29. Telegram From the Embassy in Panama to the Department of State1

112. For Secretary from Bunker. Subj: US-Panama Treaty Negotiations: January 6–7 Talks in Panama.

I. Introduction—Summary

This second engagement with the Panamanians on Contadora Island was brief but beneficial.

It relieved apprehension that the Panama negotiation was slipping on the scale of American foreign-policy priorities.

It accented the new “forthcoming” posture of the United States toward Panama, revealed to the Panamanians in the announcement from San Clemente December 28 of unilateral actions intended to modernize our operations in the Canal Zone.2 It permitted putting final touches to the eight “principles” which the Foreign Minister and I initialed as chief negotiators. They now await the approval of Ministers.

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I believe it also provided evidence available for your use in Mexico in that the “new dialogue” has been promptly initiated and promptly productive.3

It also provided agreement on a reasonable scenario for the conduct of future negotiations.

Lastly it led to confirmation that there is a negotiating momentum here which we ought not to allow to falter. I believe these developments in the shorter run will relieve some of the foreign pressures upon you, but they may create some domestic pressures. For the longer run they will make it easier to move into true treaty negotiation, but they should not obscure the difficulties of reconciling disparities between what I characterize as Panamanian and American nationalism on the issue of the Panama Canal.

II. Added Middle-East Responsibilities

My visit confirmed your message to the Foreign Minister from Cairo emphasizing that my additional responsibilities implied no diminution of your personal interest in the Panama negotiation, and on this count the Panamanians now seem content.4 They have accepted as entirely natural that once we complete the “joint statement of principles” exercise, the deputy negotiators should take over for a protracted period.

III. Unilateral U.S. Actions

The Panamanians were impressed at the December 28 announcement from San Clemente that the President will seek legislation delivering into Panamanian hands two airstrips in the Canal Zone and the authority to operate the lottery there.

I believe that announcement provides you with the first part of the two-part evidence you would have available for use in Mexico in February that the “new dialogue” with Latin America has been promptly initiated and as promptly productive.

You would be able to characterize these legislative requests as having derived from the frank, informal talks you asked me to under [Page 81] take with the Panamanians, fulfilling your October 5 commitment that no treaty arrangement in the Americas would be beyond examination.5

There was of course justification for proceeding with the unilateral actions in order to help General Torrijos keep his domestic political house tranquil while we negotiate. Yet it was the revelation of a new Panamanian flexibility of negotiation during my first visit here—confirmed during a subsequent visit of my deputy for Panama matters—which more than any other factor occasioned my recommendation to you that we proceed with the legislative requests.

IV. Agreement on Principles

The second part of the evidence would consist of the “Joint Statement” you plan to initial with Panama’s Foreign Minister. As you recall the deputy negotiators had worked out and initialed in mid-December a set of eight principles, ad referendum to the chief negotiators and, thereafter, to ministers.6 They reflect a position on Panama’s part not heretofore reserved; a willingness that the United States should continue to possess the attributes, some jurisdictional, central to operation and defense of the basic waterway.

What appears to be concessionary on the United States’ part is in fact a complex of movements we have been prepared to make for some time. These movements, such as enabling Panama’s “participation” in the administration and defense of the Canal, lie entirely within the existing Presidential guidelines and commit the United States to nothing except to work out the fashion of Panamanian participation in a new treaty.

It is interesting that Panama made still another concessionary gesture respecting the principles during this visit. In the deputies’ version of principle 8, dealing with the right of the United States ultimately to expand Canal capacity should it so desire, there had been incorporated phraseology which legal counsel in Washington feared could be interpreted as giving Panama too decisive a voice in a decision on Canal expansion and, hence, as contravening existing Presidential instructions. While I myself regarded the phraseology as suitably ambiguous, and in any case should certainly not have agreed to any dilution of this U.S. right when the moment of drafting of treaty articles arrived, mindful of counsels’ concerns, I suggested to the Foreign Minister alternative phraseology—previously cleared fully in Washington and preferred by the Department of Defense—to eliminate the ambiguity in our favor. That was not at all easy for him to accept, as Panama has always hoped for a strong measure of mutuality in the decision-making [Page 82] regarding Canal expansion. Moreover, it was politically most difficult for the Foreign Minister that I “reopened” the principles agreement at all. Torrijos and many other key private and public Panamanians had approved the deputies’ version, and the government was but two days away from the tenth anniversary on January 9 of the student riots a decade ago.

But he did accept it, though he added a few frills for Panamanian public consumption purposes to which I had no objection. He did so, it is worth noting, without seeking compensating U.S. concessions in the “package deal” of principles which I had reopened. The text of the new principle 8 is set out at the end of this message.

From the Minister’s acceptance and from conversations held on the subject I take it that Panama has no longer, if indeed it truly ever had, an intent seriously to circumscribe this U.S. right. Panama only does not wish to be left out in the cold respecting massive foreign construction activity on its territory and I must say I cannot fault it for that.

With that textual amendment we initialed the principles document in our capacities as chief negotiators and it now awaits ministerial-level approval.7

On the question of Congressional reaction, you will recall that I tested the mood of key members of both houses before my first visit to Panama, and again before the San Clemente announcement of the unilateral legislative requests. My impression thus far is that moderate opinion will prevail on Panama issues, provided of course that there is an adequacy of administration support.

Referring back to the “evidence” available for your possible use in Mexico, the fact that the two countries had been able in under two months to reach agreement through quiet bilateral conversation on principles critical to a new treaty; the fact that the agreement would surely be recognized to have resulted not from Panamanian extortion nor United States imposition but from compromising; and the fact that the principles could be read to indicate a shedding by the United States of the allegedly “colonialist” trappings in the Canal Zone—those facts might go far toward deflating the Latin American and other statesmen who have criticized the manner of our presence in the Zone and sought to multilateralize the Panama issue.

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V. Text of the “Joint Statement”

As for the “preamble” to the enumeration of the principles, I had thought we might keep it brief so as not excessively to raise Panamanian expectations nor American fears. I had also thought highly of Jack Kubisch’s suggestion that you and Foreign Minister Tack could then read individual statements at the moment of signature which would reflect the particular sentiments and policies of the two governments. Tack, for example, could speak of the principles as a milestone in the long march toward the perfection of Panama’s independence, and you could speak of them as not solely an operative act in the negotiation process but also as a guidepost to the way in which the United States wishes to move in this hemisphere.

I handed the Minister a draft text of a preamble (which had been cleared in Washington in a more extensive version), saying it represented “personal thoughts” only and requesting his comments. The Minister seemed to be attracted to this procedure, is studying the “thoughts”, and presumably will have editorial revisions to suggest.

Once he and I have some agreement on this statement, I shall forward it formally to you together with the “final” version of the principles and a suggested draft of the individual statement you might make.

VI. Scenario for the Future

I believe it fair to say from this last visit that there is now a negotiating momentum—substantive and, as importantly, psychological—which has not existed for a time and which should be sustained if this problem is to be settled amicably and in the not undiscernible future. That is especially so because, as is often the case in such expeditions, the momentum itself helps measurably to surmount quite difficult obstacles ahead.

And it is primarily for the United States to do the sustaining. Despite the rapport and trust which I take to have been created recently, the Panamanians remain a little doubting8 . . . A little in the “show me” frame of mind which years of fruitless negotiation and of general United States inattentiveness have induced; also, they will be subject to occasional fits of fear that in the negotiations the United States is, somehow or another, doing them in, and it will be necessary to tranquilize them. On occasion that may require somewhat more than constant reassurance that the United States does not have motives or goals in [Page 84] the negotiations which are not apparent from the American negotiators’ words. Accordingly I suggested to the Foreign Minister that following the announcement of the joint statement our deputies should begin meeting, in Panama City and Washington, to put some flesh on the bones of the eight principles. Once they had done so, identifying areas of agreement and disagreement, the Minister and I could meet again to negotiate our differences and approve the papers. Those would then stand as firm instructions for the drafting of actual treaty articles. The Minister agreed. He added that he would wish to return compliments by journeying to Washington for the next engagement.

VII. Principle 8

The initialed version reads as follows:

Begin Quote The Republic of Panama and the United States of America, recognizing the important services rendered by the interoceanic canal of Panama to international maritime traffic, and bearing in mind the possibility that the present Canal could become inadequate for said traffic, will agree bilaterally on provisions for new projects which will enlarge Canal capacity. Such provisions will be incorporated in the new treaty in accord with the concepts established in principle 2. End Quote.
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 791, Country Files, Latin America, Panama, Vol. 3, January 1972–August 1974. Secret; Immediate; Exdis. Repeated Priority to Governor Parker, USCINCSO, USUN, and the Mission in Geneva.
  2. On December 28, 1973, the White House announced that it would proceed with several unilateral actions to improve U.S.-Panamanian relations. See footnote 4, Document 28.
  3. Kissinger attended the Conference of Tlatelolco in Mexico City February 20–24 where he met with the Latin American Foreign Ministers. The conference was held to discuss the “New Dialogue” with Latin America that Kissinger had proposed at the United Nations in October 1973. The Declaration of Tlatelolco issued on February 24 “welcomed” the signing of the Kissinger-Tack Declaration of Principles. (Department of State Bulletin, March 18, 1974, pp. 262–264) See Document 32.
  4. Kissinger’s message has not been found. Bunker was named U.S. Representative to the Geneva Middle East Peace Conference. This added responsibility required him to postpone talks with Panama from December 27, 1973, to January 6, 1974. (Telegram 250666 to Panama City, December 27, 1973; National Archives, RG 59, Central Foreign Policy File, [no film number])
  5. See Document 21.
  6. See Document 27.
  7. The final text of the joint statement of principles is in the National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiation Files, Lot 81F1, Box 124, Treaty Negotiations, Jan–March 1974.
  8. In telegram 220 to Panama City, January 11, Sayre wrote: “Beneath the surface, a basic skepticism concerning U.S. intentions remains in some quarters, and the opposition is spreading charges of a sell-out by Torrijos.” (National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiation Files, Lot 81F1, Box 124, Treaty Negotiations, Jan–March 1974)