27. Telegram From the Embassy in Panama to the Mission in Geneva and the Department of State1

6811. Subject: Resumption of U.S.-Panama Treaty Negotiations. Ref: A) Panama 6482; B) Panama 6519.2 For Ambassador Bunker from Bell.

I. Summary—Introduction

1. As working-level representatives Ambassador Gonzalez Revilla and I agreed to and signed December 19 a set of eight principles, ad referendum to the chief negotiators. On Panama’s part the principles are as a practical matter ad referendum to no one since the Foreign Minister and the Chief of Government have both approved them personally.

2. From the following description you will note that during this negotiation Panama receded from its position on all points of major concern to the United States. That would seem to stand as additional evidence that Panama is seeking a new treaty arrangement on terms markedly more acceptable to the United States than any it has heretofore proposed.

3. Understandably the Panamanians are fearful they have accommodated the United States in the principles to an extent such that they will be charged publicly and privately with what in this country amounts to treason. Their fears are the greater for the fact that the opposition of economic interest groups to the regime is growing and so, in proportion, is the skittishness of the National Guard. They tell me that as a result it is now imperative for you to appear in Panama before January 9. Torrijos sent word that any unilateral action the United States might be contemplating would not suffice for his purposes in these circumstances.

II. Description of Agreed Principles

4. Principle One. Panama accepted verbatim the text of the United States’ second proposal.

Comment. Panama thereby receded from the “two-treaty” position under which one treaty abrogating the 1903 convention and thus restoring Panama’s sovereignty over the Canal Zone would have been con[Page 75]cluded in advance of another treaty granting new rights to the United States in the Canal Zone.

5. Principle Two. Panama had already accepted verbatim the text of the United States’ second proposal.

Comment. None.

6. Principle Three. Panama accepted verbatim the text of the United States’ second proposal.

Comment. Panama thereby appears to have receded from a position of general opposition to retention by the United States of certain jurisdictional functions in the Canal Zone, and from insistence that any jurisdictional functions Panama might permit the United States to retain should cease within a time period so brief as to be unacceptable to the United States.

7. Principle Four. Panama accepted the text of the United States’ second proposal with the following amendments:

A. Panama asked and I accepted that following the words “shall grant to the United States of America” there be inserted the phraseology “for the duration of the new interoceanic canal treaty and in accordance with what that treaty states.”

B. Panama receded from its insistence on placing the word “strictly” before the word “necessary” and I accepted, in substitution therefor, the phraseology “which may be.”

Comment. Panama acceded thereby to the United States’ position requiring reference to “defense” as well as to “protection” of the Canal; acceded to the United States’ position that control of airspace is requisite to adequate defense; and indicated by its willingness to eliminate the restrictive qualifier “strictly” that it is no longer intent on possessing ultimate authority over land usage in the Zone.

8. Principle Five. Panama accepted an offer on my part which altered the text of the second United States proposal to read as follows:

Quote The Republic of Panama shall have a just and equitable share of the benefits derived from the operation of the canal in its territory. It is recognized that the geographic position of its territory constitutes the principal resource of the Republic of Panama. End Quote.

Comment. Panama receded from its insistence on characterizing as a “natural resource” the geographic position of its territory, which would have had the effect of subjecting the United States to the confines of a United Nations Resolution asserting that a “natural resource” can be exploited under the ultimate control of the territorial sovereign. Panama also receded in effect from its position that the United States should make annual payments to Panama based not only on canal revenues but also on the value attributable to usage by the United States of its territory.

9. Principle Six. On no [Page 76] other point was Panama so adamant as on its opposition to inclusion of any language whatever which would accord the United States rights “to conduct related activities.” Therein, as Panama explained, it perceived “the perpetuation of the Southern Command, the commercial enterprises, and all the other things that have nothing to do with operating and defending a waterway and are utterly abhorrent to the Panamanian people.” Panama was not much less adamant, however, in opposing inclusion of language which would accord the United States not only the basic jurisdictional rights but also “privileges and immunities.” It perceived those words as indicative of a desire on the part of the United States to retain colonialist perquisites and trappings.

I accepted exclusion of “privileges and immunities”, since specification of them is hardly essential in a statement of principles and since the United States remains free to seek them in the negotiating process. Panama thereupon accepted my proposed language which grants to the United States the right to operate, maintain, protect and defend the canal “and to undertake any other specific activity related to those ends, as may be agreed upon in the treaty.”

Panama also objected vigorously to inclusion of rights for the United States to regulate “the passage of traffic” through the canal, but ultimately accepted phraseology permitting regulation of “the transit of ships.”

Panama asked that the statements referring to its participation in the administration of the canal be placed at the first rather than at the last of the principle, and I accepted that restructuring, as well as inclusion of phraseology asserting that Panama’s participation will be “in accordance with a procedure to be agreed upon in the treaty.”

Comment. Panama’s acceptance of the substance of the second United States proposal, taken in conjunction with its verbatim acceptance of Principle Two, would seem to remove any doubt that Panama is at last prepared to permit the United States to possess the basic rights it has been seeking for continued canal operation and defense.

Panama’s position that its participation in canal administration should be a “growing” one did not prevail.

10. Principle Seven. Panama accepted the verbatim text of the second United States proposal.

Comment. Panama thereby receded from the position that its armed forces should not only “participate” in canal protection and defense but also join in the “exercise of responsibilities” relating thereto. Thus the full rights and responsibilities for canal defense are preserved for the United States.

11. Principle Eight. In order to obtain Panamanian acceptance of the United States’ second proposals in Principles One, Three and Seven and of the “related activities” [Page 77] concept in Principle Six, and to foreclose Panama from language which would have diluted the United States’ right to expand the canal by making reference to an equal right for Panama, I offered and Panama accepted a rephrasing of Principle Eight which permits Panama some voice in the decision on expanding canal capacity, yet does not endow Panama with a veto power. The new text is as follows:

Quote The Republic of Panama and the United States of America agree to incorporate in the new treaty relating to the interoceanic canal provisions for new projects by the United States of America to expand capacity for international maritime traffic should they consider that necessary. End Quote.

Daniels
  1. Source: National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiation Files, Lot 81F1, Box 124, Treaty Negotiations, 1973. Secret; Immediate. Drafted and approved by Bell. Repeated to Governor Parker, USCINCSO, and USUN. Kissinger was en route to Geneva to attend the Middle East Peace Conference.
  2. See footnotes 2 and 4, Document 26.