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board comprised of a group of permanent U.S. seats, another group of permanent Panamanian seats and a third group of term seats to be rotated among canal-using nations. Another possibility might be to have that third group made up of representatives of our neighbors, the nations of North and South and Central America.

The proposed treaties call for an increase of the money we pay Panama annually from $2.3 million to an average income from canal operations of as much as $80 million. There is no assurance this would benefit the Panamanian people. A modernization program-the Terminal Lake Third Lock plan-could definitely help the people. It would be approximately 10 years in the building and cost between $1 and $2 billion. We could make certain that Panamanian workers and contractors were engaged extensively in the program which would directly benefit the people and the economy of Panama.

Such a modernization of the canal would make it capable of handling all but a few supertankers. It could have important implications for the cost of moving Alaskan oil to gulf coast refineries. Then, too, increased speed of transit and general traffic would mean increased toll revenues which could further benefit Panama through a sharing formula.

There are two alternatives for discussion. I am sure there are other ways for the United States to do what it can for a neighbor, without abdicating its own responsibility to permanently provide an open waterway for all the world's shipping and a guarantee of security for the Western Hemisphere.

FREEDOM HOUSE DATING

In conclusion, I would like to touch on the subject of human rights. The concept of individual human freedom is deeply ingrained in us here in the United States. Though I believe the best way to help human rights flourish elsewhere is to set the best possible example in our own country, I realize that some idealists believe we should be more assertive in getting others to follow our example. Now that a high standard of sensitivity to human rights has become a cornerstone of our Government's policy, I think it is not only fair but mandatory to raise the question with regard to the repressive regime in Panama with which we have been negotiating. And, I do not accept our negotiators' effort to characterize it as merely authoritarian.

Human rights criticism, public and private, has been leveled at a number of nations in the Western Hemisphere which have always been friendly toward us, yet I cannot recall a single word of criticism by any representative of our Government toward Panama in this regard. Yet, Freedom House, which is recognized internationally as an impartial monitor of the status of human freedom, rates Panama as one of 67 nations in the world that is "not free." They rate 42 as "free" and 48 as "partly free". In its annual survey, Freedom House rates poltical rights on a scale of 1 to 7, with 7 being least free. They rate Panama as a 7. They rate civil rights on a similar scale, and Panama receives a 6.

Documents have been widely circulated in this country, with names, dates, places, and details of alleged violations of human rights by the regime in Panama. I, personally, have received a letter from a Pana

manian businessman who was forced, at gunpoint, from his automobile some months ago and sent into exile because he has dissented.

Can we afford a double standard in this most fundamental of areas? I don't think so, for to do so says to the world that we are cynics, using the issue of human rights only as a tactic to produce specific political results. Worse, it may say to those who hold out hope of reduced oppression and ultimately the restoration of freedom that Americans are, when you get right down to it, hypocrites. The recent history of our negotiations with the Panamanian dictatorship does nothing to dispel such concerns. So, I leave you with this question: Can we separate canal negotiations from human rights when those rights as we know them are severely limited in Panama?

Finally, what conclusions are to be drawn about these treaties? Let me reiterate that: The Panama Canal is vital to our security and that of the Western Hemisphere; we provide the one sure guarantee that the commerce of the world will have continued access to this waterway; the rights of sovereignty we hold in the Canal Zone are the foundation of our ability to remain there to operate and defend the canal; the proposed treaties relinquish those rights and do not provide adequate guarantees against future threats to the canal; alternatives should be sought which recognize the aspirations of the Panamanian people, without compromising our ability to meet security requirements.

Thus, the treaties as proposed should not be ratified. Furthermore, it seems clear from legal opinions and historical precedent that the ratification process will require implementing legislation by the Congress.

Thank you again for inviting me to appear before you.

Senator ALLEN. Thank you very much, Governor Reagan. Your remarks constitute a very fine and forceful statement. Will you permit questions by the subcommittee?

Governor REAGAN. Yes, sir.

Senator ALLEN. The members decided that we would impose a 10minute period for asking questions and answering them. If that does not give sufficient time, then we would have a second round of 5 minutes each.

I am going to forgo for the time being my opportunity to ask questions. I am going to ask Senator Hatch if he would start.

Senator HATCH. Governor, I want personally to express my appreciation for your taking time to chat with our committee in trying to elucidate some of the more important aspects of the issues involved in the Panama Canal.

You have indicated that the Russians have been to Panama. Do you know when they were there?

Governor REAGAN. Yes; it was in the month of July. They were there for over a week.

Senator HATCH. Just a month or so ago?

Governor REAGAN. Yes.

Senator HATCH. They were negotiating various commercial agreements and so forth

Governor REAGAN. And talking about locations for plants and so forth. Some, as I believe, were actually discussing buying, at way above the world price, sugar. They were talking about putting in processing plants for sugar refining.

Senator HATCH. They asked about buying 50.000 metric tons of sugar at almost double the world price or double the world price. Do you have any idea as to why the Russians would do this? Governor REAGAN. Oh, I have a very clear idea.

Senator HATCH. Please give us the benefit of your thoughts. Governor REAGAN. We could go back, if we wanted to, and quote Lenin; he said that they would take Eastern Europe. They would organize the hoards of Asia. They would then move into Latin America. The United States would be surrounded, and they would not have to take it; it would fall into their outstretched hands like overripe fruit.

I do not believe there is any indication that they have ever changed in that overall strategic plan. They are moving into Latin America first by way of Cuba. That has been very evident. I think that does pose a considerable threat to us.

SEA LANE "CHOKE POINTS"

Senator HATCH. In your statement today, you say that there is no secret that the Soviet Union believes control of over some 16 vital sea lane "choke points" means dominance of the world's oceans, and that our presence at one of the busiest and most important of those choke points is a definite deterrent.

Do you have any opinion with regard to the rest of the world's choke points as to who really controls them today?

Governor REAGAN. Yes; I think, if they don't already, they are very

close.

They have a simpler problem than we have. Our naval problem is one of keeping the sea lanes open. It is absolutely vital to us. The Soviet Union, in the event of hostilities, has the simple point of simply choking off those sea lanes. To do that, instead of foraging out in the open ocean, you simply have to intercept shipping in those various trade lanes.

Once upon a time in the history of the world, there were only about five such lanes. They were around the short east-west route around the world. They were the Panama Canal, the Straits of Gibraltar, the Suez Canal, the Madagascar, and the Malacca Straits. Now, of course, with the industrialization of other countries such as Japan, there are north and south lanes. There are lanes up in the North Sea and so forth.

Their maneuvers, the largest naval maneuvers ever held by any nation, some time ago revealed that their strategy was based on the interception at those points.

[Map of aforementioned choke points follows:]

WORLD MARITIME CHOKE POINTS AND U.S. AND SOVIET FLEETS

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ANTIC OCEAN

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Source: Author, from article published in the U.S. Naval Institute Proceedings, January 1977.

Senator HATCH. One of the best arguments-at least those who are proponents of the canal-offered is that the treaty has a guarantee of neutrality.

Don't you find that a very good point?

Governor REAGAN. NO: I

Senator HATCH. Or do you find some matters of hazard with regard to that?

Governor REAGAN. Under that neutrality clause, guarantees to all nations in peace and war are given to use the canal. In other words, we have the spectacle of possible hostilities in which nations at war with the United States would be guaranteed use of the Panama Canal. Senator HATCH. Are you aware, Governor, that there was a guarantee of neutrality with regard to Suez before it was shut down?

Governor REAGAN. Yes. And I am aware that it was a phaseout plan that was to meet some of Nassar's demands on his theories of nationalism. The British and the French had a phaseout plan of withdrawing. Two years after the treaty was signed, Nassar walked in and took over the canal and did end neutrality with regard to Israel.

It is what I was referring to here. What would we do if we were out and faced with the prospect of coming back? Britain and France took a look and said, "Well, we were going to give it away anyway; why bother?"

Senator HATCH. Some persons have indicated that this issue is a Republican issue and that the filibuster, if it occurs in the Senate, would be a Republican filibuster. Do you have any comments on that? Governor REAGAN. I have never seen an issue more bipartisan.

I just received a newspaper clipping from a paper in St. Louis, Mo., that has been running a poll on its front page with a coupon to be clipped out and sent back to the paper. In the first few days of the running of that poll, it came back 5,460-I believe-votes against ratification and 71 for. I do not think that in St. Louis, Mo., that the Republicans outnumber the Democrats by 5,000 to 70.

Senator HATCH. Do you have any comments about the recent Gallup poll showing that the percentage margin may be somewhat more narrow?

Governor REAGAN. I do. I have not seen the exact wording, but I heard from someone experienced in polling that the question asked, as sometimes they are in polls, including in effect, editorial comment. It was not a plain question of do we or don't we give up the canal. That editorial comment could have influenced that vote.

Senator HATCH. Governor, you and other witnesses have reminded this committee that there is no historical precedent for bypassing the House of Representatives in the present situation. In all previous agreements between the United States and Panama where property transfers were involved, the State Department always sought authorization and implementing legislation from both Houses of Congress. Yet, in this instance, the administration appears to be deliberately circumventing the House.

Why, in your judgment, is the administration doing this?

Governor REAGAN. Well, because I think the counsel and the advice coming from the State Department has been for giving up the canal for a number of years. I think there was an opinion in certain levels in the State Department, long before negotiations even were underway

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