and Germany pitted against France. Then came the 1914-1917 war. It was followed by the war from 1938 to 1945. Yet Switzerland was an oasis of peace in Europe. What we want is to prevent Panama from becoming a military target. That is why neutrality has to be permanent. And the permanent status here is a blessing just like perpetuity is a curse in the present canal treaty. One cannot compare one with the other.

4. Article III sets forth the rules of this neutrality. Section 1(c) states that the tolls and other charges for transit and ancillary services shall be just, reasonable, equitable and consistent with the principles of international law. I have heard that since we have accepted that the tolls be reasonable the United States will have the right to participate in fixing tolls after Panama assumes exclusive responsibility for managing the canal. This is not so. The treaties currently in effect, including the Hay-Pauncefote agreement of 1901, set forth exactly the same—that is, just and equitable-stipulations on rates. This provision appears in article III, section 1 of the Hay-Pauncoefote agreement. May we ask : When has the United States felt bound to consult with Panama about the tolls which are unilaterally fixed by the U.S. Congress? When? The United States has set the rules for interpretation of that clause. And Panama will do exactly the same. Panama will fix the reasonable tolls. However, the tolls cannot be fixed arbitrarily. We live in a competitive world. Other means of transport compete with the canal. There are railways, pipelines, and there will be other transportation means invented in the future. That is why Panama will not be able to fix the tolls arbitrarily. The tolls will be reasonable and competitive because there is no monopoly. However, this is very different from contending that by accepting reasonable tolls in this clause we are binding ourselves to the United States so that it can continue to be a coadministrator in regard to this aspect of the administration of the Panama Canal. This has no semblance of reality or basis of support in the treaties we have signed.

5. We know that the Panama Canal Treaty will terminate. It will terminate on 31 December 1999. However, despite this fact, the two countries have agreed that this regime of neutrality will project into the future because this neutrality treaty will go into effect concurrently or simultaneously with the Panama Canal treaty. (Sentence as heard). However, the termination of the canal treaty does not extinguish the regime of neutrality of the Panama Canal. That is why the two countries pledge to maintain it despite this termination. They pledge to maintain this regime under the same conditions. As long as the canal exists, we will maintain this regime of neutrality. However, I have heard it said that the United States has the right to intervene in Panama after the year 2000. It is sad to see highly responsible officials in the United States say that this neutrality treaty grants the right of intervention. It is sad to note this inconsistency, not only because there is nothing in this treaty to serve as a basis for such a claim. But also because the term "intervention" has been left out of international diplomatic jargon since World War II, since the time when the U.N. charter was signed. It is almost as if we said that we are reviving piracy or letters of Marque (Patente de Corso). Intervention has disappeared as a right and practice. There might be intervention a thousand times over but never authorized intervention. Intervention might occur by virture of force or de facto occurrences (Cuestions de Hecho), but may this treaty never be said to contain a basis for intervention. The U.N. charter binds Panama and the United States, and it binds 152 countries in the world as well. This charter excludes, condemns and punishes intervention. Then, how can an official of the United States or of any other country invoke a right of intervention?

6. The United States expects that not only Panama but the entire world will respect the right of its war and merchant ships always to be able to transit the Panama Canal. However, what would happen if the passage of a U.S. ship were blocked? Let us not think that Panama would do so, for two basic reasons. We do not have the strength to do so; second, it is our business that the canal be used intensively by all countries of the world. It is our source of wealth too. So, let us not expect arbitrary or immature action by Panama. The hypothesis is valid only in the case of other countries. And if any country blocks passage of any U.S. ship, how would the United States react in face of the failure to recognize a right? It is only natural to expect that the United States will react violently (violentamente) against the country obstructing its right, or that it will take reprisals which would be legal because a U.S. right would have been violated or it might take recourse to other mechanisms, the United Nations, or

the International Court of Justice. These paths are open to the United States. But it is natural to recognize here that whoever denied this right of the United States to pass its ships would be inviting war or reprisal by the United States.

7. Naturally, and we affirm this here, Panama's policy will be to maintain the canal permanently neutral, with reasonable tolls and open to all flags without any discrimination whatsoever.

However, I have heard it said that the United States can take action as it pleases the same way it can take action from now until the year 2000. But this is not possible. The wording of article IV of the canal treaty, whereby the United States is granted the primary right of defense, is not repeated in the neutrality treaty. And this means that the United States cannot take similar action, because it cannot rely on the same criteria to take action.

8. Article VI is also the subject of much debate, particularly in the United States at the present time, because in section 1, the war and auxiliary vessels of the United States and the Republic of Panama are entitled to transit the Panama Canal expeditiously. And one can hear abusive interpretations of this term, expeditious. Let us state very clearly: Expeditious does not mean priority or preferential treatment. Let us state this very clearly. And we say this very clearly because this is exactly what the United States proposed in May of this year. In May of this year, the United States proposed that in time of war or grave emergency these ships have the right to transit the waterway on a preferential basis. But this proposal was rejected by the Republic of Panama. Reference is made to priority in the 1967 treaties in article XXXIV, section 4. We are talking about expeditious transit, which in a negative way does not mean preferential treatment, I repeat, because this U.S. proposal was rejected by the Panamanian negotiating team.

9. However, I have heard it said that expeditious means "ahead of the line" (quoted phrase spoken in English-FBIS), at the front of the line. And from where does this interpretation come, when the history of the negotiations reveals that every notion of preferential treatment was rejected? Anyway, why did Panama reject this idea of preferential treatment? Because it is a contradiction of terms. Article IV and this entire treaty consecrate neutrality, and neutrality, according to all definitions I have seen and according to all the experts, means that this principle of impartiality runs, like a conducting wire, through the entire right of neutrality. Neutrality means equality in transit, impartiality, equilibrium, balance, not discrimination between two belligerent parties.

And we cannot speak of a regime of neutrality, of consecrating neutrality, and at the same time speak of preference or discrimination. These terms exclude each other; these are contradictory terms in themselves. This is why Panama could not accept any preferential treatment in favor of the United States. Expeditious passage means that it is facilitated, that it is not hindered, but it cannot mean discrimination. Let this be clear, because the history of the negotiations excludes every right to preference for the United States and the concept of neutrality also excludes it... unquote

GONZALEZ.

Senator STONE. Senator Dole, does the cable you put in the record and the further cable reporting the speech of the negotiator, Lopez Guevara, to the Panamanian people raise a question in your mind as to whether we continue to insist on our interpretation and they continue to insist on their interpretation of the fundamentals of this treaty?

CONFLICTS IN INTERPRETATION UNDERSCORED

Senator DOLE. I think it does very clearly. In fact, I am pleased you have the additional information. It not only underscores it, it goes a bit further than the cable I have from the Political Counselor. It seems to me that it is very clear-and again, I go back to what Secretary Vance said, that our ships can go to the head of the line. That is obviously not the way they interpret it. It is not the way they interpreted it Thursday morning, or Thursday evening. I guess the speech has been made and he made it very clear.

I don't know who speaks for the Panamanian Government. But I suggest again that he is one of the leading negotiators.

Senator STONE. When I originally raised this point, I was quoting from the speech of the Chief Negotiator, Escobar, to the Panamanian National Assembly before the treaty was signed. The rebuttal to my questions was on the basis that possibly there were some changes in provisions between his interpretation and the time of the signature. However, now we have another negotiator making a speech over Panamanian television-which I would submit is authorized as I do not think you would get that kind of communications treatment under that regime unless it were authorized-again reaffirming what Escobar was saying.

Isn't that right?

Senator DOLE. That appears to me to be right. Of course, I understand there is a referendum coming up and they may be trying to sell the treaty there on one basis and we are trying to sell it on another basis, which I think is totally wrong. I think we ought to have a common understanding and it ought to be the same. It obviously is not. I think that Secretary Vance and Mr. Linowitz will, of course, in due time further explain to members of this committee how they interpret the language.

Senator STONE. Thank you, Mr. Chairman. I yield the balance of my time.

Senator CHURCH. Senator Percy.

Senator PERCY. Senator Dole, I think you have performed a very valuable service to the country and to this committee in suggesting these changes in the treaties. This is the time to debate them.

TIME TO CLARIFY PROVISIONS IS BEFORE RATIFICATION

I became convinced in just questioning the Governor of the Canal Zone and our military experts, that there were very crucial interpretations of the treaty language on which we did not agree among ourselves much less with Panama.

I pointed out at the time that I felt the time to clarify the terms of any contract between two parties is ahead of time. This deliberate process that we have of advise and consent is an extraordinarily important one. We have taken 13 years to negotiate a new treaty. Sometimes the negotiators may have been too close to the picture, I think, to see the forest for the trees.

I think we in the Senate have a duty to step back now and look at the work that has been done. I think you have performed a valuable service in this regard.

I disagree with some of the conclusions that you have come to, but I think the process itself has been valuable, thought provoking, and a real contribution.

LATIN AMERICAN INTERPRETATION OF U.S. AGREEMENT TO TREATY

One witness before this committee cited the comments of the late Dr. Mario Lazo, a Cuban lawyer and author, who wrote that the nations of Latin America would interpret the United States agreeing to a new

treaty as a sign that the United States no longer had the will to carry out its responsibilities.

Would you care to respond to that?

It seems like an extreme statement.

Senator DOLE. I think that there are a lot of extreme statements floating around. I have not commented on many of them. I don't share his view. I don't think it is an indication of that at all. I think it would depend on what kind of treaty we have, what kind of treaties finally are ratified by the Senate.

As everyone in the Senate knows, we have difficulty ourselves haggling over language. Now this committee is asked first, and then the Senate will be asked to pass on language where we were not even a party to the negotiations. This is going to be very difficult. But I don't think that is a particularly valid statement.

NECESSARY MODIFICATIONS TO 1903 TREATY

Senator PERCY. Senator Strom Thurmond, when he appeared before the committee, indicated that he felt there had to be a new treaty. In questioning him, I got the impression that he did not favor just staying with the status quo and just saying that we have the 1903 treaty, we will stay with it, we will not modify it.

Do you take that position also, that some modification, some changes, some updating, some modernization of our present relationship with Panama is necessary, and we are just discussing what kinds of modifications? Is that correct?

Senator DOLE. That's correct.

There may be a few members who would just flatly oppose anything, but I don't know of anyone in that category. I think Senator Thurmond has expressed it. I didn't have a chance to hear Senator Laxalt this morning, but I know they are opposed to the treaties. But I also believe that if the proper changes were made and some have indicated that that is a way to thwart the treaty, by saying that I don't agree with it and you have to change it my way-well, that is not this Senator's view. If there are satisfactory changes made, I would think it would have widespread support.

Senator PERCY. So, there would be relatively few people who would associate themselves with the idea that, "That canal is ours, we are going to hold it, there will be no changes." We are not really talking about just flatly rejecting the present treaty that is before us, with no alternatives; we are really talking about possible modifications. Even those who are among the most ardent opponents of ratification are talking in those terms-about working on the present structure, based on 13 years of negotiation, to correct or clear up certain weaknesses and misunderstandings.

Senator DOLE. That is what this Senator is talking about. Of course, I can't speak for everyone who has a view on the treaties, or the canal, or what has happened during the last 65 years. I would guess that the great majority fall in that category.

CONSIDERATION OF ALTERNATIVES, MODIFICATIONS

Senator PERCY. Would you feel that, if we just took a rigid position against ratification without considering alternatives or modifications, over a period of years it would be possible to maintain our ability to get along, to keep peace and security in the area, and certainly at some point negotiate arrangements for a sea-level or modernized canal? Do you feel that if we did not make some changes, it would be at all possible for us to just continue on the present course even though we possess all the military might that may be necessary to somehow "bull it through?"

Senator DOLE. Senator Church said that "might does not make right." I assume that we could stonewall the treaties and say that we are not for any change. Maybe the treaties will be rejected. I am not suggesting what will happen on the Senate floor. But if they are, then, of course, there will be an effort to renegotiate. I don't know what Panama's reaction would be.

My only point was that these should not be thrown up as roadblocks or an effort to confuse. We need clear thinking on the treaties. It should not be said that there is going to be terror or conflict or saboage unless we agree to every word in these treaties. I don't think that is necessary.

You know, you have suggested also that maybe modifications ougnt to be made and that is our responsibility..

OKINAWA PARALLEL

Senator PERCY. Did you take any position, Senator Dole, on Okinawa? We captured Okinawa with blood, sweat, and tears. We held it. It was acquired in time of war and I suppose we could have kept it indefinitely. There are certain conditions still imposed upon Japan as a result of the end of the war.

Did you feel it wise for us to try to keep Okinawa as an American base or maintain our presence here without a revised arrangement with Japan?

Senator DOLE. No. I think I tried to balance the interests there. I had no strong feeling. I think we probably did the right thing. But I also suggest that there may be some who feel there is a rather sharp difference between Okinawa and the Panama Canal, with the impact on our agricultural interests and other interests, particularly shipping. The canal is vital to our economic strength and also to our military capability and strength.

As I recall, I did not get too exercised about Okinawa.

Senator PERCY. Well, there was some emotion about it. I know I mentioned in yesterday's hearing that I visited Okinawa. I could foresee no possibility of our holding Okinawa with a hostile surrounding indigenous population surrounding us. But today we have it as a secure base. We have all the rights and privileges that we need and are surrounded by a friendly population that feels we have been fair and equitable in the steps that we took.

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