2. Briefing Memorandum From the Assistant Secretary of State for
Inter-American Affairs (Meyer) to
Secretary of State Rogers
1
Washington, January 17, 1973.
Panama Canal Treaty Negotiations
In accordance with your request,2
there is attached a talking points paper on the Panama Canal Treaty
negotiations.
Tab A
Talking Points3
After an encouraging start in mid-1971 followed by a year of relative
inactivity, the Panama Canal Treaty negotiations retrogressed when the
Panamanians presented to Ambassador Anderson their detailed position during their December
4–6, 1972 meeting in Panama City. The Panamanian position is less
forthcoming and more inflexible than the position Panama presented in
January 1971 and reveals a wide gap between us on almost all points (a
comparison of positions is attached).4 Although Foreign Minister
Tack has stated that
Panama’s position is negotiable, the substantive differences and the
atmosphere of lack of trust that exists over the canal treaty issue make
the disparity unbridgeable under present circumstances.
On December 12, Panama took the unprecedented step of publicizing both
its and the U.S. negotiating positions.5 We can expect Panama [Page 3] to pursue its quest for full independence by
continuing to seek to elicit public and international support for the
elimination of the “U.S. colonial and military enclaves in its
territory,” the next occasion being at the U.N. Security Council meeting
to be held in mid-March in Panama. The anachronistic terms of the 1903
Convention together with our prominent military presence in Panama
render us vulnerable. A complicating factor is that relations between
Canal Zone agencies and the Panamanian Government, which have been
brittle for years, have deteriorated to the point where there is almost
no communication between the heads of these agencies and top Panamanian
officials.
Failure to achieve some substantive improvement soon in its canal treaty
relations will probably force Panama to take further actions (which
could end in violence) designed to dramatize its situation and to
pressure us into meeting its terms. Were we to offer to make a few
significant changes in our extra-territorial rights and military
presence in Panama without awaiting conclusion of a new treaty, while
continuing treaty negotiations on other issues, we would relieve
pressure in Panama and improve our posture with the international
community, without adversely affecting our ability to operate and defend
the Canal or without materially impairing our bargaining position.
Three changes should be made now which would help achieve these
goals.
1. Elimination of Extraterritoriality
The 1903 Treaty allows the U.S. to exercise criminal and civil
jurisdiction over Panamanians, third-country nations and private
business in the Zone—the major remaining case where one nation holds
extraterritorial rights in perpetuity in another’s territory. Perhaps no
other treaty right so infuriates Panama as our jurisdiction over its
nationals. We should obtain authorization from the Congress to conclude
and put into effect an agreement to transfer to Panama civil and
criminal jurisdiction over Panamanians and third country nationals as
well as civil jurisdiction over private businesses and organizations in
the Canal Zone. Panama in turn should agree to prosecute Panamanians and
third country nationals who commit offenses in the Canal Zone.
2. Transfer of the Southern Command (SOUTHCOM) from Panama
General Torrijos has repeatedly
requested that SOUTHCOM be removed
from Panama because he finds such an imposing U.S. military presence
politically difficult to accept and almost impossible to deal with on
matters relating to defense of the canal, because the rank structure is
so disproportionate and the Command is such a large structure compared
to the Guardia Nacional. In addition, Panama argues that military
activities in the Canal Zone unrelated to canal defense are not
authorized by the 1903 Convention and violate the treaty requirement
that the Canal “shall be neutral in perpetuity”. [Page 4] Although we have not accepted this position it would
be persuasive to large segments of world opinion. Transfer of SOUTHCOM to the U.S., while retaining
the successful military schools in the Canal Zone, would be welcomed by
General Torrijos, would create
a more propitious climate for treaty negotiations, would continue to
enable us to respond to requests for assistance from Latin American
nations, and would not impair our military position with respect to
canal defense.
3. Demilitarization of the Canal Zone Government and
Panama Canal Company
Traditionally, the Corps of Engineers has furnished the President of the
Canal Company (who is also the Governor) and runs the canal. A Canal
Zone government headed by a U.S. general officer responsive to the
Department of Defense is regarded by the Panamanians as an offensive
symbol of colonialism which tends to perpetuate itself. The key
objective in the Panamanian position is the complete elimination of the
Canal Zone Government. This should only be accomplished in a new treaty,
but we can reduce the tensions and improve communications if the
Governor is a civilian and the canal operates under the civilian
administration of the Department of Transportation which already has the
St. Lawrence Seaway. The Congress already handles the budgetary aspects
of the canal in the Transportation Subcommittees of the Appropriations
Committees. There is no legal impediment to the appointment of a
civilian as President of the Canal Company to act also as Governor.
Transfer of the Canal agencies to the Department of Transportation
would, however, probably require Congressional acquiescence in a
reorganization plan.
Tab B
Comparison of Positions6
1. Duration. In response to our position to drop
perpetuity and operate the lock canal for fifty years and a sea-level
canal for forty additional years, Panama offers 22 years on the lock
canal and a willingness to negotiate a sea-level canal.
2. Jurisdiction. In reply to our offer to return
most criminal and civil jurisdiction in 15 years, Panama wants immediate
jurisdiction over [Page 5] Panamanians and
over all Americans within five years. Panama also wants jurisdiction on
military bases.
3. Administration. We are seeking almost 100
percent control over the Canal administration as a U.S. agency but
Panama wants effective participation in canal operation including
control over labor relations.
4. Land and Water. We are willing to return about
30 percent of the land and establish a joint system for identifying
additional areas for Panamanian use under U.S. control, but Panama wants
it all returned and will then designate areas in the treaty for U.S.
use.
5. Defense. We want to retain the decisive voice
on defense but Panama wants primary responsibility for protecting the
lock canal in peacetime and proposes joint agreement on defense measures
in time of war. Panama is willing to accept a U.S. role for protection
of the lock canal but wants no U.S. forces to defend a sea-level
canal.
6. Neutrality. Panama wants effective neutrality
of the canal endorsed by the U.N. but established and controlled by
Panama including the decision whether U.S. forces may be used to enforce
it. It also insists that SOUTHCOM
be removed since it considers its presence a violation of the 1903
Convention. We wish to continue to be able to deny use of the canal to
an enemy in time of war.
7. Flags. Panama wants no flags in the Canal Zone
or on bases except the Panamanian flag.
8. Compensation. We have offered a formula similar
to that of 1967, which would give Panama about $25 million annually. We
understand that Panama wants substantially more based upon a 200 percent
toll increase and 50 percent of gross revenues.
9. Expansion. The only advance in the Panamanian
position over the past was an expression of willingness to grant a
concession for a sea-level canal if the U.S. decided within five years
to build it where the present canal is now located.
