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

49. Memorandum of Conversation¹

Washington, July 9, 1974, 2:35–3:20 p.m.

SUBJECT

• Briefing by Ambassador Bunker—Panama Canal Treaty Negotiations (U)

(U) PARTICIPANTS

• Department of State

  • Chief U.S. Negotiator, Panama Canal Treaty Negotiations—Ambassador-at-Large Ellsworth Bunker
  • Deputy U.S. Negotiator, Panama Canal Treaty Negotiations—Mr. S. Morey Bell
  • Prospective Deputy Chief of Mission, U.S. Embassy Panama—Mr. Ray Gonzalez
  • Advisor for Panama Canal Treaty Affairs—Mr. Richard Wyrough
  • Executive Assistant to the Chief U.S. Negotiator—Mr. Charles Hill
  • Country Director for Panama—Mr. Richard B. Howard
  • Legal Advisor for Panama Canal Treaty Affairs—Mr. Michael G. Kozak

• Office of the Secretary of Defense

  • Secretary of Defense—Honorable James R. Schlesinger
  • Assistant Secretary of Defense (ISA)—Mr. Robert Ellsworth
  • Principal Deputy Assistant Secretary of Defense (ISA)—Mr. Amos A. Jordan
  • Deputy Assistant Secretary of Defense (ISA–IA)—Ambassador R.F. Corrigan
  • Military Assistant to the Secretary of Defense—Major General John A. Wickham, Jr., USA
  • Director, Inter-American Region (ISA)—Major General G.M. Wallace, USA
  • Military Assistant to the Deputy Secretary of Defense—Brigadier General John G. Jones, USA
  • Assistant for Panama Canal Treaty Negotiations—Colonel T.W. Swett, Jr., USA

• Army Secretariat

  • Secretary of the Army—Honorable Howard H. Callaway
  • Deputy Under Secretary of the Army (DUSA) and Chairman of the Panama Canal Negotiations Working Group (PCNWG)—Mr. Henry L.T. Koren
  • Assistant to DUSA for Canal Zone Affairs—Colonel B.L. Walton, USA

• Joint Chiefs of Staff

  • Chairman, Joint Chiefs of Staff—General G.S. Brown, USAF
  • Director, Joint Staff, J–5 (Plans & Policy)—Lieutenant General J.H. Elder, Jr., USA
  • Deputy Director, Joint Staff—Major General R.N. Ginsburgh, USA
  • JCS Representative, Panama Canal Negotiations Working Group—Colonel C.D. Corbett, USA
  • OJCS (J–5) Coordination Representative, Panama Canal Negotiations Working Group—Colonel E.L. Parker, USMC

• Department of the Army

  • Acting Vice Chief of Staff of the Army—Lieutenant General D.H. Cowles, USA
  • Service Principal, Panama Canal Negotiations Working Group—Major General J.P. Cleland, USA

• Department of the Navy

  • Deputy Chief of Naval Operations for Plans & Policy—Vice Admiral G.C. Talley, Jr., USN
  • Service Principal, Panama Canal Negotiations Working Group—Rear Admiral C.D. Grojean, USN

• Department of the Air Force

  • Air Force Chief of Staff—General David C. Jones, USAF
  • Service Principal, Panama Canal Negotiations Working Group—Brigadier General R.B. Collins, USAF

• United States Marine Corps

  • Service Principal, Panama Canal Negotiations Working Group—Major General N.H. Gourley, USMC

1. (U) Introductory Comment

Ambassador Bunker expressed pleasure at the opportunity to brief senior DODofficials on Panama Canal Treaty Negotiation developments to date; on the next steps to be taken in the negotiations; and on the philosophy governing the negotiations. He expressed appreciation for the cooperation of the several DODofficials with whom he had been working, including the Secretary of the Army. He was complimentary about the Joint State-Defense Support Group for the U.S. Negotiators.²

2. (U) Technique for Conducting Negotiations

Ambassador Bunker explained that the negotiating technique is to proceed from agreement on principles to agreement on major issues under each principle and then to a threshold agreement for each principle encompassing the several issues associated with that principle. He said he was proceeding with all deliberate speed in a relaxed, informal atmosphere. The only negotiators who meet are himself and his Deputy Negotiator, and Foreign Minister Tack and his Deputy.

3. (C) Philosophy of Negotiations

Ambassador Bunker emphasized that, in his view, it is time for the United States to make good on its commitment to develop a more modern treaty relationship with Panama. This commitment was initially made by President Johnson after consultation with ex-Presidents Truman and Eisenhower. He stated the United States should not wish to be the only country in the world exercising extra-territoriality and asserted that Panama’s consent to United States presence would continue to decline without a more modern treaty. Declining Panamanian consent would probably bring on conflict; in addition, the United States would suffer in Latin American and world opinion. On the other hand, Panamanian acquiescence in our presence would permit the United States to exercise continued control of the Canal enterprise during the life of the new treaty. In essence, the objective of the United States Negotiators is to give Panama the sovereignty it “requires” and retain for the United States what it needs to control and protect the Canal for an extended period. The Panamanians are demonstrating a sense of responsibility during negotiations. They recognize the importance of the Canal to the United States. They also recognize that phased training will be necessary before Panamanians can be considered capable of significant participation in its operation.

4. (U) Stages of Current Negotiations

a. The eight principles were negotiated in November and December 1973 and agreed to by Panama and the United States (Tack-Kissinger) in February 1974.

b. The Deputy Negotiators developed statements of the major issues for each of the eight principles in February and March 1974. The Chief Negotiators agreed on these statements in early April.³

c. Substantive discussions on Principle VI concerning Panamanian participation in the operation and administration of the Canal were held in Panama in late June 1974.⁴ A threshold agreement providing general solutions to the issues associated with Principle VI resulted, constituting a conceptual approach for Panamanian participation in the Canal operation. This occurred earlier than we expected and will permit us to proceed promptly to other issues.

d. We will develop similar threshold agreements for the remaining principles, leaving details and the treaty language to be negotiated later.

(1) The next matter to be discussed will be Principle VII, Panamanian participation in defense of the Canal.

(2) Discussions on rights, land use, compensation to Panama, and finally the toughest issues, duration of the new treaty and expansion rights, will follow.

5. (C) Unified Command Structure

Ambassador Bunker stated he understood that DODwas reviewing the United States Unified Command structure world-wide and said he would appreciate an opportunity to be able to inform the Panamanians of developments in this regard which might affect them.

6. (U) Outlook for the Future

a. Ambassador Bunker’s goal is to develop a draft treaty sometime in early 1975. He hopes to be able to adhere to that goal.

b. Possible constraining factors are:

(1) There are Panamanian “hard liners,” but, in general, the Panamanians have demonstrated flexibility. They expect to begin their involvement in the Canal in a modest way and agree that the United States must retain control. They see sovereignty, but not continued control, as essential to Panama.

(2) Congressional attitudes reflect some United States “hard line” positions. Ambassador Bunker will continue to listen to their opinions and explain the Panamanian need for sovereignty with the concomitant agreement for United States control. He recognizes that he will need supportive representations from DODbefore the Congress.

c. Ambassador Bunker expressed the hope that a satisfactory, reasonable document which protects the United States interests would result from the negotiations.

7. (S) Questions and Comments by DODOfficials

a. The SecDef asked Ambassador Bunker’s reaction to attitudes in the Congress, making specific reference to the 35 senators who signed the Thurmond Resolution. Ambassador Bunker responded that Department of State analysts estimate that only 16 or 17 of the signatories are “hard liners.” Among the remainder, some are not returning to the Senate and others might be persuaded. He added that the Vice President had told him to go slow in 1974 but to expedite his efforts in 1975. In addressing Congressional attitudes, Ambassador Bunker indicated his concern that Panamanian consent to our presence in the Canal Zone will decline if there continues to be no new treaty.

b. The SecDef indicated that the Joint Chiefs of Staff had recently updated the JCS position on Panama Canal Treaty Negotiations and had supported the objective of attaining a new treaty with the following caveats:⁵

(1) Seek the longest possible lock canal treaty duration.

(2) Seek the longest possible term for the exercise by the United States of Canal expansion options.

(3) Seek the longest and broadest extension of United States control over operations and defense following any expansion.

(4) Require a joint United States-Panamanian guarantee that upon termination of the new treaty, provisions will exist to ensure that the Canal will be open to all world shipping without discrimination, at reasonable tolls, and that Panama would take no action that would hamper the efficient operation of the waterway.

c. General Brown indicated that the Chief of Naval Operations (CNO) had not agreed with the JCS position, taking a harder line. Admiral Talley interjected that CNO had finally agreed with the adopted positions.

d. The SecDef asked Ambassador Bunker to clarify who currently possesses sovereignty over the territory in the Canal Zone. Ambassador Bunker responded that under the current treaty the United States may act “as if sovereign” but that “residual sovereignty” rests with Panama.

e. The SecDef indicated that after discussions with Senators McClelland and Thurmond, he wished that the negotiations were taking place somewhere else and at some other time. He pointed out, with some humor, that Ambassador Bunker could probably understand this statement, realizing that Senator McClelland heads up the Senate Defense Appropriations Committee.

f. The SecDef asked Army Secretary Callaway if he was happy with the negotiations. Secretary Callaway responded that if a new treaty can be moved through the Senate, only Ambassador Bunker with his deftness can accomplish it. Secretary Callaway asked Ambassador Bunker if he believed that legislation would be necessary in addition to treaty ratification. Ambassador Bunker responded affirmatively. Secretary Callaway then commented that the House of Representatives would play a part. He added that the Army supports the negotiations, but is concerned about keeping United States control as long as possible. The Army must also take care of its employees, many of whom see negotiating away the Canal Zone to be a highly emotional matter.

g. The SecDef asked Ambassador Bunker whether Panamanian participation in defense of the Canal was merely “hopefully” a cosmetic formula or something that might permit saboteurs to get closer to the Canal. Ambassador Bunker responded that there has been some participation to date, and since the concept of a new treaty includes a termination date, at some point Panamanians must participate.

Comment. There has been no combined defense participation to date; rather, small scale training projects have been accomplished sporadically.

h. The SecDef asked whether Panama would ever be able to defend the Canal. General Brown responded that he sees two aspects to defense; one, defense against sabotage, and the other traditional (conventional) defense. He thought that combined participation with an effective working relationship would probably enhance security. Ambassador Bunker stated that since the Canal is the best asset that Panama has, Panama would not wish to damage it.

i. The Assistant SecDef (ISA) stated his concern with respect to the problem created by the apparent attitude in the Senate and stated that he was leery about accelerated treaty efforts in 1975. He feared that current optimism and expectations in Panama could lead to an extremely bad situation if no treaty was forthcoming. Ambassador Bunker agreed this was a potentially serious problem but stated that the Administration did not desire to present a draft treaty to the Senate in an election year which rules out doing so in 1974 or 1976, leaving only 1975 in the short term.

j. Mr. Ellsworth then asked Ambassador Bunker about the duration of the new treaty. Ambassador Bunker replied that Presidential guidelines were to shoot for a treaty of 50 years duration, with an extension of the treaty to accommodate Canal expansion. He pointed out that Panama desires a much shorter duration. He thought agreement on this issue would depend largely on what we can accomplish in meeting Panamanian desires with respect to participation and jurisdiction.

k. The SecDef asked Ambassador Bunker what was, in his judgement, the minimum duration probable. Ambassador Bunker replied that he could only go on the Presidential guidelines and did not know what else would be acceptable. He pointed out, however, that the United States is depreciating the Canal over 40 years and that it might be feasible to let it go after it has depreciated. Mr. Ellsworth observed that it was probable that the longer the duration of the new treaty, the more Senate votes for ratification would result.⁶

Robert Ellsworth
Assistant Secretary of Defense International Security Affairs

1. Source: Washington National Records Center, RG 330, OSD Files, FRC 330–78–0011, Panama 821 1974. Confidential. Drafted by Swett; approved by Ellsworth on July 16. The meeting was held in Schlesinger’s dining room.
2. See Document 43.
3. Bunker’s report on the April 2–5 talks on Contadora Island is in telegram 1989 from Panama City, April 5. (National Archives, RG 59, Central Foreign Policy File, D740077–0586) Additional information is in a memorandum from Bell to Bunker, April 8. (National Archives, RG 84, American Embassy, Panama, Panama Canal Treaty Negotiation Files, Lot 81F1, Box 124, Treaty Negotiations, April–June 1974)
4. See Document 47.
5. See Document 46.
6. A July 12 memorandum of conversation prepared by Wyrough described the conversation between Bunker and Schlesinger as more confrontational. Schlesinger questioned Bunker’s analysis of Senate opposition and asked, “Doesn’t that chill you a bit?” (National Archives, RG 59, Treaties, Lot 77D14, Talking Points and Briefings for Meetings—1974) In his memoir, Jorden asserted that the meeting was hostile. He wrote: “When Bunker finished, Schlesinger did not thank him or even use his name. He brusquely read off the first of several prepared questions: ‘Why should we jeopardize our national security by giving up our vital sovereignty?’ The tone was that of a jaded professor addressing a freshman at exam time. Bunker, who was Schlesinger’s senior by thirty-five years, found rudeness unacceptable and aggressive egotism offensive. He sat looking straight ahead as if nothing had been said. An aide worried that the Ambassador had drawn a blank or had not heard. Then he realized that the elderly Vermonter was simply not going to respond to impertinent quizzing. The silence deepened. General Brown finally jumped in to ease the moment.” Jorden added: “He [Schlesinger] had proved to all present that the consensus in official Washington and in the press was firmly based: that the secretary of defense was probably the most arrogant, self-centered, opinionated individual in the capital city.” (Panama Odyssey, pp. 251–252)