550. Telegram 118183 From the Department of State to the Embassy in Panama1 2
SUBJ:
- Panama Treaty Negotiations—First Meeting
(Following is based on uncleared memcon and subject to revision).
1. Summary. US and Panamanian negotiators in business-like 5 hour meeting covered number of major issues involved in treaty negotiations. It was emphasized that discussions should be kept confidential and positions advanced would be considered tentative and subject to modification. Possible methods of handling problems of jurisdiction and duration were suggested. US stressed requirement that any treaty provide for existing canal, sea-level canal and defense arrangements.
2. On jurisdiction US outlined areas of jurisdiction which Panama might assume and other areas which US would desire to retain. (Will forward written outline used as [Page 2] basis of US oral presentation). Panamanians expressed strong disappointment with US position and questioned US need for broad legal rights in support of what they considered basically commercial operation. After considerable discussion Panamanians stated they willing to provide that transfer of jurisdictional rights to Panama could be carried out on gradual basis. US then suggested that negotiators might consider phaseout over 25 years, with certain agreed jurisdictional rights transferred every 5 years to Panama. Panama said this should be explored but US should give reasons justifying retention of any jurisdictional rights during substantial part of 25 year period. US agreed to work up outline of how 25 year phaseout of its jurisdictional rights might be scheduled.
3. On duration Panama said treaty must make reference to terminal date in order avoid appearance of perpetuity, but that treaty might provide for continuation beyond that date so long as neither party requested [Page 3] renunciation or termination of treaty.
4. Regarding sea-level canal US emphasized need to make provision in treaty for this as well as for existing canal and defense arrangements. US emphasized value to Panama and world commerce of arrangements ensuring canal system could handle traffic requirements in future. US also stated that if sea-level canal were constructed US would need to maintain control a for substantial period thereafter such as 75 to 180 years, in order to be able to amortize heavy investment. Panama said they prefer discuss canal expansion after understandings reached regarding present canal.
5. Regarding land areas in the Canal Zone Panama stressed its need for more real estate to accommodate expanding civilian populations of Panama City and Colon. Panama claimed much of Canal Zone either not being used or devoted to training and maneuvers for which alternative real estate could be substituted. Panama said that out of total area in zone of 372 square miles only 12 square miles [Page 4] being used for canal operations and facilities. Panama also suggested officer from National Guard might serve as liaison with canal zone authorities to discuss questions of land areas. Panama indicated its basic position is that land not being used for canal operations and defense should be it returned to Panama, but that Panama would consider permitting US to use areas for other purposes if Panama participated in this use or derived benefit from it, as for example research activities. US suggested land Commission might be set up to deal with real estate issues.
6. Several other subjects discussed briefly:
(a) As regards employees of commercial services which might be phased out by Canal Company, Panama agrees this hard problem and is considering remedial measures as for example cooperatives.
(b) Regarding compensation, Panama suggested this could consist of lump sum plus variable figure based on toll revenue. [Page 5] US countered by saying lump sum annuity could pose congressional problems for US and that compensation based entirely on canal revenues might be preferable. US also suggested commission might be established to consider future adjustments in compensation. There was no discussion of amounts.
(c) Panama suggested US consider making general statement of its position in regard to new status for canal, arguing Panama public hears only hard line statements of US position emanating from congressional sources and that more objective outline of US views would be helpful to negotiations and to acceptability of new arrangements in Panama.
7. It agreed that next meeting would be July 6.
8. Will pouch memcons.
- Source: National Archives, RG 59, Central Files 1970–73, POL PAN–US. Confidential. Repeated to USCINCSO and the Panama Canal Company. Drafted on June 30 by Finn; cleared by Curran; approved by Finn.↩
- Under Secretary John Irwin summarized the first meeting of the treaty negotiations, which focused on issues of jurisdiction and duration. Irwin stated that the U.S. position called for a treaty which accommodated existing defense arrangements.↩