212. Memorandum From the Department of Defense Representative for Panama Canal Treaty Affairs (Dolvin) to Multiple Recipients1


  • Panama Canal Treaty Implementation Update

The purpose of this memorandum is to summarize recent developments pertaining to key treaty implementation activities.

1. (C) Summary: House hearings and related markups on implementing legislation continue. Some slippage may occur in legislation passage date. Staff discussions underway to resolve major issues and to report out a Bill that both the Administration and Murphy can support. House Foreign Affairs Committee hearings will focus on the role of the U.S. Ambassador in Panama. State-DOD MOU may be [Page 510] released for insertion into the record (Tab A).2 GOP has agreed to USG position on contingency payment/back taxes/building refurbishing issues. Some Panama Canal Subcommittee members remain dissatisfied with GOP attitude on these and other issues (Tab B).3 It is a fact that GOP attitude has hardened across the board—a tactic often used during the course of the treaty negotiations.4 Treaty costs remain a front-running opposition issue. Revised DOD incremental treaty costs (Tab C)5 have been provided State for incorporation into Administration response to Panama Canal Subcommittee query.6 USCINCSO is concerned about the $2–4 million cost overrun on the contingency MILCON Project. The PCC Board has approved a proposed toll rate increase of 21.8 percent. If approved, the rates become effective 1 October 1979. A number of other miscellaneous treaty-related developments are discussed herewith.

[Omitted here is further explanation of issues discussed in the summary and other miscellaneous information.]

  1. Source: Washington National Records Center, OSD Files, FRC: 330–82–0205, Panama (Jan-Apr 1979). Confidential. A stamped notation reads: “Mar 30 1979 Dep Sec Has Seen.” Sent to Duncan, Alexander, Jones, and McGiffert.
  2. Tab A, attached, is printed as Document 201.
  3. Tab B, “Statement of the Honorable John M. Murphy, March 22,” is attached but not printed. On March 21, the Embassy in Panama and Panama exchanged notes resolving the issues of contingency payments, back taxes and building refurbishing that had troubled the Murphy committee. Murphy found the Panamanian note unacceptable, and sent a Merchant Marine and Fisheries Committee task force to Panama March 22–26 to learn the true positions of the Panamanian government on these issues. In telegram 2194 from Panama City, March 26, the Embassy reported on this visit, which resulted in the task force stating publicly that “troublesome obstacles had been overcome and that negotiators here and the Congress could now settle down into productive work.” (National Archives, RG 59, Central Foreign Policy File, D790139–0407)
  4. See Document 210.
  5. Tab C, “Memorandum for the Record, March 12,” is attached but not printed.
  6. See Document 211.