ortant to our country respecting the Panama Canal.

We have reached agreement in principle ith the Panamanians on three major is

ges:

Jurisdiction: Jurisdiction over the zone rea will pass to Panama in a transitional fashion. The United States will retain the ght to use those areas necessary for the peration, maintenance, and defense of the anal.

Canal Operation: During the treaty's lifeme the United States will have the pri-ary responsibility for the operation of the anal.

There will be a growing participation of Panamanian nationals at all levels in day-day operations in preparation for Panma's assumption of responsibility for canal peration at the treaty's termination.

The Panamanian negotiators understand hat there are a great many positions for hich training will be required over a long eriod of time and that the only sensible urse is for Panamanian participation to egin in a modest way and grow gradually. Canal Defense: Panama recognizes the portance of the canal for our security. As result, the United States will have primary sponsibility for the defense of the canal aring the life of the treaty. Panama will rant the United States "use rights" for efending the waterway, and Panama will articipate in canal defense in accordance ith its capabilities.

Several other issues remain to be reolved. They concern:

-The amount of economic benefits to Panama;

-The rights of the United States to exand the canal should we wish to do so;

-The size and location of the land and water areas we will need for canal operation and defense;

-A mutually acceptable formula for the canal's neutrality and nondiscriminatory operation of the canal after the treaty's termination; and

-Finally, the duration of the new treaty.

Quite obviously, we still have much to do to resolve these issues.

Although we have no fixed timetables, we are proceeding with all deliberate speed. We are doing so with the full support of the Department of Defense.

While I cannot predict when completion of a draft treaty will be possible, I am persuaded that a new treaty which satisfies our basic interests is attainable. Though a great deal of hard negotiating will be required to complete a satisfactory agreement, we are confident that our efforts will produce a treaty which will be judged on its merits and will be approved by the people of both countries.

The stakes are large. They involve not only the legitimate interests of both the United States and Panama and the future contribution of this important waterway to the world community; they involve as well our nation's relations with Latin America as a whole and the credibility and reputation of our country as a force for creative leadership.

America has always looked to the future. In the Panama Canal negotiations we have the opportunity to do so again:

-To revitalize an outmoded relationship; -To solve an international problem before it becomes a crisis; and

-To demonstrate the qualities of justice, reason, and vision that have made and kept our country great.

JOINT U.S.-PANAMA REPORT 2

For the past twelve years, with the support of the OAS, Panama and the United States have maintained an active negotiating process with respect to the new regime for the Panama Canal. By virtue of the Joint Declaration of April 3, 1964, both countries pledged their word to work out a new treaty-a treaty new not only in its date of entry into force, but also in the mentality which it will reflect; that is, it will be in accord with the evolution experienced by the international community.

We are negotiating because both countries feel the need to build a new relationship which gives full regard to the aspirations of the Panamanian people, the interests of both nations and the principles and objectives of the Charter of the UN. And we are negotiating in deference to the unanimous views of our sister republics in the Western Hemisphere.

We are working on the basis that every negotiation concerning an old problem is a transaction towards new formulas of justice; and that progress can only be achieved when a spirit of compromise between the parties exists as a result of their understanding of new realities and, above all, when they seek a balancing of interests within a reasonable period of time.

The negotiating process has confirmed the dedication of both parties to the eight principles agreed on by their authorized representatives on February 7, 1974. The two countries reported to this Assembly last year that significant progress had been made in this process of balancing the interests of both parties in accordance with the eight principles. We are pleased to report that during the past year the parties have made further significant progress on the highly complex issues before them.

Presented to the General Assembly on June 9 by the Governments of the Republic of Panama and the United States (text from press release 295).

For text, see BULLETIN of Apr. 27, 1964, p. 656. For text of a joint statement initialed at Panama on Feb. 7, 1974, by Secretary Kissinger and Panamanian Foreign Minister Juan Antonio Tack, see BULLETIN of Feb. 25, 1974, p. 184.

Differences remain between the two parties on important issues-the period of duration of the new treaty and arrangements in the land and water areas comprising the Panama Canal Zone.

The Republic of Panama and the United States are anxious to complete these negotiations as se as possible and recognize that the other nations rep resented in this Assembly share that desire. But w have recognized that the complexity of the issues remaining before us requires the most careful and painstaking negotiating efforts if we are to achieve a treaty which is truly just and equitable-a treaty which will balance the respective interests of both countries and those of the other nations of the Hemisphere and the world in such a way as to definitely eliminate the potential for causes of coflict in the future. It is in this sense that both Governments are in agreement with the concept expressed by General Torrijos [Brig. Gen. Omar Terrijos, Head of Government of Panama] that we are not simply seeking any new treaty-we are seeking a treaty that will fully meet our common goals in the future and be seen by our sister republics as reflecting a new era of cooperation in the Americas. The United States and the Republic of Panama reiterate their commitment to continue their most serious efforts to achieve such a treaty as promptly as possible.

The negotiation offers both peoples a peaceful alternative for the solution of a prolonged disagreement between them, and both Governments are covinced that it is their responsibility to explore to the utmost this path which offers such real possibilities for a satisfactory agreement which will cement on solid foundations the friendship and cooperation between our two countries.

If we continue the serious work presently being carried out and if we maintain the reciprocal good will of both missions towards reaching a solution to the pending problems, we cherish the hope that soon we will be able to advise you that a treaty has been agreed upon, a treaty which not only all Ameri ca, but the entire world, awaits as an effective contribution to consolidate peace and friendship amongst all peoples.

Hace tres años, tuve el honor y placer de hablar ante la Asamblea General de la OEA celebrada en mi estado de Georgia. Igual que en Atlanta, hoy seguiré el consejo de mis compañeros, que opinan-para el beneficio de buenas relaciones-sería mejor que no hablara en español hoy.

[Three years ago I had the honor and pleasure of speaking before the General Assembly of the OAS held in my State of Georgia. As I did then in Atlanta, I will today follow the advice of my friends, who have the opinion that-in the interest of good relations-it would be better for me not to speak in Spanish today.]

Since I can also speak English, I will shift to that language.

That day in Atlanta three years ago, I shared with you some of the thoughts that my wife and I had brought back from our visits to several of the American states. I spoke particularly for the need for constant cooperation, consultation, and harmony among the nations of this hemisphere. I believe that just as strongly today as President of the United States as I did three years ago as Governor of Georgia.

I am delighted to be with you in this

beautiful House of the Americas. For nearly three decades the OAS has stood for mutual respect among sovereign nations for peace and the rule of law in this hemisphere. The OAS Charter pledges us to individual liberty and social justice. I come here now to restate our own commitment to these goals. * * *

| There are also problems that plague us from the past. And we must work together to solve them.

One that addresses itself to us is the Panama Canal. In the first days of my own Administration, just a few weeks ago, I directed a new approach to our negotiations with Panama on a new canal treaty. In the light of the changes which I discussed before, the treaty of 1903, which combines [defines] our relationship with Panama on the canal, is no longer appropriate or effective.

I am firmly committed to negotiating in as timely a fashion as possible a new treaty which will take into account Panama's legitimate needs as a sovereign nation and our own interests and yours in the efficient operation of a neutral canal open on a nondiscriminatory basis to all users.