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Panama The 1977 Treaties and Associated Agreements
On September 7, 1977, Carter and Torrijos met in Washington to
sign the treaties in a ceremony that also was attended by
representatives of twenty-six other nations of the Western
Hemisphere. The Panama Canal Treaty, the major document signed on
September 7, abrogated the 1903 treaty and all other previous
bilateral agreements concerning the canal. The treaty was to enter
into force six months after the exchange of instruments of
ratification and to expire at noon on December 31, 1999
(see Appendix B).
The Panama Canal Company and the Canal Zone government
would cease to operate and Panama would assume complete legal
jurisdiction over the former Canal Zone immediately, although the
United States would retain jurisdiction over its citizens during a
thirty-month transition period. Panama would grant the United
States rights to operate, maintain, and manage the canal through a
new United States government agency, the Panama Canal Commission.
The commission would be supervised by a board of five members from
the United States and four from Panama; the ratio was fixed for the
duration of the treaty. The commission would have a United States
administrator and Panamanian deputy administrator until January 1,
1990, when the nationalities of these two positions would be
reversed. Panamanian nationals would constitute a growing number of
commission employees in preparation for their assumption of full
responsibility in 2000. Another binational body, the Panama Canal
Consultative Committee, was created to advise the respective
governments on policy matters affecting the canal's operation.
Article IV of the treaty related to the protection and defense
of the canal and mandated both nations to participate in that
effort, though the United States was to hold the primary
responsibility during the life of the treaty. The Combined Board,
composed of an equal number of senior military representatives from
each country, was established and its members charged with
consulting their respective governments on matters relating to
protection and defense of the canal
(see Canal Defense
, ch. 5).
Guidelines for employment within the Panama Canal Commission were
set forth in Article X, which stipulated that the United States
would establish a training program to ensure that an increasing
number of Panamanian nationals acquired the skills needed to
operate and maintain the canal. By 1982 the number of United States
employees of the commission was to be at least 20 percent lower
than the number working for the Panama Canal Company in 1977. Both
nations pledged to assist their own nationals who lost jobs because
of the new arrangements in finding employment. The right to
collective bargaining and affiliation with international labor
organizations by commission employees was guaranteed.
Under the provisions of Article XII, the United States and
Panama agreed to study jointly the feasibility of a sea-level canal
and, if deemed necessary, to negotiate terms for its construction.
Payments to Panama from the commission ("a just and equitable
return on the national resources which it has dedicated to the
. . . canal") were set forth in Article XIII. These
included a fixed annuity of US$10 million, an annual contingency
payment of up to US$10 million to be paid out of any commission
profits, and US$0.30 per
Panama Canal net ton (see Glossary) of
cargo that passed through the canal, paid out of canal tolls. The
latter figure was to be periodically adjusted for inflation and was
expected to net Panama between US$40 and US$70 million annually
during the life of the treaty. In addition, Article III stipulated
that Panama would receive a further US$10 million annually for
services (police, fire protection, street cleaning, traffic
management, and garbage collection) it would provide in the canal
operating areas.
The second treaty, the Treaty Concerning the Permanent
Neutrality and Operation of the Panama Canal, or simply the
Neutrality Treaty, was a much shorter document. Because it had no
fixed termination date, this treaty was the major source of
controversy
(see Appendix B).
Under its provisions, the United
States and Panama agreed to guarantee the canal's neutrality "in
order that both in time of peace and in time of war it shall remain
secure and open to peaceful transit by the vessels of all nations
on terms of entire equality." In times of war, however, United
States and Panamanian warships were entitled to "expeditious"
transit of the canal under the provisions of Article VI. A protocol
was attached to the Neutrality Treaty, and all nations of the world
were invited to subscribe to its provisions.
At the same ceremony in Washington, representatives of the
United States and Panama signed a series of fourteen executive
agreements associated with the treaties. These included two
Agreements in Implementation of Articles III and IV of the Panama
Canal Treaty that detailed provisions concerning operation,
management, protection, and defense, outlined in the main treaty.
Most importantly, these two agreements defined the areas to be held
by the United States until 2000 to operate and defend the canal.
These areas were distinguished from military areas to be used
jointly by the United States and Panama until that time, military
areas to be held initially by the United States but turned over to
Panama before 2000, and areas that were turned over to Panama on
October 1, 1979
(see
fig. 3).
One foreign observer calculated that 64 percent of the former
Canal Zone, or 106,700 hectares, came under Panamanian control in
1979; another 18 percent, or 29,460 hectares, would constitute the
"canal operating area" and remain under control of the Panama Canal
Commission until 2000; and the remaining 18 percent would
constitute the various military installations controlled by the
United States until 2000. The agreements also established the
Coordinating Committee, consisting of one representative of each
country, to coordinate the implementation of the agreement with
respect to Article III of the Panama Canal Treaty, and an analogous
Joint Committee to perform the defense-related functions called for
in the agreement with respect to Article IV of the treaty.
Ancillary agreements signed on September 7 allowed the United
States to conduct certain activities in Panama until 2000,
including the training of Latin American military personnel at four
schools located within the former Canal Zone; provided for
cooperation to protect wildlife within the area; and outlined
future United States economic and military assistance. This latter
agreement, subject to the availability of congressionally approved
funds, provided for United States loan guarantees, up to US$75
million over a 5-year period, for housing; a US$20-million loan
guarantee by the United States Overseas Private Investment
Corporation for financing projects in the Panamanian private
sector; loans, loan guarantees, and insurance, up to a limit of
US$200 million between 1977 and 1982, provided by the United States
Export-Import Bank for financing Panamanian purchases of United
States exports; and up to US$50 million in foreign military sales
credits over a 10-year period.
The speeches of Carter and Torrijos at the signing ceremony
revealed the differing attitudes toward the new accords by the two
leaders. Carter declared his unqualified support of the new
treaties. The statement by Torrijos was more ambiguous, however.
While he stated that the signing of the new treaties "attests to
the end of many struggles by several generations of Panamanian
patriots," he noted Panamanian criticism of several aspects of the
new accords, particularly of the Neutrality Treaty:
Mr. President, I want you to know that this treaty, which
I shall sign and which repeals a treaty not signed by any
Panamanian, does not enjoy the approval of all our
people, because the twenty-three years agreed upon as a
transition period are 8,395 days, because during this
time there will still be military bases which make my
country a strategic reprisal target, and because we are
agreeing to a treaty of neutrality which places us under
the protective umbrella of the Pentagon. This pact could,
if it is not administered judiciously by future
generations, become an instrument of permanent
intervention.
Torrijos was so concerned with the ambiguity of the Neutrality
Treaty, because of Panamanian sensitivity to the question of United
States military intervention, that, at his urging, he and President
Carter signed the Statement of Understanding on October 14, 1977,
to clarify the meaning of the permanent United States rights. This
statement, most of which was subsequently included as an amendment
to the Neutrality Treaty and incorporated into its instrument of
ratification, included a declaration that the United States "right
to act against any aggression or threat directed against the Canal
. . . does not mean, nor shall it be interpreted as the
right of intervention of the United States in the internal affairs
of Panama." Despite this clarification, the plebiscite that took
place the next week and served as the legal means of ratification
in Panama, saw only two-thirds of Panamanians registering their
approval of the new treaties, a number considerably smaller than
that hoped for by the government.
Ratification in the United States necessitated the approval of
two-thirds of the Senate. The debates, the longest in Senate
history, began on February 7, 1978. The Neutrality Treaty was
approved on March 16, and the main treaty on April 18, when the
debate finally ended. To win the necessary sixty-seven Senate
votes, Carter agreed to the inclusion of a number of amendments,
conditions, reservations, and understandings that were passed
during the Senate debates and subsequently included in the
instruments of ratification signed by Carter and Torrijos in June.
Notable among the Senate modifications of the Neutrality Treaty
were two amendments incorporating the October 1977 Statement of
Understanding, and interpreting the "expeditious" transit of United
States and Panamanian warships in times of war as being
preferential. Another modification, commonly known as the DeConcini
Condition, stated that "if the Canal is closed, or its operations
are interfered with [the United States and Panama shall each] have
the right to take such steps as each deems necessary, ... including
the use of military force in the Republic of Panama, to reopen the
Canal or restore the operations of the Canal." Modifications of the
Panama Canal Treaty included a reservation requiring statutory
authorization for payments to Panama set forth in Article XIII and
another stating that any action taken by the United States to
secure accessibility to the Canal "shall not have as its purpose or
be interpreted as a right of intervention in the internal affairs
of the Republic of Panama or interference with its political
independence or sovereign integrity." Reservations attached to both
treaties made the United States provision of economic and military
assistance, as detailed in the ancillary agreements attached to the
treaties, nonobligatory.
The inclusion of these modifications, which were never ratified
in Panama, was received there by a storm of protest. Torrijos
expressed his concern in 2 letters, the first to Carter and another
sent to 115 heads of state through their representatives at the UN.
A series of student protests took place in front of the United
States embassy. The DeConcini Condition was the major object of
protest. Although the reservation to the Panama Canal Treaty was
designed to mollify Panamanian fears that the DeConcini Condition
marked a return to the United States gunboat diplomacy of the early
twentieth century, this provision would expire in 2000, whereas the
DeConcini Condition, because it was attached to the Neutrality
Treaty, would remain in force permanently.
Despite his continuing concern with the ambiguity of the
treaties with respect to the United States role in defense of the
canal after 2000, the close Senate vote made Torrijos aware that he
could not secure any further modification at that time. On June 16,
1978, he and Carter signed the instruments of ratification of each
treaty in a ceremony in Panama City. Nevertheless, Torrijos added
the following statement to both Panamanian instruments: "The
Republic of Panama will reject, in unity and with decisiveness and
firmness, any attempt by any country to intervene in its internal
or external affairs." The instruments of ratification became
effective on June 1, 1979, and the treaties entered into force on
October 1, 1979.
Data as of December 1987
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