There are many valid points which I think can be made as to why we should not give up the Panama Canal. Many of those have been stated earlier.

What I would like to do is address myself to some of what I consider the key arguments or key problems that I think are bothering and troubling many members of this committee and the Congress and focus on those.

ESCOBAR STATEMENT BEFORE PANAMANIAN NATIONAL ASSEMBLY

To begin with, I would like to refer to Dr. Rómulo Escobar Bethancourt's statement of August 19 before the Panamanian National Assembly.

The ACU feels particularly justified in addressing this question since we received, shortly after he made that speech, a copy of his speech in the "Matutino," a Panamanian newspaper, issue of August 20. We translated this and distributed it. We made it public on September 2, including copies to many Senators on this committee.

If there is no objection, Mr. Chairman, I would like to introduce the text of Dr. Bethancourt's statement for the record.

The CHAIRMAN. Without objection, that will be included. [The information referred to follows:]

DR. ROMULO BETHAN COURT, HEAD OF THE PANAMANIAN NEGOTIATING TEAM BEFORE THE NATIONAL ASSEMBLY OF PANAMA. ADDRESS CONCERNING THE NEUTRALITY PACT WITH THE UNITED STATES. AUGUST 19, 1977

The original (American) position was that to reach an agreement with Panama there would have to be a neutrality treaty and a military treaty. The military treaty would be made before the end of this century to be operative after the year 2000. This kept the negotiations stalled for a long time, because Panama opposed the enactment of a military treaty. Such a treaty would have implied two things: First, the continued U.S. military presence in Panama after the end of the present treaty (2000); and second, the United States, as a great power, is a country frequently involved in wars in other parts of the world, and we did not want that, because of the existence of a military treaty, the future youth of our country to have to go fight in the American battlefields with the pretext that this related to the defense of the Panama Canal. This was a position that Panama maintained until the United States withdrew the idea of a military treaty. We were then able to negotiate a neutrality treaty alone.

With regard to the neutrality pact, the following situation arose: The United States asked if Panama would disagree with the idea of the Canal being neutral. We told them we didn't, that on the contrary, a long-standing aspiration of Panama had been that the Panama Canal would be neutral. They said that they wanted the Panama Canal to be neutral and we said we entirely agreed with them. Differences then arose only in what they understood by neutrality and what we understood by neutrality. They proposed that Panama and the United States declare that the Canal was neutral and that the United States would guarantee that neutrality. Panama was opposed to this concept, explaining that we did not want the United States to maintain a guarantee over the State of Panama, using the neutrality issue as an excuse. This was another source of debate that kept the negotiations stalled until the United States gave up the idea of its guaranteeing the Canal's neutrality.

Another of the positions they presented was that Panama must agree to maintain the Canal permanently neutral and permanently open. We told them that Panama could commit herself to maintain the Canal permanently neutral because that was her wish. Panama has no interest in having anything other than a neutral Canal, the Panama Canal, because otherwise the Isthmus of Panama could become a battlefield. But we said Panama could not promise to maintain

the Canal permanently open because of three circumstances that might arise. One, because of natural causes; we explained that an earthquake could take place, for instance, which would close the Canal, and, in such a situation, Panama could not be under an obligation to keep it open. Another possibility was temporary disruptions-landslides could take place and the Canal would have to be closed to carry out clean up operations. The third possibility was that the Canal could become unprofitable for Panama; in such a situation. Panama could not be tied down to keeping open a canal which was not earning revenue. They (United States negotiators) accepted the first two reasons-natural causes and temporary disruptions-but they did not accept the third reason, lack of profits. This, too, kept the negotiations stalled for a long time.

They argued that if the Canal was not profitable, Panama could obtain money from the United States or the other countries that use the Canal to keep it open. We told them that when the new treaty with the United States ended, we did not want Panama to be under either direct or indirect obligation to turn to the United States or any other country to request money to keep the Canal open. Our respective positions remained unchanged until we reached the agreement I am about to describe. They said, we can't present to our Congres an article that states you will close the Canal because of insufficient revenues. And we said we could not present an article committing us to operating the Canal permanently when we have no way of knowing if the Canal someday will yield no profit. We finally agreed to eliminate that article, and so Panama was freed of the obligation to maintain the Canal open permanently. The negotiations then went exclusively to the issue of neutrality.

The United States then proposed that there be a neutrality treaty between Panama and the United States and no one else. Because they did not want for either the Russians, the Cubans or the Chinese-they said so exactly to intervene in the neutrality of the Panama Canal. Our position was that neutrality didn't make any sense if limited to two countries as a result of a treaty between the United States and Panama and that we opposed the other countries not having the right to join in that treaty. They changed their position and agreed to allow the countries of the American continent (except for Cuba). but no others, to join. We said no, that this was meaningless, because in case of a war between the United States and Russia or China, those countries not being a party of the neutrality agreement would be under no commitment to respect the Canal or the Isthmus of Panama. That was another reason for long delays, until they finally accepted the idea that all the countries of the world could join the neutrality treaty.

Later, there arose the problem of choosing a forum for all the nations of the world the join the pact. We said it had to be done in the United Nations. They answered that they did not much like the idea of the United Nations because of their problems with the non-aligned countries, the Third World, the Arabs, etc. They proposed the O.A.S. We agreed, provided that this body only serve as a depository, as the physical location where all the nations of the world would sign the treaty, and that O.A.S. would have no say in determining which countries would sign. This was another cause for discussion. It was solved through a protocol of neutrality-that famous protocol which has been attacked as giving the United States the right to intervene in Panama by some who apparently read such a description in a Miami newspaper. This protocol is only a note* indicating the existence of the neutrality pact. It summarizes the agreement and sets down that country such-and-such agrees to abide by it. That is the famous protocol. It is the same thing as the neutrality treaty but in the form of a protocol (that is what it is called), and the O.A.S. is the depository. Another issue was preferential right of way through the Canal for American warships. The Americans said that they had two problems. First, they had to please the Pentagon-they had to present it with something it liked so it would support the treaty and second, that as they would be leaving Panama as soon as the treaty ended, they should be allowed at least that much, if nothing else, because they built the Canal. We pointed out that we recognized they had indeed built the Canal, but that writing in the neutrality pact that the United States warships would have preferential right of way over the rest of the vessels violated the neutrality treaty and that was contrary to the

The meaning of "note" is not clear. It could mean a note of explanation or a small piece of paper.

objectives of the treaty we were negotiating. This was another cause for lengthy discussion and much analysis. They searching through their books and we searching through ours; they invoking their treaty writers and we invoking ours. This is how these discussions are carried out. Changing their position, they asked for preferential right of way during times when the United States was at war-originally they wanted it in times of peace and warand that this right be granted only when requested by the ship's captain. We said no-that war time was the least appropriate moment to grant preferential passage rights since it would be a violation of neutrality. After long discussions they accepted that U.S. warships could not be granted preferential rights. Then both countries set about looking for a formula which would not involve preferential rights, and we came to the agreement that the warships of the United States, in times of peace or in times of war, and the warships of Panama-we still don't have any now, but maybe by the year 2000 we will have some will have the right to speedy passage through the Canal. This means that they will have the right to as rapid a passage as possible. We were able to agree on this because it's not in any country's interest to have another nation's warships delaying for long in its territorial waters; so the faster they go through, the better.

Another of the issues in the neutrality pact that we were I should explain that I am giving you the true picture of what the neutrality agreement will consist of. We did not give in either to the American's insistence that the United States and Panama jointly declare the neutrality of the Canal. We said that the declaration of the Canal's neutrality was an act relating to Panama's sovereignty, and that it would have to be a unilateral declaration. After long discussion, they accepted that the declaration would be made by Panama alone, in other words, that Panama be the one to declare the Canal permanently neutral. They proposed that in our declaration we say that the state of neutrality was intended to prevent the Canal from becoming a theater of war. We answered that we were declaring the Canal neutral so that neither the Panama Canal nor the Isthmus of Panama would become a theater of war. They wanted to separate the Canal and the Isthmus. We told them that we could not do that, that the Canal was part of our Isthmus, and that our neutrality only made sense if it covered both the Canal and the rest of the country. We wouldn't be any better off if, rather than dropping a bomb in the canal, they dropped it, for example, on Ocu or Santiago. They accepted that the declaration of neutrality be worded in such a way that neither the Canal nor any part of the Isthmus of Panama could be the object of reprisals in the course of another nation's conflict.

The other point we made in relation to our concept of neutrality is that it is not a neutrality which will allow the United States ships to transit peacefully, but rather one which will allow ships flying all the flags in the world to transit peacefully, notwithstanding what country may be involved, its being a communist country, a facist country, or a monarchy-that we were not insistent on its being a democratic country to allow it peaceful passage. And finally, that the pact was to be made between the two countries, and it is stated there that Panama declared the neutrality of the Canal, in the manner that I already explained to you, following the establishment of a neutrality pact with the United States and a commitment being made on the part of both nations to maintain that neutrality. This concept of maintaining the neutrality was that which replaced their original position of guaranteeing the neutrality. The upholding of the neutrality is indicated within the treaty and in the protocol all other countries are committing themselves to this protocol.

Later came a discussion on their proposal that the two countries commit themselves to upholding this neutrality under all circumstances. We said that if the phrase "under all circumstances" was included, two important exceptions would have to be made. The first was that this would apply only so long as internal order was not involved, since these are problems for one country or our national guard to address; and second, in the case of an attack on the Isthmus or the Panama Canal by a third country. This was cause for much discussion, and in the end, they preferred to leave out the phrase so that we would not include the exception. We also pointed out that the neutrality pact must indicate clearly that after the 31st of December 1999 at 12 o'clock noonor at 12 noon as Edwin (Edwin Fabroga) says or at 12 midnight as Ahumada (Adolfo Ahumada) says-that from that date on, the American troops could not

be in Panama. After much discussion, they said, "We don't like that phrasethat there can be Russian troops or Cuban troops." Then a proposal was made to change the phrase to read that from the 31st of December 1999 on only Panamanian troops could be stationed in Panama. We were in perfect agreement with this. They were happy, because they had been half-thinking that we are going to call in the Russians, and we were happy because one of our aspirations was precisely that our troops be the only ones here.

So this is the "problem" with the neutrality pact. (Sarcastic) The criticism made of it-some that you have heard or have read-indicate that we give the United States the right to intervene in our country after the year 2000. These critics think that rights of intervention are granted in the treaty. To the great powers, no one gives the right of intervention; they intervene whenever they feel like it with or without a treaty. When they (the Americans) landed in Santo Domingo, they had no military treaty with Santo Domingo, nor had any right of intervention in Santo Domingo, and they landed anyway. But there are people here who think that it is in the articles of a code (law code) that tell a country if it has the right to intervene or not, and they don't know that it is the bayonets, the guns, and the atomic bomb that gives a country the strength to intervene. And so a country like the United States can land in Panama whenever it feels like it after the year 2000 with or without a neutrality pact. But it cannot land, for example, in Russia, even if Russia tells it to land. Those are the facts of the matter so that with the neutrality pact, we are not giving the United States the right of intervention. What we are giving is an assurance that the Canal will be permanently neutral, that we are not going to close the Canal so that their ships or this ship or that ship cannot go through. Why this neutrality pact? Because they are thinking, "By the year 2000 this country (Panama) may have gone socialist and become our (U.S.) enemy and we now want to make sure that even if they become socialist, they cannot close our passage."

And, frankly speaking, they do not need this neutrality pact to intervene or not intervene. They need it to present it to their Congress, to tell their Congress, "Look, we are giving the Canal to those Panamanians, but we retain the right to watch over it so that they behave themselves." That's the truth. It's an internal political problem; they are trying to solve an internal problem with a Congress intensely opposed to these negotiations and one which, in addition, includes members who have not been elected by the American people but rather who have become members of Congress of their own accord-these are certain Panamanians living here and others in Miami. (n.b. Referring to exiled people opposed to Torrijos' government.)

So about the neutrality pact, these are its real contents, distinguished Representatives. It was very carefully thought out, as you can see from my description of how its final form was arrived at. I might add that we feel very proud of the way the matter has been resolved. You should have seen the original draft they presented along with the military treaty. Agreeing totally to that would have been shameful; I would not have dared to sit at this table now to give you any kind of explanation if I'd brought with me their original draft for the military treaty and the neutrality treaty.

The other problem concerned the option for the construction of the sea level canal. Two months ago, almost on the day of the opening of the Alaskan pipeline, President Carter delivered a speech in which he said that his government was deeply interested in the construction of a sea level canal either through Panama or through another point in Central America, and right after President Carter's speech the American negotiators brought the question of the option to the negotiating table. During the earlier negotiations of 1966 and 1968 this issue had been intensely debated by the negotiators of that time, Doctor Diogenes de La Rosa and others since it was at that time that they (the Americans) were making the studies which they later completed and they wanted to speed up the time-table for possible construction. But in the present round of negotiations it appears they had put the problem aside until now, with President Carter's speech and the Alaskan oil.

And so the discussion of the option began. We talked about this option approximately two times and we arrived at no conclusion. Then came the Bogota conference.

There, the problem of the option truly made for a crisis, because there a very complete proposal was laid out for agreement by all the presidents, with Carter

working through negotiators Linowitz and Bunker, and our side being represented by our Chancellor, Gonzales Revilla, and our negotiating team. They (U.S.) proposed that Panama have an option to build a sea level canal at an unspecified time, and second, that Panama commit herself to the idea that no other country could construct a sea level canal. They presented that proposal in Bogota, and we read it to the presidents. It was the proposal that the negotiators had brought and we read it to them, and as a result the negotiations between the two countries were practically broken off.

The General said in his statement that we had come to this Bogota conference to celebrate a new treaty only to find that we had come to a wake. There, the struggle between the two countries began, with Bogota taking part also, since the other presidents were meddling as if they were Panamanians too.

There was no way to reach an agreement on what they proposed. Panama's delegation wrote a proposal which met with general approval. Read word for word, it is more or less like this:

Article 3-The possibility of constructing a third set of locks or a sea level canal.

1. The Republic of Panama and the United States agree that a sea level canal could be important in the future or in the context of international relations.

Consequently, after its approval, the question of construction will be dealt with. There isn't even an option. The option relates only to studying the matter. We will sit down and analyze with the United States if it is feasible. If it is, the two countries will build it, maybe during the next 10 or 15 years. The generations of the future will be much more prepared. We do not give you a copy of the treaty because its release is pending on the announcement of President Carter and of General Torrijos, and its becoming an official document. We will publish it wholly when it does become (official), and we will debate it publicly.

The ones who cannot prove that this treaty is better than the one of 1903, that perpetuity is better, will have the problem. That the two million dollars a year is better than what is proposed now. We don't care if they say that General Torrijos is a dictator; those who are opposed and say that we are not revolutionaries let them grab their knapsack and their grenade and go prove it with deeds.

Mr. JARMIN. This has been the cause of a great deal of concern lately and it has been argued from the very day of the opening of these hearings. I know Senator Baker and Senator Stone both asked Ambassadors Linowitz and Bunker and Secretary Vance some hard questions regarding these interpretations. It has been discussed a great deal.

It seems clear that in this treaty the United States clearly has no spelled-out guarantee that it will have the right to intervene to defend the canal if we consider that the neutrality of the canal has been violated.

There are also many other questions concerning the neutrality negotiation process which Dr. Bet hancourt referred to. This was that they could not guarantee keeping the canal open in case it was not making money, in the case of internal disorder, and our U.S. warships would not have preferential right of passage in time of war, and so on and so forth.

These have all been brought out and discussed before.

It is this question of interpretation that is so important.

The history of treaties has been quite dismal. They often fail simply because of the interpretation problem. A country will always interpret an agreement to serve what it considers to be its own self-interest. In most treaty negotiations, you are usually not too clear exactly what the interpretation of the other party is. You just have to wait and hopefully, down the road, you will find out when they take some kind of action which shows you what their interpretation is.