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December 20, 2016
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May 15, 2007
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February 2, 1973
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Approved For Release 2007/ - 79ROO967AO01600010017-6 25X1 CENTRAL INTELLIGENCE AGENCY ~71 23 33 OFFICE OF NATIONAL ESTIMATES 2 February 1973 MEMORANDUM THE UN SECURITY COUNCIL MEETS IN PANAMA: IMPLICATIONS FOR THE CANAL TREATY NEGOTIATIONS Since he came to power in a coup by the National Guard in October 1968, General Omar Torrijos has steadily increased his personal and political stake in freeing Panama from the 1903 canal treaty with the US. Fairly early in his regime it became clear that a new partnership arrangement, like that, worked out in nego- tiations on the draft treaties of 1967., would not satisfy Torrijos' more ambitious objectives: full Panamanian jurisdiction over the Canal Zone as. early as possible and a definite limit on the duration of a new treaty, after which the canal itself would revert to Panama. The latest round of negotiations, begun in June 1971, have been stalled since early last year, and despite some recent re-definition of each side's position, the impasse continues. We believe the 1971-1972 effort at compromise is now as dead as the 1967 draft treaties. As we see it, Torrijos' demands for early and full Panamanian sovereignty over the canal will harden in the wake of the Security Council meeting. Torrijos will be amenable to accommodation with the US on secondary issues, but the prospects for an early overall settlement appear bleak. Amidst his government's stepped-up public attacks on the US, the chances for anti-US incidents, always a potential prelude to violence, will be appreciable. In short, we expect new strains, possibly leading to another major crisis, in US-Panamanian relations. This paper has been discussed with other components within CIA, but has not been formally coordinated. t t Dept. revievv comp SECRET Approved For Release 2007 Apprdved For Release (Rp- V Background 67AO01600010017-6 By the latter part of 1972, it became clear that, as part of this facing up process, Torrijos had decided to stage a major campaign to drum up international support for the Panamanian position on the canal. He now probably views the March meeting of the UN Security Council in Panama City, under Panarrlanian chairmanship, as the cap- stone of this campaign. 2. When Panama first made its bid to hold the Council meet- ing in Panama it was hard to see just what Torrijos expected to gain from the event. Clearly, the presence of the UN in Panama at this delicate stage in the US-Panamanian treaty talks would only serve to increase tensions between Panama and the US and dim further the prospects for progress in the negotiations. Then, in mid-December, Torrijos' strategy took more definite shape: In an indelicately detailed speech by a principal advisor on the nego- tiations, the Panamanians for the first time publicly revealed both the Panamanian and the US positions on key issues in the SECRET Approved For Release 2007/05/15: CIA-RDP79R00967AO01600010017-6 Approved For ReleasbNQT 1~ 7AO01600010017-6 talks. One obvious and immediate effect was to make it exceedingly difficult for the US to move toward further compromise, particularly with a wary and much-concerned US Congress watching from the sidelines. The disclosure also served to freeze Torrijos politically into an un- compromising position on key issues. And it provided a convenient standard for enlisting international sympathy for Panama's struggle against US "colonialism." In these respects, the Council meeting. signals a shift in Torrijos'- strategy from bilateral negotiations to international pressure.* The US and Panamanian negotiating positions on key issues, as they emerged during the 1971-1972 talks, may be summarized thud: The Panamanians are asking for a new treaty which would terminate no later than 1994. They want full jurisdiction over the Canal Zone no Later than five years after the signing of a treaty. Beyond that period, they would grant the US. land and water areas for the exclusive purpose of operating, maintain- ing, and protecting the canal. Panama would have primary respon- sibility for the protection of the canal, in cooperation with the US. No US forces would be permitted which were not needed strictly for the defense of the canal. The canal would be run strictly as a per- manently neutral waterway. Stipulated in the new treaty would be a five year Limitation on an option for the US to build either a sea-level canal or a third set of locks. Finally, Panama would expect greatly expanded financial and economic benefits from the canal under the new treaty ($50 to $100 million a year has. been hinted at by. Panama's negotiators). The US is willing to abrogate the 1903 treaty and devise a new treaty relationship. It wants a treaty that would Last about 50 years, with options to extend it 35 more years after third Locks SECRET- Approved For Release 2007/05/15: CIA-R?P79R00967AO01600010017-6 Approved For Releasel po : CIA-RDP79ROO967AOO 600010017-6 25X1 Torrijos' Game Plan 3. The factors which have moved Torrijos to harden his position and shift to the international stage are complex and difficult to sort out. But at least three major influences appear to be at work: There is, first, Torrijos' growing impatience. Increasingly in recent months he has expressed frustration over his inability, after years of on again-off again negotiations be- tween US and Panamanian governments, to make the US accept Panama's basic demands: the establishment of effective Panamanian sovereignty over both the canal and the Canal Zone within a relatively short are built or 40 more years after a sea-level canal is built. It wants continued rights to operate, maintain, and protect the canal during the life of the.treaty. It wants an open option (1990 or later) to expand the capacity of the canal either with third locks or with a sea-level canal. Panama would gain im- mediate jurisdiction in criminal and civil cases involving Panamanians in the canal area, but most other types of jurisdic- tion would be passed to the Panamanians over a transition period of 15 years,. e.g., joint patrols with the National Guard during the transition period, after which Panama would get exclusive police authority, but with the US retaining the right to maintain security guards around US property, employee residences, and canal operations. There would be a substantial reduction in land and water areas used by the US in operation, maintenance, and protection of the canal, but Panama could not unilaterally ,determine the extent of the canal area or the kind of future activities authorized therein. The US would retain the right to defend the canal in peace or war, the power of decision in this area remaining with the US. Finally, there would be a substantial increase in financial benefits to Panama from the operation of the canal, i.e., some $20-25 million annually (com- pared with a $1.9 million annuity at present) and the expectation of steady growth in income to Panama during the life of the treaty. SECRET Approved For Release 2007/05/15: CIA-RDP79R00967A001600010017-6 Approved For Release 2007/0511 - 01600010017-6 25X1 period of time. The mounting frustration is no less real for the fact that the current impasse in the talks is due partly to Torrijos' unwillingness to come to grips with hard decisions and specific issues and to his vacillation over just how hard he could afford to press his demands at any given moment. 4. Second, there is the fact that, while his personal frus- trations vis-a-vis the US have increased, Torrijos' political position within Panama has been strengthened considerably over the past year or two. The transformation from a provisional military junta to a constitutional government via an elected (albeit rigged) National Assembly last fall has not only enhanced Torrijos' sense of legiti- macy as a political leader but it has in fact created a more stable government. Torrijos clearly feels that he and his government now have a clear mandate to rule; and indeed his opponents have all but abandoned hopes of overthrowing him. The net result has been to bolster Torrijos' feeling of confidence in taking a harder position in dealing with the US. 5. This is not to suggest that public support for Torrijos, or for his demands on the US over the canal, have grown apace. In fact, Torrijos' success in generating backing from students and other groups has been meager and transitory. To be sure, Torrijos appears to be widening his personal appeal in certain quarters, SECRET. Approved For Release 2007/05/15: CIA-R?P79R00967AO01600010017-6 Approved For Release 2007/05/15: CIA-RDP79R00967A001600010017-6 "SE.CRE"1 particularly among younger businessmen and among campesinos. Still, the sense of enhanced power is probably attributable more to the feeling that he is in a stronger position to control events to suit his purposes than to any sharp increase in popular support for his government and policies. Clearly also, his frustration over lack of success in the negotiations with the US is more a matter of psycho- logical pressures building within Torrijos than it is a product of public discontent with the course of the talks. 6. Third, Torrijos perceives growing opportunities to gener- ate international interest in, and ultimately support for, Panama's side on the canal issue. He appears to have concluded that. in present circumstances he will not be able to get concessions from the US which will satisfy his basic requirements -- requirements which, as we have indicated, have become even less negotiable following their public disclosure. He,apparently now feels that the combined pressure of weightier actors on the international stage might give him the additional leverage he needs to influence US public opinion in his favor and to force the US government to accept his terms. 7. Thus far, his efforts to enlist support in the inter- national arena have not been particularly successful. Despite an SECRET Approved For Release 2007/05/15: CIA-RDP79R00967AO01600010017-6 Approved For Release, / l laq energetic propaganda and diplomatic campaign in various Latin Ameri- can capitals in recent months, governments in the region have generally shied away from open support for Panama's position on the canal. Torrijos nonetheless may feel, with some justification, that this is just the beginning -- that eventually Panama's cause will gain more tangible backing among countries who are seeking to assert their own independent nationalist positions, separately and where feasible in concert, against the US. The fact that Panama's proposal to convene the Security Council in Panama won the unanimous approval of the Latin American group in the,UN and that it was endorsed out- side the region by nations as politically-disparate as the Soviet Union, France, India, and Austria has probably led Torrijos to con- clude that there is indeed a large international reservoir of po- tential support for Panama's cause waiting to be tapped. Build-up for the Council Meeting 8. Torrijos' personal frustrations, strengthened internal political position, and perception of growing international atten- tion will almost-certainly workagainst attempts to resolve the impasse in the treaty talks between now and March. Indeed, over the next couple of months we can expect mounting efforts by the Torrijos government to air the whole gamut of Panama's grievances SECRET Approved For Release 2007/05/15: CIA-R?P79R00967AO01600010017-6 Approved For Release against the US. These efforts will almost certainly include sharpened attacks on the US in the public media and carefully organized rallies to publicize Panama's grievances; they may also include the staging of small anti-US incidents. All these activities would be designed to dramatize the existence of the Canal Zone "government within a government" and to challenge US rights derived from the 1903 treaty. 9. Torrijos' feel for how far he can push these tactics without losing control seems to have been sharpened by experience, however, and his basically realistic political sense will probably keep him from triggering a chain of events which might lead to serious new trouble with the US before the Security Council meet- ing. Indeed, we would judge that in his preparations for the meeting, he will make every effort to convey an image of Panamanian maturity, legitimacy, and responsibility in the face of what he por- trays as a US."colonial enclave" across the middle of his country. During the Meeting 10. While the Council is in Panama the Torrijos government will probably continue to embellish anti-US themes in a major lobbying campaign aimed at delegates and observers, particularly S?CR. T Approved For Release 2007/05/15: CIA-RDP79R00967A001600010017-6 Approved For Release 2007/05/15: CIA-RDP79R00967A001600010017-6 those from other Latin American countries. To this end Torrijos has invited the foreign ministers from all Latin American countries to attend the meeting. Though most of them are likely to decline, enough can be expected to show up to provide a respectable audience for Torrijos' purposes. There are even reports (unconfirmed) that efforts are underway to get Premier Fidel Castro from Cuba', Presi- dent Salvador Allende from Chile, and President Juan Velasco from Peru to attend and add nationalist revolutionary luster to the gathering. 11. Panama's lobbying campaign is likely to include, in addition to the normal corridor buttonholing, a heavy schedule of personal meetings between Torrijos and the delegates and guests, meetings between. delegates and carefully rehearsed student and other groups, and heavy media replay of all foreign statements of sympathy for Panama's cause. The objective would be to create the image, if not the reality, of strong international backing for Torrijos' demands on the canal issue.. 12. Within the Security Council itself, the Torrijos govern- ment is likely to revive Panama's earlier charges in the UN that continued US jurisdiction over the canal constitutes a potentially explosive situation which threatens international peace and SECRETI Approved For Release 2007/05/15: CIA-RDP79R00967A00160b010017-6 Approved For Release 2 5 5 IA-RDP79R009 7A001600010017-6 25X1 security..* In pressing this theme, it will probably push. strongly for the adoption of a resolution supporting its general objective of full Panamanian sovereignty over the canal. It is also likely to press for resolutions against neo-colonialism, on the rights of nations to be sovereign over their natural resources, and for regional disarmament -- all subjects which bear on key issues in the canal negotiations. There-is a good chance that it will ask for Council endorsement of the canal's neutrality, thus but- tressing Panama's position that no US military activities should be permitted in the canal area which are not approved by Panama and related directly to the protection of the.waterway. In view of Torrijos' likely reluctance to do anything which might lead to a permanent breakdown of the bilateral treaty talks, however, we would not expect him to press for UN action on specific issues of Panama's dispute with the US. 13. In his lobbying campaign Torrijos will be careful to avoid actions which might lead to harassment of individual dele- gates or disruption of the Council's proceedings, There is a The Canal issue was first raised by Panama in the UN after the .student riots ~n Panama in 1964 and the subsequent'break in US Panamanian relations. It is stiZZ officially on the agenda and hence open to discussion by the Council, SECRET- Approved For Release 2007/05/15 . - 7A001600010017-6 Approved For Releas 2 / 67A001600010017-6 chance, nevertheless, that an anti-US demonstration might trigger a violent incident which would inflame Panamanian passions and lead to a new crisis in US-Panamanian relations. Given the pre- sumed strong concern of the Torrijos government to maintain an image of responsibility and the proven ability of the National Guard to keep a firm lid on public demonstrations, however, the likelihood of this type of incident does not appear great. 14. In some respects the Council meeting is likely to be a disappointment for Torrijos. Many Council members will be reluc- tant to involve the UN in bilateral issues between the US and Panama which do not appear to pose an immediate international crisis; some will remain neutral for fear of offending the US. Thus, in the end, the meeting is unlikely to give Torrijos the strong and lasting international leverage he wants for dealing with the US on the canal. The Outlook after the Council Meeting 15. The Council meeting can nonetheless be expected to set the stage for an even more difficult period in the treaty talks and for generally heightened tensions in US-Panamanian relations in the months ahead. Regardless of the likely reticence of most SECREI'~ Approved For Release 2007/05/15: CIA-R?P79R00967AO01600010017-6 Approved For Release 2007/05/1 -R B 967A001600010017-6 SECRET of the delegates to speak out on the specific.issues involved in the negotiations, Torrijos will undoubtedly interpret any and all expressions of sympathy generated by the meeting as evidence of new international backing for Panama's cause. He is likely to conclude that the legitimacy of his rule and the rightness of Panama's struggle against the US have now been formally recog- nized by the international community. And he will probably see sustenance in this for continuing to adhere to his principal de- mands, even over a protracted period. He would hope that, in such circumstances, world opinion would swing increasingly toward support of Panama's position. 16. With these considerations in mind, Torrijos is likely to try to keep the canal issue open as an active agenda item in inter- national forums and to enlist further expressions of support from communist as well as non-communist nations. Within the hemisphere he can be expected to step up efforts to get other Latin American nations, particularly those with nationalist revolutionary gov- ernments such as in Peru and Chile, to identify more closely with Panama's cause. In these endeavors he will probably see ad- vantages in closer ties with Cuba, particularly if, as seems likely, other nations continue the trend toward normalizing relations with the Castro government. As long as the treaty talks hold out some SECRET Approved For Release 2007/05/15: CIA-R DP79R00967A001600010017-6 Approved For Releas 2 Q7/~, /_1 67A001600010017-6 hope of ending eventually in Panama's favor, however, we would ex- pect Torrijos to stop short of any close alignment with Castro which might seriously offend the US and jeopardize Panama's chances in the talks. 17. Having committed himself and his government firmly to the proposition that the US presence in Panama must be removed com- pletely, Torrijos is likely_to become even more inflexible in ne- gotiations with the US on the basic issues of jurisdiction and duration of a new canal treaty. At the same time, however, he will continue to see advantages in accepting or proposing accommodations on secondary issues, e.g., increased Panamanian use of zonal terri- tory and facilities, elimination of some of the more visible symbols of the US presence like the zonal border fence and US-owned com- mercial enterprises, or the establishment of joint US and National Guard patrols in the Canal Zone. Torrijos would be particularly interested in any deal which included increased financial or econ- omic benefits needed to relieve his government's continuing budge- tary strains. In such an event, he might even be willing to tone down his anti-US campaign for a while. 18. Arrangements such as this would enable Torrijos to point to continued progress in Panama's struggle to reduce and eliminate SECRET Approved For Release 2007/05/15: CIA-RDP79R00967AO01600010017-6 Approved For Release 7A001600010017-6 the US presence. But in such settlements Torrijos. would be care- ful to avoid any indication that he was-giving up on his basic demand for full Panamanian sovereignty over the canal. Indeed, as his commitment to this objective hardens, he may become in- creasingly wary of any deal which might convey an impression of weakness or compromise in his determination to attain his primary goal. 19. In sum, Torrijos will probably be receptive to offers' on secondary matters, but we now see little chance that he will agree to a package agreement like that presented by the US during the 1971-1972 negotiations. He will want to keep the negotiating door open to test periodically US willingness to accommodate him on his basic demands. But he is likely to believe that ultimate victory lies in greater pressure not in compromise. His public attacks on the US and its "colonial enclave" will increase in fre- quency and intensity. In the increasingly nationalistic atmosphere, the chances for new incidents, perhaps violent as in 1964, will be appreciable. Whatever Torrijos' present desires may be to avoid a serious confrontation with the-US, the growing strains could lead to another major crisis in US-Panamanian relations. SECRET] Approved For Release 2007/05/15: CIA-R?P79R00967AO01600010017-6 elease 2007/05/15: CIA-RDP79R00967A001600010017-6 MEMORANDUM FOR: Ambassador David H. Ward Special Representative for Interoceanic Canal Negotiations The attached memorandum on Panama assesses the implications for the Canal Treaty negotiations of recent moves by the Torrijos government to gain international support for its position. A Special National Estimate on Panama is scheduled for Director National Estimates 2 February 73 (DATE) Approved For Release 2007/05/15.: CIA-RDP79R00967AO0160001CT017-6 Approved For Release 2007/05/15: CIA-RDP79R00967AO01600010017-6 MEMORANDUM FOR: Mr. Robert Hurwich Deputy Assistant Secretary of State, ARA The attached memorandum on Panama assesses the implications for the Canal Treaty negotiations of recent moves by the Torrijos government to gain international support for its position. A Special National. Estimate on Panama is scheduled for JOHN HUI .GA Director` National Estimates 2 February 73 (DATE) FORM NO. 10 i REPLACES FORM 10- 101 447) I AUG 5 1 WH CH MAY RE USED. approve For Re ease 2007105/15 :CIA-RDP79R00967A001600010017-6 Approved For Release 2007/05/15: CIA-RDP79R00967A001600010017-6 MEMORANDUM FOR: DCI This memorandum was done for Bill Jorden, NSC Staff, who has a role in the Panama Canal negotiation and plans an early trip to Panama. It has been given also to Deputy Assistant Secretary Hurwitch in State as well as to USIB representatives who will be convening on a Special National Intelligence Estimate on this subject J ., ENGA Director National Estimates cc: DDCI ExecDir-Compt 2 February 73 (DATE) FORM NO. iOI WHICH RELACES BE JO-IOT MAY FORM I AUG 54 Approved For Release 2007/05/15: CIA-RDP79R00967A001600010017-6