FUTURE OF THE CANAL: Panama: Caving in to Neo-Colonialism

September 25, 2007

Bitterness against U.S. colonial presence has been smoldering among Panamanians since the country's very inception. At that time, in 1903, the U.S. government and a French engineer named Buneau-Varilla (whose company had a $40 million vested in- terest in the proposed canal project) imposed a treaty on Panama that it had had no part in negotiating. Panamanians were forced to ac- cept this blackmail as their only guarantee of independence from Colombia.' In short, Panama gained national independence at the expense of sovereignty over the transit route, its principal natural resource.' But while the entire nation has been united in opposition to U.S. colonial domination of the transit route, different and antagonistic class interests have been behind this opposi- tion. The bourgeoisie has been content to bargain for economic concessions from the United States. All the accords since 1903 have been revisions to that treaty, serving the tradi- tional oligarchy, and have not disturbed the basic colonial relationship: 1926-Kellog-Alfaro Treaty: Bourgeoisie would gain economic access to Canal Zone market; the United States would bind Panama to declare war should the United States go to war (rejected by popular op- position); 12Sept/Oct 1979 1936-The General Treaty of Friendship and Cooperation: 1) United States gives up right to unilateral intervention in Panama's political affairs (gained in 1903 Treaty) in exchange for tax exemptions for imports destined to Canal Zone market; 2) Panama's bourgeoisie gains additional ac- cess to Canal Zone markets and to sell to ships anchored in port cities in exchange for U.S. access to further lands and waters for defense and modernization of Canal; 1942-U.S.-Panama Base Convention: United States obtains over 100 new military and telecommunication facilities for war effort; 1947-Filos-Hines Treaty: Attempt to legal- ize U.S. military bases (defeated by popular protest); 1955-The Treaty of Mutual Understand- ing and Cooperation: In exchange for huge military base in Rio Hato, United States gives further economic access to Canal Zone to local manufacturers and agrees in principle to equalize wage scale for Panamanian and U.S. workers. Panama- nian state obtains right to tax non-U.S. residents working in Canal Zone.' For the professionals, technicians and students who make up the majority of the petit bourgeoisie, the Canal struggle has had a dual meaning. Since the mid-1920s they have played a progressive role challenging the oligarchy's sellout of patriotic interests to the United States. It is also the vehicle for the aspirations to expand their administrative role in the state and broaden the economic base of the public sector through control of the transit route. Historian Ricaurte Soler characterizes the role of these middle sectors in forming Panamanian nationalist and anti- colonial consciousness as follows: . the petit bourgeoisie, especially its non- productive salaried sectors, has provided the [Panamanian] theory of nationality with its philosophical, historical and political texts. . . . The popular masses, on the other hand, have aspired for much more: the total with- drawal of the U.S. military presence and the total recuperation of Panama's principle natural resource so that it can be integrated into the development of the country for the improvement of its entire people. Lacking independent political organiza- tion, the popular sectors have largely chan- neled their demands through middle class political organizations. But over the last seven decades of struggle they have gained in organizational as well as political strength. The most notable manifestations have been the anti-U.S. demonstrations in 1947 that caused the Panamanian National Assembly to reject a new treaty on defense sites, the "Flag Riots" in 1964 which first demanded com- plete abrogation of the 1903 Treaty, and the rejection of the so-called "3 in 1" Johnson- Robles Treaty in 1967. TOWARD A NEW TREATY- ROUND ONE According to a Joint Declaration of April 3, 1964, Panama and the United States agreed to 1) reestablish diplomatic relations, 2) ap- point special ambassadors with sufficient powers to secure prompt "elimination of the causes of conflict" between the two countries and 3) begin immediate procedures necessary to reach a just and equitable covenant. 5 However, the solutions for eliminating the causes of conflict put forward by Johnson and the Panamanian oligarchy were not quite what the majority of Panamanians had in mind. In 1967, after three years of negotia- tion, Johnson and the new Panamanian presi- dent, Marco Robles, agreed to 1) abrogate the 1903 treaty; 2) legalize all U.S. bases in the Canal Zone (which the 1903 Treaty did not do), permitting their presence until 2004 with option to renew; and 3) replace the Canal Zone government run by the United States with a Canal Commission dominated by the United States. The Panamanian National Assembly was pressured by mass protest and massive demonstrations to reject this treaty. The political accumulation of the popular masses had led them to differentiate between a treaty favoring U.S. political, economic and military consolidation and one which really would eliminate the causes of conflict be- tween the two countries. U.S. military bases, U.S. control over the administration of the Canal, U.S. jurisdiction over the Zone, all these were areas of conflict, but the 1967 Treaty did not eradicate any of them. Rather it tried to institutionalize them. 13NACLA Report Furthermore the 1967 Treaty spoke of U.S. rights over any new canal to be built in Panama. This clearly showed that the United States only sought to modernize and con- solidate its economic and military power over Panama. TOWARD A NEW TREATY- ROUND TWO In 1977, Panama and the United States signed another accord--the Carter-Torrijos Treaty. In negotiating this new accord with the United States, the Torrijos civil-military regime had the full support of the military. Unlike President Robles, however, it had the support as well of the middle classes, labor, students, peasants and international finance capital. With the displacement of the oligarchy resulting from the 1968 coup, middle class sectors became increasingly entrenched in the bureaucracy of the state and dependent on it for their economic stability. The negotiating role of these nationalistic administrators in the treaty process lent Torrijos the legitimacy to finally initiate Panama's historic mission- consolidating its national sovereignty-- with a real shot at success. Their leadership role among the masses accrued to Torrijos in the form of broad popular support, which he used skillfully in maneuvering for a bold new treaty. In his third anniversary address com- memorating the "revolutionary" takeover in 1968, he warned, "If there isn't a satisfactory arrangement for our nation and our people, something inevitable will happen.... As leader of the National Guard Omar Torrijos will only have two roads: to crush this patriotic rebellion of the people or to lead it. And I won't crush it." 6 NEW GUIDELINES FOR NEGOTIATIONS In 1973, when the United Nations Security Council met in Panama City, Torrijos brought the Canal issue up in the form of a resolution demanding the restoration of Panamanian sovereignty. To the surprise and embarrassment of the United States, all other countries save Great Britain, who abstained, voted to pass the resolution. The United States, which had been avoiding negotiations for the past five years, was forced to veto it. The following year Torrijos was able to secure an agreement of principles, known as the Tack-Kissinger Agreement, which would serve as a guide to the Canal negotiations. A brief analysis of the eight principles contained in the agreement is illustrative of the new cor- relation of forces between the two countries. Articles one through three appeared favorable to Panama. They affirmed that the 1903 Treaty would be abrogated and the "perpetuity" concept eliminated, that the new treaty would have a stipulated duration, and that U.S. jurisdiction over the Canal Zone would be promptly terminated. On the other hand, articles four through John Scali, unhappy Ambassador to UN Security Council meeting. Signs reads: You may rest assured that in our negotiations with the United States of America you will always find us standing on our feet and never on our knees. Never! Omar Torrijos (UPI) 14Sept/Oct 1979 In Panama City students protest emerging treaty elements in May 1976. Banner reads: Not one Yankee Base!Joint Defense: A Betrayal of the People! (Dialogo Social) eight limited Panamanian rights and jurisdic- tion for this specified time period regarding administration, benefits from and defense of the Canal. The final point referred to a joint agreement for new work on a canal. In general the language of all eight points was dangerously ambiguous. THE LONG-AWAITED TREATY- ANOTHER ACCOMMODATION The final Carter-Torrijos treaties are the product of a coincidence of interest between transnational finance capital and the Panamanian bourgeoisie. The military, economic and political interests of these groups were secured in the 1977 treaties, as we have seen, while the interests of the Panamanian peasants, workers and popular classes were not. While the 1977 treaties have to be analyzed within the context of the eight principles, it is also necessary to take into account an un- favorable shift in the correlation of forces be- tween Panama and the United States in the 1974-77 period. Along with increasing infla- tion, Panama reached zero economic growth by 1976 and accumulated the highest per capita foreign debt in Latin America. As a result, the civil-military regime lost much political support and its ability for populist maneuvering. It was forced to make conces- sions to a dissatisfied bourgeoisie, transform- ing the progressive 1972 Labor Code into an instrument of capitalist control and thus alienating support from labor and its urban base. Military Aspects: Xabier Gorostiaga and Marco Gandasegui, Panamanian economists, have characterized the 1977 treaty as the most militaristic of all the bilateral agreements bet- ween Panama and the United States. The treaty legalizes, for the very first time, the presence of U.S. military bases. Second, it contemplates a closer relationship with Panama's National Guard, necessarily subor- dinating the Guard to the U.S. military. Third, the Treaty on Neutrality, as well as the DeConcini Amendment, assures the right of U.S. military intervention, even after the year 2000-that is, in perpetuity. This reflects a new U.S. military strategy for Latin America and a different, but not less important, role for Panama. The most salient features of the new strategy are a greater role for local armies in defending the interests of the empire and a lower visibility of U.S. military.' At the same time, however, the United States was careful not to sacrifice any of its capability for a direct role. The Carter-Torrijos Treaty reflects this new strategy in part in its stipulation of a new function for the School of the Americas, situated in the Canal Zone. Instead of train- ing 42,000 Latin American soldiers, as in the past, the school now will concentrate on turn- ing out high-ranking Latin American mili- tary officers. Although the U.S. military bases will be 15NACLA Report Vietnam-bound soldiers rehearsed at Jungle Warfare Center, U.S. Army School of the Americas, Panama Canal Zone. reduced from 14 to three over the next two decades, there is nothing in the agreement which calls for a reduction in U.S. military combat troops or military capability from its present level. Further, the more than 21 so- called "defense sites" and joint "areas of military coordination" provided for in the treaties on the one hand give the United States exclusive control over strategic military installations and, on the other, provide for the sharing of subordinate training sites with the Panamanian National Guard. 8 The bottom line is that the Neutrality Treaty gives the United States the unilateral right to intervene in the affairs of Panama should the joint U.S.-Panama military cooperation break down or prove inadequate for defense of U.S. interests. The Treaty gives the United States the further right to in- tervene in Panama's affairs under the guise of supplying military hardware to Panama for internal defense. 9 "The Pentagon must like this treaty, or Bunker would never have agreed to it. And if the Pentagon likes it, it can't be any good for us." A Panamanian professor Economic Aspects: The single most impor- tant economic aspect of the Carter-Torrijos Treaty is its concern with the "security and ef- ficiency" of Canal operations.' 0 Economic ef- ficiency, according to Article III of the Neutrality Treaty, is defined thus: "The tolls and other rights for transit and related ser- vices will be just, reasonable and equitable and consistent with the principle of Interna- tional Law." The legal history of "just, reasonable and equitable" in U.S.-Panama negotiations has meant that the Canal tolls cannot be commer- cial, that is, must be non-profitable." If this remains true, the Panamanian bourgeoisie will never be able to operate the present of any future canal on a profitable basis. All foreign shipping will be assured of a permanent subsidy and relatively low-cost use rights of the present and any future waterway. There are other economic aspects that some might consider beneficial to Panama, namely the $10 million annuity and the $345 million package of loans and grants which Carter offered as a substitute for the $1 billion indemnity Torrijos originally sought.12 But there are several reservations to the relevant treaty article, made by the U.S. Senate, which nullify any hope that Panama would receive large sums from the U.S. government. On the contrary, the reservations, along with restric- tions on toll increases, makes the economic recuperation of the Canal Zone, even for the Panamanian bourgeoisie, incomplete. The bourgeoisie will of course benefit, especially that fraction linked to U.S. banks and transnational firms, as the "platform for transnational services" extends its reach over the Panamanian economy.* The local com- mercial and industrial bourgeoisie will also benefit from the $200 million from the Export-Import Bank, the $75 million from 16Sept/Oct 1979 AID for housing, and the $20 million from the Overseas Private Investment Corporation which provides incentives to Americans cor- porations investing in Panama for the first time. The National Guard will also benefit from the $50 million in military aid received from the United States government. But this $345 million aid package, designed to stimulate the Panamanian economy, will further increase the public debt which is already over $2 billion, and "deepen and ag- gravate the structural defects of an underdeveloped Panama."'" Labor Aspects: The role of the U.S. and Panamanian workers in the treaty negotia- tions was at best marginal. Therefore the many uncertainties the treaty poses for workers, primarily Panamanians, is not surprising. 1 4 It is a certainty that workers will be dis- missed as a result of the Treaty, but it is ques- tionable whether jobs will be found for those dismissed, or whether pre-existing terms and employment conditions (salary levels, fringe benefits, etc.) will be observed. For example, Panamanian workers who are affected either as a result of closing U.S. facilities in the Zone or because such facilities are assumed by Panama will be given jobs to the extent possible. However, the United States will find employment for U.S. workers. Panama guarantees, whenever possible, that terms and conditions of employment for Canal Zone workers will not vary when Panama assumes certain Zone functions. For non-U.S. citizens who are adversely affected by the Treaty and who do not qualify for retirement under U.S. civil service, Panama will provide special employment services for them. As recently as May 1, 1979, Luis Anderson, president of Local 907 (an AFSCME affiliate), *Panamanian economist Xabier Gorostiaga has coined the term to refer to areas of strategic importance to trans- national interests. In the case of Panama it encompasses the Colon Free Zone, the Canal itself, the dollar-tied monetary system, its geographic position, the military and economic presence of the United States, and its "tax haven" legal system which includes the legalism of "flags of convenience," giving Panama the appearance of being the third largest merchant fleet in the world. (Xabier Gorostiaga, Los Centros Financieras Internacionales en los Paises Subdesarrollados, ILET, Mexico, 1978. representing 2,000 Panamanians working for U.S. armed forces in Panama) was quite pessimistic about the number of Panama- nians facing dismissal as of October 1, 1979. He was even more pessimistic as to whether Panama will apply Law 95 (which suspends collective bargaining and affects job stability for Panamanian workers outside the Canal Zone as of January 1, 1977) to Canal Zone workers.'" Anderson, however, was among those who, subordinating the interests of workers in Panama, had given unconditional support to the Carter-Torrijos Treaty. Of equal detriment to the whole working class, especially those in the Canal Zone, is the possibility of a general decrease in wages in the Canal Zone as a way of making the Canal operations profitable, and of attracting in- vestment to those areas of the Zone turned over to Panama. This is a serious concern, for Panama's revenue from Canal operations depends on the Canal's profitability. With decreasing Canal traffic and U.S.-imposed low tolls, Canal profitability for the state can come only as a result of a general decrease in wages. Lastly, the Neutrality Treaty and the DeConcini Amendment have grave conse- quences for the development of an effective and class conscious workers' movement in the former Canal Zone. Since the Neutrality Treaty does not define what type of action constitutes a "threat to the security of the Canal," it leaves open the possibility that any type of Panamanian mass political action that seeks to break the chain of dependency, poverty and hunger can be interpreted as jeopardizing the operation of the Canal or any future canal. United States' concern over an indepen- dent, aggressive and militant labor force in the Canal Zone dates as far back as 1856 when West Indian Railroad workers rioted to pro- test unemployment and adverse working con- ditions. Since then, the history of the United States in the Canal Zone has been one of re- pression of black workers, busting up of in- dependent labor unions, racially and eth- nically based wage discrimination, and apar- theid as public policy. These were all mechanisms to control the Canal Zone work- force while the U.S. military had a direct presence. Now, with the physical departure of 17NACLA Report the United States in the year 2000, the empire reserves the right of unilateral and perpetual intervention. SLAM BAM PLEBISCITE When Torrijos was in Washington, D.C. for the signing of the treaties in September 1977, he acknowledged, in a way that he hoped would preempt some of his opponents, "I know the leftists will be on me like a pack of dogs over the treaty. They are against it because their goals were total liberation now or death."' 6 Torrijos gave the country just six weeks- since the negotiations had been conducted with a virtual news blackout in Panama--to read, understand, debate and rally votes in favor or against the signed treaties. No amendments, as in the United States, just a simple yes or no. While the government controlled all mass communications, including television sta- tions, radio and the press, the opposition was permitted one page daily in three newspapers. Pro-treaty advertisements, posters, slogans, editorials and broadcast speeches pro- liferated. The state apparatus, teachers, the military and even health workers in the most remote regions of the country became pro- moters of the treaties during those weeks. Torrijos' government was finally obliged to permit treaty opponents to appear on televi- sion during the last week before the plebiscite. Both supporters and opponents were heterogeneous groups whose arguments in favor or against the treaties reflected underly- ing concerns that went beyond accords. As one critical magazine put it: The plebiscite did not manage to polarize "pure" votes around the treaties (i.e., votes con- cerning solely the content of the treaties) since, in a complex dependent and underdeveloped society such as ours, the liberation of the word turns into an explosion of vital and heartfelt ne- cessities. The electoral process "rediscovered the profound class antagonisms of our social forma- tion." 7 Supporters gave arguments that ranged from praise for the treaties as an improve- ment over the 1903 Hay-Bunau Varilla Trea- ty, to those who saw them as an anti- imperialist achievement, to others who sought to support the government and still others who perceived in them a stabilizing economic advance to protect their investments in the country. Notwithstanding the class interests reflected in these arguments, all groups believed economic improvement of the coun- try would necessarily follow from the im- plementation of the new treaties. Opponents displayed a similar diversity in the class composition of their ranks. At times marching together were those who opposed the treaties from a genuinely anti-imperialist and anti-interventionist premise, critical of the continuation of military bases and political control by the United States, along with impoverished sectors opposing the treaties under the illusion that the continued presence of the United States would mean a "secure" source of employment. A naive ad- miration for the North American lifestyle was a strong factor. Oligarchic sectors that had been displaced by the 1968 coup joined the opposition mainly as a way to criticize and weaken the military regime, albeit with clear capitalist interests. The final approval of the treaties in the Oc- tober 23rd plebiscite revealed the already ap- parent weakening of Torrijos' reformist- populist politics. While 90% of the eligible voters participated, the government's projec- tions of victory by at least 73-90% were pro- ven deceptively optimistic. Only 67.6% voted for the treaties and 32.4% voted against. "I would prefer a generation of Castristas (Pro-Castro types) to a generation of castrados (castrated ones). They may vote no, but I want them to vote." Brig. Gen. Omar Torrijos, August 1977 Opposition reflected more than anything widespread dissatisfaction with the Torrijos regime on domestic questions. The provinces of Veraguas, Bocas del Toro, Colon and the Indian reservation of San Bias, for example, voted overwhelmingly against the pacts due to the fact that their predominantly working class, peasant and Indian populations had been ill-served by the regime, as much as by all its oligarchic predecessors." The next article takes the long view of the Torrijos decade just past, examining how the masses were ill-served and why, as well as what alternatives are emerging. PART TWO: PANAMA 1. Walter LaFeber, The Panama Canal: The Crisis in Historical Perspective (New York: Oxford University Press), 1978. 2. See Article 1 of the "Hay-Buneau Varilla Treaty," November 18, 1903. 3. "The General Treaty of Friendship and Coopera- tion," March 2, 1936. 4. Guaykucho-NIR (PRT), "Las capas medias y el proceso de las relaciones entre Panama y los EEUU," p. 35. 5. "Declaracion Conjunta del 3 de Abril 1964," in Enrique Jaramillo Levi, Una explosion en America: El Canal de Panama (Mexico: Siglo XXI), 1976. 6. Ministerio de Relaciones Exteriores, Departamento de Informacion, Nuestra Revolucion: Discursos fun- damentales del General Omar Torrijos Herrera (Panama), Dec. 1974. 7. Xabier Gorostiaga and Marco Gandasegui, "Panama solo un Canal?" Cuadernos de Coyuntura, No. 2 (Panama: CELA), 1978. 8. Dialogo Social (April 1978), p. 40. 9. "Acta convenida sobre el Tratado del Canal de Panama," No. 21, 25, Revista Loteria, No. 258-260 (August-October 1977). 10. Gandasegui-Gorostiaga, "Panama solo un Canal?" 11. Ibid. 12. "Tratado del Canal de Panama, Art. XIII, No. 4, Para. 2, 3, 6." 13. Gandasegui-Gorostiaga, "Panama solo un Canal?" 14. "Tratado del Canal de Panama, Art. X." 15. Speech by Luis Anderson, General Secretary, Local 907, Army Employees, on May 1, 1979 in the Canal Zone, Panama. 16. Speech by Gen. Torrijos during Treaty signing, Washington, D.C., September 1977 as quoted in Revista Loteria. 17. Dialogo Social (November 1977), p. 3 18. Ibid., p. 8

Tags: Panama, Canal Zone, Panama Canal Treaty, neo-colonialism, Omar Torrijos

Like this article? Support our work. Donate now.