the long delay in the negotiations has resulted from deliberations concerning the alteration of our offer and some may view your appointment as a signal of a new policy more favorable to Panama.

Policy deliberations have indeed been underway but the result of them has not been a recommendation that new concessions should forthwith be offered. The Under Secretaries Committee paper which reviews our policy does not recommend Option A—the option which would enlarge our negotiating latitude and move us substantially toward Panama’s position.⁴ My own view is that if any changes are to be made in the US position they should be made in response to concessions by Panama that really advance the possibilities of a full settlement.

Although the Under Secretaries Committee memorandum does not recommend any enlargement of the negotiating authority, there is some unused authority remaining, as follows:

1. Duration—essentially no additional authority.

2. Land—broad authority, but not much additional land has been cleared for release with the Pentagon or Canal Company.

3. Jurisdiction—broad authority remaining, but this is a touchy one in Congress.

4. Payment to Panama—broad authority remaining, but significant increases could raise problems in Congress.

5. Expansion—essentially no additional authority.

6. Defense—possibly some latitude—situation is vague.

Our current assessment is that even if we made all of the additional concessions presently authorized by the President,⁵ the gap between the US and Panamanian positions would still be quite wide.

Paragraph 2 states the source’s view that there will be no modification in the Panamanian position until Panama has assessed our reaction to its December statement of position. Paragraph 3 alludes to Torrijos’ chronic inability to make up his mind on the treaty issue. In view of these suggestions, which are well in accord with our past experience, and our general knowledge that Panama is worried about the delay and its own conduct at the Security Council meeting, I think the following thoughts should be conveyed:

1. We cannot accept Panama’s demands that the US give up the canal by the year 2000.

2. We will have to retain certain limited jurisdictional and land use control rights for the duration of the treaty.

3. We will need the unilateral right to defend the canal and US personnel and facilities—without asking prior consent of Panama.

4. Negotiations are more likely to succeed if Panama does not simply repeat its original position. We need compromise proposals and a willingness to express definitive agreement on detailed treaty provisions.

Perhaps there will be some movement in the Panamanian position after it is recognized that the Security Council events have not caused a change in our perception of how this matter can best be settled.

1. Source: National Archives, RG 59, Ambassador Bunker’s Correspondence, Lot 78D300, Box 3, General. Secret.
2. The CIA Intelligence Report, dated August 17, is attached but not printed.
3. To cope with this situation I have sought to give the Panamanian negotiators an idea from hints and suggestions as to what over-all settlement might work with us. This would permit them to go back to their own government and, without recommending concessions, notify Torrijos of what kind of a deal is possible. Torrijos could then himself take the initiative and tell the negotiators to close. Obviously this has not worked yet. [Footnote is in the original.]
4. The final September 5 paper, NSC–U/SM–136A, is in the National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–266, Under Secretaries Committee Memorandum Files, Under Secretaries Study Memoranda U/SM 136 [2 of 2]. The paper presented four options for negotiation: A) continue to negotiate seriously, with a view to what changes in the U.S. position would result in a treaty; B) continue to negotiate seriously without changing the existing negotiating guidelines; C) continue to negotiate seriously, but make unilateral changes that did not require Congressional approval in order to improve relations with Panama, and present to Congress changes that would not disturb the status quo in the Canal Zone; and D) negotiating seriously without making changes to the existing offer, proceeding to make the unilateral changes in the Canal Zone already offered to Panama in the negotiations, and presenting to Congress unilateral changes that would change the status quo in the Canal Zone. The Department of State favored option B.
5. The Presidential guidelines for negotiating with Panama were NSDM 64, June 5, 1970; NSDM 115, June 24, 1971; and NSDM 131, September 13, 1971, published in Foreign Relations, 1969–1976, vol. E–10, Documents on American Republics, 1969–1973, Documents 536, 549, and 555. Peet provided an overview of the guidelines in a September 12 memorandum to Schlesinger. (Washington National Records Center, RG 330, OSD Files, FRC 330–78–0001, Panama 821 1973)