47. Telegram From the Embassy in Panama to the Department of State1
3750. S/S–O pass to the Secretary’s party for the Secretary from Bunker. Subj: U.S.-Panama Treaty Negotiations: Chief Negotiator Talks, Contadora Island, June 26–30, 1974.
I. Summary
I have reached agreement with Foreign Minister Tack on the first of the substantive issues to be taken up: Panama’s participation in the administration of the Canal. We are to form an operating partnership in which the United States retains control over the lifetime of the new treaty.
We plan two meetings during July between the chief negotiators and virtually continuous sessions of our deputies, and that should move us fairly far along the substantive negotiating road.
II.
For some months we have been preoccupied with creating the correct climate for this negotiation. A posture of confrontation had to be converted into one of accommodation; the general principles agreed upon; the specific points at issue between the parties identified. Now we are proceeding into substance.
The Panamanians had wished to take up first the issue of arrangements for Panama’s acquisition of jurisdiction over the Canal Zone (read “sovereignty”). But I preferred not to treat at the outset a matter which is of overriding importance to Panama and on which I have wide negotiating flexibility under the Presidential guidance. Hence I suggested the issue of Panama’s participation in the administration of the waterway (no. 6. of the eight “principles”), and they agree.
We proposed a set of concepts—the product of a joint State/Defense/Canal Company effort—under which the United States would retain effective control of Canal administration over the new treaty’s lifetime, yet which would permit Panama to begin participating in the administration immediately the treaty enters into force. That participation would increase during the treaty period so that Panama would be able to assume total control at its expiration.
[Page 133]Panamanians would be brought into and rise through the Panama Canal enterprise at all levels and in all functions, although in a staged fashion to allow for (a) psychological accommodations on both sides to what will be a markedly new way of life, (b) the necessary training of Panamanians, and (c) continual reassessment by the United States of whether its effective control is in any significant measure being vitiated by Panama’s increasing participation.
The Foreign Minister’s initial response was gratifying. He said he recognized that the United States had made a generous offer and that it was an extremely pragmatic one.
He emphasized two points. First, Panamanian participation in Canal administration “must begin in a modest way, and grow gradually.” “That is the only sensible course.”
Second, “General Torrijos and the Panamanian people fully accept that as a function of the United States’s super-power status, it must control the Canal’s operation effectively.”
Tack added that our offer of an operating partnership in the Panama Canal enterprise constituted proof for him that the United States was intent—as you had promised him it would be—on negotiating with Panama as an equal, and on negotiating a truly equitable treaty. Perhaps the most meaningful response he could make, he continued, was to declare that the United States no longer had to fear encountering “non-negotiable” Panamanian positions.
After explaining the set of United States concepts to Tack in some detail, and drawing on his reactions to them, we reduced them to a two-page “threshold agreement.” That is a document, to be employed throughout the negotiation, which sets forth conceptual formulae for resolving treaty issues and which, when approved by the chief negotiators, stands as firm guidance for the drafting of actual treaty language.
The Foreign Minister approved the text, following consultation on it with General Torrijos. Thus we have disposed of the first of the major issues between us.
III.
We plan to meet again in mid-July, and then at the month’s end, to address Panama’s participation in the protection and defense of the Panama Canal. That will be followed by the issue of Panama’s acquisition of jurisdiction plus the operating rights the United States will retain. The deputies will be in virtually constant session. Thereafter we plan a recess for the month of August, and on resuming we would have only the issues of compensation to Panama and of land areas to take up before we reach the final, critical issues of the new treaty’s [Page 134] duration and of an option for the United States to expand Canal capacity.2
- Source: National Archives, Nixon Presidential Materials, Box 791, Country Files, Latin America, Panama, Vol. 3, January 1972–August 1974. Confidential; Immediate; Exdis. Repeated Priority to Governor Parker and USCINCSO.↩
- In telegram 3777 from Panama City, July 2, Bunker stated that part of telegram 3750 from Panama was inadvertently not transmitted. He reported that U.S. and Panamanian officials had also reached a threshold agreement on the abrogation of the 1903 treaty, and that the deputy negotiators had been requested to remain in Panama for “two more days while he [Tack] obtains the formal consent of the President and Vice President of the Republic to the threshold agreement.” (Ibid.) In a July 24 memorandum to Ellsworth, Corrigan noted that the Panamanians had provided a counteroffer for Principle VI on July 15. The memorandum quoted Bell as saying the counterproposal was “generally acceptable” and “in the ball park,” but described Bunker as “very upset at the Panamanian document, primarily because it rejects the ‘gentleman’s agreement’ which had been made.” (Washington National Records Center, RG 330, OASD Files, FRC 330–77–0054, Panama 000.1–350.05 1974)↩