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IMPORTANCE OF STUDYING TREATIES

It is vitally important that the American people study these new treaties carefully and openmindedly and recognize what is at stake. The issues involved are far too complex and significant to be compressed into a slogan or reduced to the size of a poster. In these agreements we believe we have a rare opportunity to demonstrate to the world how a large nation and a small nation can settle their differences amicably and with mutual respect and enter into a lasting partnership of which future generations will be proud. They will bear witness to our intention to build a balanced, constructive, and lasting relationship among the countries of this hemisphere and throughout the world. President Theodore Roosevelt, I think, put it very well. He said, "We have no choice as to whether we shall or shall not play a great part in the world. That has been determined for us by fate. The only question is whether we will play that part well or badly."

Thank you, Mr. Chairman.

[Ambassador Linowitz's prepared statement follows:]

PREPARED STATEMENT OF HON. SOL M. LINOWITZ, CO-NEGOTIATOR, PANAMA CANAL

TREATIES

Mr. Chairman and members of the committee, although I have not been involved in Panama Canal diplomacy for as many years as Secretary Vance and Ambassador Ellsworth Bunker, I have for a long time been deeply concerned about the Panama Canal issue and its implications for our whole relationship with Latin America.

For three years prior to my designation as Co-Negotiator of the new Canal treaties, I served as Chairman of the Commission on United States-Latin American Relations.

In the Report which our Commission issued on December 20, 1976 we said: "The most urgent issue the new Administration will face in the Western Hemisphere in 1977 is unquestionably the smoldering dispute with Panama." We went on to say: "1977 will be a crucial year for resolving the volatile Panama issue; if negotiations do not produce an equitable solution during this coming year, deepened hostility seems inevitable." We urged the new President "to exercise prompt, vigorous and decisive leadership in negotiating an acceptable compromise with the Panamanian Government while serving our own interest in the Canal. Such an action will also indicate our desire to address the issues which concern the United States and Latin America in a more cooperative and mutually respectful atmosphere."

Our recommendation was: "The new Administration should promptly negotiate a new canal treaty with Panama; it should involve members of both parties and both Houses of Congress in the negotiations; and it should make clear to the American public why a new and equitable treaty with Panama is not Only desirable, but urgently required."

Mr. Chairman, the treaties which we have negotiated and which are now before you in large measure follow that prescription. We have negotiated treaties which, we believe, are fair and equitable and which fully preserve our interest in the canal while taking into account Panamanian aspirations. In the course of the negotiations, we have indeed involved members of both parties and both Houses of Congress. And the terms we have agreed upon clearly reveal a more cooperative and mutually respectful atmosphere in hemispheric relations. There are. I believe, three basic facts which must be understood about the Panama Canal issue.

First, it is an issue which involves far more than relations between the United States and Panama, for it is an issue which affects all United States-Latin American relations. In the eyes of our Latin American neighbors, the Panama Canal runs not just through the center of Panama, but through the center of the Western Hemisphere. All the countries of the hemisphere have therefore made common cause in looking upon our position in the canal as the last vestige of a colonial past which evokes bitter memories and deep animosities. So in going

forward with these new treaties with Panama, the United States will be improving its position with virtually all the countries of this hemisphere whose attitude towards us as a nation will be importantly influenced by how we conduct ourselves on the Panama Canal issue.

Second, our primary interest in the Canal is, and always has been, to assure that it remains secure and open, on a neutral, non-discriminatory basis. Viewed in this light, it is unmistakably clear that the greatest threat to the operation and security of the Canal would be to try to insist upon retention of the present outmoded treaty and its anachronistic provisions-provisions which have in the past, and can so easily again in the future, trigger hostility and violence. The simple fact is that if we do not agree upon treaties which are mutually agreeable and acceptable, the time may come when we may find ourselves in the position of having to defend the Canal by force against a hostile population and in the face of widespread condemnation by the countries of Latin America and even the rest of the world.

Third, it is, therefore, clear that the best way to preserve an open, accessible and secure canal and to maintain its permanent neutrality would be to substitute for the 1903 Panama Canal Treaty a new arrangement which will be mutually fair, which will properly provide for Panama's just aspirations, and which will take into full account our own national needs. Putting it another way, a new treaty arrangement is the most practical means for protecting the very interests we are seeking to preserve in the Canal.

We believe that the new treaties meet this test by preserving for the nation the important interest it has in assuring that the Canal remains secure, accessible and open on a non-discriminatory basis-and in a manner which will both advance our national security interests and further our hemispheric objectives.

With your idulgence I would like to recall a few words of history about how we got where we are in the Panama Canal.

During the middle of the 1800's we were, as a young nation, interested in the possibility of constructing a canal across the isthmus in order to connect the Atlantic and Pacific Oceans. This need was dramatically underlined when, during the Spanish American War, it took the battleship Oregon 67 days to get from the Pacific coast to its Atlantic battle station.

At the end of the 1800's the French Canal Company had undertaken to construct a canal through the Province of Colombia known as Panama. By the end of the century it acknowledged failure-failure because of disease, because of technological and scientific problems which seemed unsurmountable, because of lack of financing, and finally because of loss of spirit and morale.

At that time an engineer, Philippe Bunau-Varilla, who had worked for the French Canal Company, spurred an effort for the United States to take over the French company's assets and enter into a treaty with Colombia for the completion of the canal. Such a treaty was rejected by the Colombian Senate.

At that point it was suggested that the Province of Panama might undertake to declare its independence from Colombia and then enter into a satisfactory treaty with the United States. On November 4, 1903 a revolution occurred in Panama and a few days later the United States recognized Panama's independence. Thereupon a treaty was entered into known as the Hay-Bunau-Varilla treaty. The treaty granted the United States rights "in perpetuity" to construct a canal within a zone 10 miles wide over which the United States would exercise the "rights, powers and authority" it would have if "it were the sovereign." Secretary of State Hay candidly wrote to a leading Senator that the treaty was "very satisfactory, vastly advantageous to the United States and, we must confess with what face we can muster, not so advantageous for Panama." The treaty was ratified in 1904 and construction of the canal was begun immediately. It was completed in 1914 after a brilliant engineering and scientific performance by American engineers, doctors, scientists and builders who were determined to conquer the unconquerable and make the canal a reality.

Today the Panama Canal stands as an engineering marvel, as one of this country's greatest accomplishments. In a very real sense it was our moon shot of the early 1900's. Any American must view with pride this highly complex, integrated hydraulic system of locks, dams and artificial bodies of water designed to move ships over the uplands of the isthmus for 50 miles from ocean to ocean.

And we can also point with pride to the way we have operated the Canal. For 62 years it has been run as a public service for the nations of the world rather than as a business. Tolls have been set as low as compatible with meeting costs

and providing a modest return, and world commerce has been a major beneficiary: of our Canal operation. The toll rate when the Canal opened in 1914 was $1.20 per Panama Canal ton; today it is $1.29.

But while the Canal has been a source of deep pride to the United States, it has been a troubling and festering presence in Panama. Under the treaty the United States exercises jurisdiction over the Canal Zone courts. It has estab lished the Zone's schools, jails and its police force. It has set up what the Panamanians have regarded as a colonial enclave splitting their country in two and using 550 square miles of their best land. And the Panamanians have made known their resentment at the United States doing so pursuant to a treaty which was not even signed by a Panamanian.

It is against this backdrop that these new treaties must be evaluated.

Several arguments have been widely advanced against a new treaty arrange-.. ment with Panama. Secretary Vance has already discussed the sovereignty is sue, and I would like to touch upon several other major concerns which have been asserted in connection with the new treaties.

First, will the new treaties in any manner prejudice our national security Your Committee will have the benefit of the testimony of our foremost defense. authorities on this score; but it is important to stress that in all of our negotiations we have worked closely with the Department of Defense and the Joint Chiefs or Staff to assure that our national security interests would not in any respect be prejudiced under the new treaty arrangements. And we have been as sured by them that the treaties we have agreed upon will not only preserve but indeed enhance our national security interests.

Second. will the new treaties seriously affect United States commercial in terests? The new treaties, we believe, are the best protection of our commercia interest in the Canal. The simple fact is that the commercial value of the Cana has diminished considerably as world commerce patterns and technologies of ship ping have changed. Today supertankers and other larger vessels cannot use the Canal. In percentage terms the Canal is much more important to the various countries of Latin America than it is to us. Today approximately 7 percent of tota United States international maritime trade passes through the Canal each year About 4 percent of the trade between the East and West coasts traverses the Canal. It is, therefore, clear that though the Canal is still important, it has, to £ substantial extent become economically obsolescent.

Third, is the present Government of Panama the one with whom we should be negotiating these new treaties? For over 13 years we have been engaged in negotiations for a new Panama Canal treaty. The present Chief of Government General Omar Torrijos, who has been in power for almost 9 years, has been com mitted to trying to work out a new treaty with the United States, in doing so he is supported by the people of his country and is following in the footsteps of every Panamanian Head of State since 1903-regardless of ideological differences Moreover, pursuant to the Panamanian Constitution, the treaties will now have to be submitted to a plebiscite in Panama next month so that the Panamanian people will be able to express their judgment with respect to these treaties.

Secretary Vance and Ambassador Bunker have already described to you the major terms of the new Panama Canal treaty, and I would like to focus my re marks on the neutrality treaty. This treaty commits the United States and Panama to maintain a regime of permanent neutrality for the Canal. Under the rules of neutrality set forth in this treaty, the Canal is to be opened to merchant. and naval vessels of all nations at all times without discrimination as to con ditions or charges of transit. A special provision authorizes United States and Panamanian warships to transit the Canal expeditiously in both peace and wai without being subject to any restriction as regards means of propulsion, arma. ment or cargo.

Under this provision no question can be raised about the right of U.S. nava vessels to transit the Canal with all their weapons nor can any restriction be placed on the type of cargo they may carry. Further, we are assured of a pref erential right to expeditious transit of our naval vessels whenever we consider this necessary.

Under the treaty the United States is in a position to assure that the Canal': permanent neutrality is maintained and there is no limitation on our ability to take such action as we may deem necessary in the event the Canal's neutrality is threatened or violated from any source.

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The precise type of response we might determine to make would of course depend upon all the political, military, legal, economic and other factors involved in a particular situation. But the key point is that it is for the Untied States to make the determination as to how we should respond and how we should defend our rights under the Canal's regime of permanent neutrality. Thus the treaty provides for the United States maximum freedom to determine how to carry out its responsibility for Canal neutrality. We are under no obligation to consult with or seek approval from any other nation or international body before acting to maintain the neutrality of the canal nor does the treaty in any other way limit our ability to act.

This permanent neutrality treaty will also apply to any other international waterway that may be built in Panama in the future. In short, the neutrality treaty provides a firm foundation for assuring that our long-term interest in the maintenance of an open, accessible, secure, efficient Canal is preserved― now and in the future.

In order to emphasize the importance of the regime of neutrality to world shipping there is a protocol to the neutrality treaty which will be open to accession by all the countries of the world. The signatories to this protocol will, in effect, endorse the neutrality treaty by specifically associating themselves with its objectives and by agreeing to respect the regime of permanent neutrality of the Canal both in time of war and in time of peace. The Instruments of Accession will be deposited with the Secretary-General of the Organization of American States.

The lasting and deeply significant implications of this treaty have been fully recognized by the Panamanians. In signing the treaties at the Pan American Union here in Washington on September 7, 1977, General Torrijos clearly told the people of Panama, the people of the hemisphere, and the people of the world: "We have agreed upon a neutrality treaty that places us under the protective umbrella of the Pentagon. This pact could, if not administered judiciously by future generations, become an instrument of permanent intervention."

Both countries recognize that this treaty is designed not only to assure that our own interests will be fully preserved but to assure the other countries of the world that the United States will be in a position to do whatever may be required in the future to preserve the openness, security and accessibility of the Canal.

It is vitally important that the American people study these new treaties carefully and open-mindedly and recognize what is at stake. The issues involved are far too complex and significant to be compressed into a slogan or reduced to the size of a poster. In these agreements we believe we have a rare opportunity to demonstrate to the world how a large nation and a small nation can settle their differences amicably and with mutual respect and enter into a lasting partnership of which future generations will be proud. They will bear witness to our intentions to build a balanced, constructive, and lasting relationship among the countries of this hemisphere.

Theodore Roosevelt put it very well:

"We have no choice as to whether or not we shall play a great part in the world. That has been determined for us by fate. The only question is whether we will play that part well or badly."

The CHAIRMAN. Thank you, Mr. Ambassador.

AGREEMENT BETWEEN NEGOTIATORS

Let me ask a few questions, and then I will pass on to my colleagues here on the committee. You and Ambassador Bunker have worked together as our chief negotiators during the whole period of negotiation. Is that not right?

Ambassador LINOWITZ. Ambassador Bunker has been working on these treaties for a longer time. I joined him in February of this year. The CHAIRMAN. You joined him about 6 months ago? Ambassador LINOWITZ. About 7 or 8 months ago, yes, sir.

The CHAIRMAN. But during that time, have you worked in complete agreement?

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Ambassador LINOWITZ. Absolutely, yes, I think. Ambassador Bunker?

Ambassador BUNKER. Yes; absolutely, Senator Sparkman.

The CHAIRMAN. It seems to me that you have very well answered most of the criticism that has been sent to us in many different ways. As I said earlier, I think a great deal of it was wholly emotional, worked up on such slogans as "giving away our Panama Canal" and these various things which I feel you gentlemen have answered quite well. I appreciate it.

Senator Case?

Senator CASE. Thank you, Mr. Chairman.

There are some technical questions, gentlemen.

The CHAIRMAN. May I break in, please? I would like to remind the members of the committee that we will be operating under the 10-minute rule.

Senator CASE. We don't have our little gadget here, do we?

The CHAIRMAN. We will have it well timed.

Senator CASE. Will we be warned a minute ahead of our time expiring?

The CHAIRMAN. Yes; I think we can. Norvill, will you set up the timer for us and do the timing?

Mr. JONES. Yes, Mr. Chairman, certainly.

QUESTION OF NECESSITY OF HOUSE APPROVAL

Senator CASE. The question has been raised as to the necessity of approval by the House, that is to say for the enactment of legislation implementing the provisions of the treaty. I wish you gentlemen would comment on that. You may do so now if you wish to. This relates, I think, particularly to the transfer of property.

Secretary VANCE. It does indeed. Let me comment first, and then I will ask either of my colleagues to supplement whatever I have to say on this.

In our judgment, the treaty can contain, as it does, self-executing provisions which provide for the transfer of property to the Panamanians as a result of the treaty itself. The constitutional aspects of such a question I think are fairly clear, Senator Case. The transfer of property is a subject on which the Congress is authorized to act, but in addition it is also clear that property can be transferred pursuant to a treaty unless there is a specific provision which requires that that not be done.

If one takes a look at the history of the Constitutional Convention, it is clear that the Framers of the Constitution envisaged that property could be transferred through a treaty that was self-executing.

Senator CASE. I thank you, gentlemen. Do you have any further elaboration of that point that you would care to make?

Ambassador LINOWITZ. Perhaps just a comment, Senator Case. It is quite clear that while the Constitution knew how to convey exclusive power to the Congress when it chose to do so-for example, in connection with appropriations and taxation, raising of revenues-it did not in this instance, the conveyance of property, do more than convey concurrent jurisdiction; so that the Congress does have concurrent juris

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