THE UN SECURITY COUNCIL MEETS IN PANAMA: IMPLICATIONS FOR THE CANAL TREATY NEGOTIATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00967A001600010016-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: May 11, 2007
• Sequence Number: 16
• Publication Date: February 2, 1973
• Content Type: MEMO

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CENTRAL INTELLIGENCE AGENCY
OFFICE OF NATIONAL ESTIMATES
6 February 1973
MEMORANDUM FOR: Mr- David Mark. St NR)
Directorate
for Estimates. D A
Boards and
Estimates Division, NSA
The attached Memorandum on Panama is being given a limited
distribution to the USIB Representatives in connection with a forthcoming
oral contributions meeting on the Special National Intelligence Estimate
for Panama (SNIE 84-73) scheduled for March. You will be receiving
Terms of Reference for this SNIE shortly.
113 25X1
Director
National Estimates
DISTRIBUTION B
cc: Colonel T. L. Morgan, USA (ACSI)
Captain Jerome Henderson, USN
Lt. Colonel Donald Ralph, USAF (AF/INA)
State Dept. rev
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CENTRAL INTELLIGENCE AGENCY
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, has 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,erisis, in US-Panamanianrelations.
This paper has been discussed with other components within CIA,
but has not been formally coordinated.
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Background
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 Panamanian 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
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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 as
follows: 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, maintaining,
and protecting the canal. Panama would have primary responsibility
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 declared a per-
manently neutral waterway. The new treaty would stipulate
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 (Panama's negotiators have
hinted at $50 to $100 million a year).
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
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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 the 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-ZeveZ canal is built. But
it wants an open option (1990 or later) to expand the capacity of
the canal either with third locks or with a sea-ZeveZ canal. In
any case it wants continued rights to operate, maintain, and pro-
tect the waterway during the life of the treaty. Panama would
gain immediate 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. The US would still retain the right to main-
tain 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 deter-
mine 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 remain-
ing 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 (compared with a $1.9 million
annuity at present) and the expectation of steady growth in income
to Panama during the life of the treaty.
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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 forcefully 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 now believes that he and his government
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,
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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
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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 work against attempts to resolve the
impasse in the treaty talks between now and March. Instead, over
the next couple of months we can expect mounting efforts by the
Torrijos government to air the whole gamut of Panama's grievances
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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
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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
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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 the specific issues
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 in Panama in 1964 and the subsequent break in US-
Panamanian relations. It is still officially on the agenda
and hence open to discussion by the Councils
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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
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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
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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
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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
accept 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 Torrijosa 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.
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