Foreign Relations of the United States, 1969–1976, Volume E–10, Documents on American Republics, 1969–1972

535. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon¹ ²

Washington, June 1, 1970

SUBJECT:

• Panama Canal Treaties

Panama has pressed us to reopen talks on new Canal treaties. We cannot realistically refuse. To do so would expose us to charges of bad faith in light of past commitments, create serious antagonisms with Panama, exacerbate Panamanian nationalism and risk renewed violence against the Zone. All agencies agree it is in our interest to achieve a satisfactory modus vivendi on the Canal question.

The problem is how far we should go in these talks with regard to negotiating fundamentally new canal and treaty relationships.

Last December you authorized a NSSM on this question. The resulting paper, which has been reviewed by the Review Group, is at Tab B. Agency positions on the issues raised in that paper are at Tab C.

The paper poses two basic issues on which the agencies request your direction and guidance:

A. Timing: Should we (a) seek to avoid basic revisions in our present treaty arrangements by dealing now only with interim economic concessions aimed at appeasing some of Panama’s demands, or (b) be prepared to discuss all the basic issues affecting our canal arrangements and to negotiate fundamentally new treaty relationships?

B. Substance: If the latter, what should our position be on the key elements of our canal relationship?

A. TIMING

To try to delay or avoid discussing basic canal issues and revision of our present treaty arrangements appears neither realistic nor in our overall interest:

• —No Panamanian Government can politically afford to settle only for interim measures; Panama will insist on discussing our basic relationship and on holding us to our previous commitments to do so.
• —All agencies agree that our primary interest—having available to us an adequate and secure canal system—can best be protected through a mutually satisfactory and healthy relationship with Panama.
• —Not only are the 1903 arrangements no longer strictly essential to the protection of our primary security and commercial interest, but they are also the source of recurrent irritations and rising antagonisms that threaten the continued stability and peace of our relationship with Panama. The 1903 arrangement is increasingly considered offensive by Panama and is an incongruity in the pattern of our present-day relationship in the hemisphere and the world.
• —Therefore, if we do not deal with our comprehensive relationship now we will only face steadily increasing pressure and growing problems regarding our presence in the Canal Zone.
• —Moreover if we make an interim arrangement, that will be the starting point for the next round.

All agencies agree that we should be prepared to discuss and negotiate the basic elements affecting our treaty relationship if Panama wants to. All believe that we should have exploratory talks first to probe Panama’s position and reach a judgment as to whether mutually satisfactory new treaty arrangements can be expected. Positions for formal negotiations could be drawn up later on the basis of what we learn from these exploratory talks and Congressional consultations. Most agencies suggest we delay any formal negotiations until after the U.S. Congressional elections and after we have been able to evaluate the Canal Study Commission report due December 1.

I recommend that you:

(a) authorize the initiation of preliminary exploratory talks to determine what the prospects for such negotiations are;

(b) authorize consultations with the Congress as appropriate; and

(c) ask that recommendations be submitted to you, after (a) and (b) have been completed, as to whether and when to open formal negotiations and as to what our specific negotiating objectives should be.

B. SUBSTANCE

State believes the 1967 drafts should constitute a “floor” for future negotiations. Other agencies believe that major revisions of our 1967 position should be adopted, especially with regard to the duration and pattern of U.S. control over canal operations and territory.

The IG paper requests your guidance for the exploratory talks on six key issues: (a) expanded canal capacity; (b) control of operations; (c) defense; (d) sovereignty and jurisdiction; (e) duration of control; and (f) economic benefits for Panama. Individual pages on the factors and choices involved in each of these issues are attached to this memo together with my recommendations for your guidance to our representatives.

In summary, your guidance would:

• —recognize three points as non-negotiable in any new negotiation: (a) effective US control over Canal operations; (b) effective US control over Canal defense; and (c) the continuation of these controls for an extended period in the future.
• —recognize the need to meet reasonable Panamanian aspirations for greater voice in Canal management, in improving expression of its sovereignty and jurisdiction, and in gaining more economic benefit from the Canal system.
• —agree that in any new treaty negotiation we should seek definitive rights to build a new sea level canal and/or enlarge the present canal, but without the obligation to do either.

Background on the history of the 1967 canal negotiations and the draft treaties is at Tab D. A map showing proposed new canal routes is at Tab E.

RECOMMENDATION:

That you sign the directive at Tab A embodying the above recommendations.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–216, NSDM, NSDM 64. Secret. Sent for action. Tab A is published as Document 536. Tab B is published as Document 533. Tabs C through E are not published. Tab C is an undated appendix entitled “Key Issues—Panama Canal,” and Tab D is an April 21 letter from Burns to Woods, asking that the President’s Secretary give Nixon the enclosed views of Walter Williams and Roger Cake, both members of the Panama Canal Board.
2. After summarizing a National Security Council Inter-Department Group for Inter-American Affairs (NSC–IG/ARA) paper on the Canal, Kissinger recommended Presidential guidance for future negotiations. Kissinger suggested that the U.S. Government maintain control over Canal operations and its defense; recognize reasonable Panamanian aspirations for more influence over Canal management and a greater share of the economic benefits of the Canal; and seek the right to build a new sea level canal or enlarge the present Canal.