Panama Canal


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Panama Canal
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Kozak, Michael G
United States -- Dept. of State. -- Office of Public Communication. -- Editorial Division
U.S. Dept. of State, Bureau of Public Affairs, Office of Public Communication, Editorial Division ( Washington, D.C )
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Michael G. Kozak

anama Canal:

'he Strategic Dimension

United States Department of State
Bureau of Public Affairs
Washington, D.C.

Following is a statement by Michael G.
Kozak, Deputy Assistant Secretary for
Inter-American Affairs, before the Sub-
committee on Panama Canal and Outer
Continental Shelf of the House Commit-
tee on Merchant Marine and Fisheries,
Washington, D.C., November 2, 1989.

I am pleased to appear before you today
and welcome the opportunity to review
the role of the Panama Canal from a re-
gional and global strategic perspective.
My colleagues from the Department
of Defense and the Panama Canal Com-
mission have discussed the canal's im-
portance from the perspectives of na-
tional defense and economic value. As
the State Department's representative,
I will approach the question of the
canal's strategic role and value from a
broad foreign policy perspective.

The State Department's Perspective
Noting that the last major discussion of
this topic occurred during the debates
over the Panama Canal Treaties 10
years ago, the Chairman [Roy Dyson]
has wisely provided an opportunity to
review the canal's strategic role and
value in light of the changes which have
occurred over the past decade. From
the Department of State's perspective,
three basic considerations affect our
view of the canal's strategic role and

First, the United States has a broad
national interest in continued commer-
cial and military use of the canal into
the 21st century and a permanent re-
sponsibility for the canal's security and
neutrality. We have successfully oper-
ated the canal for 75 years for our bene-
fit and for that of international com-
merce. While the canal is no longer
crucial to U.S. military strategy or to
the U.S. economy as it was some dec-
ades ago, it still serves important U.S.
military and economic interests. Thus,
we want to see efficient canal service
Second, although-as I have
noted-the canal's importance for the
U.S. economy is less than it once was, it
continues to play a critical role in the
economies of other countries in the
Western Hemisphere and a vital role in
global maritime trade. Uninterrupted
access to a safe and efficient Panama
Canal is an important element of eco-
nomic and political stability for coun-
tries like Chile and Ecuador and con-
tributes to the overall stability and
prosperity of world trade. We want to
see that stability protected.
Third, the steps we have taken over
the past decade to adapt the methods
for operating and defending the canal to
the modern world have not taken place
in a vacuum. Instead, they have
occurred within the context of a world-
wide demand for democracy and self-
determination, including the Western
Hemisphere. Throughout the hemi-

sphere we are witnessing increasing
popular insistence on freedom from ar-
bitrary or authoritarian rule, on protec-
tion for basic human rights and civil lib-
erties, and on progress toward open po-
litical and economic systems. Nowhere
has the desire for democracy and self-
determination posed a greater challenge
for U.S. policy than in Panama.

The Primary Goal:
Safety and Efficiency
A primary and historical goal of U.S.
policy with respect to Panama is to
ensure that the canal continues to oper-
ate without interruption, safely and
efficiently, and that it remains acces-
sible to the United States and to all
other trading nations under conditions
of neutrality. This is a goal and an in-
terest that the United States and the
Republic of Panama have in common, as
the Panama Canal Treaties reflect. In-
deed, one of the best guarantees we
have of responsible Panamanian policy
toward the canal is the fact that the
safe, efficient, and neutral administra-
tion of the canal is manifestly crucial to
the national interest of Panama. We
must recognize, however, that Panama's
ability to responsibly pursue its own in-
terest-and hence the long-term future
of the canal-cannot be assured in the
context of political instability. In sum,
protection of the interests of the United


States and of world commerce in a safe,
efficient, and neutral Panama Canal
requires two basic things. First, that
responsibility for canal management,
operation, and security be in accord
with the will of the Panamanian people.
Second, that the Panamanian system
develop in such a manner that the will
of the Panamanian people can be accu-
rately expressed and implemented by
the government of that country.
How have we met these responsi-
bilities over the past decade? Where
are we today, and what does the next
decade hold?

The New Treaty Relationship
The United States entered into a treaty
relationship with the newly independ-
ent Republic of Panama in 1903 which
gave the United States in perpetuity ex-
traordinary sovereign-like powers in
Panamanian territory to build and oper-
ate the Panama Canal. Soon thereafter,
the United States found it necessary to
face up to the first of the requirements I
mentioned-that responsibility for the
management, operation, and defense of
the canal be conducted in accordance
with the will of the Panamanian people.
Practical adjustments in the way the
United States exercised its rights were
made under the so-called Taft agree-
ment to address the sensitivities of the
Panamanian people concerning sover-
eignty. Further adjustments were
made by formal treaty modifications in
1936 and 1955. And in 1965, President
Johnson agreed to a complete renegotia-
tion of the treaty relationship, which
culminated in the 1977 Panama Canal
Treaties. These treaties-which were
approved by plebiscite in Panama-
largely met the longstanding demands
of Panamanians across the political
spectrum to eliminate the sovereign and
perpetual character of U.S. rights in
Panama. At the same time, they sought
to protect U.S. interests by granting the
United States-for the remainder of
this century-the functional rights nec-
essary to operate the canal and our
military bases in Panama. In a broad
sense, they were modeled on the mod-
em base rights treaties and agreements
the United States has with other na-
tions throughout the world. U.S. inter-
ests after the year 2000 were to be pro-
tected by the Neutrality Treaty, which
establishes the basic terms for opera-
tion of the canal on a neutral, nondis-
criminatory basis and gives the United
States the right and responsibility to
take necessary action to protect the se-
curity of the canal and the regime of

The treaties of 1977 have worked
well in the sense of achieving their in-
tended purpose of removing the Pan-
ama Canal as an object of political con-
flict in Panama and between Panama
and the United States. Perhaps the
greatest demonstration of this conclu-
sion is the fact that throughout the re-
cent political crisis in Panama, General
Noriega has been singularly unsuccess-
ful in his efforts to use the canal issue
to rally nationalistic and hemispheric
support. In essence, since the treaties
the canal has become a "nonissue" in
Panama and in Latin America.
Progress toward meeting the second
requirement I mentioned-the develop-
ment of a stable internal system
reflecting the will of the Panamanian
people-has been woefully inadequate
during the past decade, however.
By 1979, the United States was on
the verge of implementing a treaty
which had taken almost 14 years to ne-
gotiate and prepare for implementation.
At that time, both the executive branch
and the Congress recognized that
democracy was an essential element of
political stability on the isthmus and
had received commitments from Gen-
eral Torrijos to open up the Panama-
nian political system.
When the treaties entered into force
on October 1, 1979, political exiles had
been allowed to return and political par-
ties and opposition media had become
active. Our canal policy, our support for
the treaties, and our support for democ-
racy in Panama were thus proceeding in
tandem as the new treaty relationship
was inaugurated.
Implementation of the new treaty
relationship proceeded without serious
setback or disruption from the treaties'
entry into force in October 1979 until
General Noriega's seizure of the govern-
ment in February 1988. During the ini-
tial transition period, a historic transfer
of authority took place on schedule and
without incident as Panama assumed
the governmental functions formerly ex-
ercised by the Canal Zone Government.
The joint bodies established by the
treaty began to resolve problems and
plan for canal defense. The Panama
Canal Commission did an exceptional
job of increasing Panamanian participa-
tion throughout the canal work force
while maintaining the canal's efficiency
and commercial competitiveness. The
United States and Panama continued to
conclude a number of important treaty-
related agreements, such as that which
established (with Japan) a commission
to conduct a feasibility study of alterna-
tives or possible modifications to the ex-
isting canal system. Certainly, there
were problems and areas of difficulty,

but on balance the implementation
process was on track and was serving
the interests of both the United States
and Panama.
On the political scene, the death of
General Torrijos in 1981 left a vacuum.
The Torrijos dominance of the political
scene since 1968 was due as much to his
populist political skills as to his com-
mand of the military. No other officer
had this combination of skills, and the
subsequent maneuvering among senior
military commanders for control of the
Panama Defense Forces (PDF) further
weakened the political role of the mili-
tary. Although the military continued
to dominate the government, their con-
trol was increasingly based on a heavy-
handed manipulation rather than any
semblance of genuine political popular-
ity. Through newly legalized political
parties and a lively media presence, the
opposition offered a civilian alternative
to military rule and increasingly at-
tacked the government for corruption
and abuses of privilege and power. A
number of events during the early and
mid-1980s-a 1984 presidential election
clouded by charges of fraud, the 1985
murder of opposition activist Hugo
Spadafora, the forced resignations of
three presidents, rumors of drug traf-
ficking, and charges of assassination,
corruption, and vote fraud made against
Noriega by the former PDF Deputy
Co nmarder in 1987-showed that de-
mocracy would face severe tests. Never-
theless, opponents of military rule con-
tinued to gain strength, broadened their
demands, and refused to give way
before an upward spiral of intimidation
and repression. t certainly, there was
evidence that a political transition to
civilian, democratic government would
be neither quick nor painless, but there
was no doubt that such a political tran-
sition had begun.

The Force of Democracy at Work
I would note that throughout the period
of the 1980s another force was at
work-not just in Panama but through-
out the region. That is the force of
When I joined the U.S. Government
18 years ago, you could count on one
hand the number of democracies in
Latin America. Now you can count the
dictatorships with perhaps a finger or
two to spare. This transformation did
not just happen. Pirst and foremost, it
is the product of a change in the intel-
lectual climate in Latin America and
the courage of the peooles of the region.
People have come to realize that the
man on the white horse offering easy

solutions to all their problems in return
for absolute power is no solution at all.
Dictatorships of both the right and the
left have demonstrably failed to meet
the needs of their people. And the
people of Latin America-both in and
out of uniform-have demonstrated the
courage and the resolve necessary to a
successful struggle to institutionalize
democracy in their nations.
But while the Latin peoples deserve
the credit for the historical transition to
democracy that has occurred over the
past decade, the United States has not
been a silent bystander. Successive
U.S. Administrations and the Congress
have given active encouragement and
support to the forces struggling for
democracy in the region.
This approach not only reflects basic
U.S. values but fundamental U.S. inter-
ests. Gone are the days when respon-
sible U.S. officials might argue that a
dictatorship-even a dictatorship
closely aligned to U.S. policy in certain
areas-could provide the long-term sta-
bility vital to securing U.S. interests in
the region. Instead, I believe, a consen-
sus has developed across the U.S. politi-
cal spectrum that the only means to
achieve long-term stability is through
the development of democratic proc-
esses and institutions. Where democ-
racy is established, transfers of power
occur periodically through peaceful,
orderly processes and not through coups
or social convulsions. And while civil
liberties and free elections do not al-
ways guarantee that the government in
power will follow responsible economic,
social, or foreign policies, they do guar-
antee that a government that fails to do
so will be brought up short by its own
constituents. In sum, in my judgment,
the fundamental interests of the other
nations of this hemisphere and our own
interests are sufficiently congruent and
sufficiently evident to the people of our
respective nations that our interests
will be well served if we are dealing
with governments that genuinely reflect
the will of their people. Nowhere is this
more evident than in Panama.

Panama's Political Crisis
Clearly, the political crisis in Panama
which began in the summer of 1987 has
severely strained our ability to work
with Panama on matters of mutual in-
terest, including the canal relationship.
But neither the United States nor the
treaties themselves have become the is-
sue. Despite a constant stream of disin-
formation and unsubstantiated charges
about U.S. "treaty violations," the re-
gime has been careful not to attack or

disown the treaties. Despite efforts to
paint the internal crisis as a product of
a 'liberation" struggle against "U.S. im-
perialism," the Panamanian people look
to the United States as their friend and
ally in their struggle for democracy.
Polls taken at the time of the May 7
election are revealing. Over 80% of
Panamanians blamed Noriega and his
cronies for the crisis in the country.
Less than 5% blamed the United
States-and this after a ycar in which
General Noriega totally controlled the
Despite regime efforts to change
U.S. nonrecognition policy by har-
assing U.S. and Panamanian employees
of the U.S. forces and the Panama Ca-
nal Commission, Noriega has seemingly
sought to avoid a direct threat to the
canal or a direct challenge to the proper
exercise of U.S. rights. Nevertheless, it
becomes clearer each day that Noriega's
continuation in power is a threat not
only to the interests and freedom of his
own people, but also to the canal. The
longer the crisis persists the more diffi-
cult it will be for the canal to avoid a
variety of additional costs. And as this
subcommittee well knows, it will be the
canal's users who ultimately must face
the burden of bearing these costs.
The challenge to U.S. policy in Pan-
ama has been and remains Noriega's re-
fusal to allow the democratic process to
go forward. Our response to develop-
ments there has been measured and
appropriate. As the President an-
nounced last May, the United States
will continue to support multilateral
diplomatic efforts designed to bring
about a democratic transition in Pan-
ama. The United States will continue
to assert and defend with U.S. military
forces our rights under the Canal Trea-
ties, and will take the necessary steps
to protect U.S. lives. We will neither
recognize nor accommodate with any
regime dominated by General Noriega.
In sum, the President's policy of
support for a return of democracy re-
quires that Noriega must leave power
as a necessary first step in a resolution
of Panama's internal crisis. We will
continue to support and work closely
with the democratic opposition and con-
tinue to seek every possible means of
bringing political, economic, and diplo-
matic pressure to bear on Noriega and
his dwindling group of loyalists.
We have been resolute, and we must
continue to be so. The Panama Canal
Commission and its work force as well
as the other U.S. Government personnel
in Panama-both U.S. and Panamanian
citizens-have made extraordinary sac-
rifices to keep the canal and other U.S.
activities operating safely and effi-
ciently under trying circumstances.

They have and deserve our admiration
and appreciation for their contribution
to securing the long-term future of de-
mocracy in Panama and of the canal.
These two elements are indissolubly
linked, because in a world of rising
democratic expectations, a political sys-
tem other than a functioning democracy
cannot provide the political stability
and the economic strength which is in-
dispensable for the canal's continuing
safe and efficient operation.
Make no mistake. The interest of
the United States is not in installing a
particular individual or party in power
in Panama. To do so would only sow
the seeds of a new crisis in the future.
Our interest lies in the institutionaliza-
tion of a democratic process that will
ensure that successive Panamanian
governments truly reflect the will of the
Panamanian people. In essence, we
want representative governments that
we can work with, not narrowly based
governments that the Panamanian
people will be compelled to work
against. The nature of the U.S. interest
in the canal has been changing for a
long time. Nevertheless, we believe in
the canal's continuing importance for
the United States, for Panama, and for
world commerce. In this context, it is
essential that Panama set its house in
A decade ago the Panamanian
people achieved their long-sought goal
of perfecting their sovereign right to
order governmental affairs in their own
territory free of foreign constraints.
Now they are engaged in a much more
fundamental struggle, a struggle to per-
fect their sovereign right to choose their
own government through democratic
They have had the understanding
and support of the United States both
in their struggle for sovereignty and
their struggle for democracy. We are
confident that they will triumph.
And we are confident that when
they succeed in establishing an authen-
tic democracy, the manifest interests of
the Panamanian people will lead their
government to work responsibly with
the United States and other user na-
tions to protect our common interests in
the safe, efficient operation of the canal
into the next century. E

Published by the United States Department
of State Bureau of Public Affairs Office
of Public Communication Editorial Division
Washington, D.C. November 1989
Editor. Sharon R Haynes This material is
in the public domain and may be reprinted
without permission; citation of this source is


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