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

553. Memorandum From Secretary of Defense Laird to President Nixon¹ ²

Washington, September 3, 1971

SUBJECT:

• Panama Canal Treaty Negotiations

This is in reply to your memorandum of July 29 concerning the Panama Treaty negotiations. We have taken part in the consultations with Congress on this matter and have closely followed the progress of the negotiations. Our views are set forth below.

I. Opposing Positions on Duration.

From the beginning of the present negotiations the Panamanian positions has been that the 1903 Treaty must be abrogated, because it gave the United States the Canal Zone in perpetuity, and must be replaced by a Treaty giving Panama either the option of terminating, the Treaty at some future date, or a formula to produce a termination date. The future date Panama appears to have in mind for its termination option is 1990, less than 20 years hence and nine years before the date specified in the 1967 drafts, which the present Panamanian negotiators seek to better. They are now supported in this position by General Torrijos, to the point of insisting that the United States at this time agree to a fixed-term treaty before further consideration of other issues of substance. The alternative, they state, is to break off the negotiations.

The United States’ position has been that the issue of termination should be discussed after agreement is generally reached in other matters, which include phasing out of US jurisdiction, cession of areas not necessary for the defense and control of the Canal and other essential military activities by the United States, increased economic benefits to Panama and expanded canal capacity. We view these portions of the Treaty as essential elements for your consideration and approval, before the issue of duration can be opened, much less decided, and are also of prime interest for Senate ratification.

II. Duration Issue for Decision Now

Ambassador Anderson, in his letter of August 20, 1971, recommends that the United States now indicate to Panama that, although we strongly prefer an open-ended treaty, we are willing to consider the possibility of a termination formula or fixed-term treaty of long duration provided the total treaty package is satisfactory to the United States. If this is done, the United States will have acceded to the Panamanian negotiating position of considering treaty termination before other substantive issues are concluded. In addition, the United States will have accepted the principle of termination.

I regard this change of US position as unwarranted at this point, and ultimately detrimental to our national security interests. If the duration issue is to be decided now, I recommend the US adhere to insistence on an open-ended treaty.

There are recognized risks in this decision. If the US declines to discuss the duration issue now, Panama may break off the negotiations, and might well open up a series of steps to undermine the US position. If the US concedes now on duration, the detriment to national interest might be serious in itself, and, in any case, cause Senate rejection of a new treaty. On balance of risks, I believe any determination on a fixed termination date, or a formula to arrive at it, is unacceptable, and the US should be prepared to so stand.

III. Termination Arguments Examined

The basic Panamanian position is that the grant to the US in perpetuity of jurisdiction in the Canal Zone, contained in the “iniquitous 1903 treaty,” is no longer tolerable and that the“government within a government” in Panamanian national territory must be ended, the Canal Zone returned to the jurisdiction of Panama (which would permit US defense and control of the canal for some period of time) and to terminate all US presence at a date to be agreed upon. Failing to obtain these ends by negotiations, it is reported that Panama would denounce the 1903 Treaty before the United Nations’ General Assembly scheduled to convene on September 21 1971, and might also take its case to the Organization of American States. Internally in Panama, civil disturbances and even riots directed against the Canal Zone might be instigated, resulting in bloodshed and possibly loss of life, as in 1964, and danger to the American community in Panama. It is argued that these risks would be avoided by a treaty acceptable to Panama.

These arguments must be prudently evaluated.

The perpetuity of US jurisdiction has been extensively dealt with in the negotiations, and agreement has already largely been reached on a phase-down of the Canal Zone government functions, so that at the end of a period of less than 25 years Panama will exercise full jurisdiction except in those areas essential for control and operation of the Canal and others still held under a type of Status of Forces and Base Rights Agreement. Thus, the Panamanian aspiration to eliminate the “government within a government” will be fulfilled without the US conceding that the 1903 Treaty, twice later revised and affirmed by different elected Panamanian governments, is invalid.

Our national interest in the Panama Canal is both commercial and strategic: that the Canal should provide transit at reasonable rates to commercial shipping, especially when bound to or from US ports, and that the Canal assure inter-ocean passage for the US Navy and other military transport. These purposes are of high national interest for the indefinite future. Our strongest assurance that the Canal will be open for both purposes is for the US to retain defense and control, as no one can foresee at this time when and under what conditions the cession of these rights, as granted in the 1903 Treaty and reaffirmed in the revisions of 1936 and 1955, will permit their adequate preservation.

Recourse by Panama to international organizations should not find the United States in a defenseless posture. On the contrary, Panama, in asking international intervention in a matter already under continuous and active negotiation between the two parties, would be in a weak position—especially if Panama itself broke off negotiations. Without armed conflict, it may be questionable that Panama’s appeal to the UN in the opening sessions would gain significant interest, in view of critical situations immediately competing for attention in the Middle East, South and Southeast Asia, South Africa and Ireland. Soviet and Communist nations’ backing for Panama would be likely to alienate Latin American delegations there, as well as in the OAS, where the United States is not without friends. Chile is the only likely proponent of Panama’s position which, throughout decades of its own advocacy, has never gained any official Latin American sympathy. The record of US relations with Panama and its responsiveness in the present negotiations are clearly defensible and need not cause us to abandon a solid interest in face of unwarranted charges.

The possibility of Panamanian demonstrations, riots, and even bloodshed is not to be discounted. This has happened in the past under elected governments, and could happen again. Despite the authoritarian character of the Torrijos government, its control by the National Guard and intolerance of public disorders, it can be considered capable of manipulating student and radical groups to storm the Canal Zone, as a means of whipping up nationalistic fervor against the “imperialists.” This risk has never been overlooked, and plans are well prepared to meet it with reasonable defensive measures, and without bloodshed if possible. US forces in the Canal Zone are adequate not only to protect the Canal but to safeguard American lives and property. The military rulers of Panama are well aware of this. It is possible they are also aware that such cynical sacrifice of human life would immediately harm Panama more than the US in terms of loss of tourism, trade and investment, without gaining surrender of the United States negotiating stand, originally stated as not to be influenced by force or threats of force.

More persuasive for maintaining our stand is the fact that any termination treaty would bring with it no assurance of peace. Panama’s history is one of endemic instability. Panamanian politics have always centered around the Canal Zone as the core of Panama’s problems, and as long as the United States remains there Panamanian politicians will use the same convenient target to gain votes and distract attention from Panama’s own domestic problems. Thus, any fixed term treaty will be the object of attack to reduce the term, and the means of attack will be the same violence as is now threatened. At such time, our stance would be greatly weakened by having accepted withdrawal in principle.

No one can forecast what kind of government will be in power in Panama when these demands are made. The possibility of a Communist regime cannot be excluded there any more than it should have been in Cuba, or a Marxist government any more than it was in Chile. Close relations or even alliance with the Soviet Union could result. Recent and current Soviet naval activities in the Caribbean are ample evidence of Soviet interest in this area of vital security to the United States, and the advantage to the Soviets of US departure from the Isthmus of Panama would be obvious. These considerations led to our adoption in the present treaty talks of the objective of unilateral US defense as non-negotiable.

Should the United States obtain treaty rights of re-entry to the Canal, there is no certainty that the locks and essential installations would meanwhile be maintained by the Panamanians in good condition. There is little in present Panamanian performance to give confidence on this point. After expiration of the fixed-term treaty, freedom of passage and guarantee by the United States of access to the Canal for its own and other nations’ shipping would depend on Panama fulfilling treaty agreements. Once out of the Isthmus, the United States would have to rely on Panama for enforcement of these rights, or take its own measures under risk of serious external disadvantages.

With the Canal a political football for the almost continuous power struggle in Panama, the substitution of a fixed date for a perpetuity clause will do no more than telescope the timing rather than change the target, and predictably will invite more rather than less pressure for periodic re-examination of the treaty. Threats of violence would end only when the target is gone, that is, when all US presence is ended. We would meanwhile have to choose between facing up to recurrent demands and violence, or capitulating on defense and control of the Canal at an accelerated pace.

In 1970, General Torrijos rejected the 1967 draft treaties which favored Panama and had been reached after two years of intensive work. Later, he went back on his word to extend the agreement for US Army use of the Rio Hato base. Prior to and during the present negotiations, General Torrijos has taken contradictory positions on essential matters such as the US military presence, use of the zone for hemispheric defense, and duration of the treaty. It is unrealistic at this time in view of the country’s institutional weaknesses to expect that he or any near-term Panamanian leader will respect treaty obligations after the United States has removed itself from the area.

I do not recommend an inflexible position, but under current conditions cannot justify this essential change in our rights.

IV. Treaty With Open-Ended Duration Justified

The points of agreement so far reached in the negotiations are very substantial. The ceding of jurisdiction in the Zone will eliminate the “government within a government” complaint of Panama. The proposed agreement concerning the status of US forces at defense sites is consistent with similar agreements in force with more than forty governments in other parts of the world and not found by them to be derogatory of their sovereignty. Transfer of large areas within the Canal Zone to Panamanian ownership will vastly enhance real estate acquisition. These agreements by the United States exceed the bounds of all previous treaty revisions, and are without any corresponding concessions by Panama. General Torrijos could well point to a treaty with these provisions (and considerable economic benefits yet to be considered) as a substantial victory. For a government which has no political base and enjoys limited popular support, this kind of outcome should have more appeal than the collapse of the negotiations.

From the viewpoint of US national interests, the preservation of our treaty rights to defense and control of the Canal has intrinsic value there and elsewhere. Abrogation of perpetuity in Panama would invite similar abrogation of the agreement with Cuba for the Guantanamo Naval Base, obtained in the same year and under the same general terms. Abrogation of the perpetuity clause in a treaty with one Caribbean country would undermine the perpetuity clause in a treaty with another Caribbean country a few hundred miles away. Castro has previously criticized the Guantanamo treaty and as long ago as 1962 listed US withdrawal from Guantanamo as one of his “five essential conditions” for restoring normal relations with the United States. We believe US retreat from the Caribbean will not be supported by the average American, and that these points will carry weight with the Senate in its consideration of ratification.

V. Consultations With the Senate

As you directed, the views of key Senators have been sought. Of the 20 Senators consulted, 15 seemed to have reservations about the acceptability of a treaty with a fixed termination date, particularly one which would not extend US control into the next century. Apart from this generally negative reaction, any accurate assessment of Senate views must await the negotiation of the specific treaty terms and will be related to the entire document as well as to the state of US relations with Panama.

VI. Recommendation

Accordingly, it is recommended that:

1. Panama be informed that we will not agree to consideration of a fixed-term treaty at this point in the negotiations;

2. Panama be informed that we are ready to proceed much further into the negotiations and settle all other major terms in detail in order to present the President as complete a document as possible for approval;

3. Panama be informed that our consultations with the Senate were mainly negative on a fixed-term treaty and require further consultations when more details of a total treaty are available;

4. The United States not agree now to a fixed-term but be prepared in the future in the light of the then prevailing conditions to consider whether a change in this position is warranted. Meanwhile, in the present negotiations, we should be as forthcoming as possible with Panama on other aspects of its positions.

5. In the event that the Panamanian negotiators leave the conference table, Panama be informed that we are fully prepared to continue the negotiations or to resume the contact as early as possible.

6. The US negotiators be informed now to seek further instructions from you at the time such an interruption in the talks may occur. The Department of Defense will be prepared to offer further recommendations at that time should you desire them.

7. If a crisis in US-Panamian relations appear imminent, rather than yield to pressure tactics, we follow through with our recently approved contingency plans, especially clarifying publicly that substantial agreement had been reached on matters beneficial to Panama, that the United States was willing to continue the negotiations in good faith in order to reach final agreement but that Panama prematurely broke off negotiations.

Should you not favor the Defense position stated above and instead authorize Ambassador Anderson to negotiate a fixed-term treaty, I respectfully request that the views of Defense be sought as to both the duration of the treaty and the timing of the US agreement to negotiate.

Melvin R. Laird

1. Source: Washington National Records Center, OASD/ISD Files: FRC 330–74–083, Panama 1971, 821. Secret; Noforn. Prepared on August 26 by Colonel Mallett (DOD/IA). Published from a copy that bears Laird’s typed signature with an indication that he signed the original. The President’s July 29 memorandum has not been found. Anderson’s August 20 letter to the President is referenced in the source note to Document 554.
2. Laird addressed the opposing positions on duration, the temporary decision on the issue, examined the termination arguments, and recommended that Panama be informed that the United States would not agree to a fixed-term treaty. He also recommended that the U.S. Government proceed much further into the negotiations and settle all other major terms in detail in order to present President Nixon as complete a document as possible for approval.