66. Memorandum of Conversation1

SUBJECT

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

PARTICIPANTS

  • Department of State

    • Chief Negotiator, Panama Canal Treaty Negotiations—Ambassador-at-Large Ellsworth Bunker
    • Special Advisor for Panama Canal Treaty Affairs—Mr. Richard Wyrough
    • Executive Assistant to the Chief, US Negotiator—Mr. Richard Barclay
  • Department of Defense

    • Assistant Secretary of Defense (ISA)—Mr. Robert Ellsworth
    • Principal Deputy Assistant Secretary of Defense (ISA)—Mr. Amos A. Jordan
    • Director, Inter-American Region—Major General George M. Wallace, USA
    • Assistant for Panama Canal Treaty Negotiations—Colonel Trevor W. Swett
[Page 183]

1. (U) Introductory Comment

Ambassador Bunker expressed appreciation for the continued DoD cooperation during all aspects of the negotiations, especially noting the forebearance and patience of Mr. Barringer, FMRA (ISA) and Captain Smith, ODUSA, in the Status of Forces Agreement (SOFA) discussions. He was complimentary about the ISA January presentation to the Panamanians of the US position on lands and waters.

2. (C) SOFA

Ambassador Bunker stated that the SOFA is nailed down now, although language polishing remains.2 This was no mean feat, in view of the rapidity with which it was accomplished. In conjunction with the three threshold agreements consummated (Canal Administration, Canal Defense, and Jurisdiction), the SOFA completes the first political transaction of the negotiations.

Comment

While there is substantive agreement on all twenty-three SOFA articles, there are differences in several articles which will require further discussion between both sides. Target date for completion is 24 February.3

3. (C) January Meetings in Panama

The Panamanian presentations on Compensation and Lands/Waters Use were unrelated to the US presentations, with the opposing positions far apart. The Panamanian position on Compensation, for example, would result in payment to Panama by the US of several hundred millions of dollars. The US position, based upon tonnage transiting the Canal, envisions payment of $35.7 million annually. Ambassador Bunker emphasized that the US will stick with this figure.

4. (C) Land Use Technical Talks

Ambassador Bunker feels that these have gone well, affording a better mutual understanding of the opposing positions and the requirements of each side. Panama had omitted activities requiring use of [Page 184]lands to which they had previously agreed. There was no negotiating during these talks. Negotiations in this regard will resume in late February after Ambassador Bunker’s return from Geneva, leaving only the issues of Duration and Expansion to be subsequently negotiated.

Mr. Ellsworth emphasized his particular interest in land use, expressing pleasure at the constructive nature of the technical talks and at the fact that we had enlarged Panamanian understanding of US land requirements. He noted that the Joint Chiefs of Staff are especially concerned about US land requirements, as is the entire Department of Defense.

5. (S) Modification of Presidential Guidance

Ambassador Bunker stated that it will be necessary to have more negotiating flexibility than current Presidential Guidance provides with respect to Duration and Expansion. During 1967 negotiations the US offered thirty years for treaty duration. The fifty years now prescribed in Presidential Guidance thus will not be at all acceptable to Panama. For Canal Expansion the US needs a definitive option of twenty-five years to construct a third set of locks or a sea level canal; or, alternatively, a specified period of time with first refusal rights. An example of the flexibility which the US Negotiators seek is authority to bargain for a shorter duration for Canal operation with a longer duration for Canal defense. In return we would expect Panama to enter into a separate agreement providing the Canal’s US civilian employees the same rights and privileges as military personnel will have under the SOFA. Ambassador Bunker has made it clear to Panama that he will not present a treaty to the President without such provisions.

Mr. Ellsworth described the strong concern of Deputy Secretary of Defense Clements and Secretary of the Army Callaway that the duration guideline of 50 years not be scaled back. Ambassador Bunker responded that, in his judgment, if we insist on 50 years there will be no treaty, but that, in any case he would stick with the guidance that the President ultimately provides. He indicated that Panama would probably propose the end of this century as a termination date, and that we might be able to get a longer period for defense. He pointed out that there is agreement with Panama that the US will participate in post-treaty protection of the Canal.

Comment

Current Presidential Guidance provides for a duration for as long as possible but with a minimum of 50 years.

6. (C) Arthur D. Little Study

Ambassador Bunker cited interest in accomplishing a study defining the value of the Panama Canal, with special emphasis on economic [Page 185]considerations. He mentioned an August 1973 memorandum from DepSecDef and a later memorandum from Mr. Koren, and stated that he had written to LTG James Gavin (USA, Ret’d), Chairman of the Board of A. D. Little, Inc., about such a study.4 After investigating the proposal, LTG Gavin quoted a cost figure of a minimum of $150,000 for the study. Since the State Department has only $30,000 available, Ambassador Bunker inquired as to Department of Defense interest in the project. He pointed out risks involved; i.e., the study could be helpful or otherwise, but, in any case, A. D. Little, Inc. could be relied upon for objectivity.

Mr. Ellsworth responded that he was not persuaded of the utility of the proposed study, citing the following reasons:

—There is broadly based political interest and technical knowledge with respect to the Canal in the Senate and among other politicians in Washington.

—The players in the ratification process understand the issues to such a degree that they would not be attracted to a study.

DoD has a modest amount of funds for contract studies, most of which is already committed; thus DoD is financially strapped.

Ambassador Bunker commented that he was fairly neutral about the study, but that he thought that an authoritative, objective study would be useful for the Congress. Mr. Jordan noted that its results could be used either for or against the treaty. Ambassador Bunker replied that he understood the risks. Mr. Ellsworth observed that, if each side could use the study, the degree to which it was “authoritative” was questionable. Ambassador Bunker agreed and stated that he would not pursue the project further.

7. (C) Sensing of Congress

Mr. Ellsworth queried Ambassador Bunker concerning his sensing of Congressional attitudes concerning a new treaty. Ambassador Bunker responded that Congressman Leggett and Mrs. Sullivan were circulating a House resolution opposing it.5 They hoped to get 100 signatures and so far had 60. He understands that Senator Thurmond may be recirculating that resolution in the Senate. He stated that at this point he is purposely staying away from Congress. Major General Wallace observed that 32 of 35 Senators who supported Senator Thur[Page 186]mond’s resolution a year ago are still in the Senate. Ambassador Bunker stated that, of the 32, 18 were “hardliners” with the remainder susceptible to persuasion. He acknowledged that ratification of any Canal treaty would involve an uphill fight, and that, without a major Ford Administration effort, ratification was unlikely. He observed that BG Torrijos would rather have a draft treaty without ratification than no treaty at all, pointing out that Torrijos in a recent interview had expressed the hope that there would be a treaty in 1975, but had emphasized that getting a modernized treaty was important whether this occurred in 1975, or in three years or ten years.

  1. Source: Washington National Records Center, RG 330, OSD Files, FRC 330–78–0058, Panama 821C, Jan–July 1975. Secret. Drafted by Swett; approved by Jordan on February 21. The meeting took place in Ellsworth’s office. In an undated briefing paper to Ellsworth, Wallace wrote: “Severe pressure from U.S. Negotiators to persuade Department of Defense to ‘give’ on U.S. position is a certainty,” adding, “Ambassador Bunker has prepared a memorandum for the Secretary of State to send to the President requesting modification of Presidential guidance with respect to the duration of the new treaty [ Document 65]. State Department authorities report that this memorandum, which was not coordinated with the Department of Defense, has not yet been sent to the President. There is no indication that this document will be coordinated with DoD which portends a most difficult situation for the Administration during Congressional hearings which will be held on the subject.” (Washington National Records Center, RG 330, OASD/ISA Files, FRC 330–77–0043, BDM Panama Canal—FY 75)
  2. In a February 13 report, Bunker summarized the January and February negotiations and noted: “The United States Negotiators now consider that the basic elements of a satisfactory SOFA have been achieved.” (National Archives, RG 59, Ambassador Bunker’s Correspondence, Lot 78D300, Box 1, Negotiation Round, Jan 12–25, 1975)
  3. In telegram 1110 from Panama City, February 26, Bell outlined the agreement on the SOFA that had been reached on February 22. (National Archives, RG 59, Central Foreign Policy File, D750068–0067)
  4. In a December 18, 1974, letter to Gavin, Bunker asked if he “would be willing and available to undertake a research project.” Bunker and Gavin met on January 6, 1975. (National Archives, RG 59, Ambassador Bunker’s Correspondence, Lot 78D300, Box 3, Panama General)
  5. Congresswoman Sullivan sponsored House Resolution 75, which was introduced on January 17 and referred to the House Foreign Affairs Committee.