PANAMA CANAL TREATY NEGOTIATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00803R000400020027-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 19, 2016
• Document Release Date: January 3, 2000
• Sequence Number: 27
• Content Type: REPORT

Approved For. Release 2006/11/18: CIA- R'DP82-00803R000400020027-4
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REPORT FOR THE PRESIDENT
Subject: Panama Canal Treaty Negotiations
In the aftermath of the Security Council meeting
in Panama last March, General Torrijos appears to have
adopted a more conciliatory attitude. Past history
suggests that this is likely to be transitory -- that
he will be prepared to revert.to?confrontation tactics
if his current line does. not produce the results he
seeks. The gap between our positions on the critical
issues (Tab A) remains so wide that bridging it in
the early future is not in prospect.
.We could-continue with the present strategy of
formal negotiation on the theory that eventually, once
we have made concessions on non-critical points and
Torrijos is convinced he can do no better, he will
decide that something for his.people is better than
nothing and sign a treaty. But the General believes
himself to.be the man for whom Panamanians have waited
70 years to. restore their full sovereignty over the
Canal Zone.. While we pursued this protracted course
Panamanian frustration would probably grow and could
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result in-a renewal of violence against the U.S.
presence.
We could substantially improve our treaty offer
on the theory that we might be able. to provide Torrijos
a minimum of what he thinks he needs and thereby be
able to conclude a treaty quickly. But he might only
be encouraged to believe he could extract even more
from us. Some movement on the Panamanian side toward
a more reasonable position would therefore seem advisable
before we consider a significant change in our own
position.
A strategy designed to produce such movement would
take into account the fact that lack of progress in the
negotiations is permitting Panama to marshal wide
international sympathy for its charge that the U.S.
is maintaining, by means of an overwhelming military
.presence, a colonial enclave on Panamanian soil. While
continuing vigorous pursuit of our objectives through
formal treaty negotiations, we could take a number of
steps that would reduce our vulnerability to this charge
without impairing our bargaining position or seriously
affecting our ability to continue operating and-defend-
ing the Canal. Such steps would also be responsive to
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Torrijos' view that unilateral U.S..actions could
improve the climate for' negotiations and perhaps
enable him to adopt "a somewhat more forthcoming
position. Many of these steps can be taken by the
Executive Branch while others require congressional
approval.
Measures that could be taken by the Executive
1. Accept explicitly that the.Canal Zone is
Panamanian territory which is under U.S.
jurisdiction as stated in the 1903 Convention
as amended, and that Panama retains sovereignty
over its territory.
2. Authorize
(a) Use of Panamanian license plates on
private automobiles of U.S. citizen
employees of Canal Zone agencies.
__(b) Conversion of the postal system in the
Canal Zone to an APO system, with Panama
handling domestic mail in the Zone.
(c) 'Flying of Panamanian flags on Canal Zone
lands and on vessels transiting the-Canal.
(d) Use by Panama for commercial purposes of
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Canal Zone piers and?drydocks', as well
as land areas and airfields not vital to
U.S. defense objectives.
(e) Joint Panama-U.S. police-pat r ols within
the Canal-Zone.
(f) Operation of Panamanian commercial enter-
prises in the Canal Zone.
(g) Instruction in Canal Zone schools of the.
Spanish language and Panamanian culture
and history.
(h) Maximization-of employment opportunities
in the Canal Zone for Panamanian nationals
on a non-discriminatory basis.
(i) Maximization of procurement by Canal Zone
agencies of Panamanian products.
(j) Use by the Panamanian government, for
educational and similar purposes, of
unused buildings and facilities in the
Canal Zone.
(k) Establishment of. joint commissions with
Panama to `stud
y (i) a sea-level Canal and
(ii) the resolution of urban problems-
created by the Zone's presence.
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Transfer from the military-command in Panama --
.in'keeping with our treaty obligations on
Canal neutrality -- all responsibilities not
related to defense of the Canal. The. rationale
'for this suggested action is at Tab B.
4. In a further effort to reduce the military image
of our Canal presence, we could.consider trans-
ferring responsibility for administration of
the Canal and the Zone from the Department
of the Army to the Department of Transportation
upon. completion of the tour of the present
Governor of the Canal. The technical expertise
of the Corps of Engineers could be retained
through_ the' appointment of an officer from the
Corps as deputy to a civilian administrator.
The Committee believes that the selection and
timing of the above-described unilateral steps should
be closely meshed with the progress, or absence thereof,
in the treaty negotiations.
Measures which would require congressional action
are:
Amendment of the Canal Zone" Code to relin-
quish U.S.'criminal and civil jurisdiction
within the Zone over Panamanians and third-
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country nationals, and over private
Panamanian Government activities in -_~
?the Zone.
Transfer of Canal Zone piers and drydocks,
and non-essential lands, buildings, airfields
and other facilities to Panama.
3. Increase of the annuity payment to Panama.
4,1.'' Creating.of highway corridors through the
Canal Zone at both ends to permit Panamanians
to cross from one side. to. the other.
Kenneth Rush
Chairman
Under Secretaries Committee
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