93. F. THE DANFORTH UNDERSTANDING TO THE PANAMA CANAL TREATY The Danforth Understanding was passed by the Senate on April 17, by a voice vote, as an amendment to the resolution of ratification of the Panama Canal Treaty. The substantive portion reads as follows: "Nothing in subparagraph 4 (c) of Article XIII shall This understanding returns once more to the same theme as some of the reservations already discussed; yet it makes even more explicit certain principles which are anathema to Panama. The distinguished Senator from Missouri, Mr. Danforth, sought to nail down the point: "The Commission must be free to make expenditures which it deems are required to insure the same level of Canal operations as existed under the Panama Canal Company. The contingent payment must not in any way act as a constraint on Commission decisions. This understanding makes it clear that the Commission's authority shall not be burdened or limited in any way by considerations of the contingent payment. "The understanding also makes it clear that tolls for users of the Canal need not be set at levels designed to produce sufficient revenues to cover the $10 million contingent payment, or any portion thereof. The wording does allow Congress, if it so desires, to permit tolls to account for this payment. I have noted that the draft implementing legislation proposed by the administration does not allow for this payment in the toll base. But I do not want to bind this or some future Congress in this regard. I do, however, wish to establish the fact that the United States, through the Panama Canal Commission, is under no obligation 29-400 (pt. 3) O 79 128 94. whatsoever to compel Canal users to bear explicitly This explicit rebuke to Panama's expectations somehow became almost too much for the Foreign Ministry to bear. Although it merely makes explicit what follows from the logic of the treaty and of other reservations, the Panamanian communique burst out in a long restatement of grievances--an hysterical outburst that calls into question the future cooperation of Panama and its good faith in accepting any of the amendments which the Senate added to the Treaties and the resolutions of ratification: "When the text of Article XIII, Paragraph (4) (b) and (c) was agreed to, it was evident from a study of the Canal operations that the Canal produces approximately $18 million annually which comprise the Canal's operating revenues. The negotiators' understanding was that this figure would serve as a base to cover the payment to Panama of the $10 million guaranteed in Article XIII, Paragraph (4) (b) and the additional $10 million agreed to in Article XIII, Paragraph 4 (c), these payments being considered as part of the Canal's operating revenues. For this reason we are in agreement that the obligations derived from Article XIII, Paragraph (4) (b) and (c) in favor of Panama can be covered without raising tolls and for this reason we agree with the Senate that it is not imperative to raise tolls to cover these obligations to Panama. By virtue of the principle of good faith which prevails in the observance of the treaties, Panama expects the United States to accommodate its policy on expenditures so that this article can be the means by which Panama receives a fairer retribution for its contribution to the Canal work. To the extent that the Panamanian people are satisfied with the Canal administration due to the products they derive from it, they will continue protecting their Canal. But if a stingy spirit prevails, aggravating the injustice suffered by Panama since 1903, then a circle of friendship will not have been built around the Canal but rather one of hatred, with possible grave consequences if a crisis occurs which the national government would be the first to deplore." Once again, the Panamanian position is based upon economic fantasy. Even at present toll rates, there has been no surplus 95. of "$18 million" annually to serve as a base. The reorganization of the Canal under the Treaty is too complicated to discuss at this point, but there is no simplistic method of arriving at any $18 million figure. Indeed, the Canal has run at losses. Every single financial study of the Canal has clearly demonstrated that tolls will have to be raised. The official figure, and minimum figure, is an increase of 19.5 per cent, but other studies show double and triple that amount. Thus the notion that payments can be paid to Panama without raising tolls has no relation to reality. When the communique says that "we agree with the Senate that it is not imperative to raise tolls to cover these obligations to Panama," it is agreeing with something the Senate never said. Moreover, if all the true costs are added in, as permitted by the Cannon reservation, the Panamanian statement is nonsense. Thus the statement that "Panama expects the United States to accommodate its policy on expenditures" to provide the benefits which Panama expects is diametrically opposed to the Danforth understanding, the Cannon reservation, and the Hollings-HeinzBellmon Reservation. When Panama calls for "good faith" in implementing the treaties, Panama is insisting on implementing the treaties according to Panama's original expectations. Panama is totally rejecting the concept that the U.S. Senate has any right to alter the treaties in any respect. When Panama makes such statements, Panama is rejecting its own principle of offer and counter-offer. Panama is demanding 96. that the Senate amendments have no meaning. It is perhaps not surprising that a dictatorship fails to understand the democratic process, and the constitutional requirements which United States officials must adhere to. In a dictatorship, one man can approve a treaty draft; but in the United States, the draft accepted by the Chief Executive is only a provisional document, subject to change by the U.S. Senate. For the U.S. Senate itself is acting in good faith when it changes treaty language. If Panama is to rely upon "good faith," therefore, then Panama must accept the changes imposed by the Senate in good faith, and Panama must work to implement those changes in good faith herself. The only alternative is to reject the whole package. Panama's Yet the Foreign Ministry goes on to raise the spectre of crisis, created by violence among the Panamanian people. use of threats has been typical of the entire negotiating process. The negotiations began in a Communist-organized riot in 1964. Panamanian government propaganda about the "martyrs" of 1964-when half the "martyrs" were looters who were trapped by greed in buildings set on fire by arsonists--has been direct incitement to violence. The multiplicity of statements by government officials --from Omar Torrijos on down--about the inability to control the anger of the people have been direct attempts to stir up the Panamanian people. Deploring such violence is thus the height of hypocrisy. 97. To once more use the same techniques--techniques that are doubtless tried and true--during the period preceding ratification, throws into doubt Panama's willingness to cooperate in any aspects of treaty implementation. It casts into doubt Panama's acceptance of any of the amendments and reservations. It says to the American people that the treaty does not represent a true agreement, a true meeting of minds, but is a transparent device for the rapid and total takeover of the Canal. For the President to ratify the treaties under such circumstances would be to break faith with the Senate and the American people. III. HAS PANAMA ACCEPTED THE TREATIES AND AMENDMENTS? The Foreign Ministry communique purports to contain Panama's acceptance of the treaties and amendments. Yet even in the concluding pages of the communique, it is clear that Panama is not yet satisfied. It is clear that Panama's "acceptance" is only a short-term tactical maneuver. For once Panama regains sovereignty, Panama will be in a strong position to denounce the treaties and demand negotiations. Having already rejected the key reservations by interpreting them as having meanings opposite to what the Senate intended, Panama is ready to re-enter the "liberation struggle," with all the trappings of Marxist dialectic: "The achievements obtained in the negotiations are conquests which belong to the Panamanian people. They cannot be destroyed or renounced but can be taken to their ultimate culmination by future generations. Let us strengthen these conquests, the most feasible now, and when better circumstances for struggle exist, we will again undertake the task to improve the terms of the relationship." This passage makes it plain to all that Panama expects to |