49. Memorandum of Conversation1


  • U.S.-Panama Relations


  • Panama

    • Ambassador to the United States Gabriel Lewis Galindo
  • United States

    • The Secretary
    • Ambassador William J. Jorden
    • Minister S. Morey Bell
    • David G. Wagner (notetaker)

Ambassador Lewis immediately addressed the details of the negotiations and made the following points:

1. A stipulation that American employees will be rotated back to the United States after five years in Panama should be written into the new treaty. (Note: The current proposal calls for rotation according to the regulations of the Department of Defense.)

2. Panama wants the right to be able to choose the three Panamanian members of the Entity’s Board of Directors.

3. Since the United States has the right to go back into Panama under the terms of the neutrality treaty, the right of priority transit of United States warships in times of war or emergency is superfluous and should be dropped as a negotiating question.

The Secretary expressed his pleasure with the May round of the negotiations.2 He was, however, disturbed by some of the additions Panama wanted to make because he feared that the progress already made in the talks could be lost.

On the question of economic arrangements, Lewis stated that it would be very difficult to raise the toll rates to pay for the package. Ecuador and Peru especially would be disturbed. Panama needs a large economic package because it wants to become a developed country with the help of the United States. It wants to be able to count on the United States in this effort and therefore wants provisions for [Page 157] development support written into the treaty. Moreover, there are certain aspects of the Canal’s operation which lose money. If Panama is not a developed country when it takes over the Canal, it will not have the money to cover these losses.

The Secretary replied that Panama’s economic arrangements proposal “is not in the ballpark.” To turn over the Canal and also to give Panama a large sum of money also would drive the Congress up the wall. We have relationships with many other countries in which their development is generously funded on a case-by-case basis. We can handle projects for Panama on a case-by-case basis, but a large lump-sum payment is out of the question.

The question of economic arrangements highlights our political problems with the treaty in this country, he said. This afternoon we were barely able to block a surprise amendment in Congress which would have stopped the negotiations altogether.3 The Executive’s course of action on the Panama treaty is not popular in the United States, and there will be similar amendments in the future.

On the matter of human rights, the Secretary expressed satisfaction with Panama’s decision to allow many exiles to return to Panama.4 Anything that Panama can do in this regard is helpful to us on the Hill, since the opponents are using human rights as a weapon.

Lewis told the Secretary that, after the talks move a little farther, he would like to fly back to Panama to talk with General Torrijos. He asked if he could meet with the Secretary again before he leaves so that he can carry the Secretary’s views back to the General. The Secretary agreed, since the negotiations’ momentum must be maintained.5

In closing, the Secretary stated that he looked forward to having breakfast with Foreign Minister Gonzalez-Revilla at the upcoming OAS General Assembly in Grenada.6

  1. Source: Department of State, Records of Cyrus R. Vance, 1977–1980, Lot 84D241, Box 10, Nodis Memcons 1977. Secret; Nodis. Drafted by David G. Wagner (ARA/PAN) on June 14; cleared in ARA/PAN, ARA, and S/S; approved by Twaddell on June 23. The meeting took place in Vance’s office.
  2. See Documents 36, 38, and 39.
  3. A reference to an amendment Representative Marion Snyder (R–KY) offered on June 10 to H.R. 7556, which made appropriations for the Departments of State, Justice, Commerce, the Judiciary, and related agencies for FY 1978. His amendment introduced the following new section to Title I of the bill, which dealt with State Department appropriations: “SEC. 105. None of the funds appropriated herein may be used to implement any new treaty with the Republic of Panama, which surrenders or relinquishes United States sovereignty over and control of the Canal Zone and Panama Canal.” After lengthy discussion, which included a phone call from Vance urging the House not to adopt the amendment, a recorded vote was refused and the amendment was rejected. (Congressional Record, vol. 123, Part 15, June 7, 1977, to June 14, 1977, pp. 18383–18398)
  4. On May 26, Torrijos announced in a published letter that a group of Panamanian exiles would be allowed to return. His letter was accompanied by a list of 51 exiles cleared for return. See telegram 3833 from Panama City, May 27, in the National Archives, RG 59, Central Foreign Policy File, D770190–0621.
  5. No record of the meeting has been found.
  6. The OAS met from June 14–17 in Grenada. Vance met with Gonzalez-Revilla on June 15. See Document 52.