Ceding the Canal-Slowly

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The treaty gives Panama full sovereignty over the canal—but slowly. Not until the year 2000 will the U.S. relinquish complete control of the 51 -mile-long waterway. In the meantime, the U.S. will continue to operate the canal, as well as the 14 military bases in the zone. The bases will be phased out at U.S. discretion over the life of the treaty. Under the terms of a separate treaty to be signed later by all of the hemisphere's nations, the U.S. will guarantee the neutrality of the canal and its accessibility to all the world's shipping even after the year 2000. If the safety of the canal is threatened, the U.S. is free to intervene with military force.

Once the treaty is approved by both countries, the venerable Panama Canal Company will be replaced by a board of directors consisting of five Americans and four Panamanians. The Panamanian members will be proposed by their own country but appointed by the U.S. Until 1990 the canal administrator will be an American and his deputy a Panamanian; after that year, the positions will be reversed. Increasing numbers of Panamanians (who now make up approximately 75% of the 13,000-member canal work force) will be brought into all phases of the operation.

As soon as the treaty is in effect, more than half of the 648-sq.-mi. Canal Zone will be handed over to Panama, which is planning a variety of public and private development programs. American citizens may continue to work in the zone as long as they choose or their jobs last, and they will have the same rights and privileges as other U.S. Government employees overseas. But within three years, they will be subject to Panamanian law, except in certain cases. If they are charged with a crime, they will be guaranteed much the same procedural rights they have in the U.S. If sentenced to jail, they can serve their terms in American prisons.

The U.S. will raise the rent that it currently pays to Panama from $2.3 million to $10 million a year and will add another $10 million from canal revenues, business permitting. Panama will also be advanced a $200 million loan from the Export-Import Bank, a $75 million loan for housing investment and $20 million to start a Panamanian development bank. The two nations are also negotiating a military-assistance program.

The money had been the last big hurdle to an agreement. Torrijos had initially demanded a more than $5 billion package—$1 billion as "reparations" for the years of U.S. control of the canal, then an annual $200 million payment. But President Carter wrote him a letter pointing out that there were political and other constraints on the amount he could get if he wanted a treaty—in other words, the higher the price tag, the lower the chances of Senate ratification. Torrijos got the message. Declaring a national holiday to commemorate the signing, Torrijos mingled regret with relief. "In truth," he said, mangling some metaphors, "the treaty is like a little pebble which we shall be able to carry in our shoe for 23 years, and that is better than the stake we have had to carry in our hearts."