Ceding the Canal-Slowly

Yet a bruising fight for Senate ratification lies ahead

In the sun-swept presidential suite of Panama City's Holiday Inn, overlooking a bay speckled with shrimp boats, the mood was clearly jubilant. Chief Panamanian Negotiator Romulo Escobar Bethancourt jumped to his feet and reached across the table to grasp the outstretched hands of U.S. Negotiators Ellsworth Bunker and Sol Linowitz. With a smile that seemed as broad as the canal over which they had been arguing for many months, Escobar proclaimed: "This is good. Here are the people who did it."

That it was done was something of a miracle. After 13 years of often bitter negotiations, "principles of an agreement" on a Panama Canal Treaty were finally signed last week. If the treaty is formally approved--and that could prove a very big "if'--the fabled "Big Ditch," supreme symbol of American ingenuity and determination for generations, will gradually come under Panama's control.

Panama's strongman, General Omar Torrijos Herrera, had predicted that satisfying all parties would be about as difficult as pleasing the "princess who had big feet and asked a shoemaker to find her a shoe small on the outside and large inside." But the negotiators kept hammering away until the shoe seemed to fit. The treaty will be formally signed later this month or in early September. Torrijos has invited all Latin American heads of state, as well as President Carter, to Panama City for the event, and Carter has indicated that he is willing to go. After the signing ceremony comes what is likely to be the toughest part of all. The accord must be approved by a plebiscite in Panama and by a two-thirds vote in the U.S. Senate, which promises to be a bruising battle.

The treaty is very much a compromise --neither a triumph nor a defeat for either side. Not only does it settle a nagging quarrel with Panama, it also removes a major irritant in U.S. relations with Latin America, which regards American control of the canal as a humiliating relic of the colonial era. It also assured continued U.S. control over a long transitional period; there is to be no radical, overnight shift of authority. Said Escobar: "Getting control of the Canal Zone and the canal is one of Panama's oldest national desires. To generation after generation of Panamanians, the canal has symbolized the country's national patrimony--in the hands of foreigners. We developed a kind of national religion over the canal." Linowitz told TIME, "In the world as a whole, Panama is regarded as a colonial enclave. The treaty sets off a whole new relationship between the U.S. and Latin America. We can prove how a great nation can deal magnanimously with a small nation at a time when Third World and North-South relations are at stake."

The treaty gives Panama full sovereignty over the canal--but slowly. Not until the year 2000 will the U.S. relinquish complete control of the 51 -mile-long waterway. In the meantime, the U.S. will continue to operate the canal, as well as the 14 military bases in the zone. The bases will be phased out at U.S. discretion over the life of the treaty. Under the terms of a separate treaty to be signed later by all of the hemisphere's nations, the U.S. will guarantee the neutrality of the canal and its accessibility to all the world's shipping even after the year 2000. If the safety of the canal is threatened, the U.S. is free to intervene with military force.

Once the treaty is approved by both countries, the venerable Panama Canal Company will be replaced by a board of directors consisting of five Americans and four Panamanians. The Panamanian members will be proposed by their own country but appointed by the U.S. Until 1990 the canal administrator will be an American and his deputy a Panamanian; after that year, the positions will be reversed. Increasing numbers of Panamanians (who now make up approximately 75% of the 13,000-member canal work force) will be brought into all phases of the operation.

As soon as the treaty is in effect, more than half of the 648-sq.-mi. Canal Zone will be handed over to Panama, which is planning a variety of public and private development programs. American citizens may continue to work in the zone as long as they choose or their jobs last, and they will have the same rights and privileges as other U.S. Government employees overseas. But within three years, they will be subject to Panamanian law, except in certain cases. If they are charged with a crime, they will be guaranteed much the same procedural rights they have in the U.S. If sentenced to jail, they can serve their terms in American prisons.

The U.S. will raise the rent that it currently pays to Panama from $2.3 million to $10 million a year and will add another $10 million from canal revenues, business permitting. Panama will also be advanced a $200 million loan from the Export-Import Bank, a $75 million loan for housing investment and $20 million to start a Panamanian development bank. The two nations are also negotiating a military-assistance program.

The money had been the last big hurdle to an agreement. Torrijos had initially demanded a more than $5 billion package--$1 billion as "reparations" for the years of U.S. control of the canal, then an annual $200 million payment. But President Carter wrote him a letter pointing out that there were political and other constraints on the amount he could get if he wanted a treaty--in other words, the higher the price tag, the lower the chances of Senate ratification. Torrijos got the message. Declaring a national holiday to commemorate the signing, Torrijos mingled regret with relief. "In truth," he said, mangling some metaphors, "the treaty is like a little pebble which we shall be able to carry in our shoe for 23 years, and that is better than the stake we have had to carry in our hearts."

Wars have been fought and concluded, a generation has come and gone in the time it has taken to produce a treaty. Negotiations were triggered in 1964 when Panamanian students, outraged by the American flag flying in the heart of their country, rioted in the zone. With three American soldiers and 21 Panamanians dead, President Lyndon Johnson opened talks to revise the treaty. An agreement was reached in 1967, but its details were leaked, and conservative U.S. Congressmen protested so vociferously that L.B.J., up to his earlobes in Viet Nam, backed off. Before the treaty revision could be concluded, Torrijos in October 1968 overthrew the existing government and immediately spurned the accord. Making a new treaty his major issue, he abolished political parties, seized control of the press, drove opponents into exile and saw his once prosperous economy falter. Latin American and indeed world pressures began to build on the U.S. In 1974 Secretary of State Henry Kissinger and then Panamanian Foreign Minister Juan Tack signed a "statement of understanding" that renewed serious negotiations.

The issue of the canal was thrust into the last presidential campaign when G.O.P. Contender Ronald Reagan denounced the proposed treaty as a "giveaway." Jimmy Carter also pledged never to surrender "complete or practical control" of the canal. But once Carter was in office, he put the treaty near the top of his agenda. He named Diplomat-Lawyer-Businessman Linowitz to the U.S. negotiating team. As a former U.S. Ambassador to the Organization of American States, Linowitz, 63, had pleased and impressed Latin Americans. Moreover, he firmly believed in a new treaty.

Linowitz joined Career Diplomat Bunker, 83, who had been in charge of negotiations since 1973. They made a formidable team that Latin America called "Hit 'em high, Hit 'em low." Linowitz kept pressing hard, talking fast, rarely letting up. "He works with all his heart and lungs," said his admiring adversary Escobar. More low-keyed and taciturn, Bunker was an inspired contriver of compromises. He also defused arguments by occasionally dozing off--or seeming to.

The team had to cope with allies as well as adversaries. At certain critical points, President Carter disrupted negotiations by sounding off in public. In a speech last month, for example, he casually remarked that the U.S. might retain "partial sovereignty" over the canal even after 2000. Panamanians, who thought that issue had been settled, exploded in outrage until they were reassured by Bunker and Linowitz. "Well," noted a participant, "there isn't much we can do about loose language."

Negotiations were finally speeded up by an artificial deadline. At midnight last Wednesday (Washington time), Linowitz's six-month commission as special negotiator was due to expire. He would not have been ejected from the conference room. Nevertheless, he warned his fellow negotiators: "I guess I become a pumpkin at midnight." They made sure he stayed to the end of the ball. After a final, 14-hour marathon session, with only short breaks, they completed the treaty.

Approval of the agreement by Panama is a pretty sure bet. A sharp outcry from the country's militant left is expected over the retention of U.S. bases in the zone, but then much of the Panamanian left (as well as the right) is in exile. But many Panamanians, perhaps unrealistically, look to the treaty to cure many of their national ills--including a zero growth rate. Says Nicolas Ardito Barletta, Minister of Planning and Economic Policy: "This will create a perfect situation for a lasting boom."

The fate of the treaty in the U.S. is less certain. Commitment to a U.S.-controlled canal is deeply embedded in popular sentiment and skillfully exploited by such conservative Republican Senators as Strom Thurmond of South Carolina and Jesse Helms of North Carolina. Helms flaunts a recent poll of 1,011 adult Americans by the Opinion Research Corporation, showing 78% for keeping the canal, only 14% willing to cede it to Panama. Yet the survey does not specify the conditions under which the U.S. might relinquish the canal.

A rough nose count indicates at least 50 Senators for the treaty, 20 unalterably opposed (a minimum of 34 will be needed to block the treaty). Proponents are encouraged by the defection of Barry Goldwater and S.I. Hayakawa. Since Barry switched, he says that Ronald Reagan has not spoken to him. Explains Goldwater, resignedly: "I would have said that we should fight for the canal if necessary. But the Viet Nam years have taught me that we wouldn't. So we might as well hand it over." During his California senatorial campaign, Hayakawa quipped: "We stole it fair and square." He now insists that he was only being waggish. He thinks the agreement is fair and square.

To try to convince others, Bunker and Linowitz have spent hundreds of hours on Capitol Hill briefing Senators and conducting seminars to explain the "justice and timeliness" of the treaty. Linowitz even had lunch with Reagan. "I don't think I persuaded him," admits the diplomat, "and I'm sure he didn't persuade me." The opposition to the pact, says Linowitz, "is not only one of emotionalism; it is one of great ignorance on the part of the American people." The treaty, he feels, "will indeed preserve those interests which are important to us."

Carter wasted no time coming to the support of the agreement. He got on the phone from Plains to more than a dozen congressional leaders to ask for help in winning approval of the pact. He put his top troubleshooter, Hamilton Jordan, in charge of steering the treaty through Congress--the toughest assignment Jordan has been given since getting Carter elected. A White House task force under Jordan fired off wires to all 534 members of Congress, urging them to approach the treaty with open minds. White House emissaries were planning to ask for help from Gerald Ford, Nelson Rockefeller and Henry Kissinger. Says a senior White House adviser: "A major job of lobbying and education must be done immediately --fireside chats, the works, or we're going to lose on the Hill."

The lobbyists and educators will have to field a number of thorny questions about the canal and its future:

Why Give It Up? Opponents of the pact have tradition on their side. The U.S. has always run the canal, they maintain, so why should it not continue to do so? Hubert Humphrey admits that the biggest problem of advocates like himself is that they will be arguing abstractions against real estate. The 1903 treaty, signed by Secretary of State John Hay and French Entrepreneur Philippe Bunau-Varilla, gives the U.S. "in perpetuity" all powers over the canal that it would possess "if it were the sovereign of the territory ... to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights."

Thus Reagan's campaign slogan had a basic appeal: "We bought it, we paid for it, we built it. And we are going to keep it." To cede the canal, he declared, would be tantamount to retreat, particularly following the U.S. withdrawal from Viet Nam. If the U.S. is going to give up the canal, argue other opponents, then why not the territories acquired in the Louisiana and Gadsden purchases? These territories, however, are now an integral part of the American nation, not an isolated enclave splitting a foreign country in two. The U.S., further, does not even own the property but has full rights over it. The canal, in fact, is an arrangement without a parallel in the world today. The U.S., moreover, has never had a very clear conscience about it. Even John Hay acknowledged that the treaty was "vastly advantageous to the United States, and, we must confess, not so advantageous to Panama."

Will U.S. Security Be Endangered? Treaty opponents also feel that U.S. security may be jeopardized. Says Reagan: "Security is based on the openness of sea travel and on preventing bottlenecks at critical points around the globe. The Soviet buildup reveals that they now have an offensive naval force capable of shutting off bottlenecks and destroying world commerce." Some conservatives, pointing to the growing power of the separatists in Quebec, even fear that leftist regimes may some day try to choke off both the canal and the St. Lawrence Seaway.

Treaty proponents counter that the rise of a two-ocean Navy has markedly reduced reliance on the canal. Thirteen U.S. aircraft carriers cannot navigate the waterway at all. Still, even though the biggest flattops and supertankers cannot squeeze through the canal, 96% of the world's 63,000 or so ocean-going vessels are capable of doing so. Coast-to-coast U.S. trade that relies on the canal totals only about 4% today (v. 9% in 1964), but that still amounts to roughly $5 billion worth. During Viet Nam, an impressive 70% of the cargo destined for the combat zone moved through the canal. And now oil from the Alaskan North Slope is beginning to be shipped through the waterway.

Could It Be Defended? The Joint Chiefs support the new treaty. "Otherwise, there'll be trouble," says George Brown, chairman of the Joint Chiefs, who has visited the canal several times. "You'd be fighting men you can't identify at a time and place of their choosing. That's not the way, in my judgment, to assure continued operation of the canal."

Trying to hang on to the canal in the face of growing opposition might be more of a threat to U.S. security than gradually ceding control. "This thing is terribly explosive," says a high Administration source. "If the treaty is rejected, we'll confront a bloody mess in Panama, and elsewhere." It is generally conceded that the waterway is basically indefensible. Determined guerrillas could close it down for an indefinite period by lobbing a few hand grenades into lock machinery. Says a top British military expert: "The whole history of the years of decolonization since 1945 has shown that however big the army you deploy, you cannot win against a hostile population and terrain--which in Panama means taking on a population of 2 million and 50 miles of jungle plus 1,000 miles of semitropical hell." Adds a senior British diplomat: "A U.S. strategy of holding on to the Canal Zone by force would be tantamount to following a strategy devised in Moscow."

Can Panama Run It? A final argument against the treaty is that efficient and responsible management of the canal may be sacrificed. Since the Big Ditch was opened for business in 1914, accidents have been rare, and no ships have sunk in the canal proper. On an average day, 34 vessels move uneventfully through the canal without mishap or even tension. The U.S. has also run the canal as a bargain for shippers: tolls have been raised only twice. The operation's 1976 deficit: $7.4 million, on tolls totaling $134.3 million.

If tolls are increased and service deteriorates under Panamanian control, Latin American nations will be particularly damaged. Half of Ecuador's trade, 41% of Peru's and 77% of Nicaragua's moves through the canal. Accordingly, while these and other Latin American countries such as Colombia and Chile publicly supported U.S. cession of the canal, they conducted "back channel" talks with Washington to make sure that there would be American guarantees of uninterrupted operation.

A provision of the new treaty calls for a "feasibility study" for a second canal, but it is generally agreed that the cost would be prohibitive. Still, there is no reason to assume that Panamanians will fail to run the canal properly. They have ample time to learn on the job. And, of course, the U.S. retains the right to intervene if the canal runs into serious trouble.

The reasons for the intense commitment of many Americans to the canal may be more implied than stated. It remains a point of pride in a period of national disillusionment and setbacks. It also recalls a bygone era when a more confident U.S. could act with a free hand in Latin America. Says David McCullough, author of The Path Between the Seas, a history of the canal: "It is the physical expression of a boundless confidence, one which believed tomorrow will be better. If an archaeologist were to come across only the locks and the cuts in that jungle, his conclusion would be: 'My God, what a civilization it must have been to build this!' " Many people, adds McCullough, feel that by relinquishing the canal "we are saying something profound about ourselves, that we have reached a turning point in our growth as a nation. Will we go forward as a people with our skills and great machines, or have we become a people who are pulling in and withdrawing?"

Yet as the U.S. advances on innumerable technological fronts--last week's space shuttle test, for one example--it does not really have to prove its mettle by maintaining "in perpetuity" an achievement of the steam age. Moreover, in adjusting to a changing situation and sharing its accomplishments with the rest of the world, the nation demonstrates skills and ingenuity of a different but no less vital sort. In that sense, the Panama Canal will always be American.

This file is automatically generated by a robot program, so viewer discretion is required.