US control over the Panama Canal and the associated Zone following the enforcement of the 1903 Hay–Bunau-Varilla Treaty had long epitomised Washington’s hegemony in Central America or, to paraphrase Peter H. Smith, perhaps represented the main prey in the eagle’s talons.Footnote 1 The establishment of Panama’s sovereignty over the Canal, therefore, marked a new beginning in US foreign policy in the Western hemisphere as it not only ended a source of enduring complaints by Washington’s southern neighbour but also represented an almost unprecedented gesture of goodwill in US relations toward Latin America. This outcome resulted from the signing of the Torrijos–Carter Treaties, which, on 7 September 1977, marked the conclusion of years of diplomatic negotiations between the two countries, with a sudden intensification the previous May.
The breakthroughs achieved in May laid the foundation for the treaties, as both the United States and Panama made significant progress on key issues that had previously stalled discussions. These negotiations addressed vital concerns, such as the transfer of control over the Canal Zone, the future defence and neutrality of the Canal, and the timeline for US military withdrawal. Understanding the complexities and the stakes of the ‘May round’ of negotiations is essential for grasping the overall success of the treaties and their long-lasting impact on the Panama Canal.
My focus on the negotiations of May 1977 fills a significant gap in the existing literature. The only in-depth study of the Panama Canal negotiations is Las negociaciones de los tratados Torrijos–Carter 1970–1979 by Omar Jaén Suárez, a Panamanian historian and participant in the technical negotiations.Footnote 2 Although Jaén Suárez’s work is invaluable, it was published only in Spanish and in 2005, when interest in the subject had waned. Furthermore, he dedicates but eight pages to the crucial month of May, and his work lacks archival documentation not accessible 20 years ago. Most other studies were published shortly after the signing of the treaties and often lack depth, relying heavily on US sources and focusing on political–strategic analyses. One of the most comprehensive works from this period, Panama Odyssey by US Ambassador to Panama William J. Jorden, is a blend of memoir and history, but it lacks the methodological rigor of a scholarly study and is often criticised for its anecdotal approach.Footnote 3 This stands in contrast to the more robust historiography concerning the ratification of the treaties, such as The Limits of Victory by George Moffett and The Dynamics of Foreign Policymaking by William Furlong and Margaret Scranton.Footnote 4
Given these limitations in the existing historiography, my detailed exploration of the May round aims to provide a more balanced and thorough account of this pivotal period in the Panama Canal Treaty negotiations. The details of these meeting sessions have remained largely unexplored until now, but my study benefits from a meticulous examination of formal and informal meeting records, memoranda, correspondence and firsthand testimonies that have only recently been made available. Importantly, much of this documentation has never been utilised in scholarly publications; it therefore offers fresh insights into the nuances of this key negotiating period.
David and Goliath: A Troubled Relationship
The history of the Panama Canal Treaty negotiations is a complex process marked by significant political and diplomatic efforts. Failure to revise the outdated 1903 Hay–Bunau-Varilla Treaty, combined with Panamanian frustration during six decades of US control over the Canal Zone, escalated in a series of protests that peaked in 1964.Footnote 5 These demonstrations boiled over into riots following a symbolic dispute over the display of the Panamanian flag within the Canal Zone,Footnote 6 leading Panamanian President Roberto F. Chiari to temporarily break off diplomatic relations with Washington. Negotiations resumed, resulting in the 1967 Robles–Johnson Treaties that, among other provisions, would have ensured mutual defence and security and replaced the Canal Zone with an area managed by a joint US–Panamanian entity, with Panama receiving a share of canal tolls.Footnote 7
However, political instability in Panama, particularly the National Guard coup of 1968 that brought Omar Torrijos to power, stalled these efforts to implement the 1967 Robles–Johnson Treaties. A significant breakthrough occurred in 1974 when US Secretary of State Henry Kissinger and Panamanian Foreign Minister Juan Antonio Tack outlined eight principles for a new treaty. These included recognition of Panamanian sovereignty over the Canal Zone and set the stage for further negotiations that would eventually become one of the key foreign policy issues of newly elected President Jimmy Carter.Footnote 8
Even now, the talks failed to produce a treaty, largely due to opposition from US Republican senators. The prospect of losing the Panama Canal was unpopular in the United States, even among the Democrats who, at this time, were reluctant to address Panama’s demands. During the 1976 Democratic primary elections, Carter’s stance on the Canal was vague: despite his emphasis on human rights in foreign policy – which would have led one to suppose that he would support a resolution of the issue in favour of Panama – he did not at first believe that Panama should have control over the Canal, and his position remained unclear throughout his campaign, with the issue of the Panama Canal notably absent from his public statements and campaign briefings.Footnote 9 Torrijos criticised the ‘superficial’ handling of the issue by the US presidential candidates, calling it ‘irresponsible’ given its significance to US–Latin American relations.Footnote 10 Nonetheless, Carter’s perspective evolved after the election, thanks to National Security Advisor (NSA) Zbigniew Brzezinski and Secretary of State Cyrus Vance. Carter’s commitment to addressing past US mistakes and promoting human rights became central to Washington’s foreign policy, as he aimed to improve US relations with Latin America through Panama Canal treaty negotiations.Footnote 11
The talks began under promising circumstances on 31 January 1977, after more than two years of stasis. On this date, Secretary of State Vance and Panamanian Foreign Minister Aquilino Boyd issued a joint declaration affirming their commitment to concluding the negotiations ‘as soon as possible’. In pursuit of this objective, they agreed that the US and Panamanian teams would resume negotiating sessions in Panama on 10 February 1977.Footnote 12 In the spirit of future partnership, Vance expressed in a telegram to Torrijos his pleasure at being able to have such an early meeting with Boyd and thus underscored the importance of an early settlement.Footnote 13 However, the premature ouster of Boyd from his position in favour of Nicolás González Revilla – a diplomat more pliable to Torrijos’ orders – marked a cooling in the two nations’ initial enthusiasm.Footnote 14 By March, frustration on both sides reached a level that led the Panamanian delegation to propose a temporary suspension of the treaty discussions after a month of stagnation and minimal compromise.Footnote 15 In late April 1977, the ongoing negotiations were, once again, at a substantial impasse.Footnote 16 Impasse had been the norm ever since the Johnson administration had expressed its commitment in 1964 not to revise but to replace the treaty with an entirely new agreement that ‘should recognize the sovereignty of Panama’.Footnote 17
An important event occurred on 21 April, when the Bureau of Intelligence and Research provided a memorandum to Vance that granted insights into Torrijos’ current perceptions on the negotiations. The analysis concluded that the Jefe, who had previously been rushing to reach a treaty, now seemed less pressured. In fact, only one week before, the presidents of Venezuela and Colombia had told Vance that Torrijos needed a treaty ‘if he is to survive politically’.Footnote 18 This change in Torrijos’ stance had possibly occurred due to internal stability, allowing his confidence in leaving decisions to the United States to grow. This news did not lead to any progress being foreseen. However, the director of the Bureau also stated that Latin American support for Panama had decreased over the years due to concerns about the practical consequences of Panamanian control of the Canal. Conservative governments in the region feared Cuban influence because of Torrijos’ growing ties with the Castro regime, while west-coast and landlocked countries worried about the efficiency of Canal management and levels of tolls.Footnote 19
The Jefe’s personal and political relationship with Fidel Castro was marked by strategic complexity. While the two leaders shared a common anti-colonial agenda, Torrijos was careful not to appear ideologically aligned with Castro, particularly as he sought to position himself as an independent and influential figure within Latin America. Panama’s gradual rapprochement with Cuba had begun in 1974, when Tack articulated basic principles for an improvement in diplomatic relations. The process advanced further with Panama’s accession to the Non-Aligned Movement (NAM) in 1975 and culminated in Torrijos’ first official visit to Cuba in 1976. However, despite this growing relationship, Torrijos deliberately maintained a more cautious and autonomous diplomatic posture. Unlike Castro, who increasingly sought to align the NAM with Soviet interests, Torrijos remained committed to the ideal of non-alignment, aspiring to play a leading role in the Global South without becoming a proxy for any superpower.Footnote 20
On 22 April, the day after the Bureau issued its memorandum, the State Department informed the press that the next negotiating session would begin on 9 May in Washington. This development was the result of Jorden’s successful effort to convince Torrijos to agree to a new round of talks at short notice.Footnote 21 Within the Carter staff, tension at the dawn of what would be known as the ‘May round’ was extremely high. At the end of that month, the team would know if they could indeed reach an agreement before the end of the year, as Carter had confidently believed since January.Footnote 22 The main point of contention was the duration of the treaty that would allow the transfer of the sovereignty of the Canal Zone to Panama; the Panamanians did not want this to extend beyond the ‘reasonable [date] of the year 2000’.Footnote 23 While Panama wanted a new treaty to expire in the year 2000, the United States pressed for a deadline of 2025. The United States could accept the year 2000 as the end date of the Canal Treaty only if a defence treaty remained in force for longer. Vance acknowledged that Torrijos was testing the US need for a bilateral guarantee of the Canal’s neutrality and defence. ‘He [Torrijos] believes that if Panama agrees to the principle of such a guarantee, it can oblige the U.S. to accept the Panamanian positions on most other outstanding issues.’Footnote 24
When the US Chief Negotiator Sol Linowitz proposed a framework for a neutrality agreement between the United States and Panama regarding the Panama Canal, Panama’s Chief Negotiator Rómulo Escobar Bethancourt rejected the proposal, seeking clarifications. The US delegation pressed for a permanently neutral Panama Canal and desired the United States’ and Panama’s joint commitment to a regime of neutrality to maintain the Canal’s security, freedom and accessibility to all vessels. Moreover, after the termination of the Canal Treaty, only Panamanian troops would remain in Panama unless both Panama and the United States agreed otherwise. Yet, Escobar remained sceptical; he questioned the implications of a neutrality agreement, particularly how it might apply in scenarios involving third countries. His reservations extended to the potential involvement of US troops in Panama’s internal affairs, especially in the event of domestic turmoil. Additionally, Escobar highlighted the necessity for clear rules delineating what constituted a violation of neutrality, in order to avoid ambiguities that could compromise Panama’s sovereignty. He even tried to bring forward the ending of US administration of the Canal to 1990 in exchange for Panama allowing the United States to continue to play a role beyond the year 2000 in matters of defence.Footnote 25 This was the situation at the dawn of the May round.
Two Issues, Two Treaties
When on 9 May the two negotiating teams met at the Panamanian Embassy, the talks changed direction in a significant way. The US team led by the newly appointed Linowitz and Ambassador at Large Ellsworth Bunker, who had served as chief negotiator since 1972, took some huge steps forward towards the Panamanians. They promised a treaty in which US control over Canal operations and defence would expire on 31 December 1999 and guaranteed that there would be no post-treaty security pact or any US military presence after the termination of the treaty. The ‘only’ provision Panama had to agree to was an arrangement for the Canal’s permanent neutrality to be endorsed by the Organization of the American States (OAS) countries, rather than by the larger and more complex group of UN members.Footnote 26
Jorden states that, for the first time, eventual neutrality was officially being presented as the contents of a distinct pact rather than as a clause in an all-in-one Panama Canal Treaty.Footnote 27 However, this is partially wrong. The idea for a neutrality pact came up on 13 March during what Jorden called the ‘secret’ meeting in New York when Linowitz ‘suggested several separate aspects that might be covered by a neutrality agreement’.Footnote 28 This formula replaced the ‘security pact’, a concept that the negotiators used until the morning of the same day but immediately abandoned during the resumption of the meeting in the afternoon.Footnote 29 For this reason, both Jaén Suárez and Carter refer to the ‘secret’ session as the moment of genesis of the two separate treaties.Footnote 30 Nonetheless, Jorden is right when he talks about the official US proposal during the May round, given that, in March, the two negotiating teams were almost mostly brainstorming ideas. In fact, only from this moment on would the teams continue to negotiate the two matters – neutrality and transfer of sovereignty – separately.
The unexpected US proposal of a complete withdrawal of their troops from within the borders of Panama pleased the Panamanians. However, Escobar – who was certainly not the kind of man to act hastily – immediately raised significant reservations regarding the interpretation of the words ‘permanent neutrality’. He emphasised that no internal event within Panama should be deemed a violation of neutrality, asserting that dealing with any threat to the Canal’s functioning arising from a domestic incident would be the exclusive responsibility of the Panamanian authorities and the National Guard. Panama in fact wanted a neutrality pact applicable only to third-country problems.Footnote 31
Moreover, Escobar vehemently opposed the possibility of the introduction of US military forces into Panama under the pretext of protecting the Canal, even if Washington had promised to withdraw all its bases. The focus of the meeting then shifted towards aspects of the ‘main’ Canal treaty, and neutrality issues remained unaddressed during the next talks. In fact, this marked a strategic move in the negotiations, with Escobar implying an exchange of concessions: Panama would consider granting more on neutrality if the United States reciprocated with favourable terms on Canal operation and facilities.Footnote 32
On 16 May, the recently appointed Panamanian Ambassador to the United States Gabriel Lewis Galindo met Carter and NSA Brzezinski for the first time since the beginning of the May round.Footnote 33 Carter, once again, expressed a strong desire for a new treaty and provided a written statement to Lewis, outlining the importance of granting necessary rights for operating, maintaining and defending the Canal. The president also stressed the political need for a Neutrality Treaty that the Senate could ratify and expressed readiness to expedite the process, warning against unnecessary delays that would hinder success in Congress. Lewis pledged to convey Carter’s message to Torrijos.Footnote 34
Two days later, the Panamanian ambassador talked with Brzezinski privately. Torrijos wanted to maintain direct communication with Brzezinski through Lewis. It was not the first time (nor was it to be the last) that the Jefe had tried to bypass the negotiators, since he sometimes showed greater faith in Carter than in his own political negotiating team.Footnote 35 On this occasion, Lewis told him that Torrijos fully understood the critical importance of the Canal’s neutrality and acknowledged that maintaining this neutrality would be beneficial in both peace and wartime, confident that Panama would not become a target for attacks or reprisals in any military conflicts with other nations.Footnote 36
This was the first time that Torrijos – at least in writing – had acknowledged the need for a neutrality pact. The Jefe had won the tug-of-war with Washington, as he welcomed US demands after only a week of negotiations which had been solely concerned with the Panama Canal Zone land and facility reversion.Footnote 37 Torrijos reiterated this argument to the press and even went further, stating that Panama could accept the rights of the United States to intervene against a third country that might challenge the neutrality of the Canal – a bitter pill to swallow. Yet this provision had been strongly requested by neighbouring Latin American countries and other allies, who knew that the Panamanian army would not be capable of defending such crucial infrastructure alone. After all, Torrijos said, the Latin American economies depended on an open and free Panama Canal.Footnote 38 Or at least, that was what The Washington Post reported in an article by Marlise Simons resulting from what she described as ‘a lengthy interview’ granted by Torrijos to ‘a group from Mexico called “Twenty Women and One Man” at Farallón [Panama] over the weekend [14–15 May]’.Footnote 39
However, Torrijos denied the content of the article on TV2 (now Televisora Nacional TVN2), insisting that no representatives from The Post had been present – only the group of Mexican journalists.Footnote 40 What he probably did not realise was that one of the group, Simons, was based in Mexico but actually worked for the US newspaper. It is possible that he made these important overtures to Washington – i.e. accepting a neutrality pact and granting the United States the right to intervene in the defence of the Canal – because he was aware of polls showing that only a minority of US senators were in favour of a new treaty, and he knew that the US ratification process was a process he could not participate in.Footnote 41 The Jefe, perhaps unaware that Simons worked for a US newspaper, may have intended to share this perspective only with members of the Mexican news corps. Regardless of what he did or didn’t know, by offering two different accounts to two different audiences he might have been seeking to maintain his unwavering and uncompromising image at home.
The negotiations resumed on 18 May, with the swift defusing of an incident the day before that could have derailed them: a Canal Zone police officer, whilst trying to stop what seemed to be a gathering of Panamanian students who were protesting and diverting traffic near Balboa, was attacked and stabbed in the leg.Footnote 42 News that the negotiations were progressing and the government’s apparent hushing-up of the incident prevented protests which would otherwise have continued for days.Footnote 43 In Washington, the Panamanians agreed to the issue of neutrality on the understanding that their right to defence applied only to external threats and that only Panamanian forces were allowed to protect the Canal against domestic dangers. The United States intended that Panama keep the Canal permanently neutral and open forever, but the Panamanians could not accept this clause because they wanted the right to potentially close the waterway in case of natural events (earthquakes), temporary closures (e.g. due to collapses) or loss of profitability. So Escobar pushed for an agreement that would not include the expression ‘abierto por siempre’ (‘open forever’).Footnote 44
The other main issue of the meeting was the decision about who would be the guarantor (or guarantors) of neutrality. The US position had not changed; neither had the Panamanian: Washington wanted the neutrality pact to be exclusively between the two nations, while Panama wished the United Nations and possibly other countries to join the pact. The United States and Panama reached a provisional compromise as they agreed on what the US team had proposed on 9 May – the accession protocol would be deposited at the OAS. Furthermore, they agreed that all countries in the Americas except Cuba could be party to the Neutrality Treaty.Footnote 45
On 27 May, Torrijos sent his teams to Washington with very detailed instructions for what could be possibly the last week of negotiations concerning neutrality. First, the Panamanian delegation should stress that the decolonisation of the Canal Zone had to begin the day after the treaty was signed and be completed by 31 December 1999, when the facilities would return to Panama. Then, Torrijos wanted to make sure that the word ‘neutrality’ also had the implicit meaning ‘Panama must stop being a strategic target in an international conflict.’ The latter two issues were, in reality, questions that the two countries had already agreed on – namely the fact that there should not be a single US soldier left in the Canal Zone from 31 December 1999 and that only Panamanian forces would defend the Canal in peacetime. To reinforce this position, the National Guard organised an exercise to demonstrate that Panama could defend the Canal effectively on its own.Footnote 46
The same day, Bunker and Linowitz briefed Senator Harry F. Byrd (I-VA) and Senate Whip Alan M. Cranston (D-CA). The negotiators indicated that agreements on major points of the treaty could well be reached within two to three weeks; they felt it was important to begin briefing senators on the key issues of the treaty, especially neutrality, as this was the topic that worried Byrd the most. The senators then asked questions about the defence of the Canal after the year 2000, as well as about the involvement of the Department of Defense in the negotiating process. Byrd indicated that the Senate would never pass a treaty that did not include a ‘strong’ neutrality agreement; Linowitz replied that the Department was in perfect agreement. He assured him that neither did Secretary of Defense Harold Brown want or need troops in the Canal Zone after the expiration of the treaty.Footnote 47 Brown had accepted this condition early in the negotiations, given his initial reluctance – persisting until May – to surrender numerous US army privileges in the Canal Zone.Footnote 48 In the end, Byrd – who had been against the treaties for at least three years – seemed ‘generally pleased’ with the description of the negotiators’ neutrality position.Footnote 49
Three days after the meeting, the negotiating teams held the final session of the May round, in which they adjusted and refined all the issues they had previously agreed on. The US team ensured that merchant and warships from all countries, including those at war with the United States or Panama, would have non-discriminatory access through the Canal. But to maintain this principle, the United States would have to retain the authority to undertake any measures necessary to protect the Canal against threats to its neutral status. This stipulation should also extend to any future canals that might be constructed in Panama with US involvement.Footnote 50
With all the main principles concerning neutrality settled, the Panamanians announced that they were going home for consultations and agreed to hold the next round in Panama starting from 13 June.Footnote 51 Apart from a disagreement that arose before the new session of meetings, the draft of the pact that the two teams considered on 13, 14 and 15 June was almost the same as that which Carter and Torrijos would sign in September at the OAS in the presence of 18 Latin American leaders.Footnote 52 Furthermore, the two parties prepared a specific protocol in regard to the Neutrality Treaty, whose Article IV stated that ‘the Republic of Panama grants to the United States of America the first option to participate in the construction of any new inter-oceanic Canal wholly or partially within the territory of the Republic of Panama, upon terms and condition to be agreed by the two contracting parties’.Footnote 53
An ad hoc Technical Commission
The significance of the May round extended beyond the Neutrality Treaty. Throughout the negotiation process, there was a parallel effort by another Panamanian team dedicated to examining the technical and logistical dimensions of canal operations. This team, known as the Comisión Panameña de Tierras, Aguas y Administración del Canal (CPTAAC), played a critical role in assessing and managing the details of the Canal’s administration and functionality. Before the current opportunity to discuss a new treaty that would give Panama full sovereignty over the Canal Zone, the Panamanians had focussed on securing the facilities and areas of the Panama Canal Zone that were ‘not indispensable’ to the waterway’s operation.Footnote 54 For this reason, the Torrijos government, until February 1977, had been interested mainly in reducing US-controlled ‘land and waters’ to the smallest possible area.
International historiography has paid little attention to the work of this Panamanian commission. However, the CPTAAC’s professionalism, which the US delegation did not anticipate, was instrumental in shaping the negotiations. Not only did the team craft nearly all the technical provisions of the Panama Canal Treaty, but it also played a key role in securing a positive outcome for the Neutrality Treaty. Political and technical discussions were, in fact, bound together, as a concession on one side could lead to a concession on the other.
Architect Edwin Elias Fábrega Velarde had been ‘Coordinator’ of the CPTAAC since December 1974. He was very close to Torrijos, a childhood friend, who had appointed him Rector of the University of Panama from 1969 to 1971, Minister of Public Works from 1971 to 1974 and then Managing Director of the Instituto de Recursos Hidráulicos y Electrificación. Fábrega’s main colleagues in the CPTAAC were Augusto Zambrano, Flavio Velásquez, Arnoldo Cano and Omar Jaén Suárez.Footnote 55 While major changes occurred within the ‘main’ Panamanian negotiating team, especially during the first months of the 1977, the composition of the CPTAAC remained stable throughout the whole year. Moreover, contrary to the main negotiation team, the CPTAAC had in fact been operating without major interruption since 1974, the year the United States and Panama signed the Tack–Kissinger Agreement.Footnote 56
At this stage of the negotiations, it was the US technical team – led by General Welborn G. Dolvin – that was responsible for the delays. For instance, Dolvin had agreed to Fábrega’s classification of land and water sites in the Canal Zone into six categories only to take back his word a month later.Footnote 57 The general stated that he did not feel prepared to work according to the method proposed by the Panamanian delegation in January, which was to divide areas and infrastructures on the basis of their functions. Rather, he preferred a procedure that would develop over time and that would consist of the gradual allocation to government agencies or third parties of activities and functions currently carried out by the Panama Canal Company and Canal Zone Government, starting with the Canal Zone.Footnote 58 Only in April did the two teams manage to find common ground on the issue.Footnote 59
While it is evident that Torrijos and the Panamanian negotiators did not appreciate the significance of neutrality for the United States, at least before May, a parallel can be observed in the US response. On various occasions, including throughout the May round, the US negotiating teams struggled to understand the Panamanian insistence on a comprehensive and detailed list of the territories and infrastructures within the Panama Canal Zone designated for return to Panama at the outset of the negotiations. Indeed, the CPTAAC was often accorded less importance than the political team and was hindered by the diplomatic exchanges between Linowitz, Bunker and Escobar. Yet, in the absence of progress on the fundamental principles of the two treaties, Fábrega and Dolvin could not proceed with technical discussions.Footnote 60
Shaping the Panama Canal Treaty, Detail by Detail
If by 9 May the US political team had already found some kind of agreement with the Panamanians, the same cannot be said for the technical teams that were exceptionally sitting around the same negotiating table at that meeting. An impatient Escobar immediately asked the US negotiators to take a position on the land and waters negotiations. He reiterated Panama’s key demands, including for Ancon Hill, the transisthmian railroad and significant land areas at both ends of the Canal Zone. These issues had already been raised in March, but the US negotiators had not seemed to pay enough attention to the Panamanian points, focused as they were on post-treaty defence as the key issue.Footnote 61 In his opening statement, Bunker specified that ‘what you have requested concerning some of these lands and waters questions would require the approval of our highest authorities’. For this reason, he and his colleagues were not prepared to give a ‘yes or no’ answer to any of Panama’s territorial requests. This was strange since Bunker, Linowitz and Jorden had planned to make ‘concessions to their priority goal’ only five days before.Footnote 62
The first meeting of the May round ended with a question from Linowitz about US employees’ rights, with Escobar expressly rejecting the extension of Status of Forces Agreement (SOFA) rights to all canal workers as they were civilians and not, of course, military personnel. The Panamanians were concerned that if the canal-operating agency fell under the Defense Department and if SOFA rights were expanded, it could lead to the designation of all military bases and canal operating areas as ‘Defense Sites’. This would resemble a new, albeit smaller, Canal Zone.Footnote 63 However, no steps back were made regarding the transition – Panama would assume administrative control over the Canal Zone three years after the new treaty was ratified.Footnote 64
The following day, Escobar expected a response on the land and waters issue but, as was reasonable, the US team had not had enough time to discuss the matter with Carter. Yet, Bunker had a plan to ease Panamanian disappointment. He agreed to the request for the Balboa–Colón railroad and the top of Ancon Hill in exchange for US ‘priority use’ of these assets whenever necessary.Footnote 65 Since the railroad was an essential link in the operation and defence of the Canal, its transfer would be subject to certain conditions, so that the United States would have priority use for supplies, equipment and personnel whenever necessary. According to Jorden, Escobar acknowledged the reasonable limitations on the Canal’s operational areas, but he still expressed frustration at the way Bunker had presented the partnership obligations. The ambassador then asserted that once the railroad was under Panama’s control, regulations prioritising the transport of equipment and workers for the Canal’s operation would in any case be implemented.Footnote 66
As for Ancon Hill, the Panamanians refused to accept ‘only the “top”’, on the grounds that the hillock – being the most visible Canal Zone possession from Panama City – had become the symbol of the US occupation over the years and had strong political and patriotic resonance. The US team, on the other hand, was sceptical about giving away the mound since the Canal Company’s administration building was located there. The gathering ended with the teams agreeing on a few substantial issues but with profound disagreements on the weight to give to the pivotal problems. Once again, the Panamanians wanted to discuss ‘land and waters’ as soon as possible while the US diplomats aimed to conclude the Neutrality Treaty first. At the end of the day, Panamanian representative Lewis called Jorden to inform him that Torrijos was not happy with the results of the first two days of the talks and was planning to have the team return to Panama the following day. Jorden then persuaded his fellow ambassadors to change the list of compromises and concessions for the following day to avoid diplomatic failure.Footnote 67
On 11 May, the Panamanian Minister of Education Arístides Royo briefed Foreign Minister González Revilla about recent developments in the negotiations.Footnote 68 By the end of the morning, the US team had updated the land and waters concessions; they now appeared to be more generous and detailed.Footnote 69 The railway, as agreed the previous afternoon, would revert to Panama upon the enforcement of the treaty. Surprisingly, Washington gave in on Ancon Hill: its entire cone would immediately return to Panama, except for some existing facilities, such as schools and hospitals. Other major concessions were the Albrook Field military base, the urban area of Coco Solo and the two ports of Balboa and Cristóbal. The United States would also have, with the participation of Panama, ‘the authority to establish the reversion criteria that, over five-year periods, will allow the transfer to Panama of all housing areas’. By doing this, ‘There will be a heterogeneous mix of Americans and Panamanians in these areas.’Footnote 70
The first session of the May round ended on the 13th. Fábrega phoned the rest of the members of the CPTAAC to inform them of the current situation (as Royo had done with González Revilla two days earlier). But there were differences between Fábrega’s and Royo’s updates. Fábrega provided a meticulously comprehensive account of all the discussed or omitted sites, regardless of their size. He also emphasised that there was still a lot of work to do: the accurate definition of the areas to revert to Panama and the delineation of all the specific rights that the United States wanted to maintain in the territory that would replace the Canal Zone.Footnote 71 The same day, Fábrega met with the political team, Torrijos and González Revilla. The Panamanian negotiators left this meeting with specific – and restated – instructions from Torrijos:
On 31 December 1999, the progressive decolonisation process that will have begun the day after the signing of the agreement will be completed; by that date … all the territory and facilities of the Canal Zone, including the Canal itself, must be in Panama’s hands; second … the territory of Panama must stop being a potential strategic target in the event of armed conflicts of any nature or scale. I demand that by 31 December 1999, not a single foreign soldier remain in the Panamanian territory known as the Canal Zone. And only Panamanian troops will defend the canal.Footnote 72
A hint of arrogance is clearly visible: it seemed that Torrijos was treating the negotiation process as a path ultimately leading to his position, without any compromises on the Panamanian side. In the meantime, the mood in the White House was positive. The Deputy Secretary of State, Warren Christopher, told Carter that ‘the Panamanian negotiators [have returned] to Panama for consultations with General Torrijos – not because negotiations are going badly but because they are going well … The negotiations appear to be moving in the right direction.’Footnote 73
On 19 May, the first non-neutrality meeting since the resumption of the round of talks began in the best way possible. Escobar opened the session firmly believing that a positive conclusion was around the corner if during the session they could reach a definitive agreement on major issues. Royo then spoke about the inclusion of a new form of US preferential transit right through the Canal ‘in time of war or during a serious situation … in recognition of the important contribution of … the United States of America to the construction and defence of the Canal’.Footnote 74 Other matters under discussion were the biological and chemical sanitation and maintenance of the Canal. Linowitz and Dolvin wanted these issues to be very detailed, while the Panamanians did not care so much. Bunker even felt embarrassed because Washington’s fussy requests seemed just an indirect way to say that the Panamanians were not up to such a demanding task as managing the Canal. As for the US military on national soil, the Panamanians wanted to delete the clause ‘unless Panama and the United States agree’. They thought that this ‘escape clause’ would run counter to the entire article of the treaty that stipulated no US military bases. Linowitz agreed.Footnote 75
As the meeting neared its conclusion, a potential disagreement arose between the two parties regarding neutrality for a hypothetical new waterway. The concern emanated from a phrase in a draft reading ‘the existing canal (present or current)’, that the Panamanians perceived as problematic. They were worried that this wording could be interpreted as distinguishing between ‘a potential future waterway’ and the ‘already existing canal’, leading to ambiguity and potential complications: the neutrality clause would presumably remain in force even in the case of a hypothetical new canal built without any contribution by the United States. Royo emphasised that Panama’s decisions regarding a hypothetical new canal on the border with Colombia, for example, were not the business of the United States, indicating a desire for autonomy in such matters. To address this concern, the Panamanians had proposed the use of the term ‘canal actual’ (the Panama Canal) without additional adjectives but the US team rejected this draft.Footnote 76
In the end, they reached agreement on the meaning of ‘canal’: ‘la palabra canal se define como el canal actual (existente o presente) y cualquier otro canal en Panamá en que los Estados Unidos haya participado en la construcción o financiamiento’ (‘the word canal is defined as the current canal [existing or present] and any other canal in Panama in whose construction or financing the United States has participated’).Footnote 77 While this might be regarded as a minor problem, it reflected the ongoing sensitivity of the Panamanians to any apparent attempts by the United States to exert influence or control over their affairs. Overall, the negotiation process still seemed to be influenced by historical factors and a lingering sense of mistrust, with the Panamanians nitpicking over the English wording and potential bad Spanish translations.Footnote 78
The gathering of 20 May was even more challenging that of the previous day. It was all about the new entity that would replace the Panama Canal Company. The third article of the Panama Canal Treaty would state that Panama would grant the United States the necessary rights to regulate the transit of ships through the Canal, to maintain, operate, protect and defend the Canal and to carry out any other specific activity related to those purposes. The United States would have primary responsibility for the operation of the Canal and transit of ships.Footnote 79 The Panamanians had interpreted this provision to mean that the entity that would control the operation would be an agency of the United States, therefore something like the Panama Canal Company. Royo pointed out that one of the major criticisms of the Robles–Johnson Treaties was their failure to propose a joint commission to run Canal activities, and that Panama was committed to negotiate on this aspect.Footnote 80 This was a problem for the United States because the Panama Canal Company had run the waterway efficiently for 63 years and the United States did not want to risk the Canal’s failure by immediately transferring half of its administration. Linowitz accepted the request that the Director of the Advisory Board be a Panamanian but this was still too little: the Panamanians wanted a canal authority under which everything would be decided jointly: hiring and firing, ship handling, toll policy, purchasing, training – basically the gamut of activities involved in running a major waterway.Footnote 81
For Bunker, regardless of US trust in Panama’s administrative capabilities, the problem concerned above all whether the Senate would consent to Panama playing such a large role in the management of the Canal. Once again, the US negotiators reiterated that the treaties, besides pleasing the Panamanians, had to satisfy at least two-thirds of US Senators. The US ambassadors proposed another concession such as an Advisory Board composed of an equal number of US representatives and Panamanians. This provision had already been raised on the first day of the May round but the delegations discussed the issue only two weeks later.Footnote 82
Royo was not impressed by the US negotiators’ ‘concession’, arguing that there was a clear distinction between an advisory group and an administrative body. He articulated his awareness that the role of an advisory body would be limited to providing advice and counsel without the authority to issue directives: the Panamanians wanted to be more than advisors. Linowitz proved open to these requests and said that his team would try to find a better solution. Escobar then mentioned the need to extend Panamanian competences beyond those in the Tack–Kissinger Agreement, according to which the United States would retain primary responsibility for both the operation and defence of the Canal. But the Panamanian negotiator argued that if primary responsibility existed, this meant that ‘there exists a secondary responsibility, and … said secondary responsibility falls to Panama’.Footnote 83
The negotiation continued with Royo proposing a ‘better solution’ before Linowitz could do so. The treaty would establish a Board to supervise the entity that would run the Canal (this entity would be called Panama Canal Commission) composed of four members from the United States and three from Panama (eventually five and four). Furthermore, a Panamanian would be the director of the Panama Canal Commission as of the last ten years of the duration of the treaty, with Royo confident that, over the years, more and more Panamanians would take up key positions within the Commission.Footnote 84 Towards the end of the discussion, Royo and Escobar highlighted what was to be discussed the following Monday (23 May): although the ‘new entity’ was to all intents and purposes to be an agency of the US Department of Defense this did not mean that the Canal administration and operation areas should be regarded as ‘defence sites’, nor that employees working for the Department of Defense or for the entity should be considered to be employees protected by SOFA.Footnote 85
The meeting of 23 May was relatively short. The teams reiterated their agreement to appoint a Panamanian Deputy Director who would replace the US Director of the Commission in 1990, as they were envisaging that the treaty would expire on 31 December 2000.Footnote 86 Then, when they discussed the distribution of the key positions between the two nationalities in the new entity, Fábrega made sure that the meaning of ‘director’ was the same in English and Spanish:
Si la palabra ‘dirección’ puede estar en una posición, la dirección desde la posición más alta hasta la del más bajo nivel … todos estos son jefes; y estos pueden ser individuos de alto o bajo nivel … En otras palabras, cuando se habla de un número limitado de posiciones de alto nivel – lo que llamaríamos nosotros dirección – esto nos presenta un problema, porque para nosotros dirección puede significar cualquier cosa.Footnote 87
They ultimately agreed on the expression ‘posiciones de alto nivel’ (‘high-level positions’).Footnote 88 The language issue was the main reason for the Panamanians’ mistrust and fear of being deceived by the US negotiators. This was something that would continue to torment the Panamanians (as it did for the ‘presente o actual canal’ problem) for the following months, even after the signing of the treaties.
Commercial activities in the Zone before the treaty expired were the last issue of the day. Royo was worried about the US proposal because it did not contemplate the possibility that some businesses could close or open. Hence, the Panamanians sought a highly generic provision that would not prevent them from undertaking new commercial activities and, more generally, would ensure flexibility in this domain, avoiding the treaty defining a specific (and therefore immutable) list of activities and responsibilities. So Linowitz proposed the formula ‘the entity will also be excluded from engaging in commercial activities except for those that will not be carried out or authorised by the government of Panama [i.e. activities that do not form part of the core mission of the entity]’, which the Panamanians ultimately accepted.Footnote 89
At the meeting of 24 May, Royo raised the issue of payment. The Panamanians wanted the ‘new entity’ to pay the Republic of Panama for the public services, utilities and governmental functions that it would provide in the area designated for the operation and maintenance of the Canal, such as the police, firefighters and courts. The Panama Canal Company had hitherto paid for such services, but Royo insisted that ‘now Panama will have to provide those services as the Republic of Panama’.Footnote 90
However – according to Jorden – the Panamanians were now confronted with the harsh reality that, after decades of taking the Canal’s secondary and indirect operations for granted, they had to appreciate their crucial importance and bear the financial burden of these operations. This sudden shift would require them to finance public services without the income arising from taxes on the US employees working on the Canal, leading to urgency in agreeing the principle of payment for services provided.Footnote 91 In the end, they agreed on an ‘economic annex’ to the treaty ‘which would spell out specifically how the two countries would agree on how the various services would be paid for and what the costs would be’.Footnote 92
The second half of the meeting was about ‘land and waters’, and Fábrega was the best prepared, as always. He pointed out that, on a technical level, Panama and the United States had agreed on virtually everything during the previous negotiations. However, he remarked that these agreements had not yet been agreed on or endorsed at the political level and expressed the hope that, in this round of meetings, the negotiators could secure an agreement in principle on these issues, along with the clarification of certain special functions that would be transferred back to Panama.Footnote 93
Fábrega then proceeded to illustrate to Bunker and Linowitz the ‘ten points’ that his team had drawn up in February and that Dolvin, albeit only in general terms, had agreed to.Footnote 94 He stated that they had succeeded in differentiating various types of areas, including those that would revert to Panama for its full use once the treaty took effect. Once again, he drew attention to Ancon Hill, for reasons of national pride, and to Coco Solo, the ports of Balboa and Cristóbal and the transisthmian railroad and military bases on the Atlantic side, for more concrete logistic and economic reasons. Given the agreement that the ‘new entity’ would administer ‘civilian coordination areas’ (i.e. housing; see note 57), the head of the CPTAAC noted that the areas where ‘civilian populations’ resided would revert to Panama ‘by an orderly process following the entry into force of the treaty’, i.e. almost half of the Panama Canal Zone plus another large percentage over a few years. However, the entity would not be involved in managing housing.Footnote 95
Linowitz asked the Panamanians about the importance of this document to them, so anxious did they appear to be to receive political approval from the US ambassadors.Footnote 96 Fábrega replied that even though some of the points were only principles and not proper specific requests, they were ‘the principles that have prompted us and inspired us in this work that we have done on the technical level with General Dolvin’s team’ and were also ‘a frame of reference, a list of guidelines’. Linowitz remained sceptical, as he did not understand why these ten points had to be discussed in the political meeting: the document itself did not have any legal status; it was just a framework, drawn up at a much earlier stage of the negotiations. Furthermore, even if they were to agree on every point, the paper would not be an organic part of the treaty. Royo then came to Fábrega’s aid, stating that neither had the Tack–Kissinger Agreement had any legal status and yet both teams had recognised its importance and value.Footnote 97
If, in the previous months, Panama had tended to overlook the importance of the neutrality issue for the United States, the latter still did not understand why Panama was in such a hurry to regain possession of things like the railroad as soon as possible. This urgency was likely driven by domestic considerations: the need to secure immediate and tangible victories by reclaiming symbolic structures familiar to Panamanians. As Royo later explained, persuading the public of the value of the treaties required a vigorous campaign – meeting people in public spaces and university halls, addressing workers and students, appearing on television panels – but most importantly answering ‘questions from our enemies. These enemies will try to portray themselves as greater patriots than we.’Footnote 98
Despite the overlapping of the negotiating meetings that Linowitz had complained about, during the May round of negotiations most of the technical details that would fill the numerous pages of the Panama Canal Treaty were meticulously crafted. On 28 and 31 May, the negotiating teams held the final session of the May round, in which they adjusted and refined the wording of all the issues they had previously agreed on. The topics discussed were the abolition of the Canal Zone at the beginning of the new treaty, US rights to operate and defend the Canal, the permanent neutrality of the Canal (or any other canal to be constructed in Panama in which the United States would be a participant), the composition and modalities of the agency to run the canal, and the land and waters issues.Footnote 99
On 14 June, the same day the political team agreed the final draft of the Neutrality Treaty, the technical team met at the Pentagon. They agreed to some minor cartographic fixes and adjustments to the entity’s administration, housing and public services. The most notable aspect was that schools and hospitals would be transferred to joint military control.Footnote 100 This question – along with that of neutrality – was also ultimately resolved to the satisfaction of all parties involved. However, the month of May, apart from being fruitful, marked the beginning of an issue that would engage the two delegations for the following three months – economic compensation. The negotiations regarding this issue deserve their own in-depth study due to their complexity.
Conclusion
The signing of the Panama Canal Treaties by the United States and Panama represented a turning point in the history of both countries and, more generally, in the history of international relations between unequal parties. It was unprecedented for negotiations of such magnitude to be conducted with this level of equality between two vastly different countries, with the parties engaging as though they were nearly on a level in power and influence.
Nonetheless, misunderstandings, especially for linguistic correspondence between English and Spanish terms, often impaired the precarious trust between the parties. In fact, one of the significant challenges throughout the negotiations was overcoming the language barrier. The Panamanians were especially wary of what they perceived as ‘suspect’ English wording, which, along with broader miscommunication about core interests (US neutrality guarantees and Panama’s demand for reversion of facilities), slowed negotiations. Yet, despite these obstacles, both sides demonstrated a commitment to reaching a mutually beneficial agreement.
Throughout the May round, the Carter administration’s willingness to compromise on the expiration date of the Canal Treaty and the complete withdrawal of US military presence by the end of 1999 were crucial concessions that facilitated progress. On the Panamanian side, Torrijos’ eventual acceptance of the necessity for a neutrality pact, albeit with significant reservations, showcased a pragmatic approach to ensuring the Canal’s security and operational continuity. The strategic decision to separate the Canal’s operational treaty from the neutrality agreement was a turning point in the negotiations, allowing the two teams to address their concerns more effectively.
However, not even the negotiating process was free from contradictions and errors on the part of the two parties. Carter’s human rights policy clashed with the stark reality: Panama was a country very far from being a democracy. What was to be done? Protect the human rights of Panamanians indirectly, by ‘giving away the Canal’ – to paraphrase Ronald Reagan – into the hands of a possible dictator, or use military superiority and sovereignty over the Canal to impose a change of regime in the country?
The case of Panama presented a unique opportunity to blend astute political strategy with a strong moral commitment. Washington devised a solid solution to ensure the proper functioning of the Canal without the threat of possible Panamanian anti-US terrorism, all while remaining aligned with Carter’s 1976 human rights-oriented agenda. By engaging the OAS throughout the negotiation process, the United States successfully distanced itself from the negative perception that had followed the 1973 coup in Chile. This strategic move not only improved the United States’ image in the region but also proved advantageous for Panama. Torrijos was able to strengthen his standing among other Latin American leaders, positioning himself as a trustworthy figure in the continent.
In conclusion, the successful negotiation of the Panama Canal treaties reflected the professionalism of the Panamanian delegation, the balanced nature of the talks and the determination of both sides to overcome linguistic and diplomatic challenges. The intense meetings of May 1977, where political and technical negotiating teams worked synergistically, were key to reaching a fair and lasting agreement. Ultimately, the treaties demonstrated that even complex disputes can be resolved through dialogue and long-term commitment to cooperation, setting a global example for the peaceful resolution of tricky international issues – arguably the core legacy of the entire process.
Acknowledgements
Archivists and librarians at the Jimmy Carter Presidential Library, Biblioteca Presidente Roberto F. Chiari, Biblioteca Nacional de Panamá and the National Archives provided valuable assistance with the research for this article. I am grateful to the three reviewers of the Journal of Latin American Studies, whose comments made this article much stronger, and to Virginia Catmur, whose careful copy-editing further improved the clarity and precision of this work. Above all, I am grateful to Professor Stefano Luconi, whose help and dedication made this work possible.
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