STATEMENT BEFORE THE COMMITTEE ON FOREIGN RELATIONS-FIVE MAJOR FLAWS IN THE TREATIES

[From the Congressional Record, Oct. 4, 1977-S16215]

THE PANAMA CANAL TREATIES-No. 11

Mr. ALLEN. Mr. President, the last 2 or 3 weeks the leadership has been gracious enough to me to allow me three times a week to have time reserved for the purpose of discussing the Panama Canal treaties.

This morning I am to testify before the Committee on Foreign Relations in opposition to the treaties, and, for my remarks this morning, I ask unanimous consent that there may be printed in the RECORD a copy of the statement I will give in just a few moments before the Committee on Foreign Relations. The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

STATEMENT BY JAMES B. ALLEN

Mr. Chairman, thank you very much for affording to me an opportunity to state to you and to the distinguished members of the Committee on Foreign Relations my reasons for opposing ratification of the proposed Panama Canal Treaty and the proposed, so-called neutrality treaty. Although the defects in both documents are legion, in my judgment there are five major flaws, each of which on its own ground would warrant complete rejection of the arrangements negotiated, inasmuch as each would independently damage the national interest of the United States to such extent as to render it improper for the Senate to give its assent.

The five major defects, at least as I see it, are (1) the failure of the Canal Treaty to provide for an adequate defense of the Canal during the proposed 23-year term of the treaty, (2) the failure of the neutrality treaty to grant to the United States the unilateral right to intervene to assure the neutrality of the Canal Zone, (3) the astonishing provision of the Canal Treaty which forbids the United States even to negotiate with another nation for construction of a sea level canal without the express consent of Panama, (4) the decision embodied in the Canal Treaty and related loan agreements to pay to Panama some $2.262 billion, and (5) the failure of the Canal Treaty to require Congressional authorization for its proposed cession to Panama of United States territory and property.

DEFENSE OF THE CANAL

In order to understand the defense provisions of the proposed treaty, care must be taken to examine in detail the Executive Agreement in Implementation of Article IV of the Canal Treaty. Moreover, further study must be given to the annexes to the executive agreement, to the annexes to the annexes, and to the various notes, minutes, and protocols-all of which form the fabric of the joint military defense we would undertake with Panama.

I am particularly concerned, Mr. Chairman, that the drafters of the Canal Treaty saw fit to set forth the major substantive defense provisions not in the Canal Treaty in its Article IV, which is entitled "Protection and Defense," but instead in the Executive Agreement in Implementation of Article IV—an agreement which is several times as large as the entire Canal Treaty itself. Article IV of the Canal Treaty does not cover a complete printed page, yet the Agreement in Implementation of Article IV is some 53 pages long, excluding annexes and excluding an additional 22 pages of agreed minutes, the minutes themselves having their own annexes. So, Mr. Chairman, we have critical defense provisions not in the text of the treaty but rather in this executive agreement and in other extrinsic documents which could be modified from time to time by the executive branch with no requirement whatever to obtain the assent of the Senate.

Moreover, Mr. Chairman, the defense provisions set forth in the executive agreement are themselves unworkable and portend a complete withdrawal of the U.S. forces from the Canal Zone well in advance of the projected date of 2000

AD. The Administration proposes in this first executive agreement to surrender 10 out of 14 bases. Thus, we are asked at the outset to permit the surrender of 10 out of 14 military bases and to permit our forces defending the Canal to be hemmed in from day one in 4 relatively small enclaves. These bases would indeed be enclaves because our freedom of action outside of the 4 bases would be severely limited by the treaty requirement for approval of operations by a joint military board in which th United States and Panama will have equal authority. Apparently, the doctrine of unity of command is imperfectly understood at the Department of State, but the Panamanians no doubt recognize fully that this provision of the executive agreement would give a de facto veto of United States operations outside of the 4 retained bases.

So our forces would be restricted to 4 relatively small enclaves, and only the naive would doubt that we would very soon see pressure on our forces to withdraw from the 4 sites retained. That process of withdrawal would be facilitated by the fact that the executive department could close down any one or all of the remaining bases by amendment of the executive agreement with the stroke of a pen without the consent of the Senate or the consent of the Congress. Now, Mr. Chairman, the members of the distinguished Committee may not think that this process of accelerated withdrawal is contemplated, but I would call attention to the provision of the executive agreement implementing Article IV which provides explicity that the agreement will be renegotiated every two years or upon the request of either government and thus tactly acknowledges what is coming. This treaty is for a proposed term of 23 years. Yes, we are going to need toughminded negotiators if we plan to hang on to these 4 defense sites for a term of 23 years with the Panamanians hounding us daily for complete withdrawal and with our own government already proposing to negotiate the matter on a biennial basis or upon request. Frankly, Mr. Chairman, these 4 defense sites would rest on a foundation of sand, if, by Senate ratification of the Canal Treaty, the Department of State were to be given the right to agree and they seem pretty agreeable with this dictator down there in Panama-if the Department of State were to be given the right to agree with Panama more or less at any time that the time was propitious to shut down another base.

Finally, Mr. Chairman, I would ask the Committee to consider carefully the feasibility of successful joint military operations with Panamanian forces. Over the long term we can expect problems. How can we expect full cooperation from an Army whose recruits are taught to chant in unison at their recruit training base at Fort Cimmaron, "Down with the Yankees, death to the Yankees, to the wall with the Yankees." No, Mr. Chairman, over the long term we would be naive in the extreme to expect full cooperation from Panama in any joint defense of the Canal.

CANAL NEUTRALITY

Closely related to the issue of defense is the failure of the executive branch to negotiate for the United States a right to defend the neutrality of the Canal after 2000 AD. Much has been said in the media to the effect that the United States could unilaterally preserve Canal neutrality after a full withdrawal of U.S. forces from the Isthmus of Panama, but, Mr. Chairman, a careful reading of the neutrality treaty makes it evident that, in fact, the United States would have no such right whatsoever,

The neutrality treaty simply declares that the Canal Zone is neutral and sets forth an agreement by the United States and Panama that both parties recognize the Canal's neutrality. Nowhere is the United States granted permission to determine that the neutrality of the Canal is endangered or has been violated and nowhere is the United States granted the right to intervene to insure that the Canal is not made available to an enemy nation while being denied to our Navy and merchant ships.

Additionally, Mr. Chairman, the so-called right of expeditious transit given to United States warships is totally meaningless. The failure of our negotiation to insist on privileged passage for United States war vessels could permit Panama in an emergency to delay the movement of United States warships by simply requiring those vessels to transit the Isthmus on the same "expeditious" basis as merchant ships of all nations.

As Dr. Romulo Escobar Bethancourt, chief negotiator for Panama, put the matter, "If the gringos with their warships say, 'I want to go through first,' then that there is their problem with the other ships there." Regretably, Mr. Chairman, Dr. Escobar's analysis of the practical meaning of our right to expeditious transit, although stated undiplomatically, is nevertheless precisely

correct. His complete rejection of any claim that the United States is given the right to send troops to preserve Canal neutrality also accords accurately with the language in the text. In fact, the truth is, Mr. Chairman, that Dr. Escobar's construction of the neutrality treaty, unlike the construction placed on it by our own executive department, is a construction based on the language of the treaty itself rather than on wishful thinking or on the assertions of the mass media.

SEA LEVEL CANAL

From the language in the Canal Treaty rather than from press reports, we also learn that the United States would agree not to negotiate without Panamanian consent with any country except Panama for the right to construct an interoceanic canal on any other route in the Western Hemisphere. Mr. Chairman, knowing you as I do, I feel certain you share my astonishment that the negotiators for the United States saw fit to preclude any possibility of construction of a new interoceanic canal, perhaps at sea level, without our country first obtaining the express consent of a pro-Marxist and highly unstable military dictatorship. Why was this concession necessary? What did the United States gain from the concession?

I notice with some amusement, Mr. Chairman, that the Republic of Panama purports to grant to the United States of America the right to add a third lane of locks to the existing canal. Inasmuch as the United States already has the right to add a third lane of locks to the existing canal, surely our negotiators did not think that a meaningless concession of that variety was sufficient considertaion for giving the Panamanians a veto over any other project we may wish to undertake to connect the two oceans. Certainly, the negotiators for the United States could not have felt that the Panamanian agreement to commit Panama "to study jointly the feasibility of a sea level canal" warranted a countervailing commitment from the United States not to do anything whatsoever without Panamanian permission-but perhaps so. The bizarre behavior of our negotiators has produced other results equally as startling.

In any event, Mr. Chairman, one thing is sure and that is that the Panamanians know they got the best of this bargain. Discussing the sea level canal issue, chief Panamanian negotiator, Romulo Escobar Bethancourt, on August 19, 1977, with pride explained to the Panamanian National Assembly the unilateral benefits of the so-called sea level canal options. Dr. Escobar's remarks on the subject, like his remarks on neutrality, are illuminating and are worth studying in full. As Dr. Escobar explains, instead of the United States obtaining an option to build a sea level canal, the United States negotiators gave to the Panamanians the option to veto construction of a sea level canal by the United States anywhere in the Western Hemisphere.

Now, Mr. Chairman, committing the United States to deal only with Panama about building another canal is a serious mistake. As the distinguished Chairman knows, the best route for a sea level canal is in Nicaragua, that being the route that Senator John Tyler Morgan favored during consideration of Isthmian routes in the early part of this century. Senator Morgan of Alabama, who was Chairman of the Senate Committee on Interoceanic Canals, felt strongly that Nicaragua provided a more favorable political and geographical solution to the immense problems involved in constructing a canal between the two oceans. Retrospectively, he may well have been correct, yet our present treaty negotiators propose to foreclose entirely the option Senator Morgan and many others favored, an option which should at least be kept open. Certainly, with the great volume of Alaskan oil which is only now beginning to come on stream and which must move to Gulf and East Coast refineries, any relinquishment of the right to negotiate for a sea level route in Nicaragua is a very grave mistake indeed.

$2.262 BILLION TO PANAMA FOR THE RIGHT TO CEDE THE CANAL ZONE TO PANAMA So, Mr. Chairman, we are presented a treaty which does not provide for an adequate defense of the Canal, does not give the United States the right to intervene to guarantee neutrality, and does not allow the United States to initiate new canal projects except with Panama's consent. The Canal Treaty does, on the other hand, give the Canal Zone to Panama; it does eventually also give the Panama Canal Company to Panama; it does immediately give the most lucrative operations of the Panama Canal Company to Panama; it does give 10 United

States military bases to Panama; it does give Panama political jurisdiction over 37,000 United States citizens living in the Canal Zone; and finally, Mr. Chairman, it gives to Panama over the life of the treaty $2.262 billion in 1977 dollars.

You know, Mr. Chairman, ordinarily the grantee pays the grantor, but our clever negotiators have figured out a way for us to give away the Canal Zone and pay the recipient at the same time. I will not insist on going into great detail on how this $2.262 billion in 1977 dollars is to be paid to Panama because I know the Committee is fully familiar with the financial ramifications of this proposed arrangement. However, I would recommend to the Committee a careful reading of a speech given on August 19, 1977, before the Panamanian National Assembly by Panamanian Planning and Economic Policy Minister Nicolas Ardito Barletta. Minister Barletta's analysis of the cash flow of this arrangement is, in my judgment, valid, and it is from his work that I have drawn the figure $2.262 billion.

Why are we proposing to pay these tremendous sums to Panama? Why would we permit these proposed toll increases which will surely burden commerce and inflate consumer prices in the United States? The only reason I can ascertain is a desire to provide Panama with funds to repay outstanding loans from the large international banks.

The Library of Congress did a study at my request which indicates that the external public debt of Panama is some $1.7 billion. Interest on that sum is a tremendous burden in this small country of only 1.7 million inhabitants, and already 40% of current revenues in Panama go to carrying present indebtedness. Stating the matter bluntly, Panama is on the verge of bankruptcy and many of our large banks hold loans which may soon be bad debts, that is, of course, unless the United States taxpayer rescues the banks by providing the funds to Panama for repayment.

Mr. Chairman, sooner or later the Congress must draw the line and stop robbing American taxpayers to extend funds to bankrupt Third World countries so that international banks can collect principal and interest on shaky loans. In my judgment, the international banks should be required to write off their bad debts, to write off at least some portion of the loans they made in error, and the international banks should be put on notice that the American taxpayer will not always guarantee a profit in any loan transaction with unstable governments. Perhaps, rejection of the Panama Canal Treaty would be a good method to send that message.

THE CONSTITUTION IGNORED

The final major defect in the treaties is perhaps the most significant since it represents a direct assault by the executive branch on the prerogatives of Congress and since it would set a precedent extending the authority of the executive branch far beyond the bounds contemplated by the authors of the Constitution of the United States.

Article IV, Section 3 of the Constitution provides that Congress "shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States." Mr. Chairman, I know that the Attorney General has advised the Committee that the proposed treaties do not in any respect violate this clause, but with all due deference to him as a very able lawyer, I cannot share his rationalization of the clear language of the Constitution or his characterization of consistent past practice in our dealings with Panama.

In 1936 and again in 1955, cessions of United States territory to Panama were made continguent on Congressional authorization. Yet now that a truly major cession of virtually all United States territory in the Isthmus of Panama is contemplated, the executive branch has seen fit to assert a noval theory by which the Administration would circumvent the Congress. The reason for development of this novel theory of Constitutional law is, I believe, a matter of practical politics rather than legal scholarship since public opposition to giving up the Canal is so overwhelming that any Congressional authorization of a cession of territory would be difficult, if not impossible to obtain.

But beyond the immediate question, if we in the Senate permit this circumvention of the role of the whole Congress in any cession of United States territory, we will be setting a very dangerous precedent which will surely be used again by this or future administrations to assert power in an area heretofore preserved to the Congress. My own guess is that we would next see this precedent applied

to the Guantanamo Naval Base in Cuba, but perhaps other cessions of territory or property are also in the works.

So, Mr. Chairman, this Committee should not lightly endorse a departure from sound Constitutional principles simply for the political expediency of the moment. This Committee, should, instead, amend the proposed treaty at all appropriate points to make cessions of territory subject to the enactment of authorizing legislation by the Congress. I would hope that such an amendment would be one of many adopted in Committee to correct these glaring defects I have discussed.

RESERVATIONS, AMENDMENTS, AND THE FILIBUSTER

In summary, Mr. Chairman, I believe that the Senate should play a significant role in the formulation and revision of these proposed treaties so that the terms of any new arrangement with Panama can be made acceptable to the American public and so that the national security interests of the United States can be protected.

Mr. Chairman, I am sure you know of the early practice of including Senators in delegations sent to foreign countries for the purpose of negotiating treaties. That practice has unhappily in large measure ceased, and the Senate has been more and more asked for consent rather than advise. These treaties provide an excellent opportunity for the Senate to reaffirm its Constitutional prerogative and, indeed, duty to advise the Executive-to advise the President-in matters of foreign policy, particularly with respect to treaty negotiation. The Senate can give its advise through the amending process. These treaties should be amended to cure their obvious defects, and since any amendment will require a renegotiation of the amended treaty, the Administration will be advised by these Senate amendments of what is accpetable to the Senate and to the people and what might later receive Senate consent.

Reservations to these treaties would be of little or no value. Reservations simply state the opinion of the Senate and do not have the full force and effect of law. No, Mr. Chairman, the defects in these treaties require outright amendments, and I strongly urge that the Committee take in hand the process of amending the treaties before reporting the treaties to the Senate, at which time the Senate will first receive them as the Committee of the Whole. Although there will be ample opportunity, I am certain, for amendment in the Committee of the Whole and on the floor of the Senate, certainly the Committee on Foreign Relations should play the leading role in molding and amending these documents and giving thereby to the Administration its advice on arrangements with Panama. Finally, Mr. Chairman, I would comment that I do not foresee a filibuster of these proposed treaties. I do foresee a full discussion, legitimate debate, and consideration of substantive and serious amendments. A filibuster would be pointless, both because a filibuster could be stopped by 60 Senators whereas the treaties could be stopped by 34 Senators and because both treaties present questions which should be disposed of without undue delay.

Inasmuch as the concerns of the citizens of the United States are fairly evident, the Senate should with deliberation, but nevertheless promptly, discharge its duty in considering ratification. No good purpose would be served by having these proposed treaties more or less hanging around for years. They should be put to the test of ratification expeditiously, and it is my own sincere hope that the wisdom and desires of the people of the United States will be respected and that accordingly the treaties will be defeated.

Thank you for the opportunity to appear before this distinguished Committee and before its distinguished Chairman, who is my friend and senior colleague.