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

19. Briefing Memorandum From the Assistant Secretary of State for Inter-American Affairs (Kubisch) to the Chairman of the National Security Council Under Secretaries Committee (Rush)¹

Washington, October 2, 1973.

USC Meeting on the Panama Canal Treaty Negotiations, October 4, 3:00 p.m.

Agenda Item 1—Canal Treaty Negotiations (NSC–U/SM–136A)

All Committee members have now concurred in, or commented on, the IG/ARA review:

—CIA, Treasury, USIA, Commerce and the NSC concurred.

—OMB concurred, but had some objection to the proposed unilateral action which would increase substantially the annuity we pay to Panama.

—Of the three Defense Department components, the JCS and Army concurred. OSD/ISA was unwilling to commit itself to recommended Option D,² believing that to do so would be to offer Panama a major bargaining chip in the negotiations.

Unexpectedly, Secretary of the Army Callaway requested a meeting of the Under Secretaries Committee. Defense Department officials have given us—reluctantly—only the sketchiest idea of the issues they will raise, partly because they are still negotiating internally.

Apparently the original purpose for requesting a meeting was to emphasize the importance the Army attaches to Ambassador Bunker receiving the concurrence of the Washington agencies concerned prior to implementing any of the unilateral actions which the IG/ARA paper³ suggests that the President be asked to approve. (We do not know the reason for this but surmise that the Army is concerned at the possibility of an adverse psychological impact on Canal Zone residents were the unilateral actions to be implemented in a piece-meal fashion.)

Once you had agreed to the USC meeting, OSD/ISA perceived an opportunity to press its case against recommended Option D. We understand that the Office of the Secretary of the Army has been persuaded by OSD/ISA to reverse its concurrence for Option D, given at the Inter-Agency Group meeting on August 28. The JCS is apparently also being pressured to change its approval so that three Defense Department entities can present a united front at the Under Secretaries meeting.

We understand indirectly that the opposition of Ambassador Hill and Army Secretary Callaway (and perhaps Deputy Secretary Clements) to Option D is based on their concern at the erosion of U.S. power positions around the world. Evidently they hold that the Canal Zone is one position which the U.S. has the force, and the legality, to retain, and that the unilateral actions proposed in Option D would diminish the U.S. capacity to exercise sovereign rights in the Zone, with a consequent distinct erosion of our position there.

Thus it is possible that the Defense representatives will try to persuade the Committee to back away from Option D and instead recommend Option C to the President, or to recommend a watered-down version of Option D.

ARA believes we must firmly resist efforts to move away from Option D. The treaty negotiation will be protracted and difficult, and significant changes in the nature of our presence in Panama as proposed in Option D are needed in the interim to (a) improve the negotiating climate by encouraging Panama to be forthcoming and (b) lessen our “colonialist” image and thereby reduce international criticism.

Recommendations:

1. If a Defense representative tries to use the meeting to obtain a more explicit understanding that Ambassador Bunker must obtain prior concurrence before offering to Panama the unilateral actions contemplated in Option D, we recommend that you

(a) Observe that the paper as written already calls for prior concurrence, and also acknowledges the need for implementing the actions so as to minimize their impact on Zone residents; and

(b) Suggest that the Committee agree to make “particular record” of this concern.

2. If the Defense components urge the Committee to change the recommendation for the President from Option D to Option C, or to a watered-down version of Option D, we recommend that you

(a) Ask the State representative to restate briefly the case for Option D;

(b) Invite Ambassador Bunker to comment;

(c) Inquire whether any agency apart from Defense has changed its view with respect to Option D and, if that is not the case,

(d) Note that the consensus remains in favor of Option D and that we are encouraged to submit disagreements to the highest level of this government, and invite Defense to submit a formal dissenting statement to accompany the Memorandum to the President.

3. If Defense representatives, in support of their desire to back away from Option D, speak of the need to prevent erosion of our few remaining power positions abroad and cite the Canal Zone as a prime example, we recommend that you comment as follows:

(a) The modern world does not accept that one nation should exercise perpetual extraterritoriality—backed by military force—in another’s territory. The President was surely recognizing that fact when he ordered resumption of negotiations with Panama.

(b) The situation in Panama is such that we should give up some rights and properties—that is, some attributes of sovereignty—for which we no longer have any need, and which cost us something to preserve, in order to be able to retain the sovereign rights we still need since they are critical to operation and defense of the Canal for a further extended period.

Agenda Item 2—Civilianization of Canal Zone Governorship (NSC– U/SM–136B)⁴

State favored the selection of a civilian as the next Governor of the Canal Zone, while Defense recommended that the President continue to look to the Army Corps of Engineers as the primary source for qualified candidates for Governor. State’s position was supported by CIA, Treasury, USIA, OMB, Commerce, and the NSC. Accordingly, the proposed Memorandum to the President from the Under Secretaries Committee recommended that

“. . . when a successor to the present Governor is considered, attention be given to the possibility of appointing a qualified civilian as his successor.”

When queried last week the Department of Commerce, while concurring with State’s position, suggested orally that this recommendation be strengthened to state categorically that the next Governor should be a civilian. We do not know whether Commerce will press its point of view at this meeting. There are no indications that Defense will raise the matter at this meeting. We would prefer that the issue not be reopened for discussion and that the proposed recommendation be adopted as is.

Recommendation:

1. If Commerce presses its point, we recommend that you state that the present language seems broad enough to embrace Commerce’s position and provides for more flexible consideration of the question at the appropriate time.

Agenda Item 3 (ARA Suggestion)—Additional Points: SOUTHCOM and the Bunker Negotiation

During the meeting we believe it would be useful for you to make two additional points.

SOUTHCOM

Since the issue of SOUTHCOM’s locale as contemplated under Option D is a major one which is now being addressed by the USC/IG–ARA, it would be useful for you to give a status report and at the same time underscore its importance. This would serve to remind those who would prefer to see this issue fade away that it is very much alive and must be addressed.

The deadline for presentation of the study to the Under Secretaries Committee is October 30. ARA has completed a good first draft. We are awaiting the Defense input.

The Bunker Negotiations

This meeting affords an opportunity to emphasize the importance of the negotiating mission entrusted to Ambassador Bunker by the President. You might ask him to describe his plans for consultation with the Congress and initiation of talks with Foreign Minister Tack.

In this context it would be helpful if you would also note that the purpose of the Memorandum to the President on negotiating strategy is not to limit or restrict the flexibility or freedom of action of our negotiator, but rather to facilitate his efforts by providing a set of actions which he can draw upon at his discretion. It is not the Committee’s function to insert itself into the negotiations themselves, nor to provide tactical suggestions on how and when these actions may best be employed in the negotiations. Within the constraints of presidential guidance, Ambassador Bunker must be free to find the basis for agreement with Panama.⁵

1. Source: National Archives, RG 59, Deputy Assistant Secretary, Subject and Country Files, 1969–75, Lot 76D110, Panama, POL, Treaty Negotiations, 1973. Secret. Drafted by Bell and ARA/PAN Deputy Director Patrick F. Morris.
2. Option D involved negotiating seriously with the Panamanians 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.
3. Not found.
4. An undated paper entitled “Civilianization of the Canal Zone Governorship” is in the Washington National Records Center, RG 330, OSD Files, FRC–78–0001, Panama 821 1973.
5. The Under Secretaries Committee meeting did not occur. In an October 4 memorandum to Scowcroft, Vallimarescu stated: “There is considerable discussion of and disagreement about Options B and C in the Negotiations paper” and “Secretary Rush feels that it is best to hold the meeting approximately two months from now, after Ambassador Bunker has had a chance to look at the situation.” No Under Secretaries Committee meeting about the four negotiating options was held in December 1973. (National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional File (H-Files), Box H–266, Under Secretaries Committee Memorandum Files, Under Secretaries Study Memoranda U/SM 136 [2 of 2])