Foreign Relations of the United States, 1964–1968, Volume XXXI, South and Central America; Mexico

435. Memorandum of Conversation¹

US/MC–9

Punta del Este, April 3, 1967, 8:45 a.m.

SUBJECT

• U.S. Panamanian Canal Treaty Negotiation

PARTICIPANTS

• United States
  • President Johnson
  • Secretary Rusk
  • Mr. Rostow
  • Secretary Gordon
  • Ambassador Irwin
  • Mr. Neil Seidenman, Interpreter
• Panama
  • President Marco A. Robles
  • Foreign Minister Fernando Eleta
  • Ambassador Ricardo Arias
  • Ambassador Diogenes de la Rosa
  • Mr. Hernan Porras, Special Advisor

President Robles said he wished to take up two points in particular with President Johnson, and in the matter of “one farmer to another.” The first was the matter of arrangements under the new treaty governing the administration of justice in the Canal Area Panama wishes to uphold its sovereignty over the Area, but considers that such sovereignty cannot be successfully exercised without the ability to administer justice in the criminal, civil and administrative fields. Panama recognizes that the effective functioning of the Joint Authority will require certain preconditions. Panama considers joint administration of justice acceptable, however, with reference only to cases directly related to the operation of the Canal. He appealed to President Johnson to help to bring about agreement between the two countries on this score. He stated that from the Panamanian standpoint, criminal acts not related to the operation of the Canal should not be prosecuted by any but Panamanian authorities, as provided by the Constitution and laws of Panama.

The second point President Robles wished to bring up concerned revenue to Panama accruing from the Canal. Every country receives benefit from the utilization of its own natural resources. Panama’s principal resource is its geographic position and the interoceanic canal made possible by that position. President Robles stated that Panama has never received fair compensation for its contribution and role making possible the building and operation of the canal. The rate survey carried out by the American firm, Arthur D. Little,² indicates that Panama could be receiving much more from the Canal than its present revenue. Panama is working to enhance the social and economic development of its country, consistent with the goals of hemispheric growth and progress adopted at Punta del Este in 1961. By now Panama has contracted foreign loans to the extent that it is approaching the saturation point in its external credit position. A continuation of present policies in this area could lead to “asphyxiation”.

President Robles went on to say that Panama wants no more than a fair return from the Canal, so as to be able to secure the financial resources needed for economic and social development programs. Those programs are now proceeding well, but they would stand to suffer in the absence of sufficient funds to feed them. An important source of such funds should be Panama’s share in Canal revenues, by virtue of its geographic and human contribution to the Canal.

President Robles said the negotiation of these problems can proceed in the climate of tranquility that his administration has maintained. It is of great political importance for President Robles to be able to sign the treaty as soon as possible, so as to eliminate the nationalistic passions and emotional effects surrounding this issue, which otherwise could give rise to agitation and set up a prolonged chain of disturbances in Panama.

President Robles said that the key elements of timing include the fact that the ordinary session of the Panamanian Legislative Assembly begins in October 1. During that session, according to the rules of procedure, a whole range of issues may be taken up, with all the attendant opportunities for prolonged and politically biased debate. If the agreement can be concluded well before the ordinary session, President Robles would be able to call a special session, in which debate would be limited exclusively to the Treaty.

President Robles said that the other key date is that of forthcoming elections in Panama. He has been able to create a climate of tranquility for the signing and ratification of the Treaty. However, if the process drags on too long, he would hardly be able to contain the situation throughout the weeks and months of political campaigning, which is already in its initial stages. The presidential elections are to take place on May 1, 1968.

President Johnson expressed understanding of the wishes of President Robles, and said that we, too, want to conclude the agreements at the earliest possible date. We share Panama’s sense of urgency, and are anxious to do all possible to speed up the negotiations. He will speak with Ambassador Anderson promptly on his return and issue appropriate instructions to our negotiators to this effect. The President told Robles that he would personally follow the progress of the negotiations. He agreed with him in his desire to avoid dragging on too long, which could make trouble for both countries, and he would be prepared to meet again with Robles if this should be useful.

With regard to Panama’s share of benefits from the Canal, President Johnson stated that he assumed the amounts to be received by Panama would be determined, based on the revenue sharing concept, upon traffic volume through the Canal and Canal earnings derived from the volume. The President assured Robles of his awareness of Panama’s needs for development programs. There are problems of mutual concern in all our countries, and we appreciate their importance to Panama.

With reference to the issue of justice, President Johnson said the United States would be happy to review the question of civil justice. There are some problems involved, but he would ask that the civil issue be reviewed again, in order to discover some solution that would be mutually satisfactory.

The President agreed with President Robles on the importance of the earliest possible conclusion of the agreement. He reiterated that the Canal earnings would rise according to the volume of the traffic. Also, we would ask our negotiators to give sympathetic review to the matter of justice. The President went on to say that he had spoken with Ambassador Anderson on several occasions in the past about the negotiations. The latter has been out of the country for several weeks, and there has been no recent opportunity to discuss these matters further with him. The President told Robles that as a result of this meeting he would again take these things up with him so that he (Ambassador Anderson) and Ambassador Irwin could bring about a speed-up in our work.³ The President expressed the hope that this approach would meet with the satisfaction of President Robles, and assumed that Robles’ people would be available for rapid pursuit of the negotiations. He praised President Robles for the wisdom of his view that he should get these matters behind him well before the elections.

President Robles brought up the subject of land return to Panama. He explained that as things now stand, Panama City and Colon, at their present stage of growth, are hemmed in, with no further space available in which to expand. He stated that these lands are not needed for the operation or defense of the Canal. If they could be returned to Panama, this would provide for further development of these two cities. He noted that this matter is also politically sensitive, and could lead to irritations and resentment. Secretary Rusk commented that he had spoken recently to Secretary McNamara on the subject of return of land areas to Panama and that Secretary McNamara said he would review sympathetically Panama’s requests. President Johnson said he, too, would review this issue.

The interview closed with a discussion of the statements⁴ to be made to the press, which have been separately reported.

1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL 7 IA–SUMMIT. Confidential. Drafted by Neil A. Seidenman (OPR/LS) and approved in the White House on April 28. The discussion was held during a “working breakfast.”
2. Arthur D. Little Company studied the issue of tolls and concluded that they could be raised 125 percent without affecting Canal traffic.
3. On April 22 Rostow reported to President Johnson that “all concerned are operating with the sense of urgency you promised Robles.” He outlined progress in the areas discussed between the Presidents at Punta del Este, indicating that “Anderson and the Panama Review Group will want to discuss the deal with you prior to sounding out key Senators and presentation to the Panamanians.” (Memorandum from Rostow to President Johnson, April 22; Johnson Library, National Security File, Country File, Panama, Vol. VIII (part 1 of 2), September 1966–May 1967)
4. Johnson’s statements at Punte del Este are in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1967, Book I, pp. 444–451.