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

5. Memorandum From Robert Pastor of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, January 26, 1977

SUBJECT

• Background Comments on the PRM Study in Response to PRM/NSC–1

Attached is the response to PRM/NSC–1/Panama, the paper requested by PRM/NSC–1.² I think the paper represents a basis for discussing the issue. The major issues are correctly identified and the major differences between State and Defense are stated in the options, if not in the body of the paper. As I mentioned to you, State believes that the Canal is of declining strategic and economic utility, and its primary interest is in securing a treaty with Panama. The Defense Department continues to see the Canal as “vital”, but has reluctantly agreed to a treaty; any departure from the status quo, however, is painful to Defense. These differences are reflected in the text where a State Department sentence (or clause) declaring the Canal’s declining significance is balanced against a Defense Department’s sentence proclaiming it a “major” defense asset.

The continuing debate (see pp. 6–9) between State and Defense served to focus the paper to an unwarranted degree, in my judgment, on only the major issues of the negotiations with Panama. There are, however, three negotiating arenas which count: (1) U.S.-Panama; (2) Congress-Executive; (3) Congress-Executive-Zonians. As a result of Carter’s meeting with Congressional leaders,³ the anticipated appointment of Linowitz as co-negotiator⁴ and my own appointment (in my capacity as Director of the Linowitz Commission,⁵ I have been in regular contact with the Panamanians for two years), the U.S. has sent and the Panamanians have already received a signal that Carter plans to do something positive on this issue. It is my opinion that relatively greater emphasis should be placed on winning over the Congress and the Zonians first—in a sense, securing our flanks before we advance on (negotiations with) Panama.⁶ This interest—in making sure the Congress, the Zonians, and the American people can support a treaty was unfortunately missing in the debate. It was inserted in the paper (Tab 10) but still does not have the kind of emphasis which, I believe, it merits.

Even if the Thurmond Resolution⁷ is slowed or stopped, the anti-treaty forces in Congress will probably decide to give Linowitz a difficult time in confirmation hearings, and the Executive should be prepared to make a strong effort to assure his confirmation, and in doing so, to gain substantive support for a new treaty. The argument that we should ask Senators to allow Carter time to make his own decisions on the issue strikes me as insufficient.⁸ We should take a more positive approach, persuading Congress of the need of a new treaty.

The discussion in the PRC should focus on four sets of decisions:

1. Overall strategy for resuming negotiations (pp. 9–10: “Issues—Next Step”).⁹

2. Major Unresolved Treaty Issues (Tab 9).¹⁰

3. Steps to Obtain Congressional and Public Support for a Treaty (Tab 10).¹¹

4. Outcome of PRC Meeting: Messages to and for the President¹²

1. Overall Strategy (pp. 9–10)

The State Department has erased a third, middle option providing some Presidential guidance short of fixed instructions to the negotiators. Option 1 (a formal offer) seems to expect too much to transpire at a single PRC meeting, while Option 2 (informal exploration), in my opinion, expects too little. The reason, I believe, that the State Department deleted the middle option is because they think even that option would lead to a bureaucratic stalemate, and they believe it is essential for the negotiators to return to Panama as soon as possible, and, of course, Option 2 (informal exploration) will accomplish that objective.

In my opinion, the process will be most effectively speeded up, if the negotiators could return to Panama with some sense of where the President stood on the major unresolved issues. Thus, an informal understanding between the President and the negotiators prior to their return combined with a coordinated lobbying campaign represents the best strategy for moving toward a new treaty.

As to Interagency Coordination, State’s argument for a committee chaired by the Under Secretary of State for Political Affairs strikes me as sound, although Defense will require some special role or veto. Even though it is not mentioned, I believe it is essential for a Congressional Liaison to play a full role in these discussions.¹³

2. Major Unresolved Issues (Tab 9)

This section will demand the most time, and we should, therefore, move briskly through the discussion to this section. Suggested choices:

a. Duration of Canal Operation Rights. Try to get as much flexibility here as possible. (Thus, Option 3.)

b. Duration of Canal Defense Rights. The real question here is: What will Panama accept? And the clear answer appears to be Option 5. (This is the only issue—i.e., question of terminating defense rights by the year 2000 in which Panama’s position appears fixed.) I have spoken to people at Defense and have been told that General Brown will accept this.¹⁴

c. Permanent Neutrality Guarantee. The question here is how to ensure the right of the U.S. to guarantee the neutrality of the Canal after the treaty without making it appear that this represents a new form of perpetuity. This is the principal area where exploration of the Panamanian position is necessary, and where differences within the USG might be the widest. Options 2, 3, 4 or 5 might work.

In the last NSC meeting on Panama,¹⁵ the pivotal question was the duration of defense rights. With new flexibility by Defense on this issue, the debate has shifted to the neutrality issue and to post-treaty defense rights, and here Defense has again dug in its heels and insisted on a treaty provision which recognizes the unilateral right by the U.S. to intervene.¹⁶ State, correctly, in my view, believes Panama will view this as another attempt at perpetuity and reject it outright. Remaining sensitive to the perpetuity complaint of the Panamanians is an essential factor in deciding on a negotiating position on neutrality and post-treaty rights.

d. Post-Treaty Defense Arrangements. Given the student pressure on Torrijos, it will be very difficult for him to accept a provision giving the U.S. any defense rights beyond the year 2000. Indeed, I would guess that the best way to get these rights is not to include it in the treaty or to have a secret protocol, but rather to ignore this item for ten years until the responsibility for operations and defense begin to shift to Panama and the relationship between the two countries rises to a more mature level. Thus, Options 5, 4, 6, 3, in that order, would probably offer the best approach.

The real post-treaty problem for the U.S. is not in addressing a genuine threat to the Canal, but in dealing with “salami-type” policies—e.g. (the equivalent of) excluding Israel from the Canal, or raising rates for one or two countries. We could not send the Marines in for this; and probably the only response by the U.S. could be diplomatic or economic.

e. Lands and Waters. The initial U.S. position on this (85% of the Zone to be retained) was unrealistic. The new position (around 45%, I think) is still much higher than the amount of land we use (6%). An exploratory option (2) is necessary here.¹⁷

f. Zonians. There are two issues here: (1) how to ensure an adequate American work force to operate the Canal; and (2) how to guarantee the job safety and benefits for the U.S. employees in the Zone. Only the first question is addressed in this paper, and Option 1 (rights equivalent to SOFA) appears the best means to achieve this objective.

The second issue, however, must be addressed quickly to ensure that the AFL-CIO, which is very concerned about the jobs of its union members in the Zone, is transformed from a major obstacle to treaty ratification into a significant supporter.

g. Canal Operating Entity. Option 1 is the present U.S. position, but it would be helpful to permit negotiators to explore other possibilities.

h. Financial Benefits. On this issue, it is important to keep in mind that Congress would not be very receptive to the idea of generously compensating Panama for, in effect, taking the Canal.¹⁸

i. Expansion. Flexibility on this issue is essential—i.e., it should not be permitted to hold up negotiations—since we will probably never use the option to expand the Canal anyway.

3. Steps to Obtain Congressional and Public Support For a Treaty.

In State’s agenda, this section will be discussed only “if time permits”. In my opinion, this should be the second item on the agenda, and Tab 10 provides a good list of all those steps that need to be taken. In addition to those points, however, it would be useful to discuss:

a. The role of Linowitz in coordinating this effort. Linowitz and Bunker have a good personal relationship and can work out their respective roles in negotiations on an informal basis; but on the issue of mobilizing domestic support, Linowitz clearly has a comparative advantage, which he could most effectively exploit if he were working out of the White House, rather than State. This is an essential point: every important and successful lobbying campaign on a major foreign policy issue—from the Marshall Plan to the Trade Expansion Act—has been run out of the White House, where the coordinator can involve domestic groups much more easily and engage the Defense Department as well as State.

b. Bunker should testify in open as well closed session (or closed, only if we could make a “sanitized” transcript immediately available for distribution) at the earliest.

c. The President should encourage congressional leaders to organize a Consultative Committee to work closely with the U.S. negotiators.

4. Outcome of Meeting

a. It is important for a summary of the meeting to be sent to the President and that the Secretary of State or yourself brief him on the meeting. Then, the President should meet with the negotiators either in the NSC or informally to provide guidance for them on the major issues.¹⁹

b. President Carter should immediately move to set in motion the steps needed to obtain congressional and public support and should appoint Linowitz his personal liaison and coordinator of this effort.

1. Source: Carter Library, National Security Council Institutional Files, Box 24, PRM–01(1). Confidential. Sent for information.
2. Paper not attached, printed in Document 3.
3. See footnote 28, Document 3.
4. The Carter administration asked Linowitz to negotiate the Panama Canal Treaties, and he accepted on the condition that he co-negotiate with Bunker. On February 8, Carter designated Linowitz to be part-time co-negotiator of the Panama Canal negotiations. For the text of the designation, see Public Papers: Carter , 1977, Book I, p. 101.
5. A reference to the Commission on United States-Latin American Relations under the Center for Inter-American Relations, which Linowitz chaired before becoming co-negotiator of the Panama Canal Treaties in 1977.
6. Brzezinski highlighted this sentence.
7. See footnote 15, Document 3.
8. Brzezinski highlighted this sentence.
9. See footnote 2.
10. Ibid.
11. Ibid.
12. For the outcome of the January 27 PRC meeting and Carter’s responses to it, see Document 8.
13. Brzezinski highlighted this sentence.
14. Brzezinski wrote in the left margin:“bilat [illegible]after 2000.”
15. See Foreign Relations, 1969–1976, vol. XXII, Panama, 1973–1976, Document 90.
16. Brzezinski highlighted this sentence.
17. Brzezinski highlighted this sentence.
18. Brzezinski highlighted this sentence.
19. Brzezinski highlighted this sentence. See footnote 12 for the summary of the PRC meeting. Carter met with Bunker and Linowitz on February 11 (see Document 14).