Unknown to most North Americans, many South American nations are par ticularly dependent on the canal. In 1974, according to U.S. maritime estimates, 73 percent of Ecuador's imports and exports transited the canal, for example, as did half of Peru's total export-import tonnage.

Recent studies indicate that roughly one-third of the total tonnage going through the canal is either from or bound for the U.S. or is part of the U.S. domestic trade. Overall, petroleum products, grains, and coal and coke make up one half of all shipments by tonnage, followed by iron, steel products, ores and metals, and such commodities as nitrates, phosphates, potash, agricultural products, lumber, canned and refrigerated foods, chemicals and petrolchemicals, and machinery and equipment products.

According to a 1974 Commerce Department study, "The Panama Canal in U.S. Foreign Trade," a complete closure of the canal could cost U.S. consumers billions of dollars.

While President Carter has broached the possibility of the U.S. and Panama eventually building a second, sea-level canal, the Panama Canal is currently operating will below capacity. In the past years there have been between 12,000 and 13,000 transits per year by commercial seagoing vessels. New North Slope oil deliveries are expected to add another 700 or so transits year year by 1982. Yet, the canal can easily handle a minimum of 20,000 to 22,000 transits a year. In spite of operating deficits in fiscal years 1975 and 1976, the canal is expected to come close to breakeven this year. Main concerns about the long-range shipping waterway center around the huge amounts of fresh water necessary for each vessel moving through the locks-often scarce during dry spells. Also the question remains of the future toll cost structure of the canal, particularly when it comes under Panamanian jurisdiction.

[From the Wall Street Journal, Monday, Aug. 22, 1977]

SCARE TALK AND THE CANAL

(By Roger W. Fontaine, Director of Latin American Studies at Georgetown University's Center for Strategic and International Studies)

Negotiators for the Carter administration have reached an "agreement in principle" with Panama on the "basic elements" of a new treaty on the Panama Canal.

Although the exact language has not yet been fully drafted, the main features call for transfer of the canal and the 533-square mile Canal Zone to Panamanian control in 23 years. The military presence of the U.S. would end by the year 2000, after which we would continue to have the unilateral right to insure an open and neutral canal. This latter provision clearly implies the right to military intervention, although the Carter administration does not like to use that term. A major controversy will undoubtedly flare up over this point.

But what is interesting about the proposed treaty is not its novelty but its utter familiarity to those who have had the patience to follow the negotiations over the last few years. The supporting arguments are also familiar, and they will now be echoed by most of our foreign policy establishment, including Gerald Ford and Henry Kissinger. Yet these arguments are still open to serious criticism, not, as our protreaty pamphleteers would have it, the criticism of the uninformed, the jingoistic and the merely nostalgic.

Three scare arguments are especially prominent, and need especially to be reviewed. First, that the canal is vulnerable to sabotage. Second, that a full-blown guerrilla war might break out in Panama. And last, that in such an event, the United States would be condemned by all of Latin America, if not by the entire Third World.

The Carter administration, facing a suspicious Senate and public opinion, will probably rely on these arguments in its campaign for ratification. Suggesting that the U.S. is being subjected to extortion by tiny Panama is accurate enough, but the truly important part of the equation is that we Americans are engaging in acts of self-extortion. We are frightening ourselves with disaster scenarios which although superficially plausible have never been thoroughly dissected.

FEAR OF SABOTAGE

First, the fear of sabotage. Although the canal is and always has been vulnerable, wrecking it is obviously to no one's advantage, and least of all to that of the Panamanians. Since North American capital would be required to restore operations, Panama would remain as dependent as ever on the United States. Furthermore, a treaty which delays full control until the year 2000 seems unlikely to stay the hand of the young and impatient saboteur.

Second, guerrilla warfare. The specter of another Vietnam is an effective weapon, no doubt, in persuading a war-weary American public to surrender its rights on the isthmus. But the extent of the problem remains to be analyzed properly.

The potential does exist for small urban terrorist squads, recruited from Panama's large student population, to make lightning raids into the zone. They might stage robberies, kidnappings and assaults on police or civilian functionaries in the zone as well as in Panama itself. U.S. military and police units would find it tempting to chase these raiders back into Panamanian territory, thus provoking nationalist outcries.

Yet a truly serious insurgency is unlikely. Panama is not Vietnam in size or resources, nor does it have a nearby neighbor willing to aid the "liberation struggle." Furthermore, the Panamanian chief, General Omar Torrijos Herrera, is unlikely to provide the training and logistical support necessary to transform urban terror squads into full-fledged rural insurgents. Declaring war, even sub rosa war, on a superpower is still a dicey business.

Moreover, Gen. Torrijos may well find it more in his interest to stamp out, than to encourage insurgents. The regime remains extraordinarily dependent on foreign banks and, yes, foreign tourists-none of whom would enjoy working and playing in Belfast-style surroundings.

Finally, Gen. Torrijos is even less likely to enlist outside material support, even from such friends as Fidel Castro and Muammar Khadarfy. The risks are too great and these gentlemen have too many other preoccupations. The Cuban leader, moreover, knows very well that Latin American guerrillas have an extraordinary rate of failure. Their only hope would be to wear down U.S. public opinion through a sustained campaign of terror, not a wholly irrational hope, but far from the worst-case scenario of the treaty's supporters.

The third major pro-treaty argument is the fear of alienating world opinion. a familiar scenario which arises whenever there is a question of using force to insure American interests. Ambassador Sol Linowitz, one of the treaty negotiators, has even stated that the new treaty will "prove" us magnanimous to a skeptical (third) world. Yet if this world is not convinced of U.S. benevolence after our rebuilding of post-war Europe and our billions of foreign aid dollars to scores of underdeveloped countries, one more act of charity will not convince it. This treaty might just as well reinforce the notion that America is acting, not from generosity, but from weakness.

To criticize this argument is to question the notion that what others may think must control our policy. No serious man should be concerned with critical opinion of Panama emanating from Conakry or Kampala, or much less Moscow.

Yet Latin America is a somewhat different case since, with the exception of Cuba, none of its countries are our sworn enemies. The depth of our ties with this region is matched only by those with Western Europe. Yet even though no Latin American regime publicly supports the United States, the depth of proPanamanian feeling varies considerably from country to country. It is strongest in Venezuela, Colombia and possibly Mexico; it is weakest in the southern cone of South America. For example, Brazilians, heavy users of the canal, have privately expressed deep misgivings over Panamanian control.

ONLY FIVE NATIONS

Despite Gen. Torrijos's numerous meetings with regional leaders, the last one held in Bogota early this month, he has managed to get the collective support of only five other nations.

Moreover, a surrender of the canal is not likely to gain us lasting respect or affection. And why should it when the obvious way to deal with us is to make more demands in as unfriendly a fashion as possible?

Beyond these arguments, our reluctance to hang on to the canal reflects a sense of uneasiness, of guilt at maintaining what is so glibly described as a "colonial enclave." Our presence simply can't be squared with the radical anticolonial (to wit, antiwestern) sentiment that is now the common intellectual coin of the globe.

Yet it must be pointed out that Panama has benefitted mightly from a resource that it alone could not exploit. It is a fact of life that the canal is a major international waterway that simply cannot be operated, much less defended, by one of the smallest countries in Christendom. That it would strike many as arrogant to state these facts is a mark of the extent to which we have absorbed the doctrine of international egalitarianism. National duty is not easily transferred nor fundamental geopolitical facts altered by political bombast.

The United States must retain the major role in running and defending the canal. It is still open to question how precisely to define that role, as well as the nature and extent of Panama's contribution. What should not be open to debate is the right of this country and the other users to an open and secure passageway between the planet's two principal oceans.

In spite of the attempts to secure ratification through scare arguments, this treaty does not fit these requirements.

[From the Encyclopedia Britannica 1970]

PANAMA CANAL

(By Capt. Miles P. Du Val, Jr., U.S. Navy, Retired)

Panama Canal, a high-level artificial interoceanic waterway of the lake and lock type at the Isthmus of Panama connecting the Atlantic and Pacific oceans, owned, operated and controlled by the United States under treaty, for the transit of vessels of commerce and of war of all nations on terms of equality, with tolls that are just and equitable. The Canal Zone, through which it was built, is the constitutionally acquired territorial possession of the United States granted in perpetuity by the Republic of Panama for the construction of the canal and for its perpetual maintenance, operation, sanitation and protection. The gross total investment of the United States in the canal enterprise, including defense expenditures, from 1904 to June 30, 1968, amounted to $6,368,009,000; and net to over $5,000,000,000.

By using the canal, vessels plying between the Atlantic and Pacific coasts of the United States can eliminate the Cape Horn route and save a distance of about 8,000 nautical mi., while journeys between the Atlantic and Pacific coasts of the North and South American continents can be reduced by 3,000-4,000 mi.; vessels from Europe to eastern Asia and Australia can effect a saving of 1,000–2,000 mi. Hence the canal is of the greatest international importance, strategically and economically.

This article is divided into the following sections:

I. The Waterway.

1. Description.

2. Navigation.

II. The Canal Zone

1. Area and Tidewaters.

2. Sovereignty.

3. Administration.

4. Tolls.

5. Canal Traffic.

6. Defense.

III. History

1. Panama Railroad, 1849–55.

2. French Project, 1879-1904.

United States Policy, 1850–81.

4. Isthmian Canal Commission, 1899-1901.

5. U.S. Diplomacy, 1901-03.

6. Building Canal, 1904–14.

7. Principal Engineering and Construction Projects After 1914.

8. Reorganization and Policy Determination.

9. Panama-U.S. Relations.

1. Description

I. THE WATERWAY

The Panama canal does not cross the isthmus from east to west as generally supposed, but from northwest to southeast, with the Atlantic entrance 331⁄2 mi. N. and 27 mi. W. of the Pacific entrance. Located in one of the heavier rainfall areas of the world with its longest section formed by impounding the waters of the Chagres river valley by a dam at Gatun, the canal's principal features include: twin-flight locks, dams and spillways at both ends of the canal: the summit-level Gatun lake; an excavated gorge across the continental divide, renamed as Gaillard cut, connecting Gatun lake with the Pacific locks; a small Miraflores lake between two sets of Pacific locks; and two terminals.

The Atlantic terminus is at Cristóbal on Limón bay, a natural harbour protected against storms from the north by east and west breakwaters. The Pacific terminus is at Balboa, a sheltered artificial harbour with its Pacific entrance channel safeguarded from silt-bearing currents by a causeway from the mainland to the fortified islands in the Bay of Panama.