JOINT DEFENSE BOARD

Defense: A "Joint Board" would be composed of an equal number of Panamanian and U.S. military representatives, whose mission is "consulting and cooperating in all matters relative to the defense of the canal, and planning the measures which shall be taken jointly to insure the security or neutrality of the canal." Thus Panama would be privy to all defense preparations and decisions. Moreover, it would include "the guarantee that Panamanian participation includes the use of manpower and other Panamanian resources with regard to functions, personnel levels, and operation locations." The only defense "control" we would have would be sheer, overwhelming military force. We already have that kind of control without a new treaty. Moreover, "the structural position of the Joint Armed Forces" will be reviewed at 5-year intervals-making all talk of a 25-year treaty meaningless.

JOINT CONSULTATION GROUP

Administration: The working paper proposes "A Joint Consultation Group" established "on the basis of the principle of parity and at a high governmental level which shall constitute the liaison between the two governments in connection with Panamanian participation in the administration." Their job is to assure "growing participation on the part of Panamanian nationals at all levels and fields of employment in the canal operation, including participation in the drafting of overall policies as well as in daily canal operations." Essentially, the Joint Consultation Group is to draw up affirmative action plans to increase the number of Panamanians at all levels in the canal organization, including hiring, promotion, training, and policymaking to make Panama able to assume full responsibility for the canal administration operation and maintenance when the treaty expires. Obviously, the United States would soon lose control of the policymaking situation, and be unable to protect direct U.S. interests, or the U.S. conception of the international interest. Moreover, the United States would be unable to prevent the perversion of the hiring system into a corrupt "makework" system inextricably involved in the internal politics and political favoritism of the host country: The inefficiency and exorbitant costs would be borne by tollpayers or by the U.S. taxpayers.

JOINT POLICE AND CRIMINAL JURISDICTION

In addition, there would be a Joint Technical Advisory Commission to make recommendations regarding the integration of electric power, water supply, roads, ports, and other systems of the canal infrastructure into that of Panama. When these recommendations are carried out, the canal would be unable to function if there is a breakdown in services or civil order in Panama.

Jurisdiction and "right of use": U.S. jurisdiction would cease, and the Canal Zone and the Canal Zone government would disappear. Panamanian law would be applicable, with certain exceptions not yet agreed upon. However, the following principles would be followed:

First. All relations of a private nature will be subject to Panamanian jurisdiction immediately.

Second. Panama would assume criminal jurisdiction over Panamanians and third country nations-including U.S. citizens now living in the zone and third country residents of the zone. Lawsuits and legal procedures would be included. Third. For 3 years, the United States would have "primary jurisdiction" in locations whose use has been granted by the Republic of Panama to the United States over all crimes committed by members of the Armed Forces, their dependents, and civilian employees of the U.S. Government.

Fourth. Only a limited number of high ranking officials of the United States would enjoy the same privileges and immunities as diplomatic personnel.

Fifth. Panama would assume general police authority immediately, but for a 3-year period a system of joint police patrols will be set up in which each member may arrest persons under the police authority of his respective country. What is clear about this is that U.S. citizen-employees would have police protection only on U.S. installations; otherwise, they would be at the mercy of any Panamanian Government. They would be liable to arrest for alleged criminal activities by the Panamanian members of the joint police patrols, even on locations

granted to the United States under the use-rights concept. For even though the United States has "primary jurisdiction" over all crimes committed in this area, it follows logically that Panama retains secondary jurisdiction, and that if a U.S. member of a joint police patrol failed to arrest a U.S. citizen-employee, the Panamanian member could do so. At any rate, this minimal protection vanishes with the U.S. Federal Court in 3 years, at which time it may be assumed that a good proportion of the U.S. citizens employed by the Canal will also vanish back to the United States. This working paper promises a hollow control.

UNRESOLVED ISSUES

Perhaps even more significant, however, is Ambassador Bunker's list of "issues yet to be resolved," reported in the New York Times article referred to previously. From a practical, operational standpoint, the issues yet to be resolved are precisely those which matter most to the functioning of the canal organization. If the dubious "control" which Ambassador Bunker claims to have won has been granted at all, it is still only granted in principle, not in practice. And if we are to have "control" we must have it in practice. For example, the Ambassador says we have not agreed on :

First, duration of the treaty; second, economic benefits to Panama; third, right to expand the canal; fourth, location of land and water areas needed for defense; fifth, a formula for nondiscriminatory operation of the canal after the treaty's termination.

Indeed this account of the Ambassador's speech does not go far enough. There seems to be no progress either on adequate guarantees of the rights of the present employees of the canal, particularly U.S. citizen-employees. There is no firm guarantee that a third nation would be excluded from operating the canal after the treaty lapses, or from interfering should problems arise between the United States and Panama. We do not even have guarantees that our nuclear-powered ships will be able to transit the canal.

NO PRACTICAL CONTROL

Such things are not mere "unresolved issues." They are vital to the defense and operation of the canal, vital to any practical "control" which the U.S. might retain. If we do not have a fully adequate base structure, for example, we cannot protect our rights. If we cannot agree on land and water facilities that are necessary to the operation of the canal, we cannot even operate efficiently or safely. If we do not have the right to keep third nations out of canal affairs, we are practically asking for trouble. If we cannot keep United States employees satisfied that their proper interests are going to be taken care of, we will lose day-today control by attrition. And if we do not know how long the treaty is to last, what good is any of it?

TORRIJOS' ULTIMATUM

It is plain that Panama has not yet yielded on anything of consequence. This is clear also from the Spanish language news reports from Panama City and Buenos Aires. These reports say that General Torrijos gave Ambassador Bunker a written ultimatum: Either bring back a serious proposal on the canal negotiations or do not return. According to these reports, Torrijos confirmed the written note to Ambassador Bunker personally. None of this sounds like Panama "accepting" U.S. control, or even U.S. "primary responsibility." It is true that a nameless State Department spokesman denied that Torrijos had sent such a note; yet it is not the first time that Washington spokesmen seem to know less about communications with Torrijos than is known in Panama City.

Mr. President, I think a more accurate assessment of the negotiating situation would note that the Panamanians remain intransigent both on a conceptual framework for cooperation, and on the practical aspects of how cooperation would take place. There is a fundamental flaw in the State Department's approach of conceding our sovereign rights. Once those rights have been given up, there is no way in which any practical, stable relationship can be maintained. Our whole posture of defensive concessions merely induces the Panamanians to imagine that the United States can be ousted completely from the canal, retaining the United States only in a managerial capacity until Panama believes itself ready to take over completely.

NEGOTIATING STRATEGY CREATES UNSTABILITY

An analysis of this posture reveals a conclusion that should be self-evident: namely, that Panama is not ready to take over. In fact, the negotiations are thrusting a tremendous burden upon a small country whose circumstances cannot support such a responsibility. The State Department is dreaming if it imagines that piling the top-heavy responsibility of sovereignty over one of the strategic waterways of the world on Panama will bring about stability. Such a relationship is inherently unstable, and is bound to bring about further misunderstandings and acrimony. Moreover, it opens the Panamanian Government to subversion-either internal or external. If Panama really controls the sovereignty over the canal, then there will be many forces both within the country and outside the country which will seek to control Panama.

It is time, I believe, for Ambassador Bunker to take the word of General Torrijos and break off negotiations which are premised upon such instability. Instead, we should try to work out a positive relationship with Panama, premised upon the guarantee of regional stability which our sovereign powers in the Canal Zone imply. We should speak frankly with those elements in the Republic of Panama which want to continue our working relationship, and use it as a basis for developing Panamanian aspirations in a constructive sense. It is time to stop negativism, concessions, and giveaway. It is time to build, so that both nations can enhance their mutual leadership and self-respect.

[EXHIBIT 1]

CONCEPTUAL AGREEMENT ON THE PROTECTION AND DEFENSE OF THE CANAL Whereas :

The Panama Canal is a maritime interoceanic waterway wherein the Republic of Panama has an inherent interest as a territorial sovereign and the United States has an interest because it built it, and it contributes in a significant manner to the goal of an economically prosperous and peaceful world;

Panama, as a territorial sovereign, has the responsibility of protecting and defending its territory;

The United States shall have the main responsibility of protecting and defending the maritime waterway until the expiration of the treaty ;

Upon the expiration of the treaty, Panama shall take over total responsibility for the protection and defense of the waterway;

During the life of the treaty, Panama will increasingly participate with the United States in the protection and defense of the waterway, subject to a continuous examination so as to determine what changes can be made in the course of time, to the extent Panama's capacity will allow, and in accordance with the main responsibility of the United States for the protection and defense of the waterway;

To the extent this procedure exempts the United States from the requirements of operation, those installations not considered essential shall be turned over to Panama in accordance with the terms to be agreed upon; and

The agreements on the joint protection and defense of the Parties shall not restrict the identity or lines of authority of the Panamanian and U.S. military institutions.

It is agreed that:

A. Each of the parties, in accordance with its constitutional procedures, shall act to face the common danger arising out of an armed attack or other action which might threaten the security of the waterway and the transit of ships. B. The contracting parties commit themselves to guarantee the permanent and effective neutrality of the interoceanic waterway, which shall remain open to the vessels of all nations on an indiscriminate basis, and they shall make efforts to have this neutrality recognized and guaranteed by all nations.

C. Both parties shall establish a Joint Board, composed of high level Panamanian and U.S. military representatives, in equal number, whose respective governments shall entrust them with consulting and cooperating in all matters relative to the defense of the Canal, and planning the measures which shall be taken jointly to ensure the security or neutrality of the Canal. The Board shall make provisions for the coordination and cooperation with regard to:

1. The management of the Panamanian and U.S. operations for the protection and defense of the waterway;

2. The preparation of plans for the protection and defense of the waterway for possible emergencies on the basis of the cooperative efforts of the two national forces;

3. Planning and performance of joint military exercises;

4. The implementation of the joint use of training areas; and,

5. The guarantee that Panamanian participation includes the use of manpower and other Panamanian resources with regard to functions, personnel levels, and operation locations.

D. The Panamanian Government shall grant to the United States rights of use for the purpose of protecting and defending the waterway as well as the transit of vessels through same, whereby :

1. The United States shall be allowed to maintain land, air and naval forces in specific locations to be made available by Panama;

2. An agreement shall be included regarding the laws applicable to the Armed Forces which shall allow an effective operation of such forces and their agencies; and,

3. Such rights shall end upon the expiration of the treaty, unless the parties reach another agreement through negotiations which shall take place five years prior to the expiration of the treaty.

E. Both Parties shall review the structural position of the Joint Armed Forces at five-year intervals during the life of the Treaty.

F. The matters relative to the costs of Panamanian participation in the protection and defense of the canal shall be established in the Treaty.

G. In view of the fact that the Republic of Panama is a signatory to the Treaty of Proscription of Nuclear Arms in Latin America (TLATELOLCO), the United States shall not install any type of nuclear armament in Panamanian territory.

DOCUMENT 2.-CONCEPTUAL AGREEMENT ON THE INCREASED PANAMANIAN
PARTICIPATION IN THE ADMINISTRATION OF THE CANAL

Whereas :

Panama shall participate in the administration of the interoceanic waterway; The primary objective of Panamanian participation is to guarantee that Panama is prepared to assume complete responsibility for the efficient operation of the interoceanic waterway once the treaty expires;

This objective shall be reached by guaranteeing a sufficient number of Panamanian personnel, qualified and available to operate the interoceanic waterway when the treaty expires;

This procedure should begin immediately as the treaty goes into effiect;

The joint planning of the various stages of Panamanian participation should be begun before the new treaty goes into effiect;

This Panamanian participation should be the basis for an effective partnership between the two countries regarding the administration of the interoceanic waterway;

The following is agreed:

A. During th elife of the treaty, the United States will have primary responsibility for canal operations and the transit of ships.

B. There will be a growing participation on the part of Panamanian nationals at all levels and fields of employment in the canal operation, including participation in the drafting of overall policies as well as in daily canal operations. C. Employment preferences for citizens of the Republic of Panama will be established, in order to ensure the growth, in orderly stages, of Panamanian participation.

D. A Joint Consultation Group shall be established on the basis of the principle of parity and at a high governmental level which shall constitute the liaison between the two governments in connection with Panamanian participation in the administration. The functions of this group shall include:

1. Recommend specific programs for the hiring of personnel in order to provide employment to an increasing number of Panamanian citizens through horizontal transfer from the Panamanian economy.

2. Recommend specific promotion and training programs aimed at achieving a vertical promotion of Panamanian citizens for low level positions to higher positions at all levels;

3. Recommend other policies, programs and guidelines designed to make preparations for Panama to assume, in an orderly and efficient fashion, full responsibility for the canal administration, operation, and maintenance upon the expiration of the treaty.

E. The new administrative body shall appoint Joint Technical Advisory Commissions whose functions shall include making recommendations regarding the integration of electric power, water supply, roads, ports and other systems of the body's infrastructure with the rest of the Republic of Panama.

F. The present Panama Canal Company shall be eliminated once the treaty goes into effect. It shall be replaced by a new administrative body, governmental or otherwise, which, in addition to taking over the management of the canal, shall implement programs to hire and train Panamanian citizens in accordance with the aforementioned principles and objectives, which shall be stipulated in the treaty.

G. Activities currently being carried out by U.S. Agencies and to be transferred to a Panamanian operation shall be specified in the new treaty. Such transfers shall be effected as soon as practicable and within the time periods to be agreed upon between the two governments in accordance with the recommendations of the Work Team to be created prior to the conclusion of the treaty, in order to plan the initial stage of Panamanian participation in the canal operation.

H. The government of Panama and the government of the United States shall be directly responsible for compliance with the treaty provisions.

CONCEPTUAL AGREEMENT ON JURISDICTION AND RIGHT OF USE

Whereas :

The Panama Canal is an interoceanic waterway in which the Republic of Panama has an inherent interest as territorial sovereign and the United States has an interest for having built it, and it contributes significantly to the objective of an economically prosperous and peaceful world;

The parties are prepared to carry out these objectives through the formulation of a new relationship of association between them, in accordance with the new treaty that shall eliminate the sources of conflict,

It is agreed:

A. Upon the abrogation on the treaties governing the relations between Panama and the United States concerning the Panama Canal, the U.S. jurisdiction over the Panamanian territory known as the Canal Zone shall cease.

B. The laws of the Republic of Panama shall be applicable in the Panamanian territory previously known as the Canal Zone, except as may be otherwise provided for in the treaty.

C. Upon the treaty's becoming effective, the U.S. entity known as the Canal Zone Government shall immediately terminate.

D. All relations of a private nature shall be subject to Panamanian jurisdiction immediately after the new treaty goes into effect.

E. By virtue of the abrogation of the treaties, the Republic of Panama shall reassume criminal jurisdiction over Panamanians and third country nationals. F. The Republic of Panama, in the exercise of its sovereignty, shall reassume general police authority in that part of its territory known as the Canal Zone when the new treaty goes into effect.

1. The U.S. installation specified in the treaty are excepted.

2. In the agreed areas, the Republic of Panama shall grant the United States police authority up to a period of three years after the treaty goes into effect. During the stated three-year period, the parties shall set up a system of joint patrols in which each member may arrest persons under the police authority of his respective country.

G. The courts of the Republic of Panama shall exercise jurisdiction and shall have competence over all lawsuits and procedures that may arise in the Panamanian territory previously known as the Canal Zone, except as agreed in the treaty.

H. The new treaty shall contain the rights of use that the Republic of Panama grants to the United States relevant to the operation and maintenance of the Panama Canal.

1. The Republic of Panama shall grant the U.S. the rights, for a period of three years after the exchange of ratification instruments, of primary jurisdiction over all crimes committed in locations whose use has been granted by the Republic of Panama to the United States, as specified in the treaty, by members of the Armed Forces of the United States, civilian nationals of the United States, employed by the U.S. Government and the dependents of members of the U.S. Armed Forces and of U.S. nationals and civilians employed by the U.S. Government.

2. U.S. courts of law in the old Canal Zone shall cease operation three years after the new treaty goes into effect.