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

59. Memorandum From Ambassador at Large Bunker to Secretary of State Kissinger¹

Washington, December 3, 1974.

SUBJECT

• Panama Treaty Negotiations

While the Panamanians always are unpredictable, we made significant progress during my last visit to Panama and for the first time I feel I can say that a treaty is in sight.

Panama accepted (in the form of initialed conceptual agreements) a package proposal which I made to them combining defense, administration and jurisdiction (summary attached).² In essence, we gave them the jurisdictional rights so important to their sense of national sovereignty in exchange for their agreement that we have the primary right to operate and defend the Canal during the life of the treaty. They also agreed to commit themselves to join us in guaranteeing the permanent neutrality of the Canal.

Acceptance of this package was essential to a new treaty. If we have success in dealing with the remaining four issues, I believe we may be able to arrive at a treaty by next spring. This should give us a good chance of getting Congressional approval in time to avoid the possibility of the treaty becoming an issue in the Presidential campaign.

Revised Presidential Guidance

Between now and March, our schedule calls for taking up four remaining issues. I do not anticipate much trouble on two of them: how much we pay Panama for using the Canal, and how much non-essential land we return to Panama. The other two will be difficult, and I will have to ask for some relaxation of existing Presidential guidance in order to handle them.

The guidance calls for a 50-year treaty with an additional 30 to 50 years if the Canal is expanded. It is clear to me that this is unrealistic. Panama could not accept it politically. I shall have to ask for greater flexibility so that I could be able to propose, for example, a significantly shorter period of US control of Canal operations, say to the year 2000 or perhaps less, in exchange for a clear US defense responsibility of longer duration.

The other difficult area is the question of Canal expansion. As the Panamanians tend to suspect that our interests in long-term options to expand are a disguised attempt to get US perpetuity, the question of extending the duration of the treaty in the event we expand the Canal may have to be left for future negotiation.

It is clear that the Canal is an aging utility. Its commercial—and its military value—may be diminishing. Therefore, we will probably want the treaty to include options for us to expand. However, studies which have examined the value of an expanded Canal in comparison with alternative modes of transportation indicate that the cost-effectiveness of an expanded Canal, whether sea-level or lock, is debatable. The issue should be considered as part of a national transportation policy.

An Educational Effort

Although these are complicated questions, I hope we can resolve them with the Panamanians by the spring. However, to get the treaty through Congress will require strong support by the Administration and a fairly intensive, but low-key, effort with both Congress and the public. To date, our opponents on the Hill have had the field virtually to themselves, for we have not wanted to inflame passions before we were relatively certain that a treaty was possible. Now that it does appear possible, I believe we should begin a low-key educational effort now.

As we see it, our effort would be built around a series of meetings between senior State officials and key undecided Senators. We also are thinking of establishing a citizens’ committee—perhaps drawing from the Linowitz group.³ And we are working on a program to reach the media across the country in the hope of influencing skeptical Congressmen. On the Panamanian side, Tack told Bob Ingersoll in Quito⁴ that he already has begun the job of educating the Panamanian people to accept a reasonable treaty.

The Defense Department’s Role

Throughout the negotiations I have coordinated closely with the Defense Department. They have been very cooperative even though we have made some pretty heavy demands on them. When the time comes we want Defense to join us in a coordinated approach to influence Congressional opinion in favor of the treaty.

However, it is possible that Defense may become increasingly reluctant to support our efforts to get a treaty. In my conversation with Secretary Schlesinger last August, and from other indications we have had from the Pentagon since then, I sense a growing concern over the problems of inflation and Congressional support as they relate to the Defense budget. In view of this, Defense might well decide that they do not want to promote anything on the Hill which might antagonize Congress. Clearly, Defense now believes that some key people in Congress who have a voice in shaping Defense appropriations are irritated or uneasy with the idea of a new treaty. The Pentagon therefore might hesitate to expend their credit with the Hill on this issue—which they see as primarily beneficial to State rather than Defense.

On the other hand, I expect this new, more liberal Congress to look with greater favor on a new treaty. We may be able to persuade Defense that they might strengthen their hand in Congress by joining us in advocating the treaty.

While there has been and will be a lot of opposition to this new treaty, I believe that eventually it will be a positive political factor, both domestically and in our foreign relations, and will serve as one more piece of evidence of our determination to construct a new, more mature relationship with the rest of the world. It will be especially helpful to the course of your “new dialogue” with Latin America.

The President’s Views

Thinking that you might wish to brief the President on the negotiating progress, and make certain he has no problem with trying for a treaty by the spring . . . no problem with a low-key effort in the Congress . . . and no problem in principle with relaxing the guidance, we have prepared an “issues paper” to serve as talking points for you.⁵ My conversations with Secretary Schlesinger and Secretary of the Army Callaway lead me to expect that Defense will be reluctant to help us on the Hill until it is clear to them that the President is fully informed and clearly committed to the new treaty.

1. Source: National Archives, RG 59, Ambassador Bunker’s Correspondence, Lot 78D300, Box 4, Key Documents. Confidential; Stadis; Nodis.
2. Attached but not printed. For more information on the threshold agreements, see Document 57.
3. Sol M. Linowitz was Chairman of the Commission on U.S.-Latin American Relations.
4. In telegram 7723 from Quito, November 13, Ingersoll summarized his conversation with Tack. (National Archives, RG 59, Central Foreign Policy File, D740326–0763)
5. See Document 63.