Foreign Relations of the United States, 1977–1980, Volume XXIX, Panama

27. Memorandum of Conversation¹

Washington, March 13, 1977, 10 a.m.

SUBJECT

• U.S.-Panama Canal Negotiations

PARTICIPANTS

• United States

  • Ellsworth Bunker, Ambassador at Large
  • Sol M. Linowitz, Co-Negotiator, Panama Canal Treaty
  • A. J. Hervas, Interpreter
  • Stephanie van Reigersberg, Interpreter

• Panama

  • Romulo Escobar
  • Edwin Fabrega
  • Aristides Royo, Minister of Education, Notetaker
  • Jaime Arias

Escobar: First I would like to greet Ambassador Bunker and Ambassador Linowitz and explain the presence on our delegation of Minister of Education, Dr. Aristides Royo. Though you might not have seen him at the negotiating table in the past, he has always worked very closely with us within the Panamanian negotiating team. Not only for this reason, but also because of his position in our government as a member of the Cabinet, General Torrijos has sent him to the meeting which he considers of transcendental importance. I also want to mention that Dr. Jaime Arias will join us as soon as he arrives in Washington. At different times during the course of our negotiations, he has played a very active role, especially during the drafting of the status of forces agreement.² In addition to extending to you a warm greeting, I also want to tell you that we have brought you some presents which we have placed on the table. On the one hand you can see a turtle, and on the other some rabbits. Please receive them as an expression of our affection. In addition, one of our purposes is to perceive how our negotiations might proceed, whether at the pace of the turtle, or with the speed of a rabbit. What you pick up first, we will take as a message of your intentions and this should save us some time. We are very grateful for your invitation to meet with us and you can sincerely believe that we are very pleased to be here. It shows that you are interested in Panama’s problems. General Torrijos has instructed us to discuss with you, in full privacy and with complete confidence, all the problems that might come up, with the purpose of determining whether our two countries can realistically work towards a treaty that resolves the causes of conflict between us, as well as provide an example of how to conduct relations with the rest of the countries of Latin America.

Bunker: Thank you Ambassador Escobar. Both Ambassador Linowitz and I appreciate your courtesy in coming to Washington to meet with us, after yesterday’s aborted mission.³ It is indeed a great courtesy on your part. Regarding the question of the turtle and the rabbits, we’re faced with two alternatives. The turtle’s pace is slow but steady. Rabbits on the other hand, breed very fast. Maybe if we followed their example in breeding more ideas faster, this could lead us to finding solutions. I leave it up to you to suggest what alternative we should follow.

Escobar: I believe that a mixture of both alternatives would be the best one to follow.

Bunker: Ambassador Linowitz and I thought it would be useful to hold this informal meeting to continue our search for solutions to the various problems and issues we face, before proceeding to the next formal round of our negotiations, and see if we can make any more headway.

First I would like to report to you on our activities since we returned from our last meeting in Contadora.⁴ We have reported to the Secretary of State, to the Secretary of Defense, and to the Joint Chiefs.⁵ We have also talked with President Carter and with the Vice President.⁶ We have given the President the message from General Torrijos,⁷ and the President has written him a letter in response,⁸ of which I have a copy here for your information, as I do not know whether you have seen the text. I understand the letter arrived in Panama two days ago and was transmitted to the General.

(At the request of the Panamanian delegation the full English text of President Carter’s letter was orally translated into Spanish by Hervas.)

Linowitz: I understand that Ambassador Jorden spoke to Foreign Minister Gonzalez Revilla, after the President’s letter had been transmitted to General Torrijos. Since then Ambassador Jorden has called us and read the General’s response. We do not have it in writing yet, but he told us that the General expressed his warm appreciation for the thoughtful and friendly sentiments expressed by the President in his letter. He felt that they would become good friends because both were populists, and both share the same aspirations for the well being of their people. We feel it was a warm and gratifying response.

Bunker: Ambassador Jorden also reported that General Torrijos had said that apparently the Negotiators expected that both he and the President do their work for them.

In our conversation with the President, Ambassador Linowitz and I had an opportunity to present a good review of the issues discussed during the last round of talks. We did the same with the Vice President, who is particularly familiar with the requisites and the operations of the Congress, as a result of his recent personal experience there. Both of them greatly emphasized, as was reflected in the President’s letter that we could not consider a treaty relationship that did not take into account the United States interest and responsibility for the permanent neutrality and security of the canal. They especially emphasized that this was an essential element for Congressional ratification. I wanted to underscore this before we take up the other issues related to the last round.

Linowitz: I would like to add my own words of appreciation to you for your willingness to come here to Washington to meet with us. It was a great pleasure to meet with you in Panama and now here. I want you to know that I personally welcome the spirit with which you are approaching this meeting. Our government is also eager to move as expeditiously as possible to see whether we can make some real progress. You must avoid what we did yesterday, which was to fly high, without a destination. It is that same spirit that we share in the hope that we can speak with frankness and in a forthright manner, and that we avoid playing games with each other. Time is of enormous importance to both our governments. I have said so before. If we want to arrive at a new treaty, the time to move is now. If we don’t make every possible effort to arrive at a treaty that meets your needs and our requirements, I am afraid that we will find out that the moment will have passed us by.

It is for this reason that I have a special plea to make: that we talk frankly, that we make an effort to understand each other, and that we seek what is right for you and for us, and that we do so with confidence that we can find the answers. Let us seek those general principles for a treaty that we can present to President Carter and to the high officials of the United States Government, and that will have good prospects for success and approval and ratification.

Bunker: Mr. Escobar, how would you like us to proceed with the issues? We could take them up from where we left off on our last meeting. I might suggest that we start with what we call the triad, that is the group of issues dealing with duration, neutrality and post-treaty security arrangements. We could then go on to the points you brought up regarding lands and waters. Also the question of civilian employees. The question of the entity. You pointed out during the past few meetings that there were certain matters of great importance to you, such as ports, docks, the railroad, housing, common land areas, and that kind of thing. Would you want to begin with the triad?

Linowitz: As you already know, because we have mentioned it during the course of earlier talks, and as we have now been strongly reinforced since our return to Washington, it is vitally important for the United States Government to reach some understanding regarding the preservation of the continued neutrality of the canal. This will make it possible to obtain Presidential approval, and also Congressional ratification. If you feel that some thought can be given in these talks to this matter, and in the light of General Torrijo’s letter, do tell us what flexibility you can show, so that we can begin to approach the kind of a deal that will take into account your concerns and your needs regarding sovereignty and will allow a positive response to the US position. It is then that we will be able to move forward, with flexibility on the other issues. It is important to know that we can talk about the vital problems before we talk about the other issues. Perhaps you could indicate to us which would be a useful way to start.

Escobar: I want to thank you for your suggestion. I too believe that the only way to proceed, is to talk frankly and honestly, as we have done in the past. The only way to move forward is to avoid going around in circles. I think that this meeting must have as its fundamental goal to arrive at political decisions so that our respective Chiefs of Government may assume a realistic attitude in the framework in which political decisions are made.

I believe that to continue discussing every issue by issue that lies between us, without going into the central problem of our negotiations, is a waste of time. We consider that what we should do, is to point out with great clarity whether both countries are ready to assume the responsibility for taking the fundamental political decisions necessary for a new treaty, and whether each government can confront their respective peoples and governmental institutions with those decisions.

I will try to be more concrete. The concern of the US delegation is whether Panama is in a position to make the necessary political decision regarding the problem of neutrality after the end of the treaty, and whether Panama has the capacity to make the political decision to create the instrument that will allow the US Government the power to defend the canal against third country attacks, after the termination of the treaty.

From our standpoint, and as vital to us as the above is to the US, is to ask whether the United States is ready to make the political decision to return to Panama its ports, its railroad, its lands and reduce its military presence, without reducing its capabilities for the defense of the canal. Is the USG ready to make the political decision that will allow Panama to assume responsibility for the operation of the canal on the year 1999 while the US continues its military presence until the year 2000 when the treaty terminates? I believe this meeting should frankly consider if the two countries are in a position to adopt the type of political decision I have stated and transmit them to their respective Chiefs of State. If you do not have the capacity to do so, I think that you should frankly state so because otherwise we are wasting our time.

If I may sound blunt, but I believe that the intent of this meeting is to clearly determine whether we can talk about these basic issues. We cannot make them dependent upon the discussion of secondary matters or on the issue by issue discussion of other pending matters.

In other words, Panama can make the political decision on the issue that is vital to the United States, that is on the matters of neutrality and post-treaty defense arrangements. Can the United States make the decision on the rapid dismantling of the Canal Zone and return to Panama of its territory, without affecting the defense or the operations of the canal? I believe, distinguished Ambassadors, that that is the character and purpose this meeting should convey.

Linowitz: I would like to respond by saying that I welcome your statement and your frankness and that I will talk with equal frankness and bluntness. As you have done, I will equally focus on the issues, and will place our ideas on the table and speak with utter candor. We are pleased to know that you, on behalf of the Government of Panama can make the decision and the necessary undertakings on the issues of neutrality and defense.

On our part, as negotiators, we can assure you that if that is the kind of attitude that is forthcoming, we can promise you greater flexibility on the issues of the railroad, the lands, the ports and facilities and other matters. However, obviously, we will have to submit whatever you put before us to our higher authorities.

Regarding the defense aspects neither Ambassador Bunker nor I, nor indeed our political leaders, are in a position to propose formulas that do not count with the support of our defense leaders. On the issues of housing for Americans, port facilities, etc., we might find satisfactory proposals, but I could not personally suggest that we recommend to Congress or present to the American people something that has not been endorsed by our defense leaders. I can assure you that whatever you state are your requirements, we will transmit. However, as I have said before, and I still feel very strongly, the idea of the year 1990 simply will not work. I do not see any possibility for submitting and obtaining approval for any date before the year 2000. I want to make this clear, unequivocal and definite. I would be misleading you if I were to suggest that we could do more. For, in our role as negotiators, we have a sense of what is politically feasible, within the authority of the US Government. If in that assurance you can see possibilities for progress, let us attempt to move ahead. What more can I tell you than what we have been told and what President Carter himself has stated?

Bunker: That is a fair statement.

Escobar: We both understand that this is an exploratory meeting. However, it is different in nature from our regular rounds. This time we should attempt to explore the issues in greater depth. President Carter has set your parameters, as General Torrijos has set ours. Yet in the final analysis it will be the heads of state who will have to make the basic political decisions.

We are not suggesting that those of us gathered here today are going to make an agreement or formulate the treaty. However we do believe that if we follow the basic principles of the Tack/Kissinger Agreement,⁹ as well as the threshold agreements¹⁰ we have reached over the years, we might be able to find the core of a possible treaty. We need to prepare an outline that will allow our leaders to arrive at those basic political decisions. Thereafter, the experts can take over and put into practical terms the consequences of those political decisions.

For example, we have already submitted Panama’s basic position as reflected in the letter to President Carter. You can see there our position regarding neutrality and defense arrangements after the end of the treaty. Whether we can deliver on this will depend on the solution of the other points that are included in the position of Panama. To repeat there all the points included on our position would simply make us lose very valuable time.

What the members of the teams gathered here want to know is whether it is possible or not to transmit to their respective governments a very simplified draft of the questions that can be accepted and of those that can not. We should know this before the next round is announced so that we can see that the two countries have developed on these matters.

In the context of the guidance we could provide I would like to suggest a series of hypotheses on several issues, as a framework incorporating the following concepts:

—That Panama and the United States agree on the necessity that the Canal remain neutral, peaceful, and open to all nations at all times and will consequently draft a provision that reflects that mutual interest;

—That regarding the security of the Canal after the end of the treaty both countries agree that an attack by a third country would affect the security of Panama, of the U.S., and possibly of other countries in the Hemisphere, and therefore a provision will be drafted to reflect the need for such security;

—That Panama needs to recover as soon as possible its ports, railroad and lands, and consequently a provision will be drafted to do so promptly;

—That Panama, within the provisions to be drafted will point out that the transit of vessels will have priority in the operations of the Panamanian ports;

—That we must see an appreciable reduction in the physical military presence of the U.S. in Panama, without affecting the defensive capability of the Canal by the U.S.; and therefore a provision is drafted to appreciably diminish the number and extension of defense sites;

—That it is necessary for Panama to achieve its economic development that it recover a large quantity of its lands and waters which are today part of the so called Canal Zone, and consequently a provision is drafted in accordance with the proposal submitted by Panama in February of 1977.¹¹ This provision should also include the additional point made in the message to President Carter in the sense that the quantities of lands should be reduced, especially those for military areas of training. The quantity of land should be strictly what is needed for the operation of the Canal.

Regarding the matter of the year 1990, I am frankly surprised by your reaction. I think that what has happened is that Ambassador Linowitz, who has not been present during the many years of our negotiations, has not yet familiarized himself with the fact that it was the U.S. that proposed to end the administration of the Canal in 1990 in exchange for Panama allowing the U.S. to exceed the year 2000 in matters of defense. So this is not an arbitrary date, or one we picked out of a blue sky. At that time we did not accept that date because Panama did not want a security pact which would grant the U.S. defense rights beyond the year 2000.¹²

Bunker: Regarding the year 1990 you will recollect that it was made as a “what if” proposal. However it was coupled with a defense period that was not acceptable to Panama, and it was later withdrawn by us. It is no longer on the negotiating table.

Linowitz: First I would like to comment on the careful analysis of Ambassador Escobar. I think it is a good suggestion to see if we can agree on some basic principles, to be implemented later by the experts, and see if we can provide the framework of a treaty. I must say here that we have to work out something that has some prospects of approval, using our best judgment and the instructions we have received. My problem is how to deal with the general principles when, in the final analysis, they will require careful delineation if they are to be meaningful, instead of broad statements and open questions.

For example, you talk about the need to recover the ports, railroad, lands, etc., and yet my study of past negotiations shows that a great deal of progress has been made through the cooperation of U.S. and Panamanian representatives in finding solutions to the transfer of a number of facilities and installations. As I have said before, and I repeat now, we are willing to show a cooperative attitude and see if we can find more possible areas of flexibility and of some give in our part. However, I would mislead you if I were to tell you that it would be possible to transfer all of the port of Balboa. That is not what I understand. We will need further discussions to determine that areas in the port of Balboa can still be the subject of earlier transfers. I am afraid that general principles without specifics would only put off a solution.

Regarding duration and neutrality I think that the formulation of general principles can be very useful. Since the last time we met, I have devoted considerable time, and have spent over one hundred hours in consultations trying to figure out a solution to the issues of duration, neutrality and post treaty defense arrangements, in a manner that will permit us to say to our people that we have done what is required, and that will also permit you to say that Panama’s position with respect to its sovereignty has not been affected. With this in mind I want to see if we can try the following solution to the problem of neutrality. It consists of three points:

First: Panama, a territorial sovereign, will declare the Canal permanently neutral. This is a principle that you always wanted.

Second: After the termination of the treaty on the Canal, only Panamanian troops shall remain in Panama, unless Panama and the United States should otherwise agree.

Third: On the starting date of the new treaty, Panama and the United States would commit themselves to a regime of neutrality which shall be maintained in order that the Canal remain secure, free and open.

That would permit you an interpretation of how you wish to see it done. And you know the way we will interpret it regarding post treaty neutrality. If you could agree on such a formulation I feel we could make progress because I have some confidence that we could get the required approval. Maybe also in some other areas we could find general language that could bring us closer.

Bunker: I might add, in addition to the points made by Ambassador Linowitz, that any outline we might prepare would have to include other points that are of great importance to the U.S. For instance, the matter of the rights of civilian employees is of great importance to us and to Congress. It would need to be spelled out after careful negotiation, and it is a subject that we have not approached yet. There is also the question the entity and the operation of the Canal during the term of the treaty. It is these kinds of areas, as Ambassador Linowitz has said, that will require concrete negotiation.

Escobar: I think Ambassador Linowitz has made a correct evaluation in the sense that we should become more concrete each time we deal with the different issues, so that our heads of state are in a better position to study and decide these matters.

I also think that the tentative proposal you have made specifically regarding the concept of neutrality is of the kind that we must submit to our head of state. In passing I shall note that we will study it with all due care and attention.

We have certain difficulties understanding what is, and what is not, vital to the interest of the United States. Yet we feel that if Panama is ready to submit to its country those questions that will be difficult for our people to accept, because they are vital to the United States, the US should be ready to present to its country and its people the difficult issues because they are vital to Panama. This is the only way in which these negotiations can progress. For example, regarding the entity that is to be created for the operation of the canal, it should be specified that it will devote itself exclusively to canal operations, and not to any commercial activities. When Panama assumes jurisdiction of what is now the Canal Zone, it will own and control the ports of Balboa and Cristobal. Panama will adopt the measures to insure that the entity, within the ports will have operating priority to facilitate the transit of vessels through the canal. Also at the time of the signature of the treaty, the railroad of Panama will become the property of the Republic of Panama. The United States accepts the proposal on lands and waters presented by Panama in February 1977 and its attached “modus operandi”.¹³ The US will appreciably reduce the training areas. The Republic of Panama will completely occupy Ancon Hill, and if there are any instruments of a technical or military nature on it, Panama will allow access without interference, in accordance with a coordinated plan. The distinguished Ambassadors must realize that these specific formulations are as vital to Panama, as defense and neutrality are to the United States, and each country must face the resulting responsibilities.

There is no way in which we can go home with an agreement that is specific regarding neutrality and defense, and yet is not specific and concrete regarding the recovery by Panama of its territory. Regarding duration to the year 1990, it is a matter on which I insist that we can take it back to our respective heads of state so that we may continue resolving the matter. If we could reach such a tentative draft at this meeting, these kinds of specific formulations would be advancing our purposes. I honestly don’t think it is possible to be specific on neutrality and defense, if the US does not want to be specific on what Panama wants to recover, which for practical purposes represents the rapid dismantling of the Canal Zone.

Bunker: I think that in pointing out the issues that are of importance to Panama, such as the recovery of the lands and waters, you do require further conferences and negotiations. I have indicated that we could possibly do something regarding the railroad and housing. Maybe there are other things we could turn over to Panama in the areas of ports, but first it is necessary to negotiate these things out before we can incorporate them in the kind of document that you are suggesting. The document ought to come closer to each side’s positions. We can’t present a document with your positions and our positions, yet with further discussion we could draw the positions closer. You want to recover as much of the lands and waters as possible; we want the minimum necessary for the operation and defense of the canal. I feel that we have come closer on this issue than on the others. On the other hand, it is important to us especially for the purpose of submitting the treaty to Congress, that we deal with the rights of the civilian employees, which is a matter we have not even discussed. We face certain difficulties, but they are not insuperable, in developing the kind of document that you have suggested.

Linowitz: I would like to say a word to better relate to your approach. First, it is not a matter that we want to be specific on neutrality and yet remain general on the other matters. On the contrary, our proposal on neutrality is of a general nature, and we will need to work out the rules. We want to agree on the principle, and later fill out the appropriate specifics. Secondly, if you understand what we are trying to do, we will be better able to serve our mutual interests. As Ambassador Bunker has said we could take any sort of proposals you make and submit them. However, we as friends, would not be serving our cause well if we did not discuss and explain what is politically feasible. I do not favor presenting something that is going to be rejected, but I will do it if you insist. On the entity you say that it should be restricted to operations only and not to commercial enterprises. Yet, who is going to determine what are commercial activities? How is it going to be done? On the matter of jurisdiction over Balboa and Cristobal, I know it is not going to happen. Maybe some changes are possible, but not your full ownership and control of Balboa and Cristobal. On the railroad, as Ambassador Bunker said, we can talk. There are possibilities for exploring the matter further. Regarding the lands and waters presentation of February 1977 and its modus operandi, we cannot accept it. On Ancon Hill I cannot tell you it is possible because there are certain problems, but we can explore the matter further. We are willing to hear about the year 1990 instead of the year 2000 but you won’t get it and it won’t serve you well to insist on it. We can take up the draft that Panama wants, but I feel it would be better if we could get closer, in order to obtain approval.

There are two courses of action open to us. We could list, side by side, your position for submission to General Torrijos, and our position for submission to President Carter, and they can study them and observe the differences. Alternately, we could try to narrow down our differences. This is feasible, but we will follow whatever course of action you suggest.

Escobar: Regarding the first alternative that each side present its own position, it does not make sense. For a long time now we have both known what our respective positions have been. The second method is more appropriate as long as the approximation of positions is not exclusively on the issues of neutrality and duration but extends also to other issues that are essential to Panama. All issues that you claim are vital to you, are in fact mostly secondary. This confuses the Panamanian side. You say you cannot go to Congress without a guarantee on neutrality and on defense beyond the year 2000 against attacks from third countries because they would not approve the treaty. We understand that. But you also tell us that you can’t go to Congress with the issues of the ports, the railroad, Ancon Hill, the lands and waters, the commercial activities. We really don’t know what you can go to Congress with, and we must say that we are confused.

We must insist on knowing what is vital to the US and what is not vital. In theory, neutrality and defense are vital, and yet in practice, when we come down to it, everything is vital. We fail to understand this. We honestly think that it is possible to reach a closer approximation of our positions on these matters. In the same way as you require greater specificity on the issues of neutrality and defense, so do we regarding the dismantling of the Zone. I feel we can do this with goodwill. If you need to undertake consultations on these problems, we will keep in touch and see what the results of these consultations are. President Carter said that he wanted to see a rapid solution to the negotiations with Panama, and General Torrijos also wishes to reach a rapid solution. This is the real core of the matter. To reach a decision.

I fail to see why the ports of Balboa and Cristobal cannot be transferred to Panama when eighty percent of the cargoes are actually shipments destined to Panama and are not related to canal transits. As long as in the ports areas priority is assured to vessels in transit I cannot see that the ports are vital to the US. I must insist to the distinguished ambassadors that each time we get into a discussion of this problem we enter into a vicious circle in which all is vital to the US. We wish to separate what is vital to the US from what is vital to Panama. I think this will bring us closer.

If you seek flexibility from Panama on neutrality and defense, the US must also be flexible on the other issues that are important to Panama.

Linowitz: I have something to say and I would ask you to listen carefully. We want to show a spirit of flexibility to try to find a way of resolving the issues before us. Among the areas we have explored, and which I intended to indicate to you later, but that I shall present to you now to show how seriously we are considering the vital issues and seeking room for flexibility, is the following.

When we read over our proposal on neutrality we decided to say that we will not insist on a mutual assistance treaty. If you accept our formula on neutrality, we will not press for a security pact. I think that it is a tremendous thing for the US to say this. We do so because we are trying to find a way which is satisfactory for you and meets our needs. Regarding the railroad I think there might also be a way to show greater flexibility. I hope that you will study this approach that I wanted to bring up before we go to lunch.

NOTE: Morning meeting was recessed for lunch at 1:45 p.m.

Escobar: Good afternoon, distinguished Ambassadors. I wish to start this meeting by requesting that Ambassador Linowitz give us an explanation of the concept of neutrality that could be in the agreement that he presented to us this morning. We want this so that we could study its full dimension and import. We would appreciate this information and know that he will go along with our request to find out in greater depth how he conceives the concept of neutrality can be developed, its content and its modus operandi. In other words we would like to know all those aspects that he feels would be necessary to allow us to understand more clearly what he told us this morning.

Linowitz: First let me say that I welcome this opportunity and that I am flattered by your suggestion that my proposal might be more complex than it really is. It is simply a suggestion which I have put forward in the hope of providing greater simplicity, instead of greater complexity to our search for solutions. I suggested several separate aspects that might be covered by a neutrality agreement. Two of them are those which Panama has advocated; first a declaration by Panama, as territorial sovereign, that the canal will be permanently neutral; second a provision after the termination of the canal treaty that only Panama will maintain troops, unless both Panama and the US were to otherwise agree; and thirdly, a carefully framed provision that would say simply what might be interpreted as meeting US needs as well as Panama’s aspiration, to the effect that “Panama and the United States agree to commit themselves to a regime of neutrality (later we would define the specifics that would have to be agreed upon), which shall be maintained in order that the canal shall be secure, free, and open to all vessels without discrimination.” Later we would apply the rules of neutrality.

What this formula does is:

(1) It starts on the day of the treaty when the United States has primary responsibility for assuring the neutrality of the canal, and for the period after.

(2) It does not say by whom or how such neutrality shall be maintained but it simply states the concept in general language.

In short the implementation is left for future discussion and future actions, instead of for present delineation. I think, and I wish this kind of language should meet what we understand were your concerns regarding sovereignty, and also, I hope, our needs as they have been asserted in this country. Admittedly this is general language but it is for these general terms that we have a preference.

Escobar: Could I ask you a question regarding this matter with the purpose of gaining a better insight into some of these concepts:

Linowitz: Certainly.

Escobar: Regarding the neutrality pact, how would it operate vis-a-vis third countries? Concretely, what would be the relations between Panama and third countries specifically with regard to the declaration of neutrality?

Linowitz: I don’t know. The point is simply that we are stating our mutual concern that the canal remain neutral and we are committing ourselves to a regime of neutrality. I have not thought out how it would be done. We are talking of the principle. There are greater advantages to this general language. We are not trying to foresee what may eventually happen in the future. The language simply joins us in our commitment to neutrality.

Escobar: I have another question. How would the neutrality pact operate between the United States and Panama? What would its effects be supposing the United States went to war with third countries?

Linowitz: I have not thought about that specific case. However, what we are saying, is that the canal must remain neutral and that concept is covered. We have assured the neutrality of the canal.

Escobar: I ask for your indulgence, Ambassador Linowitz, in asking so many questions. However to better understand those matters we will have to study I have another question. In the neutrality pact between the United States and Panama would third countries only adhere to the pact, or would they form part of the pact? How would this operate?

Arias: The questions we are posing regarding the three points are due to the fact that they contain different elements. First, a declaration by Panama stating the permanent neutrality of the canal as a function of its sovereignty. This we understand would be a unilateral declaration by Panama. Second, when we say that only Panamanian troops shall be maintained, where would this formulation appear? Would it appear as part of the pact or in the new canal treaty?

Linowitz: It does not make any difference. The agreement would be signed after the canal treaty. There will be another document on neutrality.

Arias: There is another aspect I wish to clear up. Would it be a bilateral declaration? Would it be a bilateral agreement?

Linowitz: The United States and Panama would enter into a treaty which would be a separate one from the new canal treaty. In it, first, Panama as territorial sovereign would declare the permanent neutrality of the canal. Second, the US would agree, (and this could also appear in the canal treaty), that no troops would be stationed after the expiration with the exception of Panamanian troops. Third, the provision that I have read to you plus the rules of neutrality.

Arias: I do not see clearly the point that the second provision attempts to make. If we are talking of a neutrality treaty or agreement, not one on defense, why do we need a provision that no troops would be maintained? The rules of neutrality do not allow the presence of such troops.

Linowitz: OK. Because it is so important for Panama we could include a statement to that effect in the neutrality treaty as well as in the pact.

Escobar: I want to see if I understand what is being said. In the new treaty on the canal we would state that there would be no troops as of the end of the treaty. Then, in the neutrality pact, we would not mention this question.

Linowitz: Yes.

Escobar: Regarding the neutrality pact between the United States and Panama what would be the situation of third countries? Would they simply adhere to the bilateral pact or would they become parties to the pact?

Linowitz: First, only the United States and Panama would enter a pact. Secondly, as we have suggested previously, and if it meets with your approval the US is willing to support it, the United States and Panama together would sponsor a resolution in the OAS calling upon all countries to subscribe to a protocol asserting that they will respect such a neutrality. The OAS could also be the depository.

Escobar: I have another question on a matter of great importance. Your ideas regarding any bilateral neutrality pact between the United States and Panama are always very clear. However, if any problem arose regarding the operation of the canal, resulting from domestic Panamanian policies or actions, such as those that might be required because of internal terrorism we understand that it would be the exclusive competence of Panama to resolve such problems and that at no time you would invoke the neutrality pact.

Linowitz: With all due respect I want to say that your question is precisely the kind of question I wanted to avoid. If you are going to require specific interpretations of the provisions, then we will require specific interpretations of other provisions. I see no reason for the United States to have to move in, in the future, as a result of domestic Panamanian matters but I believe it is a mistake to try to reach clear language for each specific circumstance. The reason that this formulation can be approved is because it leaves open the possibility of interpretation to the future. We consider this a great concession. We are not playing games here tonight. We have put on the table what we consider is a very substantial concession on our part. I understand your questions. Maybe our proposals sound too generous. However instead of devoting more hours to further discussion I believe that at this juncture I should make clear to you that I am trying to inform you of what will be needed to obtain the required approval. However if we start once again speaking of specific questions we will be largely defeating our purpose and we will find ourselves back where we started.

I want to add that you must look upon this proposal as a very substantial indication of how far we are ready to move in order to motivate you and to find out whether we can agree or not on this principle of the treaty.

Escobar: I understand, Ambassador Linowitz. The problem is that as these questions must be studied in depth by our government, the more information we have the better we will be able to study these problems and reach appropriate decisions. I feel it is necessary to find out whether the neutrality pact or bilateral neutrality agreement would require, in addition to a definition of neutrality, a series of rules regarding the modus operandi of such neutrality. Logically it is necessary to develop procedures once the pacts have been drafted. The problem is what is going to happen when neutrality is considered violated. This is the reason for my question. To determine the import of the rule first regarding how we are to interpret that a violation has occurred, and secondly, what actions are to be taken against the violators. And here is where we get into the military problem.

We really did not consider it necessary to enter into a security pact. We saw that a security and a neutrality pact were not only redundant but even contradictory.

A neutrality pact does not present us with a problem. However the definition of the rules regulating neutrality are what both countries will have to agree on. Regarding these regulations we will have to find satisfactory answers to the question of when neutrality has been violated, by whom, and what action will be necessary. I have posed these questions because our government will be asking us these very same questions when we return.

Linowitz: I understand your reasons and I must tell you first that I don’t have all the answers. Secondly, when we were in Contadora we gave you a paper with the rules of neutrality which also referred to arbitration and mediation, as well as the kind of things that are covered normally under the rules of neutrality.¹⁴ I hope that we are not trying to cover every single possible eventuality. In providing you with that paper we were trying to find areas of agreement regarding the rules that would apply. We have not thought beyond those rules.

Escobar: Please excuse me, Ambassador Linowitz, if I insist so much on these questions. I wanted to take the maximum advantage of your knowledge of the issues that constitute vital problems for our two countries. I want to thank you for all your explanations, which will serve as the parameters within which we will study the problems with the care and seriousness required. I am aware that the issue is of vital importance to the operation of the canal and to the interest of the US and Panama.

[Omitted here is discussion of the Panamanian position on lands and waters and of the need for flexibility on the part of both the U.S. and Panama.]

1. Source: National Archives, RG 59, Official and Personal Files of Ambassador at Large Ellsworth Bunker, Lot 78D300, Box 1, Negotiating Round (Washington, DC) March 13, 1977. Secret. Drafted by Anthony J. Hervas and Stephanie van Reigersberg (OPR/LS) on March 18. The meeting took place at the Panamanian Embassy Residence.
2. See Foreign Relations, 1969–1976, vol. XXII, Panama, 1973–1976, Document 57.
3. According to a March 24 memorandum from Dolvin to multiple recipients, the meeting had originally been scheduled for March 12 in New York City, but was postponed and relocated because poor weather prevented the U.S. negotiators from landing in New York that day. (National Archives, RG 218, Records of Chairman George S. Brown, Box 48, 820 (Panama) Bulky 1 Jan 1976–31 May 1977)
4. See Document 15.
5. See Documents 20 and 22.
6. See Document 23.
7. See footnote 1, Document 20.
8. See Document 25.
9. See footnote 10, Document 3.
10. The Threshold Agreements are discussed in Document 3.
11. A reference to the “10 Points” proposal. See footnote 13, Document 22.
12. See footnote 23, Document 3.
13. See footnote 11 above.
14. See Document 15.