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

75. Memorandum From the Chairman of the Department of Defense Panama Canal Negotiations Working Group (Koren) and Ambassador at Large Bunker to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, May 2, 1975.

SUBJECT

• Request for Joint State-Defense Proposals for NSC Meeting

Pursuant to your recent request² the Departments of State and Defense have developed the enclosed series of steps which the United States might consider taking in the event that agreement on a new treaty with Panama is not possible. Listed actions are not limited entirely to jurisdiction and lands and waters. Most would require Panamanian agreement and cooperation for implementation. The few and relatively insignificant measures which could be taken by Executive Branch action alone are at Attachment 1. Even so, Congress should be informed of these steps before they are taken. Measures requiring Congressional action are at Attachment 2.

The views of the Department of State on the effectiveness of these unilateral steps are being submitted separately.³

Henry L.T. Koren

Chairman, Panama Canal Negotiations Working Group

Ellsworth Bunker

Attachment 1⁴

Undated.

UNILATERAL ACTIONS WHICH REQUIRE NO CONGRESSIONAL ACTION

1. Expand current Canal Zone practice of flying jointly Panamanian and US flags to include US military installations and transiting vessels.

2. Offer to use Panamanian license plates on Canal Zone privately-owned vehicles.

3. Propose establishment of combined military board for planning and coordinating defense of the Canal.

4. Redesignate, consolidate and reduce USSOUTHCOM structure.

Attachment 2⁵

Undated.

UNILATERAL ACTIONS REQUIRING CONGRESSIONAL APPROVAL

1. Increase substantially the existing monetary annuity to Panama.

2. Offer Panama civil and criminal jurisdiction over matters arising in the Canal Zone solely between Panamanian nationals.

3. Offer Panama limited police authority in the Canal Zone in matters affecting Panamanian nationals.

4. Permit Panama to establish courts in the Canal Zone.

5. Offer to establish in consultation with the GOP employment preferences and other programs designed to bring about increased employment for Panamanian nationals.

6. Offer to take actions designed to increase Panamanian involvement in policy direction of Canal operations.

7. Offer to transfer all or some parcels identified in the existing US negotiating offer of January 18, 1975 concerning land use, subject to conditions included in the offer.⁶

8. Disestablish certain USG commercial activities and offer to permit the establishment of Panamanian enterprises in the Canal Zone, exempting such enterprises from aspects of US jurisdiction (e.g., minimum wage coverage and safety and health requirements).

9. Redesignate the Panama Canal Company and the Canal Zone Government.

10. Disestablish Canal Zone postal system, permit Panama to establish post offices in the Canal Zone, and expand scope of APO operations.

11. Establish preference for CZ procurement of Panamanian goods.

12. Offer Panama traffic responsibility for certain Canal Zone thoroughfares.

13. Offer to authorize sale of Panamanian lottery tickets in the Canal Zone.

1. Source: National Archives, RG 59, Central Foreign Policy File, P770102–0101. Secret; Sensitive.
2. See Document 73.
3. Not found.
4. Confidential.
5. Confidential.
6. In telegram 343 from Panama City, January 19, Bell summarized some of the lands and waters proposals given to the Panamanians. (National Archives, RG 59, Central Foreign Policy File, D750020–0707) In addition, a January 9 paper entitled “Lands and Waters. Views of the United States Negotiators” is in the National Archives, RG 185, Subject Files of 1979 Panama Canal Treaty Planning Group, Box 9, Land Water, Airspace Use 1 10/11/74–7/26/75. The Panamanian response to the paper, which Bunker gave to them on January 18, is summarized in telegram 414 from Panama City, January 22. (National Archives, RG 59, Central Foreign Policy File, D750024–0910)