Communications submitted-Continued Miura, Takashi: Letter of March 9, 1979, to Hon. Carroll Hubbard, Jr Rivlin, Alice M.: Letter of December 19, 1978, to Hon. Robert L. Leggett Shore, Melvin: Letter of February 20, 1979, to Hon. John M. Murphy with Page 1573 856 1259 792 1599 1500 1578 818 362 1549 Stathis, Stephen W.: Memorandum of February 14, 1979, to Merchant 1321 Telegram from 11 environmental organizations on September 6, 1977, to the President 1634 Tierney, Paul J.: Letter of March 30, 1979, to Hon. John M. Murphy 1604 White, H. Loring: Letter of January 4, 1979, to Ralph Sheppard with Wyrough, Richard W.: Letter of August 2, 1978, to Mr. Blenman CANAL OPERATION UNDER 1977 TREATY MONDAY, FEBRUARY 26, 1979 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE PANAMA CANAL, COMMITTEE ON MERCHANT Marine and FISHERIES, Washington, D.C. The subcommittee met, pursuant to notice, at 9:30 a.m., in room 2261, Rayburn House Office Building, Hon. Carroll Hubbard, (chairman of the subcommittee) presiding. Present: Representatives Hubbard, Lowry, Bonior, Bauman, Carney, Wyatt, Murphy (ex officio), and Hansen. Staff present: Ernest J. Corrado, chief counsel; Carl L. Perian, chief of staff; Kenneth Merin, minority counsel; Kai Midboe, minority counsel; W. Merrill Whitman, consultant; Bernard Tannenbaum, special counsel; Terrence W. Modglin, staff director; Kenneth Fendley, professional staff member; and Anita C. Brown, clerk. The CHAIRMAN. The committee will come to order. If Ambassador Moss and the subcommittee members will indulge me just a moment, I think it is crucial that some important points which have arisen in the last few days be included in the record. There are new developments which have come to light at the field hearings held in the Canal Zone this past Friday and Saturday and in the meetings and briefings our delegation had with Panamanian Government officials. Let me make a few general comments on the findings of our field hearings and inspection visit, which I think was a very successful one from the point of view of ascertaining the opinions of elements in the Canal Zone and Panama with respect to the legislation before us. Our visit to Panama, which I was privileged to lead, could not have been so productive had it not been for the courtesies extended by Governor Parfitt, General McAuliffe, President Royo, the Panama Canal Authority, and Ambassador Gabriel Lewis, and we certainly extend our thanks to them for the arrangements that they made. The three sets of hearings Friday and Saturday were the chief reason for our visit to Panama. The hearings allowed us to go into some issues, such as canal finances and levels of tolls, in much greater depth. Other issues, such as the precise level of benefits that should be enjoyed by canal workers, the future status of present employees, and the problems of the transition period, were introduced in detail in the subcommittee's hearings for the first time. (847) I believe there were some common understandings in the minds of many members of the visiting delegation at the conclusion of our visit yesterday. First, we now more clearly understand the need to deal with the implementing legislation as soon as possible, so that the employees of the canal will have adequate time to determine their futures and so that all of the physical and organizational changes caused by the new treaty can be achieved. And this committee will act expeditiously. We also recognize in a clearer way the critical nature of the 30month transition period specified by article XI of the treaty. This is the period which will require the closest kind of cooperation between the United States and Panama. The good faith and trust of both governments are at stake in the transition period, which will span about one-eighth, the first eighth, of the duration of the treaty. Third, while we see that the financial benefits for canal employees are important in the substance of the implementing legislation, we also know that those now living in the zone, both United States and Panamanian, have a real fear about the deterioration of the quality of life in the canal area. Residents there have serious doubts about the physical security of their families, a good educational system, decent housing, and career mobility in their work. They fear all of these will be lost. The prospective Canal Commission, and the Congress through implementing legislation, must do all that can be done to maintain the quality of services and life now found there. In the final analysis, however, the terms drawn in the Panama Canal Treaty mean that the citizens of the government of Panama will have much to do with whether or not skilled employees remain on the isthmus or whether or not we have an efficient canal. This brings me to the last, and perhaps most important, matter arising from our trip. Some members of the delegation that visited the canal, including members who will play a major role in the shaping of the implementing legislation, became quite concerned that some of the key understandings that underlie the Panama Canal treaty are now in shambles. Last year when the treaty debates were ongoing in the Senate, numerous amendments and reservations were turned back only by strong assertions that Panama and the United States had clear understandings of the meanings of certain provisions. Now we are hearing from some representatives of the Panamanian Government that these understandings do not exist. If this is the case, at worst, there may, in fact, be no true treaty agreement to implement. At best, there will be a need to clarify the terms of the treaty in the implementing legislation. The terms will have to be drawn in a fashion that will allow no possible misinterpretation by Panama as to the intent of the United States, and in a way that will deny the executive branch the ability to conclude new terms with Panama that might be detrimental to U.S. interests. In many senses, the Panama Canal Treaty that has been concluded between the United States and Panama is an incomplete document, even with the implementing agreements. The treaty is an agreement to agree in more detail. It was intended that it be supplemented by other agreements of varying levels. It is going to prove virtually impossible to arrive at other agreements or to do a good job in writing implementing legislation unless the basic terms of agreement are clear. Interpretations that violate not just the spirit but even the letter of the treaty, such as the demand for personal property not intended to be transferred to Panama, the demand for the payment of back taxes for a decade by organizations doing business in the Canal Zone-we were assured it would put many private enterprises out of business immediately if that were to go forward-and the upgrading of facilities not used for 20 years, imply that we really do not have an agreement at all. In general, then, the field hearings and visits to the isthmus demonstrated the vital need to carefully write the implementing legislation. It also showed how much the understandings, or misunderstandings, between the United States and Panama are related to this legislation. Ambassador Moss, we are certainly privileged to have you here with us this morning. We appreciate the courtesy that you extended to the Committee in Panama this weekend, and we hope to clarify, or at least set clearly forward, the basic misunderstandings that clearly were pointed out to every member of this Subcommittee. The subcommittee, in toto, was completely aware of the difficulties. If you will take the stand, we certainly would appreciate hearing from you. STATEMENT OF HON. AMBLER H. MOSS, JR., U.S. AMBASSADOR TO THE REPUBLIC OF PANAMA, U.S. DEPARTMENT OF STATE Ambassador Moss. Thank you very much, Mr. Chairman and members of the subcommittee. I appreciate very much this opportunity to meet with you to discuss the proposed implementing legislation for the Panama Canal Treaty. I have a prepared opening statement which I will now proceed to read before I will be available for the questions on the matters you raised, sir. At present, in addition to its traditional diplomatic and consular tasks, the American Embassy in Panama is actively engaged, in close coordination with the Governor of the Canal Zone and the Commander-in-Chief of the U.S. Southern Command, in planning for the implementation of the Panama Canal Treaty, which comes into effect this October 1. Previous executive branch witnesses before this subcommittee have covered a number of aspects of the draft versions of implementing legislation under consideration by the committee. There are two aspects in particular I would like to address this morning which are of special concern to the embassy. These are, first of all, our overall objective in building a partnership with Panama in the canal enterprise, designed to maintain a safe and efficient canal; and, second of all, the need to safeguard the interests of American citizens in the present Canal Zone whose lives will be affected by the implementing legislation. ་ First, I would like to make a few observations to the subcommittee about the cooperation I have observed thus far between the United States and Panama. Although there is a great deal of work to be done between now and October 1, and there are obviously a tremendous number of difficult decisions to be made by the United States and Panama individually as well as together, the cooperation between our Government and the Panamanian Government has been excellent. The treaties are a mutual obligation to which both sides are committed, and in that spirit the work being done by both countries' planners to date represents an honest effort to complete the arrangements called for under the treaty. We are fortunate in that many of the leaders of the Panamanian Government today were heavily involved in the treaty process over the last few years and are therefore extremely knowledgeable. President Aristides Royo, a young lawyer who became President of Panama last October 11, was a chief treaty negotiator for Panama. He has shown a particular sensitivity toward the needs and concerns of the United States citizens who live in the Canal Zone and who work on the canal. President Royo has visited both the Atlantic and Pacific sides of the Canal Zone where he has met with American and Panamanian citizens who work there. As a gesture of goodwill, he recorded a television message in English to the American residents of the Canal Zone which was broadcast on the local Armed Forces television stations. Ambassador Gabriel Lewis, a businessman who was Panamanian Ambassador to Washington during the treaty ratification process, returned to the private sector shortly after approval of the treaties, but now has come back to the Panamanian Government as Ambassador-at-Large and as the head of the Panama Canal Authority, the Panamanian organization which has responsibility for all planning for treaty implementation. He has a strong team working with him in this effort, including three cabinet ministers, two top military officers, and a number of economists, lawyers, and other advisers, many of whom have earned university and post-graduate degrees in the United States. Panama has sent as its new Ambassador-designate to the United States, Carlos Lopez-Guevara, a distinguished international jurist, who holds a law degree from Harvard. As Governor Parfitt has reported to you, numerous working subcommittees made up of representatives from our two countries have been working together since mid-1978 to plan for the implementation of the treaty in a wide range of subjects from operation transfers, such as the ports and railroads, to areas of employee and community interests, including personnel, housing, social security, utilities, the environment, and police and fire protection. Similar binational committees have recently begun work in areas of concern to our Southern Command and the Panamanian National Guard. The goodwill and businesslike attitude which exists between our two countries is exemplified by the fact, as Deputy Secretary Christopher has already observed, that last month we signed three agreements with Panama which were called for under the new |