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

66. Intelligence Information Cable Prepared in the Central Intelligence Agency¹

Washington, July 24, 1977

SUBJECT

• Optimism of General Omar Torrijos that complete agreement with the United States on Canal Treaty talks will soon be achieved

ACQ

• [location not declassified]

SOURCE

• [2 lines not declassified]

TO STATE

• No distribution except to Mr. Harold Saunders

TREASURY

• No distribution except to Mr. Foster Collins, Special Assistant to the Secretary (National Security)

1. During meetings with the Panamanian Canal Treaty negotiating team on 21 July 1977, General Omar Torrijos Herrera, Chief of Government, stated that the treaty talks appeared to be in the final phase and that he was optimistic² that complete agreement could be reached with the United States on all outstanding issues by the end of July 1977. Torrijos said the United States was preparing a new proposal on the compensation issue that apparently would come closer to Panama’s position on this issue. Torrijos commented that Panamanian negotiators Romulo Escobar Bethancourt and Aristides Royo would return to Washington early in the week of 25–31 July to pursue the compensation talks and that the remainder of the team would stay in Panama to continue work.³

2. At one point during these meetings with Torrijos, Foreign Minister Nicolas Gonzalez-Revilla expressed strong disapproval of U.S. tactics with regard to the compensation talks. However, Rodrigo “Rory” Gonzalez, treaty negotiator and confidant of Torrijos, answered the foreign minister by saying that Panama could not continue negotiating this issue indefinitely, that it was now necessary to reach a final agreement. Rory Gonzalez said there would not be another opportunity to reach a final agreement because Panama’s economy could not stand two more years of uncertainty regarding a Canal treaty.⁴ ([less than 1 line not declassified] Comment: Senior Panamanian officials interpret Rory Gonzalez’s remarks to mean that Torrijos has decided to arrive at the best possible formula now, with no further delay in the negotiating process.)

3. Torrijos and the Panamanian negotiators also discussed plans for a possible meeting of Chiefs of State of Panama, Colombia, Venezuela, and Costa Rica in Bogota on 30–31 July.⁵ Torrijos said Gonzalez-Revilla was working on plans for the meeting, which would take place if final conceptual agreement were reached with the United States on the new treaty.⁶ Torrijos commented that he hoped to be able to first inform these heads of state privately that the treaty talks had culminated in an agreement that was satisfactory to Panama, and then after the meeting to make a public announcement. ([less than 1 line not declassified] Comment: although Torrijos was optimistic while discussing plans for a Chiefs of State meeting, he gave the impression that such a meeting would not take place if conceptual agreement were not reached with the United States during the final week of July.)

4. Torrijos also raised once more the idea of meeting with the President of the United States at some point following the Bogota meeting.⁷ Torrijos suggested that such a meeting would allow the two heads of government to make a joint public appearance that would formally indicate their backing of the conceptual agreement, and thus set the stage for drafting the new treaty instrument.

5. Senior Panamanian government officials do not believe the current lands and waters discussions, headed by Lieutenant Colonel Armando Contreras, G–3 of the National Guard (GN), represent a possible stalemate in this phase of the negotiating process. The outstanding lands and waters issues are technical rather than political in nature, according to the Panamanian technicians involved in the talks. Also, although Contreras takes part in sessions other than the technical lands and waters talks, members of the Panamanian negotiating team claim that he has not influenced other aspects of the negotiations.

6. The Panamanian negotiators who will remain in Panama will continue studying the draft treaty presented by the U.S. negotiators during the week of 18–23 July. The Panamanian negotiators have criticized certain aspects of the U.S. draft treaty, but to date no serious substantive discrepancies have surfaced. The Panamanian negotiators are currently preparing a separate draft treaty as a counter-proposal which will be presented to the U.S. for consideration in arriving at a final document. Members of the team are hopeful that a Panamanian draft can be completed by early August.

7. The meetings with Torrijos were held throughout the afternoon and evening of 21 July. Persons attending the meetings in addition to Escobar, Gonzalez-Erevilla, Royo, and Rory Gonzalez included Nicolas Ardito Barletta, Minister of Planning and Economic Policy; Adolfo Ahumada Corcho, Minister of Labor; Eligio Salas Dominguez, Rector of the University of Panama; Carlos Lopez Guevarral and Diogenes De la Rosa, Treaty Advisors; Abraham Saied, Minister of Public Health; Ernesto Perez-Balladares, Economic Advisor to Torrijos; Carlos Ozores Typaldos, Deputy Foreign Minister; and Ruben Dario Herrera Perdomo, Member of the National Legislative Commission. ([less than 1 line not declassified] Comment: there were no GN officers present during these meetings.)

8. [location not declassified] Dissem: [dissemination information not declassified] report class secret/warning notice-sensitive intelligence sources and methods involved—not releasable to Foreign Nationals—not releasable to contractors or contractor/consultants—dissemination and extraction of information controlled by originator. Classified by recorded reporting officer. XGDS-2, advance copy transmitted State Treas CIAOPSCEN.

1. Source: Carter Library, National Security Council Institutional Files, Box 63, PRC 027 Panama 7/22/77. Secret; Priority; Noforn; Nocontract; Orcon. Sent to the Departments of State and Treasury, and to SDO, D/CRG, DCI, NSC, D/ORPA, and WHSITRM. All brackets except those that indicate omitted text are in the original.
2. An unknown hand underlined “Torrijos” and “appeared to be in the final phase and that he was optimistic.”
3. An unknown hand underlined “would return to Washington early in the week of 25–31 July to pursue the compensation” and “would stay in Panama to continue.”
4. An unknown hand underlined “Rory Gonzalez” and “Panama could not continue negotiating this issue indefinitely, that it was now necessary to reach a final agreement. Rory Gonzalez said there would not be another opportunity to reach a final agreement because Panama’s economy could not stand two more years of uncertainty regarding a canal treaty.”
5. An unknown hand underlined “plans for a possible meeting of chiefs of state of Panama, Colombia, Venezuela, and Costa Rica in Bogota on 30–31 July.” The leaders of Panama, Colombia, Costa Rica, Mexico, Jamaica and Venezuela met in Bogotá August 5–6. In telegram 7313 from Bogotá, August 8, the Embassy provided a summary of the summit, which Torrijos called to review the progress of the canal negotiations. The chiefs of state issued a joint communiqué, a portion of which dealt with the negotiations and was generally laudatory of Carter and Torrijos. (National Archives, RG 59, Central Foreign Policy File, D770284–0977) See footnote 2, Document 73.
6. An unknown hand underlined “the meeting which would take place if final conceptual agreement were reached with the United States on the new treaty.”
7. Carter and Torrijos held a meeting by telephone on August 24. See Document 85. They also met at the White House on September 6, the day before the treaty was signed. See Document 94.