United States stands at the crossroads of an historic but dangerous
transfer of power in the Americas. By the end of 1999, the U.S.
military will no longer have troops in Panama, the nerve center of
U.S.-Latin America policy throughout this century, as well as a
major artery for U.S. commerce and counternarcotics operations.
phasing out America's strategic presence in Panama carries serious
consequences. Unless the Clinton Administration cements a new
agreement to retain a direct U.S. presence in Panama, the complete
withdrawal of U.S. troops will jeopardize the security of, as well
as U.S. access to, the Canal. It will open the door for China to
gain virtual control of the Panama Canal and assert its influence
in the Western hemisphere; it also could make the war on drugs and
terrorism more difficult.
The 1977 treaty transferring ownership of the Canal to Panama
requires all U.S. military troops to leave when the treaty expires
on December 31, 1999. Under the companion Treaty of Permanent
Neutrality, which also becomes effective on that date, the United
States retains the right to protect and defend the Canal beyond
2000. The U.S. instrument of ratification for the Neutrality Treaty
allows both sides to negotiate an extension of the agreement giving
the United States the right to station troops in Panama and enjoy
basing rights there.
Panama agreed to these terms. Since then,
both sides have been working on an agreement to define the new U.S.
presence, but progress stalled in early 1998. The United States
sees Panama as an important base for counternarcotics and
intelligence gathering; Panama is interested primarily in leasing
the former U.S. holdings to the highest bidder.
July 29, 1999, U.S. Special Negotiator Thomas McNamara told the
House International Relations Committee that a "cooling off" period
of several years should occur before negotiations resume. "Having
spent the money to move out of Panama, we should do just
this frustrated assessment is not shared by every Member of
Congress or by most Panamanians. McNamara admits that opposition to
a U.S. military presence comes from "a small, but vocal minority of
the Panamanian elite"; 65 percent to 80 percent of the population,
however, favors U.S. involvement in the proposed Multinational
Indeed, most Panamanians recognize that
their government is unable to defend the Panama Canal or protect
the country against the type of terrorist raids that Colombian
guerrillas conducted in the Darien region in 1997. José Luis
Sosa, director of Panama's National Police, said that Panama is
"not in a condition to undertake a battle in the field with any
group." In such a vulnerable environment, a U.S. priority should be
the joint establishment of an effective security force.
Although the Panama Canal is no longer the vital national interest
it once was, the United States is the Canal's number one user. The
U.S. military relies on it to move naval vessels between the
Atlantic and Pacific Oceans. More than 15 percent of goods entering
or leaving the United States pass through the Canal, including 40
percent of U.S. grain exports. In 1996, according to a recent
Investor's Business Daily article, about 670,000 barrels of
oil per day passed through it.
Panama is also the hub of major
anti-narcotics operations in the region. More than 2,000
multinational anti-drug flights were staged from Howard Air Force
Base each year before it closed last May. The counternarcotics
force reportedly used the now-closed Rodman Naval Station for boat
searches and Fort Sherman for jungle training. Concerns have been
expressed that sites in Ecuador and elsewhere may not be as
In 1997, a subsidiary of Hong Kong-based Hutchison Whampoa, Ltd.,
a firm with close ties to Beijing and the People's Liberation Army
(PLA), won a 25-year concession to operate the Canal's coastal
ports at Balboa and Christobal. The U.S. government is disputing
this contract, claiming to have outbid the Chinese. The deal gives
China virtual control of both the Atlantic and Pacific entrances to
the Canal. Such control could compromise the U.S. military's
ability to move ships between the oceans during a conflict.
Senator Majority Leader Trent Lott (R-MS),
in an August 1 letter to Secretary of Defense William Cohen, noted
that "U.S. naval ships will be at the mercy of Chinese-controlled
pilots and could even be denied passage through the Panama Canal by
Hutchinson, an arm of the People's Liberation Army." Moreover, "the
Chinese Communist Party will gain an intelligence information
Under treaty rights Panama has granted to
Hutchison in Law No. 5, the Chinese could exercise the right of
"first option" to lease the Rodman Naval Station; they could even
"transfer contract rights" to a third party, such as Cuba, Iran,
Iraq, or Libya.
Although the Pentagon says that China's
foothold in the region is not a threat, the geopolitical
implications are serious. China's flagship commercial fleet, China
Ocean Shipping Company (COSCO), has direct links to Beijing and the
PLA. It has participated in drug smuggling and in transporting
missiles and nuclear technology to such countries as Pakistan and
Iran. Having found "friendly" facilities on both coasts, COSCO
could continue its illicit activities and threaten the political
and social interests of the Americas. "This is absolutely not the
time to leave Panama," said retired U.S. Army General George
Joulwan, former chief of the U.S. Southern Command, speaking before
the International Relations Committee.
Newly elected President Mireya Moscoso, who will be inaugurated on
September 1, has indicated an interest in joint patrols to defend
Darien. Her concern may well offer Washington its last best
opportunity to preserve a strategic U.S. presence in Panama.
that end, the Administration should pursue negotiations on strict
adherence to treaty obligations, the establishment of a
multinational counternarcotics center, fair compensation for a
continued U.S. presence in the Canal zone, the feasibility of
private U.S. ownership of base sites with an open option for
military use, joint security patrols in areas that are vulnerable
to terrorist attacks, and a fair bidding process in the awarding of
leases of former U.S. bases in Panama.
John J. Tierney, Ph.D.,
is a Professor of International Relations at the Institute of World
Politics in Washington, D.C.