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Q:

What does the rest of Latin America think about the Panama Canal issue?

A: Latin America, often divided, is united on the issue of the need 17 for a new Panama Canal Treaty. Latin American nations unanimously oppose continued U. S. control of the Panama Canal under the 1903 treaty terms. When Mrs. Carter recently visited Latin American countries, this issue was raised consistently. Latin America sees the canal and the 1903 treaty as a relic of American colonialism. The existence of a U. S.-controlled canal, subject to perpetual rule, is a festering wound to them. It revives memories of past intervention in Latin American affairs.

Q:

If the Panama Canal stirs up such strong emotions in the United States, and is sometimes an unpopular cause to embrace politically, why negotiate for a new treaty?

A: A new treaty is being negotiated because it is the opinion of the Carter Administration, Latin America and nations of the Third World, that the terms of the 1903 treaty no longer reflect the many changes which have occurred in Panama, the U. S. and the world in the past decades. We are negotiating because it is believed this is the best way to protect America's basic national interest in an open, efficient neutral and secure canal.

The canal is important to the United States, though less than in earlier years, and we believe a new treaty with arrangements more acceptable to Panama will be more protective of the Canal than the present treaty, which is outmoded and a source of hostility.

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Q:

Is the Panama Canal the sovereign property of the United States?

A: No.

The United States has all the rights, power, and authority to conduct its activities in the zone, "as if it were sovereign," not as the sovereign.

Q:

A:

What is the economic status of the canal?

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The canal is still an important link for the trade routes, but the economic picture is more difficult now. In 1975, about 12 percent of all United States export and import waterborne tonnage used the Panama route. The canal carries 7 percent of our trade between the East and West Coasts and 8 percent of our foreign trade is in canal traffic 1 percent of our Gross National Product. However, the canal's economic status is such that some economists say it is no longer as valuable as in the first two decades of existence, but in recent years it has run at a loss. From 1973-76, the canal lost about $29 million and during the same period canal traffic decreased from 39 ships a day to 33. In November, 1976, President Ford approved a 19.5% toll increase to try to lower canal deficits the third toll increase since 1974, when the rates were raised for the first time since the canal was opened in 1914.

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Q: What are some of the factors behind the drop in daily traffic?

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A: The new, larger ships such as the supersized cargo ships cannot go through the 63-year-old waterway. Another factor is the so-called "minibridge system. The minibridge concept allows steamship companies to have a single rate for a container that is sent from the East Coast of the United States to the West Coast by rail, and then by ship to the Far East. This new system was inaugurated in 1972 and in its first 18 months the ports lost more than 50,000 containers to minibridge traffic and most of this traffic would otherwise have used the Panama Canal.

Q:

A:

Militarily, does the canal have an important strategic role?

Not since the United States established a two-ocean navy, and 2 built aircraft carriers that are too big to go through the canal. However, it is still an important defense asset to the United States because it does facilitate the movement of military supplies.

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Q:

A:

Why is the canal's strategic importance now diminished?

Because larger aircraft carriers cannot move through it and submarines would have to surface during transit. Also, the canal is 2 vulnerable to attack. Military officials generally agree that it would be extremely difficult to prevent canal closure by an air attack or by skilled sabotage.

Q: How large is the military establishment in the Canal Zone?

A: The United States is responsible for the defense of the Canal and Canal Zone. There is a military community of about 23,500 including dependents. Actual combat and support forces number about 9,400 and there are four administrative installations in the zone and 22 submarine bases. The Canal Zone is the headquarters for the Joint United States Southern Command. This office directs military assistance programs in other Latin American countries. Also in the Zone are headquarters of the U. S. Army Forces Southern Command, the United States Naval Forces Southern Command, the United States Air Forces Southern Command. They operate schools for Latin American armed forces students.

Q: What assurances do we have that, should Panama take over operation of the canal, that it could be run efficiently and without sharp increases in rates?

A: Under the proposed terms of a new treaty now being discussed, the United States would in effect have until the year 2000 to train 23 Panama in operations of the canal. Since the canal is so vital to Panama's economy, sharp increases in rates would drive down its use and, therefore, only result in diminishing revenues for Panama. Panama's national and economic self-interest rely on operating the canal efficiently, with neutrality, and with reasonable rates to encourage continued use by all nations. Panama must keep the canal competitive with other transportation modes.

Q: Suppose at some future date i ternal or external developments constitute a threat to the canal. What could we do?

A: Under the new treaty we clearly would have the right to defend 24 the canal against military actions directed against the canal. Also, we intend to have adequate assurances that the canal always will be open to the ships of all nations on a non-discriminatory basis and that our security interest in the canal will be protected. In the transition period to 2000, the U. S. will be training the Panamanian military in protection of the canal. During the life of the proposed new treaty, the U. S. will be responsible for primary defense of the

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Q: General Omar Torrijos appears to be a strong-armed ruler. Is his government leftist? Is it a dictatorship? Will it remain in power long enough to negotiate a new treaty and make it acceptable to the Panamanian people?

A:

Panama's current government has been in power since 1968 and shows considerable stability. All Panamanian factions, no matter what their political ideology, want a new canal treaty and a more equitable relationship with the United States, so acceptance by the Panamanian people is not considered a problem if the treaty is fair. The Panamanian government is not a democracy as we understand that term, but slogans are not accurate for the Torrijos government. The Torrijos regime is strongly nationalist and populist and concerned about its political independence. Settlement of the treaty issue would remove the major issue which radical elements could exploit in Panama against the U. S.

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This Memorandum is a response to the Panama Canal Memorandum sent by the White House Media Liaison Office to editors and news directors throughout the United States on July 29, 1977.

The White House Memorandum, in my judgment, is not only misleading, but also contains a number of factual and historical errors. The American people, who deserve to know the truth about the Panama Canal Treaty, cannot meaningfully and effectively participate in the upcoming debate on this issue if they are deceived into believing the so-called "facts" that are presented in the White House Memorandum.

In the interest of accuracy, I offer for your consideration

the following information:

1. The White House Memo states (p.2) that:

"Annual payments to the Republic of Panama (are) $2,328,000."

Comment: This statement does not tell the whole story. Of the $2,328,000 annuity for 1976, the Panama Canal Company paid $518,718 and the State Department paid $1,809,282. But far more important is the fact that in 1976 the total benefits to Panama from all U.S. sources in the Canal Zone, including the amuity, was $243,197,000. This sum is rarely mentioned by the State Department. Nevertheless, it has given Panama the highest per capita income in all of Central America and encouraged about one third of Panama's population to live near the Canal Zone.

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