534. Memorandum From the Deputy Secretary of Defense (Packard) to the President’s Assistant
for National Security Affairs (Kissinger)1
2
[Page 1]
SUBJECT:
This memorandum responds to your request for our comments on the response
to NSSM 86 enclosed with your memorandum of April 14th.
By way of general background, we believe that there are two basic
considerations that should be taken into account when examining the
specific issues covered in the response to NSSM 86. First, we must
expect that the Panamanian Government will try to reopen, from time to
time, whatever new treaty arrangements might be reached now, with a view
towards gaining additional concessions. (I have in mind particularly the
duration provisions of any new arrangements.) Second, there are
essentially three points that should be considered nonnegotiable: (1)
effective U.S. control over Canal operations, (2) effective U.S. control
over Canal defense, and (3) the continuation of these controls for the
indefinite future (a departure from the 1967 negotiations).
As a practical matter, it would seem wise to hold preliminary discussions
with the Panamanians before entering formal negotiations. The
preliminary talks would give us an opportunity hopefully to develop a
conducive negotiating climate and, more importantly, a chance to
determine whether the Panamanians’ negotiating posture is such that we
could expect to achieve new treaty arrangements acceptable to both sides
(including the U.S. Congress).
Our views on the specific issues identified in the response to NSSM 86
are attached as Enclosure 1.
The Joint Chiefs of Staff are in general agreement with the views
expressed herein. In accordance with your request, their views are
attached.
My staff has informed me that a Memorandum to the President may be
forwarded without a meeting of the National Security Council being
necessary. I am reserving the option of requesting a meeting of the
National Security Council to consider the NSSM 86 study until after we
have had the opportunity to review the comments submitted by the other
agencies.
Enclosure 1
Paper Prepared in the Department of Defense
[Page 2]
VIEWS OF THE DEPARTMENT OF DEFENSE ON
THE ISSUES OUTLINED IN THE RESPONSE TO NSSM 86
I. Expanding Canal Capacity
Comment. Preliminary discussions would be a
useful way to explore what price the Panamanians would demand for
definitive rights to construct a third set of locks or a sea level
canal. A firm decision on whether to press forward on these points
could be made later when we would have the benefit of the Panamanian
reaction and the report of the Canal Study Commission which should
be ready by the end of the year.
II. Sovereignty
Comment. The exercise of Panamanian limited
sovereignty in the Zone is negotiable, except for US retention of
effective control of Canal operations and defense.
III. Control of Canal Operations
Comment. Option A (exclusive US control)
should be our objective. Option B (joint US-Panamanian control as
agreed in the 1967 drafts) would give the US the control it needs
but could become a serious source of irritation if the Joint Board’s
operations were marked by continued disagreement along national
lines (i.e., 5–4 splits). The net result would be greater Panamanian
pressures for greater control (and the US would not be able to move
back to Option A). Option C (multinational control) would raise more
problems than it would resolve.
IV. Defense
A. Canal Defense
Comment. Option A (maximum US control) would
be the best to assure the defense of the Canal. Option B (Panamanian
participation) would be acceptable with the Panamanians exercising
routine security and protective functions and with the US retaining
effective control.
B. Hemispheric Defense
Comment. Option A (specific treaty rights to
conduct hemispheric defense functions from Panama) would best assure
the availability of Canal facilities for training, contingency and
other operations related to hemispheric defense. Option B (a
non-specific but understood permissive clause similar to the 1967
draft treaty) would give rise to serious misunderstandings with the
Panamanians if they choose at a later time to reject our
interpretation of the permissive clause. Option C (agreements
separate from the Canal Treaty for hemispheric defense functions)
would be the least desirable since they would probably encounter the
greatest opposition within Panama.
[Page 3]
V. Jurisdiction
Comment. Option A (giving up non-essential
lands and facilities, with Panamanian jurisdiction over commercial
activities and government functions not essential to the operation
and defense of the Canal) would be acceptable. Option B (joint
US-Panamanian administration, under US majority control, exercising
jurisdiction over all activities related to the operation of the
Canal, including basic administration of jurisdiction and provision
of municipal services—Panamanian jurisdiction over the remainder)
would be less desirable because of the difficulties inherent in
joint administration noted in III above. Option C (ceding all
jurisdiction over Panamanian territory other than the Canal itself
and related defense activities, coupled with treaty guarantees
against interference with Canal operations) would be risky, and even
less desirable, since Canal operations would be too susceptible to
harassment by the Panamanian Government.
VI. Perpetuity
Comment. Option A (an open-ended arrangement
with the new treaty continued indefinitely unless changed by mutual
agreement, coupled with specific provision for periodic review) is
the only way we can achieve essential elements of control over Canal
operations and defense for the indefinite future. Option B (specific
date for termination of US control) has the dual drawback of
apparently limiting our control to the earliest termination date in
the 1967 drafts and subjecting us to Panamanian future efforts to
achieve an even earlier termination date.
VII. Economic Benefits to Panama
Comment. Substantial increases in revenues to
Panama from the Canal could prove to be a bargaining counter for
those elements of control we wish to retain. Raising Canal tolls to
increase revenues may be the means of achieving the controls we wish
to retain but could open the door for future pressure for further
increases.
