Print this page© 2001 Donald J. Mabry
Two provisions of the 1903 treaty immediately became a source of conflict
between the two countries: the division of the economic benefits and the
sovereignty question. Of the two, the economic issue has been the easier to
solve. In 1909, the United States agreed to end private trading in the Canal
Zone while allowing only the Canal Commission to sell imported goods to
employees of the canal company without paying Panamanian taxes; thus Panamanian
merchants received some of the protection they wanted although not as much as
they had demanded.
In the 1936 treaty revision, the annuity was adjusted upwards
to $430,000 to offset the dollar devaluation but no other major economic
concessions were made until the 1955 revision. In that year, the annuity was
increased to $1,930,000 and the United States gave Panama the right to tax
non-US Zone employees and some goods entering the Zone, altered some boundaries
in favor of Panama, and returned some land as well, relinquished the exclusive
right to construct trans-isthmian railroads and highway, and granted Panamanians
a large share in supplying goods to the Zone market. In a separate agreement,
the United States promised to end wage discrimination against the Panamanians
working for the canal company. The United States acted slowly, however, and
anti-US demonstrations marked the late 1950s. In 1960, President Eisenhower took
executive action to implement some of the changes promised in an attempt to
reduce tensions.
The economic issue was linked to the more inflammatory sovereignty question,
which was the more serious threat to US interests in Panama. Since 1904, Panama
contended that it is sovereign over the Zone and that the United States has
limited "jurisdictional sovereignty." US citizens, on the other band,
have believed that the Zone is an integral part of the United States(1)
(in ignorance of the 1903 treaty and its subsequent revisions) or that Panama
yielded all Zone rights in perpetuity. As long as Washington considered
the Canal essential to its security, it refused to budge on the issue, for it
did not trust Panama to protect US interests. Panamanian political instability
further discouraged the United States from yielding.(2)
The 1936 treaty revision was ratified in 1939 only after Panama agreed to allow
the United States to continue military intervention when the latter thought it
necessary. Panama ceased to be a protectorate in name only. This fundamental
disagreement meant that Panamanian demands met fierce resistance in the United
States and the Zone while failure to budge prompted demonstrations and riots in
Panama. Both Panamanian and US politicians found the sovereignty issue replete
with demagogic appeal.
Nevertheless, the United States slowly yielded to Panama's demands albeit
unwillingly. Defense sites acquired in 1942 were abandoned in 1947 after violent
demonstrations encouraged the Panamanian congress to reject the extension
agreement. The 1955 treaty was negotiated after a series of anti-Yankee
protests; and was only fully implemented after student demonstrations, attacks
on the US embassy, and threatened mob invasions of the Zone. The US government
decided that its interests were best served by conceding. In response to more
nationalist demands, Eisenhower, in 1960, ordered the Panamanian flag flown in
parts of the Zone and President John Kennedy, in 1963, ordered the Panamanian
flag be flown jointly with the US flag over civilian installations and that
foreign consuls accredited to Panama be allowed to operate in the Zone. Such
actions temporarily improved relations but did not solve the sovereignty
problem.
Continued Panamanian nationalism, combined with a decline in the importance of
the canal, resulted in the proposed 1967 treaty revision. In 1964, US high
school students raised the US flag in violation of orders and instigated a riot
in which 24 were killed and hundreds injured. Because US troops clashed with
Panamanians in the Zone, President Chiari demanded an Organization of American States and a United Nations investigation of what he
called US aggression and suspended diplomatic relations. Shortly thereafter,
negotiations on a new treaty began. President Lyndon Baines Johnson, however,
determined not to yield the canal, agreed to negotiate three treaties. One would
change the military defense of the canal. The second would recognize Panamanian
sovereignty over the Zone and give it more control over the canal. The third was
for the possible construction of a new canal (since the Panama Canal was
antiquated and incapable of handling the super ships being built) after the best
possible site was determined. That the proposed new canal was not specified and
discussions included possible construction in Nicaragua or Mexico, the United
States had tremendous leverage over Panama, The treaties were not ratified,
however, because they faced opposition within the United States and the military
government which replaced the 1967 government was not satisfied with the terms.,
By the mid-1970s, the United States was willing to concede to Panama's demands
on the sovereignty issue if both nations could got the necessary ratifications.
Since the development of a two-ocean navy, nuclear submarines and carriers,
long-range bombers and missiles, the Canal's strategic importance and the
necessity of the military bases there have declined. Some experts assert that
the Canal has no strategic value. The development of excellent internal
transportation in the United States as well as the use of super ships (which
cannot go through the Canal) have reduced the commercial importance of the Canal
to the United States. About 80% of the traffic through the canal by the 1960s
was Latin American. By December, 1973, the two nations agreed in principle that
the United States would return the Zone to Panama while gradually involving
Panama in the Canal's operation and defense, that Panama would receive a more
equitable share of the benefits, that the United States would retain only three
of its fifteen military installations in the country, and that the new treaty
would have a fixed life.
A new treaty was finally ratified in April, 1978 under the leadership of
President Jimmy Carter and General Omar Torrijos. The negotiations were often
bitter and the treaty faced strong opposition in the US Senate. The Canal Zone
would be returned to Panama in 1999. The US would leave its military bases in
Panama but would have the right to intervene militarily to protect the canal, a
proviso Panamanians did not like. Operation of the canal became Panamanian. The
fear that they were incapable of doing it proved groundless.
Relations between the two nations went well until the US decided the invade
Panama in 1989 and arrest its dictator, Anthony Noriega. Noriega ruled between
1983 and 1989. His rule became increasingly more harsh. In 1985, his minions
tortured and killed Hugo Spadafora, a doctor and journalist who was one of
Noriega's most vocal critics. Noriega was an active participant in the drug
trade. Noriega clamped down on domestic opposition. His Legislative Assembly
demanded the expulsion of the United States ambassador and accused the United
States of interventionist aggression. About 500 demonstrators attacked the U.S.
embassy and consulate as well as American business establishments in Panama
City. Noriega obtained an Organization of American States resolution accusing
the United States of unwarranted intervention in Panamanian affairs. A summer,
1987 Gallup poll indicated that 75% of Panama's urban population wanted Noriega
to step down, and a July, 1987 nationwide strike indicated that rural areas had
also quit supporting Noriega. Two U.S. grand juries indicted him as a drug
trafficker in February, 1988, but Noriega argued that "this is simply
another aggression against Panama by the United States."
Encouraged by the
United States, President Eric A. Delvalle, who had been put into office by
Noriega under dubious circumstances, ordered Noriega's dismissal as commander of
the Panamanian Defense Force but the Noriega-controlled Legislative Assembly
dismissed Delvalle and appointed a pro-Noriega man as acting president.
Washington continued to recognize Delvalle as the legitimate Panamanian
president, however, and stepped up economic and diplomatic pressure on Panama.
Noriega easily suppressed a March coup attempt by police chief Colonel Leonidas
Macías. By November, 1988, a poll taken in Panama indicated strong opposition
to Noriega. Panamanian public opinion definitively turned against Noriega and in
favor of U.S. military intervention when Noriega stole the May, 1989 elections
and ordered his minions to beat the opposition presidential and vice
presidential candidates when they led a massive protest of the electoral fraud.
Elements of the Panamanian Defense Force failed to overthrow Noriega in October,
1989. Noriega executed the ringleaders and reorganized the PDF to insure its
loyalty. He also sought to neutralize other dissidents, some of whom fled to the
Zone and U.S. protection. The thug dictator seemed invincible. In December,
1989, Noriega, growing bolder by his seeming ability to act with impunity,
harassed U.S. personnel and had the national assembly assert that Panama was in
a state of emergency because of U.S. aggression. For both the average Panamanian and for
Washington, Noriega had gone too far.
Confronted with this intolerable situation, Panamanians welcomed Operation Just
Cause even though U.S. military intervention did not meet the strict guidelines
of the neutrality treaty. The only legal grounds for U.S. intervention is to
prevent closure of the Canal; the U.S. had specifically signed away all other
rights to intervene. Noriega had not threatened to close the Canal. By closing
the Canal during the invasion (the only time it has ever been closed), the
United States gave the Panamanian government the right, under both Panamanian
and U.S. law, to resist by military means. This issue was clouded, however, by
the problem of which was the legitimate government of Panama.
Regardless of the legality or illegality of the war against Panama, Operation
Just Cause, Panamanians initially, at least, supported the invasion and the
capture of Noriega, and the installation of Guillermo Endara as the new
president of the republic. By December 20, 1989, Panamanians had so despaired of
ridding themselves of the tyrannical dictator that even usurpation of their
nation's sovereignty seemed preferable to his continuance in power. Such a
euphoric response was unlikely to endure, however, and more thoughtful
Panamanians realized that not much had changed in U.S.-Panamanian relations
since 1903. The relationship between the two nations remained as unequal as it
had been in 1903. Washington could and did manipulate the Panamanian economy at
will even though doing so caused suffering for innocent Panamanians. Endara was
as much a part of the U.S. colonial system as former presidents had been. In the
disputed election of May, 1989, he had benefited from the expenditure of
millions of dollars in American funds. He and his vice president had been sworn
into office on an American military base shortly before the invasion and then
had to be protected by the U.S. military for several days. While the Panamanian
business and professional classes, from which Endara and his vice presidents
come, clearly supported the new government, Endara's government had few ties to
the majority of Panamanians--farmers, laborers, and the urban middle sectors.
U.S. military forces were still the key to power in Panama, treaties
notwithstanding. Panamanians realized that the longevity of the Endara
government depended upon the U.S. military and U.S. economic aid. In short,
Panama was a client state.
The United States asserted that Noriega had to be removed because, under his
regime, drug trafficking and money laundering had become serious problems in
Panama. With his departure, however, drug trafficking and money laundering
increased.
1.
The belief that the Canal Zone is as much a part of the United States as Georgia or Michigan has been encouraged by Zonian representation in national political conventions as well as by the sizeable number of US citizens who have lived in the Zone. Nationalistic demagogues have encouraged this belief.