(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "Department of State bulletin"

BOSTON 
PUBLIC 
LIBRARY 




/J; 



77/ 



/f?7 




THE DEPARTMENT OF STATE 

BULLETIN 



Volume LXXVII • No. 1997 • October 3, 1977 



RHODESIA— PROPOSALS FOR A SETTLEMENT 

Joint News Conference by Foreign Secretary Owen and 
Ambassador Young and Text of Proposals U17 

LATIN AMERICAN DEVELOPMENT IN AN INTERDEPENDENT WORLD 
Address by Assistant Secretary Todman kkO 

DEVELOPMENTS CONCERNING APARTHEID 

Statement by Ambassador Young and Text of Declaratio>i 4i6 






[ 1 7 flff 
DEP OS\TORY 



THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY 



For index see inside back cover 



THE DEPARTMENT OF STATE g[ f] ^ 



Vol. LXXVII, No. 1997 
October 3, 1977 



For sale by the Superintendent of Documents 
U.S. Government Printing Office 
Washington, D.C 

PRICE: 

52 issues plus semiannual indexes. 

domestic $42.50, foreign (58.15 

Single copy 85 cents 

The Secretary of State has determined that the pub- 
lication of this periodical is necessary in the transac- 
tion of the public business required by law of this 
Department. Use of funds for printing this periodi- 
cal has been approved by the Director of the Office 
of Management and Budget through January 31, 
1981. 

Note: Contents of this publication are not 
copyrighted and items contained herein may be re- 
printed. Citation of the DEPARTMENT OF STATE 
BULLETIN as the source will be appreciated. The 
BULLETIN is indexed in the Readers* Guide to 
Periodical Literature. 



The Department of State BILLET1S, 
a weekly publication issued by thi 
Office of Media Services, Bureau ot 
Public Affairs, provides the public and 
interested agencies of the government 
with information on developments ir, 
the field of U.S. foreign relations and 
on the work of the Department and 
the Foreign Service. 

The BLLLETIS includes selectee 
press releases on foreign policy, issued 
by the White House and the Depart- 
ment, and statements, addresses, and 
news conferences of the President and 
the Secretary of State and other offi- 
cers of the Department, as well as spe- 
cial articles on various phases of in- 
ternational affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and inter- 
national agreements to which the 
I nited States is or may become a party 
and on treaties of general interna- 
tional interest. 

Publications of the Department ot 
State, L'nited Xations documents, and 
legislative material in the field of 
international relations are also listed. 






I 

111 
ID 



Rhodesia — Proposals for a Settlement 



British Foreign Secretary David Owen and 
U.S. Ambassador to the United Nations An- 
drew Young visited Africa for consultations 
on the question of establishing majority rule 
in Zimbabwe (Southern Rhodesia). They met 
with leaders in Nigeria (August 26), Zambia 
(August 26-28), South Africa (August 28-30), 
Tanzania (August 30), Kenya (August 30- 
September 1), and Zimbabwe (September 1). 
They left for London on September 1 and Am- 
bassador Young returned to the United States 
on September 2. 

Following are a joint news conference by 
Foreign Secretary Owen and Ambassador 
Young in London on September 2 and the text 
of the proposals for establishing majority rule 
in Zimbabwe presented to the British Parlia- 
ment on September 1 by Foreign Secretary 
Owen. 

JOINT NEWS CONFERENCE 

Q. Dr. Owen, what are your pla)is now, 
immediately to go to the [U '.N .] Security 
Council at once or [inaudible]? 

Foreign Secretary Owen: Well, the 
documentation is being sent to the Security 
Council — to the President of the Security 
Council. That was done on publication day and 
we'll now go to the Security Council; the exact 
timing and the exact — when we go I won't 
want to be committed but I'd be surprised if 
it's — well, we expect to do it this month. 

Q. But ivhat do you ask for when you go? 

Foreign Secretary Owen: We'll be asking for 
the Security Council to agree for the Secre- 
tary General [Kurt Waldheim] to appoint a 
representative to enter into the negotiations 
and discussions about the security situation 
and law and order and above all the achieve- 
ment of a negotiated cease-fire. It's for the 

October 3, 1977 



Secretary General in the United Nations to 
decide who it should be, but I think from my 
discussions with Dr. Waldheim that he was 
thinking in terms of appointing the person 
who might become the commander of the 
U.N. force. So that you would have the people 
who are actually going to deal with the secu- 
rity situation, the Resident Commissioner 
designate, and the special representative of 
the United Nations doing the negotiating in 
the full knowledge that any agreement that 
was reached was one that they would actually 
be implementing, and I think that tends to 
concentrate the mind of everyone. 

Q. Does anyone you talk to seriously accept 
the need to get an early cease-fire? 

Foreign Secretary Owen: I think almost 
everyone. My only doubts on that score still 
lie with a few people in Rhodesia who seem to 
believe that there is a successful military out- 
come in the present situation or possibly a 
successful outcome— military outcome — with 
an internal solution. I don't believe that there 
is any solution other than a negotiated cease- 
fire that would end the violence under 2 
years — and that's taking a very optimistic 
view — and I must say I think it's much more 
likely to go on for years. 

Q. What do you make of Mr. Smith's [Ian 
Smith, Prime Minister of the white regime in 
Rhodesia] seeking change of demeanor after 
the elections — he seemed very much of a tiger 
before, now he seems to have changed? 

Foreign Secretary Owen: I am not going to 
be drawn really. I think the — I've asked him 
to look at these proposals extremely seri- 
ously. The future of his country is important 
to him, I'm sure, as it is to every citizen and I 
hope that he will weigh heavily the respon- 
sibilities. I don't think he is under any illu- 
sions himself, but the security situation has 

417 



seriously deteriorated, and I hope that — the 
election was a strange election. I don't know 
what it achieved, but one thing— I think if you 
ask most people— is that they wouldn't really 
know what they were voting on and people 
who were there during the election and others 
have said to me that they felt for the first 
time in Rhodesia that there was a real yearn- 
ing for a settlement. Well, if that is true and 
the more the Rhodesians look at this, I have 
no doubt that the vast majority of the 
population — when you think of it is over 6 
million — will have no doubt that they want to 
go down this far. 

The problem is the white minority, the very 
small electorate which in fact voted in that 
election — how many of them will really want a 
settlement, how many people who are fighting 
either territorials or people in the active 
forces really are beginning to realize that a 
settlement is what is the only outcome. Now it 
is often the military that are the first to 
realize that some settlement has got to come. 
I just hope on all sides there is that willing- 
ness to get into what essentially now are 
cease-fire negotiations and the more they're 
seen in a military context — of course it's got 
political involvement — the better. 

Q. Are you expecting restrictions when your 
proposals have to be accepted or rejected; do 
you plan to go on another visit to Africa or 
have talks with [inaudible]? 

Foreign Secretary Owen: No, that's one 
thing certain, I don't have any plans but who 
knows what happens. I don't think there'll 
ever be a point of time that you actually know, 
until perhaps the order in council has gone 
through the Houses of Parliament setting up a 
transitional constitution. But I think though 
that at this moment in time we're beginning to 
get the feedback, and you've got to remember 
that some countries in private may feel more 
committed to the proposals than they can 
say — or individuals — and some who sound 
very loud against may in private be rather 
more realistic. 

So you've got to balance the voices and re- 
member that there is always a private and a 
lower voice and we, Ambassador Young and I, 
have been hearing both the public and the pri- 



vate. One thing we can assure you is we've 
said the same thing everywhere we've been; 
no one is under any doubt about that. There 
has been no room for any misunderstandings; 
it's been laid straight out on the table, clearly. 

Q. Mr. Young, there have been some doubts 
expressed at this end that the enthusiasm of 
the American Government to stay with the 
initiatives — it has been suggested that you're 
resolving it more as a British initiative than 
an American one. Can you say that that is 
not the case and can you say to what extent 
there will be an American involvement be- 
yond the government [inaudible] prepared to 
soul people with the British Resident 
Commissioner? 

Ambassador Young: Let me say that we are 
very much in support of this initiative. It was 
worked out with your Prime Minister [James 
Callaghan] and my President and we've kept 
President Carter in touch with events all 
along the way and he's been very encouraging 
of the work that Dr. Owen has been doing in 
taking the lead on this. We were in the posi- 
tion of having been told by the Africans — the 
first group of Africans we met almost — that 
they did not want this initiative to in any way 
suggest some superpower rivalry in Africa 
and they wanted to see it as essentially a 
proposal of the United Kingdom and they wel- 
come the U.S. support but they insisted that 
our role be a supportive role. I think that's 
been the position of the front-line Presidents 
[Agostinho Neto of Angola, Seretse M. 
Khama of Botswana, Samora Moises Machel of 
Mozambique, Julius K. Nyerere of Tanzania, 
and Kenneth David Kaunda of Zambia] and 
the patriotic front and everybody else. That's 
a role that suits me just fine and it's been a 
very good trip. We have worked very closely 
together but it's been Dr. Owen who's had to 
put the hard questions and take the tough po- 
sitions on all sides and my role has been es- 
sentially a supportive role. 

Q. The second part, American involvement 
in the next stadium? 

Ambassador Young: American involve- 
ment, I think, will be present throughout the 
process and we have begun talking about just 



418 



Department of State Bulletin 



how that might be organized and expressed, 
but there's no question that we're committed 
to see this process through to the end. It 
seems to us to be the only way to avoid a kind 
of imminent chaos that not only affects 
Rhodesia, threatens Rhodesia, but threatens 
the whole of southern Africa. The continued 
struggle is putting tremendous strain on both 
front-line states surrounding it — I'm talking 
about an economic strain that makes it very 
difficult for them to take care of just the basic 
feeding and housing and clothing of their 
people. 

I think the economic strain on South Africa 
and the overall potential of this situation to 
degenerate into something like the situation 
in the Horn of Africa, we think is serious 
enough for us to put a major commitment in 
place. I have to say though that that commit- 
ment for a number of reasons does not include 
a military presence, but the diplomatic, the 
economic influence of the United States is in 
full support of this initiative. 

Q. Dr. Owen, do you have any insurances 
that there will be no future [inaudible]? 

Foreign Secretary Owen: No, I don't think 
anyone can have assurances. My own feeling 
is that if these proposals carry the support of 
the OAU [Organization of African Unity], 
then they are very unlikely to encounter ve- 
toes and I think that it's a very good chance 
that they will carry that support. 

Q. Have you had any [inaudible] consulta- 
tions [inaudible]? 

Foreign Secretary Owen: Well that's what 
we've been doing all around Africa. We saw 
the OAU; we've been consulting really on this 
at a level of intensity which I think is almost 
unparalled ever since it was really launched in 
April when I first went round South Africa, 
and I think there are very few individuals, or- 
ganizations, or governments that have a voice 
to say in this whole issue who haven't been 
listened to and the Anglo-U.S. consultative 
group [on Rhodesia] went round, considerable 
meetings involving the President of the 
United States, the Prime Minister of this 
country, Secretary Vance, myself, Ambas- 
sador Young, and then the consultative group 



with Ambassador Low and Mr. Johnny 
Graham. 1 

There has been a really very considerable 
listening and sharing of views and trying to 
reach an overall proposal which we think is fair 
and just and will stand out. Now in that situa- 
tion we can't now have vetoes from anyone, 
and everybody will have to stand up and their 
position will have to be known and they'll 
have to defend it and they'll have to be — no 
way of anybody avoiding the ultimate respon- 
sibility because we feel that if these proposals 
are to be vetoed and to be knocked down, then 
the outcome, as Andy is saying, is really very 
serious for southern Africa as a whole. 

Q. What's your early reading of the re- 
sponse of the patriotic front which so far in 
public has been somewhat cool ? 

Foreign Secretary Owen: Well, it seems 
that both the forces that are doing the fight- 
ing are sharing, well, coolness. Let's keep 
that word at the moment. That may be neces- 
sary. Remember they've also got the morale 
of their forces to consider; they've got to con- 
sider their position. As I say, all I want to do 
is bring people to the negotiating table. They 
can come to the negotiating table with every 
bit of coolness they like but if they come to 
the negotiating table they must recognize 
they come within the overall shape of this 
package, that it must be judged as a whole. It 
is no good trying to unpick the package in 
major elements. Of course, there are some 
bits that are still clearly for negotiation and 
both — and they are delineated in the white 
paper and in other areas but the broad struc- 
ture of the package has got to be judged as a 
whole, otherwise you get back into the whole 
situation that you never get progress on these' 
issues because everybody wants to accept that 
part which they agree with and carve into that 
part which they disagree with. 

Q. The areas open for negotiation, some of 
the contentions seem to be surrounding the re- 



'Stephen Low, Ambassador to Zambia, is the senior 
United States official working with John A. Graham, 
British Deputy Under Secretary at the Foreign and 
Commonwealth Office and head of the special consulta- 
tive group on Rhodesia. 



October 3, 1977 



419 



tention of military forces [inaudible] — how 
much of that is negotiable? 

Foreign Secretary Owen: Well, I reckon the 
whole business of the cease-fire is negotiable. 
I mean that the framework under which those 
negotiations must take place we felt we should 
make very clear. The white paper was not de- 
liberately phrased as clearly as that because it 
had to be written before we entered into the 
final round of consultations and discussions. 
We knew the structure before we went out to 
Africa. What we were doing was clarifying the 
issues and in the statement which I made in 
Salisbury yesterday afternoon clarifies how 
we would see the basis of the negotiations 
being conducted. 

Q. Ambassador Young, Mr. Smith said 
today he felt that the Rhodesians might stand 
a better chance of reaching an agreement with 
the Americans than with the British ami he 
also said that he felt the Aynericans had been 
given ojdy one side of the story [inaudible]. 

Ambassador Young: I really think that it 
doesn't much need commenting. These are 
joint proposals. We've been involved with 
them from the very beginning of the Carter 
Administration and there is certainly nothing 
that we have not been aware of through the 
proposals, and I can only say that the only 
way that the United States could be involved 
in the situation is in support of the British 
Government. 

Q. Mr. Foreign Secretary, you're putting 
co)isiderable emphasis on getting the military 
on both sides invoice/! in these negotiations 
very early. Is that because you see [inaudi- 
ble]? 

Foreign Secretary Owen: I think no one is 
going to make their final decision on the set- 
tlement and I think this is clear of all the par- 
ties and it certainly includes the British Gov- 
ernment and I think it considers the United 
Nations too, which is the sort of final decision 
which commits a force and then mandates 
until they see the actual outcome of the 
negotiations. They've all got to be satisfied 
that you can have fair and free elections dur- 
ing the transitional period and that the new 
Zimbabwe will be a stable government and a 
stable country. 



Now that is the objective so it's reasonable 
that everybody will want to be satisfied on 
that, but you have to approach that within a 
certain structure, and it's no good going into 
those negotiations in the usual way which 
everybody holds positions which are totally 
incompatible, and our task was to try to de- 
fine that area of the basis of the negotiations, 
which is what I tried to do in the statement 
yesterday in Salisbury. 

Q. [inaudible]. 

Foreign Secretary Owen: When will the 
negotiations start is the question. Well, the 
negotiations will start when people settle 
down into negotiating — and of course no one 
knows when that will be — and sometimes 
negotiations take place privately, people don't 
always know about, remember that. 

Q. Dr. Owen [inaudible] will be a private 
agreement from the various parties that they 
will accept to talk to [inaudible] and the U.N. 
special represortative? 

Foreign Secretary Owen: I think there is a 
broad measure of acceptance of that, a broad 
measure of acceptance. I think you'll hear the 
voices of various people commenting on the 
proposals over the next few days and you'll be 
able to gather and make your judgments, as 
they say, about public and private voices but 
there are some encouraging public voices that 
look as if they're coming out in the next few 
hours and days. 

Q. Can you tell us what framework you're 

going to have for the talks between the U.N. 
representative and [Resilient Commissioner 
designate] Lord Carver and the various other 
parties. Is it go'mg to be a reconvened 
[inaudible] conference? 

Foreign Secretary Owen: No. 

Q. Or is it going to be private talks — 

Foreign Secretary Owen: I think the more 
these talks are conducted in a private atmos- 
phere the better, and I don't think you're 
going to have that sort of formal conference at 
all. I think cease-fire negotiations, as history 
shows, are best conducted with a good deal of 
privacy. No one is going to reveal their posi- 
tions totally. We'll see the format. These are 



420 



Department of State Bulletin 



the decisions to be taken by the U.N. repre- 
sentative and Lord Carver to a great extent. 

Q. [Inaudible] what did he reveal about his 
[Ian Smith's] internal solution [inaudible]? 

Foreign Secretary Owen: He talked a bit 
about it and said he had his own plans and 
talked a little bit about a variety of different 
things and from a lot of his questioning of us 
on our proposals, one could see that he hadn't 
really made his mind up on some of the fun- 
damental issues still. And we've heard 
roughly what was envisaged in his internal 
[solution]; we didn't enter into a very great 
detail on that, no. 

Q. He said that he thought the British were 
seeking revenge for the UDI [Unilateral Dec- 
laration of Independence of November 11, 
1965], but that the Americans were much less 
vi)idictive [inaudible] one of the number of 
speeches he made over a near or more. It 
would seem [inaudible]? 

Foreign Secretary Owen: Well, certainly 
from that statement we got the impression. It 
didn't come out in the discussions at all. I 
don't know what's been said about Andy by 
Mi-. Smith but I suspect that quite a lot has 
been said in the past. I don't know, but, I 
think, anyone who has followed around with 
us two last week and a bit knows perfectly 
well there is no wedge between us personally; 
anyone who knows the relationships between 
Cyrus Vance and I over the whole of this 
knows there is no wedge between us. Any- 
body who followed the talks I had with the 
President about this knows that there is no 
wedge between us and anyone who has seen 
the Prime Minister and the President to- 
gether knows there is no wedge. 

I doubt there has ever been a period where 
there has been closer, almost unique inter- 
change of diplomatic and political activity over 
a problem like this. One has seen it with the 
five Western security powers [United States, 
United Kingdom, Canada, West Germany, 
France] in dealing with the problem of 
Namibia. This augurs very well for the whole 
era of multilateral, bilateral diplomacy that is 
the modern diplomacy and there is no one who 
is going to drive a wedge between us. Cer- 



tainly of all the people, I cannot see Mr. Smith 
driving a wedge between Andy and I. 

Q. [Inaudible]. 

Foreign Secretary Owen: It's a nice turn up 
for the books. 

Ambassador Young: I think that was a 
necessity that the structure of things — and 
Dr. Owen really did have a tough job of taking 
the hard line everywhere, and he was deter- 
mined that he was going to be consistent and 
so he talked with the front-line Presidents I 
thought sometimes as though he were talking 
to the South Africans and he talked with the 
South Africans as though he were talking to 
the front-line Presidents. But by doing it, 
made it certain that we were not getting into 
any ambiguous situation where everybody 
thought that something was being said that 
was not. He really took a hard line 
everywhere and it gave me the luxury of 
being able to be the good guy. [Laughter] 

Q. The proposals have been described in 
Washington as something with a last chance 
ever. Would you agree with that? Could you 
sum up the significance of these proposals to 
the people of southern Africa as a whole, how 
serious — 

Ambassador Young: I don't know why I al- 
ways get into trouble in having to disagree 
with Washington [laughter], but I think that 
the — there can't be a last chance. I don't think 
that the people of the United States or Great 
Britain are going to just plain give up and 
turn their backs on a potentially dangerous 
situation. I think — I didn't hear "last chance" 
from President Carter. What I heard was the 
determination to solve this problem together 
with the British Government and that we 
were not going to give up and that nobody 
would have the right to veto it; so you don't 
know when we're through because I think 
there is a commitment to see it through to the 
finish. I think that gives the parties involved 
a new kind of security that this is not just a 
flash-in-the-pan initiative to clear our own 
consciences and wash our hands of the trou- 
ble. We are contemplating all of the difficul- 
ties that might occur over the next few years, 
and saying that we are going to be involved 
with the British Government in assisting the 



October 3, 1977 



421 



parties in southern Africa in resolving these 
problems. 

Q. And this can do it? 

Ambassador Young: This process, this de- 
termination can do it. 

Q. What pressure will you put on cither side 
to withdraw from their positions they've so far 
occupied? Is it still more pressure you'll put 
on cither Smith or — 

Foreign Secretary Owen: Well, I think we 
oughtn't to talk too much about pressures but 
certainly one of the factors is that you can't 
just talk to the people directly involved — 
sometimes we've come under criticism from 
some people who are talking to the front-line 
states, others have criticized us for talking to 
South Africa. The facts are that those people 
who for a variety of reasons — which to them 
are good and understandable — are in close re- 
lationship with the parties who are actually 
doing the fighting. They are important in any 
overall settlement. You cannot ignore any of 
those factors and so that's why we did see so 
many different people; but above all — and I 
think rightly when we finally presented our 
proposals — we presented them in Rhodesia to 
all the people, either inside or those on the 
outside who for either reasons they've been 
declared illegal immigrants or because they 
are fighting for, as they see it, their freedom. 
Then those people should be the people to 
hear our proposals and those people should be 
the people to judge. You can't just talk about 
Rhodesian citizens and those who are going to 
live in an independent Zimbabwe; they're not 
just inside Rhodesia. It's because of the situa- 
tion that has existed in Rhodesia since 1965 
and even before that that many people are un- 
able now to be within that country. 

So anyone who is looking at this has got to 
go both inside and outside but always recog- 
nizing that it is finally the people who will live 
in Zimbabwe who must decide their future, 
and we say they must decide it in fair and free 
elections and they must have security for 
their future which could be a bright one. This 
is a country which could have a sound and sta- 
ble economy; this is a country that if we can 
rescue it from division, bitterness, and vio- 
lence could in fact bring stability to southern 



Africa. It's interesting interlocking relation- 
ship with the economies, the countries around 
us, Andy Young has said, is crucial and that 
affects South Africa as well as all the states 
around it. 

Q. / would like to ask a question about 
your statement yesterday when yon said the 
new army would be based on the liberation 
forces but then a few sentences on said that 
this army has to be loyal to whoever is 
elected president. How can you be sure that 
an army based on the guerrillas — 

Foreign Secretary Owen: One of the fun- 
damental things is to try and achieve 
that — and no one denies that it will be 
difficult — but when you have an independent 
country it must have a single army. If it in- 
herits a divided army or two armies that 
would be a very grave recipe for civil war 
and civil disturbance. This is a very impor- 
tant and very difficult issue. Everyone 
knows that, but it has to be grappled with 
and many people who are fighting for their 
freedom at this moment in the liberation 
armies see their allegiance to very different 
nationalist leaders. There's not — and that is 
an issue which will have to be resolved but 
above all I point out in that statement, for 
instance, the President-elect under the pro- 
cedure, which is one that is present in the 
Botswana constitution and others, allows for 
the President to emerge at the time of the 
election; then there is a little time, 3 to 4 
weeks — maybe less, maybe more, unlikely to 
be more — before independence day is ac- 
tually declared and we say that the final 
compositional structure of the force would 
be decided by the President-elect. So this 
avoids the Resident Commissioner having to 
make those final decisions and that gives the 
President some assurance. 

Q. [Inaudible]. 

Foreign Secretary Owen: It is well known 
and has been announced that the EEC 
[European Economic Community] is looking 
on a joint policy on this whole issue code of 
conduct for firms, national firms operating 
in South Africa, and this has been discussed 
and publicly known. I generally, as a politi- 
cian, tend to take the view that I don't like 



422 



Department of State Bulletin 



adopting too many positions unless I know 
what the local people think. And I went into 
that on the basis that this was a seminar, it 
wasn't private in the way of being secret in 
the sense, but it was because I really 
wanted to learn and there were collected to- 
gether a broad range of people — trade 
unionists, black and white, industrialists — 
and we just talked through the problem. It's 
a very difficult problem, and I certainly at 
the end of it was a wiser man than when it 
started, which is no bad thing. 

Q. [Inaudible]. 

Foreign Secretary Owen: I think the 
Europeans will develop their own policy on 
that and the United States may want to look 
at their policy; that's for them to decide. We 
haven't had much discussions about that, the 
main discussions — previously we have had 
them in Britain, of course, and now we're 
looking at it in a European context. This is 
reasonable and the German Deputy Foreign 
Minister, Klaus von Dohnanyi, said some- 
thing about that only a couple of days ago. 

Q. [Inaudible]. 

Foreign Secretary Owen: Well, nobody 
wants to be too rigid in anything but 
equally well you can't be too flexible with 
people who hold differing views. You have 
to strike a reasonable balance. When in 
April I went round southern Africa I said I 
thought that in the wake of the Geneva 
conference — where by its very structure ve- 
toes were held by all the differing parties — 
that I was going to try a different approach. 
That I was going to look at the constitution, 
look at the ways in which we could imple- 
ment, look at the security situation, do this 
with the United States and that we would 
come forward with proposals at the end of 
the day which we thought were fair and bal- 
anced. We would not pretend that they were 
proposals to which everybody had agreed 
but on listening and looking at the situation, 
forming our own judgment that they were 
the most viable. Now that's what we've 
done. 

Q. Mr. Smith has had a press conference 
this morning. One of the things he said, he 
said the [inaudible]. 



Foreign Secretary Owen: Well, we've 
made it clear that we're going to the Secu- 
rity Council and we've made it clear the 
[inaudible] in which this, we can make prog- 
ress and we will go on making progress if 
those consultations, clarifications with Mr. 
Smith go on during that period. I am not 
complaining about that. 

You asked me how seriously do I take it. I 
take it very seriously. I don't see any jokes 
about the security situation. I can assure 
you that. It's deteriorated since I was there 
in April. The car from South Africa this time 
had to drive through in a convoy. There's a 
lot of change around in that country. What I 
worry about, I must say, is how isolated 
Rhodesia is from world opinion and from 
world events. There is a very strict control 
of Rhodesian television and Rhodesian radio. 
People often hear what people want them to 
hear rather than necessarily what are the 
facts of life. Now I think that when you 
have an opportunity of explaining to the 
people of Rhodesia, as I had in April when I 
explained to them how I approached the 
problem, they listen and they understand. I 
would have like to have done the same when 
I was in Rhodesia yesterday. 

Q. In view of this deteriorating security 
.situation, how long do you intend to pro- 
ride, until you do get an answer — say 
you've now appointed the Resident Commis- 
sioner, Smith yesterday was saying he 
would require a couple of days [inaudible] 
or words to that effect. Now he's saying 
[inaudible] there's a scenario whereby you 
expect a positive or negative or fortified an- 
swer within a limited time from Mr. Smith 
uuil that then, thereafter there will not 
be a conference but that although you 
I inaudible]. 

Foreign Secretary Owen: I'm not sure 
your question has not confused it more than 
it was [laughter]. Let me be clear. The first 
decision point is for the United Nations to 
decide whether to appoint a special repre- 
sentative to enter into discussions with the 
Resident Commissioner designate. Then it 
is for the various parties to the armed 
struggle to decide whether they're going to 
come to the negotiating table and how that 



October 3, 1977 



423 



negotiation is conducted, how much is done 
publicly, how much is done privately, how 
much is done in face-to-face negotiations, 
how much is done in bilateral, trilateral dis- 
cussions — that I leave for the negotiators. I 
don't think anybody wants to lay down fixed 
patterns and don't let's always take the pub- 
lic voices as necessarily representing the 
private ways. Everybody's got their audi- 
ence, everybody's got their domestic audi- 
ence, their home problem. So I think that — 

Q. [Inaudible]. 

Foreign Secretary Given: Well, how I view 
that statement is best analyzed if you read 
carefully what I said in a press statement 
yesterday in Salisbury when I did make it 
clear how we see the pattern on which the 
negotiations for a cease-fire could take 
place. 

TEXT OF PROPOSALS 

Foreword 

The British Government, with the full 
agreement of the United States Government 
and after consulting all the parties con- 
cerned, have drawn up certain proposals for 
the restoration of legality in Rhodesia and 
the settlement of the Rhodesian problem. 
These proposals are based on the following 
elements: 

1. The surrender of power by the illegal 
regime and a return to legality. 

2. An orderly and peaceful transition to 
independence in the course of 1978. 

3. Free and impartial elections on the 
basis of universal adult suffrage. 

4. The establishment by the British Gov- 
ernment of a transitional administration, 
with the task of conducting the elections for 
an independent government. 

5. A United Nations presence, including a 
United Nations force, during the transition 
period. 

6. An Independence Constitution provid- 
ing for a democratically elected government, 
the abolition of discrimination, the protec- 
tion of individual human rights and the in- 
dependence of the judiciary. 



7. A Development Fund to revive the 
economy of the country which the United 
Kingdom and the United States view as 
predicated upon the implementation of the 
settlement as a whole. 

A full account of the proposals is attached. 
The first of the Annexes to the proposals 
outlines the principal points of the proposed 
Independence Constitution; the second 
Annex deals with the Constitutional ar- 
rangements during the transition period; and 
the third Annex relates to the Development 
Fund. The precise provisions of the Inde- 
pendence Constitution will have to be elabo- 
rated in further detailed discussions with 
the parties and in due course will be consid- 
ered at a Constitutional Conference to be 
held during the transition period. 

It is impossible at this stage to lay down 
an exact timetable: but it is the intention of 
the British Government that elections should 
be held, and that Rhodesia should become 
independent as Zimbabwe, not later than six 
months after the return to legality. To 
achieve this it will be necessary to proceed 
as quickly as possible after the return to 
legality to the registration of voters, the de- 
limitation of constituencies, the detailed 
drafting of the Constitution and its enact- 
ment under the authority of the British 
Parliament. 



Proposals for a Settlement in Rhodesia 

1. On 10 March 1977 the British and 
United States Governments agreed to work 
together on a joint peace initiative to 
achieve a negotiated settlement in Rhodesia. 
The objective was an independent Zimbabwe 
with majority rule in 1978. 

2. To succeed, any settlement must com- 
mand the support of those people of goodwill 
of all races and creeds who intend to live to- 
gether in peace as citizens of Zimbabwe. 
Amongst these people there are now many 
conflicting interests and views. There is an 
atmosphere of deep distrust. The armed 
struggle has led to the loss of many lives 
and to much human suffering. The economy 
has been gravely weakened. But there is 
surely one overriding common interest, that 



424 



Department of State Bulleti 



peace should be restored and that govern- 
ment with the consent and in the interest of 
all the people should be established. 

3. In April the British Foreign and Com- 
monwealth Secretary, Dr. [David] Owen 
toured the area and met all the parties to 
the problem as well as the Presidents of the 
five Front-Line States, the Prime Minister 
[John Vorster] of South Africa and the 
Commissioner for External Affairs [Joseph 
Garba] of Nigeria. He set out the elements 
which, taken together, could in the view of 
the two Governments comprise a negotiated 
settlement, as follows: 

(a) A Constitution for an independent 
Zimbabwe which would provide for — 

(1) a democratically-elected govern- 
ment, with the widest possible franchise; 

(2) a Bill of Rights to protect individual 
human rights on the basis of the Universal 
Declaration of Human Rights. The Bill 
would be "entrenched" so that amendment 
of it would be made subject to special legis- 
lative procedures and it would give the right 
to an individual who believed his rights were 
being infringed to seek redress through the 
courts; 

(3) an independent judiciary. 

(b) A transition period covering the sur- 
render of power by the present regime, the 
installation of a neutral caretaker adminis- 
tration whose primary role, in addition to 
administering the country, would be the or- 
ganisation and conduct of elections in condi- 
tions of peace and security and the prepara- 
tion of the country for the transition to 
independence. This period, it was envisaged, 
would be as short as possible, and in any 
case not more than six months. 

(c) The establishment of an internationally 
constituted and managed development fund 

•(the Zimbabwe Development Fund). 

4. Following that tour, Dr. Owen and the 
United States Secretary of State, Mr. 
Vance, met in London on 6 May and agreed 
to carry forward their consultations with the 
parties on the basis of these proposals. To 
this end they established a joint consultative 
group. The group met all the parties on a 
number of occasions in London and in Africa 



and carried out detailed technical discus- 
sions with them. In parallel, the Govern- 
ments of interested countries have been 
kept informed generally of the progress of 
the consultations. 

5. On the basis of these consultations the 
British Government, in full agreement with 
the United States Government, have now 
decided to put firm proposals forward, cov- 
ering the three aspects of the problem de- 
scribed in paragraph 3 above. In doing so 
they emphasise that the three aspects are 
intimately linked and must be judged as a 
whole. It is impossible for every single as- 
pect of a settlement to be acceptable to 
everyone. The best, if not the only, hope for 
a settlement is a balanced and fair package 
in which, though no one may achieve all 
their aims, everyone can see hope for the 
future. 

The Constitution 

6. It is' proposed that the Independence 
Constitution should provide that Zimbabwe 
would be a sovereign republic. Provision 
would be made for democratic elections on 
the basis of one man, one vote and one 
woman, one vote, for a single-chamber Na- 
tional Assembly. Elections would be on the 
basis of single-member constituencies. De- 
tailed constitutional proposals are set out at 
Annex A. The proposals should not necessar- 
ily be taken as excluding alternative pos- 
sibilities in certain areas which do not go to 
the heart of the Constitution: e.g. provision 
is made for an executive President with a 
Vice-President, but there might instead be a 
constitutional President and a Prime Minis- 
ter, in which case many of the powers which 
it is proposed to vest in the President would 
be vested in the Prime Minister or would be 
exercised by the President on the advice of 
the Prime Minister. 

7. Discrimination would be forbidden by a 
Bill of Rights protecting the rights of indi- 
viduals. As described above (para. 3(a) (2) ), 
this Bill of Rights would be entrenched in 
the Constitution and would be justiciable so 
that aggrieved individuals could enforce 
their rights through the courts. The Bill of 
Rights would permit the Government of 



October 3, 1977 



425 



Zimbabwe to introduce measures of land re- 
form while guaranteeing the right to private 
property. The Constitution would also estab- 
lish an independent judiciary and an inde- 
pendent Public Service Commission to ensure 
an efficient and nonpolitical civil service. 

8. The Government of Zimbabwe would 
inherit the assets and debts of the Govern- 
ment of Southern Rhodesia and would take 
over past and present pensions obligations in 
the public sector, the rights of the pension- 
ers being guaranteed by the Constitution. 
The Constitution would contain the basic 
provisions regulating Zimbabwe citizenship 
and these would be entrenched. The ques- 
tion whether there should be any restric- 
tions on the possession of dual citizenship 
and. if so, whether there should be an ex- 
tended period during which the choice would 
have to be made would be a matter for fur- 
ther discussion with the parties. 2 

9. The Commonwealth Governments in 
London expressed the unanimous hope that 
Zimbabwe would soon become a member of 
the Commonwealth. The British Government 
will do everything to facilitate this. 

The Transition 

10. It is a basic premise of the British and 
United States Governments that the present 
illegal regime will surrender power so that 
the transitional administration may be in- 
stalled peacefully. The two Governments 
will take such steps as seem to them appro- 
priate to secure the transfer of power by 
Mr. [Ian] Smith (or his successor) on a day 
to be agreed. 

11. The British Government will place be- 
fore the Security Council their proposal for 
the Independence Constitution (Annex A) 
[see p. 427] and also their proposal for the 
administration of the territory of Rhodesia 
during the transition period leading up to 
independence. The latter will comprise the 
following elements: 

(a) The appointment by the British Gov- 



2 Any citizen of the United Kingdom and Colonies 
who surrenders his citizenship in order to retain or ac- 
quire the citizenship of another member of the Com- 
monwealth is entitled to regain United Kingdom citi- 
zenship subsequently under the British Nationality Act 
1964 [footnote in original]. 



ernment, either under existing statutory 
powers or under new powers enacted for the 
purpose, of a Resident Commissioner and a 
Deputy. The role of the Resident Commis- 
sioner will be to administer the country, to 
organize and conduct the general election 
which, within a period not exceeding six 
months, will lead to independence for Zim- 
babwe, and to take command, as 
Commander-in-Chief, of all armed forces in 
Rhodesia, apart from the United Nations 
Zimbabwe Force (see below). 

(b) The appointment by the Secretary- 
General of the United Nations, on the au- 
thority of the Security Council, of a Special 
Representative whose role will be to work 
with the Resident Commissioner and to ob- 
serve that the administration of the country 
and the organisation and conduct of the elec- 
tions are fair and impartial. 

(c) The establishment by resolution of the 
Security Council of a United Nations Zim- 
babwe Force whose role may include: 

(1) the supervision of the cease-fire (see 
below); 

(2) support for the civil power; 

(3) liaison with the existing Rhodesian 
armed forces and with the forces of the Lib- 
eration Armies. 

The Secretary-General will be invited to 
appoint a representative to enter into dis- 
cussions, before the transition period, with 
the British Resident Commissioner desig- 
nate and with all the parties with a view to 
establishing in detail the respective roles of 
all the forces in Rhodesia. 

(d) The primary responsibility for the 
maintenance of law and order during the 
transition period will lie with the police 
forces. They will be under the command of a 
Commissioner of Police who will be ap- 
pointed by and responsible to the Resident 
Commissioner. The Special Representative 
of the Secretary-General of the United Na- 
tions may appoint liaison officers to the 
police forces. 

(e) The formation, as soon as possible 
after the establishment of the transitional 
administration, of a new Zimbabwe National 
Army which will in due course replace all 
existing armed forces in Rhodesia and will 



426 



Department of State Bulletin 



be the army of the future independent State 
of Zimbabwe. 

(f) The establishment by the Resident 
Commissioner of an electoral and boundary 
commission, with the role of carrying out 
the registration of voters, the delimitation 
of constituencies and the holding of a gen- 
eral election for the purposes of the Inde- 
pendence Constitution. 

On the agreed day on which power is 
transferred to the transitional administra- 
tion (para. 10 above), a cease-fire will come 
into effect within Rhodesia and measures 
will be taken to lift sanctions. 

12. An outline of the Transitional Con- 
stitution is at Annex B [see p. 433]. 

The Zimbabwe Development Fund 

13. The Zimbabwe Development Fund, 
jointly sponsored by the British and United 
States Governments, will have as a target a 
minimum approaching US$1,000 million and 
a maximum rather less than US$1,500 mil- 
lion to which Governments in many parts of 
the world will be asked to contribute. Its 
purpose will be to provide funds for the eco- 
nomic stability and development of an inde- 
pendent Zimbabwe through assistance to 
various sectors and programmes such as 
rural development, education, health, social 
and economic infrastructure, and resettle- 
ment and training schemes for Africans, in- 
cluding those affected by the present con- 
flict. The operations of the Fund would help 
to ensure that the obligations of the Zim- 
babwe Government under the settlement 
will not inhibit economic development in 
Zimbabwe for lack of foreign exchange and 
would thereby also help to reassure those 
who might fear that the new Government 
might be unable to carry out these obliga- 
tions. The establishment and continued op- 
eration of the Fund are predicated upon the 
acceptance and implementation of the terms 
of the settlement as a whole. A more de- 
tailed account of the proposed Fund is at 
Annex C [see p. 437]. 

Conclusion 

14. The British and United States Gov- 
ernments believe that the above proposals 



provide for all the citizens of the independ- 
ent Zimbabwe security, but not privilege, 
under the rule of law, equal political rights 
without discrimination, and the right to be 
governed by a government of their own 
choice. They also believe that the proposed 
arrangements for the transfer of power are 
calculated to ensure a quick, orderly and 
peaceful transition to independence. They 
have agreed to use their joint influence to 
the full to put the proposals into effect. But 
a lasting settlement cannot be imposed from 
outside: it is the people of Zimbabwe who 
must achieve their own independence. These 
proposals offer them a way. The two 
Governments urge them to seize the 
opportunity. 



ANNEX A 
Independence Constitution 

Status of Zimbabwe 

1. On independence Southern Rhodesia 
will become legally known as Zimbabwe. 
The Constitution will provide that Zim- 
babwe will be a sovereign Republic with the 
Constitution as its supreme law. 

The Head of State 

2. (a) There will be a President of the Re- 
public. Candidates for President will have to 
be citizens of Zimbabwe and will be subject 
to the same qualifications and disqualifica- 
tions as candidates for election to the Na- 
tional Assembly. 

(b) Elections to the office of President will 
take place at the same time as general elec- 
tions to the National Assembly and the Con- 
stitution will provide that the successful 
presidential candidate will be the one who 
has been endorsed by at least half of the 
successful candidates for election as Elected 
Members of the National Assembly. 

(c) A President will usually hold office 
until a new President is elected (or he him- 
self is re-elected) at the next general elec- 
tion to the National Assembly. However, 
there will be provision for his removal from 
office for physical or mental incapacity or 
because of his violation of the Constitution 



October 3, 1977 



427 



or other gross misconduct. Such removal 
will take place if (but only if) a recommenda- 
tion to that effect is made by a judicial 
tribunal appointed on the initiative of the 
National Assembly: the Constitution will 
prescribe the procedure to be followed. 

(d) When the President's office has be- 
come vacant in the above way or because of 
death or resignation, the Vice-President (see 
paragraph 3(b) below) will succeed to the of- 
fice. The Vice-President will also discharge 
the functions of the office of President dur- 
ing the latter's absence from the country or 
during any temporary incapacity. 

(e) The President's emoluments, which 
will be determined by Parliament, will be 
charged on the Consolidated Fund and may 
not be reduced during his tenure of office. 
The Constitution will also provide for the 
President's personal staff. 

(f) The President will be immune from suit 
or legal process during his tenure of office. 

The Executive 

3. (a) The executive powers of the Repub- 
lic will be vested in the President who will 
discharge them, subject to the Constitution, 
either directly or through officers subordi- 
nate to him. 

(b) The President will appoint a Cabinet, 
consisting of a Vice-President and a limited 
number of other Ministers, from among the 
Members of the National Assembly. The 
President will himself preside over the 
Cabinet. The Vice-President and other 
Ministers will hold their offices at the Presi- 
dent's pleasure. 

(c) Each department of government will 
be in the charge of a Minister (though the 
President may himself take charge of one or 
more departments) and the Cabinet will be 
collectively responsible to the National As- 
sembly for the government of the Republic. 

(d) The Vice-President will be the Gov- 
ernment leader in the National Assembly 
but the President himself will have the right 
to participate in its proceedings though not 
to vote. 

(e) The President may also appoint a lim- 
ited number of junior Ministers from among 
the Members of the National Assembly- 



(f) The Constitution will establish the of- 
fices of the Secretary to the Cabinet and 
Permanent Secretaries of departments. All 
these will be civil service officers but there 
will be special provisions (see paragraph 7 
(e) (v) below) regulating the appointment 
and tenure of the holders. 

(g) The office of Attorney-General, who 
will be the principal legal adviser of the 
Government of the Republic, will be held by 
a Minister. 

(h) There will be a separate office of Di- 
rector of Public Prosecutions which will be 
an office in the civil service. The Director of 
Public Prosecutions will have final control 
over the initiation, conduct and discon- 
tinuance of prosecutions and, in the exercise 
of that power, will not be subject to direc- 
tion or control by any other person or au- 
thority. However, the Attorney-General will 
be entitled to bring to his attention any con- 
siderations of public interest which may be 
relevant to any particular case. The ap- 
pointment, tenure and terms of office of the 
Director of Public Prosecutions will be spe- 
cially provided for (see paragraph 7 (e) (vi) 
below). 

(i) The Prerogative of Mercy will be vest- 
ed in the President. There will be an Ad- 
visory Committee on Prerogative of Mercy 
which the President will be obliged to con- 
sult in all capital cases and which he will be 
able to consult in any other case. But he will 
not be bound to act in accordance with its 
advice. 

(j) The President will be the Supreme 
Commander of the armed forces of 
Zimbabwe. 

Parliament 

4. (a) The Parliament of Zimbabwe will 
consist of the President and a single- 
Chamber National Assembly. 

(b) The National Assembly will consist of 
[100] 3 Elected Members (but see sub- 
paragraph (f) below). 

(c) The Elected Members will be returned, 
in elections conducted on the "simple major- 



3 The precise number of seats remains to be decided 
in negotiation with the parties [footnote in original]. 



428 



Department of State Bulletin 



ity" principle, by single-Member constituen- 
cies containing as nearly as possible equal 
numbers of registered voters. 

(d) The delimitation of constituencies will 
be carried out at prescribed intervals by an 
independent Electoral Commission which 
will also supervise the registration of voters 
and the conduct of elections. 

(e) The franchise for the election of the 
Elected Members will be based on universal 
adult suffrage, i.e. all Zimbabwe citizens of 
the age of 21 and upwards who have been 
registered as voters and who are not specif- 
ically disqualified (e.g. on grounds of insan- 
ity, criminal conviction, etc). 

(f) The Constitution will also provide for 
[20] 4 Specially Elected Members who will 
be elected by the Elected Members of the 
Assembly after each general election. The 
purpose of providing for the Specially 
Elected Members will be to give adequate 
representation to minority communities. The 
exact way in which the Constitution should 
achieve this will be a matter for further dis- 
cussion. After an initial period (the life of 
two Parliaments or eight years, whichever is 
the longer) Parliament may abolish the seats 
of the Specially Elected Members or alter 
the arrangements which are designed to se- 
cure minority representation. Such a provi- 
sion may be made by a simple Act of Parlia- 
ment requiring no special majority and no 
special procedure and it will take effect at 
the next succeeding dissolution of Parlia- 
ment. But no such change may be made dur- 
ing the initial period and the relevant provi- 
sions of the Constitution will, during that 
period, be unamendable. 

(g) All Members of the National Assembly 
must be citizens of Zimbabwe who are them- 
selves qualified as voters and are not subject 
to one of the specified disqualifications (e.g. 
insanity, criminal conviction, holding public- 
office, etc.). 

(h) Subject always to the provisions of the 
Constitution, Parliament will have full 
power to make laws for Zimbabwe. 



4 The precise number of Specially Elected Mem- 
bers will be one-fifth of the number of ordinary 
Elected Members (see footnote 3) paragraph 4 (b) 
above) [footnote in original]. 



(i) Parliament's power to make laws will 
be exercised by bills passed by the National 
Assembly and assented to by the President. 

(j) When a bill is presented to the Presi- 
dent for his assent, he will be free, acting in 
his discretion, to give or withhold his as- 
sent. But if he withholds his assent, the bill 
will be returned to the National Assembly 
which may, within six months, present it 
once more for the President's assent. If a 
bill is so re-presented, the President must 
then either give his assent or dissolve 
Parliament. 

(k) The President may summon, prorogue 
or dissolve Parliament at any time but there 
must be a session of Parliament at least once 
in every year and not more than six months 
may elapse between sessions. There must be 
a general election within two months of any 
dissolution. If Parliament has not been ear- 
lier dissolved by the President, it will stand 
dissolved automatically at the end of five 
years after a general election. 

(1) If the National Assembly at any time 
passes a vote of no confidence in the Gov- 
ernment, the President must either dissolve 
Parliament or resign his own office. 

Fundamental rights 

5. (a) The Constitution will contain provi- 
sions ("the Bill of Rights"), on the lines of 
those in the Constitutions of other recently 
independent Commonwealth countries, pro- 
tecting fundamental human rights and free- 
doms. These will guarantee: 

(i) the right to life; 

(ii) the right to liberty of the person; 

(iii) protection from slavery and forced 
labour; 

(iv) protection from inhuman treatment; 

(v) protection from deprivation of prop- 
erty: this will confer protection from ex- 
propriation of property except on specified 
grounds of public interest and even then 
only on condition that there is prompt pay- 
ment of adequate compensation (the amount 
of which, if not agreed, can be determined 
by an independent tribunal) and that the 
compensation may be remitted abroad within 
a reasonable period. It will be expressly 



October 3, 1977 



429 



provided that, where undeveloped agricul- 
tural land is compulsorily acquired for the 
purpose of encouraging its development, the 
compensation payable to the former owner 
may disregard any value which might attach 
to the land by reason of its potential de- 
velopment and should take into account only 
the original purchase price and any other ac- 
tual expenditure on it, e.g. the cost of phys- 
ical improvements; 

(vi) the right to privacy of home and 
other property; 

(vii) the right to a fair trial in civil and 
criminal proceedings; 

(viii) freedom of conscience; 

(ix) freedom of expression; 

(x) the right of individuals, groups or 
communities to establish and maintain 
schools at their own expense, provided that 
such schools are not operated on a dis- 
criminatory basis; 

(xi) freedom of association (especially to 
form and operate trade unions); 

(xii) freedom of movement (including 
the freedom to leave Zimbabwe and the im- 
munity of Zimbabwe citizens from expulsion 
from Zimbabwe); 

(xiii) freedom from discrimination. 

(b) These fundamental rights will be jus- 
ticiable, i.e. any person who asserts that 
they have been, are being or are likely to be 
infringed in his case will be able to apply to 
the High Court for that question to be de- 
termined and, when appropriate, for 
redress. 

(c) It follows from the fact that the Con- 
stitution is to be the supreme law of Zim- 
babwe (see paragraph 1 above) that any law 
which conflicts with the Bill of Rights will, 
to the extent of that conflict, be void and 
that any executive action that so conflicts 
will, to the same extent, be unlawful. This 
applies in particular to laws or practices that 
are discriminatory. Most of the discrimina- 
tory laws and practices now in operation will 
in fact have been terminated by the transi- 
tional administration before independence 
(see paragraph 9 (a) of Annex B) but there 
may be a few which are still in existence 
when the independent Government of Zim- 
babwe takes over. It will presumably be the 



intention of that Government to terminate 
them as soon as possible thereafter but in 
some cases it may still not be possible to do 
so at once since the first Government of 
Zimbabwe may need a little further time in 
which to work out the new laws or new ar- 
rangements to take their place. To this lim- 
ited extent, therefore, the Constitution will 
permit the Government of Zimbabwe to con- 
tinue these existing laws and practices, not- 
withstanding the Bill of Rights, for such 
time as it takes to replace them but in any 
case for no longer than two years from the 
date of independence. No new discrimination 
will, of course, be lawful and the Constitu- 
tion will expressly provide that, if any exist- 
ing law or practice is amended or replaced 
during that period, no greater degree of dis- 
crimination may be introduced than was law- 
ful before that amendment or replacement. 

(d) The Constitution will permit certain of 
the provisions of the Bill of Rights to be 
derogated from during periods of public 
emergency. For this purpose, a public emer- 
gency will be deemed to exist when it has 
been proclaimed by the President but any 
such proclamation must either have received 
prior approval by a resolution supported by 
two-thirds of all the Members of the Na- 
tional Assembly or must be ratified by such 
a resolution within a week after it was 
made. The proclamation will lapse within a 
further three months unless the National 
Assembly's approval has in the meantime 
been renewed by a similar majority. 

The Judicature 

6. (a) The Constitution will establish a 
High Court, which will be divided into an 
Appellate Division and a General Division, 
and there will also be such subordinate 
courts as Parliament may from time to time 
provide for. 

(b) The judges of the High Court will be a 
Chief Justice and such other judges (either 
Justices of Appeal or Puisne Judges) as Par- 
liament may prescribe. 

(c) The Chief Justice will be appointed by 
the President, acting in his discretion. 

(d) The other judges of the High Court 
will be appointed by the President in ac- 



430 



Department of State Bulletin 



cordance with the advice of the Judicial 
Service Commission (see sub-paragraph (h) 
below). 

(e) The Chief Justice and other judges of 
the High Court will not be removable from 
office (until retiring age) except on grounds 
of physical or mental incapacity or miscon- 
duct, as determined by a judicial tribunal in 
accordance with a procedure which the Con- 
stitution will prescribe. 

(f) The terms of service of the judges of 
the High Court (including their emoluments, 
which will be charged on the Consolidated 
Fund) may not be altered to their disadvan- 
tage during their tenure of office. 

(g) The power to appoint, exercise disci- 
plinary control over, and remove from office 
the judges of the subordinate courts and 
certain other officers connected with the 
High Court (e.g. Registrar) will vest in the 
Judicial Service Commission. 

(h) The Constitution will establish an in- 
dependent Judicial Service Commission, con- 
sisting of the Chief Justice, another judge of 
the High Court designated by the Chief Jus- 
tice, and a member of the Public Service 
Commission (see paragraph 7 below) desig- 
nated by the Chairman of that Commission. 

The Public Service 

7. (a) The Constitution will establish an 
independent Public Service Commission 
consisting of a Chairman and four other 
members. 

(b) The members of the Public Service 
Commission, who must not be (or have re- 
cently been) public officers or Members of 
the National Assembly or otherwise actively 
engaged in politics, will be appointed by the 
President for a fixed term and. will not be 
removable during that term except for phys- 
ical or mental incapacity or misconduct, as 
determined by a judicial tribunal in accord- 
ance with a procedure to be prescribed by 
the Constitution. 

(c) The terms of service of the members of 
the Commission (including their emolu- 
ments, which will be charged on Consoli- 
dated Fund) may not be altered to their 
disadvantage during their tenure of office. 

(d) Subject to certain specified exceptions, 



the power to appoint persons to hold or act 
in public offices, to exercise disciplinary con- 
trol over persons so appointed and to re- 
move them from office will vest in the Public- 
Service Commission. (The term "public of- 
fices" includes all civil service offices and of- 
fices in the police force but not offices in the 
armed forces.) 

(e) The specified exceptions are as follows: 

(i) offices on the President's personal 
staff: these will be within the President's 
personal control, though he may arrange 
with the Public Service Commission for reg- 
ular public officers to be seconded to his 
staff; 

(ii) offices of the judges of the High 
Court and other offices within the jurisdic- 
tion of the Judicial Service Commission; 

(iii) officers on the staff of the National 
Assembly: before exercising the relevant 
powers in the case of these officers, the Pub- 
lic Service Commission will need to obtain 
the concurrence of the Speaker of the 
Assembly; 

(iv) offices in the police force: the rel- 
evant powers in the case of the Commis- 
sioner of Police himself will be vested in the 
President, acting after consultation with the 
Public Service Commission; in the case of 
other members of the police force they will 
be vested in the Commissioner of Police or 
in such officers subordinate to him as may 
be provided for by any law in that behalf or, 
subject to any such law, as he may delegate 
them to; 

(v) the offices of Secretary to the 
Cabinet, Permanent Secretaries and Zim- 
babwe Ambassadors abroad: the relevant 
powers will be vested in the President, act- 
ing after consultation with the Public Serv- 
ice Commission; 

(vi) the office of Director of Public 
Prosecutions: the power to appoint a person 
to this office will be vested in the President, 
acting after consultation with the Public 
Service Commission and the Judicial Service 
Commission; but a Director of Public Prose- 
cutions will not be removable from office 
(until retiring age) except for physical or 
mental incapacity or misconduct, as deter- 
mined by a judicial tribunal in accordance 



October 3, 1977 



431 



with a procedure to be prescribed by the 
Constitution; and his terms of service (in- 
cluding his emoluments, which will be 
charged on the Consolidated Fund) may not 
be altered to his disadvantage during his 
tenure of office; 

(vii) The office of Auditor-General: the 
power to appoint a person to this office will 
be vested in the President, acting after con- 
sultation with the Public Service Commis- 
sion: once appointed, the Auditor-General 
will be protected in the same way as the Di- 
rector of Public Prosecutions. 

(f) The Constitution will protect the pen- 
sions of all public officers (including past of- 
ficers) by: 

(i) charging them on the Consolidated 
Fund; 

(ii) a provision which will ensure that 
the pensions of officers who are compulsorily 
retired to facilitate the reconstruction of the 
public service can be freely remitted abroad; 
and 

(iii) preventing the law regulating the 
payment of a public officer's pension from 
being altered to his disadvantage after the 
commencement of his service. 

Finance 

8. (a) The Constitution will establish a 
Consolidated Fund into which all public rev- 
enues (not otherwise payable by law into 
some other public fund) will be paid. 

(b) The Constitution will require annual 
estimates of expenditure to be laid by the 
Government before the National Assembly 
for its approval and will provide for the pas- 
sage by Parliament of Appropriation Acts to 
authorise such expenditure. No monies will 
be allowed to be withdrawn from the Con- 
solidated Fund or any other public fund ex- 
cept under the authority of such an appro- 
priation or when they are charged by the 
Constitution or some other law on that fund. 

(c) The Constitution will provide for a 
Contingencies Fund and for other 
procedures for authorising unforeseen 
expenditure. 

(d) The Constitution will establish the of- 
fice of Auditor-General whose duty it will be 
to monitor the above requirements, to audit 



the accounts of Government and other public 
authorities and to report on these matters 
direct to the National Assembly. 

Citizenship 

9. (a) The Constitution will establish Zim- 
babwe citizenship and will contain the basic 
provisions relating to it. Parliament will be 
authorised to make supplementary legisla- 
tion regulating the acquisition and loss of 
Zimbabwe citizenship within the limits per- 
mitted by the Constitution. 

(b) All persons who are citizens of South- 
ern Rhodesia (whether by birth, descent, 
adoption, naturalisation or registration) im- 
mediately before independence will become 
Zimbabwe citizens automatically on 
independence. 

(c) All persons who have the right, im- 
mediately before independence, to apply to 
become citizens of Southern Rhodesia will 
have a similar right, within a specified 
period after independence, to apply to be- 
come Zimbabwe citizens. 

(d) All persons born in Zimbabwe after in- 
dependence will be Zimbabwe citizens by 
birth. 

(e) Any person born outside Zimbabwe 
after independence whose father is a citizen 
of Zimbabwe by virtue of his birth in Zim- 
babwe (or in Southern Rhodesia) will be a 
Zimbabwe citizen by descent. 

(f) A woman who is married to a citizen of 
Zimbabwe after independence will have the 
right to become a citizen of Zimbabwe 
herself. 

(g) Whether the Constitution should per- 
mit dual citizenship (with or without restric- 
tions) is a matter for further discussion. If it 
is not permitted, a citizen of Zimbabwe who 
acquires the citizenship of another country 
by voluntary act (other than marriage) will 
automatically lose his Zimbabwe citizenship, 
while a citizen of Zimbabwe who involuntar- 
ily acquires the citizenship of another coun- 
try (e.g. by birth) must either renounce that 
other citizenship (or, if that is not possible, 
make a prescribed declaration) within, say, 
five years of the relevant event (or of attain- 
ing the age of 21 years) or lose his citizen- 
ship of Zimbabwe. Similarly, a person who, 



432 



Department of State Bulletin 



at independence, automatically becomes a 
citizen of Zimbabwe and is also a citizen of 
another country will have to renounce his 
other citizenship (or make the prescribed 
declaration) within five years of independ- 
ence, failing which he will lose his Zimbabwe 
citizenship, and a person applying for Zim- 
babwe citizenship will have to renounce his 
existing citizenship (or make the prescribed 
declaration). 

(h) Parliament will be empowered to pro- 
vide for additional grounds upon which per- 
sons may acquire Zimbabwe citizenship or 
lose that citizenship (but may not take away 
the citizenship of persons who have it by 
birth or descent or who have automatically 
acquired it at independence). 

Amendment of Constitution 

10. (a) All provisions of the Constitution 
will be amendable by Act of the Zimbabwe 
Parliament. But the Constitution will pre- 
scribe the procedure to be followed for ef- 
fecting such an amendment. These will vary 
according to the extent to which the provi- 
sions to be amended go to the basic struc- 
ture of the Constitution or are especially 
sensitive. 

(b) Some provisions, e.g. those prescribing 
the maximum number of Ministers, will be 
amendable by simple Act of Parliament: no 
special majority and no special procedure 
will be required. 

(c) Most provisions will be amendable by 
an Act of Parliament which has been passed 
at its final reading in the National Assembly 
by a majority of two-thirds of all the Mem- 
bers of the Assembly. But a Bill for an Act 
to amend such a provision must also have 
been published in the Official Gazette at 
least thirty days before first reading and a 
period of at least three months must elapse 
between first reading and final reading. 

(d) A limited number of provisions {e.g. 
those dealing with citizenship, with funda- 
mental rights and with the judicature and, 
of course, those prescribing the procedure 
for constitutional amendment) will be 
amendable only by a bill which has satisfied 
the requirements in (c) above in two succes- 
sive sessions, in between which Parliament 



has been dissolved and a general election 
has taken place. 

(e) In addition, there will be a very few 
provisions which will not be amendable at all 
for a specified limited period after independ- 
ence. These will be the provisions dealing 
with fundamental rights, the provisions re- 
lating to the Specially Elected Members in 
the National Assembly and the provisions 
prescribing the procedure under (d) above. 
A bill to amend any of these provisions will 
not be capable of being introduced in the 
National Assembly until after the end of the 
specified period. In the case of the provi- 
sions dealing with fundamental rights this 
period will be the life of the first Parliament 
or four years from independence, whichever 
is the longer: in the case of the other provi- 
sions the specified period will be the life of 
the first two Parliaments or eight years 
from independence, whichever is the longer. 



ANNEX B 

Transitional Constitution 
and Related Legal Provisions 

1. The Transitional Constitution will be 
contained in an Order in Council made under 
an Act of the United Kingdom Parliament. 
It will come into operation on a day to be 
appointed by the British Foreign and Com- 
monwealth Secretary, and on that day 
Southern Rhodesia will return to legality. 

The Resident Connnissioner 

2. The Transitional Constitution will es- 
tablish the office of Resident Commissioner. 
The Resident Commissioner will be the rep- 
resentative of the Crown in Southern 
Rhodesia and in him will be vested responsi- 
bility for all executive and legislative func- 
tions of the Government of Southern 
Rhodesia. In exercising his functions, the 
Resident Commissioner will at all times be 
subject to any instructions that he may be 
given by the United Kingdom Government 
except so far as the Constitution otherwise 
expressly provides. The holder of the office 
of Resident Commissioner will be appointed 
and removable bv the British Government. 



October 3, 1977 



433 



The Constitution will also establish the of- 
fice of Deputy Resident Commissioner, the 
holder of which will similarly be appointed 
and removable by the British Government. 
The Deputy Resident Commissioner will 
generally assist the Resident Commissioner 
in his duties and will ordinarily act as Resi- 
dent Commissioner if the latter has to be 
absent from Southern Rhodesia or is tem- 
porarily incapacitated. The Constitution will 
also provide for the emoluments of the Resi- 
dent Commissioner and the Deputy Resident 
Commissioner and for the Resident Commis- 
sioner's staff. 

Legislative powers 

3. There will be no separate Legislative 
Assembly or other similar body during the 
transition period and, in its place, the Resi- 
dent Commissioner will himself be the legis- 
lature. He will have full power to make laws 
for the peace, order and good government of 
Southern Rhodesia. This power will be exer- 
cisable by Ordinance signed by the Resident 
Commissioner and published in the Official 
Gazette. All Ordinances made by the Resi- 
dent Commissioner (and all subordinate 
legislation made under them or under any 
existing law) will be subject to the provi- 
sions of any applicable Act of the British 
Parliament or any Order in Council or 
other instrument made under such an Act 
and, in particular, will be subject to the 
provisions of the Transitional Constitution 
Order itself, especially the provisions of the 
Bill of Rights which will form part of the 
Transitional Constitution (see paragraph 8 
below). 

Executive powers 

4. The Transitional Constitution will pro- 
vide that the executive authority of South- 
ern Rhodesia will be exercisable by the 
Resident Commissioner, as the representa- 
tive of the Crown, either directly or through 
officers or authorities subordinate to him. 
Since there will be no Ministers during the 
transition period, the Resident Commis- 
sioner will exercise all powers that are cur- 
rently vested by any law in a Minister and 
he will, either directly or through officers 



subordinate to him, exercise supervision and 
control over all Ministries and departments 
of government. The Constitution will specif- 
ically give him power to give binding direc- 
tions to all public officers and authorities. 

5. The Resident Commissioner will be the 
Commander-in-Chief of all armed forces 
which may be lawfully operating in Southern 
Rhodesia during the transition period and, 
through the Commissioner of Police, he will 
also have ultimate command of the police 
forces. (References in this paragraph to 
armed forces do not include the United Na- 
tions Zimbabwe Force.) All members of all 
armed and police forces will be required to 
comply with the orders or directions given 
by the Resident Commissioner directly or 
through their superior officers. The Resi- 
dent Commissioner will be empowered to 
require any member of any such force to 
swear an oath of allegiance to the Crown 
and an oath to uphold the Constitution and 
obey the laws of Southern Rhodesia. All 
powers relating to appointments in, disci- 
plinary control over, and removal from office 
in any of these forces will be vested in the 
Resident Commissioner. Subject to any pro- 
vision that he may make, they will be exer- 
cisable by the like authorities and in the like 
manner, as nearly as may be, as they were 
immediately before the coming into opera- 
tion of the Transitional Constitution but the 
exercise by those authorities of any such 
power will be subject to any general or spe- 
cial direction that the Resident Commis- 
sioner may give. 

6. The Resident Commissioner will be 
able, if he considers it desirable, to set up 
one or more Advisory Councils or Commit- 
tees to assist him in the performance of any 
specific function or of his functions gener- 
ally. But he will be free to act without hav- 
ing consulted any such body or to act other- 
wise than in accordance with its advice if he 
does consult it. 

Bill of Rights 

7. The Transitional Constitution will con- 
tain a Bill of Rights (i.e. provisions guaran- 
teeing fundamental human rights) on the 
lines of the one to be included in the Inde- 



434 



Department of State Bulletin 



pendence Constitution but adapted to take 
account of the fact that, during the transi- 
tion period, the Resident Commissioner will 
take the place both of an elected legislature 
and of a Ministerial government. For a more 
detailed description of the rights to be 
guaranteed, see paragraph 5 (a) of Annex A. 

8. Every law (whether an existing law that 
is continued in force during the transition 
period or a law made by the Resident Com- 
missioner) will have to be read subject to 
the Bill of Rights and, if there is any con- 
flict, will be invalid to the extent of the con- 
flict. The Bill of Rights will be justiciable, 
i.e. any person who asserts that his rights 
under it have been, are being or are likely to 
be infringed by any law or by any govern- 
ment action will be able to apply to the High 
Court for that question to be determined 
and, when appropriate, for redress. 

9. However, as in the case of the Bill of 
Rights in the Independence Constitution, 
there are two necessary qualifications to the 
position as described above: 

(a) Some existing laws or administrative 
practices will be contrary to the Bill of 
Rights because they are discriminatory. It 
will be the intention of the Transitional Ad- 
ministration to abolish all discrimination, 
whether by legislation or by administrative 
practice, at as early a date as possible. 
However, it may be that some existing dis- 
criminatory laws or administrative practices 
cannot simply be invalidated without provid- 
ing a new system to take their place; and 
that such new system, or systems, will take 
some time to work out. Indeed, in some 
cases it may be thought right that the task 
of creating the new system should fall to the 
Government of Zimbabwe and not be under- 
taken by the Transitional Administration. In 
these limited cases, therefore, the Transi- 
tional Administration (and subsequently the 
Government of Zimbabwe: see paragraph 5 
(c) of Annex A) will be permitted to continue 
these existing laws and practices, not- 
withstanding the Bill of Rights, for such 
.time as it takes to replace them but in any 
case for no longer than two years from the 
date of independence. 



(b) The Transitional Constitution (like the 
Independence Constitution) will permit cer- 
tain of the provisions of the Bill of Rights to 
be derogated from during periods of public- 
emergency. For this purpose, a public emer- 
gency will be recognised as in existence 
whenever it has been proclaimed by the 
Resident Commissioner and until such time 
as he withdraws the proclamation. As a pre- 
cautionary measure, a number of the emer- 
gency powers now operating in Southern 
Rhodesia will need to be available to the 
Resident Commissioner immediately upon 
the commencement of the Transitional Con- 
stitution, which will therefore deem a proc- 
lamation of emergency to be in force as from 
that date and until the Resident Commis- 
sioner himself otherwise provides. But it is 
the intention of the British Government that 
this period of emergency should be brought 
to an end as soon as it is prudent to do so 
and that, in any event, the Resident Com- 
missioner should take very early steps to re- 
lease existing detainees and also to release 
those undergoing sentences of imprisonment 
for offences for which, if proceedings have 
not already taken place, criminal liability 
would be extinguished by the amnesty (see 
paragraph 18 (c) below). 

Judicature 

10. The Transitional Constitution will es- 
tablish a High Court of Southern Rhodesia, 
staffed by a Chief Justice and other judges 
and organised into a General Division and an 
Appellate Division substantially as at pres- 
ent. It will also recognize such subordinate 
courts as are at present constituted under 
existing law. 

11. The Transitional Constitution will pro- 
vide that the judges of the High Court and 
the subordinate courts will be the persons 
who are serving in those respective 
capacities immediately before it comes into 
operation. (The office of Chief Justice, how- 
ever, will be vacated by the present incum- 
bent before the date of the return to legality 
and will not be filled until after that date.) 
Any new judge of the High Court will be 
appointed by the Resident Commissioner but 
a judge of the High Court, once appointed 



October 3, 1977 



435 



(and this includes such a judge who has been 
continued in office at the commencement of 
the Transitional Constitution), may not be 
removed until he reaches retiring age except 
for proved misconduct or incapacity, estab- 
lished by a judicial tribunal appointed by the 
Resident Commissioner. Nor can his terms 
of service be altered to his disadvantage 
during his tenure of office. 

12. All powers relating to the appoint- 
ment, disciplinary control and removal from 
office of the subordinate judiciary and the 
more senior staff of the High Court other 
than the judges {e.g. the Registrar) will be 
vested in the Resident Commissioner. Then- 
exercise, subject to the overall control of the 
Resident Commissioner, by other persons 
and authorities in accordance with existing 
law will be regulated in the same way as for 
other offices in the public service (see para- 
graph 14 below). 

13. During the transition period, appeals 
will lie from the High Court to the Judicial 
Committee of the Privy Council but only by 
leave of the High Court or by special leave 
of the Judicial Committee. 

The Public Service 

14. All powers concerning appointments to 
offices in the public service, disciplinary 
control over persons holding or acting in 
such offices or their removal from office will 
be vested in the Resident Commissioner. 
Subject to any provision that he may make, 
they will be' exercisable by the like au- 
thorities and in the like manner; as nearly as 
may be, as they were immediately before 
the coming into operation of the Transitional 
Constitution but the exercise by those au- 
thorities of any such power will be subject 
to any general or special directions which 
the Resident Commissioner may give. The 
foregoing is without prejudice to the special 
provisions relating to the judges of the High 
Court (see paragraph 11 above). 

15. The Transitional Constitution will pro- 
vide that all persons holding or acting in 
public offices immediately before the coming 
into operation of the Constitution will con- 
tinue to hold or act in the like offices under 
the Transitional Constitution. (There will, 

436 



however, be a few offices, such as that of 
Secretary to the Cabinet, which will be va- 
cated by the present incumbents before the 
date of the return to legality and will not be 
filled until after that date.) The Resident 
Commissioner will be empowered to require 
any person holding or acting in a public of- 
fice to swear an oath of allegiance to the 
Crown and an oath to uphold the Constitu- 
tion and observe the laws of Southern 
Rhodesia. 

16. The pensions of all public officers (in- 
cluding past officers) will be guaranteed by 
the Transitional Constitution by: 

(i) being charged on the Consolidated 

Fund; 

(ii) a provision which will ensure that 
the pensions of officers who are compulsorily 
retired to facilitate the reconstruction of the 
public service can be freely remitted abroad; 

and 

(iii) a provision which will prevent the 
law regulating a public officer's pension from 
being altered to his disadvantage after the 
commencement of his service. 

Finance 

17. The Transitional Constitution will con- 
tain provisions adapting the existing proce- 
dure for authorising the expenditure of 
public funds (e.g. annual Appropriation 

Acts). 

M iscella neons p ro v is io n s 

18. In addition to the above matters which 
directly relate to the constitutional structure 
of the* government of Southern Rhodesia 
during the transition period, there will be a 
number of other matters, necessarily conse- 
quential upon or incidental to the restoration 
of legality, which will have to be regulated 
by the Transitional Constitution Order. The 
relevant provisions will include the 
following: 

(a) Validation of existing laws and pre- 
vious transactions. So that Southern 
Rhodesia may return to legality with a coher- 
ent and workable legal and administrative 
system, there will be a general validation of 
all laws which were purported to have been 



Department of State Bulletin 



made during the period since 11 November 
1965. There will be an exception for speci- 
fied laws which would not be compatible 
with the restoration of legality, e.g. those 
relating to membership of the "Parliament" 
that functioned during that period. Simi- 
larly, transactions which have taken place 
since 11 November 1965 and which might 
otherwise be regarded as invalid merely be- 
cause they were carried out in reliance on 
any such law, or because (owing to the con- 
stitutional situation in Southern Rhodesia at 
the time) there was some defect in the au- 
thority by which they were performed or in 
the procedure employed or some other simi- 
lar defect, will be deemed to have been validly 
performed. 

(b) Adaptation of existing laws. A 
number of laws which will be in force on and 
after the day appointed for the coming into 
operation of the Transitional Constitution 
will be in terms which will not be literally 
applicable to the new constitutional ar- 
rangements. This will apply not only to laws 
made since 11 November 1965 which will 
have been validated as explained above but 
also to laws enacted by the competent legal 
authorities under the 1961 Constitution and, 
indeed, earlier. For example, references in 
laws to "the Minister" will no longer be ap- 
propriate. The reference will, during the 
transition period, have to be to "the Resi- 
dent Commissioner". There will therefore be 
provision for the adaptation of existing laws 
to make them conform with the new con- 
stitutional structure. 

(c) Amnesty. In order to bring to a close 
the unhappy chapter of the past 12 years 
and to open a new chapter which will be 
marked, it is hoped, by a spirit of reconcilia- 
tion and the desire of all Rhodesians to work 
together for the construction of a peaceful 
and prosperous Zimbabwe, it will be neces- 
sary to "wipe the slate clean" when legality 
is restored and to prevent punitive or re- 
criminatory action being taken thereafter in 
respect of acts arising out of the political 
situation which obtained during that period. 
In practice it will be necessary to extinguish 
both civil and criminal liability for such acts. 
This applies to the acts of both sides, that 
is, both those committed in furtherance of 



the rebellion and those committed in resist- 
ance to it. The Transitional Constitution 
Order will therefore contain a provision to 
this end which will prevent prosecutions 
being brought or civil actions being pursued 
in the courts of Southern Rhodesia in re- 
spect of such acts. In addition, it will be a 
priority task of the Resident Commissioner 
to review the cases of all persons undergo- 
ing imprisonment and to order the im- 
mediate release of those serving sentences 
for offences for which, if proceedings had 
not already taken place, criminal liability 
would be extinguished by this provision. 

(d) Rights and liabilities of the Govern- 
ment of Southern Rhodesia. The Transi- 
tional Constitution Order will make it clear, 
for the avoidance of doubt, that the Gov- 
ernment of Southern Rhodesia, as set up by 
that Order, is entitled to all the rights, and 
is subject to all the obligations, now apper- 
taining to the Government of Southern 
Rhodesia as set up by the 1961 Constitution. 
Furthermore, as a corollary of the provision 
explained above for the validation of exist- 
ing laws and of past transactions, it will also 
be expressly declared that the lawful Gov- 
ernment of Southern Rhodesia, as estab- 
lished by the Transitional Constitution, will 
succeed at the same time to the rights and 
assets (and, correspondingly, to the obliga- 
tions) in municipal law which would, im- 
mediately before the coming into operation 
of that Constitution, have been recognised 
by the courts then operating in Southern 
Rhodesia as belonging to "the Government 
of the Republic of Rhodesia". 



ANNEX C 

The Zimbabwe Development Fund 

1. A political settlement in Rhodesia, in- 
volving first a transitional administration 
and later an independent Government of 
Zimbabwe, would remove a source of acute 
conflict and help establish a climate condu- 
cive to economic development in central and 
southern Africa. A political settlement, 
however, will set in motion an economic 
transition which will be most effective if ac- 
companied by measures designed to realize 



October 3, 1977 



437 



the growth potential of the economy and 
rapidly improve opportunities for all the 
population of Zimbabwe. The responsibility 
for the necessary economic measures after 
independence will rest primarily with the 
new Government, but it is already evident, 
in spite of the sparse detail at present avail- 
able about the present state and future 
prospects of the economy, that substantial 
international economic assistance and exter- 
nal private investment will be needed. 

2. When a political settlement is achieved, 
the lifting of sanctions, combined with aid, 
will provide both Zimbabwe and its 
neighbours with new development pros- 
pects. Different trade and transport pat- 
terns will be established. African Zimbab- 
weans should have expanded access to 
better jobs in mining, industry, commerce 
and the public service. More balanced pat- 
terns of ownership for farms, houses and 
businesses will emerge. External assistance 
can help the people of Zimbabwe effect the 
social and economic changes required to take 
advantage of these new opportunities for a 
more prosperous and balanced economy. 

3. The ability of an independent Govern- 
ment of Zimbabwe to raise the living stand- 
ards of the poor majority depends not only 
on the development of the traditional sector 
but also on effective administration and a 
high level of output in the modern sector, 
which accounts for the greater part of 
Rhodesia's export earnings, internal rev- 
enues, domestic production of consumer 
goods, and wage employment of African 
Zimbabweans. It is, therefore, of the great- 
est importance to find ways to facilitate the 
economic transition while minimizing its dis- 
ruptive effect on the potential for economic 
growth. It is crucial that skilled workers and 
managerial personnel are encouraged to con- 
tinue to contribute to the welfare and pros- 
perity of the economy. 

4. The United Kingdom and the United 
States have, therefore, agreed to cooperate 
in helping to organize an international eco- 
nomic effort in support of a Rhodesian set- 
tlement. They propose the establishment of 
a Zimbabwe Development Fund. The pur- 
pose of this Fund would be to assist the new 
government to promote: 



(i) balanced economic and social de- 
velopment in Zimbabwe; 

(ii) rapid expansion of economic oppor- 
tunities for and skills of the African major- 
ity; 

(iii) basic economic security for all sec- 
tions of the population so that they might 
continue to contribute their skills and en- 
thusiasm to the development of the country. 

5. The Fund would respond to requests 
from the Zimbabwe Government to support 
specific proposals for development projects 
and programmes, for example, in agricultural 
and land reform, education and training, and 
social and economic infrastructure. Its ef- 
forts should encourage commercial capital 
flows, especially in extractive, processing, 
and manufacturing industries, supported as 
appropriate by national export credit and 
investment insurance agencies. The Fund 
should be prepared to provide balance of 
payments support during the period of eco- 
nomic transition, especially to enable the 
gradual return to normal external relations 
after the lifting of sanctions. The Fund could 
also provide support for, and take into ac- 
count the balance of payments implications 
of, programmes designed to encourage 
skilled labour and managerial personnel to 
contribute to Zimbabwe development and to 
effect a smooth transition to a more bal- 
anced pattern of access to ownership of 
farms, houses, and businesses. 

6. The Fund should be established as soon 
as possible after the establishment of a tran- 
sitional administration in Rhodesia. Even 
before it began to be funded to any consid- 
erable extent, the Fund could begin working 
with developmental institutions, either al- 
ready existing or to be established by the 
Zimbabwe Government. The Fund could as- 
sist both the transitional administration and 
the independent Government of Zimbabwe 
to plan development projects and pro- 
grammes consistent with the political 
changes which will have taken place without 
disruption of the economy. The Fund could, 
in the initial period, also co-ordinate bilat- 
eral development assistance, especially in 
the training of Africans in technical and ad- 
ministrative skills. 



438 



Department of State Bulletin 



7. Since specific development projects and 
programmes for an independent Zimbabwe 
are not available, a precise quantification of 
the resources needed by the Fund is not 
possible. A preliminary assessment, how- 
ever, suggests that the target for total con- 
tributions, on concessionary terms, from 
those Governments willing to participate in 
the Fund should be at a minimum approach- 
ing US$1,000 million and at a maximum 
rather less than US$1,500 million. The 
Fund's objectives, and the fact that experi- 
ence shows that economic development proj- 
ects take a long time to mature, will make it 
necessary to envisage a fairly long period of 
disbursement of the Fund's resources. It is 
suggested, however, in order that the man- 
agement of the Fund can plan its operations 
in the knowledge of the total amount of its 
resources and so that it can meet extraordi- 
nary balance of payments demands on its re- 
sources during an economic transition, that 
contributions by participating Governments 
should be made over a five-year period with 
the likelihood of a longer period of actual 
disbursement in mind. 

8. Flows of bilateral concessional aid 
could, it is suggested, be counted as part of 
their contribution to the Fund, but the 
greater part of each country's contribution, 
at least during the first five years of its op- 
eration, should be direct to the Fund. On 
this basis, initial finance envisaged for the 
Fund might be, say, two-thirds over a five- 
year period in cash or in promissory notes, 
and, say, one-third on call if the manage- 
ment of the Fund should require it for the 
fulfilment of its longer-term objectives. The 
method by which the contributions were 
made can be discussed between Govern- 
ments and need not necessarily be uniform: 
For example, some Governments might pre- 
fer to contribute cash at regular intervals in 
equal instalments. Others might prefer to 
make available promissory notes for en- 
cashment as disbursements by the Fund re- 
quire, a method permitted in replenishment 
of the resources of the International De- 
velopment Association. The questions of the 
currencies in which contributions should be 
made, the degree and structure of any ar- 
rangement for tying of procurement in the 



participating countries and provision for the 
local costs of development projects can be 
the subject of intergovernmental consulta- 
tion. The nature of the economic assistance 
extended by the Fund should be such that 
the contributions of participating Govern- 
ments would be expected to qualify as offi- 
cial development assistance in accordance 
with the criteria of the Development Assist- 
ance Committee. 

9. On this basis, the Government of the 
United Kingdom would be prepared, subject 
to Parliamentary approval, to contribute 15 
per cent of the resources provided directly 
to the Fund, up to a maximum of £75 mil- 
lion, and in addition to provide £41 million of 
bilateral aid over a five-year period; and the 
Government of the United States would, 
subject to the authorization and appropria- 
tion of funds by Congress, be prepared to 
contribute 40 per cent to the total resources 
of the Fund, up to a maximum of $520 mil- 
lion, the major part a direct contribution to 
the Fund and the rest in the form of bilat- 
eral assistance. The British and United 
States contributions w T ould be conditional on 
each other and on contributions being forth- 
coming from other countries on an equitable 
basis. 

10. The Fund will also facilitate action by 
agencies of donor countries to make appro- 
priate non-concessional loans and guarantees 
to encourage commercial trade and private 
investment flows to Zimbabwe. These would 
be additional to the concessionary contribu- 
tions discussed above. The Fund could also 
provide support for regional development 
projects and take part in any consortium or 
consultative group established to co-ordinate 
development assistance to Zimbabwe and re- 
late it to development aid to the southern 
Africa region as a whole. 

11. It is envisaged that the World Bank 
[International Bank for Reconstruction and 
Development (IBRD)] would manage the 
Fund's resources as an agent of the Fund. 
Matters of policy would be discussed and de- 
cided by a governing body, which might be 
composed of the IBRD Executive Directors 
representing the Governments contributing 
to the Fund, together with representation 
from the Zimbabwe Government. 



October 3, 1977 



439 



Latin American Development in an Interdependent World 



Address by Terence A. Tod man 

Assistant Secretary for Inter-American Affairs ' 



The world we see before us — the world on 
which your generation will leave its indelible 
mark — is one of profound, even dizzying, 
change. It is a very different world from the 
one your parents faced, or my own 
classmates faced, only a generation ago. It is 
a world of exploding population, growing 
membership in the nuclear club, and the 
emergence of new nations out of old colonial 
empires. 

It is a world where the cold war has given 
way to an uneasy cooperation while new 
forces of economic tension and rivalry pose a 
new challenge — potentially, perhaps, a more 
difficult one — to world order and coopera- 
tion. It is a world where scarcity of food and 
natural resources, and global economic 
forces affecting us all, have made all nations 
increasingly interdependent, regardless of 
their differing ideological systems or levels 
of development. 

Many of the most dramatic developments 
of our time are taking place right here in the 
Western Hemisphere. The great worldwide 
surge for development — a drive of unprec- 
edented magnitude and intensity, that 
perhaps more than anything else defines the 
times in which we live — finds Latin America 
in the vanguard of the struggle. 

Only a decade ago, many thoughtful 
people regarded the goals of two-thirds of 
the world's peoples — to raise themselves out 



1 Made at the commencement exercises of the 
Inter-American University at San German, Puerto 
Rico, on May 29, 1977 (introductory paragraphs 
omitted). 



of poverty and create lives of dignity, oppor- 
tunity, and material well-being for their 
children — more as hopeful dreams than as 
realistic possibilities. 

In the last decade, Latin America has 
proved them wrong. In Latin America we 
see a diverse range of economies at many 
stages of development. Most of them are no 
longer among the truly poor of the world. 
They have been industrializing rapidly. The 
production of manufactured goods has grown 
steadily. They look to the industrialized 
world less for direct aid than for new mar- 
kets for their increasing exports. 

You who will go forth from here to ad- 
vance the great work of development— 
whether in Puerto Rico, in the larger Carib- 
bean, or in the rest of Latin America — have 
an opportunity to be part of one of the cen- 
tral economic miracles of our time. 

So, too, will those of you who have come 
here to study from the U.S. mainland or 
who plan to work there as graduates of this 
institution. 

For just as Latin America's rapid de- 
velopment took much of the industrialized 
world by surprise, so too has much of the 
world been taken by surprise by the new 
realities of global economics and the changed 
relationships they have created among the 
developed and the developing nations. 

In that new world, the industrialized na- 
tions no longer have the luxury of choosing 
to stand aside from the development drama. 
Their supportive role that was once based on 
admiration or compassion is now dictated by 



440 



Department of State Bulletin 



economic necessity. We all were caught off- 
guard by the energy crisis. And we must 
solve it together or none of us will be able to 
pass on an industrialized economy to our 
children. We all have seen our societies 
racked by persistent rounds of inflation and 
unemployment exacerbated by rising prices 
and changing market conditions in far-off 
places beyond our control. 

We have grown increasingly dependent on 
one another — and on the health of each 
other's economies — not only for the goods 
we need but for export markets for the 
goods we produce. Last year, for instance, 
trade between the United States and the na- 
tions of Latin America alone amounted to 
more than $32 billion, divided roughly 
evenly between exports and imports. 

Even in matters that might once have 
been considered purely domestic, we are 
finding it increasingly impossible to solve 
our problems in isolation. Recession prob- 
lems in New York become a tourism problem 
in the Caribbean. Employment problems in 
Mexico become immigration problems in 
Arizona. A drug problem in Los Angeles be- 
comes a crime problem in the Andes. And 
environmental carelessness in any of our in- 
dustries can become fishing problems, rec- 
reation problems, or even public health 
problems for the rest of us. 

Economic Interdependence 

In such an interdependent world — in such 
a complex, precarious world — our only secu- 
rity lies in working together in a spirit of 
equality and mutual respect, knowing that a 
nation like the United States is as depend- 
ent on the success of our efforts and on the 
respect and good will of our sovereign 
neighbors as they are on the cooperation of 
the United States. 

Fortunately for all of us, efforts to coop- 
erate in solving these problems that beset us 
all are underway on many fronts. The Con- 
ference on International Economic 
Cooperation — in which nations of this hemi- 
sphere are playing a leading role — has been 
providing not only a forum where the ongo- 
ing North-South issues can be aired in a 



spirit of mutual understanding but has also 
provided practical guidance in many of the 
specific issue areas such as resource trans- 
fer, investment conduct, and commodity 
price stabilization. 

In the commodity area itself, negotiations 
are in progress for international agreements 
on sugar and grains. Agreements providing 
for ample supplies, at prices fair to both 
producers and consumers, are in the interest 
of all of us who either import or export 
these commodities. Part of the remedy we 
are considering would involve the establish- 
ment of a common funding arrangement for 
financing buffer stocks. 

In the wider area of trade and tariffs, 
negotiations are also in progress under the 
General Agreement on Tariffs and Trade. A 
responsible attitude on the part of all partic- 
ipants can result in greater efforts to keep 
all restrictions on international trade to a 
minimum and to provide for special policies 
to open up the markets of the industrialized 
countries to the products of developing 
economies like those of Latin America and 
the Caribbean. 

The prospect for cooperation and mutual 
progress in tackling all these problems is 
helped immensely by the growing recogni- 
tion on the part of the industrial states that 
global policies resulting in the systematic 
long-term transfer of resources and technol- 
ogy to the developing world is in the inter- 
est not only of the developing nations them- 
selves but of the whole international eco- 
nomic community. The Administration of 
President Carter certainly subscribes to that 
philosophy and intends to respond not only 
in its trade policies but in substantially in- 
creased contributions to bilateral and mul- 
tilateral assistance programs. 

Just as the world's present economic prob- 
lems transcend national boundaries, so will 
the benefits of a mutually designed, equita- 
bly based, and carefully thought out new in- 
ternational economic order. 

Diverse Political Relationships 

As we turn from the economic to the polit- 
ical sphere, we find that as economic 



October 3, 1977 



441 



realities have forcibly produced a new rela- 
tionship of interdependence and mutual re- 
spect between the nations of the Northern 
and Southern Hemispheres, this new at- 
titude has carried over into the way we re- 
gard each other as nations. 

Within the community of the Americas, 
the nations making up the inter-American 
system have enjoyed an unusually close, and 
for the most part mutually enriching, histor- 
ical relationship. But throughout our history 
that relationship has suffered from the man- 
ifest disparity of bargaining chips in the 
hands of the United States and its Latin 
American allies — creating an aura of co- 
lonialism to which U.S. conduct in the past too 
often lent credibility. 

However genuine our intentions may have 
been, it is nevertheless difficult to build a 
relationship of mutual respect when the 
needs, options, and resources of the partici- 
pants are mutually perceived as so one- 
sided. Now, as we have seen, economics has 
helped to change that. 

And so, prodded in part by forced 
changes, we are beginning at last to develop 
the type of mature, multifaceted political 
relationships that ought of right to charac- 
terize a society of independent states. 

One sign of that maturing relationship is 
the new ties the nations of Latin America 
have begun to build in recent years with 
other nations outside the hemisphere. They 
have found in Western Europe and Japan 
new trading and investment partners. They 
have found in the developing nations of Asia 
and Africa natural allies in defining the in- 
ternational agenda of highest priority to 
both. They have begun to open up diploma- 
tic and commercial ties with nations of East- 
ern Europe. 

There was a time when all this would have 
been regarded by the United States with 
great apprehension, as an undesirable 
weakening of our own influence and impor- 
tance within the Americas. Fortunately, 
that time is past. We see the growing inter- 
national involvement of our Latin American 
neighbors as a development not only to be 
accepted but to be welcomed and applauded. 



Diverse multidirectional trade patterns and 
friendly communication between all govern- 
ments are in the general interest of the entire 
world community. 

And we find particularly welcome the 
prospect that, through their increased lead- 
ership in global affairs, the nations of this 
hemisphere will contribute to the developing 
world their own wealth of development ex- 
perience and insight and will contribute to 
the entire world their record of intraregional 
arms control, dispute settlement, and many 
years of peace. 

Within our own hemisphere efforts are 
now underway, in the new atmosphere of re- 
spect and cooperation, to resolve two of the 
major areas of continuing tension that have 
made life difficult for all of us during the 
last decade and a half. I am referring to 
Panama and Cuba — issues that have re- 
ceived a great deal of thought and attention 
by the President under this new 
Administration. 

As students here in the Caribbean — and 
many of you, as Caribbeans yourselves — you 
are probably more conscious than many of us 
in North or South America of the awkward- 
ness of looking at the Caribbean region as if 
the largest island in the group were not 
there. We have felt this anomaly and strug- 
gled with its contradictions even when con- 
cern for hemispheric security left us little 
choice in our outlook. 

That, too, has been modified as times have 
changed. This Administration holds to the 
general policy that it serves our interest to 
have normal relations with all of the world's 
governments. In the case of Cuba, realizing 
that goal in the face of such longstanding 
problems will take both time and sincere in- 
dications of reciprocal interest. On the basis 
of our success in negotiating a limited 
agreement on maritime boundaries and 
fishery rights, I am confident that mutual 
efforts and good faith will enable our two 
governments to confront the more difficult 
problems with equal success. An end to this 
abnormal situation will benefit the Carib- 
bean region and the entire community of the 
Americas. 



442 



Department of State Bulletin 



Perhaps of even greater benefit to the 
harmony of the hemispheric community will 
be the conclusion, at long last, of a new 
Panama Canal treaty. While conduct of 
these negotiations is a bilateral responsibil- 
ity of the United States and Panama, the 
United States is keenly aware of the sym- 
bolic importance the issue holds, not only for 
Panama but for all Latin America. We know 
our actions are being closely watched as a 
test of our sincerity in approaching our 
southern neighbors not as a colonial protec- 
tor but as one nation in a community of 
sovereign equals. 

At the same time, the stake of the entire 
hemispheric and world shipping community 
in the nature of the new treaty is very real. 
The shipping economies of the Caribbean — 
including Puerto Rico, the nations along- 
South America's west coast, and all that de- 
pend on the canal as an artery of com- 
merce — have a stake in making sure that in 
years to come the canal will be open, operat- 
ing efficiently, secure from attack, and 
available to the world's shippers on an 
equitable and nondiscriminatory basis. 

Careful study has revealed that the inter- 
ests of the United States and the other na- 
tions of the hemisphere in this regard are 
identical. For that reason, I have every 
hope that a treaty enjoying the respect of 
both parties, and the support of all our 
neighbors, will be forthcoming in the very 
near future. 



Role of Future Generations 

I would like now to take a few minutes to 
address a few remarks, on a very personal 
basis, to the members of this graduating 
class. 

The issues I have been talking about — 
Cuba, Panama, international economic 
agreements — are matters that must be set- 
tled between governments. They are being 
negotiated by diplomats behind closed doors 
in faraway cities. Some of you perhaps, as I 
did, will pursue a diplomatic or governmen- 
tal career, and be part of negotiations such 
as these in the future. The need is particu- 
larly urgent, and the timing particularly op- 



portune, as President Carter draws in an 
unprecedented way on communities which 
traditionally have not had an opportunity to 
participate in this important area. 

But in a very real sense, the most impor- 
tant elements of our future will not be set- 
tled at distant government conferences. 
They will be determined by the individual 
actions of ordinary citizens in each of our 
societies. Those of you here today, who have 
had the opportunity for an education many 
of your fellow countrymen dare not even 
dream of, will have a particularly key role. 

When you leave here today, the attitudes 
you bring to your professions, the standards 
you set for yourselves, the ethical principles 
you honor, and the creative effort you bring 
to your tasks — multiplied many times over 
by the contributions of your fellow 
graduates just now embarking on their 
careers throughout the Americas — will de- 
termine, more than anything else, the direc- 
tions our societies choose to take and the 
achievements they are able to attain. 

You are called not just to be the techni- 
cians of your generation, but to be its con- 
science. It is not enough to be part of chang- 
ing times, of turbulent exciting times. 
Change must have a purpose. It must con- 
tribute to human well-being — to the oppor- 
tunity of every person to be all that he or 
she can be. Change must enable each to con- 
tribute his or her unique talents to the good 
of others. 

We in the Americas — coming, as our 
fathers did, from many different cultures to 
forge our destiny in a new world — have con- 
tributed something very unique to man's 
view of the world. We believe in change as 
the natural order of things. This has led us 
to see ancient values in a new light and to 
carry an added burden of responsibility. 

Our civilizations, like many others, are 
founded on the moral heritage of Chris- 
tianity and its Judaic roots. We are taught 
to treat human beings kindly and justly in a 
world where history and economics have 
treated many — perhaps most — cruelly and 
inequitably. 

This dilemma, of course, does not confront 
us uniquely. But because we believe in the 



October 3, 1977 



443 



possibility of change, everything is different 
for us: 

— Human suffering is not inevitable; 
— Cruel laws can be replaced by fair ones; 
— Inequitable institutions can be replaced 
by just ones; and 
— Good will translates into compassion. 

We know that the qualities of human life 
that make it meaningful — the satisfaction of 
the basic needs of body and mind and 
spirit — once experienced by some people, 
must be regarded as the proper destiny and 
right of any human person. 

In the light of that value — that radical, 
indeed revolutionary value — many of the 
disparate winds of change swirling around 
us begin to take on a unifying focus. With 
the insight of our education, and guided by 
our deepest moral values, we can step back 
from the glare of immediate interests and 
current controversies and try to weave our 
concerns into the type of unifying theme by 
which we would want future generations to 
remember our own. 

Many ages in history have contributed 
some distinctive movement to the great 
symphony of human progress. For the 
Americas, for instance, the 16th century was 
an age of discovery and conquest. The 19th 
century saw the abolition of slavery. 

For our own generation — knowing for the 
first time the full scope of human depriva- 
tion and, at the same time, armed for the 
first time with the tools to set it aright — for 
us has been reserved the opportunity and 
privilege of completing the liberating task 
our forefathers began. 

Slavery has been consigned to the ash 
heap of history but human bondage is with 
us still — in poverty, in ignorance, in the 
form of discrimination or exploitation and, 
all too often, in the misconduct of public au- 
thorities. All these evils have one vice in 
common — they deny to human beings the life 
of dignity and opportunity that is their 
birthright. 

Ending abuses by government officials 
won't solve the whole problem but it will 
eliminate an important element in it — an 
element more conducive to simple decision 
and direct action than many of the problems 



that threaten human rights. Each of us can 
contribute significantly to the cause of 
human rights by determining not to tolerate 
departures from international standards of 
human decency in the governments which 
derive their authority from our consent and 
thus act in our own name. 

By the same token, industrialization alone 
won't solve the whole problem — even the 
problem of human rights denied by economic 
privation. We need not look as far away as 
the world of Charles Dickens to remember 
that in the rush to industrialize, the workers 
in whose name the change is wrought are 
often its first victims. And yet we know that 
without economic progress on a revolu- 
tionary scale, the human rights we cherish 
will secure a life of scope and purpose only 
to a privileged few. 

The path we seek — the building of a new 
society where economic gains, social justice, 
individual liberty, and the growth of free in- 
stitutions all support each other — will not 
come about because we declare our dedica- 
tion to it, or because we wish it so. It will 
not come about because we work for any one 
of these goals exclusively and hope the 
others will somehow follow. It will come 
about only by clearness of purpose and by 
the vision and effort you bring to the task. 
This generation in Latin America carries a 
unique and heavy burden but it is one which 
you can embrace with a sense of great pride 
and destiny. For it is to you that all the 
world now looks to see if the worldwide 
dream of development can be proved 
possible. 

It is to you that all the world looks to see 
if the throes of economic development and 
the clumsy but unexcelled processes of 
democratic self-government can be proved 
compatible and mutually supportive. 

It is to you that all the world looks for a 
reaffirmation of the respect for the human 
person that is the foundation of the Hispanic 
culture that has enriched the entire world 
community and that each of our constitu- 
tions enshrines. 

To you — the young people of Puerto Rico 
whose fathers have set such a shining exam- 
ple for us all and to all of you who take your 
experience here to the four corners of the 



444 



Department of State Bulletin 



1 



Americas — I bring the most profound con- 
gratulations and best wishes of the people of 
the United States and my own prayer that 
the very highest standards, the noblest 
dreams, and the most humane principles 
that you hold out for yourselves as you leave 
here today will transform your generation 
and all the societies your lives enrich. 



President Carter's Fourth Report 
on Cyprus Submitted to Congress 

Message to the Congress 1 

To the Congress of the United States: 

As required by Public Law 94-104, this re- 
port describes our efforts over the past sixty 
days to bring about a negotiated settlement of 
the Cyprus problem. 

My last report, submitted to the Congress 
on June 22, noted that talks between the two 
Cypriot communities during the preceding 
sixty days had accomplished little. Regretta- 
bly, there has been no substantial change in 
the general situation. 

The efforts of U.N. Secretary General Kurt 
Waldheim's Special Representative to Cyp- 
rus, Ambassador Perez de Cuellar, to per- 
suade the two communities to hold a new- 
round of talks in Nicosia in July and early Au- 
gust have proven unsuccessful. 

Despite the failure of these efforts, how- 
ever, the Administration has persisted in its 
efforts to bring the parties together in an ef- 
fort to promote a. settlement. In meetings in 
Washington with Ambassador de Cuellar and 
with House of Representatives President 
Kyprianou (now Acting President of Cyprus), 
Administration officials continually reiterated 
our view that the intercommunal forum should 
serve as the basis for substantive talks, and 
that they should be resumed as quickly as cir- 
cumstances warranted. Moreover, we took the 
position that no time should be lost in pursu- 
ing a settlement once a new Turkish Govern- 
ment was formally installed. 



Transmitted on Aug. 



1977 (text from Weekly 



Compilation of Presidential Documents dated Aug. 29; 
also printed as H. Doc. 95-207 dated Sept. 7). 



The death of President Makarios on August 
3 was an unfortunate development. The pre- 
cise implications of his death for the future of 
the intercommunal negotiations are, as of this 
writing, difficult to assess. 

Nonetheless, we see no reason to change 
course. As Clark Clifford stressed in his press 
conference in Nicosia on August 9, this Ad- 
ministration is as dedicated today to helping 
find a solution to the problems of Cyprus as it 
was last January, when he was appointed as 
my Special Representative. We are prepared 
at any time to offer guidance and counsel to 
assist in the negotiating process, should the 
parties to the dispute so desire. It is my 
strong hope that constructive talks will be re- 
sumed and that the two Cypriot communities 
will again focus, with renewed energy, on the 
goal of achieving a just and lasting settlement 
which will enable everyone on the island to 
live in peace, harmony, and freedom. 

Jimmy Carter. 

The White House, August 25, 1977. 



United States and Mexico Sign 
New Fisheries Agreement 

Press releast' 409 dated August 29 

On August 26, 1977, representatives of the 
United States of America and Mexico signed 
a new agreement relating to fishing activities 
of Mexico off the coasts of the United States. 

The agreement sets out the arrangements 
between the countries which will govern fish- 
ing by Mexican vessels within the fishery 
conservation zone of the United States. The 
agreement will come into force after the 
completion of internal procedures by both 
governments. 

The signing of this agreement took place in 
Washington. Julian Saenz Hinojosa, Charge 
d' Affaires of the Mexican Embassy in Wash- 
ington, signed for Mexico. Patsy T. Mink, 
Assistant Secretary of State for Oceans and 
International Environmental and Scientific- 
Affairs, signed for the United States. Both 
representatives expressed their hope that the 
new accord will strengthen cooperation be- 
tween Mexico and the United States. 



October 3, 1977 



445 



INTERNATIONAL ORGANIZATIONS AND CONFERENCES 



Developments Concerning Apartheid 



The United Nations sponsored the World 
Conference for Action Against Apartheid in 
Lagos, Nigeria, August 22-26, 1977, which 
was attended by representatives of 111 gov- 
ernments and numerous nongovernmental 
and intergovernmental organizations and ob- 
servers. Following is a statement made at 
that conference by Andrew Young, U.S. Rep- 
resentative to the United Nations, on Aug- 
ust 25, together with the text of the Declaration 
for Action Against Apartheid. 

STATEMENT BY AMBASSADOR YOUNG 

USUN press release 59 dated August 25 

Mr. President [Nigerian Commissioner for 
External Affairs Joseph N. Garba], I must 
begin by taking a certain liberty with your re- 
quest that we not waste conference time by 
congratulating you on your selection as Presi- 
dent of this conference. I am not so much con- 
gratulating you for this, however, as I am 
congratulating you and the Government of 
Nigeria for your continued effort in support of 
liberation throughout the continent of Africa. 
I share the genuine and generous concern that 
the Government and people of Nigeria have 
had for oppressed peoples everywhere. I am 
grateful that in my conversations with your 
head of state he never ceases to ask how we 
are getting along in the United States. He un- 
derstands that we, too, are engaged in a lib- 
eration struggle. 

The Government of Nigeria, in its continued 
commitment to the struggle against apart- 
heid, is as responsible as any other factor in 
today's world for the progress and movement 
that we are making on the African Continent. 

Nigeria, in a unique way, is responsible for 
the new sensitivity of the West. And the fact 



is, Nigeria's growth and development gives 
the continent of Africa a new voice, a new 
power to be reckoned with. The fact that 
Nigeria is exercising its power in a statesman- 
like, wise, and restrained fashion adds to its 
credibility and effect. 

This conference, by virtue of its being held 
in Lagos, assumes enormous importance. 
What we do here will be valued not necessar- 
ily by the sound of our rhetoric but by the fact 
that 100 nations have gathered to dedicate 
and devote themselves to a continuing strug- 
gle against apartheid. 

I have been interested and somewhat 
amused — as I have listened to the many 
speeches— to find that my government, along 
with many others, has been comdemned, 
blamed, and blasted for its imperialism, 
neocolonialism, capitalism, or what have you. 
I must confess that I hope that much of that is 
in the past. But I must admit also that much 
of it is still present. However, realistically 
facing the path that is before us, I would call 
your attention to the fact that we are proba- 
bly much more condemned by the Government 
of South Africa than we have been by this 
conference. 

Recent rhetoric coming from Pretoria 
charges that the United States is trying to 
pull the rug out from under white South Af- 
rica, that U.S. policy in South Africa gives no 
chance for survival, and that the United 
States is trying to force South Africa to 
negotiate its own destruction. Prime Minister 
Vorster has characterized our policy as 
"strangulation by finesse." 

Just as I cannot accept the condemnations 
of this conference, neither can I accept the 
condemnation nor the credit that agreement 
with Prime Minister Vorster and the South 



446 



Department of State Bulletin 



African Government might engender. Our po- 
sition is more in keeping with the approach 
recommended by the head of state of the Gov- 
ernment of Nigeria, Gen. Obasanjo [Lt. Gen. 
Olusegun Obasanjo]. It is his view that we 
should rationally analyze the situation in 
South Africa, discuss the alternatives, and at- 
tempt to find realistic solutions. This is the 
kind of approach that the United States, as a 
nation made up democratically of more than 
200 million people, can support. It would not 
make much sense for us to make agreements 
here that would be refuted by our Congress or 
repudiated by our people. 

Our challenge is to harness a trillion dollar 
economy — a massive system which can work 
in the service of a moral and responsible pol- 
icy toward the continent of Africa as a whole. 
We are not without experience in the struggle 
against apartheid, although some in Africa say 
that our experience is irrelevant. They say 
that the situation we have known in the 
United States is completely different from the 
situation which exists now in Africa. I don't 
care to argue that point. But for a hundred 
years we struggled against our own version of 
discrimination and institutionalized racism, 
following upon 200 years of slavery, and we 
still have not overcome all of the burden im- 
posed upon our society by that experience. 

The majority of my life was lived under a 
very rigid and violent system of apartheid. 
When I speak of apartheid, I think I speak 
with the same passion, the same conviction, 
and much of the same emotion that we saw in 
President Kaunda [of Zambia] at the opening 
of this conference. We have, however, made 
tremendous progress in the past few decades. 
And that progress should accelerate under the 
present Administration both at home and 
abroad. 

As a result of that continuing struggle, we 
do know something about the sickness of rac- 
ism and apartheid. We know that this is a 
sickness which, like cancer, eats away at the 
inner structures of society. It can very well 
be a terminal illness, both physically and 
spiritually. But we also know that it is a dis- 
ease that can be cured and that it is not neces- 
sary to kill the patient in order to cure the 
disease. If one is to approach the problem of 
apartheid rationally and not just with rhetori- 



cal condemnation and slogans, it is important 
that we clearly define our objectives. No one 
at this conference or in any other meeting of 
the Organization of African Unity has ever 
called for the destruction of four million white 
citizens in South Africa. 

Foreign Minister Chissano of Mozambique, 
South Africa's next door neighbor, issued a 
very eloquent invitation to all South Africans 
to join in the building of a nonracist society. I 
think this is an objective that we can all share. 
In May of this year our Vice President, Wal- 
ter Mondale, met with Prime Minister Vorster 
to convey a message from President Carter 
and the entire U.S. Cabinet. He said that our 
policy toward South Africa is rooted in a firm 
commitment to the progressive transforma- 
tion of South African society toward majority 
rule and an end to apartheid. Only as we work 
toward that end, in as rapid and aggressive a 
manner as possible, can we hope to save South 
Africa from the violent and cataclysmic effects 
of continued apartheid. 

Many of us share these objectives, but it is 
inevitable that we will differ on tactics and 
methods of achieving them. Our unity must 
depend on our mutual respect for the diver- 
sity of our approaches. We may argue and 
disagree on resolutions. Our governments will 
decide on different approaches, but our goals 
must remain the same. 

I don't believe in violence. I fought violence 
in my own country. I am determined that the 
United Nations continue as one institution 
that is devoted to peaceful change. And yet, I 
have never condemned another man's right to 
take up arms in pursuit of his freedom. 

Too often, however, the armed struggle is 
advocated most vigorously by those who are 
thousands of miles away and whose only con- 
tribution to the struggle is the rhetoric of 
bitterness and frustration. At the Maputo con- 
ference [International Conference in support 
of the Peoples of Zimbabwe and Namibia, 
Maputo, Mozambique, May 16-21, 1977] I had 
a conversation with a young FRELIMO 
[Mozambique Liberation Front] freedom 
fighter who spoke profoundly of his own ex- 
perience in dealing with violence. He said to 
me: "I started killing when I was 14 years old, 
and when you watch your comrades suffer and 
die, you develop a deep respect for human 



October 3, 1977 



447 



life." And he described an attack on a Por- 
tuguese base in which many were killed on 
both sides. But after winning the battle, they 
placed all of the wounded side by side, 
FRELIMO and Portuguese, and those who 
were unharmed gave their blood to friend and 
foe alike. On this kind of humanism you can 
build a peaceful world. 

The struggle continues but the power which 
comes from the best that is within us will pre- 
vail. I am confident that even in South Africa 
there is a nation waiting to be born out of just 
such idealism. Why should I be so confident? I 
know very well how quickly the tides of his- 
tory can shift. Ten years ago I would not have 
believed that a person such as Jimmy Carter 
could even exist in rural Georgia, much less 
become President of the United States. Nor 
would I have believed that Portugal and Spain 
or even Greece would so soon become pro- 
gressive democracies. Totalitarian states and 
oppressive regimes fall suddenly and without 
much warning. It is not naive to believe in the 
future when one is also committed to work for 
the fulfillment of one's dreams. 

There is an emerging consensus about Afri- 
ca's future, first in Maputo and now in Lagos. 
There is a building of a majority of world opin- 
ion for action against apartheid. From chil- 
dren in Soweto merely asking for a relevant 
education, there awakened a new sensitivity 
which spread throughout the governments of 
Africa and the world. From the private ac- 
tions of college students to Wall Street banks, 
there is a new sensitivity to which the Gov- 
ernment of Nigeria and the U.N. conference 
on apartheid have added a new chapter. But 
the success of this conference will not be de- 
termined by what we agree to on paper but by 
the actions we take in the weeks and months 
to come. The struggle must continue. 



TEXT OF DECLARATION " 

1. The Conference heard keynote speeches 
from the Head of State of Nigeria, the Presi- 
dent of Zambia and the Prime Minister 



'Adopted by consensus on Aug. 26, 1977, but with 
reservations by the United States; unofficial text 
printed here. 



of Norway, as well as other prominent 
personalities. 

2. After a full discussion of the items on its 
agenda, the Conference adopted the following 
Declaration. 

3. The Conference reiterates the universal 
abhorrence of apartheid and racism in all its 
forms and manifestations and the determina- 
tion of the international community to secure 
its speedy elimination. 

4. The Conference reaffirms support and 
solidarity for the oppressed peoples of south- 
ern Africa and their national liberation move- 
ments, and the commitment of Governments 
and peoples of the world to take actions to 
contribute towards the eradication of 
apartheid. 

5. Apartheid, the policy of institution- 
alized racist domination and exploitation, im- 
posed by a minority regime in South Africa, is 
a flagrant violation of the Charter of the 
United Nations and the Universal Declaration 
of Human Rights. It rests on the disposses- 
sion, plunder, exploitation and social depriva- 
tion of the African people since 1652 by colo- 
nial settlers and their descendents. It is a 
crime against the conscience and dignity of 
mankind. It has resulted in immense suffering 
and involved the forcible moving of millions of 
Africans under special laws restricting their 
freedom of movement; and the denial of 
elementary human rights to the great major- 
ity of the population, as well as the violation 
of the inalienable right to self-determination 
of all of the people of South Africa. This in- 
human policy has been enforced by ruthless 
measures of repression and has led to escalat- 
ing tension and conflict. 

6. The apartheid regime in South Africa is 
the bastion of racism and colonialism in south- 
ern Africa and is one of the main opponents of 
the efforts of the United Nations and the in- 
ternational community to promote self- 
determination and independence in the area. 

7. It has continued illegally to occupy the 
Territory of Namibia, for which the United 
Nations has a special responsibility and 
extended apartheid to that international 
Territory. 

8. It has sustained and supported the il- 
legal racist minority regime in Southern 
Rhodesia, and has constantly resorted to 



448 



Department of State Bulletin 



threats against neighbouring independent Af- 
rican States and violations of their sov- 
ereignty. Since the end of colonial rule in An- 
gola and Mozambique it has engaged in a 
series of acts of aggression against neighbour- 
ing States and has connived at acts of aggres- 
sion by the illegal regime in Southern 
Rhodesia. Its massive invasion of Angola and 
constant violations of the territorial integrity 
of Zambia have been condemned by the 
United Nations Security Council. It continues 
to violate the territorial integrity of neigh- 
bouring independent African States. 

9. The policies and actions of the South 
African regime have already created an explo- 
sive situation in the whole of southern Africa 
and events have moved into a phase of an 
acute crisis. The apartheid regime has inten- 
sified its military activities along the borders 
of independent African States and is con- 
structing and expanding new military bases. 
It is reinforcing its enormous military arsenal 
and the production of nuclear weapons is 
within its reach. The possession of this arse- 
nal and the acquisition of nuclear weapons by 
this racist and aggressive regime constitutes a 
menace to all independent African States and 
the whole world. 

10. The World Conference recalls with ad- 
miration the valiant efforts of the South Afri- 
can people for many decades for an end to 
racial discrimination and for the establishment 
of a non-racial society. By their courageous 
struggle at heavy sacrifice, the South African 
people, under the leadership of their national 
liberation movement, have made a significant 
contribution to the purposes of the United 
Nations. 

11. The United Nations has solemnly rec- 
ognized the legitimacy of the struggle of the 
South African people for freedom and human 
equality, and for enabling all the people of the 
country irrespective of race, colour or creed, 
to participate as equals in the- determination 
of the destiny of the nation. It has proclaimed 
that the United Nations and the international 
community have a special responsibility to- 
wards the oppressed people of South Africa 
and their national liberation movement, and 
towards those imprisoned, restricted or exiled 
for their struggle against apartheid. 



12. The World Conference pledges its full 
support to the legitimate aspirations of the 
South African people and urges Governments, 
organizations and individuals to provide all 
appropriate assistance to the oppressed 
people of South Africa and their national lib- 
eration movement in their just struggle for 
freedom and human equality. 

13. The Conference rejects all aspects of 
the apartheid system, including the imposition 
of "bantustans" which divide the population, 
deprive the African people of their citizenship 
and inalienable right to self-determination and 
deny them a just share of the wealth of the 
country. There can be no international co- 
operation with bantustans and other entities 
based on racism. 

14. The Conference condemns all man- 
oeuvres by the South African regime aimed at 
preserving racist domination and the system 
of exploitation and oppression in South Africa, 
and in southern Africa as a whole. 

15. It calls upon all Governments to enact 
legislation declaring the recruitment, assem- 
bly, financing and training of mercenaries in 
their territories to be punishable as a criminal 
act and to do their utmost to discourage and 
prohibit their nationals from serving as 
mercenaries. 

16. It declares that South Africa belongs to 
all its people irrespective of race, colour or 
creed and that all have the right to live and 
work there in conditions of full equality. The 
system of racist domination must be replaced 
by majority rule and the participation of all 
the people on the basis of equality in all 
phases of national life, in freely determining 
the political, economic and social character of 
their society and in freely disposing their nat- 
ural resources. 

17. The Conference calls upon Govern- 
ments, intergovernmental and non-govern- 
mental organizations to intensify the cam- 
paign for the further isolation of the apartheid 
regime with a view to complementing the ef- 
forts of the South African people and their na- 
tional liberation movement and to ensure: 

(a) the immediate and total elimination of 
the policy and practice of apartheid and grant- 
ing equal rights to all its inhabitants, includ- 
ing equal political rights; 



October 3, 1977 



449 



(b) the termination of all measures, under 
whatever name, which forcibly separate ele- 
ments of the population on the basis of race; 

(c) the dismantling of the system of apart- 
heid and the policy of bantustanization, and 
abrogation of all racially discriminatory laws 
and measures; 

(d) the ending of repression against the op- 
ponents of apartheid, and the immediate and 
unconditional release of all persons, impris- 
oned, detained, restricted or exiled for their 
opposition to apartheid; 

(e) the exercise, freely and on the basis of 
equality, of the inalienable right to self- 
determination of the people of South Africa as 
a whole; 

(f) the removal of the illegal South African 
forces of occupation in Namibia and com- 
pliance by the apartheid regime with the rel- 
evant Security Council resolutions, particu- 
larly resolution 385 (1976); 

(g) compliance by the South African regime 
with Security Council resolutions on the ques- 
tion of Southern Rhodesia, and full implemen- 
tation of sanctions against the illegal racist 
minority regime including the oil embargo; 

(h) the immediate cessation by the apar- 
theid regime of all aggressive acts and threats 
against the independence, sovereignty and 
territorial integrity of African States; and 

(i) the immediate cessation by the apartheid 
regime of its military and nuclear build-up 
which constitutes a serious clanger to interna- 
tional peace and security. 

18. The World Conference recognizes that 
the continuation of the prevailing situation in 
South Africa, and in southern Africa as a 
whole, will inevitably lead to greater conflict 
in Africa with enormous repercussions to in- 
ternational peace and security. 

19. The World Conference condemns the 
South African regime for its ruthless repres- 
sive measures which are designed to per- 
petuate white racist domination. It recognizes 
and respects the inalienable right of the op- 
pressed South African people and their na- 
tional liberation movement to resort to all 
available and appropriate means of their 
choice to secure their freedom, and the need 
to assist them to achieve freedom. It declares 
that the international community has an ines- 



capable duty to take all necessary measures to 
ensure the triumph of freedom and human 
equality in South Africa. 

20. It further calls upon the international 
community to assist States which have been 
subjected to pressure, threats and acts of ag- 
gression by the South African regime because 
of their opposition to apartheid and implemen- 
tations of United Nations resolutions for ac- 
tion against apartheid. 

21. Governments and organizations par- 
ticipating in the World Conference pledge to 
use their separate and collective efforts 
forthwith, and on a continuing basis, to bring 
about the elimination of apartheid, to provide 
assistance to the victims of oppression, and to 
lend appropriate support to their national lib- 
eration movement, in consultation with the 
United Nations and the OAU, in their legiti- 
mate struggle to eliminate apartheid, and to 
attain the inalienable right to self-deter- 
mination of the South African people as a 
whole. 

22. The Conference commends those States 
and organizations which have provided assist- 
ance to the oppressed people and their na- 
tional liberation movement, and appeals to all 
States and organizations to increase such 
assistance. 

23. It draws attention to the International 
Convention on the Suppression and Punish- 
ment of the Crime of Apartheid. 

24. The Conference calls upon all States for 
cessation of any assistance or co-operation 
enabling South Africa to obtain nuclear capa- 
bility. It further calls upon all States to pre- 
vent companies or institutions within their 
jurisdiction, from any nuclear co-operation 
with South Africa. 

25. The Conference solemnly calls upon all 
States to cease forthwith all sales and supplies 
of arms and military equipment, spare parts 
and components thereof: to withdraw all 
licenses for the manufacture of arms and mili- 
tary equipment in South Africa and to refrain 
from any assistance to the South African re- 
gime in its military build-up or any military 
co-operation with that regime. It further rec- 
ommends the setting up of a watch-dog com- 
mittee to follow up the observance of the arms 
embargo. 



450 



Department of State Bulletin 



26. It calls on the United Nations Security 
Council to take all necessary measures, under 
Chapter VII of the Charter, to ensure the full 
implementation of the arms embargo against 
South Africa. 

27. The Conference recognizes the urgent 
need for economic and other measures, uni- 
versally applied, to secure the elimination of 
apartheid. It commends all Governments 
which have taken such measures in accordance 
with United Nations resolutions. It calls upon 
the United Nations and all Governments, as 
well as economic interests, including transna- 
tional corporations, urgently to consider such 
measures, including the cessation of loans to, 
and investments in, South Africa. It requests 
the Special Committee against Apartheid, in 
co-operation with the OAU and all other ap- 
propriate organizations, to promote the im- 
plementation of the above recommendations. 

28. The Conference urges States, and in- 
ternational and national sporting bodies to 
take all appropriate steps within their juris- 
diction to bring about the termination of 
sporting contacts with South Africa. 

29. It commends all public organizations 
which have taken actions in accordance with 
United Nations resolutions and in support of 
the legitimate struggle of the oppressed 
people of South Africa. 

30. The World Conference calls on all the 
Governments and peoples of the world to lend 
their full support to international efforts, 
under the auspices of the United Nations and 
in cooperation with the Organization of Afri- 
can Unity and the liberation movements rec- 
ognized by it, to eliminate apartheid and ena- 
ble the South African people as a whole to 
attain their inalienable right to self- 
determination. 

31. The Conference expresses its solidarity 
with the oppressed people of South Africa and 
with all political prisoners and detainees in 
South Africa, and pledges the total support of 
all participants to continue and intensify their 
campaign for the immediate and unconditional 
release of all political prisoners and detainees. 
It further pledges its unswerving support to 
all efforts to end arbitrary arrests, detentions 
and political trials in South Africa. 

32. It endorses the proposal to proclaim 



1978 as the International Anti-Apartheid Year 
and appeals to all Governments and organ- 
izations to observe it in the spirit of this 
Declaration. 

33. The liberation of southern Africa as a 
whole from colonial and racist rule will be the 
final step in the emancipation of the continent 
of Africa from centuries of domination and 
humiliation. It will be a major contribution to 
the elimination of racism and racial discrimi- 
nation in the world, and to the strengthening 
of international peace and security. 

34. The World Conference calls on all Gov- 
ernments and peoples to make their fullest 
contribution in this historic and crucial ef- 
fort for freedom, peace and international 
co-operation. 



TREATY INFORMATION 



Current Actions 



MULTILATERAL 

Conservation 

Convention on international trade in endangered 
species of wild fauna and flora, with appendices. 
Done at Washington March 3, 1973. Entered into 
force July 1, 1975. TIAS 8249. 
Ratification deposited: Denmark, July 26, 1977. ' 
Accession deposited : Nicaragua, August 6, 1977; 
Senegal, August 5, 1977. 

Finance 

Agreement establishing the International Fund for 

Agricultural Development. Done at Rome June 13, 

1976. 2 

Signal ure: Syrian Arab Republic, September 8, 
1977. 

Ratifications deposited: Ethiopia, September 7, 
1977; Somalia, September 8, 1977; Uganda, August 
31, 1977; United Kingdom, September 9, 1977. 

Maritime Matters 

Amendments to the convention of March 6, 1948, as 
amended, on the Intergovernmental Maritime Con- 
sultative Organization (TIAS 4044, 6285, 6490). 



1 Extended to Greenland and the Faroe Islands. 
However, application as regards the Faroe Islands will 
only be accomplished at the time the authorities of the 
Faroe Islands will have enacted the appropriate 
legislation. 

2 Not in force. 



October 3, 1977 



451 



Adopted at London October 17, 1974. Enters into 
force April 1, 1978. TIAS 8606. 
Acceptance deposited: Ethiopia, August 2, 1977. 
Convention on facilitation of international maritime 
traffic, with annex. Done at London April 9. 1965. 
Entered into force March 5, 1967; for the United 
States May 16, 1967. TIAS 6251. 
Acceptance deposited: Brazil, August 22, 1977. 

Tin 

Fifth international tin agreement, with annexes. Done 
at Geneva June 21, 1975. Entered into force June 14, 
1977. TIAS 8607. 

Ratification* deposited: Austria, August 29, 1977; 
Ireland, September 12, 1977. 



BILATERAL 

Bangladesh 

International postal money order agreement, with 
schedules. Signed at Washington August 11, 1977. 
Entered into force September 1, 1977. 

Hague Conference on Private International Law 

Agreement relating to a procedure for United States 
income tax reimbursements. Effected by exchange of 
letters at The Hague August 11 and 24, 1977. En- 
tered into force August 24, 1977; effective January 1, 
1977. 

Japan 

Joint determination for reprocessing of special nuclear 
materials of United States origin, with joint com- 
munique. Signed at Washington September 12, 1977. 
Entered into force September 12, 1977. 

Liberia 

Agreement relating to the reciprocal granting of au- 
thorizations to permit licensed amateur radio 
operators of either country to operate their stations 
in the other country. Effected by exchange of notes 
at Monrovia March 20, 1974 and July 22, 1977. En- 
tered into force July 22, 1977. 

Mexico 

Agreement relating to the reciprocal granting of 
auhorizations to permit licensed amateur radio 
duction and traffic. Effected by exchange of letters 
at Mexico September 6, 1977. Entered into force 
September 6, 1977. 

Portugal 

Agreement amending the agreement for sales of ag- 
ricultural commodities of October 22, 1976 (TIAS 
8535). Effected by exchange of notes at Lisbon Au- 
gust 17 and 18, 1977. Entered into force August 18, 
1977. 

Saudi Arabia 

Project agreement for technical cooperation in highway 
transportation. Signed at Riyadh and Washington 
August 16 and 26, 1977. Enters into force after sig- 
nature and deposit by Saudi Arabia of sums de- 
scribed in the agreement. 



PUBLICATIONS 



1950 "Foreign Relations" Volume: 
"Western Europe" 

Press release 413 dated September 7 (for release September 12) 

The Department of State on September 12 
released "Foreign Relations of the United 
States," 1950, volume III, "Western 
Europe." The "Foreign Relations" series has 
been published continuously since 1861 as the 
official record of U.S. foreign policy. The 
volume released September 12 is the fifth of 
seven volumes covering the year 1950. 

This volume of 1,799 pages presents high- 
level, recently declassified documentation on 
the major policies and problems in the rela- 
tions of the United States with the nations of 
Western Europe during 1950. Great atten- 
tion is focused upon the role of the United 
States in the newly formed North Atlantic 
Treaty Organization and the encouragement 
of West German participation in an inte- 
grated European defense force. The exten- 
sive meetings of the American, British, and 
French Foreign Ministers in May and Sep- 
tember 1950 and their consideration of a wide 
range of global matters are given consider- 
able attention in the volume. The support by 
the United States for various measures for 
European political and economic integration 
is also examined as is the special network of 
relationships between the United States and 
the United Kingdom. 

"Foreign Relations," 1950, volume III was 
prepared in the Office of the Historian, 
Bureau of Public Affairs, Department of 
State. Listed as Department of State publi- 
cation 8888, this volume may be obtained for 
$20.00. Checks or money orders should be 
made out to the Superintendent of Docu- 
ments and should be sent to the U.S. Gov- 
ernment Book Store, Department of State, 
Washington, D.C. 20520. 



452 



Department of State Bulletin 



INDEX October S, 1977 Vol. LXXVII, No. 1997 



Angola. Rhodesia — Proposals for a Settlement 
(Owen, Young, text of proposals) 417 

Botswana. Rhodesia — Proposals for a Settlement 
(Owen, Young, text of proposals) 117 

Congress. President Carter's Fourth Report on 
Cyprus Submitted to Congress (message) 445 

Cuba. Latin American Development in an Inter- 
dependent World (Todman) 440 

Cyprus. President Carter's Fourth Report on 
Cyprus Submitted to Congress (message) 445 

Developing Countries. Latin American De- 
velopment in an Interdependent World 
(Todman) 440 

Economic Affairs. Latin American Development 
in an Interdependent World (Todman) 440 

Fisheries. United States and Mexico Sign New 
Fisheries Agreement 445 

Human Rights. Latin American Development in 
an Interdependent World (Todman) 440 

Kenya. Rhodesia — Proposals for a Settlement 
(Owen, Young, text of proposals) 417 

Latin America and the Caribbean. Latin Ameri- 
can Development in an Interdependent World 
(Todman) 440 

Mexico. United States and Mexico Sign New 
Fisheries Agreement 445 

Mozambique. Rhodesia — Proposals for a Settle- 
ment (Owen, Young, text of proposals) 417 

Nigeria 

Developments Concerning Apartheid (Young, 
text of declaration) 446 

Rhodesia — Proposals for a Settlement (Owen, 
Young, text of proposals) 417 

Panama. Latin American Development in an 
Interdependent World (Todman) 440 

Presidential Documents. President Carter's 
Fourth Report on Cyprus Submitted to 
Congress 445 

Publications. 1950 "Foreign Relations" Volume: 
"Western Europe" 452 

South Africa 

Developments Concerning Apartheid (Young, 
text of declaration) 446 

Rhodesia — Proposals for a Settlement (Owen, 
Young, text of proposals) 417 

Southern Rhodesia. Rhodesia — Proposals for a 
Settlement (Owen, Young, text of proposals) . . 417 



Tanzania. Rhodesia — Proposals for a Settlement 
(Owen, Young, text of proposals) 417 

Treaty Information 

Current Actions 451 

United States and Mexico Sign New Fisheries 

Agreement 445 

United Kingdom. Rhodesia — Proposals for a Set- 
tlement (Owen, Young, text of proposals) 417 

United Nations 

Developments Concerning Apartheid (Young, 
text of declaration) 446 

Rhodesia — Proposals for a Settlement (Owen, 
Young, text of proposals) 417 

Zambia. Rhodesia — Proposals for a Settlement 
(Owen, Young, text of proposals) 417 

Same Index 

Carter, President 445 

Owen, David 417 

Todman, Terence A 440 

Young, Andrew 417, 446 



Checklist of Department of State 

Press Releases: September 12-18 

Press releases may be obtained from the Office 
of Press Relations, Department of State. Wash- 
ington, D.C. 20520. 



No. 

t420 
•421 



Date 



Subject 

9/12 U.S. -Japan Tokai Mura Agreement. 

9/12 Program for the official visit of Prime 
Minister Barre of France, Sept. 
14-17. 
'422 9/14 Conference on U.S. -Mexican Trade 
and Investment, San Antonio, 
Texas, Sept. 20-22. 

9/16 Study Group 1 of the U.S. National 
Committee of the International 
Telegraph and Telephone Consulta- 
tive Committee (CCITT), Oct. 6. 



•423 



* Not printed. 

t Held for a later issue of the Bulletin. 



Superintendent of Documents 
U.S. government printing office 

WASHINGTON. DC. 20402 



OFFICIAL BUSINESS 



POSTAGE AND FEES PAID 

Department of State STA-50I 
Third Class 




Subscription Renewals: To insure uninterrupted 
service, please renew your subscription promptly 
when you receive the expiration notice from the 
Superintendent of Documents. Due to the time re- 
quired to process renewals, notices are sent out 3 
months in advance of the expiration date. Any prob- 
lems involving your subscription will receive im- 
mediate attention if you write to: Superintendent 
of Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. 



s> 



/ / 



t 




vm 




THE DEPARTMENT OF STATE 

BULLETIN 



Volume LXXVII • No. 1998 • October 10, 1977 



U.N. CONFERENCE ON DESERTIFICATION 

Statement by Chief of the U.S. Delegation James A. Joseph 
and Background Article on Desertification 1*53 

THE LEADERSHIP ROLE FOR PRIVATE ENTERPRISE 
IN LATIN AMERICA 

Address by Assistant Secretary Todman h6k 

INTERNATIONAL DEBT: 
CURRENT ISSUES AND IMPLICATIONS 

Statement by Under Secretary Cooper 469 



THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY 



For index Mf inside bark cover 









iOKi 



THE DEPARTMENT OF STATE g [ .El IN 



Vol. LXXVII, No. 1998 
October 10, 1977 



For sale li\ ■ > ndenl of Documents 

U.S. Government Printing 
Washington, D.C 

PRICE: 
-sues plus semiannual inde 
domestic $42.50, foreign $5:115 
Single copy - 

The Secretary of State has determined that the pub- 
lication of this periodical is necessary in the transac- 
tion of the public business required by law of this 
Department. Use of funds for printing this periodi- 
cal has been approved by the Director of the Office 
of Management and Budget through January 31, 
1981. 

^ote: Contents of this publication are not 
copyrighted and items contained herein may be re- 
printed. Citation of the DEPARTMENT OF STATE 
BULLETIN as the source will be appreciated. The 
BULLETIN is indexed in the Readers' Guide to 
Periodical Literature. 



The Department of State BULLETIN, 
a weekly publication issued by the 
Office of Media Services., Bureau of 
Public Affairs, provides the public and 
interested agencies of the government 
with information on developments in 
the field of U.S. foreign relations and 
on the work of the Department and 
the Foreign Service. 

The BULLET IS' includes selected 
press releases on foreign policy, issued 
by the White House and the Depart- 
ment, and statements, addresses, and 
news conferences of the President and 
the Secretary of State and other offi- 
cers of the Department, as well as spe- 
cial articles on various phases of in- 
ternational affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and inter- 
national agreements to which the 
I nited States is or may become a party 
and on treaties of general interna- 
tional interest. 

Publications of the Department of 
State, United Nations documents, and 
legislative material in the field of 
international relations are also listed. 



U.N. Conference on Desertification 



' 



The United Nations convened an interna- 
tional Conference on Decertification at 
Nairobi, Kenya, August 29-September 9, 

1977, which was attended by delegates from 95 
countries and numerous intergovernmental 
a)id nongovernmental organizations and ob- 
servers. Followi)ig is a statement made at 
that conference by James A. Joseph, Under 
Secretary of the Interior a)id chief of the U.S. 
delegation, together with an article describing 
the background on the global desertification 
problem. 



STATEMENT BY UNDER SECRETARY JOSEPH 

Mr. President [Julius Gikonyo Kiano, 
Minister for Water Development of Kenya], 
on behalf of the U.S. delegation, I would like 
to extend to you, and to the elected Vice 
Chairpersons, our sincere congratulations. To 
|His Excellency, President Mzee Jomo 
Kenyatta, and the Government and people of 
Kenya, I wish to express our warm and heart- 
felt appreciation for your hospitality. I want 
also to record the U.S. appreciation to Dr. 
Tolba [Mostafa Tolba of Egypt, Executive Di- 
rector of the U.N. Environment Program] for 
j the outstanding service he has performed as 
Secretary General for this conference, and 
also to the conference secretariat. 

I am also pleased to have brought to this 
conference the greeting of President Jimmy 
Carter and the American people. The Presi- 
dent's message, which was read at the open- 
ing of the conference, highlights the impor- 
tance my country attaches to this conference. 

The U.S. delegation has come to this con- 
ference as representatives of a nation fully 
aware of the relationships between social de- 



October 10, 1977 



velopment and land management. Our 
experiences — and our aspirations, both for our 
own people and those of other nations— so 
clearly intermingle with the purpose and ob- 
jectives of this gathering that we have a di- 
rect and immediate stake in its success. As 
Under Secretary of the department of my 
country's government charged with the re- 
sponsibility for managing the nation's natural 
resources, I am pleased that we have not only 
been able to bring to this conference 
policymakers but some of our best experts in 
land management and reclamation. I want, 
therefore, to say a word about why we are 
participating in this conference. 

We are here because we share a common 
predicament. Desert encroachment and the 
deterioration of semiarid lands are not unique 
to any one country, region, or political sys- 
tem. The process called desertification is a 
threat to the social well-being of us all. 

We are here because desertification is a 
human problem. My nation's concern for 
people and the development of their com- 
munities has been highlighted in many 
forums. We now wish it known that this con- 
cern enlarges the boundaries of the human 
community to include the land community 
with all its interdependent parts — soil, water, 
plants, and animals. Such a concern does not 
remove humankind from the center of the 
community; it simply implies respect for the 
other members. We have come to this confer- 
ence convinced of the need for a new land 
ethic, a value system which not only fosters 
an appreciation for our ties to nature but 
which seeks to correct the abuses and eases 
the pain of many years of estrangement 
from it. 



453 



We are here to share our experiences. The 
lessons we have learned from past misman- 
agement of our arid and semiarid lands are all 
part of the national debate about effective 
land management and water resource de- 
velopment. 

We are here to learn. Desertification is not 
a new phenomenon. Many nations were 
struggling with its threat long before the 
birth of my own nation. We want to learn 
from others both what has worked and what 
has failed. 

Finally, we are here to help shape an inter- 
national consensus. We hope to come out of 
this conference with a common commitment to 
a realistic, meaningful, and coordinated plan 
of action to attack this global problem. 

U.S. Experience 

I mentioned earlier that the United States 
does not come to this conference as a curious 
bystander. We have many areas which have 
already reached the ecological danger 
point. 

While some may tend to dismiss the U.S. 
experience as not being typical, I rather be- 
lieve it should be quite instructive and mean- 
ingful to other nations, for in our relatively 
brief 200-year history, the United States has 
passed through a broad spectrum of economic 
development levels — initially, poor, sparsely 
settled, and agrarian; later, expansive, 
pioneering, rangeland-oriented with rapid 
population increases; and today, developed, 
industrialized, urbanized, and possessing a 
relatively stable population. 

In recognition of an array of problems and 
needs, a new Federal Land Policy and Man- 
agement Act was passed into law in 1976, re- 
pealing dozens of obsolete statutes and setting 
forth a multiple-use management concept for 
administering the hundreds of millions of 
acres of U.S. public lands. This concept in- 
volves the management of all the resources of 
the public lands and in that combination which 
will best serve the present and future needs of 
the people, while maintaining a high rate of 
productivity of the land and preserving the 
quality of the environment. 

In attempting to cope with desertification 
throughout the development of our country, 



454 



MESSAGE FROM PRESIDENT CARTER 

One of the serious problems of our age is the 
accelerating spread of deserts and desert-like 
conditions, with the resulting malnutrition, 
famine, and human poverty. 

Since desertification is a worldwide 
phenomenon — my own country is even now ex- 
periencing one of the worst droughts in its 
history — the United Nations has appropriately 
taken the lead in examining it. We are committed 
to help find a solution, not just at this conference 
but as part of our continuing desire to assist 
others in meeting basic human needs. The signifi- 
cant investment we are making to the Sahel de- 
velopment program — the international response 
to a tragedy which spawned this conference — 
testifies to our interest and commitment. 

The United States will do its utmost to support 
a long-term effective world effort to protect the 
Earth's natural resources. We are prepared to 
cooperate with other countries in developing effi- 
cient land and resource management policies and 
programs, which are essential to any corrective 
measures. The ultimate solution depends on the 
will and determination of the countries most con- 
cerned to apply their human and material re- 
sources in a way that can turn back the desert. 

I wish this important world conference, and all 
who participate in it, every success. 



the following lessons are among the most im- 
portant we have learned: 

— First, deterioration of our land and water 
persisted and increased until they were 
brought under effective public regulation; 

— Second, the necessary new laws, regula- 
tions, and programs must be developed with 
the direct participation of the affected local 
people; 

— Third, a definite philosophy of resource 
management must be followed; 

— Fourth, the management concept and im 
plementing programs must be supported by 
strong institutions of planning, assessment, 
research, education, and training; and 

— Last, combatting desertification requires 
continued vigilance and action by government, 
particularly to demonstrate why sound land 
management is in the best near- and long- 
term interests of the country and the indi- 
vidual citizens. 

Department of State Bulletin 






A Worldwide Problem 

The problem is critical on a worldwide 
scale, and the long-term social, economic, and 
political consequences of failure to solve it are 
enormous. 

The background analyses and numerous 
case studies before this conference reveal the 
same pattern identified in my review of the 
U.S. domestic experience being repeated 
throughout the world — the relentless pres- 
sures of too many people and too many ani- 
mals on land that can support far fewer num- 
bers; the introduction of inappropriate 
technologies that cause fertile soil to blow 
away or become saline; overuse and misuse of 
limited water resources causing them to be- 
come degraded or to dry up; and the destruc- 
tion of the vegetative cover by mismanage- 
ment, lack of understanding, or social and 
economic necessity which, regardless of ori- 
gin, quickly allows the deserts to intrude. 
Slowly but inexorably, over the decades, good 
land is lost to the desert. When drought ap- 
pears, the degraded condition is 
accelerated — and dramatized. 

Combatting desertification is not easy under 
the best of circumstances. Consequently, we 
recognize that desertification must be at- 
tacked as part of a much larger effort — one 
dedicated to uplifting the human spirit and 
man's economic condition through an inten- 
sified global development effort. 

The United States is firmly committed to 
working with the other nations in the world to 
achieve a new economic system. We stand 
second to none in our concern that basic 
human needs are met everywhere and that 
people and the betterment of their conditions 
should be at the forefront of our endeavors at 
this conference and beyond. 

I emphasize this because the subject of this 
conference — desertification — requires us to 
spend much of our time discussing land, wa- 
ter, and technologies and policies and laws 
and institutions. While doing this we are ever 
mindful, however, that concern for these in- 
animates derives directly from our belief that 
the world's marginal lands will be able to con- 
tribute their full potential to mankind's quest 
for a better life only if we can focus on the 
basic causes of the problem. It would, there- 



fore, be a matter of disappointment to the 
United States if this conference diverts pre- 
cious time to debating accepted developmental 
goals that cannot be achieved until the deserts 
have been rolled back. To ask more from these 
lands at the present is like expecting a sick 
person to do a well person's work. It is impos- 
sible. The first task is to get the sick person 
back on his feet and back to his potential. 

Hope for the Future 

Up to this point, I have spoken about con- 
cerns, about complex problems, and about dif- 
ficult challenges. I really want to talk about 
hope. And there is hope when the nations of 
the world agree on the importance of a prob- 
lem and make a special effort to come together 
to attempt to find ways to cope with it. The 
documentation before this conference is also a 
source of hope and inspiration. 

There is hope also to be found in the oppor- 
tunities which lie before us in the way of new 
methodologies and technologies which can be 
applied to the task. This conference can make 
a major contribution by raising public aware- 
ness of the status of these new tools and also 
of the steps which must be taken to insure the 
improvement, general availability, and appro- 
priate application. 

I have in mind, for example, the prospect of 
monitoring and assessing the desertification 
process via satellite and ground-based remote 
sensing and the application of new principles 
of multiple-use resource planning and man- 
agement. The extensive research on arid 
lands problems which has been carried out by 
nations, individually and collectively, over the 
past several decades is beginning to bear 
fruit. Greater use of saline water for food pro- 
duction, the safe use of sewage for irrigation 
and soil amendment, desalination of brackish 
ground water, "no tillage" agriculture, 
drought-tolerant crop varieties, and economic 
utilization of heretofore neglected desert 
vegetation — these and many others offer poten- 
tial new weapons in humanity's age-old fight 
to utilize the deserts and the desert margins 
in a manner which harmonizes social and eco- 
nomic imperatives with ecological constraints. 

Hope also derives from the historic willing- 
ness of the international community to rally at 



October 10, 1977 



455 



times of crisis. My country is pleased to be 
among those in the forefront of the many 
donor nations which are responding to the 
Sahelian drought. 

The Sahel development program, which is 
now beginning to be implemented under Afri- 
can leadership, holds great promise for pro- 
moting ecologically sound and accelerated de- 
velopment of this severely impacted region 
over both the medium and long term. The re- 
lationship of the regional program to the 
global plan of action to be adopted by this con- 
ference is a matter we believe should receive 
considerable attention over the next 2 weeks. 

In addition to participating in numerous 
"special" efforts, such as the Sahel program, 
over recent decades the United States has 
continually provided educational and training 
opportunities for scientists and students from 
abroad in our laboratories and universities. 
Working unilaterally, bilaterally, and through 
the multilateral organizations, we have at- 
tempted to help address problems of the de- 
veloping world through cooperative research, 
demonstration, and capital and technical as- 
sistance. Many other countries have done 
likewise. However, as this conference demon- 
strates by its mere existence, "we" in the 
United States, "we," the world community of 
nations, have not dealt adequately with the 
problem. 

The U.S. Commitment 

Speaking for my government, the United 
States is prepared to do more. I know that 
other countries will join with us after this con- 
ference in an intensified, coordinated attack 
on one of the most crucial global problems 
which we, our children, and future genera- 
tions must confront. Let me illustrate the in- 
tent and thrust of the U.S. commitment in 
this regard with several examples. 

The U.S. Congress is just now putting final 
touches on a foreign assistance bill which will 
provide a new and specific mandate for the 
provision of technical advisory services, train- 
ing, and research in the areas of natural re- 
sources management and environmental plan- 
ning. This legislation calls for special efforts 
"to maintain and restore the land, vegetation, 
water, wildlife, and other resources upon 

456 



which depend economic growth and human 
well-being, especially that of the poor." 

Under this same authorization, the United 
States will launch a new international pro- 
gram devoted to energy alternatives for arid I 
areas. It will include demonstration of small- 
scale energy technologies for use in rural 
areas as substitutes for firewood; a training- 
course for developing-country experts on 
energy analysis and management, with special 
emphasis on the rural sector; and research on 
fast-growing trees for use in reforestation 
leading to development of experimental plan- 
tations for such trees. 

In adflition, we will support development of 
an arid lands information system which will 
provide access to worldwide research on arid 
zone problems and multiple-use planning and 
management. My government plans to con- 
tinue and strengthen its participation in the 
Sahel development program and will support 
the establishment of a Sahelian institute. The 
United States is also prepared to give serious 
consideration to assisting with the strengthen- 
ing or establishment of other regional insti- 
tutes or centers judged essential by this 
conference. 

I mentioned earlier the rich potential af- 
forded by remote sensing and wish to note 
that two transnational feasibility studies on 
new regional centers in Latin America and 
Asia will be presented to this forum. The 
United States plans to upgrade its meteorolog- 
ical satellite system and to continue its ex- 
perimental LANDSAT [Earth resources tech- 
nology satellite] program. Throughout these 
efforts we will support the expanded 
worldwide use of the data and provide in- 
creased opportunities for training in their in- 
terpretation and application. In addition, the 
U.S. National Aeronautics and Space Admin- 
istration will give every consideration to re- 
quests for LANDSAT data outside the range 
of existing ground-receiving stations to sup- 
port sound projects related to desertification. 

As a final example — and our delegation is 
prepared to discuss these and other U.S. ini- 
tiatives in more detail as our deliberations 
proceed — our Peace Corps is prepared to train 
and place, at local government request, up to 
1,000 volunteers worldwide to assist in re- 
Department of State Bulletin 



[Id 
IS. 






r' 



..0 



Si 

IX. 

fcrei 



rid 

i 



forestation, natural resources management, 
and related antidesertification program 
efforts. 

Let me conclude by saying that the United 
States is gratified that the current concept of 
U.N. conferences is not simply discussion 
groups but action conferences. It is, there- 
fore, our hope that this conference will pro- 
ceed in the same spirit of harmony and coop- 



The Conference on Desertification was one of a 
series of U.N. -sponsored meetings of govern- 
ments addressing critical resource-oriented prob- 
lems. U.N. Conferences on the Environment 
(Stockholm, 1972), Food (Rome, 1974), Popula- 
tion (Bucharest, 1974), Human Settlements (Van- 
couver, 1976), and Water (Mar del Plata, 1977) 
have already been held. In the spring of 1979, a 
world meeting on Science and Technology for De- 
velopment will be convened at a site yet to be 
selected. 



eration which marked the recently completed 
U.N. Water Conference. The United States is 
now reviewing its water resources priorities 
and programs, both domestic and interna- 
tional, and we intend to make the necessary 
adjustments in light of the deliberations and 
conclusions of Mar del Plata. My government 
is prepared to consider the results of this con- 
ference with the same interest and serious- 
ness of purpose. 



THE GLOBAL DESERTIFICATION PROBLEM— 
A BACKGROUND ARTICLE ' 

From 1968 to 1973 a drought of mammoth 
proportions cut a swath of destruction 
through sub-Saharan Africa. Within a 
2,600-mile-long band running through the six 
nations of the Sahel — Senegal, Mauritania, 
Upper Volta, Mali, Niger, and Chad — 
decaying carcasses and bleached animal 
bones littered parched and barren ground. 

The drought was catastrophic. Lake Chad 
shrank to one-third its normal size. The 
Niger and Senegal Rivers were reduced to 
trickles, and the water table dropped leav- 
ing all but the deepest wells incapable of 



1 Taken from a Department of State pamphlet entitled 
"Desertification: A Global Challenge," released Julv 
1977. 



meeting the needs of man and livestock. 
Nomads, whose herds depend upon natural 
forage, lost between 20 and 50 percent of 
their animals. Altogether, over 25 million 
people were exposed to starvation, malnutri- 
tion, and disease. Once again the Sahara was 
said to be "on the march." 

Historically, desert margins have continu- 
ally ebbed and flowed. Throughout the 
world, evidence abounds that desert condi- 
tions now exist where lush vegetation once 
flourished. But what is most alarming about 
the present situation is the accumulating 
evidence that as a result of population 
growth, intensive use of marginal lands, and 
climatic change, deserts everywhere are ex- 
panding at an accelerating rate. 

Desert encroachment and the deteriora- 
tion of semiarid lands are not unique to Af- 
rica. The process, called desertification, is 
almost universal. It affects one-ninth of the 
Earth's surface and the lives of 60 million 
people. During the past decade, desertifica- 
tion and/or drought have touched large areas 
of Brazil, Chile, Afghanistan, Pakistan, 
Bangladesh, Somalia, Egypt, Ethiopia, 
Europe, China, Korea, and the United 
States. 

The cost to the international community of 
providing disaster assistance to drought- 
affected areas is staggering. For example, 
external assistance provided to the Sahel 
during the height of the drought reached 
almost a billion dollars. 

Desertification also removes from produc- 
tion large crop and range areas at the very 
time a growing world population demands 
more food. 

The problem is elusive and complex. Des- 
ertification occurs through a combination of 
natural and man-related events. The rota- 
tion of the Earth and its resultant wind pat- 
terns determine that many of the regions be- 
tween 15 and 25 degrees north and south of 
the Equator will be dry. The rain-shadow ef- 
fect on the leeward side of the mountains; 
distance from the ocean; shifts in ocean cur- 
rents; sunspot activity; upper atmospheric 
dust from volcanic eruptions and the wind; 
and seasonal changes in temperature, humid- 
ity, and rainfall are other factors contribut- 
ing to aridity. 



October 10, 1977 



457 









. 












iS' I 
























1 


- 










■c i c * 


•" 










£ "S ° 


*s 






















* <£ o 












ll 












= ■**-..- 








c 


' 










3 


■ 


" ** 








z 




^^■HitH I'- 








o 




ll Q *K 








; 




r" " : ' • f ; 








■<c 


s 


5 • Mil 










■ 


( I \1 

, s : 3 3 ii|5. s ^W 




i 






1 












f 


IT-".' .. ." . - . ! 1 i5 










I 


?I - r - !- 1 = & -V I 










I 


ft J W ' 1 1 


o 








■ '* •■' • - , " 


1=3" 










(, 


if 












1 










6 


<= " S S 5 

* H a | -f -- 












.iff > s , \i 




c 
o 












0) 


i 




I A I i 7^ 


- .".' : 




Crt 












03 












Q 

0) 
0) 






. 








> 














& 






U 


1 * 


c 





**- 

o 

(A 

ID 
0) 




5 v 




'MB 


n 




< 


e 




J/ " "t e 


a o 




T3 
C 
(0 


o 
O 




**> S. 6 


II 




en 


■- 










+-" 












9>. 












0) 


«< 








. 


</> 












0) 












Q 




; 


3 




1 ? ; 



458 



Department of State Bulletin ' ;.,. 



Evidence indicates, however, that climatic 
causes are not the principal reason for the 
increasing loss of arable land. Man's exploi- 
tation and abuse of the environment are 
largely responsible for the present state of 
affairs. The recent rapid growth of popula- 
tion and technology have merely underlined 
man's role. Poor and outdated agricultural 
practices such as one-crop plantings that 
exhaust the soil, straight-row plowing that 
makes land vulnerable to wind and water 
runoff, and overgrazing of rangelands en- 
danger fragile ecosystems along desert mar- 
gins and elsewhere. Deforestation resulting 
from land-clearing, timbering, or firewood- 
gathering is another major threat. The con- 
sequences are the depletion of soil nutrients 
or the topsoil itself, leading to reduced crop 
productivity and the loss of grass, shrubs, 
and browse necessary to sustain livestock. 
Without trees and groundcover, there is 
nothing to halt the invasion of sand. 

The United States clearly shares the prob- 
lem. Over the past 2 years, many of our 
Western States have experienced a severe 
drought that has forced water-rationing in 
large urban areas. Industrial activity has 
been cut back as the hydropower potential of 
the Columbia and other major rivers con- 
tinues to drop. In the U.S. "bread- 
basket" — our Great Plains — the threat of a 
second Dust Bowl looms. 

In the semiarid regions of our Southwest- 
ern States, population growth, urban expan- 
sion, and agricultural and industrial de- 
velopment have caused drastic shortages of 
surface and underground water. Farms are 
being abandoned as the cost of pumping 
water from greater depths becomes too 
great and soil and water become too saline. 
Future economic development of these 
resource-deficient areas has now become a 
public policy issue. 

Growing evidence also indicates that man 
directly affects weather patterns which con- 
tribute to the vicious cycle that enables des- 
ertification to spread. The absence of 
groundcover allows wind to carry dust to the 
upper atmosphere where the particles block 
sunlight, lower temperatures, and diminish 
natural convection of air currents. The 
warming or cooling of the Earth by merely a 



few degrees could be responsible for crop 
failures, famine, and drought. 

But dust is not the only possible cause of 
climatic change. The burning of fossil fuels 
and the resulting increases in carbon dioxide 
also may influence warming and cooling- 
trends, and scientists now fear that man- 
made fluorocarbons and agricultural chemi- 
cals affect the ozone shield which protects us 
from the Sun's ultraviolet radiation. 

Must man docilely accept the loss of the 
land's productive capacity, or can something 
be done to halt or reverse the desertification 
process that already has gone too far? 

In our own country, lessons learned in the 
Dust Bowl era have led to new ways of 
managing the range and cultivating the soil. 
The government now controls grazing on 
public lands. Before overgrazing can occur 
ranchers manage herd sizes and move ani- 
mals to other pastures, allowing the grass- 
lands to regenerate. In addition, farmers 
terrace fields and plant trees to serve as 
wind breaks and help prevent erosion. 

We are also developing or rediscovering 
better ways to conduct dryland farming. One 
method, based on a centuries' old custom, al- 
lows some fields to lie fallow and regain 
moisture under the protection of mulch or 
crop stubble. Farmers now cultivate spe- 
cially bred crops requiring less water, and 
we are now placing new emphasis on the 
conservation and upgrading of water 
supplies. 

In southern New Mexico, where grass- 
lands long ago were grazed virtually into ex- 
tinction, spraying eliminates scrub plants of 
mesquite, creosote, and tarbush to allow the 
grasses to come back. 

Other nations suffering even more from 
the effects of desertification have also taken 
initiatives. In a long-range effort to halt the 
encroaching Sahara, Algeria has begun an 
ambitious tree-planting project in its north- 
ern desert. The Algerians hope the eventual 
planting of some 20 billion trees will deflect 
the winds and serve as barriers to the for- 
ward movement of sand dunes. 

Mexico, Pakistan, and Sri Lanka are also 
conducting huge reforestation programs. 
India will plant date trees in a massive ef- 
fort to contain the Rajasthan Desert. 



October 10, 1977 



459 



Space-age technology has been enlisted in 
the war against desertification. Remote 
sensing satellites, such as those in the U.S. 
LANDSAT series, already scan 85 percent 
of the world's drylands. Computer-enhanced 
images provide scientists with data on vege- 
tational changes, geologic formations, dune 
movement, surface wind patterns, and 
ground water and drainage systems. In a re- 
cent series of photographs taken on the 
Apollo-Soyuz flight, scientists could clearly 
see the encroachment of Egypt's western 
desert on the Nile Delta. 

The advantage of this technology is ob- 
vious, but for the afflicted nations of the 
world to benefit it must be made available to 
all. 



U. S., Japan Sign Determination 
for Nuclear Facility 

Press release 420 dated September 12 

The Japanese Minister of Science and 
Technology^ Sosuke Uno, was in Washington 
September 12 and 13 for the signing of the 
Joint Determination for Reprocessing of 
Special Nuclear Material of United States 
Origin and the issuance of a joint com- 
munique. This agreement is a result of 
negotiations in Tokyo from August 29 to 
September 1 concerning the operation of the 
Japanese prototype reprocessing facility at 
Tokai Mura using U.S. origin fuel. 

The text of the communique and the de- 
termination was released on September 12, 
1977. Gerard Smith, the U.S. Special Repre- 
sentative for Nonproliferation Matters, and 
Robert Fri, Acting Administrator for the 
Energy Research and Development Admin- 
istration, signed for the United States; 
Minister Uno and Ambassador to the United 
States Fumihiko Togo for the Government of 
Japan. 

Minister Uno made calls on Secretary of 
Energy James Schlesinger and Mr. Fri on 
September 13 before traveling to Oak Ridge, 
Tenn. After a full day touring Oak Ridge, he 



traveled to San Francisco before returning 
to Japan on September 16. 



JOINT COMMUNIQUE 

Negotiations between the Governments of Japan and 
the United States of America concerning the opera- 
tion, in accordance with the Agreement for Coopera- 
tion between the Government of Japan and the Gov- 
ernment of the United States of America Concerning 
Civil Uses of Atomic Energy of February 26, 1968, as 
amended (hereinafter referred to as "the Agreement 
for Cooperation"), of the Tokai Reprocessing Facility 
(hereinafter referred to as "the Facility") were held in 
Tokyo from August 29 to September 1, 1977. The 
Japanese delegation was led by H.E. Mr. Sosuke Uno, 
Minister of State for Science and Technology and 
chairman of the Atomic Energy Commission, while the 
United States delegation was headed by H.E. Ambas- 
sador Gerard Smith, Special Representative for Non- 
Proliferation Matters. The negotiations were con- 
ducted in a frank and friendly atmosphere throughout 
the session. 

The United States recognizes the importance of the 
development of nuclear energy for the energy security 
and economic development of Japan. The United States 
strongly supports continued development of peaceful 
uses of nuclear energy in Japan. The United States is 
prepared to cooperate with Japan for the purpose of 
assuring that Japan's long-term nuclear energy pro- 
grams, including its breeder research and development 
program, not be prejudiced. The United States is pre- 
pared to work with Japan and other countries to estab- 
lish arrangements for assured supply of natural and 
low enriched uranium. The United States affirms that 
its policy is to accord Japan non-discriminatory treat- 
ment in the field of the peaceful uses of nuclear 
energy. 

Japan and the United States will cooperate in 
evaluating the nuclear fuel cycle and the future role of 
plutonium. They share the view that plutonium poses a 
serious proliferation danger, that its recycling in light 
water reactors is not ready at present for commercial 
use, and that its premature commercialization should 
be avoided. They equally share the view that, if sep- 
aration of plutonium for research and development 
work on fast breeder reactors and other advanced 
reactors is carried out, it should be at a rate not ex- 
ceeding actual plutonium needs for such purposes. 

Both Japan and the United States intend to defer 
decisions relating to the commercial use of plutonium 
in light water reactors at least during the Interna- 
tional Nuclear Fuel Cycle Evaluation Program (INFCEP), 
which is expected to continue for two years. 
Japan plans to do related research and development 
work involving several kilograms of plutonium during 
this period. Furthermore, Japan and the United States 



460 



Department of State Bulletin 



do not intend to undertake any major moves regarding 
additional reprocessing facilities for plutonium separa- 
tion during the above-mentioned period. Thereafter, 
when making decisions on such facilities, they intend 
to take into account the outcome of the INFCEP, in- 
cluding spent fuel storage possibilities and other tech- 
nical and institutional alternatives to reprocessing. 

Taking into account both immediate practical consid- 
erations and the desire of the parties to identify fuel 
cycles that are as proliferation resistant as possible, 
the parties reached an understanding that the opera- 
tion of the Facility will be guided, for an initial period 
of two years, by the following principles, in accordance 
with the relevant laws and regulations of Japan: 

1. The Facility will process up to 99 tonnes of U.S.- 
origin spent fuel. The major portion of this spent fuel 
will be processed in the scheduled mode to prove out 
plant design and to preserve Japan's warranty rights. 
Some of this spent fuel may be used for the experimen- 
tal coprocessing described in paragraph 4 below. 

2. Japan intends to defer, during the initial period of 
operation, the construction of the plutonium conversion 
facility scheduled to be attached to the Facility. 

3. The United States is prepared to consider with 
Japan on an annual basis Japanese plutonium require- 
ments for advanced reactor research and development 
and to seek ways to ensure that any shortfalls of 
plutonium resulting from deferral of the construction 
of the plutonium conversion facility referred to in the 
preceding paragraph will not entail unnecessary delay 
in the Japanese program. 

4. Experimental coprocessing will be undertaken in 
the Operational Test Laboratory (OTL) at the Facility 
and in other facilities, during the period when the main 
Facility is operating in the scheduled mode. The re- 
sults of this experimental work will be made available 
to INFCEP in support of the INFCEP effort to iden- 
tify fuel cycles that are as proliferation resistant as the 
"once through" fuel cycle. 

5. At the end of the initial period of operation, the 
mode of operating the Facility will be promptly con- 
verted from conventional reprocessing to full-scale 
coprocessing, if such coprocessing is agreed by the two 
Governments to be technically feasible and effective as 
a result of the experimental work in the OTL and in 
the light of the results of INFCEP. The necessary 
modifications of the Facility will be carried out in such 
a way as to assure that the expenditures and delays 
involved are kept to the minimum consistent with ful- 
filling the purposes of these principles, and that the 
operation of the Facility may start expeditiously in the 
coprocessing mode. 

6. The International Atomic Energy Agency (IAEA) 
will be afforded full opportunity to apply safeguards at 
the Facility, including continuous inspection, in ac- 
cordance with the relevant existing and future interna- 
tional agreements. Japan is willing to improve the 
safeguardability and physical security at the Facility, 



and for this purpose is prepared to cooperate with the 
IAEA in the testing of advanced safeguards in- 
strumentation, and to make timely preparations to 
facilitate the use of such instrumentation in the initial 
period. The United States is prepared to participate in 
this safeguards testing through agreed means. Japan 
and the United States will promptly consult with the 
IAEA to facilitate implementation of this testing pro- 
gram. The results of this safeguards experimentation 
will be made available to INFCEP. 

On the basis of the understandings, principles and 
intentions set out above, and in view of Japan's con- 
tinued adherence to the Non-Proliferation Treaty and 
its undertakings herein with respect to safeguards, the 
limited amount of plutonium involved, the carefully 
monitored experimental character of the process, and 
the provisions for the application of effective 
safeguards by the IAEA and for advanced safeguards 
experimentation, a joint determination has been made 
pursuant to Article VIII C of the Agreement for Coop- 
eration that the provisions of Article XI of that 
Agreement may be effectively applied to the reprocess- 
ing at the Facility of irradiated fuel elements contain- 
ing up to 99 tonnes of fuel material received from the 
United States. 

Japan and the United States will consult on a regular 
basis, or at the request of either of the parties, on the 
implementation of the above-mentioned matters and on 
any other matters related to the Agreement for Coop- 
eration between the two countries. 



JOINT DETERMINATION 

On the basis of the understandings, principles and 
intentions set out in the Communique of the Govern- 
ment of Japan and the Government of the United 
States of America issued on September 12, 1977, and 
in view of Japan's continued adherence to the Treaty 
on the Non-Proliferation of Nuclear Weapons and its 
undertakings therein with respect to safeguards, the 
limited amount of plutonium involved, the carefully 
monitored experimental character of the process, and 
the provisions for the application of effective safe- 
guards by the International Atomic Energy Agency 
and for advanced safeguards experimentation, 

1. The Government of Japan and the Government of 
the United States of America hereby jointly determine 
pursuant to Article VIII C of the Agreement for Coop- 
eration between the Government of Japan and the 
Government of the United States of America Concern- 
ing Civil Uses of Atomic Energy of February 26, 1968, 
as amended, that the provisions of Article XI of that 
Agreement may be effectively applied to the reprocess- 
ing in the Tokai Facility of the Power Reactor and Nu- 
clear Fuel Development Corporation of irradiated fuel 
elements containing up to 99 tonnes of fuel material 
received from the United States; 



October 10, 1977 



461 



2. No determination is now being made as to 
whether safeguards can be effectively applied to Purex 
reprocessing plants in general; 

3. There is no change in the requirement for sub- 
sequent determinations as to whether the provisions of 
Article XI may be effectively applied to the reprocess- 
ing or other alteration in form or content of any special 
nuclear material or irradiated fuel elements subject to 
Article VIII C beyond the irradiated fuel elements re- 
ferred to in paragraph 1 above. However, the United 
States would be prepared to enter into an affirmative 
joint determination, if the mode of operating the said 
facility is converted to full-scale coprocessing, subject 
to the requirements of its laws and mutual agreement 
on the scope and character of the coprocessing 
operation. 



Diplomatic Recognition 

A Foreign Relations Outline 1 

Recently President Carter expressed his 
desire that the United States work toward 
establishment and maintenance of normal 
diplomatic relations with the governments of 
all states. The United States now has diplo- 
matic relations with over 130 governments 
of states. It has no diplomatic relations, or 
is in the process of normalizing relations, 
with 11 other governments of entities widely 
recognized as states. (We do not recognize 
Southern Rhodesia as an independent state, 
in accordance with U.N. decisions and res- 
olutions.) In a few cases, the United States 
has withheld recognition from, or has sus- 
pended relations with, another government; 
in other cases, governments have suspended 
relations with us. 

Under our constitutional system, recogni- 
tion and the establishment of diplomatic re- 
lations are Presidential prerogatives. Estab- 
lishing and maintaining diplomatic relations 
with governments, however, is not a unilat- 
eral process; both states must agree that it 
serves their national interests. 

The United States maintains relations 
with other governments because it helps us 



1 Based on a Department of State publication in the 
Gist series, released August 1977. This outline is de- 
signed to be a quick reference aid on U.S. foreign rela- 
tions. It is not intended as a comprehensive U.S. pol- 
icy statement. 



achieve our basic foreign policy objectives: 
By communicating directly with govern- 
ments on a full range of issues — by stating 
our views and listening to theirs — we can 
help avoid misunderstandings and affect the 
decisions and actions of other governments. 
This is particularly true in crises, when good 
communication is essential. 

Criteria for Recognition 

Diplomatic recognition of governments is a 
comparatively recent practice in the history 
of international relations. Traditionally some 
European governments used nonrecognition 
of revolutionary change to protect monar- 
chies and to emphasize the unique legitimacy 
of dynastic heirs and their governments. 
France ignored this tradition by recognizing 
the United States during our Revolutionary 
War. Later, when the revolutionary French 
Government took power in 1792, Thomas 
Jefferson, our first Secretary of State, in- 
structed the U.S. envoy in Paris to deal 
with it because it had been "formed by the 
will of the nation substantially declared." 

Throughout most of the 19th century, the 
United States recognized stable govern- 
ments without thereby attempting to confer 
approval. U.S. recognition policy grew more 
complex as various Administrations applied 
differing criteria for recognition and ex- 
pressed differently the reasons for their de- 
cisions. For example, Secretary of State 
William Seward (1861-69) added as a crite- 
rion the government's ability to honor its 
international obligations; President Ruther- 
ford Hayes (1877-81) required a demonstra- 
tion of popular support for the new govern- 
ment; and President Woodrow Wilson 
(1913-21) favored using recognition to 
spread democracy around the world by de- 
manding free elections. 

Other criteria have been applied since 
then. These include the degree of foreign in- 
volvement in the government as well as the 
government's political orientation, attitude 
toward foreign investment, and treatment of 
U.S. citizens, corporations, and government 
representatives. 

One result of such complex recognition 



462 



Department of State Bulletin 



criteria was to create the impression among 
other nations that the United States ap- 
proved of those governments it recognized 
and disapproved of those from which it 
withheld recognition. This appearance of ap- 
proval, in turn, affected our decisions in 
ways that have not always advanced U.S. 
interests. In recent years, U.S. practice has 
been to deemphasize and avoid the use of rec- 
ognition in cases of changes of governments 
and to concern ourselves with the question of 
whether we wish to have diplomatic relations 
with the new governments. 

The Administration's policy is that estab- 
lishment of relations does not involve ap- 
proval or disapproval but merely demon- 
strates a willingness on our part to conduct 
our affairs with other governments directly. 
In today's interdependent world, effective 
contacts with other governments are of 
ever-increasing importance. 

Status of Relations 

Albania. There has been no Albanian ex- 
pression of interest in establishing diplomatic- 
relations. 

Angola. The United States looks forward 
eventually to establishing relations with An- 
gola. 

Cambodia. The new government of what 
is now Democratic Kampuchea has ex- 
pressed no interest in establishing relations 
with the United States. 

People's Republic of China. The P.R.C. 
and the United States maintain liaison of- 
fices in each other's capitals. The goal of 
U.S. policy is normalization of U.S. -P.R.C. 
relations on the basis of the Shanghai com- 
munique (1972). 

Cuba. The United States is seeking to 
normalize relations with Cuba through 
negotiations based on strict reciprocity. 

Equatorial Guinea. The United States 
suspended relations following a dispute over 
treatment of the U.S. Ambassador. 

Iraq. The United States will reestablish 
diplomatic relations, which Iraq suspended, 
whenever Iraq desires. 

North Korea. The United States is pre- 
pared to move toward improved relations, 



provided North Korea's allies take steps to 
improve relations with South Korea. 

Mongolia. The United States has made 
clear to the Mongolian People's Republic 
that we are prepared to continue negotia- 
tions begun in 1973 aimed at establishing 
diplomatic relations. 

Vietnam. The United States and Vietnam 
have begun discussions to explore the possi- 
bility of normalizing relations. 

South Yemen. The United States looks 
forward to normalizing relations with South 
Yemen. 



Status of Palestinians 
in Peace Negotiations 

Department Statement 1 

Along with the issues of the nature of 
peace, recognition, security, and borders, the 
status of the Palestinians must be settled in a 
comprehensive Arab-Israeli peace agreement. 
This issue cannot be ignored if the others are 
to be solved. 

Moreover, to be lasting, a peace agreement 
must be positively supported by all of the 
parties to the conflict, including the Palestin- 
ians. This means that the Palestinians must 
be involved in the peacemaking process. 
Their representatives will have to be at 
Geneva for the Palestinian question to be 
solved. 

As cochairman of the Geneva conference, 
the United States has a special responsibility 
for insuring the success of the conference. 
We have therefore been exploring with the 
confrontation states and Saudi Arabia a 
number of alternatives with regard to the 
participation of the Palestinians in the peace 
negotiations. 

With respect to U.N. Resolution 242, all of 
the participants in the peace conference 
should adhere to the terms of that resolution 
and Resolution 338 which presently form the 
only agreed basis for negotiations. 



1 Read to news correspondents on Sept. 12, 1977, by 
Department spokesman Hodding Carter III. 



October 10, 1977 



463 



The Leadership Role for Private Enterprise in Latin America 



Following is an address by Terence A. 
Todman, Assistant Secretary of State for 
Inter-American Affairs, before a meeting of 
the Council of the An/ericas i)i Washington , 
D.C. on June 27, 1977. 

The Council of the Americas is a young or- 
ganization, but its membership represents the 
collective wisdom and experience of nearly all 
the major American firms with investments in 
Latin America and the Caribbean. That ex- 
perience has been gained over many decades 
through eras of growth and turbulence abroad 
and shifting priorities at home. During their 
long involvement in the region many of your 
companies have confronted in microcosm the 
painful dilemmas and difficult adjustments 
that have marked the relationships between 
our country and the other nations of this 
hemisphere at the level of national policy. 

In recent years we have seen not only a 
phenomenal developmental growth of the 
Latin economies themselves; we have also 
seen a gradual yet profound shift in the way 
U.S. firms look at their role and respon- 
sibilities as investors in foreign societies. This 
has been accompanied by a similar change in 
the way the U.S. investor is perceived and 
regarded by the host governments and 
peoples. 

In each of these major developments the 
business community represented by this 
Council has played a key catalytic role. The 
Council itself as an organization has had — and 
is continuing to have — an important impact. 
Your public education efforts on the Panama 
issue, your contributions to our government's, 
understanding of technology transfer issues, 
and — most important of all — your progressive 
approach to problem-solving and good corpo- 
rate citizenship overseas have created a model 
of enlightened leadership that all of us. 



whether in government or the private sector, 
might well emulate. 

For that reason I come here today with a 
great deal of hope for the future and with the 
firm conviction that all of us here have an im- 
portant and mutually supporting role to play 
in it. 

Private-Sector Relationships 

As a representative of the U.S. Govern- 
ment and of this Administration, I am con- 
stantly struck by the fact that official gov- 
ernment actions are only the tip of the iceberg 
in the overall relationship between this coun- 
try and the peoples of other societies. Presi- 
dent Carter's pledge to involve the American 
people in the foreign policy process reflects a 
recognition of that fact. We recognize that 
government policies have little meaning un- 
less they reflect, and are backed up by, the 
public attitudes and private actions of Ameri- 
can citizens. 

This nongovernmental dimension is particu- 
larly significant in our relations with Latin 
America and the Caribbean. Every year a 
tremendous two-way migration takes place 
between the United States and the nations of 
South America, Central America, Mexico, and 
the Caribbean. Several million U.S. tourists 
visit the region each year. American citizens 
from all walks of life participate with their 
Latin American counterparts in exchange 
programs designed to increase understanding 
and cooperation between our cultures. For 
their part, many people from the Latin and 
Caribbean countries come to the United 
States as tourists or students, on business or 
seeking a permanent place to live or work. 
Within the United States, the growing size 
and influence of the U.S. Hispanic community 



464 



Department of State Bulletin 



provides yet another human and cultural link 
joining the Americas. 

Commercial relationships are even more 
pervasive and deeply ingrained. Indeed, the 
activities of American firms are probably the 
most widely impacting of all U.S. public or 
private dealings with Latin America. 

Latin America accounts for a huge volume 
of U.S. trade. Our exports and imports for the 
region have more than tripled in the last 10 
years, reaching a combined annual figure of 
$34 billion. This makes Latin America our 
third largest trading partner next to Western 
Europe and Canada. It stands far ahead of 
every other area. 

These statistics are impressive in them- 
selves but standing behind them are hundreds 
of thousands of individual transactions — each 
leaving a wake of personal relationships and 
impressions. In the area of direct 
investment — where your own experience is 
paramount — the impact of the U.S. private 
sector on Latin economies and societies has 
been not only extensive but continuing and 
deeply felt. The $20 billion U.S. private in- 
vestment stake in Latin America means not 
only a very real American interest in the eco- 
nomic progress and institutional development 
of the host countries, but also a substantial 
human impact on the everyday lives and at- 
titudes of the host peoples. 

Our overlapping populations and intense 
economic relationships have produced many 
common problems and a growing interest in 
their resolution. Economic problems that af- 
fect U.S. communities in the first instance 
have secondary effects on Caribbean tourism, 
for instance, or on the U.S. market for South 
American exports. Economic problems 
elsewhere in the hemisphere, in turn, often 
translate into immigration problems for U.S. 
communities. Poverty and hopelessness feed 
both ends of the drug traffic chain. For good 
or ill, our lives and those of our neighbors 
throughout the Americas are deeply 
entwined. 

The salience of these multiple private rela- 
tionships to overall U.S. -Latin American rela- 
tions is further magnified by the fact that we 
perceive no military threat from the region. 
Latin America's own development drive and 
the decline of security problems as such has 



moved economic and human relationships to 
the center of hemispheric relations. 

The Challenge of Develoment 

To the extent that economics is the issue, 
development — economic growth and the prog- 
ress toward social goals that it makes 
possible — is the only long-term answer. The 
nations of Latin America, like the rest of the 
developing world, seek to telescope into a few 
short decades the process of economic and so- 
cial development that in the Northern Hemi- 
sphere evolved over many generations. Their 
struggle represents in many respects the cen- 
tral challenge of our time. 

Industrialized countries like the United 
States have a very real interest in the success 
of that ambitious effort. The new realities of 
global economics — the scarcity and maldis- 
tribution of oil, the worldwide ripple effects of 
recession, the need of both developed and de- 
veloping countries for markets, and the inter- 
dependence of resource producers and 
consumers — all point to a system where no na- 
tion can hope to achieve or sustain its own 
prosperity in isolation. No nation, not even 
ours, can isolate itself from the impact of de- 
velopment failure and frustration upon world 
economic and political stability. 

The challenge of development reaches be- 
yond narrow self-interest. All of us who have 
known the blessings of material security and 
productive achievement have a moral stake in 
the success of the drive for development grip- 
ping two-thirds of the globe. Widespread pov- 
erty in much of the world is of direct moral as 
well as political and economic importance to the 
United States. Our concern over the widening 
gap between rich and poor, our own role as a 
disproportionate resource consumer, and the 
deeply felt desire of the American people to 
see our nation as a champion of human rights 
and aspirations make it impossible for us to 
stand aloof from this great human struggle. 

The challenge for the industrialized nations 
would be far simpler — though more painful — if 
the task were merely one of redistributing the 
world's existing wealth. But the development 
process, as the very term suggests, requires 
that the economies of the aspiring nations ac- 
tually develop — grow in institutional capacity, 



October 10, 1977 



465 



human performance capability, individual de- 
velopment opportunity, and productivity. 

The achievement of that complex goal will 
require not only the energies and best talents 
of the developing societies themselves, but a 
substantial infusion of capital, technology, and 
know-how from outside the developing world. 

The U.S. Government recognizes that need 
and is committed to helping to meet it. But 
the response this country makes to the de- 
velopment challenge depends as much — and in 
some critical ways more — on what takes place 
through the private sector as on official gov- 
ernment actions. 

Many of the productive resources the de- 
veloping economies need from outside 
themselves — industrial technologies, manage- 
rial skills, tested marketing capabilities — are 
mainly in the hands, not of the U.S. Govern- 
ment, but of the U.S. business community. . 

The contribution of resources to develop- 
ment cannot be compelled by governments — 
ours or theirs. The U.S. Government supple- 
ments private-sector interactions with 
economic cooperation programs and special 
trade arrangements for developing countries. 
Their governments establish the rules and en- 
vironment for your contributions. Neverthe- 
less, the crucial decisions on your involvement 
in development — whether to invest and 
where, what markets to pursue and how, 
what technology to apply or develop — must 
and will be made voluntarily by individual en- 
trepreneurs. 

In recent years, the climate for these deci- 
sions has not always been entirely propitious. 
Though conditions have, of course, varied 
greatly from country to country, there has 
been a tendency toward expanded public- 
sector activities, often to the detriment of 
local as well as foreign private investors and 
entrepreneurs. 

I believe this climate is now changing for 
the better. Economic nationalism is receding. 
It is being replaced by a new awareness of the 
fragility of the development process and of the 
important contributions that foreign firms can 
make. There is a new awareness that develop- 
ing societies can still profit greatly from the 
attitudes and habits of operation that have 
made American business so successful. The 
pragmatic and imaginative search for solu- 



tions to production and marketing problems; a 
sense of optimism and historical perspective; a 
sense that individual effort can be both per- 
sonally and socially rewarding — these things 
cannot be fully acquired from books nor 
transferred through a public grant. They can 
only become habits through imitation and 
experience. 

Role of U.S. Businessmen 

Because the corporate community holds so 
many of the tangible and intangible assets the 
development process requires, American 
businessmen have an opportunity to play a 
role of substantial leadership and creativity in 
translating development aspirations into prac- 
tical achievements. American business, with 
its far-ranging resources and its myriad daily 
decisions, can take the lead in projecting at- 
titudes and the type of conduct that will place 
this nation firmly on the side of progress, 
equity, and human dignity in meeting the de- 
velopment challenge. 

Business can and must take the lead in 
working out constructive relationships with 
the goveimments in their host societies. These 
last decades have seen changing patterns and 
difficult adjustments for both businesses and 
governments. It would be foolhardy to pre- 
tend that the investor-host relationship, in the 
context of global inequalities, will ever be 
frictionless. 

But we need look no further than this Coun- 
cil for models of how sophisticated, politically 
sensitive businessmen with enlightened lead- 
ership can turn potential conflicts into exer- 
cises in pragmatic problem-solving, anticipat- 
ing problems before they arise and devising 
procedures to deal with them. 

It is this spirit of cooperation — a willingness 
to come to terms with the new rules of the 
game and to master them — that will mark the 
successful entrepreneur in Latin America or 
the Caribbean today. Companies contemplat- 
ing a major investment or commercial role 
abroad have to make sure that the ground 
rules for coming in and staying in are clearly 
understood and mutually supported. If their 
industry is subject to regulation or limitations 
on continuing foreign control, they can 
cooperate with the host nations in working out 



466 



Department of State Bulletin 



details and language that both sides can live 
with. If disputes arise, they can attempt to 
work out amicable settlements using the good 
offices of our government where we can be 
helpful and of appropriate private 
organizations. 

Progressive American businesses abroad 
have demonstrated that by integrating their 
own business objectives into the agenda and 
priorities of the host government, they can 
discover new options and opportunities for 
advancing their own interests while serving 
those of the society in which they function. 

On the home front, the business community 
can also take the lead in bringing the realities 
of global economics home to the U.S. public. 

— Businessmen can contribute to the de- 
velopment of trade and tariff policies by 
clarifying for the selling and consuming public 
the link between U.S. willingness to import 
and our ability to export. 

— Business can clarify the extent to which 
consumers, retailers, and importers of raw- 
materials depend on the continued growth and 
vitality of Latin American economies and the 
well-being of their industries and workers. 

— Finally, business can take the lead in 
helping the U.S. public understand the mag- 
nitude and significance of the development 
struggle itself and the U.S. stake in it. 

But beyond its pursuit of enlightened self- 
interest in dealing with most governments — 
beyond its very useful role in educating a 
wider business and general public — the busi- 
ness community itself can take the lead in re- 
sponding with vigor and creativity, on behalf 
of the American people, to the development 
challenge. 

Top-level corporate leadership— people like 
you — can set a standard for policymaker and 
private citizen alike by accepting and support- 
ing the development goal. We look particu- 
larly to you for a generous and creative ap- 
proach in working out the complex practical 
arrangements of effective technology 
transfer. 

Business leadership can also make a major 
contribution by seeking out types of invest- 
ment or trade initiatives that would be par- 
ticularly appropriate for the local Latin 
economy — for instance, in meeting local mar- 



ket needs or in the development of industries 
that can be competitive in the world market. 
Whatever their product, American busi- 
nessmen overseas can contribute to the well- 
being of the people in their host country by 
maintaining high labor relations standards in 
their own companies. This achievement not 
only would benefit the workers involved but 
would reduce major obstacles to domestic 
support in the United States for foreign in- 
vestment and imports. 

U.S. firms in Latin America — particularly 
major corporations like many of the Council 
members — are also in a unique position to ad- 
vance the ideals of our nation. You become 
factors in the local social as well as economic 
picture. A creative use of your human re- 
sources might lead to sponsorship of people- 
to-people exchange programs, joint profes- 
sional projects, industry-academic working- 
groups, and other cultural initiatives. 

Above all, you are in a position both to con- 
vey and to act out the concern of the Ameri- 
can people for human rights and for the vic- 
tims of human rights violations anywhere in 
the world. You may often be in an effective 
position to convey the interest in our nation in 
basic human rights. In weighing options 
among potential buyers, sellers, industrial 
sites, or the like, you may have an opportu- 
nity to demonstrate that Americans prefer to 
do business with law-abiding, compassionate 
people. This attitude — certainly a spontane- 
ous reaction of most of us here — needs com- 
munication from the private as well as the 
public sector. 

Role of U.S. Government 

The American business community will find 
that this government and this Administration 
understand and support the constructive role 
of American entrepreneurs in economic de- 
velopment and in reflecting American ideals. 

We will do what we can, as the President 
has pledged, to help avoid differences and 
misunderstandings with host governments 
arising out of U.S. business activities. 

We will seek ways by which the government 
can bring attention to new opportunities for 
U.S. business to engage in profitable ac- 



October 10, 1977 



467 



tivities that contribute to economic and social 
development in Latin America. 

We will continue to support freer trade 
among nations, so that in your efforts to ex- 
port and import you will encounter as few re- 
strictions as possible. 

We will work to conclude negotiations for a 
new Panama Canal treaty that will enjoy the 
mutual support of the United States and 
Panama. We will thereby help to assure that 
your stake in an operating canal is not jeopard- 
ized by future friction. Your own organiza- 
tion's role in fostering responsible public de- 
bate on the Panama issue will certainly 
contribute to a healthy climate of public opin- 
ion here. I congratulate you on your initiative 
and leadership as well as on the fine programs 
you have put together in various American 
communities. 

We will look to you, to your interest and 
expertise, to help build a relationship between 
the American people and the peoples of Latin 
America that will reflect the friendliness, di- 
versity, and practical genius of our people. 

For each of us as individuals, our reward 
will be the knowledge of having contributed 
personally to the economic advancement and 
international harmony of this hemisphere and 
to the principles we are most proud to identify 
with our nation. 



Atlantic Treaty Association 

Following is the text of a letter sent by 
President Carter to Mr. Karl Mommer, Pres- 
ident of the Atlantic Treaty Association , on 

August 27 . 1 

August 27 

Dear Mr. Mommer: I ask you to extend to 
the Association my warmest greetings as you 
assemble again to consider the current state 
of our Alliance. We look to you, opinion lead- 
ers in the North Atlantic Community, for in- 
sights on how we should move to strengthen 



even further the security on which the Atlan- 
tic Community vitally depends. 

Your deliberations have never been more 
timely. We are faced with a renewed military 
challenge from the Warsaw Pact. In the last 
decade, the Warsaw Pact has steadily and 
impressively strengthened its forces deployed 
against Western Europe. 

At last May's NATO [North Atlantic 
Treaty Organization] Summit, I joined my Al- 
liance colleagues in a thorough review of the 
challenge. We chose our response 
carefully — a major program of defense im- 
provements, both short- and long-term, as 
well as both conventional and nuclear. My 
government is solidly committed to these ef- 
forts, which we believe will maintain the 
credibility of existing NATO strategy into 
the 1980s and beyond. We are intensively en- 
gaged, in cooperation with our Allies, in 
charting concrete force improvements in pur- 
suit of this objective. 

I would also like to reiterate that the 
United States remains categorically com- 
mitted to NATO's strategy of forward de- 
fense and flexible response. This is my own 
firm conviction, and it will remain the policy 
of the United States as long as I am Presi- 
dent. Since this is also the firm conviction of 
the Congress and the American people, there 
is absolutely no doubt that my successors in 
office will continue this commitment. 

We continue to be convinced that this 
strategy, kept credible through timely force 
improvements, can preserve the territorial 
integrity of all Alliance members. 

My nation's commitment to the defense of 
Western Europe is at the center of our 
foreign and security policies. The security of 
the North Atlantic Community continues to 
be vital to that of the United States itself. 

Jimmy Carter. 



1 Delivered to a meeting of the Atlantic Treaty As- 
sociation in Reykjavik, Iceland, by Ambassador W. Tap- 
ley Bennett, Jr., Chief of the Permanent U.S. Mission 
to NATO (text from Weekly Compilation of Presidential 
Documents dated Sept. 1, 1977). 



468 



Department of State Bulletin 



THE CONGRESS 



International Debt: Current Issues and Implications 



Statement by Richard N. Cooper 
Under Secretary for Economic Affairs l 



I am pleased to have this opportunity to ap- 
pear before this subcommittee to discuss is- 
sues related to international debt. I would like 
to make some observations on the nature of 
external debt and on the implications of the 
current debt situation for the international 
economy. I will also discuss existing arrange- 
ments for treating serious debt problems, 
focusing largely on the creditor club 
mechanism as well as the role played by the 
International Monetary Fund (IMF). Finally, 
I will comment on the relationship between 
public and private creditors in a situation of 
debt crisis. 

Debt as an Issue 

Reliance on external borrowing has long 
been the means of supplementing domestic 
savings for investment and thus increasing 
economic growth. By such borrowings, coun- 
tries are able to sustain larger imports of 
goods and services than would otherwise be 
possible. External debt constitutes, in effect, 
the financial counterpart to resource flows re- 
lated to merchandise trade and other current 
international transactions. 

There is nothing wrong with debt in itself. 
It has been an integral component of world 



'Made before the Subcommittee on International Fi- 
nance of the Senate Committee on Banking, Housing, 
and Urban Affairs on Aug. 29, 1977. The complete tran- 
script of the hearings will be published by the commit- 
tee and will be available from the Superintendent of 
Documents, U.S. Government Printing Office, Wash- 
ington, D.C. 20402. 



economic development. External borrowings 
made a major contribution to the U.S. de- 
velopment during the 19th century and to that 
of Japan in the 19fi0's. Canada continues to 
rely on such resource inflows to help bridge 
the gap between domestic savings and avail- 
able investment opportunities. In the post- 
World War II era, external debt has become 
increasingly associated with the efforts of 
countries in the developing world to promote 
their economic welfare. For these developing 
countries, the concept of external borrow- 
ing is now considered both normal and 
responsible. 

The oil price rise, coupled with world reces- 
sion, added a strikingly new dimension to the 
debt situation. In the 3-year period 1974-76, 
the combined current account surplus of 
OPEC nations [Organization of Petroleum 
Exporting Countries] approximated $140 bil- 
lion. (By way of contrast, their surplus for the 
7 prior years had totaled only about $15 bil- 
lion.) Since these surpluses inevitably gener- 
ated a corresponding deficit in non-OPEC 
countries, balance-of-payments management 
for most oil-importing countries became very 
difficult. In order to cushion their economies 
while adjusting to the shocks buffeting the 
world economy, these countries, as a group, 
borrowed ahead on an unprecedented scale, 
extensively through the private capital and 
money markets. 

The table [p. 470] shows clearly the impact 
on world current payments, and hence on ex- 
ternal borrowing, of the large increase in oil 



October 10, 1977 



469 



Current Account Balances 

(Including Official Transfers) 
($billions) 





1973 


1974 


1975 


1976 


1977 

(est.) 


Total OECD 


2 


-33 


-6.5 


-26.5 


-30 


Of which: 












United States 


0.3 


-3.6 


11.7 


-0.6 


-14 


Japan 


-n.i 


-4.7 


-0.7 


3.7 


7 


Germany 


4.3 


9.7 


3.8 


3.0 


2.5 


Netherlands 


1.8 


2.0 


1.6 


2.3 


2 


Switzerland 


0.3 


0.2 


2.6 


3.5 


3.3 


Other OECD 


-4.6 


-35.2 


-25.5 


-38.4 


,30.8 


OPEC 


3 


62 


34 


42 


41 


Non-Oil LDCs 


-9 


-24 


-33 


-23 


-22 


Other' 


-4.5 


-11 


-18 


-14 


-11.5 



'U.S.S.R., Eastern European countries, 
China. North Korea, Mongolia, Laos, Cambodia, 
Vietnam, Malta, and South Africa. 

Source: Organization for Economic Cooperation and Develop- 
ment (OECD), Economic Outlook, July 1977. Columns do not 
balance due to statistical errors and asymmetries. 



prices in 1974 which threw most oil-consuming 
countries into deficit; of the world recession in 
1975 which shifted that deficit even more onto 
developing countries; and of the subsequent 
gradual world recovery which has reduced the 
deficit of developing countries and enlarged 
that of the United States. 

Some of the most difficult adjustment prob- 
lems are found in industrial democracies. In 
the past 3 years, the external debt of a group 
of severely affected industrial countries of 
southern Europe has increased from about $22 
billion to $45 billion as they have borrowed to 
spread out the adjustment process over a 
period consistent with maintaining political 
and social stability. In the coming months and 
years, a number of industrial democracies will 
need the assurance that sufficient external 
financing will be available on reasonable 
terms to allow them to make necessary eco- 
nomic adjustments at a pace which their social 
and political conditions permit. 

High world commodity prices, the world re- 
cession, and increased imports of Western 
capital goods and grain also generated a sig- 
nificant upswing in the external debt of the 
Soviet Union and Eastern Europe. 



For the non-oil developing countries, total 
external debt more than doubled between 
1973 and 1976, with their debt-service pay- 
ments (interest plus amortization of outstand- 
ing debt) increasing by about 75 percent. 

Implications of International Debt 

In evaluating the implications of interna- 
tional debt, it is important that we keep the 
current situation in perspective and that we 
weigh fully the following considerations. 

— The international financial system has 
performed remarkably well under the sudden 
strains that were imposed upon it by the cur- 
rent account surpluses of the OPEC nations. 
We have managed the crisis because the oil- 
importing countries" external financing needs 
could be met on adequate terms. External 
borrowings, in effect, have cushioned the 
necessary economic adjustments by enabling 
the necessary reduction in consumption to be 
distributed over a number of years. 

— Without adequate financing, the efforts of 
the oil-importing countries to adjust would 
have necessitated curtailing economic growth 
so abruptly that it would have caused severe 
hardships on their populations and might well 
have jeopardized the political stability of a 
number of countries in both the developed and 
developing worlds. 

— An abrupt curtailment of economic 
growth in borrowing countries would also 
have complicated recovery of the world eco- 
nomic system as a whole. Without extensive 
external borrowing, we would have had a 
"seige-economy" mentality reminiscent of the 
1930's, with even greater economic 
dislocation — including the prospect of wide- 
spread default on preexisting debt — than that 
caused by the initial increase in the price of 
oil. In this context, we can point with satisfac- 
tion to the continued adherence of all major 
developed countries to the principles of liberal 
trade and their determination to avoid the re- 
strictive practices of the 1930's. 

— Given the alternatives, the concept of 
borrowing to avert what would have been a 
disastrous economic contraction can be judged 
to be prudent. This is true even though a sub- 
stantial portion of the borrowing was of 



470 



Department of State Bulletin 



necessity utilized for consumption rather than 
investment. 

— While most recent external borrowing has 
facilitated international financial stability, we 
cannot expect the current scale or distribution 
of borrowing to continue indefinitely. Since it 
appears that a large OPEC surplus will last at 
least through this decade, we face a period of 
prolonged economic adjustment and structural 
change. During this period, it will be impor- 
tant to insure a reasonable distribution of the 
deficit that will accrue to the oil-importing 
countries. In the longer term, deficits must be 
geared to the underlying productive potential 
of individual countries. Given the relative size 
and strength of the U.S. economy, it is appro- 
priate that we are a net borrower during this 
adjustment period. In pursuing appropriate 
adjustment policies, all economies confront 
the dual task of reducing reliance on external 
funds while at the same time increasingly di- 
recting such funds into investment rather 
than consumption. 

— The only sure way to revert to the pre- 
1974 pattern of borrowing is to alter the 
current financial imbalance of the OPEC coun- 
tries with the rest of the world. Their imports 
from the rest of the world will steadily in- 
crease, but given the low absorptive capacity 
for imports of a few important OPEC coun- 
tries, this cannot be accomplished fully with- 
out restraining industrial countries' imports of 
oil. Thus the President's proposal for a wide- 
ranging program to reduce U.S. dependency 
on imported oil is a critical step toward pre- 
serving a stable international economy. 

Debt-Servicing Prospects 

In assessing the current debt situation, one 
must give careful consideration to the debt- 
servicing capacity of individual debtor coun- 
tries. Although the system, as always, 
requires our attention, there is little likeli- 
hood of a general debt crisis. As in the past, 
acute debt-servicing problems will be re- 
stricted to a few countries, with individual 
problems which require country-specific solu- 
tions. 

In each case we should begin by recalling 
that a rising level of indebtedness does not by 



itself pose the threat of major debt-servicing 
problems. The nominal increases in debt that 
have occurred appear far less dramatic when 
one allows both for the growth of real output 
and trade that has taken place in the world 
economy and for the inflation that has oc- 
curred. In the 1973-76 period, for example, 
the merchandise exports of the non-oil de- 
veloping countries increased by about 70 per- 
cent in nominal terms, compared with a 75- 
percent increase in their debt service. 

Moreover, aggregate debt statistics can be 
misleading in that they obscure the widely di- 
verse situations among countries, especially 
the disparities in their capacities both to earn 
foreign exchange and to manage their debt ef- 
fectively. It is important to recognize that ex- 
ternal debt is distributed broadly in line with 
individual country debt-servicing capacity. 
Most of the new debt attributable to the 
poorer countries has, for example, been highly 
concessional in nature. On the other hand, the 
bulk of private debt is concentrated in de- 
veloped countries and a dozen or so rapidly 
growing developing countries with relatively 
high per capita incomes and diversified 
economies. 

The ratio of a country's debt-service pay- 
ments to its annual exports of goods and serv- 
ices has often been used as a rough indicator 
of a country's debt burden. Its main value is 
as a guide to the shortrun rigidity in a coun- 
try's balance of payments caused by debt 
service. The higher the ratio, the greater 
would be the need for severe adjustment 
measures if exports developed unfavorably. 
Similarly, the higher the ratio, the greater 
the level of gross borrowings required to 
reach a desired level of net capital inflows. 
The debt-service ratio at a particular time 
does not, however, record such key factors as 
the maturity structure of a country's debt or 
the cyclical variability of its exports. 

The debt-service ratio of the non-oil de- 
veloping countries was estimated at about 16 
percent in 1973. It declined to 13 percent in 
1974, largely as a result of an upsurge in 
commodity exports, and then rose to 14 per- 
cent in 1975 and roughly 16 percent in 1976. 
The ratio may increase moderately over the 
next few years. Since most industrial coun- 



October 10, 1977 



471 



tries are relatively recent participants in 
large-scale borrowing, their debt-service 
ratios tend to be significantly lower than 
those of the developing world. 

Aggregate data are, as I have already 
noted, often misleading. Several countries 
maintain debt-service ratios considerably 
higher than the average. A number of impor- 
tant Latin American countries, for example, 
had 1976 debt-service ratios in the 25- to 45- 
percent range. I emphasize, however, that the 
debt-service ratio suffers from major 
shortcomings and cannot be used independ- 
ently as an accurate guide to debt-servicing 
prospects. Other factors such as a country's 
growth and export potential must also be con- 
sidered. This is the reason why the relatively 
more advanced developing countries tend to 
have the highest debt-service ratios, yet still 
retain creditworthiness, while the poorer de- 
veloping countries, with low debt-service 
ratios, are generally unable to borrow in 
commercial markets. 

Backstopping the Financial System 

While no general debt crisis is predicted, 
this should not be considered as justifying a 
policy of complacency with respect to the fu- 
ture of the financial system. Care must be 
taken to insure individual problem situations 
are treated efficiently, taking into account 
global economic circumstances. In particular, 
we must recognize that the OPEC surpluses 
have created a different world environment 
than in the past and that the task of backstop- 
ping the world financial system now entails 
greater general responsibilities for many 
countries. 

Unless the temporary financing is available, 
countries with maladjustments in their 
balance-of-payments positions could be forced 
to resort to undesirable measures such as 
trade restrictions. It is clear that balance-of- 
payments problems for many oil-importing 
countries will remain for at least the next sev- 
eral years. These countries will require signif- 
icant external financing to facilitate internal 
adjustments in an orderly fashion. 

Some of these countries appear fully capa- 
ble of sustaining increased private borrowings 



to cushion adjustment. Where adjustment 
problems are particularly difficult, more re- 
liance on official financing may be appro- 
priate. Any serious shortfall in the overall 
availability of financing would have a major 
destabilizing effect on the world economic sys- 
tem. The question of whether adequate financ- 
ing will be available for individual countries 
for the period ahead is also an important one. 
The International Monetary Fund has as 
one purpose to provide members with an op- 
portunity to correct maladjustments in their 
external sector and to help them do so without 
resort to protectionist measures. Since 1973 
the extensive use of IMF credit has greatly 
eased adjustment problems. At the same 
time, the IMF's greatly increased activity has 
caused a depletion of its available resources. 
In the period ahead, there will be a continuing 
need for IMF lending. For this reason, the 
Administration strongly urges the Congress 
to authorize U.S. participation in the IMF's 
supplementary financing facility, which will 
be described by other members of this panel. 

Treatment of Debt Problems 

The IMF provides new financing to coun- 
tries in need. In addition to IMF assistance, it 
is often necessary to relieve a country from 
some of its outstanding debt-servicing bur- 
den. Since 1956 there have been approxi- 
mately 40 multilateral debt renegotiations 
involving 11 developing countries. The mul- 
tilateral framework is considered essential to 
insure that creditors share the risks of lending 
identically. The creditor club has been the 
forum used by most countries. The notable 
exceptions relate to the numerous reschedul- 
ings for India and Pakistan within the 
framework of World Bank-sponsored aid con- 
sortia. Debt reschedulings arranged through 
creditor clubs cover loans extended or guaran- 
teed by creditor governments. Usually, 
short-term credits, all unguaranteed bank 
credits, and loans from the multilateral lend- 
ing institutions such as the World Bank are 
excluded. Private lenders do not participate in 
creditor club negotiations, although they 
sometimes precede or follow suit. 

Countries approaching or experiencing an 



472 



Department of State Bulletin 



acute debt-servicing situation seek relief 
through the creditor club mechanism after 
they have established a relationship with the 
IMF. They then apply to a major country, 
usually France, for a convening of club 
negotiations. The club, which in the case of 
the "Paris Club" is usually chaired by the 
French Ministry of Finance, is called into 
being by the chair after consultation with 
major creditors. 

The first stage of negotiations is charac- 
terized by an assessment of the facts and a re- 
quest for detailed information from the debtor 
country. The second stage involves negotia- 
tion of an umbrella agreement between cred- 
itor countries and the debtor nation. This 
agreement is based on the principle of equal 
treatment of all creditors and serves as the 
basis for subsequent individual bilateral 
agreements. 

The viability of the creditor club mechanism 
for dealing with debt-servicing crises rests on 
three elements: the case-by-case approach, 
conditionality, and the mutual interests of 
both creditors and the debtor in reaching a 
settlement. The case-by-case approach allows 
creditors the flexibility which is necessary to 
consider and negotiate a rescheduling agree- 
ment according to the merits of each indi- 
vidual situation. Generalized approaches to 
rescheduling and the use of trigger 
mechanisms to determine eligibility for relief 
have been rejected by the major creditor 
countries. 

The linkage of debt relief with performance 
standards has proved a key element in restor- 
ing debtor countries' normal commercial and 
financial relationships. The conditional nature 
of relief serves to limit the incidence of re- 
scheduling applications by confining them to 
serious debt situations and acting as a disin- 
centive to requests for the use of debt relief as 
a means of resource transfer. 

An important element in debt negotiations 
is the confluence of interests between debtors 
and creditors. If the terms of rescheduled 
payments are met, debtors are able to rees- 
tablish creditworthiness and creditors ulti- 
mately receive payments, albeit at a later 
date than was planned. The mutual interest of 
debtors and creditors is in large part respon- 



sible for the effectiveness of the creditor club 
as an instrument to resolve debt-servicing 
crises. 

The IMF also plays a pivotal role in creditor 
club negotiations by providing an assessment 
of the debtor's balance-of-payments situation 
and, in the great majority of cases, supporting 
a financial program adopted by the debtor 
country. Of the 17 debt renegotiations that 
involved a creditor club, 11 were related to 
IMF standby arrangements, one involved a 
first-credit tranche, and 10 involved higher 
credit tranches. In five cases not involving a 
standby, the IMF was requested to survey 
the implementation of the debtor's financial 
program and/or transmit performance data to 
the creditors. On two occasions, the IMF 
helped the debtor country prepare for a debt 
renegotiation with private banks and then at- 
tended the meetings. 

Most creditor countries agree that the cred- 
itor club mechanism works reasonably well. 
There is general agreement, however, that 
steps can be taken to further assure debtor 
countries that the club mechanism may be re- 
lied upon to provide efficient and equitable 
treatment. For this purpose, during the re- 
cent Conference on International Economic 
Cooperation (CIEC), the United States and 
the European Community, with the support of 
most other developed nations, tabled a pro- 
posal which included features to provide guid- 
ance for future creditor club renegotiations. 

The U.S. -EC proposal was not approved. 
Developing countries instead maintained their 
demands for generalized debt reschedulings. 
These demands seek to utilize widespread 
debt relief for low-income countries as a 
means of supplementing what are perceived to 
be inadequate flows of development assist- 
ance. From the point of view of some develop- 
ing countries, generalized debt relief would be 
an ideal form of assistance, since it has the ef- 
fect of being unconditional, untied, and fast 
disbursing. 

The United States has stressed the fact that 
we do not view generalized debt relief as an 
efficient mode of resource transfer since it in 
no way relates to developing-country eco- 
nomic performance or need. Moreover, we are 
concerned that the publicity being accorded to 



October 10, 1977 



473 



developing-country demands for debt relief 
could erode the creditworthiness of these 
countries as a group. 

The developing countries also tabled a pro- 
posal at CIEC for guidelines to alter substan- 
tially the nature and the function of the 
creditor club. The proposal based eligibility 
for debt relief solely on developmental consid- 
erations and was intended to lead to the wide- 
spread use of debt relief as a means of meet- 
ing development targets. As such, it was not 
acceptable to the developed countries. 

Despite the lack of agreement on this issue 
at the CIEC, the United States continues to 
advocate cooperation among countries to as- 
sure that the creditor club mechanism pro- 
vides efficient equitable treatment of serious 
debt situations. 

The Role of Private Lending 

I would now like to turn to the significant 
role being played by the private banks as a 
source of finance for developing countries. 

Despite increased availabilities of official 
bilateral and multilateral financing, over the 
past few years developing countries have in- 
creasingly turned to private markets to help 
meet their financial requirements. In 1975 and 
1976, private markets supplied roughly one- 
half of the new credit to all non-oil developing 
countries. As a result, about 40 percent of 
their outstanding debt is now attributable to 
commercial banks. 

The lending standards of the banks appear 
to have been quite high. This is evidenced by 
the concentration of bank lending in a small 
number of developing countries with high 
growth rates and favorable export prospects. 
Brazil and Mexico each account for about a 
quarter of all private bank lending to the 
non-oil developing countries. Five other coun- 
tries together account for another quarter. In 
contrast, bank lending to those developing 
countries with limited export and growth po- 
tential has been minimal. 

As a result of generally prudent lending 
policies, as well as the determination of most 
borrowers to make whatever economic ad- 
justment was necessary to retain cred- 
itworthiness, losses on bank loans to foreign 



countries have been relatively small. Severe 
servicing problems have, in fact, been con- 
fined to a few countries. 

Although private banks have not partici- 
pated in creditor club negotiations, creditor 
governments take into account a country's lia- 
bility to private lenders. On occasion, 
rescheduling of the official debt is made con- 
tingent on debtor-country agreement to seek 
to renegotiate debt owed to private creditors. 

For example, in the case of Chile in 1972, 
important amounts of bank credits were 
negotiated by private banks outside the 
framework of the Paris Club but on terms 
broadly comparable to that negotiated by offi- 
cial creditors. The 1976 and 1977 Paris Club 
agreement for Zaire also called on Zaire to 
seek "comparable" rescheduling arrangements 
from private banks. Subsequent to the 1976 
agreement, an international consortium of 
banks headed by Citibank worked out a type 
of refinancing arrangement (the London 
agreement). This agreement carries no obliga- 
tion for the banks to reschedule; rather, they 
pledged themselves to a "best-effort" com- 
mitment to provide $250 million in medium- 
term financing if certain undertakings were 
carried out by the Government of Zaire. 

In other recent situations, where commer- 
cial debt was clearly the source of servicing 
difficulty, no renegotiation of government 
debt was undertaken. Instead, private banks 
"rolled over" or refinanced debt-service obli- 
gations. 

Creditor governments have no legal author- 
ity to bind private creditors. As a result, we 
have at the present time what could best be 
described as an "arm's-length" relationship 
with private lenders in a debt-rescheduling 
situation. 

Although our relationship with private cred- 
itors is "arm's length," the principle of roughly 
comparable treatment of both public and pri- 
vate creditors is appropriate. It is highly im- 
portant that the risks of lending be shared by 
both public and private creditors. Public cred- 
itors should not "bail out" their private coun- 
terparts. In addition to establishing an unfair 
burden on taxpayers, such a "bail-out" could 
lower lending standards by giving both pri- 
vate lenders and debtor countries the false 



474 



Department of State Bulletin 



impression that creditor governments are 
willing to assume responsibility for the pay- 
ment of private debt. 

Private lending will continue to have a vital 
role in assuring finance for both developed 
and developing countries. It is important that 
such financing continue to employ high lend- 
ing standards. Up to now, private lending has 
been made when such lending constitutes a 
good investment for the lender. 

In summary I believe that dealing with the 
international debt problem as we now find it 
entails three broad elements. 

— First, we need to assure steady expansion 
of the world economy, an objective which 
serves our domestic aims as well as improves 
stability of the world economy. Under these 
conditions, developing countries with deficits 
will find both the quantities and the prices of 
their exports increasing, and they will operate 
in an environment in which those domestic 
economic adjustments which they must under- 
take will be both politically and economically 
easier. Of course, continued access of these 
countries to the major markets of the world is 
critical to long-term adjustment, and the in- 
dustrial countries should continue to provide 
such access. 

— Second, reduction in our consumption of 
OPEC oil will be necessary for restoration of 
long-term balance in the world economy. The 
President's energy program is designed to re- 
strain substantially U.S. imports of oil, once it 
comes fully into effect. We urge Congress to 
enact this program, and we hope that other 
countries will encourage restraint in consump- 
tion of oil and development of alternative 
energy supplies. 

— Third, the supplementary financing facil- 
ity for the International Monetary Fund is 
necessary not only to augment the capacity of 
the IMF to lend to its member states but also 
to assure the world that a source of official 
financing exists on the scale that is sufficient 
to cope with whatever financial turbulence we 
are likely to encounter. It is, in short, as im- 
portant in its backstopping role as in its role 
as a source of funds to be used. 

With those elements, it is reasonable to as- 
sume that debt problems over the next sev- 



eral years will be confined to a relatively few 
countries and that they can be handled in a 
manner similar to the approach which we have 
used in the past — possibly improved in several 
respects — for dealing with individual coun- 
tries encountering acute difficulties in servic- 
ing their external debts. 



Developing Codes of Conduct 
for Multinational Enterprises 

Following is a statement by Paul H. 
Boeker, Deputy Assistant Secretary for Eco- 
nomic and Business Affairs, made before the 
Subcommittee on International Economic 
Policy and Trade of the House Committee on 
International Relations on September 7. 1 

I am pleased to be here today to discuss the 
status of international consideration of codes 
of conduct for multinational enterprises and to 
comment on the proposed legislation 
regarding bribery which the subcommittee is 
considering. 

International investment has played a posi- 
tive and constructive role in the economic 
growth of developed and developing coun- 
tries. Effective use of investment resources 
should continue to be one of the objectives of a 
successful international economic system. The 
United States has long believed that flows of 
trade, finance, and investment among nations 
can make their fullest contribution to sustain- 
able economic growth in an open climate in 
which these flows can respond to market 
forces. 

Consistent with our belief in such an open 
system, general U.S. investment policy is 
neither to promote nor discourage inward or 
outward investment .flows. In general, there- 
fore, we favor a climate of governmental regu- 
lation that offers on a nondiscriminatory basis 
the same opportunities to foreign and domes- 
tic investors — unless national security or es- 
sential interests dictate otherwise. 



'The complete transcript of the hearings will be pub- 
lished and will be available from the Superintendent of 
Documents, U.S. Government Printing Office, Wash- 
ington, D.C. 20402. 



October 10, 1977 



475 



For most of the postwar period all de- 
veloped countries shared in this goal. The 
consensus behind this basic principle required 
no collective safeguards. But in recent years, 
general uneasiness has grown about the qual- 
itative impacts of foreign investment on the 
economic and social fabric of host countries. 
This uneasiness has been accompanied by calls 
for unilateral action to somehow separate 
"good" investments from "bad" investments 
and thereby manipulate investment flows to 
one's national advantage — often without re- 
gard for the impacts of such actions on other 
countries. 

The tendency toward unilateralism in the 
investment field has threatened conflicts be- 
tween governments to the extent such inter- 
ventions affect exports and jobs in the home 
countries of international investors. In order 
to prevent such conflicts and to avoid unilat- 
eral actions from introducing distortions in an 
open international investment regime, we 
seek a strengthened multilateral consensus to 
clarify the rules and procedures for avoiding 
damage to other economies from national ac- 
tion. Both capital exporting and importing 
countries would be well served by a common 
set of fundamental attitudes toward invest- 
ment based upon a commitment to an open in- 
ternational investment regime. 

Establishing a Basis for Negotiation 

Eventually a new institutional framework, 
such as the GATT [General Agreement on 
Tariffs and Trade] in the investment area may 
be desirable. However, the difficulties in 
reaching such a broad international consensus 
on this issue now — particularly given the wide 
gulf separating developed and developing 
country views — has led us to look to incre- 
mental and second-best approaches for the 
next few years. Our estimate is that at the 
present time we would have to sacrifice too 
much in the negotiating process to achieve 
even the minimum consensus necessary to 
launch such an institution. Thus it is neither a 
conceptual weakness of the GATT idea nor an 
unwillingness to consider a binding approach 
but political realities that give us pause. 

For the present several avenues of progress 
are possible: 



— Negotiating nonlegislative codes of con- 
duct that at least clarify broad standards of 
acceptable behavior for governments and in- 
vestors and hopefully contribute to a longer 
term, broader consensus; 

— Negotiating binding agreements on some 
aspects of international trade and investment 
where adequate consensus may be attainable, 
such as an international treaty on bribery; and 

— Working out more comprehensive 
investment rules and cooperation among 
industrial countries where a considerable 
consensus already exists on the obligations of 
governments and the regulatory climate for 
business, as well as the basic principle of 
nondiscrimination. 

The United States has become involved in 
negotiations on codes of conduct in a number 
of international organizations, including the 
OECD [Organization for Economic Coopera- 
tion and Development] and various subgroups 
of the United Nations. Although not the ini- 
tiator of these code exercises, in each case we 
have participated actively. 

In the OECD we were able after 18 months 
of negotiation to conclude an agreement which 
reaffirmed a common interest of member 
countries in an open international investment 
climate and established a norm of national 
treatment for foreign-owned enterprises. 
Member countries also agreed to take each 
others' interests into account in incentives and 
disincentives for international investment. A 
set of voluntary guidelines for multinational 
enterprises was also agreed upon. Finally, a 
consultative process was established for each 
of the above elements of the agreement. 

We saw advantages in having a constructive 
developed country code on this subject before 
proceeding too far with code exercises in 
other forums. In the process, we for our part 
have also come to appreciate that codes of 
conduct — although of necessity broad in na- 
ture and not amenable to legally binding 
arrangements — can nevertheless serve a use- 
ful purpose by providing a basis for firmer ex- 
pectations of accepted behavior for both in- 
vestors and host governments. We have also 
found that the negotiating process has had a 
useful educational effect with regard to multi- 
national enterprise issues. 






err 



, 



476 



Department of State Bulletin 



It has been the position of the U.S. Gov- 
ernment that such broad codes of conduct 
should: 

(a) Be voluntary in nature, i.e., not con- 
stituting legally binding commitments among 
states or establishing legally recognized or en- 
forceable rights and duties on states or enter- 
prises. However, a broad range of consulta- 
tive mechanisms may be possible even with a 
voluntary code; 

(b) Be appropriately balanced in reference 
to the responsibilities of governments as well 
as multinational enterprises; 

(c) Not be used as a basis for discriminating 
against multinational enterprises as opposed 
to domestic firms and provide for nondis- 
criminatory treatment for established multi- 
national enterprises except under specifically 
defined and limited circumstances; 

(d) Not derogate from those principles gov- 
erning the treatment of foreigners and their 
property rights which international law em- 
bodies; and 

(e) Apply to all enterprises whether their 
ownership is private, government, or mixed. 

This position does not, however, exclude the 
possibility of the United States pursuing more 
binding arrangements whenever international 
consensus exists on a specific issue or group of 
issues and the subject matter is amenable to 
such arrangements. For example, we are try- 
ing to negotiate a binding treaty on illicit 
payments. We remain willing to examine the 
desirability and feasibility of other binding 
arrangements. 

I am providing a summary of the current 
status of the various negotiations on codes of 
conduct. In addition, I would like to make a 
few general comments about the major 
exercises. 

Progress of Negotiations 

To date, the investment package agreed to 
by OECD ministers in June 1976 represents 
the only existing internationally agreed code 
of conduct. We believe that the OECD pack- 
age containing all the elements of our basic 
position on codes of conduct has been a major 
step toward realizing our goal of clarifying the 
rules for, and strengthening cooperation on, 



international investment. It has also had an 
important influence on other international ef- 
forts to deal with investment and other multi- 
national enterprise issues. 

The OECD Committee on International In- 
vestment and Multinational Enterprises car- 
ries out the consultations envisaged by the in- 
vestment decisions. Thus far consultations 
have been held regarding experience under 
the voluntary guidelines for multinational en- 
terprises. These consultations have included 
the participation of both the trade union and 
business advisory councils to the OECD. 
Criticism of the conduct of multinational en- 
terprises relating to the guidelines — which 
consist of seven parts — has thus far been con- 
fined to the employment and industrial rela- 
tions area where the trade unions primarily 
have accused a few multinational enterprises 
of violating the spirit of the guidelines. We 
want to use these consultations to clarify and 
address real problems arising from the opera- 
tions of multinational business, including 
examining the need for strengthened inter- 
governmental cooperation. We do not believe, 
however, that the consultations should en- 
compass charges against specific companies' 
practices. 

We regard the forthcoming consultations 
under the OECD code on national treatment 
and possibly the incentives/disincentives deci- 
sions as important tests of the success of this 
multilateral effort. We regard further prog- 
ress in these areas as essential if we are to 
minimize government intervention in the in- 
vestment process at the expense of other 
countries. Eventually GATT-type rules in the 
national treatment and perhaps incentives/ 
disincentives area may be the ultimate solu- 
tion to intergovernmental conflicts on invest- 
ment issues. 

We are also currently examining the pos- 
sibilities of a more ambitious effort with re- 
spect to national treatment and incentives, al- 
though clearly any such initiative would need 
to be based on the progress already achieved 
in the OECD and further experience within 
the OECD on some of the issues discussed 
above. With almost 80 percent of total world 
investment taking place in the OECD member 
countries, the OECD represents an important 



October 10, 1977 



477 



forum for discussion of investment problems 
and presents greater prospects than broader- 
forums for achieving international consen- 
sus. 

We also attach great importance in finding 
solutions to problems relating to foreign in- 
vestment in the developing world. One draw- 
back to emphasis on the OECD is that this 
forum cannot directly consider all of the de- 
sires and problems of developing countries in 
the investment area, although over the longer 
haul there may be some opportunity to open 
up OECD understandings on investment to 
developing countries who might find it possi- 
ble to join with the existing general consensus 
of OECD governments on investment issues. 

The most important current forum for deal- 
ing with North-South investment issues is in 
the U.N. Commission on Transnational Cor- 
porations and its Intergovernmental Working 
Group on a Code of Conduct. In these two 
groups we are coming face-to-face with some 
important issues that divide developed and 
developing countries: 

— Permanent sovereignty (the claimed abso- 
lute right of a state over its wealth, natural 
resources, and economic activities subjected 
exclusively to its national law) versus stand- 
ards of equitable treatment and compensation 
traditionally maintained in international law; 

— A binding versus a voluntary general 
code of conduct; and 

— Responsibilities of firms versus respon- 
sibilities of governments. 

As much importance as we attach to this ef- 
fort to negotiate a general code of conduct re- 
lating to multinational enterprises and as 
dedicated as we are to fully participating in 
these negotiations, we cannot in the end en- 
visage weakening of general standards for 
equitable treatment that are recognized by 
countries where most foreign investment is 
located. 

Perhaps the most contentious negotiations 
have taken place on a U.N. Conference on 
Trade and Development (UNCTAD) code of 
conduct for transfer of technology. During the 
past 2 years there have been numerous meet- 
ings in the UNCTAD on this subject. A group 
of experts is still in the drafting process but 
prospects for achieving an agreed code are not 



good. Not only is there deadlock over the 
legal nature of the code (developed countries 
favor a voluntary code, developing countries a 
binding arrangement), but the developing 
countries are claiming an absolute right of ac- 
cess to technology while the developed coun- 
tries assert that access to technology can only 
be facilitated under mutually advantageous 
terms and conditions that take account of 
property rights. The result is a set of diver- 
gent texts which reflect sharp differences in 
approach, in underlying principles, and in 
substance. 

We will continue our efforts to negotiate an 
international agreement to deal with the seri- 
ous problem of bribery in international com- 
mercial transactions. The U.N. Economic and 
Social Council (ECOSOC) last year estab- 
lished an [Ad Hoc] Intergovernmental Work- 
ing Group on Corrupt Practices which has 
been working to elaborate the scope and con- 
tents of a possible international agreement to 
eliminate illicit payments. At its July-August 
session this year, ECOSOC expanded the 
working group, gave it a specific charge to 
draft an international agreement, and recom- 
mended that the General Assembly decide, 
when appropriate, to convene a diplomatic 
conference to conclude an international 
agreement. 

The ECOSOC decision makes possible an 
early agreement on this important subject but 
also reflects the concern of many developing 
countries that progress on the comprehensive 
code of conduct should not fall far behind the 
illicit payments agreement. We oppose this 
sort of direct linkage, believing that each 
agreement should proceed at its own pace 
with progress in one area not tied to progress 
in the other. 

Legislation on Illicit Payments 

I would like now to take this opportunity to 
comment on two pieces of legislation relating 
to illicit payments. 

As to H.R. 7543, which would establish an 
Office of Foreign Business Practices within 
the Department of Commerce, the Depart- 
ment of State has supported the approach 
which is embodied in two other bills now pend- 
ing in Congress— H.R. 3815 and S. 305. These 



478 



Department of State Bulletin 



bills would make it a crime under U.S. law for 
domestic concerns to use U.S. commerce in 
furtherance of bribes of foreign officials. 
Legislation of this type, together with the al- 
ready existing body of law and regulations 
currently being enforced with respect to 
foreign bribery, will constitute an effective 
means of dealing with the problem. 

The Department, therefore, favors enact- 
ment of legislation based on S. 305 and H.R. 
3815, rather than consideration of additional 
legislation such as H.R. 7543 at this time. A 
determination as to whether further legisla- 
tion is necessary, taking into account both 
domestic law enforcement and the negotiation 
of an international agreement on illicit pay- 
ments, can be made subsequently. The De- 
partment will certainly be prepared to assist 
in that process. 

As to H.R. 3604, the Department last year 
opposed a similar bill and has not changed its 
position. We strongly believe that OPIC 
[Overseas Private Investment Corporation] 
insurance should not be used to protect inves- 
tors from the consequences of making illicit 
payments to foreign officials. We would sup- 
port any revision of OPIC contracts which is 
necessary to insure that this will not happen. 

However, the Department is concerned that 
terminating OPIC insurance can give the mis- 
taken impression that we consider extreme 
measures, such as expropriation, to be appro- 
priate responses to bribery by U.S. firms 
abroad. 

The legislation would require OPIC to in- 
vestigate allegations that significant pay- 
ments had been made to influence foreign 
officials. Without a specific understanding 
between our government and the host gov- 
ernment involved, such investigations would 
be viewed as an unwarranted extraterritorial 
extension of U.S. jurisdiction and could have 
adverse effects on efforts to resolve invest- 
ment disputes and on bilateral relations in 
general. 

In summary, the Department believes that 
current law and regulations, together with 
new legislation based on H.R. 3815 and S. 
305, will provide an effective framework for 
dealing with the problem of foreign bribery by 
U.S. firms. We recommend against passage of 
H.R. 7543 and H.R. 3604. 



Alaska Natural Gas 
Transportation System 

Following is the text of a letter sent by 
President Carter to Speaker of the House 
Thomas P. O'Neill and President of the Sen- 
ate Walter F. Mondale on September 1. ' 

September 1, 1977. 

Dear Mr. Speaker: (Dear Mr. Presi- 
dent:) Section 7 of the Alaska Natural Gas 
Transportation Act of 1976 provides that my 
decision regarding an Alaska natural gas 
transportation system be transmitted to the 
House of Representatives and the Senate by 
September 1, 1977. The Act also provides that 
the decision may be delayed by as much as 90 
days upon a determination that additional 
time is necessary to reach a sound decision. 
Although I intend to submit my decision to 
the Congress in the near future, it appears 
prudent to take some additional time prior to 
transmittal of that decision. 

A decision on an Alaska natural gas trans- 
portation system is dependent upon a full and 
complete assessment of all options. Informa- 
tion and data concerning the proposal for 
building a pipeline across Alaska and then 
shipping Alaska gas to the lower-48 states via 
LNG [liquefied natural gas] tankers is com- 
plete and well understood. 

Discussions with officials of the Canadian 
government to determine the route and condi- 
tions associated with any joint overland pipe- 
line have been underway for some time. The 
general outline of the Canadian option is be- 
coming increasingly clear, although several 
final details must still be resolved. While I 
expect these matters to be resolved in the 
course of the next several days, I have deter- 
mined they will not be settled in time for a 
September 1, 1977, decision. 

As soon as these discussions are completed, 
a final comparative assessment of all project 
options will be made and a decision regarding 
an Alaska natural gas transportation system 
reached. 

I intend to transmit that decision to the 



1 Text from Weekly Compilation of Presidential 
Documents dated September 5. p. 1284; also printed as 
H. Doc. 95-210 dated Sept. 7. 



October 10, 1977 



479 



Congress in the very near future so that ac- 
tion on this critical matter can be taken during 
this session of the Congress. 
Sincerely. 

Jimmy Carter. 



TREATY INFORMATION 



Current Actions 



MULTILATERAL 

Agriculture 

International plant protection convention. Done at 
Rome December (5, 1951. Entered into force April 3, 
1952; for the United States August 18, 1972. TIAS 
7465. 
Ratification deposited: Indonesia (with declaration), 

June 21, 1977. 
Adherence deposited: Ethiopia, June 20, 1977. 
Succession deposited Surinam, April 22, 1977. 

Bills of Lading 

International convention for the unification of certain 
rules relating to bills of lading and protocol of signa- 
ture. Done at Brussels August 25, 1924. Entered 
into force June 2, 1931; for the United States De- 
cember 29, 1937. 51 Stat. 233. 
Adherence deposited: Cuba, July 25, 1977. 

Narcotic Drugs 

Protocol amending the single convention on narcotic 
drugs, 1961. Done at Geneva March 25, 1972. En- 
tered into force August 8, 1975. TIAS 8118. 
Ratification deposited: Peru, September 12, 1977. 

Property — Industrial 

Convention of Paris for the protection of industrial 
property of March 20, 1883, as revised. Done at 
Stockholm July 14, 1967. Articles 1 through 12 en- 
tered into force May 19, 1970; for the United States 
August 25, 1973. Articles 13 through 30 entered into 
force April 26. 1970; for the United States Sep- 
tember 5, 1970. TIAS 6923. 

Notification from World Intellectual Property Or- 
ganization that accession deposited: M'alta (with 
the exception of articles 1 to 12) (with a declara- 
tion), September 12, 1977. 

Property — Intellectual 

Convention establishing the World Intellectual Prop- 
erty Organization. Done at Stockholm July 14, 1967. 
Entered into force April 26, 1970; for the United 
States August 25, 1970. TIAS 6932. 
Accession deposited: Malta, September 7, 1977. 



Space 

Convention on registration of objects launched into 
outer space. Done at New York January 14, 1975. 
Entered into force September 15, 1976. TIAS 8480. 
Ratification deposited: Ukrainian Soviet Socialist 
Republic, September 14, 1977. 

Telecommunications 

International telecommunication convention with an- 
nexes and protocols. Done at Malaga-Torremolinos 
October 25, 1973. Entered into force January 1, 
L975; for the United States April 7, 1976. TIAS 
S572. 
Accession deposited: Tonga, August 22, 1977. 



BILATERAL 

Canada 

Agreement concerning transit pipelines. Signed at 
Washington January 28, 1977. 
Instrument of ratification signed bg the President: 

September 15, 1977. 
Ratifications exchanged: September 19, 1977. 
Entered into force: October 1, 1977. 

Agreement on principles applicable to a northern natu- 
ral gas pipeline, with annexes. Signed at Ottawa 
Si-ptember 20, 1977. Entered into force September 
20, 1977, provided that those provisions of the 
agreement requiring legislative action will become 
effective upon exchange of notification that such 
legislative action has been completed. 

France 

Memorandum of understanding for a cooperative re- 
search project in titanium alloys, with annex. Signed 
at Washington and Paris June 23 and August 26, 
1977. Entered into force August 26, 1977. 

Haiti 

Agreement amending the agreement of March 22 and 
23, 1976, as amended (TIAS 8268, 8395, 8643) re- 
lating to trade in cotton, wool, and manmade fiber 
textiles and textile products. Effected by exchange 
of notes at Washington September 14 and 15, 1977. 
Entered into force September 15, 1977. 

United Kingdom 

Arrangement in the field of nuclear safety research 
and development, with addendums. Signed at Wash- 
ington and London July 20 and August 3, 1977. En- 
tered into force August 3, 1977. 

Upper Volta 

Agreement relating to the transfer of food to Upper 
Volta. Signed at Ouagadougou September 9, 1977. 
Entered into force September 9, 1977. 

Zaire 

Agreement amending the agreement for sales of ag- 
ricultural commodities of May 24, 1977. Effected by 
exchange of notes at Kinshasa August 15 and 19, 
1977. Entered into force August 19. 1977. 



I 



480 



Department of State Bulletin 



INDEX October 10, 1977 Vol. LXXVII, No. 1998 



Albania. Diplomatic Recognition (foreign relations 
outline) 462 

Angola. Diplomatic Recognition (foreign relations 
outline) 462 

Cambodia. Diplomatic Recognition (foreign rela- 
tions outline) 462 

anada. Alaska Natural Gas Transportation Sys- 
tem (letter from President Carter) 479 

hina. Diplomatic Recognition (foreign relations 
outline) 462 

ongress 

Alaska Natural Gas Transportation System (letter 
from President Carter) 479 

Developing Codes of Conduct for Multinational 

Enterprises (Boeker) 475 

nternational Debt: Current Issues and Implica- 
tions (Cooper) 469 

onsular Affairs. Diplomatic Recognition (foreign 
relations outline) 462 

ba. Diplomatic Recognition (foreign relations 

outline) 462 

'Veloping Countries 
gy eloping Codes of Conduct for Multinational 

Enterprises (Boeker) 475 

nternational Debt: Current Issues and Implica- 
tions (Cooper) 469 

e Leadership Role for Private Enterprise in 
Latin America (Todman) 464 

conomic Affairs 

Developing Codes of Conduct for Multinational 
Enterprises (Boeker) 475 

International Debt: Current Issues and Implica- 
tions (Cooper) 469 

he Leadership Role for Private Enterprise in 

Latin America (Todman) 464 

.N. Conference on Desertification (Joseph, 
message from President Carter, background 
article) 453 

nvironment. U.N. Conference on Desertification 
(Joseph, message from President Carter, back- 
ground article) 453 

quatorial Guinea. Diplomatic Recognition 
(foreign relations outline) 462 

urope. Atlantic Treaty Association (letter from 
President Carter) 468 

uman Rights. The Leadership Role for Private 
Enterprise in Latin America (Todman) 464 

ndustrial Democracies. International Debt: Cur- 
rent Issues and Implications (Cooper) 469 

raq. Diplomatic Recognition (foreign relations 
outline) 462 

srael. Status of Palestinians in Peace Negotia- 
tions (Department statement) 4(58 

apan. U.S., Japan Sign Determination for Nu- 
clear Facility 460 

orea. Diplomatic Recognition (foreign relations 
outline) 462 

atin America and the Caribbean. The Lead- 
ership Role for Private Enterprise in Latin 
America (Todman) 464 

ddle East. Status of Palestinians in Peace 
Negotiations (Department statement) 463 

Monetary Affairs. International Debt: Current 

Issues and Implications (Cooper) 469 

Mongolia. Diplomatic Recognition (foreign rela- 
tions outline) 462 



North Atlantic Treaty Organization. Atlantic 
Treaty Association (letter from President Car- 
ter) 468 

Nuclear Engery. U.S., Japan Sign Determination 
for Nuclear Facility 460 

Presidential Documents 

Alaska Natural Gas Transportation System 479 

Atlantic Treaty Association 468 

U.N. Conference on Desertification 453 

Treaty Information 

( lurrent Actions 480 

U.S., Japan Sign Determination for Nuclear Facil- 
ity 460 

United Nations. U.N. Conference on Desertifica- 
tion (Joseph, message from President Carter, 
background article) 453 

Vietnam. Diplomatic Recognition (foreign rela- 
tions outline) 462 

Yemen. Diplomatic Recognition (foreign relations 
outline) 462 

Name Ind 

Boeker, Paul H 475 

Carter, President 453, 468, 479 

Cooper, Richard N 469 

Joseph, James A 453 

Todman, Terence A 464 



Checklist of Department of State 
Press Releases: September 19-25 

Press releases may be obtained from the Office 
of Press Relations, Department of State. Wash- 
ington, D.C. 20520. 



No. 

"424 



Date 



Subject 

9/19 Garrison diversion unit report 
released. 

9/19 Edward Marks sworn in as Ambas- 
sador to Cape Verde and Guinea- 
Bissau (biographic data). 

9/19 Oregon World Affairs Council. I 

gon Economic Development Com- 
mission, and Department of State to 
hold "Town Meeting," Oct. 6. 

9/20 Shipping Coordinating Committee. 
Subcommittee on Safety of Life at 
Sea, working group on international 
multimodal transport and contain- 
ers, Nov. 2. 

9/20 Shipping Coordinating Committee, 
Oct, 27-28. 

9/21 Senior foreign affairs officials depart 
to visit Chicago and Iowa. Sept. 25. 

9/23 Advisory Committee on Transnational 
Enterprise.--, Oct . 20. 
13 Arthur J. Goldberg sworn ill as Am- 
bassador at Large (biographic 
data). 

9/24 Documents issued after meeting 
among President Carter. Seen 
Vance, and U.S.S.R. Foreign 
Minister Gromyko. 



'425 



• 126 






*428 

'429 
•430 
*431 



"Not printed 

+ Held for a later issue of the BULLETIN. 






Superintendent of Documents 
u.s. government printing office 

WASHINGTON. D.C. 20402 



OFFICIAL BUSINESS 



POSTAGE AND FEES PAID 

Department of State STA-501 



Third Class 




Subscription Renewals: To insure uninterrupted 
service, please renew your subscription promptly 
when you receive the expiration notice from the 
Superintendent of Documents. Due to the time re- 
quired to process renewals, notices are sent out 3 
months in advance of the expiration date. Any prob- 
lems involving your subscription will receive im- 
mediate attention if you write to: Superintendent 
of Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. 



■/J 



77, 



777? 




THE DEPARTMENT OF STATE 

BULLETIN 

Volume LXXVII • No. 1999 • October 17, 1977 



THE PANAMA CANAL TREATIES AND RELATED MATERIALS 
(For complete Contents, sec p. i) 



THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY 



Fur indei s< ■ nside back cover 



THE DEPARTMENT OF STATE g [ E 1 I N 



Vol. LXXVII, No. 
October 17, 1977 



For sale by the Superintendent of Documents 

nment Printing Office 

Washington, D.C, 2"J"^ 

PRICE 

52 i ii i ' annual inci 

domestii ml' 50, foreigi 

The Secretary of State has determined that the pub- 
lication of till 

tion of the public business required bj law o 
Department. Use of funds for printing this periodi- 
ca! has been approved by the Director of the Office 
of Management and Budget throng!: 
19M. 

.\ote: Contents of this publication are not 
copyrighted and items contained herein may be re- 
printed. Citation of the DEPARTMENT OF STATE 
BULLETIN as the source will be appreciated. The 
BULLETIN is indexed in the Readers' Guide to 
Periodical Literature. 



The Department of State BULLETIN 
a weekly publication issued by the 
Office of Media Services, Bureau of 
Public Affairs, provides the public and 
interested agencies of the government 
with information on developments in 
the field of U.S. foreign relations and 
on the work of the Department and 
the Foreign Service. 

The BULLETIN includes seleete 
press releases on foreign policy, issue 
by the White House and the Depart- 
ment, and statements, addresses; an 
news conferences of the President an 
the Secretary of State and other of 
cers of the Department, as well as spe- 
cial articles on various phases of in- 
ternational affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and inter- 
national agreements to which the 
United States is or may become a party 
and on treaties of general interna 
tional interest. 

Publications of the Department of 
State, United Xations documents, and 
legislative material in the field of 
international relations are also listed. 



CONTENTS 



Page 

481 President Carter and General Torrijos Sign Panama Canal Treaties 

481 Remarks by President Carter 

482 Remarks by General Torrijos 

482 Announcement by Ambassadors Bunker and Linowitz, August 10 

483 Statement by Secretary Vance, August 11 

483 Texts of Treaties 

484 Letter of Submittal, September 15 

486 Letter of Transmittal, September 16 

487 Message From the Mexican Observer 
489 Messages From Foreign Leaders 
502 Declaration of Washington 
502 Fact Sheet 

506 The New Panama Canal Treaties: A Negotiator's View (Article by Ambassador 

Ellsworth Bunker) 

508 Background Information on the Treaties 

510 President Carter Holds Bilateral Meetings With Western Hemisphere Leaders 

510 Panama 

511 Panama — A Profile 

512 Peru 

512 Paraguay 

513 Colombia 

513 Chile 

514 Venezuela 

514 Ecuador 

515 Bolivia 

515 Dominican Republic 

516 El Salvador 

517 Honduras 

518 Argentina 

518 Uruguay 

519 Costa Rica 

Why a New Panama Canal Treaty)? (Address by Ambassador Sol M. Linowitz) 
Data on the Panama Canal 

526 U.S Negotiators Brief Press on New Panama Canal Treaties (Remarks by President 
Carter, Briefing by Ambassadors Bunker and Linowitz) 

533 Administration Officials Testify on the Panama Canal Treaties (Statements by Mr. 
Hansell, Legal Adviser, and Ambassadors Bunker and Linowitz) 

540 Treaty Rights Acquired by the United States To Construct the Panama Canal (Histor- 
ical Study) 

541 Legal Basis for the Authority of the U.S. in the Canal Zone 

545 Current Treaty Actions 



sid 

Mil 



Bit 

rai 
iwl 
to) 



iron 



kto 



'resident Carter and General Torrijos Sign 
'anama Canal Treaties 



The signing ceremony for the two Panama Canal treaties took 
place at the Pan American Union, headquarters of the Organiza- 
tion of American States (OAS), on September 7, 1977, and was 
presided over by Alejandro Orfila, Secretary General of the OAS. 
Among the distinguished guests were chiefs of state or other repre- 
sentatives of 26 Western Hemisphere nations, former President 
Ford, Mrs. Lyndon B. Johnson, former Secretaries of State 
Rogers and Kissinger, and numerous Members of the U.S. Senate 
and House of Representatives. 

Following are remarks by President Carter and Panama's Chief 
of Government Gen. Torrijos made at the ceremony, the texts of 
the Panama Canal treaties, the Declaration of Washington, and a 
fact sheet on the treaties. 



REMARKS BY PRESIDENT CARTER 

Weekly Compilation of Presidential Documents dated September 12 

Mr. Secretary General and distinguished 
leaders from throughout our own country and 
from throughout this hemisphere: First of all, 
I want to express my deep thanks to the lead- 
ers who have come here from 27 nations in our 
own hemisphere — 20 heads of state — for this 
historic occasion. 1 

I'm proud to be here as part of the largest 
group of heads of state ever assembled in the 
Hall of the Americas, Mr. Secretary General. 

We are here to participate in the signing of 
treaties which will assure a peaceful and pros- 
perous and secure future for an international 
waterway of great importance to us all. 

But the treaties do more than that. They 
mark the commitment of the United States to 
the belief that fairness, and not force, should 
lie at the heart of our dealings with the na- 
tions of the world. 

If any agreement between two nations is to 



1 All government officials attending the ceremony 
were observers, with the exception of President Carter 
and Gen. Torrijos. 



October 17, 1977 



last, it must serve the best interests of both 
nations. The new treaties do that. And by 
guaranteeing the neutrality of the Panama 
Canal, the treaties also serve the best inter- 
ests of every nation that uses the canal. 

This agreement thus forms a new partner- 
ship to insure that this vital waterway, so im- 
portant to all of us, will continue to be well 
operated, safe, and open to shipping by all na- 
tions, now and in the future. 

Under these accords, Panama will play an 
increasingly important role in the operation 
and defense of the canal during the next 23 
years. And after that, the United States will 
still be able to counter any threat to the 
canal's neutrality and openness for use. 

The members of the Organization of Ameri- 
can States and all the members of the United 
Nations will have a chance to subscribe to the 
permanent neutrality of the canal. 

The accords also give Panama an important 
economic stake in the continued, safe, and ef- 
ficient operation of the canal and make 
Panama a strong and interested party in the 
future success of the waterway. 

In the spirit of reciprocity suggested by the 

481 



ANNOUNCEMENT BY AMBASSADORS 
BUNKER AND LINOWITZ, AUGUST 10 

Press release 383 dated August 10 

We are deeply gratified to be able to announce 
that we and our Panamanian colleagues have 
today reached agreement in principle on the basic 
elements of a new treaty— and a new relationship 
between our countries. Our legal specialists will 
continue working to express promptly those 
elements in the formal treaty. 

Though this is but one stage in the completion 
of our historic task, it is a major step toward our 
mutual goal. We will be flying back to 
Washington tomorrow and will go immediately to 
the White House to report to President Carter. 
We will describe to him the work that has been 
done during this final week of negotiations and 
present for his review the agreement in principle. 

It has been a long and arduous task, as you 
know. For more than 13 years, under four 
Presidents, we have sought a new and mutually 
beneficial relationship between our countries. 
Now we have taken a significant step toward that 
long-sought goal. 

From the point of view of the United States, 
we are confident that this treaty will not only 
protect but strengthen our national security 
interests. It will also be a strongly positive 
element in our overall relationship with our Latin 
American neighbors and preserve our vital 
common interests in an open, secure, and 
efficient canal. 



leaders at the Bogota summit [August 5-7, 
1977], the United States and Panama have 
agreed that any future sea-level canal will be 
built in Panama and with the cooperation of 
the United States. In this manner, the best 
interests of both our nations are linked and 
preserved into the future. 

Many of you seated at this table have made 
known for years through the Organization of 
American States and through your own per- 
sonal expressions of concern to my predeces- 
sors in the White House, your own strong 
feelings about the Panama Canal Treaty of 
1903. That treaty, drafted in a world so dif- 
ferent from ours today, has become an obsta- 
cle to better relations with Latin America. 

I thank each of you for the support and help 
that you and your countries have given during 
the long process of negotiation, which is now 
drawing to a close. This agreement has been 
negotiated over a period of 14 years under 
four Presidents of the United States. 



I'm proud to see President Ford here with 
us tonight. And I'm also glad to see Mrs. 
Lyndon Johnson here with us tonight. 

Many Secretaries of State have been in- 
volved in the negotiations. Dean Rusk can't be 
here. He has endorsed the treaty. But Secre- 
tary of State William Rogers is here. We are 
glad to have you, sir. And Secretary of State 
Henry Kissinger is here too. 

This has been a bipartisan effort, and it is 
extremely important for our country to stay 
unified in our commitment to the fairness, the 
symbol of equality, the mutual respect, the 
preservation of the security and defense of 
our own nation, and an exhibition of coopera- 
tion which sets a symbol that is important to 
us all before this assembly tonight and before 
the American people in the future. 

This opens a new chapter in our relations 
with all nations of this hemisphere, and it tes- 
tifies to the maturity and the good judgment 
and the decency of our people. This agreement 
is a symbol for the world of the mutual respect 
and cooperation among all our nations. 

REMARKS BY GENERAL TORRIJOS 2 

Mr. President of the United States: I quote: 
"You and I know well how many points there 
are in the Treaty to which any Panamanian 
patriot would object." Letter from John Hay, 
United States Secretary of State, to Senator 
Spooner, January 20, 1904. 

My presence here, together with the most 
representative leaders and statesmen of the 
hemisphere, attests to the end of many strug- 
gles by several generations of Panamanian pa- 
triots. 

Our people, who have struggled with heroic 
perseverance to complete their independ- 
ence, harbor no feelings of animosity against 
this nation which, tnrough gigantic feats of 
technology, pierced the Isthmus of Panama 
and connected two oceans 8 hours apart. 

However, what was for mankind a techno- 
logical conquest became, through a distortion 
of history, a colonial conquest of our country. 
I say distortion of history because President 
Theodore Roosevelt himself stated publicly in 
Panama, I quote: 

"President Amador Guerrero, we have not 



Gen. Torrijos spoke in Spanish. 



482 



Department of State Bulletin 



the slightest intention of establishing an inde- 
pendent colony in the Canal Zone." October 
18, 1904. 

Basically what sustained the hopes of the 
Panamanian people and strengthened their 
patience during all these years was the firm 
conviction that the people 'of the United 
States were not colonialists at heart, because 
you yourselves had been a colony and had 
fought heroically for your freedom. We feel 
that you, Mr. President, in raising the banner 
of morality over our relations, are represent- 
ing the true spirit of your people. 

Latin America has stood by us both loyally 
and impartially. Its leaders have come to at- 
tend this ceremony in testimony of the fact 
that the religion and the cause of the Pana- 
manian people are the religion and the cause 
of the hemisphere. 

The presence of these leaders must herald a 
new and different era among us who live and 
sleep together in the hemisphere, so that all 
traces of the injustices which prevent us from 
dealing as equals may disappear. If one would 
be strong, one must also be just. You have 
changed imperial strength into moral 
strength. 

Mr. President, there are two types of 
truths — logical truth and pleasant truth. In 
the name of logical truth, I want you to know 
that this treaty, which I shall sign and which 
repeals a treaty not signed by any Panama- 
nian, does not enjoy the approval of all our 
people, because the 23 years agreed upon as a 
transition period are 8,395 days, because dur- 
ing this time there will still be military bases 
which make my country a strategic reprisal 
target, and because we are agreeing to a 
treaty of neutrality which places us under the 
protective umbrella of the Pentagon. This 
pact could, if it is not administered judiciously 
by future generations, become an instrument 
of permanent intervention. 

However, what has been agreed is the 
product of an understanding between two 
leaders who believe that their nations should 
live together peacefully and who have the 
courage and the leadership to stand before 
their people armed only with the truth and 
their deep conviction of what is just. 

In Panama the instrument of ratification 
will be a plebiscite which, more than just a 



STATEMENT BY SECRETARY VANCE, 
AUGUST 1 1 

Press release 388 dated August 12 

I was greatly pleased to learn of the agreement 
in principle between representatives of the 
United States and Panama on basic elements of 
the new treaties governing the Panama Canal. 

U.S. Ambassadors Ellsworth Bunker and Sol 
Linowitz have labored long and hard with their 
Panamanian counterparts to achieve an agree- 
ment that will assure an open, efficiently oper- 
ated, neutral, and secure canal. They deserve our 
deepest gratitude for their exceptional work in 
achieving an agreement in principle which will 
strengthen our nation's security and enhance our 
close relationships with our Latin American 
neighbors. 



plebiscite, will be the purest example of civic 
participation ever recorded in the political his- 
tory of the republic. Ratification by this coun- 
try will depend on the consensus of the Con- 
gress. 

Esteemed friends of the Senate: Before 
leaving you, I should like to recall a thought of 
a man which is today more pertinent than 
ever. Abraham Lincoln said: "A statesman is 
one who thinks of future generations and a 
politician is one who thinks of the next elec- 
tions." I return to my country convinced that 
the future of our relations rests in the hands 
of excellent statesmen. 



TEXTS OF TREATIES 3 

Panama Canal Treaty 

The United States of America and the Republic of 
Panama, 

Acting in the spirit of the Joint Declaration of April 3, 
1964, by the Representatives of the Governments of 
the United States of America and the Republic of 
Panama, and of the Joint Statement of Principles of 
February 7, 1974, initialed by the Secretary of State of 
the United States of America and the Foreign Minister 
of the Republic of Panama, and 

Acknowledging the Republic of Panama's sovereignty 
over its territory, 

Have decided to terminate the prior Treaties pertain- 
ing to the Panama Canal and to conclude a new Treaty 
to serve as the basis for a new relationship between 
them and, accordingly, have agreed upon the following: 



3 Also printed as Senate document S. Ex. 
Sept. 16, 1977. 



N dated 



October 17, 1977 



483 



LETTER OF SUBMITTAL* 

The President, The White House. 

The President: I have the honor to submit to 
you, with the recommendation that they be 
transmitted to the Senate for advice and consent 
to ratification, the Panama Canal Treaty and the 
Treaty Concerning the Permanent Neutrality and 
Operation of the Panama Canal. You signed these 
instruments with General Omar Torrijos Herr- 
era, Head of Government of the Republic of 
Panama, at the headquarters of the Organization 
of American States on September 7, 1977. 

These Treaties represent an important mile- 
stone in our relations with Panama and also our 
relations with the other countries of Latin 
America and the Caribbean. The Panama Canal 
regime established in 1903 no longer constitutes 
the best means to ensure the continued efficient 
operation and defense of the Canal. 

In my view these Treaties will protect fully the 
United States' interests in the future operation 
and security of the Panama Canal. They will pro- 
vide a basis for further improvement of our rela- 
tions with Panama and the other nations of the 
Hemisphere. Moreover, the Treaties protect not 
only the interests of the two signatories, but also 
the interest of world commerce in a Canal which 
functions efficiently and is permanently open to 
vessels of all countries on a nondiscriminatory 
basis. 

It will be recalled that negotiations with 
Panama looking toward a new, mutually satisfac- 
tory relationship began in 1964. Following dem- 



*Also printed in Senate document S. Ex. N 
dated Sept. 16, 1977. 



onstrations in Panama in January of that year and a 
three-month suspension of diplomatic relations, 
the two countries, with the cooperation of the 
Organization of American States, agreed on April 3, 
1964, to a Joint Declaration in which they 
undertook to seek the prompt elimination of the 
causes of conflict between them without lim- 
itations or preconditions of any kind. On Sep- 
tember 24 of the following year, President 
Johnson and President Robles of Panama an- 
nounced agreement to negotiate a new treaty 
based on certain principles, including abrogation 
of the 1903 Convention, recognition of Panama's 
sovereignty over all its territory and provision 
for the possible construction of a sea-level canal. 
President Johnson reached the decision to 
negotiate with Panama after consulting with 
Presidents Truman and Eisenhower and other 
leaders of both major political parties. 

Draft treaties were completed in 1967 but were 
not signed. In 1970 the Government of Panama 
formally rejected those treaties and proposed 
new negotiations. Additional negotiations in 1971 
and 1972 failed to produce agreement. Negotia- 
tions resumed in late 1973. In February 1974, 
Secretary of State Kissinger initialed with Pana- 
ma's Foreign Minister Tack a Joint Statement of 
Principles to guide the negotiations, which were 
similar in content to those established by Presi- 
dents Johnson and Robles as guidance for the 
1965-1967 negotiations. This Administration en- 
dorsed these basic concepts earlier this year, and 
the Treaties which Ambassadors Bunker and 
Linowitz have negotiated and I am submitting to 
you reflect those principles. 

Under the new Panama Canal Treaty, the 
United States will operate the Canal and have 
primary responsibility for its defense until De- 



Article I 

Abrogation of Prior Treaties and 
Establishment of a New Relationship 
1. Upon its entry into force, this Treaty terminates 
and supersedes: 

(a) The Isthmian Canal Convention between the 
United States of America and the Republic of Panama, 
signed at Washington, November 18, 1903; 

(b) The Treaty of Friendship and Cooperation signed 
at Washington, March 2, 1936, and the Treaty of Mutual 
Understanding and Cooperation and the related Memo- 
randum of Understandings Reached, signed at Panama, 
January 25, 1955, between the United States of 
America and the Republic of Panama; 

(c) All other treaties, conventions, agreements and 
exchanges of notes between the United States of 
America and the Republic of Panama concerning the 
Panama Canal which were in force prior to the entry 
into force of this Treaty; and 



484 



(d) Provisions concerning the Panama Canal which 
appear in other treaties, conventions, agreements and 
exchanges of notes between the United States of 
America and the Republic of Panama which were in 
force prior to the entry into force of this Treaty. 

2. In accordance with the terms of this Treaty and re- 
lated agreements, the Republic of Panama, as territo- 
rial sovereign, grants to the United States of America, 
for the duration of this Treaty, the rights necessary to 
regulate the transit of ships through the Panama Canal, 
and to manage, operate, maintain, improve, protect and 
defend the Canal. The Republic of Panama guarantees 
to the United States of America the peaceful use of the 
land and water areas which it has been granted the 
rights to use for such purposes pursuant to this Treaty 
and related agreements. 

3. The Republic of Panama shall participate increas- 
ingly in the management and protection and defense of 
the Canal, as provided in this Treaty. 

4. In view of the special relationship established by 



Department of State Bulletin 



cember 31, 1999. The Treaty grants to the United 
States all of the rights necessary for the opera- 
tion, maintenance and defense of the Canal, in- 
cluding the use of specific land and water areas 
necessary for these purposes. United States op- 
eration and maintenance of the Canal will be car- 
ried out by the Panama Canal Commission, a new 
United States Government agency that will re- 
place the present Panama Canal Company and 
Canal Zone Government. 

Panama will participate increasingly in the op- 
eration and defense of the Canal during the dura- 
tion of the Treaty, and will assume responsibility 
for the Canal upon expiration of the Treaty. 

In addition, the Panama Canal Treaty estab- 
lishes basic employment policies for the Panama 
Canal Commission, provides for payments to the 
Republic of Panama out of Canal operating rev- 
enues, provides for protection of the environment 
and commits the two countries to study the feasi- 
bility of constructing a sea-level canal in Panama 
and to deal with each other regarding construc- 
tion of a new interoceanic canal. 

The Treaty Concerning the Permanent Neu- 
trality and Operation of the Panama Canal will 
enter into force simultaneously with the Panama 
Canal Treaty. This Treaty establishes a regime of 
permanent neutrality of the Canal to ensure that 
the Canal, both in time of peace and time of war, 
"shall remain secure and open to peaceful transit 
by the vessels of all nations on terms of entire 
equality." 

The United States and Panama agree to main- 
tain the regime of neutrality established in the 
Treaty notwithstanding the termination of any 
other treaties between the two countries. The 
Treaty does not limit in any way the measures 
the United States might take to ensure the 



maintenance of the neutrality regime. In recogni- 
tion of the important contributions of the United 
States and Panama to the Canal, their vessels of 
war and auxiliary vessels shall be entitled to 
transit the Canal expeditiously. 

The Neutrality Treaty provides for a Protocol, 
open to accession by all States, by which sig- 
natories would acknowledge, associate them- 
selves with the objectives of and agree to observe 
and respect the regime of permanent neutrality 
established by that Treaty. 

This report is accompanied by a summary of the 
terms of these Treaties. 

The terms of these Treaties are implemented 
and supplemented by a number of separate 
agreements and other instruments between the 
United States and Panama. Additionally, ar- 
rangements have been entered into concerning 
continuation by United States agencies of various 
activities in Panama not directly related to the 
Canal, and efforts to provide to Panama certain 
loans, guarantees and credits to assist with its 
economic development and to strengthen its ca- 
pability to contribute to the defense of the Canal. 
A schedule of all of the above-mentioned docu- 
ments accompanies this report, and the Depart- 
ment of State will provide copies of these docu- 
ments to the Senate for its information. 

I am confident you will find that these Treaties 
are well designed to achieve our national 
objectives. They provide a sound basis for the 
continued operation and defense of the Canal. Ac- 
cordingly, I recommend that you transmit them 
to the Senate for its advice and consent to 
ratification. 

Respectfully submitted. 

Cyrus Vance. 
Department of State, September 15, 1977. 



this Treaty, the United States of America and the Re- 
public of Panama shall cooperate to assure the uninter- 
rupted and efficient operation of the Panama Canal. 

Article II 

Ratification, Entry Into Force, 
and Termination 

1. This Treaty shall be subject to ratification in ac- 
cordance with the constitutional procedures of the two 
Parties. The instruments of ratification of this Treaty 
shall be exchanged at Panama at the same time as the 
instruments of ratification of the Treaty Concerning the 
Permanent Neutrality and Operation of the Panama 
Canal, signed this date, are exchanged. This Treaty 
shall enter into force, simultaneously with the Treaty 
Concerning the Permanent Neutrality and Operation of 
the Panama Canal, six calendar months from the date of 
the exchange of the instruments of ratification. 

2. This Treaty shall terminate at noon, Panama time, 
December 31, 1999. 



Article III 
Canal Operation and Management 

1. The Republic of Panama, as territorial sovereign, 
grants to the United States of America the rights to 
manage, operate, and maintain the Panama Canal, its 
complementary works, installations and equipment and 
to provide for the orderly transit of vessels through the 
Panama Canal. The United States of America accepts 
the grant of such rights and undertakes to exercise 
them in accordance with this Treaty and related agree- 
ments. 

2. In carrying out the foregoing responsibilities, the 
United States of America may: 

(a) Use for the aforementioned purposes, without 
cost except as provided in this Treaty, the various in- 
stallations and areas (including the Panama Canal) and 
waters, described in the Agreement in Implementation 



October 17, 1977 



485 



LETTER OF TRANSMITTAL* 

To the Senate of the United State*: 

I transmit herewith, for the purpose of receiv- 
ing the advice and consent of the Senate to ratifi- 
cation, the Panama Canal Treaty and the Treaty 
Concerning the Permanent Neutrality and Opera- 
tion of the Panama Canal which I signed on behalf 
of the United States at the headquarters of the 
Organization of American States on September 7, 
1977. I also transmit, for the information of the 
Senate, the report of the Department of State 
with respect to those Treaties. 

When ratified, the Treaties will establish new 
arrangements for operating and defending the 
Panama Canal, and for ensuring its continuing 
neutrality and accessibility to all shipping. These 
objectives will be achieved through a new, co- 
operative relationship between the United States 
and Panama under which the United States will 
continue to operate the Canal until December 31, 
1999. After this period of preparation, Panama 
will assume control of Canal operations, with the 
United States sharing permanent responsibility 
for maintaining the Canal's neutrality. 

The Treaties serve the essential interest of the 
United States in an efficient and safe Canal. They 
permit a new relationship with Panama based on 
friendship and mutual respect. Moreover, they 
remove a major obstacle to the betterment of our 
relations with the countries of Latin America and 
the Caribbean area, and will substantially im- 
prove our standing with other nations, particu- 
larly those of the developing world. 

I believe that these Treaties are fair to both 
countries, consistent with our heritage, and right 
for our times. They protect United States inter- 
ests in the Panama Canal for the future better 
than the 1903 Convention which they will replace. 
Undue delay in ratification could cause serious 
problems for our foreign relations and jeopardize 
our long-term interests in the Canal and in the 
Hemisphere. Accordingly, I urge the Senate to 
give these Treaties early and favorable consid- 
eration. 

Jimmy Carter. 

The White House, September 16. 1977. 



*Also printed in Senate document S. Ex. N 
dated Sept. 16, 1977. 



of this Article,' 1 signed this date, as well as such other 
areas and installations as are made available to the 



4 Copies of the Agreement in Implementation of arti- 
cles III and IV of this treaty may be obtained from the 
Public Correspondence Division, Bureau of Public Af- 
fairs, Department of State, Washington, D.C. 20520. 



United States of America under this Treaty and related 
agreements, and take the measures necessary to ensure 
sanitation of such areas; 

(b) Make such improvements and alterations to the 
aforesaid installations and areas as it deems appro- 
priate, consistent with the terms of this Treaty; 

(c) Make and enforce all rules pertaining to the pas- 
sage of vessels through the Canal and other rules with 
respect to navigation and maritime matters, in accord- 
ance with this Treaty and related agreements. The Re- 
public of Panama will lend its cooperation, when neces- 
sary, in the enforcement of such rules; 

(d) Establish, modify, collect and retain tolls for the 
use of the Panama Canal, and other charges, and estab- 
lish and modify methods of their assessment: 

(e) Regulate relations with employees of the United 
States Government; 

(f) Provide supporting services to facilitate the per- 
formance of its responsibilities under this Article; 

(g) Issue and enforce regulations for the effective 
exercise of the rights and responsibilities of the United 
States of America under this Treaty and related agree- 
ments. The Republic of Panama will lend its coopera- 
tion, when necessary, in the enforcement of such rules; 
and 

(h) Exercise any other right granted under this 
Treaty, or otherwise agreed upon between the two Par- 
ties. 

3. Pursuant to the foregoing grant of rights, the 
United States of America shall, in accordance with the 
terms of this Treaty and the provisions of United States 
law, carry out its responsibilities by means of a United 
States Government agency called the Panama Canal 
Commission, which shall be constituted by and in con- 
formity with the laws of the United States of America. 

(a) The Panama Canal Commission shall be super- 
vised by a Board composed of nine members, five of 
whom shall be nationals of the United States of 
America, and four of whom shall be Panamanian nation- 
als proposed by the Republic of Panama for appoint- 
ment to such positions by the United States of America 
in a timely manner. 

(b) Should the Republic of Panama request the 
United States of America to remove a Panamanian na- 
tional from membership on the Board, the United 
States of America shall agree to such request. In that 
event, the Republic of Panama shall propose another 
Panamanian national for appointment by the United 
States of America to such position in a timely manner. 
In case of removal of a Panamanian member of the 
Board at the initiative of the United States of America, 
both parties will consult in advance in order to reach 
agreement concerning such removal, and the Republic 
of Panama shall propose another Panamanian national 
for appointment by the United States of America in his 
stead. 

(c) The United States of America shall employ a na- 
tional of the United States of America as Administrator 
of the Panama Canal Commission, and a Panamanian 
national as Deputy Administrator, through December 
31, 1989. Beginning January 1, 1990, a Panamanian na- 



486 



Department of State Bulletin 



me pi 
lies »ii| 



si netei 



;ional shall be employed as the Administrator and a na- 
tional of the United States of America shall occupy the 
position of Deputy Administrator. Such Panamanian na- 
tionals shall be proposed to the United States of 
America by the Republic of Panama for appointment to 
such positions by the United States of America. 

(d) Should the United States of America remove the 
Panamanian national from his position as Deputy Ad- 
ministrator, or Administrator, the Republic of Panama 
hall propose another Panamanian national for ap- 
pointment to such position by the United States of 
I America. 

4. An illustrative description of the activities the 
Panama Canal Commission will perform in carrying out 
the responsibilities and rights of the United States of 
America under this Article is set forth at the Annex. 
Also set forth in the Annex are procedures for the dis- 
continuance or transfer of those activities performed 
prior to the entry into force of this Treaty by the 
Panama Canal Company or the Canal Zone Government 
which are not to be carried out by the Panama Canal 
Commission. 

5. The Panama Canal Commission shall reimburse the 
Republic of Panama for the costs incurred by the Re- 
public of Panama in providing the following public serv- 
ices in the Canal operating areas and in housing areas 
set forth in the Agreement in Implementation of Article 
III of this Treaty and occupied by both United States 
and Panamanian citizen employees of the Panama Canal 
Commission: police, fire protection, street mainte- 
nance, street lighting, street cleaning, traffic manage- 
ment and garbage collection. The Panama Canal Com- 
mission shall nay the Republic of Panama the sum of ten 
million united States dollars ($10,000,000) per annum 
for the foregoing services. It is agreed that every three 
years from the date that this Treaty enters into force, 
the costs involved in furnishing said services shall be 
reexamined to determine whether adjustment of the 
annual payment should be made because of inflation and 
other relevant factors affecting the cost of such serv- 
ices. 

6. The Republic of Panama shall be responsible for 
providing, in all areas comprising the former Canal 
Zone, services of a general jurisdictional nature such as 
customs and immigration, postal services, courts and li- 
censing, in accordance with this Treaty and related 
agreements. 

7. The United States of America and the Republic of 
Panama shall establish a Panama Canal Consultative 
Committee, composed of an equal number of high-level 
representatives of the United States of America and the 
Republic of Panama, and which may appoint such sub- 
committees as it may deem appropriate. This Commit- 
tee shall advise the United States of America and the 
Republic of Panama on matters of policy affecting the 
Canal's operation. In view of both Parties' special 
interest in the continuity and efficiency of the Canal op- 
eration in the future, the Committee shall advise on 
matters such as general tolls policy, employment and 
training policies to increase the participation of 
Panamanian nationals in the operation of the Canal, and 



October 17, 1977 



MESSAGE FROM THE MEXICAN OBSERVER 

With special congratulations to President Car- 
ter and to General Torrijos for beginning the 
steps leading to attain total sovereignty by the 
Republc of Panama over all of its territory. 

The Observer, S. Roel. 



international policies on matters concerning the Canal. 
The Committee's recommendations shall be transmitted 
to the two Governments, which shall give such recom- 
mendations full consideration in the formulation of such 
policy decisions. 

8. In addition to the participation of Panamanian na- 
tionals at high management levels of the Panama Canal 
Commission, as provided for in paragraph 3 of this Ar- 
ticle, there shall be growing participation of Panama- 
nian nationals at all other levels and areas of employ- 
ment in the aforesaid commission, with the objective of 
preparing, in an orderly and efficient fashion, for the 
assumption by the Republic of Panama of full responsi- 
bility for the management, operation and maintenance 
of the Canal upon the termination of this Treaty. 

9. The use of the areas, waters and installations with 
respect to which the United States of America is 
granted rights pursuant to this Article, and the rights 
and legal status of United States Government agencies 
and employees operating in the Republic of Panama 
pursuant to this Article, shall be governed by the 
Agreement in Implementation of this Article, signed 
this date. 

10. Upon entry into force of this Treaty, the United 
States Government agencies known as the Panama 
Canal Company and the Canal Zone Government shall 
cease to operate within the territory of the Republic of 
Panama that formerly constituted the Canal Zone. 

Article IV 
Protection and Defense 

1. The United States of America and the Republic of 
Panama commit themselves to protect and defend the 
Panama Canal. Each Party shall act, in accordance with 
its constitutional processes, to meet the danger result- 
ing from an armed attack or other actions which 
threaten the security of the Panama Canal or of ships 
transiting it. 

2. For the duration of this Treaty, the United States 
of America shall have primary responsibility to protect 
and defend the Canal. The rights of the United States of 
America to station, train, and move military forces 
within the Republic of Panama are described in the 
Agreement in Implementation of this Article, signed 
this date. The use of areas and installations and the 
legal status of the armed forces of the United States of 
America in the Republic of Panama shall be governed 
by the aforesaid Agreement. 

3. In order to facilitate the participation and coopera- 
tion of the armed forces of both parties in the protection 
and defense of the Canal, the United States of America 



487 



and the Republic of Panama shall establish a Combined 
Board comprised of an equal number of senior military 
representatives of each Party. These representatives 
shall be charged by their respective governments with 
consulting and cooperating on all matters pertaining to 
the protection and defense of the Canal, and with plan- 
ning for actions to be taken in concert for that purpose. 
Such combined protection and defense arrangements 
shall not inhibit the identity or lines of authority of the 
armed forces of the United States of America or the 
Republic of Panama. The Combined Board shall provide 
for coordination and cooperation concerning such mat- 
ters as: 

(a) The preparation of contingency plans for the pro- 
tection and defense of the Canal based upon the cooper- 
ative efforts of the armed forces of both Parties; 

(b) The planning and conduct of combined military 
exercises; and 

(c) The conduct of United States and Panamanian 
military operations with respect to the protection and 
defense of the Canal. 

4. The Combined Board shall, at five-year intervals 
throughout the duration of this Treaty, review the re- 
sources being made available by the two Parties for the 
protection and defense of the Canal. Also, the Com- 
bined Board shall make appropriate recommendations 
to the two Governments respecting projected require- 
ments, the efficient utilization of available resources of 
the two Parties, and other matters of mutual interest 
with respect to the protection and defense of the Canal. 

5. To the extent possible consistent with its primary 
responsibility for the protection and defense of the 
Panama Canal, the United States of America will en- 
deavor to maintain its armed forces in the Republic of 
Panama in normal times at a level not in excess of that 
of the armed forces of the United States of America in 
the territory of the former Canal Zone immediately 
prior to the entry into force of this Treaty. 

Article V 
Principle of Non-Intervention 
Employees of the Panama Canal Commission, their 
dependents and designated contractors of the Panama 
Canal Commission, who are nationals of the United 
States of America, shall respect the laws of the Repub- 
lic of Panama and shall abstain from any activity incom- 
patible with the spirit of this Treaty. Accordingly, they 
shall abstain from any political activity in the Republic 
of Panama as well as from any intervention in the inter- 
nal affairs of the Republic of Panama. The United 
States of America shall take all measures within its au- 
thority to ensure that the provisions of this Article are 
fulfilled. 

Article VI 

Protection of the Environment 

1. The United States of America and the Republic of 

Panama commit themselves to implement this Treaty in 

a manner consistent with the protection of the natural 

environment of the Republic of Panama. To this end, 



they shall consult and cooperate with each other in all 
appropriate ways to ensure that they shall give clue re- 
gard to the protection and conservation of the environ- 
ment. 

2. A Joint Commission on the Environment shall toe 
established with equal representation from the United 
States of America and the Republic of Panama, which 
shall periodically review the implementation of this 
Treaty and shall recommend as appropriate to the two 
Governments ways to avoid or, should this not be possi- 
ble, to mitigate the adverse environmental impacts 
which might result from their respective actions pur- 
suant to the Treaty. 

3. The United States of America and the Republic of 
Panama shall furnish the Joint Commission on the Envi- 
ronment complete information on any action taken in 
accordance with this Treaty which, in the judgment of 
both, might have a significant effect on the environ- 
ment. Such information shall be made available to the 
Commission as far in advance of the contemplated ac- 
tion as possible to facilitate the study by the Commis- 
sion of any potential environmental problems and to 
allow for consideration of the recommendation of the 
Commission before the contemplated action is carried 
out. 

Article VII 
Flags 

1. The entire territory of the Republic of Panama, in- 
cluding the areas the use of which the Republic of 
Panama makes available to the United States of 
America pursuant to this Treaty and related agree- 
ments, shall be under the flag of the Republic of 
Panama, and consequently such flag always shall occupy 
the position of honor. 

2. The flag of the United States of America may be 
displayed, together with the flag of the Republic of 
Panama, at the headquarters of the Panama Canal 
Commission, at the site of the Combined Board, and as 
provided in the Agreement in Implementation of Article 
IV of this Treaty. 

3. The flag of the United States of America also may 
be displayed at other places and on some occasions, as 
agreed by both Parties. 

Article VIII 

Privileges and Immunities 

1. The installations owned or used by the agencies or 
instrumentalities of the United States of America operat- 
ing in the Republic of Panama pursuant to this Treaty 
and related agreements, and their official archives and 
documents, shall be inviolable. The two Parties shall 
agree on procedures to be followed in the conduct of any 
criminal investigation at such locations by the Republic 
of Panama. 

2. Agencies and instrumentalities of the Government 
of the United States of America operating in the Repub- 
lic of Panama pursuant to this Treaty and related 
agreements shall be immune from the jurisdiction of the 
Republic of Panama. 

3. In addition to such other privileges and immunities 



488 



Department of State Bulletin 



. as are afforded to employees of the United States Gov- 
: ernment and their dependents pursuant to this Treaty, 
the United States of America may designate up to 
twenty officials of the Panama Canal Commission who, 
along with their dependents, shall enjoy the privileges 
and immunities accorded to diplomatic agents and their 
dependents under international law and practice. The 
United States of America shall furnish to the Republic 
of Panama a list of the names of said officials and their 
dependents, identifying the positions they occupy in the 
Government of the United States of America, and shall 
keep such list current at all times. 

Article IX 

Applicable Laws and Law Enforcement 

1. In accordance with the provisions of this Treaty 
and related agreements, the law of the Republic of 
Panama shall apply in the areas made available for the 
use of the United States of America pursuant to this 
Treaty. The law of the Republic of Panama shall be 
applied to matters or events which occurred in the 
former Canal Zone prior to the entry into force of this 
Treaty only to the extent specifically provided in prior 
treaties and agreements. 

2. Natural or juridical persons who, on the date of 
entry into force of this Treaty, are engaged in business 
or non-profit activities at locations in the former Canal 
Zone may continue such business or activities at those 
locations under the same terms and conditions prevail- 
ing prior to the entry into force of this Treaty for a 
thirty-month transition period from its entry into force. 
The Republic of Panama shall maintain the same operat- 
ing conditions as those applicable to the aforementioned 
enterprises prior to the entry into force of this Treaty 
in order that they may receive licenses to do business in 
the Republic of Panama subject to their compliance 
with the requirements of its law. Thereafter, such per- 
sons shall receive the same treatment under the law of 
the Republic of Panama as similar enterprises already 
established in the rest of the territory of the Republic 
of Panama without discrimination. 

3. The rights of ownership, as recognized by the 
United States of America, enjoyed by natural or juridi- 
cal private persons in buildings and other improve- 
ments to real property located in the former Canal Zone 
shall be recognized by the Republic of Panama in con- 
formity with its laws. 

4. With respect to buildings and other improvements 
to real property located in the Canal operating areas, 
housing areas or other areas subject to the licensing 
procedure established in Article IV of the Agreement in 
Implementation of Article III of this Treaty, the own- 
ers shall be authorized to continue using the land upon 
which their property is located in accordance with the 
procedures established in that Article. 

5. With respect to buildings and other improvements to 
real property located in areas of the former Canal Zone 
to which the aforesaid licensing procedure is not appli- 
cable, or may cease to be applicable during the lifetime 
or upon termination of this Treaty, the owners may con- 
tinue to use the land upon which their property is lo- 



cated, subject to the payment of a reasonable charge to 
the Republic of Panama. Should the Republic of Panama 
decide to sell such land, the owners of the buildings or 
other improvements located thereon shall be offered a 
first option to purchase such land at a reasonable cost. 
In the case of non-profit enterprises, such as churches 
and fraternal organizations, the cost of purchase will be 
nominal in accordance with the prevailing practice in 
the rest of the territory of the Republic of Panama. 

6. If any of the aforementioned persons are required 
by the Republic of Panama to discontinue their ac- 
tivities or vacate their property for public purposes, 
they shall be compensated at fair market value by the 
Republic of Panama. 

7. The provisions of paragraphs 2-6 above shall apply- 
to natural or juridical persons who have been engaged 
in business or non-profit activities at locations in the 
former Canal Zone for at least six months prior to the 
date of signature of this Treaty. 

8. The Republic of Panama shall not issue, adopt or 
enforce any law, decree, regulation, or international 
agreement or take any other action which purports to 
regulate or would otherwise interfere with the exercise 
on the part of the United States of America of any right 
granted under this Treaty or related agreements. 

9. Vessels transiting the Canal, and cargo, passen- 
gers and crews carried on such vessels shall be exempt 
from any taxes, fees, or other charges by the Republic 
of Panama. However, in the event such vessels call at a 
Panamanian port, they may be assessed charges inci- 
dent thereto, such as charges for services provided to 
the vessel. The Republic of Panama may also require 
the passengers and crew disembarking from such ves- 
sels to pay such taxes, fees and charges as are estab- 
lished under Panamanian law for persons entering its 
territory. Such taxes, fees and charges shall be as- 
sessed on a nondiscriminatory basis. 

10. The United States of America and the Republic of 
Panama will cooperate in taking such steps as may from 
time to time be necessary to guarantee the security of 
the Panama Canal Commission, its property, its em- 
ployees and their dependents, and their property, the 
Forces of the United States of America and the mem- 
bers thereof, the civilian component of the United 



MESSAGES FROM FOREIGN LEADERS 

In the days following the signing of the Panama 
Canal treaties, President Carter received many 
congratulatory messages from leaders around the 
world, including leaders of countries which are 
principal users of the canal. They expressed great 
pleasure at the successful outcome of the negotia- 
tions between the United States and Panama and 
that the maintenance of the security of the canal 
and the insuring of nondiscriminatory use of it 
are permanently guaranteed to all nations of the 
world. 



October 17, 1977 



489 



States Forces, the dependents of members of the 
Forces and the civilian component, and their property, 
and the contractors of the Panama Canal Commission 
and of the United States Forces, their dependents, and 
their property. The Republic of Panama will seek from 
its Legislative Branch such legislation as may be 
needed to carry out the foregoing purposes and to 
punish any offenders. 

11. The Parties shall conclude an agreement whereby 
nationals of either State, who are sentenced by the 
courts of the other State, and who are not domiciled 
therein, may elect to serve their sentences in their State 
of nationality. 

Article X 

Employment With the Panama Canal 
Commission 

1. In exercising its rights and fulfilling its respon- 
sibilities as the employer, the United States of America 
shall establish employment and labor regulations which 
shall contain the terms, conditions and prerequisites for 
all categories of employees of the Panama Canal Com- 
mission. These regulations shall be provided to the Re- 
public of Panama prior to their entry into force. 

2. (a) The regulations shall establish a system of 
preference when hiring employees, for Panamanian 
applicants possessing the skills and qualifications re- 
quired for employment by the Panama Canal Commis- 
sion. The United States of America shall endeavor to 
ensure that the number of Panamanian nationals 
employed by the Panama Canal Commission in relation 
to the total number of its employees will conform to the 
proportion established for foreign enterprises under the 
law of the Republic of Panama. 

(b) The terms and conditions of employment to be es- 
tablished will in general be no less favorable to persons 
already employed by the Panama Canal Company or 
Canal Zone Government prior to the entry into force of 
this Treaty, than those in effect immediately prior to 
that date. 

3. (a) The United States of America shall establish an 
employment policy for the Panama Canal Commission 
that shall generally limit the recruitment of personnel 
outside the Republic of Panama to persons possessing 
requisite skills and qualifications which are not avail- 
able in the Republic of Panama. 

(b) The United States of America will establish train- 
ing programs for Panamanian employees and apprentices 
in order to increase the number of Panamanian nationals 
qualified to assume positions with the Panama Canal 
Commission, as positions become available. 

(c) Within five years from the entry into force of this 
Treaty, the number of United States nationals 
employed by the Panama Canal Commission who were 
previously employed by the Panama Canal Company 
shall be at least twenty percent less than the total 
number of United States nationals working for the 
Panama Canal Company immediately prior to the entry 
into force of this Treaty. 

(d) The United States of America shall periodically 
inform the Republic of Panama, through the Coordinat- 
ing Committee, established pursuant to the Agreement 



in Implementation of Article III of this Treaty, of avail- 
able positions within the Panama Canal Commission. 
The Republic of Panama shall similarly provide the 
United States of America any information it may have 
as to the availability of Panamanian nationals claiming 
to have skills and qualifications that might be required 
by the Panama Canal Commission, in order that the 
United States of America may take this information 
into account. 

4. The United States of America will establish qual- 
ification standards for skills, training and experience 
required by the Panama Canal Commission. In estab- 
lishing such standards, to the extent they include a re- 
quirement for a professional license, the United States 
of America, without prejudice to its right to require ad- 
ditional professional skills and qualifications, shall rec- 
ognize the professional licenses issued by the Republic 
of Panama. 

5. The United States of America shall establish a pol- 
icy for the periodic rotation, at a maximum of every five 
years, of United States citizen employees and other 
non-Panamanian employees, hired after the entry into 
force of this Treaty. It is recognized that certain excep- 
tions to the said policy of rotation may be made for 
sound administrative reasons, such as in the case of 
employees holding positions requiring certain non- 
transferable or nonrecruitable skills. 

6. With regard to wages and fringe benefits, there 
shall be no discrimination on the basis of nationality, 
sex, or race. Payments by the Panama Canal Commis- 
sion of additional remuneration, or the provision of 
other benefits, such as home leave benefits, to United 
States nationals employed prior to entry into force of 
this Treaty, or to persons of any nationality, including 
Panamanian nationals who are thereafter recruited out- 
side of the Republic of Panama and who change their 
place of residence, shall not be considered to be dis- 
crimination for the purpose of this paragraph. 

7. Persons employed by the Panama Canal Company 
or Canal Zone Government prior to the entry into force 
of this Treaty, who are displaced from their employ- 
ment as a result of the discontinuance by the United 
States of America of certain activities pursuant to this 
Treaty, will be placed by the United States of America, 
to the maximum extent feasible, in other appropriate 
jobs with the Government of the United States in ac- 
cordance with United States Civil Service regulations. 
For such persons who are not United States nationals, 
placement efforts will be confined to United States 
Government activities located within the Republic of 
Panama. Likewise, persons previously employed in ac- 
tivities for which the Republic of Panama assumes re- 
sponsibility as a result of this Treaty will be continued 
in their employment to the maximum extent feasible by 
the Republic of Panama. The Republic of Panama shall, 
to the maximum extent feasible, ensure that the terms 
and conditions of employment applicable to personnel 
employed in the activities for which it assumes respon- 
sibility are no less favorable than those in effect im- 
mediately prior to the entry into force of this Treaty. 
Non-United States nationals employed by the Panama 
Canal Company or Canal Zone Government prior to the 



490 



Department of State Bulletin 



entry into force of this Treaty who are involuntarily 
separated from their positions because of the discon- 
tinuance of an activity by reason of this Treaty, who are 
not entitled to an immediate annuity under the United 
States Civil Service Retirement System, and for whom 
continued employment in the Republic of Panama by the 
Government of the United States of America is not 
practicable, will be provided special job placement as- 
sistance by the Republic of Panama for employment in 
positions for which they may be qualified by experience 
and training. 

8. The Parties agree to establish a system whereby 
the Panama Canal Commission may, if deemed mutually 
convenient or desirable by the two Parties, assign cer- 
tain employees of the Panama Canal Commission, for a 
limited period of time, to assist in the operation of ac- 
tivities transferred to the responsibility of the Republic 
of Panama as a result of this Treaty or related agree- 
ments. The salaries and other costs of employment of 
any such persons assigned to provide such assistance 
shall be reimbursed to the United States of America by 
the Republic of Panama. 

9. (a) The right of employees to negotiate collective 
contracts with the Panama Canal Commission is recog- 
nized. Labor relations with employees of the Panama 
Canal Commission shall be conducted in accordance 
with forms of collective bargaining established by the 
United States of America after consultation with em- 
ployee unions. 

(b) Employee unions shall have the right to affiliate . 
with international labor organizations. 

10. The United States of America will provide an ap- 
propriate early optional retirement program for all per- 
sons employed by the Panama Canal Company or Canal 
Zone Government immediately prior to the entry into 
force of this Treaty. In this regard, taking into account 
the unique circumstances created by the provisions of 
this Treaty, including its duration, and their effect upon 
such employees, the United States of America shall, with 
respect to them: 

(a) determine that conditions exist which invoke appli- 
cable United States law permitting early retirement an- 
nuities and apply such law for a substantial period of the 
duration of the Treaty; 

(b) seek special legislation to provide more liberal enti- 
tlement to, and calculation of, retirement annuities than 
is currently provided for by law. 

Article XI 
Provisions for the Transition Period 
1. The Republic of Panama shall reassume plenary 
jurisdiction over the former Canal Zone upon entry into 
force of this Treaty and in accordance with its terms. In 
order to provide for an orderly transition to the full ap- 
plication of the jurisdictional arrangements established 
by this Treaty and related agreements, the provisions of 
this Article shall become applicable upon the date this 
Treaty enters into force, and shall remain in effect for 
thirty calendar months. The authority granted in this Ar- 
ticle to the United States of America for this transition 
period shall supplement, and is not intended to limit, the 



full application and effect of the rights and authority 
granted to the United States of America elsewhere in 
this Treaty and in related agreements. 

2. During this transition period, the criminal and civil 
laws of the United States of America shall apply concur- 
rently with those of the Republic of Panama in certain of 
the areas and installations made available for the use of 
the United States of America pursuant to this Treaty, in 
accordance with the following provisions: 

(a) The Republic of Panama permits the authorities of 
the United States of America to have the primary right 
to exercise criminal jurisdiction over United States citi- 
zen employees of the Panama Canal Commission and 
their dependents, and members of the United States 
Forces and civilian component and their dependents, in 
the following cases: 

(i) for any offense committed during the transition 
period within such areas and installations, and 

(ii) for any offense committed prior to that period in 
the former Canal Zone. 

The Republic of Panama shall have the primary right 
to exercise jurisdiction over all other offenses committed 
by such persons, except as otherwise provided in this 
Treaty and related agreements or as may be otherwise 
agreed. 

(b) Either Party may waive its primary right to exer- 
cise jurisdiction in a specific case or category of cases. 

3. The United States of America shall retain the right 
to exercise jurisdiction in criminal cases relating to of- 
fenses committed prior to the entry into force of this 
Treaty in violation of the laws applicable in the former 
Canal Zone. 

4. For the transition period, the United States of 
America shall retain police authority and maintain a 
police force in the aforementioned areas and installa- 
tions. In such areas, the police authorities of the United 
States of America may take into custody any person not 
subject to their primary jurisdiction if such person is 
believed to have committed or to be committing an of- 
fense against applicable laws or regulations, and shall 
promptly transfer custody to the police authorities of 
the Republic of Panama. The United States of America 
and the Republic of Panama shall establish joint police 
patrols in agreed areas. Any arrests conducted by a 
joint patrol shall be the responsibility of the patrol 
member or members representing the Party having 
primary jurisdiction over the person or persons 
arrested. 

5. The courts of the United States of America and re- 
lated personnel, functioning in the former Canal Zone 
immediately prior to the entry into force of this Treaty, 
may continue to function during the transition period 
for the judicial enforcement of the jurisdiction to be 
exercised by the United States of America in accord- 
ance with this Article. 

6. In civil cases, the civilian courts of the United 
States of America in the Republic of Panama shall have 
no jurisdiction over new cases of a private civil nature, 
but shall retain full jurisdiction during the transition 
period to dispose of any civil cases, including admiralty 



October 17, 1977 



491 



cases, already instituted and pending before the courts 
prior to the entry into force of this Treaty. 

7. The laws, regulations, and administrative author- 
ity of the United States of America applicable in the 
former Canal Zone immediately prior to the entry into 
force of this Treaty shall, to the extent not inconsistent 
with this Treaty and related agreements, continue in 
force for the purpose of the exercise by the United 
States of America of law enforcement and judicial juris- 
diction only during the transition period. The United 
States of America may amend, repeal or otherwise 
change such laws, regulations and administrative au- 
thority. The two Parties shall consult concerning pro- 
cedural and substantive matters relative to the im- 
plementation of this Article, including the disposition of 
cases pending at the end of the transition period and, in 
this respect, may enter into appropriate agreements by 
an exchange of notes or other instrument. 

8. During this transition period, the United States of 
America may continue to incarcerate individuals in the 
areas and installations made available for the use of the 
United States of America by the Republic of Panama 
pursuant to this Treaty and related agreements, or to 
transfer them to penal facilities in the United States of 
America to serve their sentences. 

Article XII 

A Sea-Level Canal or a 
Third Lane of Locks 

1. The United States of America and the Republic of 
Panama recognize that a sea-level canal may be impor- 
tant for international navigation in the future. Con- 
sequently, during the duration of this Treaty, both Par- 
ties commit themselves to study jointly the feasibility 
of a sea-level canal in the Republic of Panama, and in 
the event they determine that such a waterway is 
necessary, they shall negotiate terms, agreeable to both 
Parties, for its construction. 

2. The United States of America and the Republic of 
Panama agree on the following: 

(a) No new interoceanic canal shall be constructed in 
the territory of the Republic of Panama during the du- 
ration of this Treaty, except in accordance with the 
provisions of this Treaty, or as the two Parties may 
otherwise agree; and 

(b) During the duration of this Treaty, the United 
States of America shall not negotiate with third States 
for the right to construct an interoceanic canal on any 
other route in the Western Hemisphere, except as the 
two Parties may otherwise agree. 

3. The Republic of Panama grants to the United 
States of America the right to add a third lane of locks 
to the existing Panama Canal. This right may be exer- 
cised at any time during the duration of this Treaty, 
provided that the United States of America has deliv- 
ered to the Republic of Panama copies of the plans for 
such construction. 

4. In the event the United States of America exer- 
cises the right granted in paragraph 3 above, it may use 
for that purpose, in addition to the areas otherwise 



made available to the United States of America pur- 
suant to this Treaty, such other areas as the two Par- 
ties may agree upon. The terms and conditions appli- 
cable to Canal operating areas made available by the 
Republic of Panama for the use of the United States of 
America pursuant to Article III of this Treaty shall 
apply in a similar manner to such additional areas. 

5. In the construction of the aforesaid works, the 
United States of America shall not use nuclear excava- 
tion techniques without the previous consent of the Re- 
public of Panama. 

Article XIII 

Property Transfer and Economic 
Participation by the Republic of Panama 

1. Upon termination of this Treaty, the Republic of 
Panama shall assume total responsibility for the man- 
agement, operation, and maintenance of the Panama 
Canal, which shall be turned over in operating condition 
and free of liens and debts, except as the two Parties 
may otherwise agree. 

2. The United States of America transfers, without 
charge, to the Republic of Panama all right, title and 
interest the United States of America may have with 
respect to all real property, including non-removable 
improvements thereon, as set forth below: 

(a) Upon the entry into force of this Treaty, the 
Panama Railroad and such property that was located in 
the former Canal Zone but that is not within the land 
and water areas the use of which is made available to 
the United States of America pursuant to this Treaty. 
However, it is agreed that the transfer on such date 
shall not include buildings and other facilities, except 
housing, the use of which is retained by the United 
States of America pursuant to this Treaty and related 
agreements, outside such areas. 

(b) Such property located in an area or a portion 
thereof at such time as the use by the United States of 
America of such area or portion thereof ceases pursuant 
to agreement between the two Parties. 

(c) Housing units made available for occupancy by 
members of the Armed Forces of the Republic of 
Panama in accordance with paragraph 5(b) of Annex B 
to the Agreement in Implementation of Article IV of 
this Treaty at such time as such units are made avail- 
able to the Republic of Panama. 

(d) Upon termination of this Treaty, all real property 
and non-removable improvements that were used by the 
United States of America for the purposes of this 
Treaty and related agreements and equipment related 
to the management, operation and maintenance of the 
Canal remaining in the Republic of Panama. 

3. The Republic of Panama agrees to hold the United 
States of America harmless with respect to any claims 
which may be made by third parties relating to rights, 
title and interest in such property. 

4. The Republic of Panama shall receive, in addition, 
from the Panama Canal Commission a just and equitable 
return on the national resources which it has dedicated 
to the efficient management, operation, maintenance, 



492 



Department of State Bulletin 



protection and defense of the Panama Canal, in accord- 
ance with the following: 

(a) An annual amount to be paid out of Canal operat- 
ing revenues computed at a rate of thirty hundredths of 
a United States dollar ($0.30) per Panama Canal net 
ton, or its equivalency, for each vessel transiting the 
Canal after the entry into force of this Treaty, for 
which tolls are charged. The rate of thirty hundredths 
of a United States dollar ($0.30) per Panama Canal net 
ton, or its equivalency, will be adjusted to reflect 
changes in the United States wholesale price index for 
total manufactured goods during biennial periods. The 
first adjustment shall take place five years after entry 
into force of this Treaty, taking into account the 
changes that occurred in such price index during the 
preceding two years. Thereafter, successive adjust- 
ments shall take place at the end of each biennial 
period. If the United States of America should decide 
that another indexing method is preferable, such 
method shall be proposed to the Republic of Panama 
and applied if mutually agreed. 

(b) A fixed annuity of ten million United States dol- 
lars ($10,000,000) to be paid out of Canal operating rev- 
enues. This amount shall constitute a fixed expense of 
the Panama Canal Commission. 

(c) An annual amount of up to ten million United 
States dollars ($10,000,000) per year, to be paid out of 
Canal operating revenues to the extent that such rev- 
enues exceed expenditures of the Panama Canal Com- 
mission including amounts paid pursuant to this Treaty. 
In the event Canal operating revenues in any year do 
not produce a surplus sufficient to cover this payment, 
the unpaid balance shall be paid from operating 
surpluses in future years in a manner to be mutually 
agreed. 

Article XIV 
Settlement of Disputes 
In the event that any question should arise between 
the Parties concerning the interpretation of this Treaty 
or related agreements, they shall make every effort to 
resolve the matter through consultation in the appro- 
priate committees established pursuant to this Treaty 
and related agreements, or, if appropriate, through dip- 
lomatic channels. In the event the Parties are unable to 
resolve a particular matter through such means, they 
may, in appropriate cases, agree to submit the matter 
to conciliation, mediation, arbitration, or such other 
procedure for the peaceful settlement of the dispute as 
they may mutually deem appropriate. 

Done at Washington, this 7th day of September, 
1977, in duplicate, in the English and Spanish lan- 
guages, both texts being equally authentic. 



For the Republic 
of Panama: 

Omar Torrijos Herrera 

Head of Government of 
the Republic of Panama 



For the United States 
of America: 

Jimmy Carter 

President of the 
United States of America 



Annex 

Procedures for the Cessation or Transfer 

of Activities Carried Out by the 

Panama Canal Company and the 

Canal Zone Government and 

Illustrative List of the 

Functions That May Be Performed 

by the Panama Canal Commission 

1. The laws of the Republic of Panama shall regulate 
the exercise of private economic activities within the 
areas made available by the Republic of Panama for the 
use of the United States of America pursuant to this 
Treaty. Natural or juridical persons who, at least six 
months prior to the date of signature of this Treaty, 
were legally established and engaged in the exercise of 
economic activities in the former Canal Zone, may con- 
tinue such activities in accordance with the provisions 
of paragraphs 2-7 of Article IX of this Treaty. 

2. The Panama Canal Commission shall not perform 
governmental or commercial functions as stipulated in 
paragraph 4 of this Annex, provided, however, that this 
shall not be deemed to limit in any way the right of the 
United States of America to perform those functions 
that may be necessary for the efficient management, 
operation and maintenance of the Canal. 

3. It is understood that the Panama Canal Commis- 
sion, in the exercise of the rights of the United States 
of America with respect to the management, operation 
and maintenance of the Canal, may perform functions 
such as are set forth below by way of illustration: 

a. Management of the Canal enterprise. 

b. Aids to navigation in Canal waters and in prox- 
imity thereto. 

c. Control of vessel movement. 

d. Operation and maintenance of the locks. 

e. Tug service for the transit of vessels and dredging 
for the piers and docks of the Panama Canal Commis- 
sion. 

f. Control of the water levels in Gatun, Alajuela 
(Madden) and Miraflores Lakes. 

g. Non-commercial transportation services in Canal 
waters. 

h. Meteorological and hydrographic services. 

i. Admeasurement. 

j. Non-commercial motor transport and maintenance. 

k. Industrial security through the use of watchmen. 

1. Procurement and warehousing. 

m. Telecommunications. 

n. Protection of the environment by preventing and 
controlling the spillage of oil and substances harmful to 
human or animal life and of the ecological equilibrium in 
areas used in operation of the Canal and the anchor- 
ages. 

o. Non-commercial vessel repair. 

p. Air conditioning services in Canal installations. 

q. Industrial sanitation and health services. 

r. Engineering design, construction and maintenance 
of Panama Canal Commission installations. 

s. Dredging of the Canal channel, terminal ports and 
adjacent waters. 



October 17, 1977 



493 



t. Control of the banks and stabilizing of the slopes of 
the Canal. 

u. Non-commercial handling of cargo on the piers and 
docks of the Panama Canal Commission. 

v. Maintenance of public areas of the Panama Canal 
Commission, such as parks and gardens. 

w. Generation of electric power. 

x. Purification and supply of water. 

y. Marine salvage in Canal waters. 

z. Such other functions as may be necessary or ap- 
propriate to carry out, in conformity with this Treaty 
and related agreements, the rights and responsibilities 
of the United States of America with respect to the 
management, operation and maintenance of the Panama 
Canal. 

4. The following activities and operations carried out 
by the Panama Canal Company and the Canal Zone 
Government shall not be carried out by the Panama 
Canal Commission, effective upon the dates indicated 
herein: 

(a) Upon the date of entry into force of this Treaty: 

(i) Wholesale and retail sales, including those through 
commissaries, food stores, department stores, optical 
shops and pastry shops; 

(ii) The production of food and drink, including milk 
products and bakery products; 

(iii) The operation of public restaurants and 
cafeterias and the sale of articles through vending- 
machines; 

(iv) The operation of movie theaters, bowling alleys, 
pool rooms and other recreational and amusement 
facilities for the use of which a charge is payable; 

(v) The operation of laundry and dry cleaning plants 
other than those operated for official use; 

(vi) The repair and service of privately owned au- 
tomobiles or the sale of petroleum or lubricants thereto, 
including the operation of gasoline stations, repair ga- 
rages and tire repair and recapping facilities, and the re- 
pair and service of other privately owned property, in- 
cluding appliances, electronic devices, boats, motors, 
and furniture; 

(vii) The operation of cold storage and freezer plants 
other than those operated for official use; 

(viii) The operation of freight houses other than those 
operated for official use; 

(ix) The operation of commercial services to and sup- 
ply of privately owned and operated vessels, including 
the construction of vessels, the sale of petroleum and 
lubricants and the provision of water, tug services not 
related to the Canal or other United States Government 
operations, and repair of such vessels, except in situa- 
tions where repairs may be necessary to remove dis- 
abled vessels from the Canal; 

(x) Printing services other than for official use; 

(xi) Maritime transportation for the use of the gen- 
eral public: 

(xii) Health and medical services provided to indi- 
viduals, including hospitals, leprosariums, veterinary, 
mortuary and cemetery services; 



(xiii) Educational services not for professional train- 
ing, including schools and libraries: 

(xiv) Postal services; 

(xv) Immigration, customs and quarantine controls, 
except those measures necessary to ensure the sanita- 
tion of the Canal: 

(xvi) Commercial pier and dock services, such as the 
handling of cargo and passengers; and 

(xvii) Any other commercial activity of a similar na- 
ture, not related to the management, operation or 
maintenance of the Canal. 

(b) Within thirty calendar months from the date of 
entry into force of this Treaty, governmental services 
such as: 

(i) Police; 

(ii) Courts; and 

(iii) Prison system. 

5. (a) With respect to those activities or functions de- 
scribed in paragraph 4 above, or otherwise agreed upon 
by the two Parties, which are to be assumed by the 
Government of the Republic of Panama or by private 
persons subject to its authority, the two Parties shall 
consult prior to the discontinuance of such activities or 
functions by the Panama Canal Commission to develop 
appropriate arrangements for the orderly transfer and 
continued efficient operation or conduct thereof. 

(b) In the event that appropriate arrangements can- 
not be arrived at to ensure the continued performance 
of a particular activity or function described in para- 
graph 4 above which is necessary to the efficient man- 
agement, operation or maintenance of the Canal, the 
Panama Canal Commission may, to the extent consist- 
ent with the other provisions of this Treaty and related 
agreements, continue to perform such activity or func- 
tion until such arrangements can be made. 

Agreed Minute to the Panama Canal Treaty 

1. With reference to paragraph 1(c) of Article I (Abro- 
gation of Prior Treaties and Establishment of a New Re- 
lationship), it is understood that the treaties, conven- 
tions, agreements and exchanges of notes, or portions 
thereof, abrogated and superseded thereby include: 

ia) The Agreement delimiting the Canal Zone referred 
to in Article II of the Interoceanic Canal Convention of 
November 18, 1903 signed at Panama on June 15, 1904. 

(b) The Boundary Convention signed at Panama on 
September 2, 1914. 

(c) The Convention regarding the Colon Corridor and 
certain other corridors through the Canal Zone signed at 
Panama on May 24, 1950. 

(d) The Trans-Isthmian Highway Convention signed 
at Washington on March 2, 1936, the Agreement supple- 
menting that Convention entered into through an ex- 
change of notes signed at Washington on August 31 and 
September 6, 1940, and the arrangement between the 
United States of America and Panama respecting the 
Trans-Isthmian Joint Highway Board, entered into 
through an exchange of notes at Panama on October 19 
and 23, 1939. 






494 



Department of State Bulletin 



(e) The Highway Convention between the United 
States and Panama signed at Panama on September 14, 
1950. 

(f) The Convention regulating the transit of alcoholic 
liquors through the Canal Zone signed at Panama on 
March 14, 1932. 

(g) The Protocol of an Agreement restricting use of 
Panama and Canal Zone waters by belligerents signed at 
Washington on October 10, 1914. 

(h) The Agreement providing for the reciprocal recog- 
nition of motor vehicle license plates in Panama and the 
Canal Zone entered into through an exchange of notes at 
Panama on December 7 and December 12, 1950, and the 
Agreement establishing procedures for the reciprocal 
(recognition of motor vehicle operator's licenses in the 
Canal Zone and Panama entered into through an ex- 
change of notes at Panama on October 31, 1960. 

(i) The General Relations Agreement entered into 
through an exchange of notes at Washington on May 18, 
1942. 

(j) Any other treaty, convention, agreement or ex- 
change of notes between the United States and the Re- 
public of Panama, or portions thereof, concerning the 
Panama Canal which was entered into prior to the entry 
into force of the Panama Canal Treaty. 

2. It is further understood that the following treaties, 
conventions, agreements and exchanges of notes between 
the two Parties are not affected by paragraph 1 of Article 
I of the Panama Canal Treaty: 

(a) The Agreement confirming the cooperative agree- 
ment between the Panamanian Ministry of Agriculture 
and Livestock and the United States Department of Ag- 
ricul'nr' r„i the prevention of foot-and-mouth disease 
and rinderpest in Panama, entered into by an exchange 
of notes signed at Panama on June 21 and October 5, 
1972, and amended May 28 and June 12, 1974. 

(b) The Loan Agreement to assist Panama in executing 
public marketing programs in basic grains and perish- 
ables, with annex, signed at Panama on September 10, 
1975. 

(c) The Agreement concerning the regulation of com- 
mercial aviation in the Republic of Panama, entered into 
by an exchange of notes signed at Panama on April 22, 
1929. 

(d) The Air Transport- Agreement signed at Panama on 
March 31, 1949, and amended May 29 and June 3, 1952, 
June 5, 1967, December 23, 1974, and March 6, 1975. 

(e) The Agreement relating to the establishment of 
headquarters in Panama for a civil aviation technical as- 
sistance group for the Latin American area, entered into 
by an exchange of notes signed at Panama on August 8, 
1952. 

(f) The Agreement relating to the furnishing by the 
Federal Aviation Agency of certain services and mate- 
rials for air navigation aids, entered into by an exchange 
of notes signed at Panama on December 5, 1967 and Feb- 
ruary 22, 1968. 

(g) The Declaration permitting consuls to take note in 
person, or by authorized representatives, of declarations 
of values of exports made by shippers before customs of- 



ficers, entered into by an exchange of notes signed at 
Washington on April 17, 1913. 

(h) The Agreement relating to customs privileges for 
consular officers, entered into by an exchange of notes 
signed at Panama on January 7 and 31, 1935. 

(i) The Agreement relating to the sale of military 
equipment, materials, and services to Panama, entered 
into by an exchange of notes signed at Panama on May 
_'o. 1959. 

(j) The Agreement relating to the furnishing of de- 
fense articles and services to Panama for the purpose of 
contributing to its internal security, entered into by an 
exchange of notes signed at Panama on March 26 and 
May 2:!, 1962. 

(k) The Agreement relating to the deposit by Panama 
of ten percent of the value of grant military assistance 
and excess defense articles furnished by the United 
States, entered into by an exchange of notes signed at 
Panama on April 4 and May 9, 1972. 

(1) The Agreement concerning payment to the United 
States of net proceeds from the sale of defense articles 
furnished under the military assistance program, entered 
into by an exchange of notes signed at Panama on May 20 
and December 6, 1974. 

(m) The General Agreement for Technical and Eco- 
nomic Cooperation, signed at Panama on December 11, 
1961. 

(n) The Loan Agreement relating to the Panama City 
water supply system, with annex, signed at Panama on 
.May 6, 1969, and amended September 30, 1971. 

(o) The Loan Agreement for rural municipal develop- 
ment in Panama, signed at Panama on November 28, 
1975. 

(p) The Loan Agreement relating to a project for the 
modernization, restructuring and reorientation of Pana- 
ma's educational programs, signed at Panama on 
November 19, 1975. 

(q) The Treaty providing for the extradition of crimi- 
nals, signed at Panama on May 25, 1904. 

(r) The Agreement relating to legal tender and frac- 
tional silver coinage by Panama, entered into by an ex- 
change of notes signed at Washington and New York on 
June 20, 1904, and amended March 26 and April 2, 1930, 
May 28 and June 6, 1931, March 2, 1936, June 17, 1946, 
May 9 and 24, 1950, September 11 and October 22, 1953, 
August 23 and October 25, 1961, and September 26 and 
October 23, 1962. 

(s) The Agreement for enlargement and use by Canal 
Zone of sewerage facilities in Colon Free Zone Area, en- 
tered into by an exchange of notes signed at Panama on 
March 8 and 25, 1954. 

(t) The Agreement relating to the construction of the 
inter-American highway, entered into by an exchange of 
notes signed at Panama on May 15 and June 7, 1943. 

(u) The Agreement for cooperation in the construction 
of the Panama segment of the Darien Gap highway, 
signed at Washington on May 6, 1971. 

(v) The Agreement relating to investment guaranties 
under sec. 413(b) (4) of the Mutual Security Act of 1954, 
as amended, entered into by an exchange of notes signed 
at Washington on January 23, 1961. 



October 17, 1977 



495 



(w) The Informal Arrangement relating to cooperation 
between the American Embassy, or Consulate, and 
Panamanian authorities when American merchant sea- 
men or tourists are brought before a magistrate's court, 
entered into by an exchange of notes signed at Panama 
on September 18 and October 15, 1947. 

(x) The Agreement relating to the mutual recognition 
of ship measurement certificates, entered into by an ex- 
change of notes signed at Washington on August 17, 
1937. 

(y) The Agreement relating to the detail of a military 
officer to serve as adviser to the Minister of Foreign Af- 
fairs of Panama, signed at Washington on July 7, 1942, 
and extended and amended February 17, March 23, Sep- 
tember 22 and November 6, 1959, March 26 and July 6, 
1962, and September 20 and October 8, 1962. 

(z) The Agreement relating to the exchange of official 
publications, entered into by an exchange of notes signed 
at Panama on November 27, 1941 and March 7, 1942. 

(aa) The Convention for the Prevention of Smuggling 
of Intoxicating Liquors, signed at Washington on June 6, 
1924. 

(bb) The Arrangement providing for relief from double 
income tax on shipping profits, entered into by an ex- 
change of notes signed at Washington on January 15, 
February 8, and March 28, 1941. 

(ec) The Agreement for withholding of Panamanian in- 
come tax from compensation paid to Panamanians 
employed within Canal Zone by the canal, railroad, or 
auxiliary works, entered into by an exchange of notes 
signed at Panama on August 12 and 30, 1963. 

(dd) The Agreement relating to the withholding of 
contributions for educational insurance from salaries paid 
to certain Canal Zone employees, entered into by an ex- 
change of notes signed at Panama on September 8 and 
October 13, 1972. 

(ee) The Agreement for radio communications between 
amateur stations on behalf of third parties, entered into 
by an exchange of notes signed at Panama on July 19 and 
August 1, 1956. 

(ff) The Agreement relating to the granting of recip- 
rocal authorizations to permit licensed amateur radio 
operators of either country to operate their stations in 
the other country, entered into by an exchange of notes 
signed at Panama on November 16, 1966. 

(gg) The Convention facilitating the work of traveling 
salesmen, signed at Washington on February 8, 1919. 

(hh) The Reciprocal Agreement for gratis nonimmigrant 
visas, entered into by an exchange of notes signed at 
Panama on March 27 and May 22 and 25, 1956. 

(ii) The Agreement modifying the Agreement of March 
27 and May 22 and 25, 1956 for gratis nonimmigrant 
visas, entered into by an exchange of notes signed at 
Panama on June 14 and 17, 1971. 

(jj) Any other treaty, convention, agreement or ex- 
change of notes, or portions thereof, which does not con- 
cern the Panama Canal and which is in force immediately 
prior to the entry into force of the Panama Canal Treaty. 

3. With reference to paragraph 2 of Article X 
(Employment with the Panama Canal Commission), con- 
cerning the endeavor to ensure that the number of 



Panamanian nationals employed in relation to the total 
number of employees will conform to the proportion es- 
tablished under Panamanian law for foreign business en- 
terprises, it is recognized that progress in this regard 
may require an extended period in consonance with the 
concept of a growing and orderly Panamanian participa- 
tion, through training programs and otherwise, and that 
progress may be affected from time to time by such ac- 
tions as the transfer or discontinuance of functions and 
activities. 

4. With reference to paragraph 10(a) of Article X, it is 
understood that the currently applicable United States 
law is that contained in Section 8336 of Title 5, United 
States Code. 

5. With reference to paragraph 2 of Article XI (Transi- 
tional Provisions), the areas and installations in which 
the jurisdictional arrangements therein described shall 
apply during the transition period are as follows: 

(a) The Canal operating areas and housing areas de- 
scribed in Annex A to the Agreement in Implementation 
of Article III of the Panama Canal Treaty. 

(b) The Defense Sites and Areas of Military Coordina- 
tion described in the Agreement in Implementation of 
Article IV of the Panama Canal Treaty. 

(c) The Ports of Balboa and Cristobal described in 
Annex B of the Agreement in Implementation of Article 
III of the Panama Canal Treaty. 

6. With reference to paragraph 4 of Article XI, the 
areas in which the police authorities of the Republic of 
Panama may conduct joint police patrols with the police 
authorities of the United States of America during the 
transition period are as follows: 

(a) Those portions of the Canal operating areas open to 
the general public, the housing areas and the Ports of 
Balboa and Cristobal. 

(b) Those areas of military coordination in which joint 
police patrols are established pursuant to the provisions 
of the Agreement in Implementation of Article IV of this 
Treaty, signed this date. The two police authorities shall 
develop appropriate administrative arrangements for the 
scheduling and conduct of such joint police patrol. 



Treaty Concerning the 
Permanent Neutrality and 
Operation of the Panama Canal 

The United States of America and the Republic of 
Panama have agreed upon the following: 

Article I 
The Republic of Panama declares that the Canal, as 
an international transit waterway, shall be permanently 
neutral in accordance with the regime established in 
this Treaty. The same regime of neutrality shall apply 
to any other international waterway that may be built 
either partially or wholly in the territory of the Repub- 
lic of Panama. 

Article II 
The Republic of Panama declares the neutrality of the 



496 



Department of State Bulletin 



Canal in order that both in time of peace and in time of 
war it shall remain secure and open to peaceful transit 
by the vessels of all nations on terms of entire equality, 
so that there will be no discrimination against any na- 
tion, or its citizens or subjects, concerning the condi- 
tions or charges of transit, or for any other reason, and 
so that the Canal, and therefore the Isthmus of 
Panama, shall not be the target of reprisals in any 
armed conflict between other nations of the world. The 
foregoing shall be subject to the following require- 
ments: 

(a) Payment of tolls and other charges for transit and 
ancillary services, provided they have been fixed in con- 
formity with the provisions of Article III (c); 

(b) Compliance with applicable rules and regulations, 
provided such rules and regulations are applied in con- 
formity with the provisions of Article III (c); 

(c) The requirement that transiting vessels commit no 
acts of hostility while in the Canal; and 

(d) Such other conditions and restrictions as are es- 
tablished by this Treaty. 

Article III 
1. For purposes of the security, efficiency and proper 
maintenance of the Canal the following rules shall 
apply: 

(a) The Canal shall be operated efficiently in accord- 
ance with conditions of transit through the Canal, and 
rules and regulations that shall be just, equitable and 
reasonable, and limited to those necessary for safe navi- 
gation and efficient, sanitary operation of the Canal: 

(b) Ancillary services necessary for transit through 
the Canal shall be provided; 

(c) Tolls and other charges for transit and ancillary 
services shall be just, reasonable, equitable and con- 
sistent with the principles of international law; 

(d) As a pre-condition of transit, vessels may be re- 
quired to establish clearly the financial responsibility 
and guarantees for payment of reasonable and adequate 
indemnification, consistent with international practice 
and standards, for damages resulting from acts or omis- 
sions of such vessels when passing through the Canal. 
In the case of vessels owned or operated by a State or 
for which it has acknowledged responsibility, a certifi- 
cation by that State that it shall observe its obligations 
under international law to pay for damages resulting 
from the act or omission of such vessels when passing 
through the Canal shall be deemed sufficient to estab- 
lish such financial responsibility; 

(e) Vessels of war and auxiliary vessels of all nations 
shall at all times be entitled to transit the Canal, irre- 
spective of their internal operation, means of propul- 
sion, origin, destination or armament, without being 
subjected, as a condition of transit, to inspection, 
search or surveillance. However, such vessels may be 
required to certify that they have complied with all ap- 
plicable health, sanitation and quarantine regulations. 
In addition, such vessels shall be entitled to refuse to 
disclose their internal operation, origin, armament, 
cargo or destination. However, auxiliary vessels may 
be required to present written assurances, certified by 



an official at a high level of the government of the State 
requesting the exemption, that they are owned or oper- 
ated by that government and in this case are being used 
only on government non-commercial service. 

2. For the purposes of this Treaty, the terms 
"Canal," "vessel of war," "auxiliary vessel," "internal 
operation," "armament" and "inspection" shall have the 
meanings assigned them in Annex A to this Treaty. 

Article IV 
The United States of America and the Republic of 
Panama agree to maintain the regime of neutrality es- 
tablished in this Treaty, which shall be maintained in 
order that the Canal shall remain permanently neutral, 
notwithstanding the termination of any other treaties 
entered into by the two Contracting Parties. 

Article V 
After the termination of the Panama Canal Treaty, 
only the Republic of Panama shall operate the Canal 
and maintain military forces, defense sites and military 
installations within its national territory. 

Article VI 

1. In recognition of the important contributions of the 
United States of America and of the Republic of 
Panama to the construction, operation, maintenance, 
and protection and defense of the Canal, vessels of war 
and auxiliary vessels of those nations shall, not- 
withstanding any other provisions of this Treaty, be en- 
titled to transit the Canal irrespective of their internal 
operation, means of propulsion, origin, destination, ar- 
mament or cargo carried. Such vessels of war and aux- 
iliary vessels will be entitled to transit the Canal 
expeditiously. 

2. The United States of America, so long as it has re- 
sponsibility for the operation of the Canal, may con- 
tinue to provide the Republic of Colombia toll-free 
transit through the Canal for its troops, vessels and 
materials of war. Thereafter, the Republic of Panama 
may provide the Republic of Colombia and the Republic 
of Costa Rica with the right of toll-free transit. 

Article VII 

1. The United States of America and the Republic of 
Panama shall jointly sponsor a resolution in the Organi- 
zation of American States opening to accession by all 
nations of the world the Protocol to this Treaty 
whereby all the signatories will adhere to the objectives 
of this Treaty, agreeing to respect the regime of neu- 
trality set forth herein. 

2. The Organization of American States shall act as 
the depositary for this Treaty and related instruments. 

Article VIII 
This Treaty shall be subject to ratification in accord- 
ance with the constitutional procedures of the two Par- 
ties. The instruments of ratification of this Treaty shall 
be exchanged at Panama at the same time as the in- 
struments of ratification of the Panama Canal Treaty, 
signed this date, are exchanged. This Treaty shall enter 
into force, simultaneously with the Panama Canal 



October 17, 1977 



497 



Treaty, six calendar months from the date of the ex- 
change of the instruments of ratification. 

Done at Washington, this 7th day of September, 
1977, in the English and Spanish languages, both texts 
being equally authentic. 

For the Republic For the United States 

of Panama: of America: 



Omar Torrijos Herrera 

Head of Government of 
the Republic of Panama 



Jimmy Carter 

President of the 
United States of America 



Annex A 

1. "Canal" includes the existing Panama Canal, the 
entrances thereto and the territorial seas of the Repub- 
lic of Panama adjacent thereto, as defined on the map 
annexed hereto (Annex B), and any other interoceanic 
waterway in which the United States of America is a 
participant or in which the United States of America 
has participated in connection with the construction or 
financing, that may be operated wholly or partially 
within the territory of the Republic of Panama, the en- 
trances thereto and the territorial seas adjacent 
thereto. 

2. "Vessel of war" means a ship belonging to the 
naval forces of a State, and bearing the external marks 
distinguishing warships of its nationality, under the 
command of an officer duly commissioned by the 
government and whose name appears in the Navy List, 
and manned by a crew which is under regular naval 
discipline. 

3. "Auxiliary vessel" means any ship, not a vessel of 
war, that is owned or operated by a State and used, for 
the time being, exclusively on government non- 
commercial service. 

4. "Internal operation" encompasses all machinery 
and propulsion systems, as well as the management and 
control of the vessel, including its crew. It does not in- 
clude the measures necessary to transit vessels under 
the control of pilots while such vessels are in the Canal. 

5. "Armament" means arms, ammunitions, imple- 
ments of war and other equipment of a vessel which 
possesses characteristics appropriate for use for war- 
like purposes. 

6. "Inspection" includes on-board examination of ves- 
sel structure, cargo, armament and internal operation. 



It does not include those measures strictly necessary 
for admeasurement, nor those measures strictly neces- 
sary to assure safe, sanitary transit and navigation, in- 
cluding examination of deck and visual navigation 
equipment, nor in the case of live cargoes, such as cat- 
tle or other livestock, that may carry communicable 
diseases, those measures necessary to assure that health 
and sanitation requirements are satisfied. 

Protocol to the Treaty Concerning the 

Permanent Neutrality and Operation 

of the Panama Canal 

Whereas the maintenance of the neutrality of the 
Panama Canal is important not only to the commerce 
and security of the United States of America and the 
Republic of Panama, but to the peace and security of 
the Western Hemisphere and to the interests of world 
commerce as well; 

Whereas the regime of neutrality which the United 
States of America and the Republic of Panama have 
agreed to maintain will ensure permanent access to the 
Canal by vessels of all nations on the basis of entire 
equality; and 

Whereas the said regime of effective neutrality shall 
constitute the best protection for the Canal and shall 
ensure the absence of any hostile act against it; 

The Contracting Parties to this Protocol have agreed 
upon the following: 

Article I 
The Contracting Parties hereby acknowledge the re- 
gime of permanent neutrality for the Canal established 
in the Treaty Concerning the Permanent Neutrality and 
Operation of the Panama Canal and associate them- 
selves with its objectives. 

Article II 
The Contracting Parties agree to observe and respect 
the regime of permanent neutrality of the Canal in time 
of war as in time of peace, and to ensure that vessels of 
their registry strictly observe the applicable rules. 

Article III 
This Protocol shall be open to accession by all States 
of the world, and shall enter into force for each State at 
the time of deposit of its instrument of accession with 
the Secretary General of the Organization of American 
States. 



498 



Department of State Bulletin 




October 17, 1977 



499 



in 

O 

o 




Scale 1:50,000 
Escala 1:50,000 



MAPA ADJUNTO AL ANEXO A DEL 
TRATADO CONCERNIENTE A LA 
NEUTRALIDAD PERMANENTE DEL 
CANAL Y AL FUNCIONAMIENTO DEL 
CANAL DE PANAMA 



[ANNEX B] 
[ANEXO B] 



MAP ATTACHMENT TO ANNEX "A" OF 
TREATY CONCERNING THE PERMANENT 
NEUTRALITY AND OPERATION OF THE 
PANAMA CANAL. 



DECLARATION OF WASHINGTON 

We, the Chiefs of State, Heads of Government or 
other representatives of the American Republics and 
other states present at the ceremony for the signature 
on this day of the Panama Canal Treaty establishing 
new arrangements for the operation, maintenance and 
defense of the Panama Canal until December 31st, 1999, 
and the Treaty concerning the permanent neutrality 
and operation of the Panama Canal, both concluded by 
the Governments of Panama and the United States of 
America, in accordance with the Joint Declaration be- 
tween the two countries of April 3, 1964, agreed under 
the auspices of the Council of the OAS; 

Noting that the Panama Canal Treaty is based on the 
recognition of the sovereignty of the Republic of 
Panama over the totality of its national territory; 

Considering that settlement of the Panama Canal 
issue represents a major step toward strengthening of 
relations among the nations of the Western Hemisphere 
on a basis of common interest, equality and mutual re- 
spect for the sovereignty and independence of every 
state; 

Recognizing the importance for hemisphere and 
world commerce and navigation of arrangements for as- 
suring the continuing accessibility and neutrality of the 
Panama Canal; 

Record our profound satisfaction at the signature by 
the President of the United States of America and the 
Chief of Government of Panama of the Panama Canal 
Treaty of 1977 and the Treaty Concerning the Perma- 
nent Neutrality and Operation of the Panama Canal. 

Done at Washington on September 7, 1977 in the 
name of: 



Argentina 

Bahamas 

Barbados 

Bolivia 

Brazil 

Canada 

Chile 

Colombia 

Costa Rica 

Dominican Republic 



President (Lt. Gen.) Jorge 

Rafael Videla 

Prime Minister Lynden 0. 

PlNDLING 

Ambassador to the U.S. 
and OAS Oliver Jackman 5 

President (Maj. Gen.) Hugo 
Banzer Suarez 

Vice President Adalberto 
Pereira Dos Santos 
Prime Minister Pierre- 
Elliott Trudeau 

President (Maj. Gen.) Au- 
gusto Pinochet Ugarte 

President Alfonso Lopez 

Michelsen 

President Daniel Oduber 

Quiros 

President Joaquin 

Balaguer 



Ecuador 

El Salvador 

Grenada 

Guatemala 

Guyana 

Haiti 

Honduras 

Jamaica 

Mexico 

Nicaragua 

Paraguay 

Peru 

Surinam 

Trinidad and Tobago 

Uruguay 

Venezuela 



President (Vice Adm.) Al- 
fredo Poveda Burbano 

President (Gen.) Carlos 
Humberto Romero Mena 

Prime Minister Eric M. 
Gairy 

President (Brig. Gen.) Kjell 
Laugerud Garcia 

Deputy Prime Minister 
Ptolemy A. Reid 

Secretary of State for 
Foreign Affairs and Wor- 
ship Edner Brutus 
President (Brig. Gen.) Juan 
Alberto Melgar Castro 
Prime Minister Michael N. 
Manley 

Secretary of Foreign Rela- 
tions Santiago Roel Garcia 
President of Congress Cor- 
nelio H. Hueck 

President (Gen.) Alfredo 

Stroessner 

President (Gen.) Francisco 

Morales Bermudez 

Cerrutti 

Ambassador to the U.S. 
and OAS Roel F. Karamat 

Ambassador to the U.S. 
and OAS Victor C. 
McIntyre 

President Aparicio Mendez 
Manfredini 

President Carlos Andres 
Perez 



5 Ambassador Jackman did not sign the declaration for 
Barbados on Sept. 7. 



FACT SHEET 

Defense and National Security 

— The United States will have primary re- 
sponsibility for the canal's defense during the 
basic treaty's term (until the year 2000). 
Panama will participate, and at the treaty's 
end our military presence will cease. 

— A Status of Forces Agreement, similar to 
such agreements elsewhere, will cover the ac- 
tivities and presence of our military forces. 

— The United States will continue to have 
access to and the rights to use all land and 
water areas and installations necessary for 
the defense of the canal during the basic 
treaty period. 



502 



Department of State Bulletin 



} 



8Cr=00' 



79°30. 



CARIBBEAN SEA 



Fort yS \ 

Sherman^^ A, 
Colon 

;rlstobaTj 
\Limonj 
Bay' ( 



Coco 
Solo 



JPuerto Pilon 
fSabanita 



^ 



-9-15* 



Gatun 
Dam 



Where the boundary 
line is omitted it follows 
the 100' contour around 
Gatun Lake 



Trinidad 



^Gatun 
Locks 

Gatun "v. Lake 



<V 




r 

fwhere the boundary line is 
omitted it follows the 260'j 
contour around Madden 

v Lake 



Gatunclllc 



^A/addenV 

Dam )Maddeh* 

' 9. 



On 



Buenos Aires 



p 





Car 


"lboa 




\^y. 


"-C 




Madden 
V F 


\ 
j 




SurrimitN^arlo 






Canal Zone 



Canal Zone boundary 

Road 

Railroad 



Forests 



lOkilometers 



Paraiso 
ec [ ro -<^Pedro Miguel 

Fort / 
.Clayton < 

C 

/ 

A\\\ J® I 



Miguel Lockss 

j Miraflores^ 
Locks. 



Arraijan 



\ 



La Chorrera 



\ Flamenco 
N N Island 

\ 



Bay of Panama 



Is la Taboga 



Cb, 



.0 



o 



2751 8-77 STATE(RGE) 



October 1 7, 1 977 



503 



— In a separate treaty Panama and the 
United States will maintain indefinitely a re- 
gime providing for the permanent neutrality 
of the canal including nondiscriminatory ac- 
cess and tolls for merchant and naval vessels 
of all nations. 

— U.S. and Panamanian warships will be 
entitled to expeditious passage of the canal at 
all times without regard to the type of propul- 
sion or cargo carried. 

— Our continuing freedom of action to main- 
tain the canal's neutrality will not be limited 
by the treaty. 

Canal Operations 

— The United States will have responsibil- 
ity for canal operations during the period of 
the basic treaty. 

— It will continue to have access to and the 
rights to use all land and water areas and 
facilities necessary for the operation and 
maintenance of the canal during the basic 
treaty period. 

— It will act through a U.S. Government 
agency which will replace the Panama Canal 
Company. A policy-level board of five Ameri- 
cans and four Panamanians will serve as the 
Board of Directors. Until 1990, the Canal 
Administrator will be an American and the 
Deputy Administrator a Panamanian. There- 
after, the Administrator will be Panamanian 
and the Deputy, American. Panamanian board 
members and the Panamanian Deputy 
Administrator/Administrator will be proposed 
by Panama and appointed by the United 
States. Panamanians will participate increas- 
ingly in the canal's operation at all levels. 

Economic Factors 

The treaty's financial provisions involve no 
congressional appropriations. Instead, during 
the treaty's life Panama will receive exclu- 
sively from canal revenues: 

— An annual payment from toll revenues of 
30 cents (to be adjusted periodically for infla- 
tion) per Panama Canal ton transiting the 
canal and 

— A fixed sum of $10 million per annum and 



an additional $10 million per year if canal traf- 
fic and revenues permit. 

In addition the United States will cooperate 
with Panama outside the treaty to promote 
Panama's development and stability. To this 
end, the United States has pledged its best ef- 
forts to arrange for an economic program of 
loans, loan guarantees, and credits which 
would be implemented over the next several 
years under existing statutory programs. This 
economic cooperation program would use up 
to $200 million in Export-Import Bank 
credits, up to $75 million in Agency for Inter- 
national Development (AID) housing guaran- 
tees, and $20 million in Overseas Private In- 
vestment Corporation (OPIC) loan 
guarantees. 

Panama will also receive up to $50 million in 
foreign military sales credits over a period of 
10 years, under existing statutory programs, 
to improve Panama's ability to assist in the 
canal's defense. 

No major increase is contemplated in AID 
loans and grants. 

Private busineses and nonprofit activities in 
the present Canal Zone will be able to con- 
tinue their operations on the same terms ap- 
plicable elsewhere in Panama. 

A joint authority will coordinate port and 
railroad activities. 



Employees 

All U.S. civilians currently employed in the 
Canal Zone can continue in U.S. Government 
jobs until retirement. Present employees of 
the Canal Company and Canal Zone Govern- 
ment may continue to work for the new 
agency until their retirement or until the ter- 
mination of their employment for any other 
reason. The number of present U.S. -citizen 
employees of the company will be reduced 20 
percent during the first 5 years of the treaty. 

All U.S. -citizen employees will enjoy rights 
and protections similar to those of U.S. Gov- 
ernment employees elsewhere abroad. Pres- 
ent U.S. -citizen employees will have access to 
military postal, PX, and commissary facilities 
for the first 5 years of the treaty. New U.S.- 



504 



Department of State Bulletin 



citizen employees will generally be rotated 
every 5 years. 

Terms and conditions of employment will 
generally be no less favorable to persons al- 
ready employed than those in force im- 
mediately prior to the start of the treaty. Hir- 
ing policy will provide preferences for 
Panamanian applicants. 

With regard to basic wages there shall be 
no discrimination on the basis of nationality, 
sex, or race. The United States will provide 
an appropriate early retirement program. 
Persons employed in activities transferred to 
Panama will, to the maximum extent possible, 
be retained by Panama. Panama and the 
United States will cooperate in providing ap- 
propriate health and retirement programs. 

Panama will assume general territorial 
jurisdiction over the present Canal Zone at 
the treaty's start. U.S. criminal jurisdiction 
over its nationals will be phased down during 
the first 3 years of the treaty. Thereafter, 
Panama will exercise primary criminal juris- 
diction with the understanding that it may 
waive jurisdiction to the United States. 
U.S. -citizen employees and their dependents 



charged with crimes will be entitled to pro- 
cedural guarantees and will be permitted to 
serve any sentences in the United States in 
accordance with a reciprocal arrangement. 

New Sea-level Canal 

Panama and the United States commit 
themselves jointly to study the feasibility of a 
sea-level canal and, if they agree that such 
canal is necessary, to negotiate mutually 
agreeable terms for its construction. In addi- 
tion the United States will have the right 
throughout the term of the basic treaty to add 
a third lane of locks to increase the capacity of 
the existing canal. 

Treaties 

There are two treaties: (1) a treaty guaran- 
teeing the permanent neutrality of the canal 
and (2) a basic treaty governing the operation 
and defense of the canal which will extend 
through December 31, 1999. The basic treaty 
will be supported by separate agreements in 
implementation of its provisions concerning 
defense and operation of the canal. 



October 17, 1977 



505 



The New Panama Canal Treaties: 
A Negotiator's View 



By Ellsworth Bunker 

Ambassador at Large and Chief Co-Negotiator 



On August 10, after 13 years' work, U.S. 
and Panamanian negotiators reached agree- 
ment on the terms of two new treaties to gov- 
ern the roles of our two nations in the opera- 
tion and defense of the Panama Canal. These 
will replace a 74-year-old treaty now in 
force — one that has long since outlived its use- 
fulness to us and has gone on to become a 
source of needless problems for the United 
States. 

The new agreements were signed on Sep- 
tember 7 and transmitted to the Senate for 
ratification by President Carter on September 
16. We do not expect the Senators — nor would 
we wish them— to take this important step 
lightly. 

Neither, on the other hand, would we ex- 
pect any Member of Congress, or any member 
of the public, to dismiss lightly a measure that 
President Carter, President Ford, their Sec- 
retaries of State, their predecessors of both 
parties, and the Joint Chiefs of Staff of our 
armed forces all tell us is urgently needed to 
protect and promote our national interest. 

A decision on ratification should come only 
when the Senate, and the American people, 
have had a chance to consider fully what these 
treaties will do, and how they will affect our 
interests as a nation. 

The debate will be a confusing one — com- 
plicated as it is by strained legal arguments 
over the meaning of sovereignty and by moral 
arguments over the propriety of the original 
treaty of 1903. But in the end, these argu- 
ments about the past — even if interpreted to 
support the broadest possible U.S. claim — are 



506 



less important than our nation's real stake in 
the canal's future. 

In the end, these treaties — like all trea- 
ties — must be judged on one principal crite- 
rion: Do they serve the best interest of the 
United States? 

Our Interests in the Canal 

The usefulness of the canal to the United 
States is in the time and money it saves our 
armed forces or our commercial enterprises 
when they move vessels and cargoes between 
the Atlantic and Pacific. That is why we built 
it, and that is why we continue to care about 
its future. 

As the Joint Chiefs have stated, U.S. mili- 
tary interests in the Panama Canal are in its 
use, not its ownership. The same is true of our 
commercial interests. We want to be able to 
depend on the knowledge that whenever we 
feel it is in our interest to move a ship 
through, we will always be able to do so. This 
requires an arrangement that guarantees, as 
much as is humanly possible, against any fu- 
ture source of obstruction to our free passage. 

— It means making sure that the canal 
system isn't drained or otherwise physically 
put out of use by sabotage or by inexpert 
operation. 

— It means making sure that ships passing 
through are safe from attack. 

— It means making sure that ships aren't 
barred from entering by arbitrary or dis- 
criminatory policies or by involvement of the 
canal in international disputes. 



Department of State Bulletin 






— It means making sure that ships aren't ef- 
fectively barred by excessive tolls. 

Many observers, of course, point out that 
our actual need to use the canal, either for de- 
fense or for commerce, is not what it used to 
be before the days of air transport, or two- 
ocean Navy or ships too big to fit. But, to us 
as negotiators, this was not decisive. Whether 
we use the canal much or little, it is clearly in 
our interest to preserve the option — the op- 
tion we sought in building the canal — to use it 
whenever we choose. 

Our determination to protect that interest 
is the same today as in 1903. But the world 
has changed a great deal in 75 years, and the 
actions required of us to protect our interest 
have changed with it. We have negotiated a 
hew treaty because the old treaty arrange- 
ments could no longer provide the protection 
our interests clearly continue to warrant. 

In 1903 our negotiators came up with a plan 
that seemed to protect our interests very 
well. It was clean and simple. Sovereignty as 
such did not change hands; no territory was 
purchased. But the United States was given 
control of a 10-mile- wide strip of land coast-to- 
coast, in which we were granted the right — 
for an annual fee — to build a canal, operate it 
forever, provide for its defense, and provide a 
government for the encompassed Panamanian 
territory as if it were our own — to act as 
though we were sovereign in the Canal Zone. 

The terms thus gave the United States con- 
siderably more control over Panamanian coun- 
tryside and local affairs than the technical op- 
eration of a canal would require. The proposed 
canal route was unconquered jungle. The 
French had tried and failed to conquer the in- 
credible health and engineering obstacles. If a 
canal was to be built and operated at all, the 
Americans had to do it. If it was to be de- 
fended, the United States had to provide the 
defense. If civil authority and consumer goods 
and governmental services had to be provided 
for canal workers and their families, it was 
simple and most convenient for the United 
States to provide it. 

All these things were convenient means to 
an end. They have never been ends in them- 
selves. 



Protecting Our Interests in 1977 

In today's world, all the original assump- 
tions have been turned upside down. 

Our control of civilian government in the 
zone no longer is necessary to operate or de- 
fend the canal itself. It contributes only to 
tensions with Panamanian citizens, who re- 
sent — as we would — the presence of a foreign 
power running their local government within 
their territory. 

The assumption that the Panamanians 
would be unable to operate the canal — how- 
ever true it might once have been — is now in- 
correct. Over 70 percent of the present canal 
workforce is Panamanian, and the ability of 
the Panamanians over the next generation to 
assume full responsibility for the operation of 
the canal is no longer questioned by informed 
observers. 

The assumption that U.S. control would 
keep the canal safest from interruption is also 
no longer accurate. It is not reasonable to 
suggest that the Panamanian Government it- 
self, which attributes 13 percent of its annual 
GNP to the canal, would ever wish to attack it 
in a dispute over U.S. control. But any fric- 
tion that might erupt into violence poses a 
danger to a system by its nature so vulnerable 
that a terrorist could possibly render the 
canal inoperable for as long as 2 years. Our 
greatest asset in defending the canal is not 
our exclusive or perpetual control of its opera- 
tion but, rather, the absence of hostility and 
the active and harmonious support of the 
Panamanian population. 

That is why our government 13 years ago 
set out to negotiate a new treaty that would 
have the active support of Panama and serve 
both our interests better. It was a long, hard 
bargaining process because we wanted to 
make sure the new partnership arrangement 
would contain the best possible protections, 
both for our broad national interests and for 
those of individual citizens in the zone. 

The agreement we have reached admirably 
serves all our objectives and reflects substan- 
tial Panamanian concessions to our point of 
view. 

The agreement includes two separate 
treaties — one to govern the operation and de- 



October 17, 1977 



507 



fense of the canal for the rest of this century 
and another by which Panama and the United 
States would insure the permanent neutrality 
of the canal with nondiscriminatory access and 
tolls for the vessels of all nations. 

The basic operating treaty would provide 
for joint U.S.-Panamanian management of the 
canal through a U.S. Government agency, 
with U.S. control through the rest of this cen- 
tury. To insure an efficient transition, 
Panamanians will participate increasingly in 
all levels of canal operations. The zone, as 
such, will cease to exist. Panama will assume 
normal local government functions, while the 
United States will continue to control all land 
and water areas directly involved in canal op- 
eration and defense. There is no requirement 
for any phasing down of our troops during the 
treaty period. A status-of-forces agreement, 
similar to such agreements for U.S. bases in 
other friendly countries, will govern our mili- 
tary presence. 

Panama's annuity, increased to a more 
equitable amount, will be derived from tolls 
and other canal revenues. While the United 
States will control the setting of tolls through 
this century, Panama's own interest, during 
this period and beyond, will be in keeping tolls 
as low as possible to encourage maximum use 
and income. 

What Do We Stand To Lose? 

One way to look at any treaty debate is by 
asking what we stand to gain or lose by enact- 
ing the proposed agreement. In this case 
there are two very definite things we will be 
giving up: We will be giving up the right to 
run a civil government and private enclave in 
the area known as the Canal Zone; and we will 
be giving up the right to have a controlling 
say in the operation and management of the 
canal in the 21st century. But neither of these 
is a decisive interest. The first is something 
we don't need; the second is something we 
could not in any case guarantee. Neither 
serves our real interest in safeguarding the 
canal and our access to it. 

What then, in terms of real, substantial na- 
tional interests, do we stand to lose by ratify- 
ing this agreement? The answer is simple: We 
stand to lose nothing. 



Sovereignty over the zone? We have never 
had it — as treaty terms, U.S. public state- 
ments, and Supreme Court decisions all make 
clear. No amount of rhetoric can convey terri- 
tory or sovereignty that the original treaty of 



BACKGROUND INFORMATION 
ON THE TREATIES 

Purpose of the Treaties. The new treaties on 
the Panama Canal will provide an entirely new 
basis for cooperation between the United States 
and Panama in the operation and defense of the 
Panama Canal. They will replace the U.S.-Panama 
treaty of 1903, which has governed canal opera- 
tions since the waterway's construction, and sub- 
sequent amendments. 

The Existing System. Under the 1903 treaty, 
the United States has total control of canal opera- 
tions. The United States also administers the 
Canal Zone— an area of Panamanian territory five 
miles wide on either side of the canal. In this area 
Panama has sovereignty while we have as-if- 
sovereign rights permanently. This arrangement 
is deeply resented in Panama and a liability in our 
relations with Latin America and with many other 
nations of the world. 

Basic U.S. Objectives. In negotiating the 
new treaties, the United States proceeded on the 
basis that its national interest lies in assuring that 
the canal continues to be efficiently operated, se- 
cure, neutral, and open to all nations on a nondis- 
criminatory basis. Fundamental to this objective is 
the cooperation of Panama. 

History of the Negotiations. The negotia- 
tions, extending over 13 years, have been pursued 
by four Administrations of both parties. They 
began in 1964, following a serious crisis in U.S.- 
Panamanian relations created by rioting along the 
Canal Zone boundary in which 20 Panamanians and 
4 Americans were killed. In December 1964 Presi- 
dent Johnson, after consulting with Presidents 
Eisenhower and Truman, announced that the 
United States would begin talks with Panama on 
an entirely new canal treaty. These negotiations 
resulted in draft treaties that were not acted on by 
either country. 

The present series of negotiations began in 1973 
with the appointment of Ambassador Bunker as 
Chief Negotiator by President Nixon and con- 
tinued during the Ford Administration. President 
Carter decided to continue the negotiations after 
taking office in January 1977 and appointed Am- 
bassador Sol Linowitz to serve as Co-Negotiator 
with Ambassador Bunker. The Department of De- 
fense has been an active participant in the negotia- 
tions and has been represented by Lt. Gen. Wel- 
born G. Dolvin. 



508 



Department of State Bulletin 



1903 did not convey to us. We cannot lose 
what we do not have. 

Profits on our investment? The canal has 
never been operated for a profit. By law it is 
supposed to operate at cost, and in fact since 
1973 present toll structures have produced a 
slight deficit. 

Dependable, efficient operation? Coopera- 
tive U.S. -Panamanian management, with the 
United States in control until the year 2000, 
will insure expert operation by a well-trained 
labor force, over 70 percent of which is al- 
ready Panamanian today. 

Rights of U.S. employees and citizens in the 
zone? These will be fully protected — including 
job rights for present workers. 

Reasonable rates and certainty that the 
waterway will remain open? Panama's own 
stake in keeping it so is far greater than ours. 

Security from sabotage and violence? The 
Pentagon tells us a canal arrangement we 
maintain in cooperation with Panama will be 
easier to defend than one which brings us and 
Panama into conflict. 

Our own military defense options? These 
are not restricted. We will be free to defend 
the canal's neutrality as we are now, and will 
maintain our bases — as in other host coun- 
tries — under agreements covering a fixed 
term. 



In short, all our interests that matter would 
be preserved, or — in many instances — en- 
hanced, by putting the new agreement into 
force. 



What Do We Stand To Gain? 

Our immediate gain will be a new relation- 
ship of cooperation with Panama, one that will 
offer us the best assurance that the Panama 
Canal — a source of justifiable pride to our na- 
tion as well as a major asset — will continue to 
serve as an avenue of commerce on into the 
next century and will continue to be available 
to us for whatever our needs may be. 

Beyond that, though, our new relationship 
with Panama will remove a major obstacle 
standing in the way of our other policy objec- 
tives throughout Latin America. It will re- 
move the stigma of colonialism and disarm the 
propaganda of our adversaries, enabling us to 
pursue our nation's interests in trade, de- 
fense, human rights, and world leadership 
with respect and credibility. 

It will, in sum, enable us to deal with friend 
and foe alike from the truest base of strength 
we could hope to find — the respect and admi- 
ration and cooperation of the Latin American 
people. 



October 17, 1977 



509 



President Carter Holds Bilateral Meetings 
With Western Hemisphere Leaders 



Following are statements by Secretary 
Vance and General Torrijos of Panama upon 
the latter's arrival at Washington, D.C., a 
statement issued by the White House follow- 
ing a meeting between President Carter and 
General Torrijos, and those remarks Presi- 
dent Carter made to reporters after his meet- 
ings with some of the leaders of the Western 
Hemisphere who attended the signing cere- 
mony of the Panama Canal treaties. 



PANAMA 

Arrival of General Torrijos, 

Andrews Air Force Base, September 5 

Press release 414 dated September 7 

Secretary Vance 

General Torrijos, Mrs. Torrijos, members 
of the Panamanian delegation: On behalf of 
President Carter and the American people, 
may I extend to you a very warm welcome to 
Washington and to our nation. 

Your visit is an historic occasion. Our two 
nations have just completed negotiations on a 
critical issue to both of our countries — the fu- 
ture of the Panama Canal. 

The negotiations at times have been dif- 
ficult for both sides, but with good will and 
determination, we have reached agreement on 
the terms of a treaty which not only protects 
but advances the vital interests of both our 
nations. In addition, this treaty assures that 
the canal will remain open, neutral, secure, 
and efficiently run for the nations of this 
hemisphere and for the nations of all the 
world. General Torrijos, again, we welcome 
you very warmly and look forward to our dis- 
cussions this week. 



510 



General Torrijos 1 

Mr. Secretary and Mrs. Vance, may I say 
that I am very pleased to be here in your capi- 
tal city. This trip, when compared to other 
trips that I have made to this city, is very dif- 
ferent because, indeed, this time I have come 
to an occasion of great historical significance. 

It has deep significance because a group of 
leaders came up to this country, which pre- 
ferred to correct an error instead of to prolong 
for an eternity a situation of injustice. And 
when injustices become eternalized, they 
leave people without hope. However, our 
people have sustained their hopes and their 
aspirations on what they know were the very 
moral basis on which your country was 
founded. We felt secure that some day leaders 
would come up who would understand our 
claims and recognize them. And this we have 
now witnessed. 

White House Statement, September 6 

Weekly Compilation of Presidential Documents dated September 12 

President Carter met with General Omar 
Torrijos Herrera, Chief of Government of 
Panama, for one hour this morning. The Pres- 
ident was accompanied by Vice President 
Walter Mondale, Secretary of State Cyrus 
Vance, Assistant for National Security Affairs 
Zbigniew Brzezinski, Assistant Secretary of 
State [for Inter-American Affairs] Terence 
Todman, Ambassador to Panama William Jor- 
den, and National Security Council staff 
member Robert Pastor. General Torrijos was 
accompanied by Foreign Minister Nicolas 
Gonzalez Revilla, Ambassador Gabriel Lewis, 
Minister of Planning and Economic Policy 



Gen. Torrijos spoke in Spanish. 



Department of State Bulletin 






Panama — A Profile 



mi. (slightly smaller than South 



Colon 



Geography 

Area: 30,641 i 

Carolina). 
Capital: Panama City (pop. 438,000). 
Other Cities: San Miguelito (139,000), 

(85,600), David (70,700). 

People 

Population: 1.9 million (1976 est.). 

Annual Growth Rate: 3.1% (1976). 

Density: 61 per sq. mi. 

Ethnic Groups: Mestizo (70%), Antillean Negro 

(14%), white (10%), Indian (6%). 
Religions: Roman Catholic (95%), Protestant 

(5%). 
Languages: Spanish (official), English. 
Literacy: 82%. 
Life Expectancy: 59 yrs. 

Government 

Official Name: Republic of Panama. 

Type: Centralized republic. 

Independence: November 4, 1903. 

Date of Constitution: October 11, 1972. 

Branches: Executive — President (Chief of State), 
Vice President. Legislative — National Assem- 
bly of Community Representatives. 
Judicial — Supreme Court. 



1 Taken from the Department of State's August 1977 
edition of the Background Notes on Panama. Copies 
of the complete Note may be purchased for 50c from 
the c ";.^rintendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402 (a 25% dis- 
count is allowed when ordering 100 or more Notes 
mailed to the same address). 



Political Parties: A moratorium on organized 

political activity is in effect. 
Suffrage: Universal adult over 18. 
Administrative Subdivisions: 9 Provinces and 1 

Territory. 

Economy 

GNP: $2.39 billion (1976 current prices). 

Per Capita Income: $1,378 (1976 current prices). 

Agriculture: Land— 29.3%; labor— 40%; 
products — bananas, corn, sugar, rice, cattle. 

Industry: Labor — 18%; products — refined petro- 
leum, sugar refining. 

Natural Resources: Geographic location, copper 
(yet to be exploited). 

Trade: Exports— $278 million (1975 f.o.b.): 
bananas (21%), refined petroleum (46%), sugar 
(17%), shrimp (7%): partners— U.S. (44%), 
F.R.G. (15%). Imports— $795 million (1975 
c.i.f. ): crude oil (41%), capital goods (16%), 
food (6%): partners— U.S. (34%), Saudi Arabia 
(12%), Ecuador (12%), Venezuela (7%), Japan 
(3%). 

Official Exchange Rate: 1 Balboa (B/l) = 
US$1.00. 

Economic Aid Received: $647 million (1946- 
75)— IDB, IBRD, UNDP, and other countries 
and U.S. loans and grants. U.S. only— $331.5 
million (1946-75). 

Principal Government Officials 

Panama: President — Demetrio B. Lakas, Head 
of Government — Brig. Gen. Omar TORRUOS 
Herrera, Minister of Foreign Affairs — 
Nicolas Gonzalez-Revilla, Ambassador to 
the U.S.— Gabriel Lewis Galindo. 

United States: Ambassador To Panama — William J. 
Jorden. 



Caribbean Se 




518636 5-77 



October 17, 1977 



511 



Nicolas Ardito Barletta, Advisor to the Head 
of Government Ambassador Rodrigo Gon- 
zales, Aide-de-Camp of the Military House- 
hold Lieutenant Colonel Armando Beillido, 
and Aide-de-Camp of the Military Household 
Lieutenant Colonel Manuel A. Noriega. 

President Carter and General Torrijos dis- 
cussed the importance of the Panama Canal 
treaty to the United States and Panama and 
efforts by both countries to gain widespread 
and popular acceptance of the treaty. The 
President noted that the treaty had been con- 
cluded without either side being under the 
pressure of the threat of violence and that the 
treaty would establish a new era of closer 
cooperation and friendship between the 
United States and Panama. The treaty, 
suggested the President, will be the first step 
in a series of improvements in the cooperation 
and friendship between the United States and 
Panama. 

General Torrijos praised President Carter 
for pursuing the Panama Canal Treaty and 
said he too hoped the treaty would lead to a 
new type of relationship that will serve as an 
example for other Latin American countries. 

President Carter said he hoped that the 
spirit of mutual respect and friendship which 
had guided the United States and Panama 
through the canal treaty negotiations will 
serve as an example to the other countries of 
the hemisphere as all our countries seek to re- 
solve outstanding problems or disputes. 

The two leaders agreed to consult closely on 
a continuing basis as the treaty moves toward 
ratification and implementation. 

Weekly Compilation of Presidential Documents dated September 12 



items with Peru. For instance, we are very 
grateful that they have signed the treaty of 
Tlatelolco and also the nonproliferation treaty 
and the fact that they are moving strongly 
toward democratization of their government. 

The President has announced that in 1980, if 
things go well, they'll have free elections, 
which is quite a step forward. 

We also discussed matters that concern 
other countries — the possibility of Bolivia's 
having access to the Pacific Ocean, which they 
lost about a hundred years ago, and the possi- 
bility that Ecuador might have access to the 
Amazon River, which they desire very much. 

We discussed the international copper 
prices and the possibility of an international 
sugar agreement, which is of great impor- 
tance to almost all the countries to the south 
and also to us. But these are some of the items 
we discussed, in addition to the main ques- 
tion, which has brought all the countries here, 
and that is the interest in a new era of cooper- 
ation and equality of treatment of the Latin 
American countries by our country as demon- 
strated so vividly in the signing of the Panama 
Canal treaty. 

So, in each individual instance, with 18 or 
20 foreign leaders, there are general subjects 
that affect the whole hemisphere — the allevia- 
tion of tensions, the reduction of armaments, 
the nonproliferation commitment, human 
rights questions. Each country is quite differ- 
ent from one another. And I have tried to 
learn in every case what I can do to make our 
relationship with them better and also to al- 
leviate any tensions that might exist with 
their neighbors. 



PERU, SEPTEMBER 6 

In every instance, I spent several hours 
studying about each country and am briefed as 
best I can be by the State Department and by 
the other leaders of our own government con- 
cerning issues that are important between 
myself and the leaders of the visiting country. 

I've already met with General Torrijos of 
Panama and this is Morales Bermudez, the 
President of Peru. We discussed a number of 



PARAGUAY, SEPTEMBER 6 

We have President Stroessner here with his 
Foreign Minister and other dignitaries to par- 
ticipate in the signing of a treaty between 
ourselves and Panama. We had an opportunity 
to discuss subjects of interest to our country 
and to Paraguay, to reemphasize the historic 
friendship that has bound our countries to- 
gether, to discuss the present plans in 
Paraguay for the development of the country's 



512 



Department of State Bulletin 



economy, and also we made plans, I believe, 
to alleviate any differences of opinion that 
might exist between our country and 
Paraguay. 

The President outlined the plans for elec- 
tions in February and offered us an opportu- 
nity to come and observe the elections there. I 
told him that I might learn how to conduct a 
better campaign if I could see how the elec- 
tions were conducted in Paraguay. 

We had a discussion about the question of 
human rights and the fact that it has been a 
problem. And the President outlined to me 
the progress that is being made in this area. 

We were pleased to learn about the cooper- 
ation between Paraguay and the neighbors in 
Brazil and Argentina in the development of 
water resources. And the President outlined 
to me the size of the fish which he quite often 
catches in the beautiful streams of Paraguay. 

But we had a good discussion, and we are 
very grateful that he could come. 



COLOMBIA, SEPTEMBER 6 

President Lopez and I had a very thorough 
discussion about many items. First of all, the 
preservation of Colombia's special rights in 
the use of the Panama Canal — they will be ex- 
tended after the canal treaty goes into effect. 

We also discussed the very important trade 
relationships that exist between ourselves and 
Colombia and the total commitment that Col- 
ombia has always made to democracy in its 
purest form and to the principle of human 
rights. And we discussed the importance of 
many nations being involved in pursuing the 
hope that all people might live in freedom and 
without oppression from government. And 
Colombia has set a very fine example for the 
rest of the world to follow. 

We discussed the very serious problem of 
the traffic in drugs — marijuana, cocaine, and 
heroin — and the growing cooperation between 
our country and Colombia. President Lopez 
has been very helpful in this effort of ours, 
and we have been helpful, I hope, in his 
effort, as well. 

We have no differences between our coun- 
tries. There is great friendship and great 



cooperation, and this has existed historically. 
And I think that our own visit together 
was one of complete understanding and 
cooperation. 

I also, of course, expressed my thanks to 
President Lopez and to his family for being so 
hospitable to my own wife when she was in 
Colombia recently and reminded him of my 
own visit to Colombia back in 1973 when I was 
Governor of Georgia. 

So far as I know, the relationships between 
the United States and Colombia are excellent. 
It means a lot to us in this country to have the 
people of Colombia supporting the Panama 
Canal treaty that has been evolved between 
the United States and Panama. And I think 
it's accurate to say that President Lopez has 
been very helpful during the negotiations 
themselves. 



CHILE, SEPTEMBER 6 

This was President Pinochet of Chile, and 
we had a good discussion about matters that 
are important between us. We talked about 
the possibility of Bolivia having access to the 
ocean, the importance of Chile's ratifying the 
nonproliferation treaty and implementing the 
treaty of Tlatelolco. 

We also discussed the importance of holding 
down the armaments race in the Andean re- 
gion. And I discussed with President Pinochet 
the problem that exists with the question of 
human rights in Chile, and he described to me 
some of the steps they are taking to improve 
the rights of the people there as they have re- 
covered from the recent coup, and also we dis- 
cussed the possibility of some observers who 
might go into Chile to observe what has been 
done there. 

But these are matters that are, I think, im- 
portant to Chile. They are certainly important 
to us and to the interrelationships that exist 
in our hemisphere. 

Q. Did you ask him about missing Ameri- 
cans in Chile or anything about the problems 
concerning American citizens? 

President Carter: We talked about the re- 
lease of prisoners and the right of those to be 
tried, the expedition of the judicial system, 



October 17, 1977 



513 



which has, he admitted, been delayed in some 
instances, and the elimination of their intelli- 
gence agency, I think a couple of weeks ago; 
also the new process by which a prisoner can 
be released from incarceration in exchange for 
extradition. In other words, if they want to be 
released, they leave the country. 

We have had a very frank discussion about 
this serious problem. I think the Chilean lead- 
ers, including President Pinochet, recognize 
that the reputation of their country has been 
very poor in the field of human rights. He ac- 
knowledged that they have had problems in 
the past. He claimed that progress had been 
made in recent months and told me that their 
plans are for an increase in human freedoms in 
the future. 

But I think that he can describe plans for 
the future better than can I. He knows that 
this is a very serious problem for Chile. 

Q. Would you send observers? 

President Carter: No, we would not send 
observers. I think the observers that 
might — by the way, Assistant Secretary 
Todman was there recently — and the observ- 
ers that we talked about would be from the 
United Nations. - 

Q. What do you say to people who say you 
shouldn't meet with these dictators? In other 
words, is there a problem meeting with 
people who have bad reputations? 

President Carter: Well, no, I don't feel 
that this should be an obstacle to my meet- 
ing with them, to describing to them the 
problems as I see them, to ask for their ex- 
planation in a very frank and forthcoming 
way, and to request their plans for the al- 
leviation of the problem or the explanation 
of the charges that have been made against 
their governments. 

Obviously, the question of human rights 
has historically been a serious one in this 
hemisphere, Latin America in particular. 

Most of the leaders have expressed to me 
great satisfaction at the progress that is now 
being made. Even when free elections do not 
exist, the commitments have been made 
among the leaders with whom I have met 
today that within a certain period of time 



and a date set by them that free elections 
would be held. 

So, I think that my meeting with leaders 
of countries where human rights questions 
or others do exist — excessive armaments, 
border disputes, drug supply problems — I 
think it's healthy for them and for us, for me 
to know their position better and for them to 
have the encouragement of our expressions 
of concern. I think it's a good thing. 



VENEZUELA, SEPTEMBER 7 

President Perez has developed into one of 
my best personal friends and is a great 
counselor and adviser for me on matters that 
concern the nations of the Caribbean and 
Central and South America. 

Also, he was of great assistance in the 
negotiations between ourselves and Panama 
in developing the terms of the treaty. 

The people of our country look upon Pres- 
ident Perez as a great leader in this hemi- 
sphere and also, of course, the leader of one 
of the great democracies of the world. 



ECUADOR, SEPTEMBER 8 

We had a very thorough discussion about 
matters that are of mutual importance to us, 
the common commitment that we have with 
the people and leaders of Ecuador for the 
enhancement of human rights, and our 
thanks to the leaders of Ecuador for sup- 
porting our strong position in improving 
human rights taken in the last Organization 
of American States meeting. 

We also are very excited and pleased to 
see the move of the leaders of your country 
toward democratic elections that will com- 
mence perhaps next year. And we congratu- 
lated Admiral Poveda on this decision. 

We discussed the statement by the Peru- 
vian President that additional purchase of 
arms and weapons by Peru was not planned, 
the gratitude that we have for improved re- 
lationships between Ecuador and Peru. We 
discussed the future possibility of access by 
Ecuador to the Amazon River, although the 



514 



Department of State Bulletin 



prospects are not good at this point. The 
discussions, I think, will be accelerated in 
the future. 

We discussed the delivery of landing craft 
from our country to Ecuador and the upcom- 
ing delivery of a new destroyer. And I also 
expressed my thanks that the desire of 
Ecuador for army and navy equipment was 
obviously predicated on defense of your 
country and not offense against any other 
nation. 

We reemphasized our appreciation to the 
people of Ecuador for supplying oil to our 
country during the 1973 embargo and the 
gratitude that we feel for this expression of 
friendship to us. 

We had long discussions about these 
items, and I think the meetings were very 
helpful to me in understanding the special 
problems and opportunities that exist in 
Ecuador. 

We discussed other matters — oil explora- 
tion, enhancement of your port facilities, 
construction of new highways, the high per- 
centage of your national budget that's spent 
for education, improvement of health care. 
These kind of things are very good for us to 
see. 



cases examined very soon. Three of these 
prisoners are very ill, and we hope that 
within the bounds of Bolivian law, that their 
cases might be resolved very early. 

This is a serious problem in our country. 
The parents of these prisoners — and fam- 
ilies — have aroused a great deal of interest 
among American citizens, and President 
Banzer, I think, will take a personal inter- 
est, within the framework of Bolivian law, 
that attention will be given in their case. 

We have good relations with Bolivia. And 
we appreciate the cooperation that has been 
evidenced between the Bolivian people and 
our people. 

We expect good progress to be made in 
return of the political processes to civilian 
rule, hopefully by 1980 or before. President 
Banzer reemphasized his commitment to this 
process. 

Q. Mr. President, what is the outlook for 
the sea corridor, as you see it- 
President Carter: No, I think there is a 
hope that President Banzer can meet with 
the Presidents of Peru and Chile, and what 
the prospects might be for success, I really 
don't know. But we have wished him well. 



BOLIVIA, SEPTEMBER 8 

We had a very thorough discussion with 
President Banzer of the good relationships 
between ourselves and your country. We 
examined the maps of the possible route to 
the sea for Bolivia, just north of Arica in 
Chile. And our hope is that Bolivia, Chile, 
and Peru can agree on some corridor which 
will permit Bolivia to have direct access to 
the sea on Bolivian territory. 

We have no authority over the nations in- 
volved, but we have expressed our hope to 
Presidents Pinochet and Morales Bermudez 
that this might be accomplished. 

We also discussed the progress that 
Bolivia has made in reducing the traffic in 
drugs, particularly cocaine, that comes to 
North America. 

And I expressed my sincere hope that the 
Americans who are in Bolivian prisons and 
who have not been tried might have their 



DOMINICAN REPUBLIC, SEPTEMBER 8 

We have an extremely good relationship 
with the Dominican Republic, as you know. 
President Balaguer has set an example for 
all leaders in this nation in changing his own 
country and his own people away from a 
former totalitarian government to one of in- 
creasingly pure democracy. And the com- 
mitment that he's shown in preserving 
human rights and leading the other nations 
in this effort has been an inspiration to me. 

I doubt that any other two countries have 
worked more closely together in matters re- 
lating to our own hemisphere, in the United 
Nations, than has the Dominican Republic 
and the United States of America. We coop- 
erate on the sugar agreement; we cooperate 
in our debates in the General Assembly of 
the United Nations; we cooperate in matters 
that relate to the Organization of American 
States. 



October 17, 1977 



515 



We've been talking to President Balaguer 
about the upcoming elections next year, 
which will be open and free and, I think, 
which will be a model to everyone on the 
universality of the right to vote and the free 
expression of the people's will in choosing 
their own government. 

So, in the last 7 years, there's been unbe- 
lievable progress made in the Dominican 
Republic. President Balaguer pointed out to 
me that there's a great need for us to realize 
that their major crop — their major export 
item is sugar, and what we do here in our 
own country has a profound impact on the 
well-being of his own people. And of course, 
we hope that we'll have an international 
sugar agreement during 1977. We produce 
tremendous quantities of sugar in our own na- 
tion from sugar beets and cane. And of course, 
we also import large quantities of sugar. 

So, these discussions, particularly with 
him and with the other nations, are very 
important to me. 

Q. When do you think the Senate is going 
to bring up these treaties, and are you con- 
fident of the result!' 

President Carter: I'm going to do the best 
I can to have the treaties ratified. And I 
think that we will succeed. But the time 
schedule is something that I can't predict 
right now. It's going to be a matter of great 
importance to me and to our country and to 
this hemisphere, and I think a failure to 
ratify the treaty would have very serious 
consequences. 

Q. The Hill leaders are saying it won't be 
'til next year. Do you accept that that's 
probably what will happen? 

President Carter: Well, that is, I think, a 
guess at this point that would be good. But 
I've talked to the leaders on the Democratic 
and Republican sides, and if it seems appar- 
ent that we have enough votes to ratify the 
treaty during this session of Congress, 
they've all assured me that that would be 
their desire. 

Q. Don't bring it up if you don't have the 
vote. 

President Carter: That's right. 



Q. What do you mean by "serious conse- 
quences"? You've said that several times 
now. Do you mean war? 

President Carter: Well, no, I wouldn't 
want to predict war. But I think it would be 
a serious disappointment on behalf of all the 
nations of this hemisphere in the refusal to 
ratify the treaty by our country. I don't, ob- 
viously, predict war. But there would be a 
deterioration of the relationships between 
our country and almost every nation south of 
here. 

Q. Do you see your own relationship to 
other foreig)i policy questions tied to your 
success or failure on this particular one? 

President Carter: Yes, to some degree, 
yes, because it ties the character and the 
will of the American people to do what's 
fair, what's right, what's decent, and to 
treat other nations with respect, and at the 
same time to enhance the security and 
well-being of our own people. And I think it 
would be a reflection on our judgment and 
our fairness if the treaty was not ratified. 

Q. And if it is ratified, do you then have a 
better hand in the Mideast, on SALT, on 
other questions? 

President Carter: I think my own position 
would be enhanced in that it would be a 
show of support for my Administration by 
the Congress and the people, yes. 



EL SALVADOR, SEPTEMBER 8 

President Romero from El Salvador was 
very gratifying to us. 

In the past, there has been great concern 
in the United States about two questions: 
One, the question of human rights and the 
fact that charges have been made and alle- 
gations have been made that there were vio- 
lations of these rights in El Salvador. 

President Romero has informed me that 
he has requested that a commission on 
human rights from the United Nations or OAS 
go to El Salvador to see the great progress 
that has been made there in the last 2 months. 
And we are grateful to get this good news. 

Another item that has been of great con- 



516 



Department of State Bulletin 



cern to us and all the nations of this hemi- 
sphere has been the absence of approval by 
the Congress of El Salvador of the mediation 
of the border disputes with Honduras, which 
has resulted in an interruption of free trade 
and transportation and exchange of people 
with Honduras to the north and the inter- 
ruption of Pan American Highway traffic. 

But the President informed me that the 
Congress has today voted to accept the 
agreement that was signed here in Washing- 
ton last year and that he anticipates a good 
chance now that the dispute with Honduras 
can be resolved without further delay. 

So, these two problems that have existed 
between our countries have, I think, been 
substantially resolved, and we are very 
grateful that the new administration has 
been able to achieve these accomplishments 
in only 2 months in office. 

I believe that we will have in the future a 
much closer relationship between our coun- 
try and El Salvador, and I think the concern 
that has been expressed here in the Con- 
gress, among our people, and from the 
White House will be eliminated to a great 
degree in the future. 

We believe that the President will carry 
out these statements with enthusiasm and 
with determination and with success. And 
this is very good news for all the nations and 
all the people of our hemisphere. 

Q. Is there any indication when the com- 
mission might be going to El Salvador? 

President Carter: No, but the President 
said that was one of his major purposes in 
coming to Washington. Since he has only 
been in office 2 months, this is really the 
first time for him to assess the needs in his 
country and to come to the OAS to specif- 
ically request that the commission go to El 
Salvador to witness themselves the progress 
that has been made. 

But the time schedule for the sending of 
the commission, I guess, is now in the hands 
of the leaders of the international body. 

Q. Did he see any progress for possible 
renewal of relations with Honduras, or did 
you just talk about mediation? 

President Carter: He just pointed out the 



fact that the Congress had today voted 
unanimously to take this action, which all of 
us have been hoping to see. But I think the 
President himself would have to answer the 
question about prospects for the renewal of 
relations. I don't know about that. We are 
very grateful for this good news. 



HONDURAS, SEPTEMBER 8 

One of the most difficult threats to peace 
in our entire hemisphere has been the 
breakdown in relations between El Salvador 
and Honduras because of a border dispute 
that has been longstanding and which was 
aggravated by a conflict following a soccer 
game 7 or 8 years ago. And because of this, 
the Pan American Highway has been sev- 
ered for use and there have been no rela- 
tions there and a constant threat of war. 

Today, however, the El Salvadorian Con- 
gress voted unanimously to approve a pend- 
ing agreement for mediation of the border 
disputes, and on the other hand, Honduras 
has reaffirmed its commitment to peace with 
El Salvador, and the two Presidents have 
been meeting at length while they have been 
in Washington. 

We've also received good news from El 
Salvador, that they asked the Organization 
of American States to send their commission 
on human rights into El Salvador to witness 
the great progress that has been made in 
the last 2 months since the new administra- 
tion took effect. 

I've just met with President Melgar of 
Honduras, who has shown a great interest in 
multinational cooperation between Honduras 
and Guatemala and El Salvador and other 
countries in that region — like Nicaragua — in 
the development of energy resources. These 
are relatively poor countries as far as per 
capita income is concerned. And of course, 
this poverty has been aggravated by an ab- 
sence of trade and commerce and coopera- 
tion with their neighbors. 

And so, I think that many of these leaders 
have come here to Washington not only to 
participate in the ceremonies related to the 
Panama Canal treaty but also to use the oc- 
casion as a chance to meet privately with 



October 17, 1977 



517 



one another and to try to resolve differences 
that have been in existence for decades as 
an exhibition of their hope for peace and 
friendship which we showed, along with 
Panama, with our treaty. 

So, I think the discussions have been 
good. It also gives me a chance to learn 
about their special needs. 

There is a hydroelectric project, for in- 
stance, in Honduras — El Cajon — and of 
course, our attitude on the Board of Direc- 
tors of the World Bank and the Inter-Amer- 
ican Bank, the allocation of funds from some 
of the European countries and some of the 
Arab countries — Iran — for this project might 
very well make it possible now to be com- 
pleted. It's been pending for years and 
years. And I think a common interest in this 
kind of project, whether or not this 
particular one is successful, is a constructive 
opportunity. 



ARGENTINA, SEPTEMBER 9 

We discussed several items, but the two 
that we discussed at most length were, first, 
the question of nonproliferation of nuclear 
explosives. We are very hopeful that Argen- 
tina, which has been in the nuclear field for 
25 years in the production of power, will join 
with other nations in this hemisphere in 
signing the treaty of Tlatelolco to prevent 
any development of explosives. And I was 
very encouraged by what President Videla 
had to say. 

The other item that we discussed at 
length was the question of human rights — 
the number of people who are incarcerated 
or imprisoned in Argentina, the need for 
rapid trial of these cases, and the need for 
Argentina to let the world know the status 
of the prisoners. 

President Videla was very frank with me 
about pointing out the problems that have 
existed in Argentina and his commitment to 
make very rapid progress in the next few 
months. He wants Argentina to be judged 
not on his words alone but on the demon- 
strable progress that he stated would be 
made. 



We had a thorough discussion, and I think 
it was one of the most productive and most 
frank discussions that I've had with any 
leader. 

I've had a chance to visit Argentina in the 
past and know the tremendous strength of 
your people and of your economy, the 
beauty of your nation, and the serious prob- 
lem that presently exists in the opinion of 
the world about Argentina because of the 
repression of human rights and the ter- 
rorism that has existed there. 

But we have great hopes that rapid 
progress might be made in alleviating this 
problem. And I was encouraged by what 
President Videla had to say. 



URUGUAY, SEPTEMBER 9 

President Mendez would like to make a 
statement to the press, and I think I'll make 
a brief statement and then leave him here 
with you for questions. 

It's a grand pleasure for us to have in our 
country President Mendez, representing the 
people of Uruguay. We had a very thorough 
discussion about matters that are important 
to both our countries. 

One of the major discussions was about 
the question of human rights, and President 
Mendez described to us the progress that is 
being made in Uruguay and invited any rep- 
resentative from our country, or group of 
representatives from our country, to visit 
Uruguay to inspect personally the situations 
that do exist there. 

I pointed out to him that there is a very 
grave concern in our nation about allegations 
or charges that have been made. And it's 
important to Uruguay and also to us to have 
these questions answered. • 

In addition we discussed the question of 
the export of leather goods to our country, 
and we arranged for early additional negoti- 
ations to take place so that we can under- 
stand the law in Uruguay, the subsidies that 
exist, and so that Uruguay can understand 
the special American laws that restrict im- 
ports here when large subsidies are given in 
the exporting country. 



518 



Department of State Bulletin 



But these negotiations and discussions will 
be expedited in the weeks ahead. 

Q. What is your feeling about the rela- 
tions now between Uruguay and the United 
Stairs' 

President Carter: I think I've described 
our position. We have very great concern 
about the status of human rights in 
Uruguay. But President Mendez has de- 
scribed to me the situation there, the rea- 
sons for the restraint, and his commitment 
to open up the country for observation by 
people from our country and to answer any 
questions. And my hope is that under his 
leadership the relationships can be improved 
very soon. 

COSTA RICA, SEPTEMBER 9 

It's very difficult to find any differences 
that exist between Costa Rica and the 
United States. If there is a pure democracy 
in the world which has been an example for 
all nations in preserving human freedoms, it 
would be Costa Rica. 

This is a nation which has protected itself, 
not through military might, since you don't 
even have an army, but which has preserved 
its own freedom by making those freedoms 
so attractive. 

We have followed in the footsteps of Pres- 
ident Oduber and his predecessors in our 
own insistance on publicizing the deprivation 
of human rights in this hemisphere. 

Our trade arrangements with Costa Rica 
are mutually advantageous. The friendship 
that has long existed between our countries 
is a very precious possession for us. I've 



been to Costa Rica to visit. My wife has 
been there twice; Ambassador [to the 
United Nations Andrew] Young has been 
there recently; Mr. Todman has been there 
recently. And we are very proud that Presi- 
dent Oduber could come here for this 
meeting. 

Another subject that's of great importance 
to all our people is the quality of the envi- 
ronment, and the first time I became ac- 
quainted with President Oduber was when 
he received an award as the outstanding en- 
vironmentalist among all leaders in the 
world. He was here in Washington, and I 
called to congratulate him on that occasion. 

The other thing I'd like to say — and then 
perhaps he would like to make a comment — 
is that 26 nations have come here to be rep- 
resented and to sign the Declaration of 
Washington, which is a remarkable demon- 
stration of mutuality of purpose and friend- 
ship that is perhaps unprecedented. And we 
have used the signing of the Panama treaty 
as an opportunity to bring these nations to- 
gether. But I think in Central America, we 
have a much greater chance now to see the 
longstanding disputes — for instance, that 
have existed between El Salvador and 
Honduras — be resolved. 

And there's been a major commitment to 
me and mutually among the leaders for the 
enhancement of basic human rights, which 
have long been a source of deprivation in 
some of the countries of our hemisphere. 

So, Costa Rica represents the kind of na- 
tion that's worthy of admiration and 
emulation. And I'm very grateful that Pres- 
ident Oduber has been here to represent 
these great people. 



October 17, 1977 



519 



Why a New Panama Canal Treaty? 



Address by Sol M. Linowitz 

Senior Adviser to the Panama Canal Treaty Negotiations l 



I am very pleased to have this opportunity 
to be here and to talk to you about an issue 
which I regard as one of the most important 
and explosive confronting this nation today — 
the Panama Canal. 

As we know all too well from last year's 
Presidential campaign, this issue is one which 
can be emotional, divisive, and characterized 
by misconceptions and misunderstandings. 

I know that there are many thoughtful 
Americans of intelligence and commitment — 
including many members of the American 
Legion — who are expressing grave doubts and 
patriotic concern about the proposed new 
Panama Canal treaty. They are entitled to 
full, honest, and responsive answers to their 
questions, and this I will try to do in the 
course of my remarks and thereafter. 

For several years before I agreed to accept 
the post of Co-Negotiator of the Panama 
Canal Treaty, I served as Chairman of the 
Commission on United States-Latin American 
Relations. Before that I was, for a 3-year 
period, U.S. Ambassador to the Organization 
of American States. During the course of 
those assignments and during my present 
stint, I have come to three deep convictions 
about the Panama Canal and our stake in it. 
Let me start by setting those forth for you. 

— First, the Panama Canal issue involves 
far more than the relationship between the 
United States and Panama. It is an issue 
which affects all U.S. -Latin American rela- 
tions, for all the countries of Latin America 



1 Made before the American Legion Convention at 
Denver, Colorado, on Aug. 19, 1977. 



have joined with Panama in urging a new 
treaty with the United States. In their eyes, 
the canal runs not just through the center of 
Panama but through the center of the West- 
ern Hemisphere. Indeed, the problem signifi- 
cantly affects the relationship between this 
country and the entire Third World, since the 
nations of the Third World have made com- 
mon cause on this issue — looking upon our po- 
sition in the canal as the last vestige of a colo- 
nial past which evokes bitter memories and 
deep animosities. So in going forward with a 
mutually satisfactory basis for a new treaty 
with Panama, the United States will find itself 
in a position to improve relations with virtu- 
ally all the countries of this hemisphere and, 
indeed, the people of the entire developing 
world whose attitude toward us as a nation 
will be importantly influenced by how we con- 
duct ourselves on this Panama Canal issue. 

— Second, our primary interest in the canal 
is to assure its free, open, and neutral opera- 
tion on a nondiscriminatory basis. I am con- 
vinced that the greatest threat to the opera- 
tion and security of the canal would be to try 
to insist upon retention of the present out- 
moded treaty and its anachronistic 
provisions — provisions which have in the past, 
and can so easily again, trigger hostility and 
violence. If we do not approve a mutually 
agreeable basis for a new treaty, we may find 
ourselves in the position of having to defend 
the canal by force against a hostile population 
and in the face of widespread, if not universal, 
condemnation. 

— Third, in the light of these facts, I believe 
that the best way to preserve the canal's op- 



520 



Department of State Bulletin 



eration and to maintain its permanent neu- 
trality is to substitute for the 1903 Panama 
Canal treaty a new arrangement which will 
be mutually fair, which will properly provide 
for Panama's just aspirations, and which will 
take into full account our own national needs. 
Putting it another way, a new treaty is the 
most practical means for protecting the inter- 
ests we are trying to preserve in the canal. 

Briefly, that is the mission on which we 
have been engaged as negotiators in trying to 
find a satisfactory basis for a new Panama 
Canal treaty. We believe that the new agree- 
ment on principles we have reached preserves 
for this nation the important interest it has in 
assuring that the canal remains free, secure, 
accessible, and open on a nondiscriminatory 
basis — and in a manner which will both ad- 
vance our national security interests and fur- 
ther our hemispheric objectives. 

As a point of departure for examining the 
bases for these convictions, I would like to 
focus on three specific questions: 

— First, how did we get where we are in 
Panama? 

— Second, what are the main objections to a 
new treaty? 

— Third, what are the basic elements of the 
principles agreed upon? 

First a few words of history. As early as the 
middle of the 1800's we were, as a young na- 
tion, interested in the possibility of construct- 
ing a canal across the Isthmus of Darien in 
order to connect the Atlantic and the Pacific 
Oceans. In the late 1800's, this need was 
dramatically underlined when during the 
Spanish American War it took the cruiser 
Oregon 90 days to get from the Pacific coast to 
its Atlantic battle station. 

At the end of the 1800's, the French Canal 
Company had undertaken to construct such a 
canal through the province of Colombia known 
as Panama. By the end of the century it ac- 
knowledged failure — failure because of dis- 
ease, because of technological and scientific 
problems which seemed insurmountable, be- 
cause of lack of financing, and finally because 
of lack of spirit and morale. 

Sometime earlier the United States had in- 
dicated real interest in constructing an isth- 



mus canal in Nicaragua, and indeed, legisla- 
tion toward that end was approved in 1901. 
When the French Canal Company's efforts 
came to a halt, however, a French engineer 
named Bunau-Varilla, employed by the canal 
company, organized an effort to urge the 
United States to take over the French com- 
pany's assets in Panama and enter into a 
treaty with Colombia for the construction of 
the canal. Such a proposal calling for a 100- 
year treaty was put forward by the United 
States and rejected by the Colombian Senate. 

At this point Mr. Bunau-Varilla, who was 
enterprising and imaginative, suggested to 
American authorities that the province of 
Panama might undertake to declare its inde- 
pendence and then enter into a satisfactory 
treaty with the United States. So on 
November 4, 1903, a revolution occurred in 
Panama with the knowledge, if not the ac- 
quiescence, of the United States, and a few 
days later the United States recognized 
Panama's independence. 

Mr. Bunau-Varilla then appeared as Minis- 
ter Plenipotentiary on behalf of the new coun- 
try of Panama and undertook to conclude a 
treaty with the United States even before 
other officially designated negotiators had 
reached the United States. This was the treaty 
of 1903, which has been in effect ever since. It 
called for payment of $10 million by the United 
States to Panama and an annual payment there- 
after of $250,000 per annum. In return, Panama 
granted to the United States rights "in per- 
petuity" to construct a canal 10 miles wide over 
which the United States would exercise rights, 
powers, and authority as "if it were the 
sovereign." As Secretary of State Hay, the 
American signatory of the treaty, candidly tes- 
tified: The treaty has a number of advantages 
for the United States, and "I must confess not 
so many for Panama." 

The treaty was ratified in 1904, and con- 
struction of the canal was begun immediately. 
The canal was completed in 1914 after a bril- 
liant engineering and scientific performance 
by American engineers, doctors, scientists, 
and builders who were determined to conquer 
the unconquerable and make the canal a 
reality. 

Today the canal stands as an engineering 



October 17, 1977 



521 



marvel, as one of this country's greatest ac- 
complishments. It was in a very real sense our 
moon shot of the early 1900's. Any American 
must view with pride this highly complex, in- 
tegrated, hydraulic system of locks, dams, 
and artificial bodies of water designed to move 
ships over the uplands of the isthmus for 50 
miles from ocean to ocean. 

And we have more than the canal's technol- 
ogy which we can point to with such pride. 
For 62 years we have operated the canal for 
the nations of the world more as a public serv- 
ice than as a business. The canal's tolls have 
been set as low as has been compatible with 
meeting costs and providing a modest return, 
and world commerce has been a major benefi- 
ciary, not just our own domestic and foreign 
trade. 

But from the beginning and over the years, 
the Canal Zone became an ever more troub- 
ling and festering presence. Under the 
treaty, the United States instituted jurisdic- 
tion over the courts, the schools, the jails, 
and the police force of the Canal Zone. It set 
up what the Panamanians regarded as a colo- 
nial enclave, splitting their country in two 
and taking 550 square miles of their best 
land, which they otherwise might have had 
for development. 

Almost from the beginning, there was re- 
sentment by the Panamanians who asserted 
that the United States had carved out in the 
zone and taken unto itself the heart of Panama 
and made it the United States and done so 
under a treaty which was not even signed by a 
Panamanian. The opposition and resentment 
which festered over the years predictably led 
to violence. The most serious was in 1964 
when anti-U.S. riots erupted which led to the 
death of 20 Panamanians and 4 Americans. 

These developments and the dangerous ex- 
plosive atmosphere made clearer than ever 
that the 1903 treaty with Panama had become 
a constant source of potential hostility and 
that in the mutual interest of both countries a 
new treaty arrangement should be made. In 
1964 President Lyndon Johnson committed 
the United States to such a new treaty, and 
negotiations have been continuing ever since. 

In 1974 Ambassador Ellsworth Bunker was 
appointed to conduct the treaty negotiations, 
and since that time efforts have been under 



way to develop a new mutually agreeable 
treaty consistent with the basic goals and ob- 
jectives of both countries. I joined him 6 
months ago as Co-Negotiator. 



Treaty Concerns 

In the light of these facts, let us take a look 
at some of the arguments being advanced 
against a new treaty and the most important 
questions which are being raised. 

First, won't a new treaty mean surrender of 
U.S. sovereignty over the Panama Canal? 
The simple answer is that the United States 
has never had sovereignty. The 1903 treaty 
specifically gave the United States certain 
rights and authority which it would have "if it 
were the sovereign." Obviously, these words 
would not have been necessary if the United 
States were in fact intended to be sovereign. 

Before the ink was dry on the 1903 treaty 
Secretary of War William Taft wrote to Presi- 
dent Theodore Roosevelt asserting that the 
treaty "seems to preserve the titular 
sovereignty over the Canal Zone in the Re- 
public of Panama." A treaty of friendship en- 
tered into between the United States and 
Panama in March 1936 referred to the Canal 
Zone as "territory of the Republic of Panama 
under the jurisdiction of the United States." 
In 1946 John Foster Dulles, as U.S. Repre- 
sentative to the United Nations, acknowl- 
edged before the General Assembly that 
Panama had never ceased to be sovereign 
over the Canal Zone. 

The Supreme Court has dealt with the issue 
several times, but always for a limited, spe- 
cific purpose. Thus, in the earliest case of 
Wilson v. Shaw in 1907, the Supreme Court 
held that for the purposes of the validity of 
U.S. expenditure of funds to construct the 
canal, the zone was U.S. territory. But in 
1948 the Supreme Court described the Canal 
Zone as "admittedly territory over which we 
do not have sovereignty." 

It is important to recognize the difference 
between the rights acquired with reference to 
Panama and the territory acquired in the pur- 
chase of Louisiana or Alaska. In the Louisiana 
Purchase, the United States was explicitly 
granted full sovereignty over the "territory 
with all its rights and appurtenances." In the 



522 



Department of State Bulletin 



case of the purchase of Alaska from Russia, 
the United States was similarly ceded all ter- 
ritory. In both cases it was a transfer of land; 
in neither transaction was provision made for 
a continuing annual payment or for a continu- 
ing relationship on the matters covered by the 
agreements, as is true in the Panama Canal 
treaty. 

It is worth noting that U.S. citizenship is 
not granted to children born of non-U. S. par- 
ents in the zone. The zone ports are consid- 
ered foreign ports for the purpose of trans- 
porting the U.S. mail. Imports from the Canal 
Zone into the United States are treated 
exactly the same as imports from foreign 
countries. 

The simple fact is, therefore, that while we 
have exercised virtually complete jurisdiction 
over that part of the Panamanian territory 
which comprises the Canal Zone, we have 
never had actual sovereignty and do not have it 
today. 

Second, will a new Panama Canal treaty 
prejudice our national security? As I have al- 
ready tried to indicate, the greatest danger to 
our security interest in the canal would be an 
effort to maintain and continue the present 
status. While the canal remains an important 
defense asset according to our Department of 
Defense, it is no longer vital, clearly no longer 
as useful as it once was for the shifting of 
combat forces. Larger warships and merchant 
tankers are unable to pass through the canal. 
Alternative means of transportation have 
been developed which compete by lowering 
costs to make land or air transportation eco- 
nomically viable. 

But an open, secure, and efficient canal is 
still of importance to the United States and 
the world. And in our negotiations we have 
worked closely with the Department of De- 
fense and the Joint Chiefs of Staff to assure 
that our national security interests will not in 
any respect be prejudiced under the new 
treaty arrangements. They have assured us 
that the kind of treaty we have agreed upon 
will not only preserve our security interests 
but indeed enhance them. 

Third, will the new treaty seriotisly affect 
U.S. commercial interests? While the use of 
the canal commercially is still significant, ob- 
viously its importance has diminished consid- 



erably as world commerce patterns and tech- 
nologies of shipping have changed. Today 
larger vessels cannot use the canal. In per- 
centage terms, the canal is much more impor- 
tant to various countries of Latin America 
than it is to us. Today approximately 8 per- 
cent of total U.S. exports and imports by 
value pass through the canal each year. About 
7 percent of the U.S. seaborne trade 
traverses the canal. To a substantial extent, 
therefore, the canal, though still important, is 
obsolescent. 

Fourth, is the present Government of 
Panama the one with whom we should be 
negotiating? The fact is that for years now the 
Panamanian people have been pressing for a 
new treaty. For over 12 years we have been 
engaged in negotiations. The present head of 
government, General Omar Torrijos, is com- 
mitted to try to work out a new treaty with 
the United States. And in doing so he is fully 
supported by the people in his country and fol- 
lowing in the footsteps of every Panamanian 
head of state since 1903, irrespective of any 
ideological differences. 

Elements of Agreement in Principle 

Against this backdrop, what is it, then, we 
have achieved in the agreement in principle 
reached with the Panamanians? 

First let us take a look at defense and na- 
tional security. Two treaties will be agreed 
upon dealing with these aspects of the rela- 
tionship — one, a new Panama Canal treaty 
and the other, a neutrality treaty. Under the 
Panama Canal treaty, the United States will 
have primary responsibility for the defense of 
the canal during the treaty's term — until the 
year 2000. Panama will participate and at the 
end of the treaty, our military presence will 
cease. There will be a status-of- forces agree- 
ment in effect similar to agreements 
elsewhere which will cover the activities and 
presence of our military forces. 

The United States will have access to and 
the rights to use all land and water areas and 
installations necessary for the defense of the 
canal during the basic treaty period. 

The neutrality treaty is of permanent dura- 
tion and provides that the United States and 
Panama will maintain the permanent neu- 
trality of the canal, including nondiscriminatory 



October 17, 1977 



523 



access and tolls for merchant and naval ves- 
sels of all nations. In this treaty the word 
"neutrality" is defined as the assurance of an 
open, accessible, secure, and efficient canal. 
Nothing in the treaty limits our freedom of ac- 
tion to do what we may consider necessary to 
maintain the canal's neutrality. 

U.S. and Panamanian warships will be enti- 
tled to expeditious passage of the canal at all 
times and without regard to the type of pro- 
pulsion or cargo carried. 

As to canal operations, the United States 
will have responsibility for operating the canal 
during the period of the basic treaty. It will 
have access to and the rights to use all land 
and water areas and facilities necessary for 
the operation and maintenance of the canal 
during the treaty. The United States will act 
through a U.S. Government agency which will 
replace the present Panama Canal Company. 
There will be a board of nine members, of 
which a majority will always be American. 
During the first 10 years the Administrator 
will be an American and the Deputy Adminis- 
trator, a Panamanian. Thereafter a Panama- 
nian will be Administrator, and the Deputy 
will be American. It is contemplated that 
during the term of the treaty Panamanians 
will participate increasingly in the canal's 
operations. 

As to compensation to Panama during the 
term of the treaty, payments will come from 
canal revenues and no congressional appro- 
priations will be required. During the life of 
the treaty, Panama will receive an annual 
payment from toll revenues of 30 cents per ton 
transiting the canal. In addition, it will be 
paid a fixed sum of $10 million per annum and, 
if canal revenues permit, an additional $10 
million per year. 

Outside of the treaty, the United States will 
cooperate with Panama in promoting Pana- 
ma's development and stability. Toward this 
end, the United States will use its best efforts 
to arrange for an economic program of loans, 
guarantees, and credits under existing statu- 
tory programs which will total around $300 mil- 
lion over the life of the treaty. There will also 
be a military sales credit program worked out 
with Panama over the next 10 years to im- 
prove Panama's ability to assist in the canal's 
defense. 



Provision is made for private businesses 
and nonprofit activities in the Canal Zone to 
be able to continue their operations on the 
same terms applicable to such enterprises 
elsewhere in Panama. 

As to the U.S. civilians currently employed 
in the Canal Zone, all are assured that they 
can continue to hold U.S. Government jobs 
until their retirement. Present employees of 
the Canal Company and the Canal Zone Gov- 
ernment may continue to work for the new 
agency until they retire or until their 
employment is terminated for any other rea- 
son. During the first 5 years of the treaty, the 
number of U.S. -citizen employees of the com- 
pany will be reduced 20 percent. All U.S.- 
citizen employees will enjoy rights and pro- 
tections similar to those of U.S. Government 
employees elsewhere abroad. They will even 
have access to military postal, PX, and com- 
missary facilities for the first 5 years of the 
treaty. New U.S. -citizen employees will gen- 
erally be rotated every 5 years. 



DATA ON THE PANAMA CANAL 

Description. The canal is 51 miles long. It is a 
lock canal, operating by gravity flow of water from 
specially constructed reservoirs. 

Cost. It is extremely difficult to provide a 
single figure for the cost of the canal. The con- 
struction cost to the United States at the time of 
completion of the canal in 1914 was $387 million. 
The amount of unrecovered U.S. investment in the 
canal is $752 million. The current book value of the 
canal and related facilities is $561.5 million. 

Work Force. The canal enterprise employs 
13,139 persons, of whom 27 percent are U.S. citi- 
zens. Almost all of the others are Panamanians. 

Defense. The United States maintains seven 
military base areas in the Canal Zone. Total U.S. 
military personnel are 9,300. 

Financial Condition. Since 1951 the canal 
has been required by law to meet its own operating 
costs. Until 1973 it did so. It has shown a net 
operating loss each year since 1973, with the result 
that tolls have been raised — the first toll increases 
since the canal was opened. 

Importance to U.S. Trade. Of all the foreign 
trade going in and out of U.S. seaports, 7 percent 
passed through the Panama Canal in 1976. This 
compares with 13 percent in 1949. 



524 



Department of State Bulletin 



In general, terms and conditions of 
employment will be no less favorable to per- 
sons already employed than those in force 
immediately prior to the start of the treaty. 
There will be preferences for Panamanian ap- 
plicants, but no employee will lose his job on 
the basis of nationality, sex, or race, and 
there will be no discrimination with regard to 
basic wages. 

The treaty will also provide that Panama 
will also assume general territorial jurisdic- 
tion over the present Canal Zone at the start 
of the treaty. U.S. criminal jurisdiction over 
its nationals will be phased down during the 
first 3 years of the treaty. Thereafter, 
Panama will exercise primary criminal juris- 
diction with the understanding that it may 
waive jurisdiction to the United States. Any 
U.S. -citizen employees and their dependents 
charged with crimes will be assured pro- 
cedural guarantees and, if convicted, will be 
permitted to serve any sentences in the 
United States in accordance with the recip- 
rocal arrangement. 

Finally, in the treaty Panama and the 
United States commit themselves jointly to 
study the feasibility of a sea-level canal and, if 
they agree that such a canal is necessary, to 



negotiate mutually agreeable terms for its 
construction. 

These, then, are the basic terms of the 
agreement. In our judgment they represent a 
fair and equitable basis for dealing with these 
issues which have been the cause of so much 
dissension and hostility for so many years and 
do so in a manner which fully protects our 
interests, properly recognizes Panamanian 
aspirations, and does us credit as a great 
democratic nation. 

It is vitally important that the American 
people study the treaties carefully and open- 
mindedly and recognize what is at stake. In 
these new agreements we believe we have 
a rare opportunity to demonstrate to the 
world how a large nation and a small nation 
can settle their differences amicably and with 
mutual respect and enter into a lasting 
partnership of which future generations will 
be proud. Such a treaty will bear witness to 
our intentions to build a balanced, construc- 
tive, and lasting relationship among the coun- 
tries of this hemisphere. 

Theodore Roosevelt put it very well: 

We have no choice as to whether or not we shall play 
a great part in the world. That has been determined for 
us by fate. The only question is whether we will play 
that part well or badly. 



October 17, 1977 



525 



U.S. Negotiators Brief Press on New Panama Canal Treaties 



Following are remarks by President Carter 
made to reporters at the White House on Au- 
gust 12, together with the transcript of a brief- 
ing held that day by Ambassadors Ellsworth 
Bunker and Sol M. Linowitz. 



REMARKS BY PRESIDENT CARTER 

Weekly Compilation of Presidential Documents dated August 15 

For 13 years, we have been engaged in 
negotiations for a Panama Canal treaty that 
would strengthen our security interests, be 
fair to ourselves and the people of Panama, 
and insure free international use of the 
Panama Canal in a spirit of cooperation and 
friendship among all nations in this hemi- 
sphere. In spite of difficulties and even 
bloodshed, each of my predecessors since 
President Lyndon Johnson has decided that 
this effort must be continued. And I'm pleased 
that it will now be completed during my own 
Administration. 

The Joint Chiefs of Staff and other principal 
advisers of mine have been involved in these 
talks at every stage. All of us believe that 
these agreements are good ones and that the 
implementation of the treaties incorporating 
these agreements are important to our long- 
term national interests. 

Under the canal treaty that will now be 
prepared, we will have operating control and 
the right to protect and defend the Panama 
Canal with our own military forces until the 
end of this century. Under a separate neu- 
trality treaty, we will have the right to assure 
the maintenance of the permanent neutrality 
of the canal as we may deem necessary. Our 
own warships are guaranteed the permanent 
right to expeditious passage, without regard 
to their type of propulsion or the cargo they 
carry. And the treaties will be a foundation 



for a new cooperative era in our relations with 
all of Latin America. 

As provided by our U.S. Constitution, I will 
seek the advice and consent of the Senate for 
the ratification of these treaties. I know that 
each Senator and each Member of the House 
of Representatives will give the utmost and 
careful consideration to these agreements — 
not only to the treaties themselves but to the 
positive influence that their approval will 
have in our own country and in our position in 
the world as a strong and generous nation. 

We will work with Panama to assess the 
need for a sea-level canal and will also cooper- 
ate on possible improvements to the existing 
canal. I believe that these treaties will help 
to usher in a new day in hemispheric rela- 
tions. All of the countries in Latin America 
are joined with us in a conviction that a new 
treaty which properly responds to the 
Panamanian aspirations and fully preserves 
our own security and other interests will give 
us an opportunity to work together more ef- 
fectively toward our common objectives. Our 
two leading negotiators have been Ambas- 
sador Ellsworth Bunker and Ambassador Sol 
Linowitz, and they are here this afternoon to 
answer specific questions that you might have 
on the treaties themselves and the negotia- 
tions and agreements that have been reached 
with Panama. I'm glad now to introduce 
Ambassador Bunker and Ambassador 
Linowitz. 



BRIEFING BY AMBASSADORS BUNKER 
AND LINOWITZ 

White House press release dated August 12 

Ambassador Linowitz: Ambassador Bunker 
and I are very pleased with these agreements 
which have been formulated and which we 



526 



Department of State Bulletin 



think will indeed be in the highest interests of 
the United States when incorporated into 
formal treaties. Those treaties are now being- 
prepared in final form, and we trust that in 
the next week or two they will be ready for 
signature. 

Just for purposes of clarification, there are 
going to be two separate treaties — one, a neu- 
trality treaty; the other a new Panama Canal 
Treaty. The Panama Canal Treaty will be ac- 
companied by an Implementation Agreement 
which will add body to some of the provisions 
in the Panama Canal Treaty itself. 

We are ready for your questions and will be 
delighted to focus on them as you would like. 

Q. Where will the signing ceremony take 
place and with what participants? 

Ambassador Linowitz: It hasn't been de- 
cided yet. And it will be decided between us 
after the treaties have been signed. 

Q. Does the President sign those treaties be- 
fore they are advised and consented to by the 
Senate or does the advise and consent come 
first? 

Ambassador Linowitz: The treaties are 
signed and then presented to the Senate for 
ratification. 

Q. What is meant by expeditious passage? 
That seenis to be sort of an arcane word that 
is subject to several interpretations. How do 
you interpret it? 

Ambassador Linowitz: Get through with it 
as soon as you reasonably can. 

Q. Would that be this year, hopefully? 

Ambassador Linowitz: The signing of the 
treaty? 

Q. The expeditious passage? I thought yon 
were talking about confirmation. 

Ambassador Linowitz: I thought Terry was 
asking about expeditious passage of vessels. 

Q. I want to know whether it means priority 
for U.S. vessels over those of other flags. 

Ambassador Linowitz: The United States 
and Panama alone will have the right to ex- 
peditious passage. 

Q. Which means priority over other flags. Is 
that correct? 



Ambassador Linowitz: We have not used 
the word priority. 
Q. Is that a correct interpretation? 

Ambassador Linowitz: It means they will 
be in the position where two ships are coming 
at the same time, one being the U.S.- 
Panamanian and another ship, the U.S.- 
Panamanian could be accorded expeditious 
passage. 

Q. How soon do you expect Senate ratifica- 
tion? 

Ambassador Linowitz: That depends on 
wiser heads than ours. That is being explored 
now. 

Q. Will it pass this year, or do you think it 
will go over to the next session of Congress? 

Ambassador Linowitz: We are hopeful it 
might be presented for ratification this year. 

Q. Did either of you contact Ro)iald Reagan 
or any of the other political figures who were 
very much against America relinquishing 
control of the canal? 

Ambassador Linowitz: Since the treaty? 
Since the agreement? 

Q. At any point during the negotiations or 
since and could you tell us about that? 

Ambassador Linowitz: I met with Governor 
Reagan for lunch some weeks ago and for 
about two hours we discussed the general 
situation of the Panama Canal and compared 
ideas and approaches. 

Q. Did his ideas influence you i>i the out- 
come? 

Ambassador Linowitz: I think it is fair to 
say that we listened respectfully to the posi- 
tion of the other and I don't think I persuaded 
him. I am sure he didn't persuade me. 

Q. Did you also meet with former President 
Ford? 

Ambassador Linowitz: I called President 
Ford from Panama at the request of President 
Carter in order to report to him the outlines 
of the agreements we reached. 

Q.How about the other living former Presi- 
dent? Did you contact President Nixon? 

Ambassador Linowitz: No, sir. I wasn't. 
You were? 



October 17, 1977 



527 



Ambassador Bunker: No. I haven't been. 

Q. There are one out of every twelve Ameri- 
cans favoring U.S. ownership of the canal. 
This will affect the vote in Congress. How do 
you plan to overcome this? 

Ambassador Linowitz: Through education. 
We hope to alert and advise the American 
people of the terms of these agreements and 
believe that when they see what has been 
negotiated that these agreements do, indeed, 
fully protect and preserve American inter- 
ests, that they will want to support a new 
treaty. I think part of the problem has been 
that the American people have not had an al- 
ternative to the present arrangement. 

Ambassador Bunker: I think it is fair to say 
it is not ownership but use of the canal that is 
important — keep it open permanently. 

Q. You said about 6 months ago one of the 
problems was the canal had its own constit- 
uency; because it teas there the treaty had no 
constituency because we didn't have the treaty 
at the time. Note you hare a treaty. Do you 
plan to be actively involved in convincing the 
American people that you have got what you 
consider a good treaty? 

Ambassador Bunker: Yes. I certainly do. 
Q. How will you be doing that? 

Ambassador Bunker: I expect I will be 
doing it by speaking, by using what influence 
I have. Ambassador Linowitz and I have been 
briefing Senators extensively and we have 
had hearings on the congressional — House of 
Representatives — side, and we will be trying 
to carry out an educational campaign to the 
extent possible. 

Q. So you do consider yourselves an emis- 
sary to the Senate on the part of the President 
to "sell" this treaty as a wise move? 

Ambassador Bunker: I think we are two 
among many; the President being the 
foremost one himself. 

Q. There are already rumblings on the Hill 
from opponents saying that maybe this treaty 
isn't so wonderful; one says even it might lead 
to war. 

What makes this treaty good? Why are they 
wrong? Why is this the light way to go? 



Ambassador Linowitz: In important re- 
spects it not only preserves but enhances the 
national security interests of the United 
States. It does so by means of a treaty that is 
fair, equitable, and takes into proper account 
the aspirations of the Panamanian people and 
the needs of the United States. It exchanges 
an uncertain, unsettled, unstable one which 
threatens the safety, the security, the open- 
ness of the canal with one that insures the 
cooperation of the Panamanians and, there- 
fore, it is a fine investment. 

Q. The economics of this treaty will ob- 
viously be under dispute. It is not quite clear 
from the fact sheet [not printed here] how 
much money we are really talking about dur- 
ing the period of time between now and the 
end of the control period. Has there been a 
horseback guess as to what we are really pay- 
ing per ton? 

Ambassador Linowitz: Yes. It is more than 
a horseback guess; I think it is pretty clear. 
We are talking about paying 30 cents per 
Panama Canal ton from toll revenues and that 
is estimated at something around $40 million 
or so rising to $50 million as time goes on. 

In addition, out of total revenues Panama 
would receive $10 million a year and another 
$10 million if canal revenues permit. That is 
the extent of the financial commitment under 
the treaty itself. 

Q. Can you compare that with what 
Panama receives now and what is the 
Panama Canal receiving? 

A)nbassador Linowitz: Panama receives 
now $2.3 million per year. Do you want to de- 
scribe a Panama Canal ton? 

Ambassador Bunker: A Panama Canal ton 
is a measurement used by the canal. It is 
roughly, I think, 500 cubic feet. It is consid- 
ered the capacity of the Panama Canal ton. It 
comes out pretty close to long tons in the end. 
It is almost the same. 

Q. Have either one of you made a recom- 
mendation to the President or a member of his 
staff on whether he ought to travel to Panama 
or some other Latin American country to sign 
this treaty' 



528 



Department of State Bulletin 



Ambassador Linowitz: Not yet. We have 
discussed it. 

Q. What is your own feeling on that 
question? 

Ambassador Linowitz: At this moment I 
don't think we have come to a clear decision 
on whether or not it ought to be signed in 
Panama, but we are giving it a lot of thought. 

Q. In recent years, what has the annual 
revenue from the canal tolls been so that we 
can see the significance of the $10 million and 
the $10 million? I mean, how much could we 
get a year from the canal in revenues now? 

Ambassador Linowitz: About $150 million. 

Ambassador Bunker: About $150 million. 
But the other income brings it up to almost 
$220 million in toto. 

Ambassador Linowitz: A good part of that 
will be turned over to Panama under the 
treaty. 

Q. What other income is there? 

Ambassador Linowitz: There was bunker- 
ing and other activities in addition to total 
revenue coming from passage from the canal. 

Q. What role does the House of Representa- 
tives have in these two treaties? 

Ambassador Linowitz: The House will be 
asked to join in implementing legislation to ef- 
fectuate some of the terms of the treaty. For 
example, setting up the new canal operating 
mechanism, dealing with the labor conditions 
that are applicable for the employees, estab- 
lishing tolls policy, and so forth. There will be 
a number of areas in short where the Con- 
gress will be asked to pass implementing 
legislation. 

Q. The new agency hasn't been named yet. 
Do you have a name for the new agency? 

Ambassador Linowitz: Tentatively the 
Panama Canal Commission. 

Q. What does it cost to operate it for a year? 
Q. Could the House procedure block the 
treaty? 

Ambassador Linowitz: Assuming unfavora- 
ble House procedure, is that what you mean? 

Q. Yes. Do they have the power? 



Ambassador Linowitz: It depends on what 
the implementing legislation is that is sought. 
Block is a large word. It can certainly impede 
effectuation of some important provisions in 
the treaty. Whether it will completely block 
the treaty, I don't think so. 

Q. Will you attempt to draft the legislation 
that goes to the House so that in the event they 
do not act favorably on it, it would still not 
prevent the treaties from taking effect? 

Ambassador Linowitz: We haven't gotten 
into the implementing legislation. I can tell 
you what the spirit is. The spirit is not to try 
to find a way around the House but to per- 
suade the Members of the House that this is in 
the highest national interest and that they, 
therefore, ought to join the Senate in approv- 
ing the treaty. 

Q. Would you explain the details again? 
What exactly goes to the House and what does 
the relationship of the protocol with the OAS 
have to do with the treaty that goes to the 

Senate? 

Ambassador Linowitz: Yes. There are two 
separate issues and in effect two separate 
treaties. Let me talk about each of them in 
turn. 

The canal treaty itself calls for the creation 
of a commission, calls for what the Panama 
Canal Commission will be doing, how it will 
operate, and so forth. To accomplish a number 
of these things legislation is going to be re- 
quired. That will fall under the legislation that 
the House will have to participate in, and we 
have not yet worked out the whole scope of 
what that will be. 

The neutrality treaty, which is a separate 
treaty, will have appended to it a protocol by 
means of which the neutrality treaty will be 
presented to the OAS for accession by all the 
countries of the world. In other words, all the 
nations of the world will be asked to indicate 
their support of this neutrality arrangement. 

Q. That is called a separate treaty? The 
thing that goes to the House is not called a 
treaty, that is enabling legislation? 

Ambassador Linowitz: That is the law. 
That is legislation, yes, sir. 



October 17, 1977 



529 



Q. Could you tell me what it costs to oper- 
ate the canal now? 

Ambassador Bunker: The purpose is simply 
to recover the costs, so that the income from 
the canal and the other operations cover the 
cost of operating the canal, plus interest, 
which we pay to the U.S. Treasury, and in- 
cludes depreciation. 

Ambassador Linowitz: Could I add one 
word on that in amplification? We, since 1903, 
have been paying interest in the United 
States on the original investment in the canal. 
It currently runs at about $20 million a year. 
As of now, some $642.5 million has been re- 
paid to the United States against the invest- 
ment in the canal by the United States. This 
has been labeled interest. The sums that I 
have indicated before which will be paid out of 
revenues to Panama will come out of that 
interest. 

Q. How realistic is it to think that then- 
might some day be a new canal at sea-level 
somewhere in that area? 

Ambassador Bunker: That is a matter that 
we have agreed with the Panamanians to 
study, to see whether a sea-level canal is de- 
sirable and feasible, and if it proves to be so, 
together to work out some arrangements for 
constructing such a canal. 

Q. What kind of obligation do we have to 
pay for that if this feasibility study finds we 
should build that? 

Ambassador Bunker: That would have to be 
determined at the time it is concluded that we 
should go ahead with the canal. It is under- 
stood that we will work out mutually agree- 
able terms for the construction and for the lo- 
cation of the canal. 

Q. Do you think it will ever happen? 

Ambassador Bunker: It is difficult to say. I 
think certainly it is a possibility it will hap- 
pen, yes. 

Q. Does this give us an option to be involved 
in a sea-level canal if anybody builds one 
there? 

Ambassador Linowitz: If anybody? 

Q. If it is ever built, do we have an option? 



Ambassador Linowitz: What we have now 
is an understanding with Panama that this 
treaty, as it is put into effect, that we will to- 
gether undertake a feasibility study to deter- 
mine whether a sea-level canal makes sense to 
both of us. 

Q. Could we get the other side of the coin? 
Supposing tlie thing falls apart — the Senate 
refuses to ratify: the House also? 

Q. Let him finish the questio)i. He teas an- 
swering something. 

Ambassador Linowitz: If that feasibility 
study indicates that in the interest of both 
countries this new sea-level canal can be built, 
we will negotiate mutually agreeable terms 
and conditions. 

Q. Does that give us an option over any 
other country in the world? 

Ambassador Linowitz: Let me put it this 
way: No other country has this agreement 
with Panama. 

Q. It amounts to an option, then? 

Ambassador Linowitz: No. I wouldn't call it 
an option. I am trying to be accurate. No 
other country has the agreement that we are 
going to be incorporating in this agreement. 

Q. 7s this canal through Panama or 
Nicaragua? Years ago there was a feasibility 
study about a canal going through Nicaragua. 

Ambassador Bunker: Yes, but the feasibil- 
ity studies that were made indicated that the 
most desirable routes were in Panama. 

Q. How will the new com mission differ 
from the Panama Canal Company and, sec- 
ondly, there is a phrase back here on the sec- 
ond page, it says, U.S. civilians currently 
employed in the canal may continue in the 
U.S. Government jobs until retirement. 

Does that mea>i some of them will be leav- 
ing employment in the Canal Zone and, in 
connection with the canal, taking other gov- 
ernment jobs in the continental United 
States' 

Ambassador Bunker: Yes, that is true. 
Some will be leaving but will have jobs 
elsewhere in the United States. They will 



530 



Department of State Bulletin 



continue to be employees of the U.S. 
Government. 

Q. Is there any percentage of the employees 
that is going to be involved that you could tell 
us about? 

Ambassador Bunker: No. It is difficult to 
say at this stage. 

Q. How is the commission different than the 
Company? 

Anibassado)' Bunker: The commission — the 
agency which runs, operates the canal — will 
be a U.S. Government agency. 

Q. Until? 

Ambassador Bunker: They will be a super- 
vising board of nine members on which we will 
have a majority. We will have five members 
at the board throughout the life of the treaty. 

Q. Could I ask you to comment on the mili- 
tary phasedown? How soon does that begin? 
Where does it end? And then could you com- 
ment on how we will defend the canal after it 
becomes Panamanian property? 

Ambassador Linowitz: There is nothing in 
the treaty that calls for a particular rate of 
phasedown except for the United States to 
undertake to do it as it deems best. 

Q. You have H bases there now— something 
like that. Will that begin to go in the next few 
years? Will that begin to be phased down? 

Ambassador Linowitz: There is no under- 
taking in that regard. I think that is the im- 
port of your question. We have the right to 
decide what we do or don't do with those 
bases. 

Q. When you begin to phase them down, in 
other words? 

Ambassador Linowitz: Exactly. 

Q. After the canal becomes Panamanian 
territory, how do we defend it then? 

Ambassador Linowitz: We are assured by 
the Joint Chiefs of Staff, by the Department 
of Defense, that the total arrangement we 
have worked out involving the neutrality 
treaty and the present canal treaty will per- 
mit us adequately to provide for the defense 
of the canal, now until the year 2000 and after 
the year 2000. 



Q. Yes, but after the year 2000, would that 
mean we would no longer have any bases 
there at all after the year 2000? 

Ambassador Linowitz: Yes. 

Q. In other words, you would defend it with 
troops that would be stationed someplace else? 

Q. Under what conditions would we inter- 
vene in the canal to protect the neutrality? 

Ambassador Linowitz: I don't like the word 
intervene. Under what conditions would we 
be in the position to move? The answer is if 
the permanent neturality of the canal were 
jeopardized — 

Q. Who would decide that? 

Ambassador Linowitz: We would. Then the 
United States would be in the position to take 
such steps as might be deemed necessary. 

Q. Could I ask you, after sitting across 
from the Panamanians for untold hours, I 
wonder if you would give us a reading as to 
what their mood would be and what their 
course of action might be if, indeed, the U.S. 
Senate were to reject this treaty? What is 
the future of the canal under those 
circumstances? 

Ambassador Linowitz: They would be ter- 
ribly disappointed, they would feel this was a 
tremendous letdown, and it would not bode 
well for the future relationships between the 
United States and Panama and the United 
States and Latin America. 

Q. What about the canal itself? During the 
Ford Administration, for example, there was 
talk that if the canal was not agreed to that 
perhaps, indeed, it might become a lie mi- 
spheric Vietnam. Do you share that view? 

Ambassador Linowitz: The danger of an 
explosive situation developing, if the treaty is 
not ratified, is there. It would be difficult to 
project. Ambassador Bunker, of all people, 
knows about Vietnam. I wonder if he has any 
comment. 

Ambassador Bunker: The point is that the 
canal is very vulnerable. It is difficult to de- 
fend. It is difficult to keep- in operation. 

As I think General Brown [Chairman of the 
Joint Chiefs of Staff Gen. George Brown] ex- 
pressed it once, we could defend the canal. 



October 17, 1977 



531 



The question is whether we could keep it 
operating. That is the issue; that is the reason 
why we think that a new treaty is imperative. 

Q. What did former President Ford tell you 
in your conversation with him? Did he prom- 
ise to support your position or did you ask 
him to? 

Ambassador Linowitz: I didn't ask. Presi- 
dent Carter suggested he be briefed, and I 
briefed him on the developments that had 
taken place and we said we would be sending 
along the details and he appreciated it and 
said so. 

Q. What was Governor Reagan's reaction 
when you briefed him ? 

Ambassador Linowitz: I didn't brief Gover- 
nor Reagan since these arrangements have 
been worked out. Our discussion was some 
weeks ago. 

Q. If we find it difficult to defend it now 
and if we give up the sovereignty over that 
area, how do we expect to defend it later in 20 
years from now? Won't we be accused of going 
into that sovereignty, taking over? 

Ambassador Linowitz: We don't believe we 
are giving up sovereignty. We don't believe 
we have had sovereignty, and we have to ac- 
tually rely on the judgment of the most com- 
petent people we know — the Joint Chiefs, the 
Department of Defense, and those who are 
deeply concerned with our security — who as- 
sure us that under the arrangement we have 
worked out our national defense interests are 
well preserved. 

Q. You just said it is difficult to defend. 
How can we defend it later? 

Ambassador Linowitz: That is the best an- 
swer I can give you. 

Q. // there should be a defense emergency, 



how would we get troops and ships there quick 
enough and where would they come from? 
Guantanamo or where? 

Ambassador Bunker: They would come 
probably from the mainland of the United 
States. There are bases here. 
Q. That would take a while, wouldn't it? 
Ambassador Bunker: Not very long, not 
with the amount of transportation. 

Q. Have you consulted with former Secre- 
tary Kissinger? 

Ambassador Linowitz: I have talked to Sec- 
retary Kissinger several times during the 
course of these negotiations. 
Q. Can. you indicate his response? 
Ambassador Linowitz: He was interested 
and helpful and seemed pleased with the prog- 
ress of the negotiations. 

Q. If after the year 2000 circumstances 
should come about threatening the neutrality 
of the canal, you said that we would take 
whatever steps were deemed necessary. Could 
that conceivably involve U.S. troops actually 
entering the Canal Zone? 

Ambassador Linowitz: I think the impor- 
tant fact is that we are in the position to take 
such action as we may think necessary. There 
are no limits prescribed in this instrument. 
And we are given certain rights without limit- 
ing language and, therefore, we are in a posi- 
tion to await the event and then make our 
determination. 

Q. So the answer to the question is yes, it 
could include the U.S. troops entering the 
zone? 

Ambassador Linowitz: I think the answer 
to the question is let's wait and see. We are 
trying not to get into those situations in the 
future. 



532 



Department of State Bulletin 



Administration Officials Testify on the Panama Canal Treaties 



Following are statements by Herbert J. 
Hansell, Legal Adviser, before the House 
Com mitt ee on Merchant Marine and 
Fisheries on August 17 and statements by 
Ambassadors Ellsworth Bunker and Sol M. 
Linowitz before the House International Rela- 
tions Committee on September 8. 1 

MR. HANSELL, AUGUST 17 

I wish to address this morning a legal ques- 
tion that has arisen in the course of the 
Panama Canal negotiations. I refer to the 
question of whether property of the United 
States in the Canal Zone may be disposed of 
by treaty or whether legislation is required 
for such a disposition. Because this committee 
has oversight responsibility for the adminis- 
tration of the Panama Canal, the Canal Zone, 
and its waters, I appreciate that the commit- 
tee has a particular interest in this legal ques- 
tion, and I wish to discuss it fully with you. 

Ambassadors Bunker and Linowitz have 
described the general scope of the proposed 
treaties. I would simply wish to reiterate that 
under the proposed treaties, the Congress 
would have continuing legislative responsibil- 
ity over such matters as U.S. defense 
activities in Panama, organization and func- 
tioning of the canal operation, financial man- 
agement of the canal, employee relations, and 
navigation. In addition, specific legislation 
will be required to implement many aspects of 
the new relationship, including the establish- 
ment of a new canal operating agency and a 
new employment system and measures con- 
cerning the financial management of the canal. 

While it is clear that extensive implement- 



1 The complete transcript of the hearings will be pub- 
lished by the committees and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 



ing legislation will be required, we are not 
able yet to make specific proposals concerning 
the contemplated legislation since the texts of 
the treaties are still under negotiation. How- 
ever, I would emphasize that the House of 
Representatives will, in any event, have a 
major role in the creation and implementation 
of any new relationship between the United 
States and Panama. 

1 would now like to turn to the legal question 
concerning the power to transfer property. The 
nub of the problem is the interrelation of the 
treaty power clause of the Constitution (Art. 2, 
§2, cl. 2) and the property clause of the Con- 
stitution (Art. 4, S3, cl. 2).* 

Article 2, §2, cl. 2, dealing with the powers 
of the President, states: 

He shall have Power, by and with the Advice and Con- 
sent of the Senate, to make Treaties, provided two-thirds 
of the Senators present concur. . . . 

Article 4, §3, cl. 2 provides: 

The Congress shall have Power to dispose of and make 
all needful Rules and Regulations respecting the Terri- 
tory or other Property belonging to the United States; 
and nothing in this Constitution shall be so construed as 
to Prejudice any Claims of the United States, or of any 
particular State. 

I first note that nothing in the language of 
the two clauses limits the treaty power with 
respect to dispositions of property. Nor is Ar- 
ticle 4, with respect to disposition of property, 
exclusive. As Mr. Justice Field stated in 
Geofroy v. Riggs, 2 ". . .the treaty power, as 
expressed in the Constitution, is in terms un- 
limited except by those restraints which are 
found in that instrument. ..." But there is no 
restraint expressed in the Constitution with 
respect to dispositions of property. The prop- 
erty clause in Article 4, like most of the 
clauses granting legislative powers contained 
in Article 1, provides that "Congress shall 
have power," without any qualification indi- 

2 133 U.S. 258 at 267 (1890). 



October 17, 1977 



533 



eating exclusiveness against the treaty power. 

Today the rule is firmly settled that the 
treaty power extends to all areas within the 
legislative authority of Congress that are not 
expressly reserved by the Constitution to the 
exclusive jurisdiction of Congress. Under Ar- 
ticle 6, cl. 2 of the Constitution, all treaties 
made under the authority of the United States 
which are self-executing take effect as the law 
of the land. 

The Constitution, of course, contains some 
provisions which limit the treaty power with 
respect to specific subjects. Principal in- 
stances are Art. 1, §7, cl. 1 and Art. 1, §9, cl. 
7. The former clause provides that: "All Bills 
for raising Revenue shall originate in the 
House of Representatives. . . ." The second 
clause cited ordains that: "No money shall be 
drawn from the Treasury, but in Consequence 
of Appropriations made by Law. ..." Hence 
it is recognized that treaties may neither im- 
pose taxes nor directly appropriate funds. 

The property clause in Article 4, however, 
contains no language that would exclude con- 
current application of the treaty power. In 
fact the placement of the property clause in 
Article 4 of the Constitution (which deals with 
Federal-State relations), rather than in Article 
1 (which deals with the powers of Congress), 
provides further evidence that the property 
clause does not restrict the treaty power. 

As the debates in the Constitutional Con- 
vention of 1787 show, the property clause 
originated in conjunction with the grant to 
Congress, in the preceding clause of section 3, 
of the power to create new States in the ter- 
ritories ceded to the United States. The pow- 
ers of Congress enumerated in cl. 2 of that 
section were added to establish Federal au- 
thority over these territories and other prop- 
erty belonging to the United States, while 
preserving the claims of the States and the 
United States in disputed matters. The draft- 
ing history of that clause shows no indication 
of any intent to restrict the scope of the treaty 
power. 

It is also significant that the property 
clause in Article 4 links "the power to dispose 
of" property closely to "the power ... to 
make all needful Rules and Regulations" re- 
specting the territory and other property be- 
longing to the United States. These two 



categories of congressional power are closely 
related. The applicability of the treaty power 
for one of these categories should be the same 
for the other. It is well settled that the treaty 
power can be used to make rules and regula- 
tions governing in the territory belonging to 
the United States, even in the District of 
Columbia. 3 

The power to dispose of public land and 
other property belonging to the United States 
by treaty is also supported by judicial deci- 
sions 4 and long-standing practice. 

The most familiar judicial statement of the 
power to transfer rights in land by treaty was 
made by Mr. Justice Clifford in Holden v. 
Joy: 5 

. . .It is insisted that the President and the Senate, in 
concluding such a treaty, could not lawfully convenant 
that a patent should be issued to convey lands which be- 
longed to the United States without the consent of Con- 
gress, which cannot be admitted. On the contrary, there 
are many authorities where it is held that a treaty may 
convey to a grantee a good title to such lands without an 
act of Congress conferring it, and that Congress has no 
constitutional power to settle or interfere with rights 
under treaties, except in cases purely political. 

Similarly in Jones v. Meehan, 6 Mr. Justice 
Gray stated: 

It is well settled that a good title to parts of the lands 
of an Indian tribe may be granted to individuals by a 
treaty between the United States and the tribe, without 
any act of Congress, or any patent from the Executive 
authority of the United States. 7 

Although the treaties in these cases were 
concluded with Indian tribes, the decisions 
are authoritative precedents for treaties with 
foreign nations. As the Supreme Court has 
stated, 8 the former power of the United States 
to make treaties with the Indian tribes was: 

. . .coextensive with that to make treaties with foreign 
nations. In regard to the latter, it is, beyond doubt, 
ample to cover all usual subjects of diplomacy. 



3 Geofroy v. Riggs, 133 U.S. 258 (1890). 

4 Holden v. Joy, 17 Wall. (84 U.S.) 211, 242, 243 
(1872); Geofroy v. Riggs, 133 U.S. 258, 267 (1890); Mis- 
souri v. Holland, 252 U.S. 416, 433 (1920); Asakura v. 
Seattle, 265 U.S. 332, 341 (1924); Santovincenzo v. 
Egan, 284 U.S. 30, 40 (1931); Reid v. Covert, 354 U.S. 1, 
16 (1957). 

5 Holden v. Joy, 17 Wall. (84 U.S.) 211 at 247 (1872). 
B 175 U.S., 1 at 10 (1899). 

7 175 U.S. 1 at 32 (1899). 

8 U.S. v. 43 Gallons of Whiskey, 93 U.S. 188 at 197 
(1876). 



534 



Department of State Bulletin 






Let me now turn to the treaty practice of 
the United States. There the precedents look 
two ways. The record shows instances where 
transfers of territory and other property have 
been made by or pursuant to treaties alone 
and instances where treaties or executive 
agreements disposing of property belonging to 
the United States have been concluded 
pursuant to or contingent upon congressional 
authorization. 

Precedents supporting the power to dispose 
of property by treaty alone can be found in the 
boundary treaties with neighboring powers, 
especially in the treaties between the United 
States and Great Britain of 1842 and 1846 for 
the location of our northeast and northwest 
boundaries and in the treaty with Spain of 
1819 which effectuated the cession of Florida 
and determined the boundary west of the Mis- 
sissippi, ceding lands claimed by the United 
States on the Spanish side of the boundary. 

I would like to call your special attention to 
the treaty with Mexico of 1933 and the treaty 
with Mexico of 1970. Both of these treaties 
provided for the rectification of the river 
channel and the cession of lands which would 
have been left on the other side of the 
channel. 

Other recent examples of treaties transfer- 
ring or providing for the transfer of real and 
personal property are the treaties between 
the United States and Honduras of 1971 rec- 
ognizing the sovereignty of Honduras over the 
Swan Islands and the treaty between the 
United States and Japan of 1971 for the return 
to Japan of the Ryukyu and Daito Islands. 
Both treaties included provisions for the 
transfer of real and personal property belong- 
ing to the United States or its agencies. The 
terms of the treaties either transferred the 
property directly or agreed upon the transfer 
of property. The transfers were made without 
implementing legislation apparently in re- 
liance on the treaty or general statutory au- 
thority to dispose of foreign excess property. 

In the history of transfers of property to 
Panama we have had a mixed practice. Prop- 
erty has been transferred by executive 
agreement implemented by a Joint Resolu- 
tion, by treaty providing specifically for legis- 
lation, and in at least one instance by treaty 
alone. However, in the legislation implement- 



ing the 1955 treaty, Congress recognized the 
validity of conveyances made by operation of 
the treaty. 

Thus, for all of these reasons, we conclude 
that the Constitution permits the transfer of 
property belonging to the United States 
under the treaty power. 

I am authorized by the Attorney General to 
state that he concurs in the conclusions I have 
expressed here today. The Attorney General 
has provided a formal written opinion setting 
out his views. With your permission, I submit 
a copy of that opinion for the record. 

AMBASSADOR BUNKER, SEPTEMBER 8 

Ambassador Linowitz and I greatly ap- 
preciate the committee's invitation to discuss 
the new Panama Canal treaties. 

This is our first appearance before a con- 
gressional committee since completion of the 
new treaties, which were signed yesterday by 
President Carter and Panama's General Tor- 
rijos and which will shortly go to the Senate 
for advice and consent to ratification. 

The new agreements include the following 
documents: 

— The Panama Canal Treaty, with two im- 
plementing agreements concerning canal op- 
eration (Agreement in Implementation of 
Article III of the Panama Canal Treaty) and 
defense (Agreement in Implementation of Ar- 
ticle IV of the Panama Canal Treaty); 

— Treaty Concerning the Permanent Neu- 
trality and Operation of the Panama Canal; 

— Exchanges of notes concerning various 
U.S. Government activities currently located 
in the Canal Zone; 

— A note concerning loans, loan guarantees, 
and credits to be provided to Panama to assist 
its economic development and to enhance its 
capability to contribute to canal defense. 

In our opening statements Ambassador 
Linowitz and I will review a few of the most 
important features of these documents. I will 
outline the provisions governing canal opera- 
tion and defense through December 31, 1999. 
Ambassador Linowitz will describe the neu- 
trality treaty and the economic arrangements. 
Before taking up canal operation and defense, 
I want to make a few preliminary remarks. 



October 17, 1977 



535 



Among the committees of the House, yours 
is the one most concerned with this nation's 
interests abroad. Nothing could better serve 
to underscore the significance of the new canal 
agreement to our foreign policy interests than 
the presence in Washington for yesterday's 
signing ceremony of presidents or prime 
ministers from 18 countries of the hemisphere 
and of high-level representatives from eight 
other American nations. 

For many of these countries, the canal is an 
important trade artery. For all of them, the 
extended negotiations for a new canal agree- 
ment have been viewed as a test of our will- 
ingness to deal equitably with our Latin 
American neighbors. 

Two U.S. foreign policy interests are in- 
volved in the new canal treaties: The first is 
our interest — for reasons of both trade and 
defense — in assured use of an efficiently oper- 
ated and secure Panama Canal; the second is 
our interest in cooperative and productive re- 
lations with Latin America. 

The nations to the south of us are important 
not only as neighbors sharing the same hemi- 
sphere but also as partners in trade and in- 
vestment; sources of important raw materials; 
and as collaborators in building a secure, 
peaceful, and prosperous world community. 

Four Presidents of both political parties 
have recognized that the protection of our na- 
tion's interest — with regard both to the 
Panama Canal and to the hemisphere — 
required reform of the treaty arrangements 
governing the canal. 

We believe that the terms that have been 
negotiated fully meet the needs of the United 
States: 

— They assure the efficient operation of the 
canal; 

— They enable the United States to protect 
the canal; 

— They guarantee the canal's neutrality 
permanently: 

— They provide an economic settlement that 
is fair and reasonable; and 

— They provide a firm foundation for long- 
term cooperation between the United States 
and Panama. 

Let me now describe how canal operation 
and defense will be carried out under the 



terms of the Panama Canal Treaty, which will 
remain in force until December 31, 1999. 

The basic principle is that for the duration 
of the treaty — that is, for the rest of this 
century — the United States will retain control 
of operation and defense, with Panama taking 
part in both activities. This arrangement will 
assure that the United States can guarantee 
the uninterrupted, efficient operation and se- 
curity of the canal after the new treaty goes 
into effect. It will also provide the necessary 
preparatory period for Panama to develop the 
capability to assume responsibility for canal 
operation and defense beginning in the year 
2000. The key provisions are articles 3 and 4 
of the Panama Canal Treaty. 

In article 3 Panama grants to the United 
States ". . .the rights to manage, operate, and 
maintain the Panama Canal, its complemen- 
tary works, installations and equipment and 
to provide for the orderly transit of vessels 
through the Panama Canal." 

Article 3 further lists a number of specific 
powers which the United States will have in 
order to exercise its responsibility for canal 
operation. These include the authority to: 
"Make and enforce all rules pertaining to the 
passage of vessels through the Canal. . . ." 
and to: "Establish, modifv, collect and retain 
tolls. ..." 

In similar fashion article 4, which deals with 
defense matters, provides that for the dura- 
tion of the treaty, the United States ". . .shall 
have primary responsibility to protect and de- 
fend the Canal." 

The Agreement in Implementation of Arti- 
cle 4 sets forth the specific rights which the 
United States will have in order to carry out 
its defense responsibilities. These include 
rights to station, train, and move military 
forces within Panama. 

Of special importance to canal operation and 
defense are the arrangements for use of lands 
and waters in the present Canal Zone. Under 
the new treaty the Canal Zone will cease to 
exist, and the territory included in the zone 
will come under the general territorial juris- 
diction of Panama. However, the United 
States will have access to and the rights to 
use all lands and waters needed for operation, 
maintenance, and defense of the canal through 
December 31, 1999. The specific areas re- 



536 



Department of State Bulletin 






served for these purposes and the rights for 
their use are set forth in detail in the two im- 
plementing agreements. The designated areas 
include the canal itself and related facilities, 
together with military bases for the use of our 
forces. 

To administer the canal, the United States 
will establish, under legislation to be sought 
from Congress, a U.S. Government agency, 
which will be called the Panama Canal Com- 
mission and which will replace the present 
Panama Canal Company. 

Article 3 of the Panama Canal Treaty pro- 
vides that the commission will be supervised 
by a board composed of five Americans and 
four Panamanians. The executive officers will 
be an Administrator and a Deputy Adminis- 
trator. Until 1990 the Administrator will be 
an American and the Deputy, a Panamanian. 
Thereafter, the Administrator will be a 
Panamanian and the Deputy, an American. 
The Administrator, the Deputy Adminis- 
trator, and all board members — both Ameri- 
can and Panamanian — will be appointed by the 
United States. 

Also affecting canal operation are the treaty 
provisions dealing with personnel of the canal 
enterprise. The basic guidelines on personnel 
are set forth in Article 10 of the Panama Canal 
Treaty. 

In general, these are designed to allow 
present employees — both American and 
Panamanian whose services will be required 
by the new Panama Canal Commission — to 
continue working under conditions generally 
no less favorable than those which they cur- 
rently enjoy. 

For those who are displaced from their jobs, 
various procedures are provided to facilitate 
placement in other U.S. Government posi- 
tions, to the extent these are available, and to 
assist in finding other jobs when necessary. 

In addition, the United States will provide a 
special optional early retirement program to 
all persons employed by the Panama Canal 
Company and the Canal Zone Government 
immediately prior to entry into force of the 
new treaty. 

The treaty also establishes guidelines for 
increasing employment of Panamanians at all 
levels in the canal enterprise in preparation 
for Panama's assumption of responsibility for 



canal operation at the treaty's end. The right 
of collective bargaining for canal employees is 
guaranteed. We believe these provisions will 
make it possible for the Panama Canal Com- 
mission to retain a qualified workforce and 
will provide fair treatment for existing 
employees. 

In this connection, I think it worth noting 
that the AFL-CIO, which represents most of 
the U.S. and Panamanian canal employees, 
has endorsed the new canal treaties. 

The treaty makes special provision to insure 
that environmental considerations are not 
overlooked. In article 6, both governments 
commit themselves to implement the treaty in 
a manner consistent with the protection of the 
natural environment of Panama. The article 
also calls for the creation of a Joint Commis- 
sion on the Environment which will review 
the treaty's implementation and will recom- 
mend ways to avoid or to mitigate any ad- 
verse environmental impacts which might 
arise from actions taken pursuant to the 
treaty. 

A separate exchange of notes will provide 
for continued operation of the Smithsonian 
Tropical Research Institute, which makes 
such a valuable contribution to our under- 
standing of the natural environment of the 
canal area. The wildlife preserve on Barro- 
Colorado Island will also be maintained. 

Taken as a whole, the treaty provisions con- 
cerning operation and defense provide a com- 
prehensive approach toward meeting U.S. 
interests in the near and long term. They 
build on the effective administration and ex- 
perienced personnel developed in 60 years of 
U.S. operation and provide a means to utilize 
these important assets under the new treaty. 

The new agreements also establish an or- 
ganized framework for development of an ef- 
fective Panamanian management that can 
carry out canal operations after the year 2000. 
And they open the way for modernization of 
the canal should that become necessary in the 
future. 

AMBASSADOR LINOWITZ, SEPTEMBER 8 

As Ambassador Bunker has indicated, for 
more than 13 years, under four Presidents, 
the United States has been seeking to find the 



October 17, 1977 



537 



basis for a new treaty with Panama to replace 
the outmoded treaty of 1903. It has been a 
long and arduous road beset with many obsta- 
cles and frustrations. Last evening we came 
to the end of the road. The President of the 
United States, on behalf of this country, 
signed two new treaties with Panama to re- 
place the 1903 treaty. 

These new treaties, we believe, represent a 
fair and equitable basis for dealing with the 
issues which have been the cause of so much 
dissension and hostility over the years. And 
they do so in a manner which fully protects 
our interests, properly recognizes Panama- 
nian aspirations, and does us credit as a great 
democratic country. 

As you know, President Ford has joined 
President Carter in announcing his full sup- 
port for these two treaties, and they have been 
joined by a number of other leaders of both 
parties. They recognize that in these new 
treaties the United States has finally realized 
the result of such great effort by Democratic 
and Republican Administrations alike to 
achieve a fair and reasonable new treaty ar- 
rangement which permits us to act the way a 
great nation should act. 

Ambassador Bunker has outlined a number 
of the major features of these new treaties to 
you, and I would like to follow by describing 
several others. 

As you know, the new Panama Canal 
Treaty provides the basis for assuring to the 
United States continued access to a canal 
which is open and secure. Under the new 
treaty U.S. forces will have the primary re- 
sponsibility for maintaining canal defense 
until the year 2000. But the United States will 
have very important rights extending beyond 
that date. 

The separate Treaty Concerning the Per- 
manent Neutrality and Operation of the 
Panama Canal, which will take effect simul- 
taneously with the new Panama Canal Treaty, 
commits the United States and Panama to 
maintain a regime of neutrality of the canal. 
Under the rules of neutrality set forth in the 
treaty, the canal is to be open to merchant and 
naval vessels of all nations at all times without 
discrimination as to conditions or charges of 
transit. 



A special provision authorizes U.S. and 
Panamanian warships to transit the canal ex- 
peditiously in both peace and war without 
being subject to any restrictions as regards 
means of propulsion, armament, or cargo. 

The treaty gives the United States the right 
to assure that the canal's permanent neu- 
trality is maintained and places no limitation 
on our ability to take such action as may be 
necessary in the event the canal's neutrality is 
threatened or violated. 

It also prohibits any foreign country from 
operating the canal or stationing troops in 
Panama after the year 2000. 

It is most important to stress that unlike 
the treaty governing canal operation, the neu- 
trality treaty is of indefinite duration and calls 
for the maintenance of the canal's permanent 
neutrality. The neutrality treaty will also 
apply to any other international waterway 
that may be built in Panama in the future. In 
short, the neutrality treaty provides a firm 
foundation for assuring that our long-term 
interest in the maintenance of an open, acces- 
sible, secure, efficient canal is preserved — 
now and in the future. 

In order to emphasize the importance of the 
regime of neutrality to world shipping, there 
is a protocol to the neutrality treaty, which 
will be open to accession by all countries of 
the world. The signatories to this protocol 
will, in effect, endorse the neutrality treaty 
by specifically associating themselves with its 
objectives and by agreeing to respect the re- 
gime of permanent neutrality of the canal both 
in time of war and in time of peace. The in- 
struments of accession will be deposited with 
the Secretary General of the Organization of 
American States. 

Now as to the economic terms of the new 
canal agreement: At the start of these negoti- 
ations, both countries agreed — in the 1974 
Kissinger-Tack Joint Statement of Princi- 
ples — that Panama should receive ". . .a just 
and equitable share of the benefits derived 
from the operation of the canal in its terri- 
tory." Consistent with this principle, the 
United States maintained, during the negotia- 
tions, that payments to Panama should be 
drawn entirely from the canal revenues — that 
is, that the payments should reflect the can- 



538 



Department of State Bulletin 



al's economic value as measured by its 
revenue-generating capacity. 

The agreement which has now been worked 
out has two components. First, payments to 
Panama, to be financed entirely from canal 
revenues, will be provided for in the new 
treaty. And a package of loans, loan guaran- 
tees, and credits outside of the treaty and 
subject to existing statutory procedures is 
also planned. 

Payments to Panama from canal revenues to 
be provided for in the new treaty will consist of: 

— A fixed share of tolls amounting to 30 
cents per Panama Canal ton — we estimate 
that this will yield about $40 million per year: 

— A fixed payment of $10 million per year, 
also to be drawn from canal revenues; 

— An additional sum of up to $10 million per 
year if canal revenues permit. 

The economic development program outside 
of the treaty consists of loans, loan guaran- 
tees, and credits extending over a period of 5 
years and will include the following 
components — all designed to support Pana- 
ma's economic development: 

— Up to $200 million in Export-Import Bank 
credits; 

— Up to $75 million in AID [Agency for In- 
ternational Development] housing guarantees; 

— A $20 million Overseas Private Invest- 
ment Corporation loan guarantee to COFINA, 
the Panamanian national development 
corporation. 

In addition the United States is undertak- 
ing to provide to Panama up to $50 million in 
foreign military sales credits over 10 years to 
assist it in developing the capability needed to 
exercise its responsibilities for canal defense 
under the new agreement. 

None of these loans, guarantees, and cred- 
its will require appropriations from the Con- 
gress. I want to stress, however, that the dis- 
bursement of funds under these programs will 
be subject to all the procedures and criteria 
which normally apply to each of the programs 
involved. 

We believe that the economic settlement is 
fair, reasonable, and appropriate. We are 
convinced that it is a good investment toward 
establishing a new relationship with Panama 



that will protect our long-term interest in the 
canal. And it will not involve any additional 
burden for the American taxpayer, since it 
can be financed from canal revenues. 

The canal treaty also grants to the United 
States certain rights in connection with add- 
ing a third lane of locks to the canal, or pos- 
sibly construction of a sea-level canal in 
Panama. Under the treaty, we have the right 
to construct a third lane of locks if we should 
choose to do so at any time during the treaty. 

With respect to a sea-level canal, the 
United States and Panama commit themselves 
jointly to study the feasibility of such a canal 
and, if they agree that such a canal is neces- 
sary, to negotiate mutually agreeable terms 
for its construction. Panama agrees that it 
will not negotiate with any other country for 
the construction of such a sea-level canal, and 
the United States undertakes not to negotiate 
with another nation for a sea-level canal in 
any other country in the hemisphere. 

As was clear last evening during the treaty 
signing ceremonies, these new treaties will 
have profound significance throughout the 
hemisphere and they have the full approval of 
all the countries of Latin America. It has been 
apparent for years that the countries of Latin 
America have regarded the Panama Canal 
issue not as a bilateral matter but as a prob- 
lem involving the United States on the one 
hand and all Latin America on the other. At 
the beginning of this year the heads of state of 
eight countries wrote to President Carter urg- 
ing him to give highest priority to the resolu- 
tion of this important issue which so strongly 
affects our relations with our neighbors to the 
South. So, in going forward with these new 
treaties and their ultimate ratification, the 
United States will be opening up a new era in 
its relationships in this hemisphere. Beyond 
that, we believe that these new agreements 
present us with a rare opportunity to demon- 
strate to the world how a large nation and a 
small nation can settle their differences ami- 
cably and with mutual respect and enter into a 
lasting partnership of which future genera- 
tions will be proud. Such a treaty will bear 
witness to our intention to build a balanced, 
constructive, and lasting relationship among 
the countries of the hemisphere and the world 
at large. 



October 17, 1977 



539 



HISTORICAL STUDY 



Treaty Rights Acquired by the United States 
To Construct the Panama Canal 



Early Interest in a Canal 

Construction of the Panama Canal, com- 
pleted in 1914 and based on treaty rights ob- 
tained in 1903, concluded a project which had 
been in various stages of planning for more 
than 4 centuries. Interest in a passageway 
connecting the Atlantic and Pacific Oceans 
dated back to the age of exploration. Failure 
to find a natural waterway through the 
American Continents focused attention on the 
narrow isthmus connecting North and South 
America and led explorers, such as Ceron and 
Cortez, to propose construction of a passage 
across the isthmus. Charles V took an active 
interest in the proposal, and, by the middle of 
the 16th century, four routes had been 
marked out as practicable: Darien, Panama, 
Nicaragua, and Tehuantepec. The scope of the 
undertaking was daunting, however, and little 
more than planning was done until the 19th 
century. 

The United States began to take an interest 
in the construction of an artificial waterway 
early in the 19th century, after the surveys 
and reports of Alexander von Humboldt re- 
vived interest in the idea. In 1825, Secretary 
of State Henry Clay weighed a suggestion 
made by the Central American Republic that 
the United States cooperate in the construc- 



NOTE: This study (Research Memorandum No. 
1145) was prepared in December 1975 at the re- 
quest of Ambassador Ellsworth Bunker's office. It 
is based upon secondary works and published offi- 
cial documents. The research and writing were 
done by Louis J. Smith under the direction of Mary 
P. Chapman, Chief of the Area Studies Branch, 
Historical Office, Bureau of Public Affairs, De- 
partment of State. 



tion of a Nicaraguan canal. 1 In 1826, Clay in- 
structed American representatives to the 
Panama Congress that a Central American 
canal was a proper subject for discussion, and 
he added that the enterprise "should not be 
left to the separate and unassisted efforts of 
any one power" nor the benefits "exclusively 
appropriated to any one nation, but should be 
extended to all parts of the globe upon the 
payment of a just compensation or reasonable 
tolls." 2 

Treaty of 1846 with New Granada 

Nothing came of the first indications of 
American interest in a Central American 
canal, but interest in the project continued 
and grew throughout the 19th century. In 
1835, the Senate passed a resolution encourag- 
ing private American enterprise to undertake 
the construction of a canal under government 
protection, and in 1839 President Van Buren's 
confidential agent, John F. Stevens, surveyed 
the prospects for a canal and reported in favor 
of the Nicaraguan route, which he estimated 
would cost $35 million. 3 The cost was prohibi- 
tive, but in December 1846 Benjamin Bidlack, 
the American Charge d'Affaires in Bogota, 
laid the basis for an American canal by 
negotiating with Foreign Minister Manuel 
Mallarino of New Granada, Colombia, a treaty 
by which the United States guaranteed the 
neutrality of the isthmus of Panama and, as a 

1 D.C. Miner, The Fight for the Panama Route (New 
York: Columbia University Press, 1940), p. 11. 

2 J.B. Moore, A Digest of International Law (Wash- 
ington: Government Printing Office. 1906), III, 2. As it 
turned out, the U.S. delegates failed to arrive at 
Panama. 

3 Senate Journal, 23d Cong., 2d Sess., p. 238; Miner, 
The Fight for the Panama Route, p. 12. 



540 



Department of State Bulletin 



LEGAL BASIS FOR THE AUTHORITY 
OF THE U.S. IN THE CANAL ZONE 

The United States acquired the use, occupation, 
and control of the Canal Zone under Article II of 
the 1903 treaty, but the rights of private property 
owners in the zone were specifically preserved. 
Subsequently, the United States constructed 
numerous facilities and installations, including the 
canal, and paid private property owners for the 
holdings taken from them, either through purchase 
or indemnification for damage in accordance with 
Article VI of the 1903 treaty. 

In addition, the United States was given, by Ar- 
ticle III of the 1903 treaty, the privilege of exercis- 
ing the rights, powers, and authority over the area 
which the United States would exercise if it were 
the sovereign of the territory. 

From 1904 to the present, however, the United 
States consistently has recognized that the Canal 
Zone remains Panamanian territory. As early as 
1905, for example, William Howard Taft, then Sec- 
retary of War, stated in a letter addressed to the 
President: 

". . . the truth is that while we have all the at- 
tributes of sovereignty necessary in all construc- 
tion, maintenance, and protection of the Canal, the 
very form in which these attributes are conferred 
in the treaty (of 1903) seems to preserve the titu- 
lar sovereignty over the Canal Zone in the Repub- 
lic of Panama. . . ." 

From the legal standpoint, then, the United 
States does not have sovereignty; rather, we own 
certain property in and, by treaty right, exercise 
virtually complete jurisdiction over that part of 
Panamanian territory which comprises the Canal 
Zone. 

From the practical point of view, the basic inter- 
est of the United States in the canal is that it re- 
main open, safe, efficient, and neutral. 

Perpetuating this extraneous authority contrib- 
utes nothing to the protection of our interests in 
the Panama Canal; it actually threatens those 
interests by creating resentment against our pres- 
ence. 

We are proposing in a new treaty to return to 
Panama those aspects of authority which are not 
substantially related to the protection of our basic 
interests in the canal, while retaining for the 
United States those which are. Thus, under the 
new treaty each country would have the means of 
protecting its own vital concerns without impugn- 
ing unnecessarily on the legitimate interests of the 
other country. 

The legal basis for our authority under a new 
treaty would be the same as it is today — treaty 
rights granted to the United States by the Repub- 
lic of Panama. 



concomitant, also guaranteed New Granadan 
sovereignty over the isthmus. In return, the 
United States was granted the right of free 
passage across the isthmus. 4 Bidlack acted 
without instructions, but the Senate ratified 
the treaty without amendments. The purpose 
of the treaty was commercial, and President 
Polk anticipated that Britain and France 
would subscribe to the pledge of neutrality. 



Clayton-Bulwer Treaty of 1850 

Britain, under Palmerston's strong hand, 
had no desire to encourage American designs 
on Central America. The American interest in 
Panama and the war between the United 
States and Mexico impressed upon Palmerston 
the threat of American imperialism, and he 
moved to solidify British interests in 
Nicaragua along one of the proposed canal 
routes. Britain had a long-established protec- 
tive relationship with the native people who 
populated the Mosquito coast of Nicaragua. 
Acting through the Mosquito king, Pal- 
merston ordered Nicaragua to withdraw from 
the mouth of the San Juan River by January 1 , 
1848, or be expelled by force. Nicaragua 
turned to the United States for support. Pres- 
ident Polk sent Elijah Hise to Central 
America to encourage opposition to the 
British demands, and Hise, acting without in- 
structions, concluded a convention with 
Nicaragua in June 1849 which granted to the 
United States the exclusive right to build, 
fortify, and protect a canal or railroad across 
Nicaragua. In return, the United States was 
to guarantee the territorial integrity of 
Nicaragua. 5 

The convention negotiated by Hise was un- 
acceptable to Washington, and it conflicted 
sharply with British pretensions. The new 
Taylor Administration dispatched E.G. Squier 
to replace Hise with more guarded instruc- 
tions. Squier negotiated a more modest treaty 
which recognized Nicaragua's sovereignty 
over the canal route and guaranteed the neu- 



4 William M. Malloy (comp.), Treaties, Conventions, 
International Acts, Protocols and Agreements (Wash- 
ington: Government Printing Office, 1910), I, 302-14. 

5 House Exec. Docs., 31st Cong., 1st Sess., No. 75, pp. 
110-17. 



October 17, 1977 



541 






trality of any canal constructed by U.S. citi- 
zens. 6 Squier's agreement did not sit much 
better with the British, and an involved dis- 
pute and attendant negotiations ensued. The 
up-shot was the Clayton-Bulwer treaty signed 
in Washington on April 19, 1850. By the terms 
of the treaty, neither Britain nor the United 
States was to control or fortify a Nicaraguan 
canal, neither was to take possession of, for- 
tify, colonize, or exercise dominion over any 
part of Central America, and both were to 
guard the safety and neutrality of the pro- 
posed canal, wherever it was constructed in 
Central America. 7 

The Clayton-Bulwer treaty, had the effect, 
while it remained in force, of prohibiting the 
development of a canal under American con- 
trol. Irritation with the restraints imposed by 
the Clayton-Bulwer agreement mounted as 
the nation grew in strength and confidence 
during the years following the American Civil 
War. The opening of the Suez Canal in 1869 
and the development of the American west 
lent impetus to the desire for an American ef- 
fort to link the Atlantic and the Pacific. In 
1878, a French company which included Fer- 
dinand de Lesseps, the principal architect of 
the Suez Canal, obtained a concession from 
Colombia to build a canal across the Isthmus 
of Panama. The French company pledged that 
the canal would be kept free from political in- 
fluence, but Secretary of State Evarts pro- 
tested: 

Our Pacific coast is so situated that, with our railroad 
connections, time (in case of war) would always be al- 
lowed to prepare for its defense. But with a canal 
through the isthmus the same advantage would be given 
to a hostile fleet which would be given to friendly com- 
merce; its line of operations and the time in which war- 
like demonstration could be made, would be enormously 
shortened. All the treaties of neutrality in the world 
might fail to be a safeguard in a time of great conflict. 8 

President Hayes added, in a message sub- 
mitted to the Senate on March 8, 1880, that: 

The policy of this country is a canal under American 
control. The United States cannot consent to the surren- 
der of this control to any European power or to any com- 
bination of European powers. 9 



,; Ibid., pp. 152-54, 168-74. 

7 Malloy, Treaties, I, (359-63. 

8 Moore, A Digest of International Loir, III, 15. 

9 Senate E.rec. Does., 46th Cong., 2d Sess., No. 112. 



The American view was that an interoceanic 
canal would be virtually a part of the coastline 
of the United States. 

Efforts to renegotiate the Clayton-Bulwer 
treaty to bring it into line with the American 
point of view failed, and in 1884 Secretary of 
State Frelinghuysen decided, in frustration, 
to ignore it. He negotiated a convention with 
Nicaragua which granted the United States 
the exclusive right to build and control a 
canal, and, despite the obvious conflict with 
the Clayton-Bulwer agreement, the 
Frelinghuysen-Zavala treaty was only nar- 
rowly rejected by the Senate. 10 A group of 
American capitalists decided in 1887 to push 
ahead with the Nicaraguan project in any 
event, and in 1889 Congress incorporated the 
enterprise as the Maritime Canal Company of 
Nicaragua. At that point, the French effort in 
Panama collapsed, defeated by graft, corrup- 
tion, and disease, and 3 years later the 
American effort in Nicaragua suffered a simi- 
lar fate. The failures made it clear that the in- 
teroceanic canal would not be completed by 
private enterprise. 

The need for a canal remained, however, 
and from the American point of view the need 
was underlined by the Spanish-American war. 
It took the U.S. cruiser Oregon 90 days to sail 
from the Pacific coast of the United States to 
its Atlantic battle station, and the value of a 
canal was driven home. The United States 
emerged from the war as a naval power with 
two-ocean responsibilities. The McKinley 
Administration determined to push for the 
construction of an American canal, but the 
agreement with Britain still stood in the way. 

Hay-Pauncefote Treaties of 1900 and 1901 

When American diplomats approached the 
British Foreign Office at the turn of the cen- 
tury to try again to renegotiate the Clayton- 
Bulwer treaty, they found the British in a 
much more accommodating frame of mind. 
Mired in the Boer war and faced with French 
animosity and German competition, the 
British were anxious to win American good- 
will. Accordingly, Foreign Secretary 



Miner. The Fight for the Panama Route, p. 22. 



542 



Department of State Bulletin 



Lansdowne agreed to a new treaty to super- 
sede the 1850 agreement. After an unsuccess- 
ful effort to include the Canada-Alaska bound- 
ary dispute in the agreement, the British am- 
bassador in Washington, Lord Pauncefote, 
signed a treaty on Feburary 5, 1900, which 
provided that the United States could con- 
struct, own, and neutralize a canal across the 
isthmus, but could not fortify it. The Senate 
was not prepared to accept any further lim- 
itations, however, and Secretary of State Hay 
was forced to renegotiate the understanding. 
The second Hay-Pauncefote treaty, signed on 
November 18, 1901, eliminated the earlier re- 
striction, and, although it did not explicitly 
concede to the United States the right to for- 
tify a canal, the Senate was satisfied, and the 
treaty was ratified in February 1902. n 

With the British restriction cleared away, 
the remaining question was where to build the 
canal. The shortest route was across the is- 
thmus of Panama, but that route was tainted 
by the French scandal and complicated by the 
concession which the French company still 
held. By contrast, there was an established 
American interest in the Nicaraguan route, 
where an American company had already 
made a beginning and where the Nicaraguan 
Government welcomed American interest. In 
1897, the Walker Commission was appointed 
to study the proposed canal routes. The com- 
mission recommended the Nicaraguan route in 
1899, and reconfirmed its recommendation in 
1901. On May 2, 1900, the House of Represen- 
tatives voted in favor of the Nicaraguan route 
by a margin of 224 to 36. 12 

Panama Canal Bill of 1902 
(The "Spooner Act") 

The growing sentiment in favor of the 
Nicaraguan route roused the representatives 
of the French company which held the 
Panama concession from Colombia to mount a 
remarkable lobbying effort in Washington on 
behalf of the Panamanian route. The French 
company had offered to sell its concession for 
$109 million. After the House voted in favor of 
the Nicaraguan route, however, the new 



Panama Canal Company dropped the asking- 
price to $40 million. Philippe Bunau-Varilla, 
the former chief engineer of the company, and 
William Cromwell, the American legal repre- 
sentative of the company, set about the task 
of trying to convince American officials that 
the Panamanian route would be cheaper, 
quicker, and less dangerous than the Nicara- 
guan route. They succeeded in persuading a 
majority in the Senate that a Panama, rather 
than a Nicaragua, canal was in America's best 
interests. The Spooner Act, which became law 
in June 1902, instructed the President to se- 
cure a right-of-way across the Isthmus of 
Panama, but, if he failed to do so "within a 
reasonable time and upon reasonable terms," 
he was to turn to Nicaragua. 13 

Hay-Herran Treaty of 1903 

The Colombian Government, which was 
beset with financial problems growing out of a 
civil war, was willing to negotiate an under- 
standing with the United States but saw no 
reason why the French company should get 
$40 million which could well go to Colombia 
since the French concession was about to run 
out. The United States had the Nicaraguan 
route to fall back on in the negotiations and 
was in a good position to bargain. President 
Roosevelt was anxious to "make the dirt fly," 
however, and, at his instruction, Secretary 
Hay delivered an ultimatum on January 21, 
1903, to the Colombian negotiator, Thomas 
Herran: 

I am commanded by the President to inform you that 
the reasonable time provided in the statute for the con- 
clusion of the negotiations with Colombia for the excava- 
tion of an Isthmian Canal has expired, and he has au- 
thorized me to sign the treaty of which I had the honor to 
give you a draft, with the modification that the sum of 
$100,000, fixed therein as the annual payment, be in- 
creased to $250,000. I am not authorized to consider or 
discuss any other change. 14 

Herran signed the treaty on the following 
day. The treaty would have given the United 
States a 100-year lease on a strip of land 10 
kilometers wide across the isthmus for an ini- 
tial payment of $10 million and an annuity of 



11 Malloy, Treaties, I, 782-S4. 

12 Cong. Rec., 56th Cong., 1st Sess., pp. 5014-5015. 



13 Cong. Rec, 57th Cong., 1st Sess., p. 7074. 

14 Quoted in Miner, The Fight for the Panama Route, 
p. 195. 



October 17, 1977 



543 



$250,000, but the Colombian Senate rejected 
the agreement. 

Independence of Panama 

and the Hay-Bunau-Varilla Treaty of 1903 

President Roosevelt was furious at what he 
saw as Colombian greed, and he denounced 
the Colombians in private as "inefficient ban- 
dits," "foolish and homicidal corruptionists," 
and "contemptible little creatures." 15 
Bunau-Varilla, who had very good contacts in 
Washington, was aware of Roosevelt's anger 
and frustration. He calculated that the United 
States would support a revolution in Panama 
if it would facilitate the construction of an 
American canal. Roosevelt later denied that 
either he or his government conspired to en- 
courage a Panamanian revolt, but Bunau- 
Varilla was able to tell the Panamanian pa- 
triots who had long been anxious to revolt 
that the U.S.S. Nashville would arrive at 
Colon, Panama, on November 2, 1903, and 
that the United States would enforce the pro- 
visions of the treaty of 1846 to prevent the 
Colombian Government from crushing the re- 
volt. 16 With that encouragement, the small 
patriot army of Panama revolted on 
November 3, and American naval forces, act- 
ing to preserve freedom of transit across the 
isthmus, prevented Colombian troops from 
landing to suppress the revolt. Panama de- 
clared its independence on November 4, and 
the Roosevelt Administration accorded recog- 
nition on November 6. 

With the establishment of the Republic of 
Panama, the success of the canal negotiations 
was assured. Bunau-Varilla was appointed as 
diplomatic agent to negotiate the agreement 
for Panama, and he completed the negotia- 
tions with Secretary Hay before the arrival of 
two additional Panamanian ministers, au- 
thorized to participate in the negotiations. 
The terms of the Hay-Bunau-Varilla treaty 
were all that the Roosevelt Administration 
could desire. The United States was au- 
thorized to build a canal through a zone 10 
miles in width and to administer, fortify, and 



defend it. The zone was granted to the United 
States "in perpetuity" (Article II) and the 
United States was accorded rights over it tan- 
tamount to sovereignty (Article III): 

The Republic of Panama grants to the United States all 
the rights, power and authority within the zone men- 
tioned and described in Article II of this agreement and 
within the limits of all auxiliary lands and waters men- 
tioned and described in said Article II which the United 
States would possess and exercise if it were the 
sovereign of the territory within which said lands and 
waters are located to the entire exclusion of the exercise 
by the Republic of Panama of any such sovereign rights, 
power or authority. 17 

In return, the United States guaranteed the 
independence of Panama and agreed to pay 
$10 million and an annuity of $250,000 begin- 
ning 9 years after the treaty came into 
force. 18 The treaty was ratified by the United 
States Senate on February 23, 1904, 3 months 
after it had been approved by the Government 
of Panama. 

Thomson-Urrutia Treaty of 1914 

The Hay-Bunau-Varilla treaty made possi- 
ble the construction of the Panama Canal, but 
the entire episode placed a severe strain on 
U.S. -Colombian relations. In April 1914, the 
United States sought to repair the damaged 
relations. By the terms of the Thomson- 
Urrutia convention, the United States ex- 
pressed "sincere regret" over the incident and 
agreed to pay an indemnity of $25 million. 19 
Former President Roosevelt saw the agree- 
ment as a criticism of his Administration, 
however, and rallied his friends in the Senate 
to prevent ratification. It was not until 1921, 
after Roosevelt's death, that the Senate 
ratified an amended form of the treaty which 
retained the indemnity but omitted the apol- 
ogy. Colombia accepted the compromise, and 
the Panamanian incident was closed. 

Bryan-Chamorro Treaty of 1914 and the 
U.S. -Panama Treaties of 1936 and 1955 

The Bryan-Chamorro treaty with Nicaragua 
in 1914 tied up another loose end. By the 



15 Quoted in Thomas A. Bailey, A Diplomatic History 
of the American People (New York: Crofts, 1940), pp. 
538-39. 

iB Ibid., p. 541. 



17 Mallov, Treaties, II, 1350. 
i8 Ibid., pp. 1349 and 1354. 

19 Bailey, A Diplomatic History of the American 
People, p. 545. 



544 



Department of State Bulletin 



;erms of this treaty, the United States gained 
;he exclusive option to build a canal through 
Nicaragua and thus prevented the develop- 
nent of a competing canal. The United States 
naintained, and gave occasional consideration 
,o, the Nicaraguan option until the treaty was 
ibrogated in 1970. The treaty signed in 1903 
)y the United States and Panama has also 
jeen subject to regular review. 

Panamanians have maintained from the out- 
et that the Hay-Bunau-Varilla treaty was 
nequitable, and the United States has made 
allowance for a number of the Panamanian 
complaints. In 1904 Secretary of War William 
Howard Taft negotiated the so-called Taft 
Agreements, which met a number of minor 
grievances and which remained in effect until 
L924. 

A major revision of the treaty of 1903 did 
not take place until 1936, when the United 



TREATY INFORMATION 



Current Actions 



MULTILATERAL 

Antarctica 

Recommendations relating to the furtherance of the 
principles and objectives of the Antarctic treaty. 
Adopted at Oslo June 20, 1975, at the Eighth Consul- 
tative Meeting. 1 

Notification of approval: United Kingdom, September 1, 
1977. 

Aviation 

Convention on international civil aviation. Done at 

Chicago December 7, 1944. Entered into force April 4, 

1947. TIAS 1591. 

Notification of adherence deposited: Democratic 
People's Republic of Korea, August 16, 1977. 
Protocol relating to an amendment to the convention on 

international civil aviation (TIAS 1591). Done at 

Montreal October 16, 1974. > 

Senate advice and consent to ratification: September 26, 
1977. 



States and Panama signed a treaty revising 
the terms governing American control over 
the canal. Among other things, the 193(5 
treaty increased the annuity of $430,000 and 
changed the U.S. guarantee of Panamanian 
independence into an agreement to consult for 
mutual defense. 

The other major revision of the canal 
agreement which has occurred since 1903 is 
the treaty which was signed by the United 
States and Panama in 1955. By the terms of 
the 1955 agreement the canal annuity was in- 
creased to $1,930,000, Panamanians were ac- 
corded job and commercial equality with 
Americans in the Canal Zone, some boundary 
adjustments were made, and the United 
States relinquished its monopoly over a 
trans-isthmian railroad. 20 Panamanian dis- 
satisfaction with the canal agreement has con- 
tinued, however. 



Coffee 

International coffee agreement 1976, with annexes. 
Done at London December 3, 1975. Entered into force 
August 1, 1977. 
Ratifications deposited: Cameroon, September 23, 

1977; Ireland, September 22, 1977. 
Proclaimed by the President: September 22, 1977. 

Customs 

Customs convention regarding E.C.S. carnets for com- 
mercial samples, with annex and protocol of signature. 
Done at Brussels March 1, 1956. Entered into force 
October 3, 1957; for the United States March 3, 1969. 
TIAS 6632. 

Notification of denunciation deposited: Austria, Au- 
gust 10, 1977; effective November 10, 1977. 

Environmental Modification 

Convention on the prohibition of military or any other 
hostile use of environmental modification techniques, 
with annex. Done at Geneva May 18, 1977. 1 
Signature: Cuba, September 23, 1977. 



October 17, 1977 



1 Not in force. 

20 For a survey of U.S. -Panamanian relations during 
the period of 1903-63, see Department of State, Histori- 
cal Office, Research Project No. 658, "Highlights in the 
Relations Between the United States and Panama, 
1903-1963." 



545 



Finance 

Agreement establishing the International Fund for Ag- 
ricultural Development. Done at Rome June 13, 1976. ' 
Signatures: Cuba, September 23, 1977; Peru, Sep- 
tember 20, 1977. 
Ratification deposited: Malta, September 23, 1977. 

Load Lines 

International convention on load lines, 1966. Done at 
London April 5. 1966. Entered into force July 21, 
1968. TIAS 6331, 6629, 6720. 
Accession deposited: Senegal, August 18, 1977. 

Patents 

Patent cooperation treaty, with regulations. Done at 
Washington June 19, 1970. 1 

Ratification deposited: Switzerland, September 14, 
1977. 

Poplar Commission 

Convention placing the International Poplar Commission 
within the framework of the Food and Agriculture 
Organization. Entered into force September 26, 1961; 
for the United States August 13, 1970. TIAS 6952. 
Acceptance deposited: Iraq, June 7, 1977. 

Satellite Communications System 

Agreement relating to the International Tele- 
communications Satellite Organization (INTELSAT), 
with annexes. Done at Washington August 20, 1971. 
Entered into force February 12, 1973. TIAS 7532. 
Accession deposited: Angola, September 23, 1977. 

Operating agreement relating to the International Tele- 
communications Satellite Organization (INTELSAT), 
with annex. Done at Washington August 20, 1971. En- 
tered into force February 12, 1973. TIAS 7532. 
Signature: Empresa Publica de Telecomunicacoes 
(EPTEL) for Angola, September 23, 1977. 

Wheat 

Protocol modifying and further extending the wheat 
trade convention (part of the international wheat 
agreement) 1971. Done at Washington March 17, 1976. 
Entered into force June 19, 1976, with respect to cer- 
tain provisions and July 1, 1976, with respect to other 
provisions. 
Proclaimed by the President: September 22, 1977. 

Protocol modifying and further extending the food aid 



convention (part of the international wheat agree- 
ment) 1971. Done at Washington March 17, 1976. En- 
tered into force June 19, 1976, with respect to certain 
provisions and July 1, 1976, with respect to other 
provisions. 
Proclaimed by the President: September 22, 1977. 

Women 

Convention on the political rights of women. Done at 
New York March 21, 1953. Entered into force July 7, 
1954; for the United States July 7, 1976. 

Notification of succession : Bahamas, August 16, 
1977. 



idei 






1 Not in force. 



BILATERAL 

Bangladesh 

Agreement amending the agreement for sales of agricul- 
tural commodities of April 1, 1977, and the agreed 
minutes of the same date. Effected by exchange of 
notes at Dacca September 21, 1977. Entered into 
force September 21, 1977. 

Korea 

Agreement amending and extending the agreement of 
June 26, 1975, as amended (TIAS 8124, 8267), relating 
to trade in cotton, wool, and manmade fiber tex- 
tiles. Effected by exchanges of notes at Washington 
September 27, 1977. Entered into force provisionally, 
September 27, 1977; definitively, when Korea notifies 
the United States of the completion of its domestic 
legal procedures necessary for entry into force. 

Mexico 

Agreement relating to the development of tele- 
communications capability to support the narcotics 
control effort. Effected by exchange of letters at 
Mexico September 7, 1977. Entered into force Sep- 
tember 7, 1977. 

Sudan 

Agreement for sales of agricultural commodities. Signed 
at Khartoum February 21, 1977. 

Entered into force: July 7, 1977. 

Zaire 

Agreement amending the agreement for sales of agricul- 
tural commodities of May 24, 1977. Effected by ex- 
change of notes at Kinshasa September 19 and 20, 
1977. Entered into force September 20, 1977. 









546 



Department of State Bulletin 



Indc 



October 17, 197? Vol. LXXVII, No. 1999 



Arms Control and Disarmament. President (al- 
ter Holds Bilateral Meetings With Western 
Hemisphere Leaders (Cartel'. Torrijos, Vance) . . . 510 

Congress 

Administration Officials Testify on the Panama 
Canal Treaties (Bunker, Hansel], Linowitz) .... 

Letter of Transmittal to the Senate. September 16 

; terl 48(i 

Consular Affairs. President Carter Holds Bi- 
lateral Meetings With Western Hemisphere 
Leaders (Carter. Torrijos, Vance) 510 

Human Rights. President Carter Holds Bilateral 
Meetings with Western Hemisphere Leaders 
(Carter, Torrijos, Vance) .• 510 

Latin America and the Caribbean. President 
Carter Holds Bilateral Meetings With Western 
Hemisphen rorrijos, Vance) ... 510 

Mexico. Message From the Mexican Observer. . . . 487 

Narcotics Control. President Carter Holds Bi- 
lateral Meetings With Western Hemisphere 
Leaders (Carter. Torrijos, Vance) 510 

Panama 

Administration Officials Testify on the Panama 
Canal Treaties (Bunker, Hansell, Linowitz) 533 

Announcement on Conclusion of Panama Canal 
Treaties, Aug. 10 (Bunker, Linowitz) 482 

Background Information on the Treaties 508 

Data on the Panama ( 'anal 524 

Basis for the Authority of the U.S. in the 
lal Zone 541 

Letter of Submittal to the President, Septem- 
ber 15 (Vance) 484 

Letter of Transmittal to the Senate. September 1(5 

(Carter) 4m; 

Messages From Foreign Leaders 489 

Message From the Mexican Observer 487 

The New Panama Canal Treaties: A Negotiati 

View (Bunker) 506 

Panama — A Profile 511 

President Carter and General Torrijos Sign 
Panama Canal Treaties (Carter. Torrijos. texts 
of treaties. Declaration of Washington, fact 
sheet) 481 

President Carter Holds Bilateral Meeting's With 
Western Hemisphere Leaders (Carter, Torrijos, 
Vance) 510 

Statement on Panama Canal Treaties, Aug. 11 

(Vance) : 4 : 

Treaty Rights Acquired by the United States To 

nstruct the Panama Canal (historical study). . 540 
Negotiators Brief Press on New Panama 
Canal Treaties (Bunker, Carter, Linowitz) 526 

Why a New Panama Canal Treaty'.' (Linowitz) 520 

Presidential Documents 

Letter of Transmittal to the Senate. September 16 . . 486 
President Carter and General Torrijos Sign 

Panama Canal Treaties 481 

President Carter Holds Bilateral Meetings With 

Western Hemisphere Leaders 510 

U.S. Negotiators Brief Press on New Panama 

Canal Treaties 526 

Treaty Information 

Current Actions 545 

President Carter and General Torrijos Sign 
Panama Canal Treaties (Carter, Torrijos, texts 



of treaties, Declaration of Washington, fact 
sheet! 481 

Name hit 

Bunker, Ellsworth 482, 506, 52(1, 5:!:; 

Carter, President 481, 48b\ 510, 526 

Hansell, Herbert J 533 

Linowitz, Sol M 482, 520, 526, 533 

Torrijos Herrera, Omar 481, 510 

Vance, Secretary 483, 484, 510 



Checklist of Department of State 

Press Releases: September 26-October 2 

ss releases may bo obtained from the Office 
of Press Relations, Department of State, Wash- 
ington. I ).C. 20520. 
No. Dale Subject 

t433 0/2'; Vance: statement before Senate 
Foreign Relations Committee on 
Panama Canal treaties. 

"434 9/26 Mari-Luci Jaramillo sworn in as Am- 
bassador to Honduras (biographic 
dal 
I '.5 9/26 William B. Schwartz, Jr., sworn in as 
Ambassador to the Bahamas (biog- 
raphic data). 

*436 0/26 U.S., Haiti amend bilateral textile 
agreement, Sept. 14-15. 

*437 0/27 Composer David Amram to tour Latin 
America under the American Spe- 
cialists Program, Oct. 2-20. 

*438 0/27 James .1. Romano appointed Director 
of Reception Center at Miami and 
Tobias Hartwick appointed Director 
of Reception Center at New Orleans 
i biographic data). 

*439 9/27 Joan Adams Brann appointed Director 
of Reception Center at San Fran- 
cisco (biographic data). 

*440 9/29 U.S., Korea amend and extend bilat- 
eral textile agreement, Sept. 27. 

441 0/29 Advisory Committee on Private In- 

ternational Law, Study Group on 
Leasing of the Security Interests in 
Movable Property, Nov. 4. 

442 9/30 Paul H. blocker sworn in as Ambas- 

sador to Bolivia (biographic data). 

143 10/1 Shipping Coordinating Committee 
(SCO, Subcommittee on Safety of 
Life at Sea (SOLAS), working 
group on ship design and equip- 
ment, Nov. 16. 

4-14 10/1 SCC, SOLAS, ad hoc working group 
on nuclear ships of the working 
group on design and equipment, 
Oct. 26-27. 

115 1(1,1 Advisory Committee on International 
Intellectual Property, Oct. 25. 



* Not printed. 

t Held for a later issue of the BULLETIN. 






Superintendent of Documents 

u.s. government printing office 

washington, dc. 20402 



OFFICIAL BUSINESS 



POSTAGE AND FEES PAID 

Department of State STA-501 



Third Class 




Subscription Renewals: To insure uninterrupted 
service, please renew your subscription promptly 
when you receive the expiration notice from the 
Superintendent of Documents. Due to the time re- 
quired to process renewals, notices are sent out 3 
months in advance of the expiration date. Any prob- 
lems involving your subscription will receive im- 
mediate attention if you write to: Superintendent 
of Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. 



Lb 

/J: 




Jm 




THE DEPARTMENT OF STATE 

BULLETIN 

Volume LXXVII • No. 2000 • October 24, 1977 

U.S. ROLE IN A PEACEFUL GLOBAL COMMUNITY 
Address by President Carter Before the U.N. Genera! Assembly 547 

NEW HOPES FOR HUMAN RIGHTS 
Address by Assistant Secretary Maynes 556 



THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY 



nside bad 






THE DEPARTMENT OF STATE g [ , E 1 N 



Vol. LXXVII, No. 2000 
October 24, 1977 



For sale by the Superintendent of Documents 

Government Printing Office 

Washington, D.C. 20402 

PRICE: 

52 issues plus semiannual indexes, 

domestic $42.50. foreign $53.15 

. 35 rents 

The Secretary of State has determined that the pub- 
lication of this periodical is necessary in the transac- 
tion of the public business required by law of this 
1 of funds for printing this periodi- 
cal has been approved by the Director of the Office 
of Management and Budget through January 31, 
1981. 

\ote: Contents of this publication are not 
copyrighted and items contained herein may be re- 
printed. Citation of the DEPARTMENT OF STATE 
Bl'LLETIN as the source will he appreciated. The 
ETIN is indexed in the Readers' Guide to 
Periodical Literature 



The Department of State BULLETIN, 
a weekly publication issued by the 
Office of Media Services, Bureau of 
Public Affairs, provides the public and 
interested agencies of the government 
with information on developments in 
the field of U.S. foreign relations and 
on the work of the Department and 
the Foreign Service. 

The BULLETIN includes selected 
press releases on foreign policy, issued 
by the White House and the Depart- 
ment, and statements, addresses, and 
news conferences of the President and 
the Secretary of State and other offi- 
cers of the Department, as well as spe- 
cial articles on various phases of in- 
ternational affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and inter- 
national agreements to which the 
United States is or may become a party 
and on treaties of general interna- 
tional interest. 

Publications of the Department of 
State, United Xations documents, and 
legislative material in the field of 
international relations are also listed. 



an 



U.S. Role in a Peaceful Global Community 



Address by President Carter 1 



Mr. President, Mr. Secretary General, as- 
sembled delegates, and distinguished guests: 

Mr. President, I wish to offer first my con- 
gratulations on your election as President of 
the 32d General Assembly. It gives my own 
government particular satisfaction to work 
under the leadership of a representative from 
Yugoslavia, a nation with which the United 
States enjoys close and valued relations. We 
pledge our cooperation and will depend heav- 
ily on your experience and skill in guiding 
these discussions, which we are beginning. 

Mr. President, I would also like to express 
again the high esteem in which we hold Secre- 
tary General Waldheim. We continue to bene- 
fit greatly from our close consultations with 
him, and we place great trust in his leadership 
of this organization. 

Thirty-two years ago, in the cold dawn of 
the atomic age, this organization came into be- 
ing. Its first and its most urgent purpose has 
been to secure peace for an exhausted and 
ravaged world. 

Present conditions in some respects appear 
quite hopeful, yet the assurance of peace con- 
tinues to elude us. Before the end of this cen- 
tury, a score of nations could possess nuclear 
weapons. If this should happen, the world 
that we leave our children will mock our own 
hopes for peace. 

— The level of nuclear armaments could 
grow by tens of thousands, and the same situ- 
ation could well occur with advanced conven- 
tional weapons. The temptation to use these 
weapons, for fear that someone else might do 
it first, would be almost irresistible. 

— The ever-growing trade in conventional 
arms subverts international commerce from a 



'Made before the 32d U.N. General Assembly on Oct. 
4, 1977 (text from Weekly Compilation of Presidential 
Documents dated Oct. 10). 



force for peace to a caterer for war. 

— Violence, terrorism, assassination, unde- 
clared wars all threaten to destroy the re- 
straint and the moderation that must become 
the dominant characteristic of our age. 

Unless we establish a code of international 
behavior in which the resort to violence be- 
comes increasingly irrelevant to the pursuit of 
national interests, we will crush the world's 
dreams for human development and the full 
flowering of human freedom. 

We have already become a global 
community — but only in the sense that we 
face common problems and we share, for good 
or evil, a common future. In this community, 
power to solve the world's problems — 
particularly economic and political power — no 
longer lies solely in the hands of a few nations. 
Power is now widely shared among many na- 
tions with different cultures and different his- 
tories and different aspirations. The question 
is whether we will allow our differences to de- 
feat us or whether we will work together to 
realize our common hopes for peace. 

Today I want to address the major dimen- 
sions of peace and the role the United States 
intends to play in limiting and reducing all 
armaments, controlling nuclear technology, 
restricting the arms trade, and settling dis- 
putes by peaceful means. 

Control of Nuclear Arms 

When atomic weapons were used for the 
first time, Winston Churchill described the 
power of the atom as a revelation long merci- 
fully withheld from man. Since then we have 
learned, in Durrenmatt's chilling words, that 
"what has once been thought can never be 
un-thought." 

If we are to have any assurance that our 



October 24, 1977 



547 



children are to live out their lives in a world 
which satisfies our hope — or that they will 
have a chance to live at all — we must finally 
come to terms with this enormous nuclear force 
and turn it exclusively to beneficial ends. 

Peace will not be assured until the weapons 
of war are finally put away. While we work 
toward that goal, nations will want sufficient 
arms to preserve their security. The U.S. 
purpose is to insure peace. It is for that rea- 
son that our military posture and our alliances 
will remain as strong as necessary to deter 
attack. 

However, the security of the global commu- 
nity cannot forever rest on a balance of terror. 
In the past, war has been accepted as the ul- 
timate arbiter of disputes among nations. But 
in the nuclear era, we can no longer think of 
war as merely a continuation of diplomacy by 
other means. Nuclear war cannot be measured 
by the archaic standards of "victory" or "de- 
feat." This stark reality imposes on the 
United States and the Soviet Union an awe- 
some and special responsibility. 

The United States is engaged, along with 
other nations, in a broad range of negotia- 
tions. In Strategic Arms Limitation Talks 
(SALT), we and the Soviets are within sight 
of a significant agreement in limiting the total 



U.S. DELEGATION 

TO THE 32D U.N. GENERAL ASSEMBLY 



Representatives 

Andrew Young 
James F. Leonard 
Lester L. Wolff, U.S. 

State of New York 
Charles W. Whalen, Jr. 

the State of Ohio 
Coretta Scott King 



Representative from the 
U.S. Representative from 



Alternate Representatives 

Donald F. MeHenry 
Melissa F. Wells 
Allard K. Lowenstein 
Marjorie Craig Benton 
John Clifford Kennedy 



* Confirmed by the Senate on Sept. 21, 1977 (text 
from USUN press release 66 dated Sept. 21). 



numbei's of weapons and in restricting certain 
categories of weapons of special concern to 
each of us. We can also start the critical proc- 
ess of curbing the relentless march of techno- 
logical development which makes nuclear 
weapons ever more difficult to control. 

We must look beyond the present and work 
to prevent the critical threats and instabilities 
of the future. In the principles of self- 
restraint, reciprocity, and mutual accommo- 
dation of interests — if these are observed, 
then the United States and the Soviet Union 
will not only succeed in limiting weapons but 
will also create a foundation of better rela- 
tions in other spheres of interest. 

The United States is willing to go as far as 
possible, consistent with our security inter- 
ests, in limiting and reducing our nuclear 
weapons. On a reciprocal basis we are willing 
now to reduce them by 10 percent or 20 per- 
cent, even 50 percent. Then we will work for 
further reductions to a world truly free of nu- 
clear weapons. 

The United States also" recognizes a threat 
of continued testing of nuclear explosives. 
Negotiations for a comprehensive ban on nu- 
clear explosions are now being conducted by 
the United States, the United Kingdom, and 
the Soviet Union. As in other areas where 
vital national security interests are engaged, 
agreements must be verifiable and fair. They 
must be seen by all the parties as serving a 
longer term interest that justifies the re- 
straints of the moment. 

The longer term interest in this instance is 
to close one more avenue of nuclear competi- 
tion and thereby demonstrate to all the world 
that the major nuclear powers take seriously 
our obligations to reduce the threat of nuclear 
catastrophe. 

My country believes that the time has come 
to end all explosions of nuclear devices, no 
matter what their claimed justification — 
peaceful or military — and we appreciate the 
efforts of other nations to reach this same 
goal. 

During the past 9 months I have expressed 
the special importance that we attach to con- 
trolling nuclear proliferation. But I fear that 
many do not understand why the United 
States feels as it does. Why is it so important 



548 



Department of State Bulletin 



to avoid the chance that one or two or ten 
other nations might acquire one or two or ten 
nuclear weapons of their own? Let me try to 
explain why I deeply believe that this is one of 
the greatest challenges that we face in the 
next quarter of a century. 

It's a truism that nuclear weapons are a 
powerful deterrent. They are a deterrent be- 
cause they threaten. They could be used for 
terrorism or blackmail, as well as for war. But 
they threaten not just the intended enemy; 
they threaten every nation — combatant or 
noncombatant alike. That is why all of us must 
be concerned. 

Let me be frank. The existence of nuclear 
weapons in the United States and the Soviet 
Union, in Great Britain, France, and China is 
something that we cannot undo except by the 
painstaking process of negotiation. But the 
existence of these weapons does not mean that 
other nations need to develop their own 
weapons, any more than it provides a reason 
for those of us who have them to share them 
with others. 

Rather it imposes two solemn obligations on 
the nations which have the capacity to export 
nuclear fuel and nuclear technology — the obli- 
gations to meet the legitimate energy needs 
and, in doing so, to insure that nothing that 
we export contributes, directly or indirectly, 
to the production of nuclear explosives. That 
is why the supplier nations are seeking a 
common policy, and that is why the United 
States and the Soviet Union, even as we 
struggle to find common ground in the SALT 
talks, have already moved closer toward 
agreement and cooperation in our efforts to 
limit nuclear proliferation. 

I believe that the London Suppliers Group 
must conclude its work as it's presently con- 
stituted so that world security will be 
safeguarded from the pressures of commercial 
competition. We have learned it is not enough 
to safeguard just some facilities or some ma- 
terials; full scope comprehensive safeguards 
are necessary. 

Two weeks from now, in our own country, 
more than 30 supplier and consuming nations 
will convene for the International. Fuel Cycle 
Evaluation, which we proposed last spring. 
For the next several years experts will work 



UNITED NATIONS DAY, 1977 

A PROCLAMATION 1 

Each year on October 24, Americans join with 
the people of other countries in celebrating the an- 
niversary of the United Nations — an institution 
created to maintain international peace and secu- 
rity, to promote the self-determination of peoples, 
to encourage respect for human rights, and to fos- 
ter economic and social welfare. 

Americans have been instrumental in creating 
the United Nations, in advancing cooperation 
through its forums, and in providing, over the 
years, the largest share of its financial support. 

Since its establishment at San Francisco in 1945, 
the United Nations has undergone profound 
change. Its membership has nearly trebled from 
the original 51 members, as most of the former 
colonial areas of Asia and Africa received their in- 
dependence. New problems brought on by de- 
velopments in science and technology and by global 
interdependence have tested the ability of gov- 
ernments to cooperate harmoniously. Problems 
like the arms race, the spread of nuclear weapons, 
the international economic order, the disposition of 
the world's oceanic resources, energy, and en- 
vironmental pollution transcend national bound- 
aries, making the United Nations and its spe- 
cialized and technical agencies of continuing 
importance to the international community. 

Now, Therefore, I, Jimmy Carter, President 
of the United States of America, do hereby desig- 
nate Monday, October 24, 1977, as United Nations 
Day. I have appointed Henry Ford II to be United 
States National Chairman for United Nations Day 
and I urge appropriate observances to inform citi- 
zens of the aims and achievements of the United 
Nations and its affiliated agencies. 

In Witness Whereof, I have hereunto set my 
hand this 26th day of September, in the year of our 
Lord nineteen hundred seventy-seven, and of the 
Independence of the United States of America the 
two hundred and second. 

Jimmy Carter. 



'No. 4525; 42 Fed. Reg. 49433. 



together on every facet of the nuclear fuel 
cycle. 

The scientists and the policymakers of these 
nations will face a tremendous challenge. We 
know that by the year 2000 nuclear power 
reactors could be producing enough plutonium 
to make tens of thousands of bombs every 
year. I believe, from my own personal knowl- 
edge of this issue, that there are ways to solve 



October 24, 1977 



549 



the problems that we face. I believe that 
there are alternative fuel cycles that can be 
managed safely on a global basis. I hope, 
therefore, that the International Fuel Cycle 
Evaluation will have the support and the en- 
couragement of every nation. 

I've heard it said that efforts to control nu- 
clear proliferation are futile: that the genie is 
already out of the bottle. I do not believe this 
to be true. It should not be forgotten that for 
25 years the nuclear club did not expand its 
membership. By genuine cooperation, we can 
make certain that this terrible club expands 
no further. 



Conventional Arms 

Now, I have talked about the special prob- 
lems of nuclear arms control and nuclear pro- 
liferation at some length. Let me turn to the 
problem of conventional arms control, which 
affects potentially or directly every nation 
represented in this great hall. This is not a 
matter for the future— even the near 
future — but of the immediate present. 

Worldwide military expenditures are now in 
the neighborhood of $300 billion a year. Last 
year the nations of the world spent more than 
60 times as much — 60 times as much — 
equipping each soldier as we did educating 
each child. The industrialized nations spent 
the most money, but the rate of growth in 
military spending is faster in the developing 
world. While only a handful of states produced 
sophisticated weapons, the number of nations 
which seek to purchase these weapons is ex- 
panding rapidly. 

The conventional arms race both causes and 
feeds on the threat of larger and more deadly 
wars. This levies an enormous burden on an 
already troubled world economy. 

For our part the United States has now 
begun to reduce its arms exports. Our aim is to 
reduce both the quantity and the deadlines of 
the weapons that we sell. We have already 
taken the first steps, but we cannot go very 
far alone. Nations whose neighbors are pur- 
chasing large quantities of arms feel con- 
strained to do the same. Supplier nations 
who practice restraint in arms sales some- 
times find that they simply lose valuable 



commercial markets to other suppliers. 

We hope to work with other supplier na- 
tions to cut back on the flow of arms and to 
reduce the rate at which the most advanced 
and sophisticated weapon technologies spread 
around the world. We do not expect this task 
to be easy or to produce instant results. But 
we are committed to stop the spiral of increas- 
ing sale of weapons. 

Equally important we hope the purchaser 
nations — individually and through regional 
organizations — will limit their arms imports. 
We are ready to provide to some nations the 
necessary means for legitimate self-defense, 
but we are also eager to work with any nation 
or region in order to decrease the need for 
more numerous, more deadly, and ever more 
expensive weapons. 

Regional Conflicts 

Fourteen years ago one of my predecessors 
spoke in this very room under circumstances 
that, in certain ways, resembled these. It was 
a time, he said, of comparative calm, and 
there was an atmosphere of rising hope about 
the prospect of controlling nuclear energy. 
The first specific step had been taken to limit 
the nuclear arms race — a test ban treaty 
signed by nearly a hundred nations. 

But the succeeding years did not live up to 
the optimistic prospect John F. Kennedy 
placed before this Assembly, because, as a 
community of nations, we failed to address the 
deepest sources of potential conflict among us. 

As we seek to establish the principles of de- 
tente among the major nuclear powers, we be- 
lieve that these principles must also apply in 
regional conflicts. The United States is com- 
mitted to the peaceful settlement of differ- 
ences. We are committed to the strengthening 
of the peacemaking capabilities of the United 
Nations and regional organizations, such as 
the Organization of African Unity and the Or- 
ganization of American States. 

The United States supports Great Britain's 
effort to bring about a peaceful, rapid transi- 
tion to majority rule and independence in 
Zimbabwe. We have joined other members of 
the Security Council last week and also the 
Secretary General in efforts to bring about in- 



550 



Department of State Bulletin 



dependence and democratic rule in Namibia. 
We are pleased with the level of cooperation 
that we have achieved with the leaders of the 
nations in the area, as well as those people 
who are struggling for independence. 

We urge South Africa and other nations to 
support the proposed solution to the problems 
in Zimbabwe and to cooperate still more 
closely in providing for a smooth and prompt 
transition in Namibia. But it is essential that 
all outside nations exercise restraint in their 
actions in Zimbabwe and Namibia so that we 
can bring about this majority rule and avoid a 
widening war that could engulf the southern 
half of the African Continent. 

Of all the regional conflicts in the world, 
none holds more menace than the Middle 
East. War there has already carried the world 
to the edge of nuclear confrontation. It has al- 
ready disrupted the world economy and im- 
posed severe hardships on the people in the 
developed and the developing nations alike. 
So true peace — peace embodied in binding 
treaties — is essential. It will be in the interest 
of the Israelis and the Arabs. It is in the inter- 
est of the American people. It is in the interest 
of the entire world. 

The United Nations Security Council has 
provided the basis for peace in Resolutions 
242 and 338, but negotiations in good faith by 
all parties are needed to give substance to 
peace. 

Such good faith negotiations must be in- 
spired by a recognition that all nations in the 
area — Israel and the Arab countries — have a 
right to exist in peace, with early establish- 
ment of economic and cultural exchange and of 
normal diplomatic relations. Peace must in- 
clude a process in which the bitter divisions of 
generations — even centuries — hatreds, and 
suspicions can be overcome. Negotiations 
cannot be successful if any of the parties har- 
bor the deceitful view that peace is simply an 
interlude in which to prepare for war. 

Good faith negotiations will also require ac- 
ceptance by all sides of the fundamental rights 
and interests of everyone involved. 

— For Israel this means borders that are 
recognized and secure. Security arrangements 
are crucial to a nation that has fought for its 



survival in each of the last four decades. The 
commitment of the United States to Israel's 
security is unquestionable. 

— For the Arabs the legitimate rights of the 
Palestinians must be recognized. One of the 
things that binds the American people to Is- 
rael is our shared respect for human rights 
and the courage with which Israel has de- 
fended such rights. It is clear that a true and 
lasting peace in the Middle East must also re- 
spect the rights of all peoples of the area. How 
these rights are to be defined and im- 
plemented is, of course, for the interested 
parties to decide in detailed negotiations and 
not for us to dictate. 

We do not intend to impose from the outside 
a settlement on the nations of the Middle 
East. 

The United States has been meeting with 
the Foreign Ministers of Israel and the Arab 
nations involved in the search for peace. We 
are staying in close contact with the Soviet 
Union, with whom we share responsibility for 
reconvening the Geneva conference. 

As a result of these consultations, the 
Soviet Union and the United States have 
agreed to call for the resumption of the 
Geneva conference before the end of this year. 
While a number of procedural questions re- 
main, if the parties continue to act in good 
faith, I believe that these questions can be an- 
swered. 

The major powers have a special responsi- 
bility to act with restraint in areas of the 
world where they have competing interests, 
because the association of these interests with 
local rivalries and conflicts can lead to serious 
confrontation. 

In the Indian Ocean area, neither we nor 
the Soviet Union has a large military pres- 
ence, nor is there a rapidly mounting competi- 
tion between us. Restraint in the area may 
well begin with a mutual effort to stabilize our 
presence and to avoid an escalation in military 
competition. Then both sides can consider how 
our military activities in the Indian Ocean, 
this whole area might be even further 
reduced. 

The peaceful settlement of differences is, of 
course, essential. The United States is willing 



October 24, 1977 



551 



to abide by that principle, as in the case of the 
recently signed Panama Canal treaties. Once 
ratified, these treaties can transform the 
U.S. -Panama relationship into one that per- 
manently protects the interests and respects 
the sovereignty of both our countries. 

We have all survived and surmounted major 
challenges since the United Nations was 
founded. But we can accelerate progress even 
in a world of ever-increasing diversity. A 
commitment to strengthen international in- 
stitutions is vital, but progress lies also in our 
own national policies. We can work together 
to form a community of peace if we accept the 
kind of obligations that I have suggested to- 
day. To summarize: 

— First, an obligation to remove the threat 
of nuclear weaponry, to reverse the buildup of 
armaments and their trade, and to conclude 
bilateral and multilateral arms control agree- 
ments that can bring security to all of us. In 
order to reduce the reliance of nations on nu- 
clear weaponry, I hereby solemnly declare on 
behalf of the United States that we will not 
use nuclear weapons except in self-defense; 
that is, in circumstances of an actual nuclear 
or conventional attack on the United States, 
our territories, or armed forces, or such an at- 
tack on our allies. In addition, we hope that 
initiatives by the Western nations to secure 
mutual and balanced force reductions in 
Europe will be met by equal response from 
the Warsaw Pact countries. 

— Second, an obligation to show restraint in 
areas of tension, to negotiate disputes and to 
settle them peacefully, and to strengthen 
peacemaking capabilities of the United Na- 
tions and regional organizations. 

— And finally, an effort by all nations — East 
as well as West, North as well as South — to 
fulfill mankind's aspirations for human de- 
velopment and human freedom. It is to meet 
these basic demands that we build govern- 
ments and seek peace. 

We must share these obligations for our 
own mutual survival and our own mutual 
prosperity. We can see a world at peace. We 
can work for a world without want. We can 
build a global community dedicated to these 
purposes and to human dignity. 



The view that I have sketched for you today 
is that of only one leader in only one nation. 
However wealthy and powerful the United 
States may be — however capable of 
leadership — this power is increasingly only 
relative, the leadership increasingly is in need 
of being shared. No nation has a monopoly of 
vision, of creativity, or of ideas. Bringing 
these together from many nations is our com- 
mon responsibility and our common challenge. 
For only in these ways can the idea of a peace- 
ful global community grow and prosper. 



United Nations — A Profile 

Established: By charter signed in San Fran- 
cisco, California, on June 26, 1945; effective 
October 24, 1945. 

Purposes: To maintain international peace and 
security; to develop friendly relations 
among nations; to cooperate internationally 
in solving economic, social, cultural, and 
humanitarian problems and in promoting 
respect for human rights and fundamental 
freedoms; to be a center for harmonizing the 
actions of nations in attaining these common 
ends. 

Members: 149 (for complete list, see p. 555). 

Secretary General: Kurt Waldheim (Austria). 

Official Languages: Arabic, Chinese, English, 
French, Russian, Spanish. 

Principal Organs: General Assembly, Security 
Council, Economic and Social Council, Trus- 
teeship Council, International Court of Jus- 
tice, Secretariat (see p. 553 for organization 
chart of U.N. system). 

Budget: $745.8 million (1976-77); U.S. share 
$186.5 million (25%). Financed primarily by 
obligatory contributions from member 
states as determined by a scale of assess- 
ments based broadly on a capacity to pay. 

General Assembly 

Membership: All U.N. members. 
President: Elected at the beginning of each 
General Assembly session. 1 



1 For the 32d session, the President is Lazar Mojsov, 
Deputy Foreign Minister of Yugoslavia. 



552 



Department of State Bulletin 



xlav 



!y of 



ace- 



live 



Meetings: Annually in New York beginning 
the third Tuesday in September through 
mid-December. Special sessions can be con- 
vened at the request of the Security Coun- 
cil, of a majority of U.N. members, or of 
one member if the majority concurs. Emer- 
gency special sessions may be called within 
24 hours. 

Resolutions: Nonbinding except in budgetary 
and administrative matters. 

Mandate: Considers important security issues 
with the Security Council; promotes disar- 
mament agreements; encourages economic 
and social cooperation; finances peacekeep- 
ing operations; arranges world conferences 
on major issues; elects the nonpermanent 
members of the Security Council; admits 
new members after Security Council ap- 
proval; approves the budget; appoints the 
Security Council and members of other 



bodies; considers and acts on certain sub- 
jects not dealt with anywhere else in the 
U.N. system (e.g., drug control); with the 
Security Council elects members of the In- 
ternational Court of Justice. 
Main Committees: (First) Political and Secu- 
rity; Special Political Committee; (Second) 
Economic and Financial; (Third) Social, 
Humanitarian, and Cultural; (Fourth) Trus- 
teeship; (Fifth) Administrative and Budg- 
etary; (Sixth) Legal. 

Security Council 

Membership: 5 permanent (China, France, 
U.S.S.R., U.K., U.S.), each with the right 
to veto, and 10 nonpermanent elected by 
the General Assembly for 2-yr. terms (for 
32d session they are Benin, Canada, Fed- 
eral Republic of Germany, India, Libya, 



ting 

ntal 

ike 



9*) THE UNITED NATIONS SYSTEM 



Principal organs of the Untied Nations 

^B Oiler United Nations organs 

O Specialised agencies and oiher 
autonomous organizations within the system 

Mam Com 



Standing and 
procedural committees 



Other subsidiary organs 
of the General Assembly 



TRUSTEESHIP 
COUNCIL 



INTERNATIONAL 
COURT OF 
JUSTICE 



GENERAL 

ASSEMBLY 



SECURITY 
COUNCIL 



UNTSO United Nations Truce Supervision 
Organization .n Palestine 

UNMOGIP United Nalions Military 

Observer Group in India and Pakistan 

UNFICYP Umied Nations Peace-Keeping Force 
in Cyprus 

UNEF United Nations Emergency Force 

UNDOF united Nations Disengagement 
Observer Force 

Military Stall Committee 

Disarmament Commission 



SECRETARIAT 



United Nations Relief and Works Agency lor 
Palestine Refugees in the Near East UNRWA 

United Nations Conference 
on Trade and Development UNCTAD 

United Nations Children's Fund UNICEF 

Oldce ol the United Nations High Commissioner 
lor Refugees UNHCR 

Joint UN/FAO World Food Programme 

United Nations Institute 
lor Training and Research UNITAR 

United Nations Development Programme UNDP 

United Nations industrial 
Development Organization UNIDO 

United Nations Environment Programme UNEP 

United Nations University UNU 

United Nations Special Fund 

World Food Council 



ECONOMIC 

AND 

SOCIAL 

COUNCIL 



Regional commissions 
Functional commissions 



V Februai 



-o 
-o 
-o 
-o 

-o 
-o 

rO 

h-O 

k> 
-o 

-o 
-o 
-o 
-o 
-o 



IAEA International Atomic Energy Agency 

GATT General Agreement on Tarifls and Trade 

ILO International Labour Organisation 

FAO Food and Agriculture Organization 
ol Ihe United Nations 

UNESCO United Nations Educational. 

Scientific and Cultural Organization 

WHO World Health Organization 

IDA International Development Association 

IBRD International Bank tor Reconstruction 
and Development 

IFC International Finance Corporation 

IMF International Monelary Fund 

ICAO International Civil Aviation 
Organization 

UPU Universal Postal Union 

ITU International Telecommunication Union 

WMO World Meteorological Organization 

IMCO Inter -Governmental Maritime 
Consultative Organization 

WIPO World Intellectual Properly Organization 



October 24, 1977 



553 



Mauritius, Pakistan, Panama, Romania, 
Venezuela). 

President: Rotates monthly in alphabetical 
order by country. 

Meetings: Can meet at any time, therefore a 
representative of each member must always 
be present at U.N. Headquarters. May 
meet outside of New York, but has rarely 
done so. 

Resolutions: All members "agree to accept 
and carry out the decisions of the Security 
Council." Decisions under Chapter VII of 
the Charter are binding on members. 

Mandate: Primarily responsible for the 
maintenance of international peace and se- 
curity by investigating any situation 
threatening international peace; recom- 
mends procedures for peaceful solution; 
imposes economic sanctions, severence of 
diplomatic relations, and disruption of 
communications with offending states; ". . . 
may take such action by air, sea, or land 
forces as may be necessary to maintain or 
restore international peace and security." 

Economic and Social Council 

Membership: 54; 18 are elected each year by 
the General Assembly for 3-yr. terms. 

President: Elected each year. 

Meetings: Semiannually (New York in the 
spring and Geneva in the summer). 

Resolutions: Nonnbinding. 

Mandate: Promotes human rights; coordinates 
the activities of the specialized agencies; 
supervises commissions on statistics, popu- 
lation, social development, the status of 
women, and narcotics. 

Trusteeship Council 

Membership: United States, China, France, 
U.S.S.R., U.K. 

President: Elected each year. 

Meetings: Annually in the spring in New 
York. 

Resolutions: Nonbinding. 

Mandate: Insures that territories placed 
under the trusteeship system are adminis- 
tered in the best interests of the inhabitants 
and are prepared for eventual self- 
government. (Only the Trust Territory of 



the Pacific — Micronesia- 
the trusteeship system). 



-is currently under 



International Court of Justice 

Membership: 15, elected for 9-yr. terms. 

President: Elected by Court for 3-yr. term. 

Meetings: Permanently in session, except dur- 
ing judicial vacations, in The Hague, 
Netherlands. 

Mandate: Renders binding decisions in inter- 
national legal cases referred to it by 
member states accepting its jurisdiction and 
renders advisory opinions at the request of 
the General Assembly, the Security Coun- 
cil, or other U.N. bodies authorized by the 
General Assembly to request an opinion. 

Enforcement: U.N. Security Council can be 
called upon by one of the parties in a con- 
tentious case to determine measures to be 
taken to give effect to a judgment of the 
Court if the other party fails to perform its 
obligations under that judgment. 

Secretariat 

Chief Administrative Officer: Secretary Gen- 
eral of the United Nations appointed to a 
5-yr. term by the General Assembly on the 
recommendation of the Security Council. 

Staff: 18 Under Secretaries, 21 Assistant Sec- 
retaries, and a staff of more than 11,000. 
Selection is the responsibility of the Secre- 

• tary General and is made on the basis of 
ability and integrity with regard for as wide 
a geographical distribution as possible. The 
charter provides that no Secretariat em- 
ployee may receive instructions from any 
government or authority other than the 
United Nations. 

Responsibilities: Provides most facilities for 
meetings, including translators and 
documentary services; on request of U.N. 
bodies makes studies on technical questions 
(e.g., demography, law of the sea); presents 
the annual budget and annual report; di- 
rects peacekeeping activities; supervises 
the work of the international civil servants 
in New York and other U.N. offices 
throughout the world; Secretary General 
may bring to the Security Council's atten- 
tion any matter which he believes may 
threaten international peace and security. 



554 



Department of State Bulletin 





THE 149 MEMBERS OF THE UNITED NATIONS 






(Year of Ad 


mission) 




Afghanistan (1946) 


♦Ecuador 


Laos (1955) 


Sao Tome and Principe 


Albania (1955) 


♦Egypt 


♦Lebanon 


(1975) 


Algeria (1962) 


♦El Salvador 


Lesotho (1966) 


♦Saudi Arabia 


Angola (1976) 


Equatorial Guinea 


♦Liberia 


Senegal (1960) 


*Argentina 


(1968) 


Libya (1955) 


Seychelles (1976) 


*AUSTRALIA 


♦Ethiopia 


♦Luxembourg 


Sierra Leone (1961) 


Austria (1955) 


Fiji (1970) 


Malagasy (1960) 


Singapore (1965) 


Bahamas (1973) 


Finland (1955) 


Malawi (1964) 


Somalia (1960) 


Bahrain (1971) 


♦France 


Malaysia (1957) 


♦South Africa 


Bangladesh (1974) 


Gabon (1960) 


Maldives (1965) 


Spain (1955) 


Barbados (1966) 


Gambia (1965) 


Mali (1960) 


Sri Lanka (1955) 


*Belgium 


German Democratic 


Malta (1964) 


Sudan (1956) 


Benin (1960) 


Republic (1973) 


Mauritania (1961) 


Surinam (1975) 


Bhutan (1971) 


Germany, Federal 


Mauritius (1968) 


Swaziland (1968) 


* Bolivia 


Republic of (1973) 


♦Mexico 


Sweden (1946) 


Botswana (1966) 


Ghana (1957) 


Mongolia (1961) 


♦Syria 


*Brazil 


♦Greece 


Morocco (1956) 


Tanzania (1961) 


Bulgaria (1955) 


Grenada (1974) 


Mozambique (1975) 


Thailand (1946) 


Burma (1948) 


♦Guatemala 


Nepal (1955) 


Togo (1960) 


Burundi (1962) 


Guinea (1958) 


♦Netherlands 


Trinidad and Tobago 


♦Byelorussian S.S.R. 


Guinea-Bissau (1974) 


♦New Zealand 


(1962) 


Cambodia (1955) 


Guyana (1966) 


♦Nicaragua 


Tunisia (1956) 


Cameroon (1960) 


♦Haiti 


Niger (1960) 


♦Turkey 


♦Canada 


♦Honduras 


Nigeria (1960) 


Uganda (1962) 


Cape Verde (1975) 


Hungary (1955) 


♦Norway 


♦Ukrainian S.S.R. 


Central African 


Iceland (1946) 


Oman (1971) 


♦U.S.S.R. 


Empire (1960) 


♦India 


Pakistan (1947) 


United Arab Emirates 


Chad (1960) 


Indonesia (1950) 


♦Panama 


(1971) 


*Chile 


♦Iran 


Papua New Guinea 


♦United Kingdom 


♦China** 


♦Iraq 


(1975) 


♦United States 


♦Colombia 


Ireland (1955) 


♦Paraguay 


Upper Volta (1960) 


Comoros (1975) 


Israel (1949) 


♦Peru 


♦Uruguay 


Congo (1960) 


Italy (1955) 


♦Philippines 


♦Venezuela 


♦Costa Rica 


Ivory Coast (1960) 


♦Poland 


Vietnam (1977) 


*Cuba 


Jamaica (1962) 


Portugal (1955) 


Yemen (Aden) (1967) 


Cyprus (1960) 


Japan (1956) 


Qatar (1971) 


Yemen (Sana) (1947) 


Czechoslovakia 


Jordan (1955) 


Romania (1955) 


♦Yugoslavia 


*Denmark 


Kenya (1963) 


Rwanda (1962) 


Zaire (1960) 


Djibouti (1977) 


Kuwait (1963) 


Samoa (1976) 


Zambia (1964) 


♦Dominican Republic 






na and to recognize the repre- 


* Original member. 


People's Republic of Chi 


** By Resolution 2758 


XXVI) of Oct. 25, 1971, the 


sentatives of its Government as the only legitimate rep- 


General Assembly decided 


"to restore all its rights to the 


resentatives of China to the United Nations." 



October 24, 1977 



555 



New Hopes for Human Rights 



Address by Charles W. Maynes 

Assistant Secretary for International Organization Affairs 1 



A British diplomat recently told Andy 
Young [U.S. Ambassador to the United 
Nations] that the United Nations seemed to 
be getting its "second wind." Its workload, he 
pointed out, had increased; it was tackling 
problems on every area of human concern; 
there was serious work going on in the Secu- 
rity Council; there was progress — whether 
temporary or permanent is still not clear — in 
avoiding unnecessary politicization of func- 
tional U.N. agencies. Small wonder then that 
public opinion polls have begun to show that 
the trend of declining U.S. support for the 
United Nations seems to be leveling off. 

In the end, however, whether the United 
Nations can live up to this new promise will 
depend to a significant degree on whether we 
can bring along the American people. In this 
effort, one aspect of our foreign policy that 
will be critical is the attempt to make Ameri- 
can moral and ethical values more prominent 
ingredients in the conduct of our relations 
with other countries. The phrase "human 
rights" has become a kind of shorthand de- 
scription of the principles that President Car- 
ter believes are vital in this effort. Today, I 
would like to discuss with you some of the 
complex issues involved. 

We begin with an acknowledgment. Respect 
for human rights in many countries is poor. 
There are governments which practice or con- 
done torture. Detention without trial is wide- 
spread. Summary executions are too frequent. 
The hungry and sick in some areas are not 



1 Made before the National United Nations Day Com- 
mittee of the U.N. Association of the U.S.A. in New 
York on Sept. 9, 1977. 



only ignored but intimidated. In various parts 
of the world, men and women cannot express 
freely their political and religious views. 

These are practices offensive to basic 
human rights. All are contrary to civilized 
standards that should transcend national 
boundaries, cultures, religions, and political 
systems. All are facts. We cannot deny them. 
The issue is how we react to them. 

One response is very troubling. Some — 
perhaps they are many or even a majority — 
look at the human rights situation in the world 
and pronounce the battle lost. They contend 
that progress is now hopeless except in a 
small circle of countries, themselves decreas- 
ing in number. They pronounce democracy a 
dying form of government; decency a disap- 
pearing code of conduct. 

I will state my own views on this as force- 
fully as I can. The pessimism is misplaced, the 
reasoning false, and the predictions basically 
disastrous. For if there were any development 
that would end the current enthusiasm over 
the cause of human rights, it would be a 
judgment that progress was a lost and hope- 
less cause. Should that happen, we could ex- 
pect interest in the struggle for human rights 
to decline sharply. Therefore, one task that 
those of us interested in human rights must 
address is how to dispel false pessimism. 

We should begin by placing matters in 
perspective. And we can do this by recalling 
more often where we were only a short time 
ago. 

Let us recall, as we denounce today's 
abuses, that in this century we have seen two 
World Wars, innumerable short wars, and 
various tribal and regional struggles. 



556 



Department of State Bulletin 



Moreover, in the early part of this century we 
have seen blacks lynched with impunity here 
and Irishmen subjugated without concern in 
their own country — and by nations that con- 
sidered themselves among the leading prac- 
titioners of democracy. In central and Eastern 
Europe we witnessed appalling and histori- 
cally unprecedented levels of barbarism and 
mass murder carried out by totalitarian re- 
gimes of both right and left. Elsewhere in the 
world we have watched as colonial uprisings 
were crushed under conditions that edged up 
to or assumed patterns of genocide, and as 
hundreds of millions of people were denied the 
fundamental human right to education and 
self-development. 

Against this record, do we really have cause 
for such complete despair? Why should we not 
admit that we have come some considerable 
way? Our challenge, I would submit, is that 
having come this far, we are — quite 
appropriately — more conscious than ever be- 
fore of how much further we now must go. 

One of the encouraging developments in the 
field of human rights is the maturing sensitiv- 
ity we all have to their importance. The rea- 
son is not that we are more committed than 
our forefathers — although that too may be 
true — it is, rather, that our memory of the 
past remains so searing, and, secondly, that 
we have developed a growing inability to 
avoid knowing a great deal about one 
another — a fact that constitutes our main hope 
for the future. Human rights abuses, after all, 
thrive in darkness. Even in our own country 
some officials used to denounce journalists 
who dared to publish the truth, and some gov- 
ernments today try to make it more difficult 
for the outside press to report freely. But in 
today's world, the concealment of gross 
abuses is harder and harder to accomplish. 
Societies find it more difficult to close them- 
selves off from one another. 

There is, in other words, a human rights 
benefit to interdependence. No nation today 
can practice social and diplomatic autarchy to 
the same degree as in the past. There are too 
many links that cannot be severed, too many 
visiting missions that cannot be disinvited, too 
many inquisitive journalists and lawyers, too 
many effective and rapid systems of communi- 
cation, too many literate and conscious people 



to deceive for such policy to succeed for long. 
The result is mounting pressure and debate — 
in the press, in private meetings, in public 
gatherings, and in forums provided by the 
United Nations or in other international as- 
semblies. 

Even the double standard increasingly 
works against those who try to employ it. The 
more that one government trumpets the 
abuses of others, the more that country's own 
citizens are encouraged to ask why such rights 
cannot exist at home. Our own black people in 
the 1950's began asking loudly why we could 
not call for freedom at home if we fought for it 
abroad. Now we are seeing this now happen 
elsewhere. Human rights movements have 
burst into view in countries where a decade 
ago this would have been thought impossible. 

Resuming An Active Stance 

What this Administration hopes to do is to 
make U.S. diplomacy take into account this 
new international reality — a reality which will 
not disappear or change course. In doing this, 
we are not embarking on uncharted ground; 
nor, as some commentators allege, are we tak- 
ing the country into "Wilsonian excess." We 
are simply asking that the United States re- 
turn to that period of forward, balanced, and 
determined leadership in the field of human 
rights that we associate with Eleanor 
Roosevelt. 

As we all know, U.S. law and tradition 
were dominant in the creation of the Univer- 
sal Declaration of Human Rights, which was 
drafted by the U.N. Human Rights Commis- 
sion under the leadership of Mrs. Roosevelt 
and approved by the General Assembly in 
1948. Throughout this period of her involve- 
ment, the United States played a leadership 
role. But in the 1950's the United States 
backed into a more passive position. We even 
refused to support formally many of the con- 
ventions we had helped to draft. 

Today we are returning to an earlier ap- 
proach more consistent with our traditions. In 
particular, we are committed to pressing 
ahead for ratification of the principal human 
rights treaties and to undertaking other new 
and important roles in the field of human 
rights. But I should articulate more precisely 



October 24, 1977 



557 



this Administration's approach to human 
rights. 

There are three broad categories of "human 
rights" with which the Administration has ex- 
pressed special concern. 

—The first relates to the integrity of the 
person. In this we are talking about summary 
execution, cruel and unusual punishment, ar- 
bitrary arrest or imprisonment, forcible and 
unjustifiable abduction from one's home by 
government authorities, secret detention, and 
denial of public trial or even any trial at all. 
We are talking about such horrible torture 
tactics as bodily mutilation, electric shock, 
mock executions. 

— The second category in our definition of 
human rights concerns the fulfillment of vital 
human needs such as food, shelter, health 
care, and education. 

— This third relates to civil and political 
liberties — freedom of speech, of thought, of 
religion, of the press, of movement both 
within and outside one's own country, and the 
freedom to take part in the affairs of govern- 
ment. 

The issue we face as a government is how 
we should take such practices into account as 
we carry out our relations with these nations. 
Obviously there are difficult choices involved. 
We can approach the problem in one country 
with quiet, private conversations at a low 
governmental level, or we can approach it 
with very public pronouncements by the Pres- 
ident or the Secretary of State. A wide range 
of other tactics and actions is also available. 

There are also dilemmas involved. Some- 
times an action we expect to improve a human 
rights situation will make it much worse. Pub- 
lic pressure does not always work as ex- 
pected; nor does private diplomacy. 

There are policy priorities involved. Some 
would cut off all economic assistance to na- 
tions which violate certain human rights in 
some substantial, measurable way. They 
argue that there is no reason the U.S. Gov- 
ernment should help another government 
which practices or condones such abuses. 

However, the chief objective of many of our 
developmental assistance programs is now to 
protect and meet basic human needs, and this 
is also one of our major human rights objec- 



tives. If American assistance is, in fact, reach- 
ing the hungry, the homeless, and the illiter- 
ate of a certain country, then we are serving 
our human rights policy in one important way. 
If we cut off our assistance because the gov- 
ernment in that country is repressive, then 
those people will get even less help than they 
get now, and the human rights situations of 
millions of the impoverished may well be 
worsened. 

A related nuance is whether restrictions 
should be placed on the use of U.S. Govern- 
ment money in international financial institu- 
tions such as the World Bank, the regional 
banks, and the International Monetary Fund. 
Some argue that we must use all means at our 
disposal to put leverage on countries where 
human rights abuses exist. Others argue that 
if we take such an approach, we will encour- 
age other nations to inject extraneous consid- 
erations into bank debate and introduce an 
element of instability into bank procedure. 

Broad U.S. policy has been to urge other 
nations not to inject into functional interna- 
tional bodies issues that are irrelevant to the 
substantive role of each agency and to reserve 
such debate for more appropriate political 
forums like the U.N. General Assembly. 
However, since we define human rights to in- 
clude economic rights and since all bank mem- 
bers have subscribed to the provisions of the 
U.N. Charter, we do believe that human 
rights issues are relevant considerations in 
the banks. We, of course, want to maintain 
flexibility, and we reject any approach that 
would have us cast an automatic negative vote 
when human rights issues arise. But Presi- 
dent Carter has supported our use of these in- 
stitutions to advance the human rights cause. 

These are but some of the issues involved. 
You can see that there are no easy answers. 
What is important is that we have reached a 
point in our government where human rights 
must be considered in every policy decision. It 
is no longer a topic which is easily swept 
under the table. The topic is front and cen- 
ter. It is on every agenda. 

Role of the U.N. System 

Needless to say, the U.N. system is part of 
the panoply of tools available to nations as 



558 



Department of State Bulletin 



they pursue progress on this issue. The di- 
lemmas mentioned help to make the point that 
we cannot make human rights solely a bilat- 
eral effort. We must encourage others to join 
us. And this means trying to make the United 
Nations more effective in the human rights 
field. 

In this effort we have on our side the U.N.'s 
historical concern for human rights. The U.N. 
Charter, to which all members have sub- 
scribed, states that the peoples of the United 
Nations have determined ". . .to reaffirm 
faith in fundamental human rights, in the dig- 
nity and worth of the human person, in the 
equal rights of men and women and of nations 
large and small. ..." In article 56 all mem- 
bers pledge themselves ". . .to take joint and 
separate action in co-operation with the Or- 
ganization ..." for the achievement of goals on 
human rights. 

One result of these provisions in the char- 
ter, as President Carter stated in his address 
here last March [17], is that ". . .no member 
of the United Nations can claim that mis- 
treatment of its citizens is solely its own busi- 
ness. Equally, no member can avoid its re- 
sponsibilities to review and to speak when 
torture or unwarranted deprivation occurs in 
any part of the world." 

We do not underestimate the difficulties in 
mobilizing the efforts of such a vast organiza- 
tion to make progress in this field. Human 
rights is a very sensitive subject with many 
nations, including our own. It is clear that 
many members are reluctant to take any ac- 
tion which may reflect adversely on one of 
their neighbors, fearing that this will open up 
attacks on them all. As a result, the process of 
addressing human rights in U.N. bodies has 
not been evenhanded. It tends to focus on the 
few cases that are politically attractive to the 
majority of U.N. members — on Chile, on 
southern Africa, and on Israeli-occupied 
territories. 

Some impediments to progress, quite 
frankly, fall on our side. Certainly our record 
compares favorably. But it would not hurt to 
remind ourselves that in this country we have 
not been immune from prejudice and 
discrimination — by race, religion, sex, and na- 
tional origin. We still have considerable prog- 



ress to make. Yet, as Andy Young put it so 
well in his recent speech in Lagos [Nigeria, 
on August 25], the continuing struggle on 
these issues in the United States does give us 
some knowledge of the sickness caused by 
gross violations of human rights. "We know 
that this is a sickness," Andy said, "which, 
like cancer, eats away at the inner structures 
of society. It can very well be a terminal ill- 
ness, both physically and spiritually. But we 
also know that it is a disease that can be cured 
and that it is not necessary to kill the patient 
in order to cure the disease." 

Another difficulty that America faces on 
human rights is that we as a government have 
not been forthcoming in ratifying some of the 
basic U.N. treaties relating to this subject. 
The President has already announced his in- 
tention to sign the International Covenants on 
Economic, Social, and Cultural Rights and on 
Civil and Political Rights. 2 Then we must seek 
Senate ratification of both those treaties as 
well as the genocide convention and the In- 
ternational Convention on the Elimination of 
All Forms of Racial Discrimination. 

At the same time, there are specific initia- 
tives which we hope to take in the United Na- 
tions to strengthen the human rights machin- 
ery of various segments of the organization. 

— We will continue support of the proce- 
dures, made possible by ECOSOC [Economic 
and Social Council] Resolution 1503, which 
permit individuals (rather than governments) 
to raise complaints of human rights violations 
and to have those of a serious and gross na- 
ture investigated. 

— We will encourage further exploration of 
procedures to take decisions by consensus 
rather than by vote, so that members may be 
spared the need to take sides formally on sen- 
sitive issues. 

— We will support the proposal to create a 
position for a High Commissioner for Human 
Rights. 

— We will continue this Administration's 
policy of according economic and social rights 
parity with political and civil rights. 

— We will pursue, as Andy Young has al- 



2 President Carter signed these covenants at the 
United Nations on Oct. 5, 1977. 



October 24, 1977 



559 



ready publicly indicated, the proposed crea- 
tion of new procedures and policies to end tor- 
ture as a government practice in some parts of 
the world. 

— We will attempt to strengthen the opera- 
tions of the Human Rights Commission — a top 
priority of our new representative, former 
Congressman Edward Mezvinsky. 

— And we will support efforts of the sub- 
commission of the Human Rights Commission 
to establish new guidelines to protect those 
who are being detained on grounds of so- 
called mental illness. 

We need to continue exploring new devices 
to assist the United Nations to make progress 
on the human rights front — while recognizing 
all the inherent difficulties in that process — 
and we would welcome ideas and proposals at 
any time, from any of you as individuals. 

While we work on these efforts, I would 
hope we could acknowledge the evidence of 
some progress present in multilateral forums: 

— The Secretary General has taken an ac- 
tive stand on human rights questions, and we 
hope he will continue to use his unique posi- 
tion in the world community and his good of- 
fices to help U.N. members make progress in 
this important area. 

— At its last meeting, the U.N. Human 
Rights Commission, for the first time in his- 
tory, decided to keep on its agenda certain 
new cases of alleged gross violations of human 
rights, Uganda in particular; its work was 
praised even by many who traditionally look 
askance at U.N. endeavors. 

— ECOSOC delegates have been increas- 
ingly moderate on the question of Zionism and 
racism as they consider plans for a World Con- 
ference on Racism in 1978 and activities for 
the U.N. Decade for Action to Combat Rac- 
ism and Racial Discrimination, which is cur- 
rently underway, and we hope that too will 
continue. 

— And the human rights cases brought to 
the United Nations by private communication 
continue at a level of about 20,000 a year — 
making systematic screening under ECOSOC 
Resolution 1503 an obvious bureaucratic 
headache but confirming the need for this 
highly valuable procedure. 



Acknowledging Forward Steps 

But one will ask what concretely has this 
new consciousness and concern about human 
rights accomplished? There are steps that de- 
serve mention. 

Political prisoners in a number of countries 
have been released. Secret police units in 
others have been disbanded. Some newspa- 
pers have been allowed to reopen. Some other 
elements of repression have been relaxed. 

These in themselves are important concrete 
developments. But more important are con- 
crete signs for the future. 

There is increasing evidence that democ- 
racy is not a lost cause to the world. A return 
to democratic government has been achieved 
in recent times in India, Greece, Portugal, 
and Spain. A significant election just took 
place in Sri Lanka. In some of the military re- 
gimes of Latin America there are hopeful 
signs of a retorno — a return to civilian 
elected government. This is also true of the 
largest nation in Africa, Nigeria. 

In addition, more attention is now being 
paid to the human rights machinery of the Or- 
ganization of American States. Following 
Andy Young's recent visits, both Haiti and 
the Dominican Republic have agreed to admit 
representatives of the Inter-American Human 
Rights Commission. And the countries of the 
British Commonwealth — including a number 
of African nations — voted recently to condemn 
Uganda for its human rights practices, an ac- 
tion which augurs well for human rights action 
by other regional groups. 

Nor is Eastern Europe without change. 
Some Eastern European countries have per- 
mitted the reunification of divided families 
and eased rules of emigration. And as all of 
you are aware, American evangelist Billy 
Graham was invited to preach the gospel in 
Hungary this week, a step unimaginable even 
a few years ago. However we view this area, 
it is difficult not to be struck by the favorable 
contrast between Eastern Europe in the 1950's 
and Eastern Europe today. 

What we are seeing, I think, is that the 
human rights concerns to which the President 
is dedicated turn out to be among the deepest 
aspirations of human beings everywhere. The 



560 



Department of State Bulletin 



developments mentioned did not take place so 
much because others were reacting to us as 
because there is a new mood about human 
rights worldwide. People everywhere want 
the right to go where they want, to say what 
they want, to have a voice in determining the 
rules under which they live, to eat and be 
healthy, and to live under orderly legal proce- 
dures which protect them from abuses of gov- 
ernment authorities. 

And that is precisely why we should look to 
the future with confidence. But we must have 
the maturity to recognize the progress al- 
ready made. We must prevent others from 
using the great amount of work that will al- 
ways remain to be done as an excuse for con- 
stantly calling into question the work we al- 
ready have under way. 

We must admit that we will never arrive 
where we want to be, since the struggle for 
human rights is never-ending. We must never 
be satisfied. 

But if we maintain this mature perspective, 
if we keep the determination that is present in 
the Carter Administration today, then there 
is no reason why every year we cannot regis- 
ter steady progress on human rights. And we 
will not only reflect on how far we have come, 
but we will gain a new sense of accomplish- 
ment and of hope for the future. 



Allocation of United Nations 
Agenda Items by Committee 



Plenary Meetings 

1. Opening of the session by the Chairman of the 
delegation of Sri Lanka (item 1). 

2. Minute of silent prayer or meditation (item 2). 

3. Credentials of representatives to the thirty-second 
session of the General Assembly (item 3): 

(a) Appointment of the members of the Credentials 
Committee; 

(b) Report of the Credentials Committee. 



'Allocation of agenda items for the 32nd regular ses- 
sion of the United Nations General Assembly adopted at 
its 5th and 15th plenary meetings on Sept. 23 and 30, 
1977, respectively (U.N. Doe. A/32/252 and Add. 1). (For 
list of agenda items in order of appearance, see U.N. 
Doc. No. A/32/251.) Subsequent footnotes are in original 
and begin on p. 566. 



4. Election of the President of the General Assembly 
(item 4). 

5. Election of the officers of the Main Committees 
(item 5). 

6. Election of the Vice-Presidents of the General As- 
sembly (item 6). 

7. Notification by the Secretary-General under Arti- 
cle 12, paragraph 2, of the Charter of the United Nations 
(item 7). 

8. Adoption of the agenda (item 8). 

9. General debate (item 9). 

10. Report of the Secretary-General on the work of 
the Organization (item 10). 

11. Report of the Security Council (item 11). 

12. Report of the Economic and Social Council [chap- 
ters I and VIII (sections A to D and F)] (item 12). 

13. Report of the International Court of Justice (item 
13). 

14. Report of the International Atomic Energy 
Agency (item 14). 

15. Election of five non-permanent members of the 
Security Council (item 15). 

If). Election of eighteen members of the Economic and 
Social Council (item 16). 

17. Election of fifteen members of the Industrial De- 
velopment Board (item 17). 

18. Election of nineteen members of the Governing 
Council of the United Nations Environment Programme 
(item 18). 

19. Election of twelve members of the World Food 
Council (item 19). 

20. Election of twelve members of the Board of Gover- 
nors of the United Nations Special Fund (item 20). 

21. Election of seven members of the Committee for 
Programme and Co-ordination (item 21). 

22. Election of the members of the Board of Governors 
of the United Nations Special Fund for Land-locked De- 
veloping Countries (item 22). 

23. Appointment of the members of the Peace Obser- 
vation Commission (item 23). 

24. Implementation of the Declaration on the Granting 
of Independence to Colonial Countries and Peoples 
(item 24). 2 

(a) Report of the Special Committee on the Situation 
with regard to the Implementation of the Declaration on 
the Granting of Independence to Colonial Countries and 
Peoples; 

(b) Report of the United Nations Council for 
Namibia; 

(e) Report of the Secretary-General. 

25. Admission of new Members to the United Nations 
(item 25). 

26. Restitution of works of art to countries victims of 
expropriation; report of the Secretary-General (item 26). 

27. Policies of apartheid of the Government of South 
Africa (item 27): 3 

(a) Reports of the Special Committee against Apar- 
theid; 

(b) Report of the World Conference for Action 
against Apartheid; 



October 24, 1977 



561 



(c) Report of the Ad Hoc Committee on the Drafting 
of an International Convention against Apartheid in 
Sports; 

(d) Report of the Secretary-General. 

28. Question of Cyprus: report of the Secretary- 
General (item 28). * 

29. Co-operation between the United Nations and the 
Organization of African Unity: report of the Secretary- 
General (item 29). 

30. Question of Palestine: report of the Committee on 
the Exercise of the Inalienable Rights of the Palestinian 
People (item 30). 

31. The situation in the Middle East: report of the 
Secretary-General (item 31). 

32. Third United Nations Conference on the Law of 
the Sea (item 32). 

33. Operational activities for development (item 61): 5 
(i) Confirmation of the appointment of the Executive 

Director of the United Nations Special Fund for Land- 
locked Developing Countries. 

34. United Nations Special Fund (item 64): G 

(b) Confirmation of the appointment of the Execu- 
tive Director. 

35. Question of Namibia (item 91): 

(a) Report of the Special Committee on the Situation 
with regard to the Implementation of the Declaration on 
the Granting of Independence to Colonial Countries and 
Peoples; 

(b) Report of the United Nations Council for 
Namibia; 

(c) Report of the Secretary-General; 

(d) Appointment of the United Nations Commis- 
sioner for Namibia. 

36. Joint Inspection Unit (item 104): 7 

(b) Appointment of the members of the Joint Inspec- 
tion Unit. 

37. Question of the Comorian island of Mayotte 
(item 125). 

38. Recent illegal Israeli measures in the occupied 
Arab territories designed to change the legal status, 
geographical nature and demographic composition of 
those territories in contravention of the principles of the 
Charter of the United Nations, of Israel's international 
obligations under the fourth Geneva Convention of 1949 
and of United Nations resolutions, and obstruction of ef- 
forts aimed at achieving a just and lasting peace in the 
Middle East (item 126). 



First Committee — Political and Security 

1. Economic and social consequences of the arma- 
ments race and its extremely harmful effects on world 
peace and security: report of the Secretary-General 
(item 33). 

2. Implementation of General Assembly resolution 
3473 (XXX) concerning the signature and ratification of 
Additional Protocol I of the Treaty for the Prohibition of 
Nuclear Weapons in Latin America (Treaty of 



Tlatelolco): report of the Secretary-General (item 34). 

3. International co-operation in the peaceful uses of 
outer space: report of the Committee on the Peaceful 
Uses of Outer Space (item 35). 

4. Preparation of an international convention on prin- 
ciples governing the use by States of artificial earth 
satellites for direct television broadcasting: report of the 
Committee on the Peaceful Uses of Outer Space (item 
36). 

5. Conclusion of a world treaty on the non-use of 
force in international relations: report of the Secretary- 
General (item 37). 

6. Incendiary and other special conventional weapons 
which may be the subject of prohibitions or restrictions 
of use for humanitarian reasons: report of the 
Secretary-General (item 38). 

7. Chemical and bacteriological (biological) weapons: 
report of the Conference of the Committee on Disarma- 
ment (item 39). 

8. Urgent need for cessation of nuclear and ther- 
monuclear tests and conclusion of a treaty designed to 
achieve a comprehensive test ban: report of the Confer- 
ence of the Committee on Disarmament (item 40). 

9. Implementation of General Assembly resolution 
31/67 concerning the signature and ratification of Addi- 
tional Protocol II of the Treaty for the Prohibition of Nu- 
clear Weapons in Latin America (Treaty of Tlatelolco) 
(item 41). 

10. Effective measures to implement the purposes and 
objectives of the Disarmament Decade (item 42): 

(a) Report of the Conference of the Committee on 
Disarmament; 

(b) Report of the Secretary-General. 

11. Implementation of the Declaration on the Denu- 
clearization of Africa (item 43). 

12. Establishment of a nuelear-weapon-free zone in 
the region of the Middle East (item 44). 

13. Establishment of a nuclear-weapon-free zone in 
South Asia: report of the Secretary-General (item 45). 

14. Prohibition of the development and manufacture of 
new types of weapons of mass destruction and new sys- 
tems of such weapons: report of the Conference of the 
Committee on Disarmament (item 46). 

15. Reduction of military budgets: report of the 
Secretary-General (item 47). 

16. Implementation of the Declaration of the Indian 
Ocean as a Zone of Peace: report of the Ad Hoc Commit- 
tee on the Indian Ocean (item 48). 

17. Conclusion of a treaty on the complete and general 
prohibition of nuclear-weapon tests (item 49). 

18. Implementation of the Declaration on the 
Strengthening of International Security: reports of the 
Secretary-General (item 50). 

19. General and complete disarmament (item 51): 

(a) Report of the Conference of the Committee on 
Disarmament; 

(b) Report of the International Atomic Energy 
Agency; 

(c) Report of the Secretary-General. 



562 



Department of State Bulletin 



20. Special session of the General Assembly devoted to 
disarmament: report of the Preparatory Committee for 
the Special Session of the General Assembly Devoted to 
Disarmament (item 52). 

21. World Disarmament Conference: report of the Ad 
Hoc Committee on the World Disarmament Conference 
(item 53). 

22. Deepening and consolidation of international de- 
tente and prevention of danger of nuclear war (item 127). 

Special Political Committee 

1. Effects of atomic radiation: report of the United 
Nations Scientific Committee on the Effects of Atomic 
Radiation (item 54). 

2. United Nations Relief and Works Agency for 
Palestine Refugees in the Near East (item 55): 

(a) Report of the Commissioner-General; 

(b) Report of the Working Group on the Financing of 
the United Nations Relief and Works Agency for Pales- 
tine Refugees in the Near East; 

(c) Report of the United Nations Conciliation Com- 
mission for Palestine; 

(d) Reports of the Secretary-General. 

'■). Comprehensive review of the whole question of 
peace-keeping operations in all their aspects: report of 
the Special Cmmittee on Peace-keeping operations 
(item 56). 

4. Report of the Special Committee to Investigate Is- 
raeli Practices Affecting the Human Rights of the Popu- 
lation of the Occupied Territories (item 57). 

5. Establishment of an agency or a department of the 
United Nations for undertaking, co-ordinating and dis- 
seminating the results of research into unidentified flying 
objects and related phenomena (item 123). 

li. Policies of apai'theid of the Government of South 
Africa (item 27):'- 

(a) Reports of the Special Committee against 
Apartheid; 

(b) Report of the World Conference for Action 
against Apartheid; 

(c) Report of the Ad Hoc Committee on the Drafting 
of an International Convention against Apartheid in 
Sports; 

(d) Report of the Secretary-General. 

7. Question of Cyprus: report of the Secretary- 
General (item 28). ri 

8. Question of composition of the relevant organs of 
the United Nations (item 128). 

Second Committee — Economic and Financial 

1. Report of the Economic and Social Council [chapters 
II, III (sections A to F and H to K), IV, V, VI (section 
E) and VII (sections A, B, D and F to H)] (item 12). 9 

2. United Nations Conference on Trade and Develop- 
ment (item 58): 

(a) Report of the Trade and Development Board; 

(b) Report of the Secretary-General; 



(c) Report of the Secretary-General of the United 
Nations Conference on Trade and Development. 

3. United Nations Industrial Development Organiza- 
tion (item 59): 

(a) Report of the Industrial Development Board; 

(b) Report of the Executive Director. 

4. United Nations Institute for Training and Research: 
report of the Executive Director (item 60). 

5. Operational activities for development (item 61): 10 

(a) United Nations Development Programme; 

(b) United Nations Capital Development Fund; 

(c) Technical co-operation activities undertaken by 
the Secretary-General; 

(d) United Nations Volunteers programme; 

(e) United Nations Fund for Population Activities; 
(0 United Nations Children's Fund; 

(g) World Food Programme; 

(h) United Nations Special Fund for Land-locked 
Developing Countries. 

6. United Nations Environment Programme (item 62): 

(a) Report of the Governing Council; 

(b) Reports of the Secretary-General; 

(c) United Nations Conference on Desertification. 

7. Food problems: report of the World Food Council 
(item 63). 

8. United Nations Special Fund (item 64):" 

(a) Report of the Board of Governors. 

9. United Nations University (item 65): 

(a) Report of the Council of the United Nations Uni- 
versity; 

(b) Report of the Secretary-General. 

10. Office of the United Nations Disaster Relief Co- 
ordinator: reports of the Secretary-General (item 66). 

11. Assessment of the progress made in the implemen- 
tation of General Assembly resolutions 2626 (XXV), 3202 
(S-VI), 3281 (XXIX) and 3362 (S-VII), entitled respect- 
ively "International Development Strategy for the Sec- 
ond United Nations Development Decade", "Programme 
of Action on the Establishment of a New International 
Economic Order", "Charter of Economic Rights and 
Duties of States" and "Development and international 
economic co-operation" (item 67). 

12. Unified approach to development analysis and 
planning (item 68). 

13. Long-term trends in the economic development of 
the regions of the world (item 69). 

14. Economic co-operation among developing countries: 
reports of the Secretary-General (item 70). 

15. Acceleration of the transfer of real resources to de- 
veloping countries: report of the Secretary-General 
(item 71). 

16. Technical co-operation among developing countries: 
United Nations Conference on Technical Co-operation 
among Developing Countries (item 72). 

17. United Nations Conference on Science and Tech- 
nology for Development (item 73). 



October 24, 1977 



563 



Third Committee — Social, Humanitarian, and 
Cultural 

1. Report of the Economic and Social Council [chapters 
II, III (sections G and L), IV (section A) and VI) 
(item 12). 12 

2. Elimination of all forms of racial discrimination 
(item 74): 

(a) Decade for Action to Combat Racism and Racial 
Discrimination: report of the Secretary-General; 

(b) Report of the Committee on the Elimination of 
Racial Discrimination; 

(c) Status of the International Convention on the 
Elimination of All Forms of Racial Discrimination: report 
of the Secretary-General; 

(d) Status of the International Convention on the 
Suppression and Punishment of the Crime of Apartheid: 
report of the Secretary-General. 

3. World Conference to Combat Racism and Racial 
Discrimination (item 75). 

4. Alternative approaches and ways and means within 
the United Nations System for improving the effective 
enjoyment of human rights and fundamental freedoms: 
reports of the Secretary-General (item 76). 

5. Crime prevention and control: report of the 
Secretary-General (item 77). 

6. Question of the elderly and the aged: report of the 
Secretary-General (item 78). 

7. Importance of the universal realization of the right 
of peoples to self-determination and of the speedy grant- 
ing of independence to colonial countries and peoples for 
the effective guarantee and observance of human rights: 
report of the Secretary-General (item 79). 

8. Torture and other cruel, inhuman or degrading 
treatment or punishment (item 80). 

9. International Covenants on Human Rights (item 81): 

(a) Report of the Human Rights Committee; 

(b) Status of the International Covenant on Eco- 
nomic, Social and Cultural Rights, the International Co- 
venant on Civil and Political Rights and the Optional 
Protocol to the International Covenant on Civil and Polit- 
ical Rights: report of the Secretary-General. 

10. International Year for Disabled Persons: report of 
the Secretary-General (item 82). 

11. Human rights and scientific and technological de- 
velopments (item 83). 

12. Policies and programmes relating to youth: reports 
of the Secretary-General (item 84). 

13. United Nations Decade for Women: Equality, De- 
velopment and Peace: reports of the Secretary-General 
(item 85). 

14. Elimination of all forms of religious intolerance 
(item 86). 

15. Office of the United Nations High Commissioner 
for Refugees (item 87): 

(a) Report of the High Commissioner; 

(b) Question of the continuation of the Office of the 
High Commissioner. 



16. Freedom of information (item 88); 

(a) Draft Declaration of Freedom of Information; 

(b) Draft Convention on Freedom of Information. 

17. United Nations conference for an international 
convention on adoption law (item 89). 

Fourth Committee — Trusteeship 

1. Information from Non-Self-Governing Territories 
transmitted under Article 73e of the Charter of the 
United Nations (item 90): 

(a) Report of the Secretary-General; 

(b) Report of the Special Committee on the Situation 
with regard to the Implementation of the Declaration on 
the Granting of Independence to Colonial Countries and 
Peoples. 

2. Question of Southern Rhodesia: report of the Special 
Committee on the Situation with regard to the Im- 
plementation of the Declaration on the Granting of Inde- 
pendence to Colonial Countries and Peoples (item 92). 

3. Question of East Timor: report of the Special Com- 
mittee on the Situation with regard to the Implementa- 
tion of the Declaration on the Granting of Independence 
to Colonial Countries and Peoples (item 93). 

4. Activities of foreign economic and other interests 
which are impeding the implementation of the Declara- 
tion on the Granting of Independence to Colonial Coun- 
tries and Peoples in Southern Rhodesia and Namibia and 
in all other Territories under colonial domination and ef- 
forts to eliminate colonialism, apartheid and racial dis- 
crimination in southern Africa: report of the Special 
Committee on the Situation with regard to the Im- 
plementation of the Declaration of the Granting of Inde- 
pendence to Colonial Countries and Peoples (item 94). 

5. Implementation on the Declaration on the Granting 
of Independence to Colonial Countries and Peoples by 
the specialized agencies and the international institutions 
associated with the United Nations (item 95): 

(a) Report of the Special Committee on the Situation 
with regard to the Implementation of the Declaration on 
the Granting of Independence to Colonial Countries and 
Peoples; 

(b) Reports of the Secretary-General. 

6. Report of the Economic and Social Council [chapter 
VII (section E)] (item 12). 

7. United Nations Educational and Training Pro- 
gramme for Southern Africa: report of the Secretary- 
General (item 96). 

8. Offers by Member States of study and training 
facilities for inhabitants of Non-Self-Governing Ter- 
ritories: report of the Secretary-General (item 97). 

9. Implementation of the Declaration on the Granting 
of Independence to Colonial Countries and Peoples: re- 
port of the Special Committee on the Situation with re- 
gard to the Implementation of the Declaration on the 
Granting of Independence to Colonial Countries and 
Peoples [chapters relating to specific Territories] 
(item 24.) 13 



564 



Department of State Bulletin 



Fifth Committee — Administrative 
and Budgetary 

1. Financial reports and accounts, and reports of the 
Board of Auditors (item 98): 

(a) United Nations Development programme; 

(b) United Nations Children's Fund; 

(c) United Nations Relief and Works Agency for 
Palestine Refugees in the Near East; 

(d) United Nations Institute for Training and Re- 
search; 

(e) Voluntary funds administered by the United Na- 
tions High Commissioner for Refugees; 

(f) United Nations Fund for Population Activities. 

2. Programme budget for the biennium 1976-1977 
(item 99). 

3. Proposed programme budget for the biennium 
1978-1979 (item 100). 14 

4. Financial emergency of the United Nations: report 
of the Negotiating Committee on the Financial Emer- 
gency of the United Nations (item 101). 

5. Review of the intergovernmental and expert 
machinery dealing with the formulation, review and ap- 
proval of programmes and budgets (item 102). 

6. Administrative and budgetary co-ordination of the 
United Nations with the specialized agencies and the In- 
ternational Atomic Energy Agency: report of the Advi- 
sory Committee on Administrative and Budgetary 
Questions (item 103). 

7. Joint Inspection Unit (item 104): 15 

(a) Reports of the Joint Inspection Unit. 

8. Pattern of conferences: report of the Committee on 
Conferences (item 105). 

9. Scale of assessments for the apportionment of the 
expenses of the United Nations: report of the Committee 
on Contributions (item 106). 

10. Appointments to fill vacancies in the membership 
of subsidiary organs of the General Assembly (item 107): 

(a) Advisory Committee on Adminiitrative and 
Budgetary Questions; 

(b) Committee on Contributions; 

(c) Board of Auditors; 

(d) Investments Committee: confirmation of the ap- 
pointments made by the Secretary-General; 

(e) United Nations Adminsitrative Tribunal; 

(f) International Civil Service Commission. 

11. Personnel questions (item 108): 

(a) Composition of the Secretariat: report of the 
Secretary-General; 

(b) Other personnel questions: report of the 
Secretary-General. 

12. Report of the International Civil Service Commis- 
sion (item 109). 

13. United Nations pension system (item 110): 

(a) Report of the United Nations Joint Staff Pension 
Board; 

(b) Report of the Secretary-General. 

14. Financing of the United Nations Emergency Force 



and of the United Nations Disengagement Observer 
Force: report of the Secretary-General (item 111). 

15. Report of the Economic and Social Council [chap- 
ters III (sections C and G to K), IV (sections A to D, G, I 
and J), V, VI (sections A to D), VII (sections A to C, H 
and I) and VIII (sections E and G)] (item 12). 16 



Sixth Committee — Legal 

1. Report of the International Law Commission on the 
work of its twenty-ninth session (item 112). 

2. Report of the United Nations Commission on Inter- 
national Trade Law on the work of its tenth session 
(item 113). 

3. United Nations Programme of Assistance in the 
Teaching, Study, Dissemination and Wider Appreciation 
of International Law: report of the Secretary-General 
(item 114). 

4. Respect for human rights in armed conflicts: report 
of the Secretary-General (item 115). 

5. Report of the Special Committee on the Charter of 
the United Nations and on the Strengthening of the Role 
of the Organization (item 116). 

6. Report of the Committee on Relations with the Host 
Country (item 117). 

7. Measures to prevent international terrorism which 
endangers or takes innocent human lives or jeopardizes 
fundamental freedoms, and study of the underlying 
causes of those forms of terrorism and acts of violence 
which lie in misery, frustration, grievance and despair 
and which cause some people to sacrifice human lives, in- 
cluding their own, in an attempt to effect radical 
changes: report of the Ad Hoc Committee on Interna- 
tional Terrorism (item 118). 

8. Drafting of an international convention against the 
taking of hostages: report of the Ad Hoc Committee on 
the Drafting of an International Convention against the 
Taking of Hostages (item 119). 

9. Resolutions adopted by the United Nations Confer- 
ence on the Representation of States in Their Relations 
with International Organizations (item 120): 

(a) Resolution relating to the observer status of na- 
tional liberation movements recognized by the Organiza- 
tion of African Unity and/or by the League of Arab 
States; 

(b) Resolution relating to the application of the Con- 
vention in future activities of international organizations. 

10. Consolidation and progressive evolution of the 
novms and principles of international economic develop- 
ment law (item 121). 

11. Recommendation adopted by the United Nations 
Conference on Succession of States in Respect of 
Treaties (item 122). 

12. Conclusion of a world treaty on the non-use of force 
in international relations: report of the Secretary- 
General (item 37). 17 

13. Review of the multilateral treaty-making process 
(item 124). 

14. Proposed programme budget for the biennium 



October 24, 1977 



565 



1978-1979 [Computerization of treaty information and 
registration and publication of treaties and international 
agreements pursuant to Article 102 of the Charter of the 
United Nations] (item 100). 18 



French Prime Minister Barre 

Visits the United States 

Following is a White House statement is- 
sued after the conclusion of meetings between 
President Carter and French Prime Minister 
Raymond Barre on September 16. 1 

Weekly Compilation of Presidential Documents dated September 19 

French Prime Minister Raymond Barre 
paid an official visit to Washington September 
15-16 at the invitation of President Carter. 
The President gave a working dinner for 
Prime Minister Barre on September 15 and 
held two meetings with the Prime Minister 
and his party. Their talks covered the range 
of political, economic, and other issues of im- 
portance to the two governments. 

These issues included the Middle East, de- 
velopments in southern Africa, East-West re- 
lations, security and disarmament, nuclear 



nonproliferation, human rights, and economic 
policy. The two leaders agreed that close 
U.S. -French consultations are important on 
these and other issues. 

Following discussions at the seven-nation 
summit in London last May in which they had 
taken part, the President and Prime Minister 
reviewed economic conditions, both worldwide 
and in their own countries. Prime Minister 
Barre noted the significant improvement in 
France's foreign trade account and described 
the steps his government had taken to curb 
inflation, stimulate employment, and bring 
about conditions needed for sustained eco- 
nomic growth. President Carter reviewed the 
United States' own economic prospects and 
expressed confidence that the U.S. economic 
recovery would continue into 1978. 

President Carter emphasized the need to 
gain significant results in the multilateral 
trade negotiations in the near future. The 
Prime Minister stressed the importance of or- 
ganized freedom of trade as a necessary condi- 
tion for the orderly growth of that trade for 
the benefit of both developed and developing 
countries. 

The President and the Prime Minister 



2 See also "Fourth Committee", item 9. 

3 The General Assembly decided to consider this item 
directly in plenary meeting on the understanding that the 
representatives of the Organization of African Unity and 
of national liberation movements recognized by the Or- 
ganization of African Unity would be permitted to par- 
ticipate in the discussion in plenary meeting and that or- 
ganizations having a special interest in the question 
would be permitted to be heard by the Special Political 
Committee. 

4 The General Assembly decided to consider this item 
directly in plenary meeting on the understanding that it 
would, when considering the item, invite the Special 
Political Committee to meet for the purpose of affording 
representatives of the Cypriot communities an opportu- 
nity to take the floor in the Committee in order to ex- 
press their views, and that it would then resume its con- 
sideration of the item, taking into account the report of 
the Special Political Committee. 

5 For subitems (a) to (h), see "Second Committee", 
item 5. 

6 For subitem (a), see "Second Committee", item 8. 

7 For subitem (a), see "Fifth Committee", item 7. 

8 See also "Sixth Committee", item 12. 

9 The parts of the report listed below have been re- 
ferred also to the Third and Fifth Committees as follows: 
Chapters II and VI (section E) — Third Committee; Chap- 
ters III (sections C and H to K), IV (sections B to D, G, I 
and J), V and VII (sections A, B and H)— Fifth Commit- 



tee; and Chapter IV (section A) — Third and Fifth Com- 
mittees. 

10 For subitem (i), see "Plenary meetings", item 33. 

11 For subitem (b), see "Plenary meetings", item 34. 

12 The parts of the report listed below have been re- 
ferred also to the Second and Fifth Committees as fol- 
lows: Chapters II and VI (section E) — Second Commit- 
tee; Chapters III (section G) and VI (sections A to D) — 
Fifth Committee; and Chapter IV (section A) — Second 
and Fifth Committees. 

13 See also "Plenary meetings", item 24. 

14 See also "Sixth Committee", item 14. 

15 For subitem (b), see "Plenary meetings", item 36. 

16 The parts of the report listed below have been re- 
ferred also to the Second and Third Committees as fol- 
lows: Chapters III (sections C and H to K), IV (sections 
B to D, G, I and J), V and VII (sections A, B and H)— 
Second Committee; Chapters III (section G) and VI (sec- 
tions A to D) — Third Committee; and Chapter IV (sec- 
tion A) — Second and Third Committees. 

17 See also "First Committee", item 5. 

18 See also "Fifth Committee", item 3. 

1 For an exchange of remarks between President Car- 
ter and Prime Minister Barre at the welcoming ceremony 
and a working dinner on Sept. 15 and for President Car- 
ter's remarks on the departure of the Prime Minister on 
September 16, see Weekly Compilation of Presidential 
Documents dated September 19, 1977, pp. 1344, 1357, 
and 1361. 



566 



Department of State Bulletin 



agreed on the importance of continued close 
consultation between the United States and 
France on international financial issues. The 
President said that the U.S. administration 
was seeking congressional authority for the 
United States to take part in the Supplemen- 
tary Financing Facility (Witteveen facility), 
to assure that International Monetary Fund 
resources are sufficient to meet current needs 
for official financing. 

President Carter praised France's lead- 
ership in proposing and helping to sustain the 
North-South dialogue between industrialized 
and developing nations. The two leaders 
agreed that the Conference on International 
Economic Cooperation, concluded last June in 
Paris, had produced a number of positive 
benefits. They committed their two govern- 
ments to continue working for a more open 
and just international economic system. 

The President and the Prime Minister re- 
viewed major defense and disarmament is- 
sues. President Carter affirmed the un- 
equivocal commitment of the United States to 
the defense of Western Europe. He reviewed 
U.S. steps, in line with the program he an- 
nounced at last May's London meeting of the 
North Atlantic Council, to strengthen Ameri- 
can forces committed to the defense of 
Europe. Prime Minister Barre described 
France's major program to modernize and up- 
grade its armed forces. The two leaders 
agreed that these efforts and similar efforts 
by other allies are essential to maintain the al- 
liance's security into the next decade. 

President Carter and Prime Minister Barre 
discussed current and projected disarmament 
talks, including SALT [Strategic Arms Lim- 
itation Talks] and the U.N. General Assem- 
bly's Special Session on Disarmament sched- 
uled for 1978. President Carter said he is 
convinced that France, as a major power, can 
make a positive contribution both to the 
maintenance of allied security and to the 
search for a more secure and stable interna- 
tional order. He was most interested in Prime 
Minister Barre's comment on these issues and 
the indications given on the views that France 
intends to put forward in the field of 
disarmament. 



President Carter stated his appreciation for 
France's expressed willingness to participate 
in the International Fuel Cycle Evaluation, 
the opening conference of which is to occur 
next month, and noted that France's techno- 
logical leadership in the field of nuclear 
energy makes its contribution particularly 
important. The President and the Prime 
Minister agreed that vigorous and imaginative 
measures are needed to develop nuclear 
energy while preventing any proliferation of 
nuclear weapons. 

Prime Minister Barre explained the main 
features of the French energy conservation 
policy and stressed the vital importance of a 
rapid implementation of President Carter's 
energy program. 

President Carter outlined U.S. policies on 
human rights. Prime Minister Barre em- 
phasized that the concept of liberty and the 
rights of man will continue to inspire French 
foreign policy. The President and the Prime 
Minister discussed the Belgrade CSCE [Con- 
ference on Security and Cooperation in 
Europe] Review Conference. They agreed on 
the need for a thorough review of implementa- 
tion of all aspects of the Helsinki Final Act 
designed to promote further progress in each 
of these areas. 

The President and the Prime Minister re- 
viewed the situation in Africa. President Car- 
ter described U.S. steps to support the 
British effort to bring about a peaceful transi- 
tion to majority rule in Rhodesia and ex- 
pressed appreciation for French support. The 
two leaders agreed on the importance of prog- 
ress toward social justice and majority rule in 
southern Africa. President Carter praised 
France's vital role in promoting economic de- 
velopment and political stability in Africa. 

The two leaders also reviewed the situation 
in the Middle East and agreed on the impor- 
tance of convening the Middle East Peace 
Conference. 

Prime Minister Barre raised the subject of 
Concorde landing rights in the United States, 
emphasizing the importance of this issue to 
France. President Carter reiterated his sup- 
port for a 16-month trial period for Condorde at 
Kennedy Airport and expressed the hope that 



October 24, 1977 



567 



this could be soon initiated. He also said that 
he would decide the future of landing rights at 
Dulles Airport in the very near future. 

President Carter emphasized the vital im- 
portance of close cooperation between the 
United States and Europe. He expressed ad- 
miration for French leadership in resolving 
many international economic, social, political, 
and technological problems. Prime Minister 
Barre reiterated President Giscard d'Es- 
taing's invitation to President Carter to visit 
France and President Carter expressed the 
hope that he would soon be in a position to 
reply. 



News Directors Interview 
President Carter 

Following are excerpts relating to foreign 
policy from President Carter's openi)ig re- 
marks a)id a question -and-answer session 
from the transcript of a telephone interview by 
members of the Radio-Television News Direc- 
tors Association in San Francisco on Sep- 
tember 15. 1 

I've just finished the morning meeting with 
the Prime Minister of France, Mr. [Raymond] 
Barre. This is the first time a French Prime 
Minister has been to our country in more than 
20 years. Then from now on in the coming- 
months, I'll be meeting — beginning next 
week — with Foreign Minister [Moshe] Dayan 
from Israel and then with all the Foreign 
Ministers of the Arabian countries around 
Israel, searching for a settlement in the Mid- 
dle East. 

I've spent last week, as you know, with the 
Panama Canal treaty, which I consider to be 
crucial to our country's future unimpeded use 
of the Panama Canal and a very important as- 
pect in the mutual friendship and support that 
we can expect from Latin America. 

We have constant negotiations going on with 



'For the complete transcript, see Weekly Compilation 
of Presidential Documents dated Sept. 19, 1977, p. 1348. 



the Soviet Union on things concerning de- 
militarization of the Indian Ocean. The SALT 
[Strategic Arms Limitation Talks] negotiations 
are presently underway. 

We have meetings with the Soviets and also 
with the British on the comprehensive test ban 
to do away with the testing of nuclear explo- 
sives. I've met with several national leaders on 
reducing the opportunity for countries to go 
into the nuclear explosive field. One of the re- 
cent concerns, of course, was South Africa's 
prospective test. 

We are dealing with the United Nations and 
specific countries involved in trying to resolve 
the Namibian question down near South Africa 
and also the Rhodesian question. We're work- 
ing closely with the British, the French, the 
Germans, and the Canadians on these 
questions. 

Of course, here in the Congress many of 
these matters spill over into joint decisions by 
me and the leaders in Congress. 



Q. If the Panama Canal treaty is not 
ratified in the So/ate, what effect will this 
have on our relations with OAS [Organization 
of American States] countries? 

The President: Even before I was inaugu- 
rated, I had messages from eight different 
heads of state in Latin America urging me to 
put as our number one foreign policy matter 
the completion of a new Panama Canal treaty. 
For years, when the Organization of American 
States have met together, one of the prime 
items on the agenda has been to encourage 
our country and Panama to ratify a new 
treaty. 

This past week we had a demonstration of 
support for the treaty terms from 27 different 
countries in this hemisphere. And as you 
probably have noticed in the news, last week 
we had 19 heads of state who took the time to 
leave their own jobs and to come to Washing- 
ton to express publicly their support for the 
treaty terms. I met with all those heads of 
state and they considered this to be a crucial 
demonstration of our willingness to be fair. 

I think there's a new sense of mutual pur- 



568 



Department of State Bulletin 



pose. There's also a new sense that we look 
upon our Latin American neighbors as equals. 
I think there's a new sense that there is a 
vista of improved friendship and common pur- 
pose between us and our Latin American 
friends in the years to come, not based on 
grants or loans or financial aid from us to 
them but based on the fact that this treaty 
corrects a longstanding defect in our relation- 
ship with countries to the south. 

If the treaty should not be ratified, I think 
there would be very serious international con- 
sequences, not just with Panama but with all 
the nations in this hemisphere. 

We have enjoyed the benefits of the pres- 
ently existing treaty for a long time. No per- 
son from Panama ever saw that treaty before 
it was signed. No Panamanian, of course, was 
involved in the signing of that treaty. 

In my opinion it's very beneficial to our na- 
tion, to our security, and to our diplomatic re- 
lationships, to our business trade, and health 
to have this treaty ratified. 

Every President since President Johnson 
has been involved in trying to get such a 
treaty ratified. Past Secretaries of State Kis- 
singer, Rogers, Rusk have confirmed their 
support for the treaty. President Ford is 
strongly in favor of the treaty. And, of course, 
our Joint Chiefs of Staff unanimously, repre- 
senting the Armed Forces, feel that this 
treaty is in our nation's interests. 

I think if we should fail to ratify the treaty 
that there would be a threat, at least, of dis- 
ruption of the peaceful operation of the canal. 
I believe that we could defend the canal 
against such threatened disruptions. But it 
would be very difficult for us to do it. 

It's not so important who actually owns the 
canal; Panama has always had sovereignty 
over the Panama Canal Zone. But what's im- 
portant is whether or not the canal is open. 
And I believe that we can keep it open much 
more surely if we work in partnership with 
Panama rather than if we fail to ratify the 
canal [treaties] and make an enemy not only of 
Panama but betray the confidence that now 
exists in us by the other countries in our 
hemisphere. 



So, you can tell from what I say that I con- 
sider it to be very important. And I'm very 
grateful that the American people's opinion is 
changing toward favoring the Panama Canal 
treaty as they become familiar with the ele- 
ments of it. 

Q. What's your current assessme)it of the 
chances for the treaty in the Septate? 

The President: That's hard to say. As you 
know, a little more than a year ago, 40 Sena- 
tors signed the resolution against the ratifica- 
tion of any treaty. Now many of those Sena- 
tors have told me both privately and publicly 
that they favor the treaty itself. It's too early 
to say. Also, 6 months ago, according to some 
very responsible polls among the American 
people, only about 8 percent of our people fa- 
vored the treaty. A more recent poll by 
Gallup — confirmed by some private polls that 
I have seen on a nationwide basis — show that 
about 40 percent now favor ratification of the 
treaty. There are about 45 to 50 percent still 
remaining who don't favor the ratification of 
the treaty. So, I would say that the trend is in 
the right direction, but we certainly don't 
have any assurance that we have a two-thirds 
majority yet. 



United States Contributes 
to U.N. Institute for Namibia 

USUN press release 60 dated August 26 

On the occasion of Namibia Day — August 
26, 1977 — the U.S. Acting Permanent Repre- 
sentative to the United Nations, James F. 
Leonard, has sent to the Secretary General 
of the United Nations a letter informing him 
that the United States will contribute in 1977 
$250,000 to the U.N. Institute for Namibia in 
Lusaka, Zambia. This will be the second U.S. 
contribution, and through these contributions 
the United States joins with other members 
of the international community in supporting 
the Institute's program of helping Namibians 
prepare for the responsibilities of independ- 
ence. 



October 24, 1977 



569 



Editors and News Directors 

Interview President Carter 

Following are excerpts relating to foreign 
policy from President Carter's opening re- 
marks and a question-and-answer session 
from the transcript of an interview by a group 
of editors and news directors on September 
16. « 

This morning I concluded my own talks with 
the Prime Minister of France [Raymond Bar- 
re], and this is a final meeting with him. He'll 
now, this afternoon, meet with economic ad- 
visers, the Secretary of State, Secretary of 
Defense, Secretary of Energy, and others so 
that we, in shaping our own policies for the 
future, will know the special problems of 
France, and vice versa. These discussions 
which I have had with many foreign leaders 
have been very helpful to me. 

Last week, I met with, I think, 19 heads of 
state of the Latin American countries. And I 
think we have a new relationship with them, 
brought about primarily by the prospect of 
the ratification of the Panama Canal treaty. 

We are continuing our negotiations with the 
Soviets on the SALT [Strategic Arms Limita- 
tion Talks] question; also, on a comprehensive 
test ban of nuclear weapons. And as you 
know, the Soviet Union in addition is a 
cochairman, along with us, of the Mideast 
talks that we hope will take place before the 
end of this year. 

This coming week, I'll have the first of a 
series of foreign ministers who will come and 
meet with me from the Middle Eastern 
region — Foreign Minister Dayan from Israel. 
And during the following weeks, I'll meet 
with all the others. These meetings that come 
to me directly are preceded, of course, by long 
discussions with the Secretary of State and 
others. 

We have, in addition, many other defense 
matters that have come to my desk. Quite of- 



1 For the complete transcript, see Weekly Compilation 
of Presidential Documents dated Sept. 26, 1977, p. 1369. 



ten, we have foreign matters that don't relate 
to the prospect of war or the issue of peace. A 
recent one, concluded last week, was with the 
Canadians, on a means by which we might 
bring natural gas down to our country. And 
this is the biggest construction project ever 
undertaken in the history of the world, and I 
think we arrived at a common purpose there. 

Q. Mr. President, Jim Wisch, with the 
Texas Jewish Post, Dallas and Fort Worth. 

First of all, on behalf of the American 
Jewish Publishers Association, I want to 
thank you for the profound message you sent 
from your wife, Rosalynn, and yourself to the 
American Jewish community. It was indeed 
very sincere. And with regard to your sincer- 
ity, which was recognized by all editors across 
the country regardless of their background, I 
want to point up to you your profound state- 
ment on the Mideast which we published right 
before the election, which was highly informa- 
tive and set out many things that you had 
proposed to do. 

I just returned from the Mideast, where I 
had a long, long conversation with Ambas- 
sador Lewis [Samuel W. Lewis, U.S. Ambas- 
sador to Israel]. And it seems to me there's a 
great deal of apprehension going on amongst 
American Jews and Jews of the world, and 
somehow it rests upon what some of your de- 
cisions are going to be. 

I think this apprehension could be cleared, 
because I think there may be a disagreement, 
perhaps, in semantics rather than in objec- 
tives. And I wonder if you had been concerned 
about your popularity or your interpretation 
vis-a-vis your embracement of the PLO 
[Palestine Liberation Organization] and that 
your regard for them has given them a prop- 
aganda ploy where they have become 
recalcitrant — they still employ chapter 16, the 
complete destruction of Israel. 

Now, people think that you are pushing Is- 
rael to sit down and recognize the PLO, re- 
gardless of that point in the PLO's platform. 
[U.N. Security Council Resolution] 242, your 
resolution, which you so eloquently described 
last July, says that nobody can sit down un- 
less it's a face-to-face discussion and they rec- 



570 



Department of State Bulletin 



agnize the entity of each nation as being a 
sovereign nation like we are doing with 
Panama. 

And in view of this regard, I wonder if you 
plan to clear this up or elucidate or however 
you plan to handle this. 

The President: With all due respect, that's 
one of the most distorted assessments of my 
own policy that I've ever heard. 

Q. It is not my assess»ie)if [laughter] — 

The President: I understand. 

Q. But it's incumbent upon me to bring it to 

you. 

The President: I've never endorsed the 
PLO. Our government has had no communica- 
tion, at all, directly with the PLO. The only 
communication has been when representatives 
of the PLO have been to Arab leaders im- 
mediately prior to a Cy Vance visit with them 
or their visit to our country and have deliv- 
ered messages to us indirectly. 

Our agreement with the Israeli Government 
several years ago — before I became 
President — was that we would not communi- 
cate with the PLO as long as they did not re- 
fute their commitment to destroy the nation of 
Israel and did not accept the right of Israel to 
exist. Our public position is the same as our 
private position. There is no difference be- 
tween them. 

We have said that if the PLO would accept 
publicly the right of Israel to exist and exist 
in peace, as described under U.N. Resolution 
242, that we would meet with them and dis- 
cuss the future of the Palestinians in the Mid- 
dle East. We have never called on the PLO to 
be part of the future negotiations. We have 
said that the Palestinian people should be rep- 
resented in the future negotiations. That is 
one of the three major elements of any agree- 
ment that might lead to lasting peace — one is 
the territorial boundaries; the other one is the 
Arab countries accepting Israel, to live in 
peace as neighbors; and the third one is some 
resolution of the Palestinian question. 

I've never called for an independent Pales- 
tinian country. We have used the word "en- 
tity." And my own preference as expressed in 
that talk that I made in New Jersey, I think, 



and now, is that we think that if there is a 
Palestinian entity established on the West 
Bank, that it ought to be associated with Jor- 
dan, for instance. I think this was the case 
among many Israeli leaders as their prefer- 
ence in the past. 

So, we have been very cautious, very care- 
ful, very consistent in spelling out our posture 
on the Middle Eastern settlements. When we 
have gone around, for instance — I haven't, 
but Cy Vance has gone around to Israel, to 
Jordan, to Syria, to Egypt, to Saudi Arabia — 
to talk about the future Middle Eastern con- 
ference and, hopefully, a settlement, we have 
taken the same exact written set of principles 
so there would be no difference among them, 
and discussed it with Sadat and Hussein and 
Asad and Fahd and with Mr. Begin, so that 
there would never be any allegation on any 
part of theirs that we took one position with 
the Israelis and a different position with the 
Arabs. 

Sometimes the Israelis would say, "We 
don't accept this principle number 4." Some- 
times the Arabs would say, "We don't accept 
principle number 1." But we've tried to 
negotiate in good faith. 

I might say one other thing. We are not just 
an idle bystander. We are not just an unin- 
terested intermediary or mediator. Our coun- 
try has a direct, substantial interest in a 
permanent peace in the Middle East. And I sin- 
cerely hope and I believe that the nations who 
live there also want to have a permanent set- 
tlement and a permanent peace in the Middle 
East. And the principles that I described in 
that speech, the principles that the Vice Pres- 
ident described in a speech he made in 
California earlier this year, and the principles 
that we espouse in our public and private con- 
versations with Arabs and Israelis and with 
Prime Minister Barre, yesterday, from 
France, and others who are interested, are 
exactly the same. We've never deviated. 

We have learned a lot. And as we've 
learned, we've added additional new items 
onto our basic proposal. But ultimately, the 
Middle Eastern settlement has got to be an 
agreement among the parties involved. 

Now, I hope that all the countries are eager 



October 24, 1977 



571 



to negotiate in good faith. I hope that none of 
them are putting up deliberate obstacles to 
prevent a Geneva conference from being con- 
vened. That's my hope and that's my present 
expectation. 



Reorganizing Cultural and 
Informational Activities 

Following is a joint* statement by Acting 
Secretary of State Warren Christopher and 
Director of the United States Information 
Agency (USIA) John E. Reiuhardt issued on 
September 1. 

We are pleased by the President's decision 
to reorganize international cultural, educa- 
tional, and informational activities. The pro- 
posed reorganization will give these activities 
enhanced stature and make it possible to 
serve the American people and American 
interests more effectively. 

The President will recommend to the Con- 
gress the establishment of a new agency em- 
bracing USIA (including the Voice of 
America, VOA) and the Department of State's 
Bureau of Educational and Cultural Affairs. 
This will provide a more rational organization 
of these communication efforts and will give 
them greater stature in the years ahead. 

The new agency will be under the direction 
of the Secretary of State. Its Director will re- 
port directly both to him and to the President, 
as does the Director of the Arms Control and 
Disarmament Agency. The new agency's 
budget and personnel systems will be au- 
tonomous. 

In arriving at his decision to submit a reor- 
ganization plan to the Congress, the President 
studied the views of the distinguished panel 
chaired by Dr. Frank Stanton, the House 
Subcommittee on International Operations 
headed by Congressman Dante Fascell, re- 
spected academic organizations, the General 
Accounting Office, the American Federation 
of Government Employees, the American 
Foreign Service Association, as well as the 
advice of many individuals. 

We share the belief — strongly expressed by 



these groups and individuals — that we must 
step up our efforts to broaden international 
communication between the government and 
people of our nation and the governments and | 
peoples of other nations. 

The reorganization plan will be drafted and 
submitted to the Congress prior to October 31, 
as required by law, and congressional con- 
sultations about the process are underway. 
The plan will include a statement defining the 
mission of the new agency. It will guarantee 
the continued integrity of the educational and 
cultural exchange programs. It will also 
guarantee the independence and objectivity of 
the news functions of the VOA. Finally, every 
effort will be made to protect the rights of af- 
fected personnel in USIA and the Department 
of State. 

The new agency will seek to: 

— Reflect accurately to other peoples and 
governments the values of our society; 

— Convey the diversity of thought and cul- 
tural vitality of the United States; 

— Insure that other countries know where 
this country stands and why; 

— Assist Americans to understand the intel- 
lectual and cultural wealth and diversity of 
other countries; 

— Forge relationships between Americans 
and others that can contribute to mutual un- 
derstanding and the capacity to cooperate in 
solving common problems; 

— Provide the President and the Secretary 
of State with accurate assessments of foreign 
opinion on important issues; and 

— Seek to reduce barriers to the interna- 
tional exchange of ideas and information. 



Cuban Interest Section 
Opens in Washington 

Following is a statement by Philip Habib, 
Under Secretary for Political Affairs, made at 
the ceremony on opening the Cuban Interest 
Section at Washington, D.C., on September 1. 

We are here today to mark a first step, a 
step which — while in itself not large — is, just 
the same, significant. 

For many years two neighbors, Cuba and 



572 



Department of State Bulletin 



the United States, have had no dialogue. Dif- 
ferences thus have been exaggerated and areas 
of potential agreement left unexplored. After 
only 5 weeks in office, Secretary Vance said 
"... there are a number of issues that we 
ought to start discussing with the Cubans. I 
would like to begin that process. . . . " 

What we do here today, opening the Cuban 
Interest Section in the United States and the 
parallel ceremony taking place in Havana, is 
symbolic, but it also goes beyond mere sym- 
bolism. In practical terms, consular services 
now become available directly through the 
presence of consular representatives. On a 
broader basis, a direct dialogue is now possible 
on issues of mutual benefit to our peoples, and 
this is good. 

But we should all keep in mind that this is 
not an end but a beginning. With these Inter- 
est Sections we can speak directly, but we will 
have many things about which to speak and the 
dialogue will not always be an easy one. Presi- 
dent Carter recognized this when he told re- 
porters in May that we" . . . still have a lot of 
differences between us." Significantly, he went 
on to say that the United States has "full 
friendship with Cuba" as an "ultimate goal." 

And so the process has begun. I know I 
speak for the President and Secretary Vance 
when I say that it is our hope, working to- 
gether with good will, that this process can 
flourish not only to the benefit of the Cuban 
and American peoples but also in the interest 
of peace and stability in this hemisphere and in 
the world. That is our objective; let us now 
work together toward it. 



Report on Human Rights 
in the Americas 

Following is a statement by Gale W. 
McGee, U.S. Permanent Representative to the 
Organization of American States (OAS) sub- 
mitted to the Subcommittee on International 
Organizations of the House Committee on In- 
ternational Relations on September 15. 1 

I am grateful for this opportunity to report 
on the developments relating to human rights 
which took place at the Seventh General As- 



sembly of the OAS held in Grenada in June 
[14-24]. 

It is a source of great satisfaction that the 
question of human rights dominated the Gen- 
eral Assembly. At least 90 percent of the As- 
sembly's energies and almost all of its time 
was spent on this sensitive issue, which on 
previous occasions has usually been avoided or 
handled with exaggerated caution. A great 
deal of the credit for bringing human rights to 
the forefront goes to the concerted efforts of 
President Carter and other Latin and Carib- 
bean leaders dedicated to the defense of the 
most basic traditions of our hemisphere. I am 
proud to say that the U.S. delegation at Gre- 
nada worked closely with those of like-minded 
states to develop a strategy that would result 
in passage of several important resolutions 
aimed at strengthening the Inter-American 
Human Rights Commission (IAHRC), advanc- 
ing the ratification process of the San Jose 
Pact [American Convention on Human Rights] 
and, in general, enhancing the cause of human 
rights in the Americas. 2 

We had certain goals at Grenada and we 
sought to achieve them by working together 
with a number of other delegations of OAS 
member states. 

— We agreed that by standing together we 
could promote human rights in the 
hemisphere. 

— By actively seeking and successfully ob- 
taining the cooperation of the majority of the 
OAS member states, we frustrated efforts by 
a few to make it appear that the United States 
was isolated in its advocacy of human rights. 

— We also agreed that we must avoid the 
sort of crippling criticism of the IAHRC that 
was intended to result in restructuring of the 
commission in ways that would hamper its 
effectiveness. 

— To counter this initiative by some states, 
we helped sponsor resolutions supporting and 
endorsing the conclusions of the reports of the 
IAHRC. 

The OAS General Assembly in Grenada 



'The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 

2 For text of the American Convention on Human 
Rights, see Bulletin of July 4, 1977, p. 28. 



October 24, 1977 



573 



proved beyond all doubt that the promotion of 
respect for human rights is a broad-based 
movement against gross abuse of human be- 
ings in which many governments and peoples 
have joined together. At Grenada, the leaders 
of the drive for frank discussion and action in 
defense of human rights formed a roll call of 
Latin American and Caribbean states with a 
deep commitment to freedom. 

I would like to pay particular credit to the 
important work of the Caribbean delegations 
who contributed so notably to the discussion 
and its results. The three strong resolutions 
this coalition of member states supported and 
helped pass went far toward demonstrating 
that the banner of human rights will draw 
many of the regions's important leaders. Such 
frank debate and the forthright resolutions on 
human rights were unprecedented in the OAS 
and, indeed, in most international organiza- 
tions to which we belong. 

At the same time. Secretary Vance's open- 
ing statement, his bilateral discussions with 
every OAS Foreign Minister at the General 
Assembly, and the corridor work of our dele- 
gation to the conference showed convincingly 
to the participants that human rights is a seri- 
ous and enduring concern for the U.S. 
Government. 

Terrorism and its relation to human rights 
was another subject of intense interest to the 
delegations at Grenada. We gave our strong 
support to the resolution sponsored by the 
Dominican Republic that sought to focus at- 
tention on the problem of international ter- 
rorism and its consequences. The Dominican 
Republic's resolution called for early ratifica- 
tion of the OAS convention on preventing and 
punishing acts of terrorism against diplomatic 
and international organizations' personnel as 
well as for continuing study by the Permanent 
Council of other conventions on assault and 
kidnapping in the hemisphere. 

A resolution sponsored by Argentina, com- 
bining the problems of terrorism and abuse of 
human rights and giving clear priority to the 
suppression of terrorism, was defeated. 
Mexico's ambassador to the OAS, Don Rafael 
de la Colina, made the distinction between 
these two subjects with particular eloquence 
when he argued that abuse of human rights is 



a crime committed by the state against an in- 
dividual subject to its laws while an act of ter- 
rorism is a lawless offense against the state 
committed by an individual. Both are crimes, 
but they must be dealt with differently. Sup- 
pression of terrorism cannot be an excuse for 
abuse of human rights. Venezuela's Foreign 
Minister Don Ramon Escovar Salom summed 
up the views of the pro-human rights delega- 
tions when he said that "... political free- 
dom is the only antidote to terrorism." Secre- 
tary Vance himself said at Grenada: "The 
surest way to defeat terrorism is to promote 
justice in our societies — legal, economic, and 
social justice." 3 

Our strongest efforts, and those of the 
other seven delegations who joined in sponsor- 
ing it, were devoted to passage of Resolution 
315, commending the work of the Inter- 
American Human Rights Commission, rec- 
ommending that member states cooperate 
with it more fully and calling for greater re- 
sources to allow the commission to perform its 
functions more effectively. The resolution 
concluded with the affirmation that "... no 
circumstances can justify torture, summary 
conviction or prolonged detention without 
trial, contrary to law." I believe Resolution 
315 is an accurate measure of the real concern 
of a majority of countries represented at Gre- 
nada with the defense of human rights. 

The Inter-American Human Rights Com- 
mission presented its Third Report on the 
Status of Human Rights in Chile to the VII 
General Assembly. The United States sup- 
ported the resolution that was adopted by the 
General Assembly which was supportive of 
the commission and pressed Chile to continue 
cooperating with and reporting to the com- 
mission on the human rights situation there. 
The commission's report made a series of rec- 
ommendations designed to improve human 
rights in Chile. 

The Grenada General Assembly focused at- 
tention on the issue of human rights in the 
Western Hemisphere. Why is that issue of 
such concern to the membership of the OAS, 
some may ask? I think it is because every one 






3 For complete text, see Bulletin of July 18, 1977, 
p. 69. 



574 



Department of State Bulletin 



of our constitutional documents and the very 
Charter of the OAS refers to the rights of man 
and citizen — the great legacy of our Greco- 
Roman civilization and an essential element of 
our shared historical tradition. Countries of 
this tradition feel a strong obligation to live 
up to common values of respect for the rights 
of citizens to freedom from illegal arrest, pro- 
longed detention, and cruel forms of interro- 
gation and punishment. 

Grenada was a benchmark in the long, slow 
struggle for higher standards of human rights 
performance in this hemisphere. But steady 
improvement in the years ahead will only be 
made with great effort and close cooperation 
among like-minded OAS states. Improve- 
ments in the human rights climate are begin- 
ning to appear, not just or even primarily as a 
result of the work of the United States and 
the other governments who worked together 
at Grenada. Changes are being made, slowly, 
sometimes very reluctantly, but steps are 
being taken in a number of countries to end 
past abuses. More and more excuses for con- 
tinuing violations are being couched in the 
language of our common hemispheric 
tradition. 

All countries are aware of their own values 
and proud of their historical heritage. One of 
the most dramatic moments at the Grenada 
General Assembly was when the Permanent 
Observer of Spain [Luis de Pedroso] was 
brought to the rostrum to receive the warm 
praise of many delegations on the democratic 
election that took place that week in his home- 
land. This symbolic gesture of welcome for the 
mother country of many OAS member states 
was not lost on the audience at Grenada. 

One measure of the improvement underway 
is that momentum is building toward the 
adoption of the American Convention on 
Human Rights, the Pact of San Jose, which 
President Carter signed in June and which has 
now been signed by 15 states and ratified by 
four — Costa Rica, Colombia, Honduras, and 
Venezuela. Eleven states must ratify in order 
to bring the Pact of San Jose into force. Adop- 
tion of the American Convention will be a 
landmark in the struggle for human rights in 
this hemisphere. The executive branch is for- 
mulating necessary reservations to the Pact of 



October 24, 1977 



San Jose which will then be submitted to the 
Senate for advice and consent to ratification. 

I have every reason to believe, based on the 
very favorable results of the VII General As- 
sembly of the OAS and the other develop- 
ments I have referred to since then, that 
human rights in this hemisphere is of growing 
concern to a broad range of states, leaders, 
and peoples and that, far from standing alone, 
the United States is a member of a distin- 
guished fraternity in the Americas. Defense of 
citizens against torture, illegal detention, 
summary execution, or disappearance by offi- 
cial connivance are abominations to the most 
deeply held values of all the American 
peoples. These crimes against human rights 
are the target of a growing wave of revulsion 
that is spreading throughout the Western 
Hemisphere. It is not and must not be seen to 
be an exclusive concern of the Government of 
the United States. 



Congressional Documents 
Relating to Foreign Policy 

Senate Delegation Report on American Foreign Policy 
and Nonproliferation Interests in the Middle East. 
Report pursuant to S. Res. 167 of May 10, 1977. S. 
Doc. 95-47. June 1977. 55 pp. 

Packing Standards for Imported Tomatoes. Report of 
the Senate Committee on Agriculture, Nutrition, and 
Forestry to accompany S. 91. S. Rept. 95-356. July 
21, 1977. 17 pp. 

Establishing a Select Committee on Population. Report 
of the House Committee on Rules to accompany H. 
Res. 70. H. Rept. 95-516. July 21, 1977. 3 pp. 

International Trade Commission Authorization, 1978. 
Report of the House committee of conference to ac- 
company H.R. 6370. H. Rept. 95-518. July 21, 1977 
8 pp. 

Revised Customs Convention on the International 
Transport of Goods Under Cover of TIR Carnets. 
Message from the President of the United States 
transmitting the revised customs convention (TIR 
Convention), done at Geneva on November 14, 1975, 
with annexes. S. Ex. M. July 26, 1977. 86 pp. 

Protocol Relating to Intervention on the High Seas in 
Cases of Marine Pollution by Substances Other Than 
Oil, 1973. Message from the President of the United 
States transmitting the protocol relating to interven- 
tion on the high seas in cases of marine pollution by 
substances other than oil, adopted at London on 
November 2, 1973, by the International Conference 
on Marine Pollution. S. Ex. L. July 25, 1977. 8 pp. 



575 



Recommendation to Protect 
Antarctic Environment 

Following is a statement by Robert C. 
Brewster, Acting Assistant Secretary for 
Oceans and International Environmental a)td 
Scientific Affairs, made before the Subcom- 
mittee on Fisheries and Wildlife Conservation 
and the Environment of the House Committee 
on Merchant Marine a)id Fisheries a>ul the 
Subcommittee on Environment and the At- 
mosphere of the House Committee o)i Science 
and Techuologif o>i September 12. i 

I appreciate the committee's prompt con- 
sideration of H.R. 7749, the bill transmitted 
to Congress by the Department of State on 
behalf of the executive branch on May 23. The 
bill, when enacted, would enable the United 
States to implement what are termed agreed 
measures adopted by the Antarctic Treaty 
members for the protection and conservation 
of Antarctic flora and fauna and the fragile 
ecosystem on which they depend. The bill has 
the support of all the concerned U.S. Gov- 
ernment agencies and was endorsed by the 
President in his environmental message to the 
Congress of May 23. 2 

I also appreciate the committee's willing- 
ness to defer these hearings to permit the 
drafting of technical amendments that we be- 
lieve clarify and streamline the regulatory 
mechanism contemplated by the bill. These 
amendments, which were developed as the re- 
sult of consultations with the committee's 
staff, are now incorporated in the bill before 
us. 

The Agreed Measures for the Protection of 
Antarctic Fauna and Flora are the product of 
the Antarctic Treaty system. The Antarctic 
Treaty was signed by 12 countries in 1959 — 
Argentina, Australia, Belgium, Chile, France, 
Japan, New Zealand, Norway, South Africa, 
United Kingdom, U.S.S.R., and the United 
States. Subsequently, seven additional coun- 



'The complete transcript of the hearings will be pub- 
lished by the committee's and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 

2 See Weekly Compilation of Presidential Documents 
dated May 30,' 1977, p. 782. 



576 



tries have adhered to the treaty — Brazil, 
Czechoslovakia, Denmark, East Germany, the 
Netherlands, Poland, and Romania. 

The Antarctic Treaty sets aside Antarctica 
and the waters south of 60 degrees south 
latitude for peaceful purposes only, prohibits 
nuclear explosions or the disposal of nuclear 
wastes there, provides the right of arms con- 
trol inspections, and guarantees freedom ofl 
scientific research throughout the Antarctic. 
The treaty provides for regular meetings of 
consultative parties. Those parties are the' 
original 12 and, since July 29, Poland — the 
first acceding state to demonstrate its interest 
in Antarctica by conducting substantial scien- 
tific research there and thus to qualify for 
consultative status. It is at these consultative 
meetings that the parties discuss and agree on 
approaches to Antarctic problems. 

It was at the third consultative meeting in 
1964 that the representatives of the 12 consul! 
tatives parties unanimously agreed upon and 
recommended to their governments for ap- 
proval the Agreed Measures. The initiative 
for the measures came from the United States 
and stemmed from the fact that an increasing 
and continuing human activity in Antarc- 
tica — resulting in part from the cooperation 
under the treaty — threatened the biological 
and ecological integrity of certain areas and 
species for which there was inadequate or no 
protection. This was especially true for those 
habitats close to the permanent scientific sta- 
tions or otherwise relatively easily accessible. 

The Agreed Measures, among other things, 
provide for the protection of birds and mam- 
mals from harmful interference, the identifi- 
cation and establishment of specially pro- 
tected areas which are closed to most 
activities, the prohibition of the introduction 
into Antarctica of exotic plants and animals, 
and for the determination of specially pro- 
tected species. The taking of specimens or 
entry into the protected areas require special 
permits which are issued only for compelling 
and carefully delimited research activity. 

The designation of the specially protected 
areas is normally proposed by one or more 
consultative parties, usually based on the 
suggestion of the nongovernmental Scientific 
Committee on Antarctic Research (SCAR) — 



Department of State Bulletin 






relic 



an advisory body on which sit representatives 
of the private and academic scientific com- 
munities of the consultative parties. 

The Agreed Measures, as all other recom- 
mendations of consultative meetings, become 

hibil effective when all governments of consultative 

idea parties have approved them. To date nine of 
the 13 countries have approved. Among the 
four who have not, Belgium and Australia are 

irctii now going through a process similar to our 
own to obtain enabling legislation. Japan has 
indicated that it has certain domestic legal 
problems with special implementing legisla- 
8 tion, but it is trying to work out a means to 

sciei approve the measures. 



j 1 



ie ,i 



m 

Ml 

n an 
■rap 
iativi 



sta 






pro- 






Vh 



Approval of the Agreed Measures by the 
United States, which would take place upon 
enactment of the proposed legislation, would 
be significant evidence of the continuing 
interest of the United States in the Antarctic 
and its environment. It would replace the in- 
formal administrative procedures by which 
the United States has, since 1964, observed 
the Agreed Measures as interim guidelines. 
These informal procedures sufficed as long as 
most Americans visiting Antarctica were 
members of U.S. scientific expeditions. With 
the increase of public interest and activity in 
Antarctica, however, legislation with appro- 
priate enforcement and penalty provisions is 
needed to enable the U.S. Government to 
fully implement the Agreed Measures and 
formally approve them pursuant to the provi- 
sions of the Antarctic Treaty. 

The National Science Foundation, which is 
responsible for the management of the U.S. 
program in Antarctica, would have primary 
responsibility for the implementation of the 
proposed act. The director of the National 
Science Foundation would, however, refer 
any permit applications involving species of 
birds, mammals, or plants native to Antarc- 
tica that fall within the regulatory responsibil- 
ity of either the Secretary of Commerce or the 
Secretary of Interior to those Secretaries for 
action. I will leave the more detailed discus- 
sion of these procedures to the representa- 
tives of those agencies who are testifying with 
me this morning. 

The bill also contains in section 7 a notifica- 
tion requirement that will assure that the 



October 24, 1977 



United States meets its obligations under Ar- 
ticle VII of the Antarctic Treaty to inform 
other treaty parties of all expeditions to and 
within Antarctica on the part of U.S. ships or 
nationals and all expeditions to Antarctica or- 
ganized in or proceeding from U.S. territory. 

In his environmental message of May 23, 
1977, the President assigned great importance 
to continued U.S. leadership and international 
cooperation in the Antarctic. He emphasized 
the need to maintain the environmental integ- 
rity of the Antarctic which influences the con- 
dition and stability of the Earth's oceans and 
atmosphere. 

The passage of H.R. 7749 insures both sup- 
port of the President's objectives and conveys 
to the world community in a concrete fashion 
our continuing interest in the protection of the 
Antarctic environment. We appreciate the 
committee's interest in this subject and hope 
that these comments will be of assistance to 
you in considering this proposed legislation. 



TREATY INFORMATION 



Current Actions 



MULTILATERAL 

Biological Weapons 

Convention on the prohibition of the development, pro- 
duction, and stockpiling of bacteriological (biological) 
and toxin weapons and on their destruction. Done at 
Washington, London, and Moscow April 10, 1972. En- 
tered into force March 26, 1975. TIAS 8062. 
Ratification deposited: Australia, October 5, 1977. 

Economic Cooperation 

Agreement establishing a financial support fund of the 
Organization for Economic Cooperation and Develop- 
ment. Done at Paris April 9, 1975. ' 
Ratification deposited: Ireland, September 27, 1977. 

Energy 

Memorandum of understanding concerning cooperative 
information exchange relating to the development of 
solar heating and cooling systems in buildings. Formu- 
lated at Odeillo, France, October 1-4, 1974. Entered 
into force July 1, 1975. 



Not in force. 



577 



Signature: Department of Scientific and Industrial Re- 
search of New Zealand, August 9, 1977. 

Finance 

Articles of agreement of the International Monetary 
Fund. Done at Washington December 27, 1945. En- 
tered into force December 27, 1945. TIAS 1501. 
Signature and acceptance: Sao Tome and Principe, 
September 30, 1977. 

Articles of agreement of the International Bank for Re- 
construction and Development. Done at Washington 
December 27, 1945. -Entered into force December 27, 
1945. TIAS 1502. 

Signature and acceptance: Sao Tome and Principe, 
September 30, 1977. 

Agreement establishing the International Fund for Ag- 
ricultural Development. Done at Rome June 13, 1976. ' 
Accepta>ice deposited: United States, October 4, 1977. 
Ratifications deposited: Indonesia, September 27, 

1977; Mali, September 30, 1977. 
Signature: Portugal, September 30, 1977. 

Human Rights 

International covenant on civil and political rights. Done 

at New York December 16, 1966. Entered into force 

March 23, 1976. 2 

Signature: United States, October 5, 1977. 
International covenant on economic, social and cultural 

rights. Done at New York December 16, 1966. Entered 

into force January 3, 1976. 2 

Signature: United States, October 5, 1977. 

Tin 

Fifth international tin agreement, with annexes. Done at 
Geneva June 21, 1975. Entered into force June 14, 
1977. TIAS 8607. 
Ratification deposited: Italy, September 30, 1977. 



BILATERAL 



Bangladesh 

Project grant agreement for rural finance experimental 
project, with annexes. Signed at Dacca August 31, 
1977. Entered into force August 31, 1977. 

Project grant agreement for agricultural inputs project 
III relating to fertilizer distribution and marketing, 
with annexes. Signed at Dacca August 31, 1977. En- 
tered into force August 31, 1977. 

Bolivia 

Project agreement relating to rural education, with an- 
nexes. Signed at La Paz August 30, 1977. Entered into 
force August 30, 1977. 

Cuba 

Agreement concerning fisheries off the coasts of the 
United States, with agreed minutes. Signed at Havana 
April 27, 1977. 
Entered into force: September 26, 1977. 

Egypt 

Project grant agreement for technology transfer and 
manpower development III, with annex. Signed at 
Cairo August 11, 1977. Entered into force August 11, 
1977. 

First amendment to project grant agreement of August 
11, 1977. for technology transfer and manpower de- 



velopment III. Signed at Cairo August 31, 
tered into force August 31, 1977. 



1977. En- 



Guatemala 

Loan agreement for primary school reconstruction, with 
annexes. Signed at Guatemala September 14, 1977. 
Entered into force September 14, 1977. 

Indonesia 

Agreement amending the agreement for sales of agricul- 
tural commodities of May 17, 1977. Effected by ex- 
change of notes at Jakarta September 9, 1977. Entered 
into force September 9, 1977. 

Liberia 

Project grant agreement for agricultural sector analysis 
and planning, with annexes. Signed at Monrovia Au- 
gust 12, 1977. Entered into force August 12, 1977. 

Project grant agreement for agricultural cooperative de- 
velopment, with annexes. Signed at Monrovia August 
12, 1977. Entered into force August 12, 1977. 

Malawi 

Project agreement relating to extension of the capacity 
of Bunda College of Agriculture to provide skilled ag- 
riculture technicians. Signed at Lilongwe August 24, 

y>q Aiinrnct 9/1 1077 



19 



IT. Entered into force August 24, 1977. 



Nepal 

Project agreement concerning improvement in produc- 
tion of food-grain crops, with annexes. Signed at 
Kathmandu August 4, 1977. Entered into force August 
4, 1977, 

Project agreement relating to the expansion and im- 
provement of the Institute of Agriculture and Animal 
Sciences, with annexes. Signed at Kathmandu August 
4, 1977. Entered into force August 4, 1977. 

Pakistan 

Agreement on procedures for mutual assistance in con- 
nection with matters relating to the Lockheed Aircraft 
Corporation and the Boeing Company. Signed at Wash- 
ington September 9, 1977. Entered into force Sep- 
tember 9, 1977. 

River Niger Commission 

Project grant agreement for River Niger development 
planning, with annexes. Signed at Niamey August 23, 
1977. Entered into force August 23, 1977." 

Sudan 

Agreement on procedures for mutual assistance in con- 
nection with matters relating to the Boeing Company. 
Signed at Washington September 23, 1977. Entered 
into force September 23, 1977. 

Syria 

Agreement relating to investment guaranties, with re- 
lated letter. Effected by exchange of notes at Damas- 
cus August 9, 1976. 
Entry into force: August 13, 1977. 

Thailand 

Project agreement relating to population planning, with 
annexes. Signed at Bangkok August 24 and 29, 1977. 
Entered into force August 29, 1977. 



1 Not in force. 

2 Not in force for the United States. 



578 



Department of State Bulletin 



INDEX October 24, 1977 Vol. LXXVII, No. 

Antarctica. Recommendation To Protect Antarctic 
Environment (Brewster) 576 

Arms Control and Disarmament 

French Prime Minister Barre Visits the United 
States 566 

U.S. Role in a Peaceful Global Community 
(Carter) 547 

Congress 

Congressional Documents Relating to Foreign 
Policy 575 

Recommendation To Protect Antarctic Environ- 
ment (Brewster) 576 

Report on Human Rights in the Americas 
(McGee) 573 

U.S. Delegation to the 32d U.N. General 
Assembly 548 

Consular Affairs. Cuban Interest Section Opens 
in Washington (Habib) 572 

Cuba. Cuban Interest Section Opens in Washing- 
ton (Habib) 572 

Department and Foreign Service. Reorganizing 
Cultural and Informational Activities (Christ- 
opher, Reinhardt) 572 

Economic Affairs. French Prime Minister Barre 
Visits the United States 566 

Environment. Recommendation To Protect An- 
tarctic Environment (Brewster) 576 

France 

French Prime Minister Barre Visits the United 
States 566 

Human Rights 

New Hopes for Human Rights (Maynes) 556 

Report on Human Rights in the Americas 

(McGee) 573 

U.S. Role in a Peaceful Global Community 

(Carter) ". 547 

Latin America and the Caribbean. Report on 
Human Rights in the Americas (McGee) 573 

Middle East 

Editors and News Directors Interview President 
Carter (excerpts) 570 

U.S. Role in a Peaceful Global Community 
(Carter) 547 

Namibia 

United States Contributes to U.N. Institute for 
Namibia 569 

Nuclear Policy. U.S. Role in a Peaceful Global 
Community (Carter) 547 

Organization of American States. Report on 

Human Rights in the Americas (McGee) 573 

Panama. News Directors Interview President 
Carter (excerpts) 568 

Presidential Documents 

Editors and News Directors Interview President 
Carter (excerpts) 570 

News Directors Interview President Carter 
(excerpts) 568 

United Nations Day, 1977 (proclamation) 549 

U.S. Role in a Peaceful Global Community 547 

Treaty Information 

Current Actions 577 

Recommendation To Protect Antarctic Environ- 
ment (Brewster) 576 

United Nations 

Allocation of United Nations Agenda Items by 

Committee 561 

New Hopes for Human Rights (Maynes) 556 

The 149 Members of the United Nations (list) .... 555 

United Nations — A Profile 552 

United Nations Day, 1977 (proclamation) 549 



2000 

United States Contributes to U.N. Institute for 

Namibia 569 

U.S. Delegation to the 32d U.N. General Assem- 
bly 548 

U.S. Role in a Peaceful Global Community 

(Carter) 547 

Name Index 

Brewster, Robert C 576 

Carter, President 547, 568, 570 

Christopher, Warren 572 

Habib, Philip 572 

Maynes, Charles W 556 

McGee, Gale W 573 

Reinhardt, John E 572 



Checklist of Department of State 
Press Releases: October 3-9 

Press releases may be obtained from the Office 
of Press Relations, Department of State, Washing- 
ton, D.C. 20520. 



No. 

*446 



Date 

10/3 



Subject 



*447 
*448 



10/4 



10/4 



*450 
*451 



Conference on U.S. -Caribbean Basin 
Trade and Diplomacy, Kansas City, 
Oct. 25-26. 
Maurice D. Bean sworn in as Ambas- 
sador to Burma (biographic data). 
Shipping Coordinating Committee, 
Subcommittee on Safety of Life at 
Sea, panel on bulk cargo, Nov. 1. 
449 10/4 Study Group 3 of the U.S. National 
Committee for the International 
Telegraph and Telephone Consulta- 
tive Committee (CCITT), Nov. 1. 

10/5 Shipping Coordinating Committee, 
Oct. 27 meeting cancelled. 

10/5 Mrs. Hamilton Jordan hosts White 
House reception for visiting African 
women educators, Oct. 6. 
*452 10/5 Secretary of Labor Marshall and J. 
William Fulbright to represent U.S. 
at celebrations of European bina- 
tional commissions beginning 
Oct. 14. 

10/5 Peter Daland and Kenneth Treadway 
to conduct swimming workshops in 
Portugal under auspices of Depart- 
ment of State and Phillips Petro- 
leum, Nov. 4-11. 

10/7 Vance: remarks at Rev. Leon Sulli- 
van's dinner, New York, Oct. 5. 

10/7 Vance, Secretary General of the Arab 
League H.E. Mahmoud Riad: ex- 
change of remarks, New York, 
Oct. 6. 
Advisory Committee to the U.S. Na- 
tional Section of the International 
Commission for the Conservation of 
Atlantic Tunas, Oct. 26. 
Shipping Coordinating Committee, 
Subcommittee on Safety of Life at 
Sea, working group on fire protec- 
tion, Nov. 15. 
Program for the visit of Lt. Gen. 
Olusegun Obasanjo, Head of State 
and Commander in Chief of the 
armed forces of Nigeria, Oct. 10-15. 
*459 10/7 Assistant Secretary Todman to visit 
Puerto Rico, Haiti, and the Domini- 
can Republic, Oct. 11-19. 



*453 

t454 
t455 

*456 10/7 

*457 10/7 

*458 10/7 



* Not printed. 

t Held for a later issue of the Bulletin. 



Superintendent of Documents 

u.s. government printing office 

washington. d.c. 20402 



OFFICIAL BUSINESS 



POSTAGE AND FEES PAID 
DEPARTMENT OF STATE STA-501 



Third Class 




Subscription Renewals: To insure uninterrupted 
service, please renew your subscription promptly 
when you receive the expiration notice from the 
Superintendent of Documents. Due to the time re- 
quired to process renewals, notices are sent out 3 
months in advance of the expiration date. Any prob- 
lems involving your subscription will receive im- 
mediate attention if you write to: Superintendent 
of Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. 







THE DEPARTMENT OF STATE 

BULLETIN 



Volume LXXVII • No. 2001 • October 31, 1977 



SECRETARY VANCE INTERVIEWED ON "MEET THE PRESS" 579 

APPROACH TO LATIN AMERICAN POLICY: CREATIVE DEVELOPMENTS 

Address by Assistant Secretary Todman 588 

UNITED STATES AND ASEAN HOLD ECONOMIC CONSULTATIONS IN MANILA 

Statement by Under Secretary Cooper, 

News Conference by Secretary Romulo and Under Secretary Cooper, 

and text of Joint Press Release 595 



THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY 



For index see inside back cover 









DEPOSITOR-' 



THE DEPARTMENT OF STATE [J [ f ] 



For .sale by the Superintendent of Documents 

U.S. Government Printing Office 

Washington, D.C. 20402 

PRICE: 

issues plus semiannual indexes. 

domestic $42.50, foreign $53.15 

Single copy ' 

The Secretary of State has determined that the pub- 
lication of this periodical is necessary in the transac- 
tion of the public business required by law of this 
Department. Use of funds for printing this periodi- 
cal has been approved by the Director of the Office 
of Management and Budget through January 31, 
1981. 

Xote: Contents of this publication are not 
copyrighted and items contained herein may be re- 
printed. Citation of the DEPARTMENT OF STATE 
BULLETIN as the source will be appreciated. The 
BULLETIN is indexed in the Readers" Guide to 
Periodical Literature. 



Vol. LXXVII. No. 2001 
October 31, 1977 

The Department of State BULLETIN 
a weekly publication issued by tf 
Office of Media Services, Bureau 
Public Affairs, procides the public an 
interested agencies of the governmen 
with information on developments i 
the field of U.S. foreign relations ana 
on the work of the Department and 
the Foreign Service. 

The BULLETIN includes selectet 
press releases on foreign policy, issue 
by the White House and the Depar 
ment, and statements, addresses, an 
news conferences of the President an 
the Secretary of State and other offi- 
cers of the Department, as well as spe- 
cial articles on various phases of in 
ternational affairs and the functions i 
the Department. Information is it 
eluded concerning treaties and inter 
national agreements to which th 
United States is or may become a part, 
and on treaties of general interna- 
tional interest. 

Publications of the Department 
State, United Nations documents, an 
legislative material in the field of 
international relations are also listed. 



Secretary Vance Interviewed on "Meet the Press' 






. M I 



fj III 



Following is the transcript of an interview 
with Secretary Vance on the NBC television 
tand radio program "Meet the Press" on Oc- 
tober 16. Interviewing the Secretary were 
^Richard Valeriani of NBC News, Hedrick 
Smith of the New York Times, Robert Keatley 
of the Wall Street Journal, and Joseph Kraft 
of the Field Syndicate. Jim Hartz, NBC 
News, was moderator. 

I Press release 467 dated October 16 

Mr. Valeriani: The Carter Administration 
\has made the reconvening of the Geneva con- 
ference on the Middle East this fall one of its 
\major goals of foreign policy. How close are 
\you to achieving that goal? 

Secretary Vance: I think we have made 
[good progress toward that. There are still a 
|number of obstacles along the way that have 
to be overcome, but I really do believe that 
the parties want to go to a reconvened Geneva 
conference and before the end of this year. 
They have all said so, and I think in the recent 
discussions which we have been having in 
New York with the foreign ministers, the ac- 
tions, and what they have to say would con- 
firm that fact. 



Mr. Valeriani: Can you get to Geneva with- 
lout applying tremendous pressure on 
llsrael — to use Foreign Minister Dayan's 
\word, "brutal" pressure? 

Secretary Vance: Well, first let me say that 
I don't believe that is an accurate word to de- 
scribe our conversations, and Mr. Dayan has 
said that it was not. 

We have had our discussions with Mr. 
Dayan and have agreed on a working paper 
which we have transmitted to all of the Arab 
countries, and we are awaiting their views 
with respect to that working paper. We will 
then discuss among all of the parties whatever 

October 31, 1977 



differences remain and see if we can't work 
these out. 

Mr. Valeriani: Does the working paper rule 
out the participation of the Palestine Libera- 
tion Organization (PLO) in the Geneva 

conference? 

Secretary Vance: It does not deal with that 
question at all. What it says is that there shall 
be a unified Arab delegation and that within 
the unified Arab delegation there will be 
Palestinians. 

Mr. Valeriani: How will those Palestinians 
be selected? 

Secretary Vance: That is a subject still to be 
worked out among the parties. 

Mr. Valeriani: Have you asked Israel to ac- 
cept low-level members of the PLO in that 
kind of delegation? 

Secretary Vance: I am not going to go into 
the details of what we have or have not dis- 
cussed with Israel at this point. What we 
want to do is to work together and see if we 
can't find agreement among all the parties, 
and at that time we will announce what the 
results are. 

Let me say that the two principal remaining 
issues are the question of how one defines 
"Palestinian" within the unified Arab delega- 
tion and the question of the organization of 
the working groups which will come into being 
after the opening sessions of the Geneva con- 
ference. 

Mr. Valeriani: As you know, there are 
some people in Washington who think that 
you are having a conference this year for the 
sake of having a conference and to have a 
foreign policy success before the end of the 
year, and therefore you are willing to go to 
Geneva without a great deal of the substance 
agreed on beforehand. Is that the case? 

579 



Secretary Vance: No, that is totally wrong, 
and I am awfully glad to have a chance to 
speak to that. 

Before one goes to Geneva, one has to agree 
on the minimum essentials in terms of proce- 
dures and organization. Without that, you 
cannot get to a Geneva conference. 

But the reason for going to Geneva is to get 
to the negotiating table so that people can 
deal with substance — to have serious negotia- 
tions. That is the only reason for getting to 
Geneva, and I think it would be tragic if we 
would let procedural and organizational mat- 
ters preclude moving to the negotiating table 
so that we can get started on the serious 
negotiating issues. 

One more word on that, if I might, please. 
We have been discussing not merely proce- 
dure with the foreign ministers; we have been 
discussing matters of substance as well, and 
we have covered a great deal of substance in 
these discussions which we have been having 
during the last several months. 

Mr. Smith: Last spring one of the major 
elements of the arms control proposal you put 
before the Soviets in Moscow teas a sharp lim- 
itation on their heavy missile, the SS-18. We 
understand that in the latest tentative agree- 
ment that you have been working out with the 
Soviets, you have dropped that limitation. 
Why has the Administration made that kind 
of a large concession to the Russians? 

Secretary Vance: I am not going to go into 
detail, but I would very much like to answer 
your question in general terms. 

Insofar as heavy missiles are concerned, 
they are a matter of concern. But the main 
matter of concern is the total number of mis- 
siles which contain multiple warheads — so- 
called MIRV [multiple independently- 
targetable reentry vehicle] missiles — and the 
important thing is to reduce the total number 
of the MIRV missiles. 

For example, the so-called SS-19 
missile — which is not the heaviest of the 
missiles — is a very dangerous missile because 
of its accuracy; in addition to the fact that it is 
quite a large missile although not quite as 
large as the SS-18 — which is the largest of 
their missiles. 



The most important thing, then, is to re- 
duce the total number of MIRV missiles be-i 
cause they are the most dangerous thing in 
terms of a threat to the land-based systems in 
the United States. 

What we are seeking is stability, and by re- 
ducing the total number of MIRV missiles, we 
seek and achieve that objective — namely, ob- 
taining a more stable balance. 

Mr. Smith: Are you going to be able to per- 
suade Congress this is the case? 

We understand, for example, that the Sen- 
ate Armed Services Subcommittee [on Arms 
Control] headed by Senator Jackso)i is dis- 
turbed by the drift of the negotiations since 
last spring. Are you going to be consulting 
with them every couple of iveeks on the prog- 
ress of the negotiations? How are you going to 
hold their support? 

Secretary Vance: Yes we are, indeed. I met 
just this last week with Senator Jackson and 
his subcommittee. We will be meeting next 
week again. I have offered to meet with ther 
as often as they wish and suggested that we 
regularize it on a basis that would mean that 
we would meet at least once every 2 weeks. 
That has been agreed to, so we are starting 
off next week, and thereafter we will be meet- 
ing at least every 2 weeks to continue the dis- 
cussion between us. I think it is absolutely es- 
sential that we do have a complete and ful 
dialogue so that they can understand where 
we are going and can have their input into oui 
thinking. 

Mr. Keatley: I would like to go back to tin 
Mideast, if I might. Israelis say they won't at- 
tend the Geneva conference if the PLO is pres- 
ent, and Arabs say they won't be there if flu 
PLO is absent. That issue has been around fan 
a long time. I am having difficulty in under- 
standing where this good progress is that yo% 
have been talking about. 

Secretary Vance: The progress is in the fol-. 
lowing areas: 

— First, everyone has now agreed that the 
way of including a Palestinian voice — which \i 
absolutely necessary in the Middle East 
negotiations if we are to have a just and last 
ing peace — is to have them represented at the 



580 



Department of State Bulletir 



«; 



It! 



table. All parties have now agreed that this 
can be done by having Palestinians in a united 
Arab delegation. The question is now, which 
Palestinians? And that is the question which 
still has to be resolved. 

— The second question with respect to get- 
ting to Geneva is, what should the form of or- 
ganization be? We now have an increasing 
consensus that the way to organize it will be 
to have both bilateral and multilateral work- 
ing groups. Before, there was substantial di- 
vision, not only between Israel and the Arabs 
but among the Arabs themselves. We have 
made good progress in narrowing the differ- 
ences between the parties in that area as well. 

Mr. Keatley: Another aspect of the Palestin- 
ian issue is the "homeland" or "entity" or 
"state," whatever it is called. Do you have any 
reason to believe that the Begin government is 
willing to withdraw from any or all of the 
West Bank or Gaza Strip and tarn it over to 
any kind of Arab control? 

Secretary Venice: The Begin government 
has indicated that they go to Geneva without 
any preconditions and that everything is 
discussable. 

Mr. Keatley: Haven't they said they would 

Ik out if the subject of an Arab — a 

Palestinian state arose? 

Secretary Vance: No, they have not. They 
have said that they would not discuss the 
question of an independent Palestinian state. 

Mr. Kraft: How far away are you from a 
SALT [Strategic Arms Limitation Talks] 
agreement with the Russians? 

Secretary Vance: We have made good prog- 
ress in our recent talks when Mr. Gromyko 
[Soviet Foreign Minister Andrei Gromyko] 
was here. We still have a number of issues to 
be resolved, and they are difficult issues. 

We have given those issues to our two dele- 
gations in Geneva to try and resolve, and I 
cannot put a precise date on when those 
negotiations can be completed. I think it's 
possible that they can be completed in the 
near future. 

Mr. Kraft: Does that mean — by the near fu- 
ture, does that mean that possibly SALT can 



replace the Panama Canal as the number 
one, first-in item of business with the Con- 
gress? 

Secretary Vance: No, I wouldn't want to try 
and say that it would replace that, because I 
simply don't know. 

We have a Panama Canal treaty. The 
Panama Canal treaty has been signed; hear- 
ings are going forward with respect to that. I 
would expect that would be the first item of 
business. 

Mr. Kraft: Why wouldn't you want it the 
other way around? Isn't the SALT, first of 
all, more important? Isn't it an easier one to 
argue? 

Secretary Vance: The SALT agreement is 
extremely important. There should be no 
doubt about that. But we already have a 
Panama Canal treaty, which has been signed; 
hearings are going on. We don't know when 
we are going to complete our discussions with 
respect to the SALT treaty, so I think we 
ought to deal with first things first. 

Mr. Kraft: Do you have any expectation 
that Panama will be done before the end of 
this year? 

Secretary Vance: No. But I think it can be 
done early next year. 

Mr. Valeriani: To go back to the idea of the 
Palestinian entity — have you told the Israelis 
that the United States would support some 
kind of Palestinian entity on the occupied 
West Bank with an Arab civil government 
and an Israeli military presence that would 
be temporary? 

Secretary Venice: I do not think it would be 
good to go into detail. Let me say that we 
have indicated, as you know, for a long time 
that we agree there should be a Palestinian 
homeland. 

Mr. Valeriani: And on the Geneva confer- 
ence, could you have a conference if, within 
that united Arab delegation, one of the con- 
frontation states refused to participate? For 
example, if Syria refused to go, could you 
have a conference? 

Secretary Vance: That's an iffy question, 
and I don't think we ought to deal with it. 



October 31, 1977 



581 



Mr. Valeriani: Do you think you will have 
to go back to the Middle East before the 
Geneva conference is reconvened? 

Secretary Vance: I don't know. I doubt it. 

Mr. Smith: The President has scheduled a 
trip later this fall to eight countries in 11 
days — the kind of scattershot diplomacy that 
Henry Wallace once called "globaloney," it 
seems to me. Can yon give hs a plausible ex- 
planation for why the President should en- 
gage in such an exhausting trip to such 
disparate countries? ' 

Secretary Vance: I think you have to go 
back to the speech the President made at 
Notre Dame [on May 22], which sets a number 
of themes for our foreign policy. These themes 
include a number of global issues such as the 
question of arms transfers; such as the ques- 
tion of the so-called North-South dialogue, the 
economic issues that have been dividing the 
countries of the Northern Hemisphere and 
those of the South; the question of nonprolif- 
eration; and a number of these global issues. 

In addition, a number of these countries 
have very close ties with the United States 
and in addition play very important roles in 
their respective areas. Take, for example, the 
countries which we are going to be visiting in 
Latin America. There we undoubtedly would 
be discussing not only areas of nonprolifera- 
tion and arms transfers but also the question 
of North-South issues. In Africa, Nigeria is 
clearly one of the most important countries in 
Africa. We have given great emphasis in this 
Administration to the problems of Africa, and 
it's logical that we should be meeting with 
them. 

Insofar as India is concerned, it is one of the 
important countries in that part of the world, 
and we have not yet had a chance to meet with 
them. It is important that we do so. Coming 
to Europe, we have stressed the importance 
of the relationship with our allies, and it is 
important, therefore, that we visit Europe 
and have a chance to talk with our allies. 

As far as the visit to Poland is concerned, 



1 The White House announced on Sept. 23 that Presi- 
dent Carter would visit Venezuela, Brazil, Nigeria, In- 
dia, Iran, France, Poland, and Belgium beginning on 
Nov. 22. 



we have also stressed the importance of try- 
ing to deal with countries that have not been 
close to us before, and that is an example of 
one place. 

Mr. Smith: You have left out oil — I'm 
rather surprised. Looking at the list, there are 
three oil countries: Nigeria, Venezuela, and 
Iran. I wonder, if they are in that area, why 
the President doesn't go to Saudi Arabia? 
You've got the OPEC [Organization of Petro- 
leum Exporting Countries] meeting in De- 
cember. 

Secretary Vance: Well, let me say first that 
the oil situation is a critical one, and I would 
just like to make a comment on that. 

The oil problem is not simply a domestic 
problem in the United States; the oil problem 
is an international problem. Our allies are de- 
pendent upon oil, and therefore it is of funda- 
mental importance that we, in the United 
States, take the necessary action as the lead- 
ing consumer of oil to demonstrate our con- 
cern in this area. 

Now, coming back to your specific question. 
We will be visiting Iran, as you know, and 
Iran is one of the major producers of oil in 
that area. Certainly oil is one of the most 
pressing problems that faces the whole world 
because of the impact that any oil price in- 
crease could have on the economies of the 
world, and we are doing everything within our 
power to see there is no oil increase because 
we think it would be very bad for the 
economies, not only of the industrialized coun- 
tries but also the less developed countries. 

Mr. Smith: To go back to my question, are 
you going to add Saudi Arabia? 

Secretary Vance: I prefer to defer an an- 
swer on that. 

Mr. Ha>-tz: There are complaints — and 
many of them from Congress — that you are 
trying to do too much too soon in your foreign 
policy; specifically, that the Panama Canal 
treaty was signed knowing that you couldn't 
get ratification on it until next year, that 
Congress hasii't been consulted except your 
agreement this last Friday on SALT talks, 
that the Administration has changed its pol- 
icy on the Middle East without proper consnl- 



582 



Department of State Bulletin 



tation. How do you respond to these criticisms 
and complaints from Congress? 

Secretary Vance: First, I do not believe 
that we have been trying to do too much too 
fast. When we came into office, we were faced 
with a number of problems which were of crit- 
ical importance and which affected the peace 
and security of the world. Let me give you 
some examples: 

First, the question of the Middle East. 
Somebody had to come in and do what could 
be done to try and move that situation toward 
serious negotiation and thus head off the pos- 
sibility of a further war in the Middle East. 

Secondly, insofar as arms control is con- 
cerned, we were facing another twist of the 
arms spiral and, therefore, it was necessary 
to pick up and give high priority to our discus- 
sions with the Soviet Union. 

Thirdly, in southern Africa, there we saw 
increasing violence with the possibility of ra- 
cial war. This was a problem that had to be 
attacked. It couldn't be left to fester. 

And, therefore, these problems had to be 
dealt with; they couldn't be pushed aside. And 
so I could go with a number of other issues we 
have had to deal with, such as the Panama 
Canal. Therefore, I would answer that these 
are problems that had to be dealt with and, 
although it would be nice to deal with fewer 
problems, we simply had the responsibility to 
go forward and seize these problems. 

Mr. Hartz: Is there something wrong with 
the congressional mechanism, then, if you're 
right? 

Secretary Vance: No, I don't think there is 
anything wrong with the congressional 
mechanism. Let me say that these problems 
are extremely complex problems. They re- 
quire time and effort and patience to deal with 
them, and they have to be undertaken and 
work has to be started on them. One cannot 
lay out any precise time schedule as to how 
soon one can get a resolution of these prob- 
lems, if ever; but they have to be attacked 
and if one tried to set up a schedule and deal 
only with a rigid schedule, then we would 
never deal adequately with these problems. 
So I think what we have to do is move forward 
with them to do what we can in the executive 



October 31, 1977 



branch, in consultation with the Congress, 
and if they require congressional action, to 
put them on the congressional calendar when 
the Congress can properly handle them. 

Mr. Keatley: A few months ago, U.S. rela- 
tions with the Soviets were pretty testy; now 
they seem improved. Some people explain this 
by sayi)ig this is the result of U.S. policy re- 
treats, a less ambitious SALT program, many 
statements that seem to bring Russians into 
the act. not much talk about human rights 
iiny more. What is your explanation? 

Secretary Vance: I would say that that is a 
wrong interpretation. First, just let's take a 
look at the President's speech in the United 
Nations [on October 4]. 

We have had primary emphasis on the ques- 
tion of SALT and of arms control, not only 
nuclear arms control, but the question of con- 
ventional arms transfers as well. In terms of 
human rights, I had almost 80 discussions 
with foreign ministers of other nations, and 
the President had many himself. I think in al- 
most every case, one of the subjects of discus- 
sion between ourselves and the leaders of the 
other countries was the question of human 
rights. We are proceeding with human rights 
in the discussions in Belgrade, so we are 
clearly moving on with that. 

Insofar as the Mideast statement was con- 
cerned, this was something that was not 
lightly done; it was very carefully thought 
out. We believe it was both necessary and 
useful to have the cochairmen making a 
statement of principles which reflected then- 
view, and we hoped this would act as a 
stimulus to the parties to not only move for- 
ward to Geneva but to begin to deal seriously 
with issues that had to be dealt with once a 
Geneva conference was started. So, we are 
not trying to put aside these problems. They 
are very much in the forefront of our thinking 
and of our actions. 

Mr. Kraft: The answers to the last three 
questions, it seems to me, confirm the general 
criticism that there is no sense of priority in 
this Administration, that you're trying to do 
everything all at once. Let me ask you, can 
you say with some briskness, what seems to 
you, and i)i what order, are the most impor- 

583 






tant things in foreign policy confronting this 
Administration? 

Secretary Vance: I can say that the most 
important things that are facing us in foreign 
policy right now are: first, the Middle East; 
second, SALT; third, the question of southern 
Africa. Those, I would say, are the principal 
items, but there are others that are of impor- 
tance too and that have to be dealt with also. 

Mr. Kraft: I notice you put the Panama 
Canal not right on that list, so let me ask 
you — 

Secretary Vance: But it is a very important 
issue. In addition, there is the question of our 
economic discussions on North-South issues, 
and you must continue with those discussions 
and plan for them. 

Mr. Kraft: With respect to Panama, for 
example, what's the rush? It took 13 or H 
years to negotiate it. and I never heard of the 
Senate ratifying a treaty in a hurry. Why 
don't you do it slowly? What's the need, for 
example, to surface the elements of an agree- 
ment without even giving us the text? 

Secretary Vance: With respect to Panama, 
this has been a long-festering issue; it's an 
issue that should be dealt with. And it is not 
being rushed, it is not being pushed through 
this year. It is going to be put on the calendar 
at the appropriate time that the Senate Major- 
ity Leader believes that it should go on. I 
have indicated that I think it will probably be 
the early part of next year, and it doesn't 
seem to me that that's a rush. 

Mr. Kraft: You mentioned the North-South 
question, and I think at the North-South 
meeting, as I recollect, that you made a com- 
mitment to a sharp increase in American aid 
[May 30]. I know President Carter made the 
same commitment at the London summit 
meeting [May 7-8]. But you've got a lot of 
claim on resources, you — also in the presence 
of a Brookings Institution report saying that 
your aid mechanism isn't very good. Are you 
going to abide by this commitment for a sharp 
increase in aid? 

Secretary Vance: What I said is, I believe 
there should be a substantial increase, and I 



do believe there should be a substantial 
increase. 

Mr. Kraft: Will there be one? 

Secretary Vance: The decision on the exact 
level is going to be put before the President 
very shortly. We are going to make our rec- 
ommendations to him, and there will be a de- 
termination by him at that time as to the 
exact size of that increase. 



President Carter's News Conference 
of September 29 

Following are excerpts relating to foreign 
policy from the transcript of a news coufer- 
i nee held by President Carter on Septem- 
ber 29. i 

Q. There have been a lot of confusing 
statements from the White House and from 
leaders who have seen you recently on where 
exactly the United States stands in terms of 
Palestinian — PLO [Palestine Liberation Or- 
ganization] participation in a Geneva peace 
conference, if one comes about. Can you 
really clarify this point? 

The President: I doubt it [laughter] — but I 
would be glad to try. What we are trying to 
do now is — as a first and immediate goal — is 
to bring all the parties in the Mideast dispute 
to Geneva for a conference. We are dealing 
with Israel directly. We are dealing directly 
with Lebanon, Syria, Jordan, and Egypt. We 
are trying to act as an intermediary between 
Israel and each one of those Arab countries 
that border their own country. 

There are some differences among the Arab 
nations, which we are trying to resolve, con- 
cerning a unified Arab delegation or indi- 
vidual Arab delegations and the format which 
might be used to let the Palestinian views be 
represented. 

At the same time, we have a further com- 



1 For the complete transcript, see Weekly Compilation 
of Presidential Documents dated Oct. 3. 1977, p. 1438. 



584 



Department of State Bulletin 



plicating factor in that we are joint chairmen 
of the Geneva conference along with the 
Soviet Union. So, in the call for the confer- 
ence, in the negotiations preceding the format 
of the conference, we have to deal with the 
Soviet Union as well. So, on top of all that, 
and perhaps preeminent in my own mind, is 
that we are not an idle observer or bystand- 
er, we are not just an intermediary or 
mediator. We have a vital national interest in 
the ultimate peace in the Middle East. 

It's obvious to me that there can be no Mid- 
dle Eastern peace settlement without 
adequate Palestinian representation. The 
Arab countries maintain that the PLO is the 
only legitimate representative of the Palestin- 
ian interests. The Israelis say that they 
won't deal with the Palestinians, or certainly 
not the well-known PLO members, because 
they have been identified in the past as com- 
mitted to the destruction of the nation of 
Israel. 

So, we are trying to get an agreement be- 
tween the Israelis and the Arab countries, 
with widely divergent views, about the format 
of the meeting and, also, who would be wel- 
comed to the conference to represent the 
Palestinians. 

This is something that is still in the 
negotiating stage, and I cannot predict a final 
outcome. We have no national position on 
exactly who would represent the Palestinians 
or exactly what form the Arab group would 
take in which the Palestinians would be repre- 
sented. I just can't answer that question yet 
because the question has not been answered in 
my mind. 

Q. Does the United States recognize — 
"recognize" is the wrong word — but accept the 
PLO as a representative of the Palestinians? 

The President: We have pledged to the Is- 
raelis in the past, and I have confirmed the 
pledge, that we will not negotiate with, nor 
deal directly with, the PLO until they adopt 
U.N. Resolution 242 as a basis for their in- 
volvement, which includes a recognition of the 
right of Israel to exist. We have let this be 
known to the PLO leaders through various in- 
termediaries, through intermediaries through 
the United Nations, leaders in Saudi Arabia, 



Syria, Egypt, Jordan, and so forth. They 
know our position. 

If the PLO should go ahead and say, "We 
endorse U.N. Resolution 242; we don't think 
it adequately addresses the Palestinian issue 
because it only refers to refugees and we 
think we have a further interest in that," that 
would suit us okay. 

We would then begin to meet with and to 
work with the PLO. Obviously, they don't 
represent a nation. It is a group that repre- 
sents, certainly, a substantial part of the 
Palestinians. I certainly don't think they are 
the exclusive representatives of the Palestin- 
ians. Obviously, there are mayors, for in- 
stance, and local officials in the West Bank 
area who represent Palestinians. They may or 
may not be members of the PLO. So, we are 
not trying to define an exact formula that we 
would prescribe for others. We are trying to 
find some common ground on which the 
Israelis and Arabs might get together to meet 
in Geneva. 

I think, by the way, that both the groups — 
the Arabs and the Israelis — have come a long 
way. They are genuinely searching for a for- 
mula by which they can meet. They want 
peace. And I think they are to be congratu- 
lated already, because in the past number of 
years they have made very strong and pro- 
vocative statements against one another and 
now to move toward an accommodation is a 
difficult thing for them. And we are trying not 
to make it any more difficult. 

Q. What are the assurances given to the 
PLO in the event of accepting 2^2? 

The President: If they accept U.N. 242 and 
the right of Israel to exist, then we will begin 
discussions with the leaders of the PLO. We 
are not giving them any further assurance of 
that because we are not trying to prescribe, 
as I said, the status of the PLO itself in any 
Geneva conference. But it would give us a 
means to understand the special problems of 
the Palestinians. And as you know, many of 
the Israeli — some of the Israeli leaders have 
said that they recognize that the Palestinian 
question is one of the three major elements. 
But I can't and have no inclination to give the 
PLO any assurances other than we will begin 



October 31, 1977 



585 



to meet with them and to search for some ac- 
commodation and some reasonable approach 
to the Palestinian question if they adopt 242 
and recognize publicly the right of Israel to 
exist. 



Q. It is said that we have modified our 
SALT [Strategic Arms Limitation Talks] po- 
sition somewhat and, on the basis of that, we 
may be very near an agreement and, on the 
basis of that, yon mag be meeting with Mr. 
[Leonid] Brezhnev [Chairman of the Pre- 
sidium of the Supreme Soviet of the U.S.S.R.] 
in afew weeks or months. Is any or at! of that 
true? [Laughter. ] 

The President: I will resist the temptation 
to comment on the accuracy or veracity of 
past comments made in the news media — and 
by you [laughing] — I understand. 

I think some of those statements are fairly 
accurate. We have been encouraged recently 
by the cooperative attitude of the Soviets. I 
have met several hours, on two occasions, 
with Foreign Minister Gromyko. And they 
have been fairly flexible in their attitude, and 
we have tried to match their cooperative 
stance. 

There has been no decision made about a 
time or place for a meeting between me and 
Mr. Brezhnev. In fact, the meeting itself is 
certainly not a sure thing at all. It is, as a 
matter of record, his time to come to the 
United States — if and when a meeting does 
take place — and he has that permanent stand- 
ing invitation which he can accept as he sees 
fit. 

Our purpose in the SALT negotiations this 
year has been generally twofold: One is to re- 
duce the overall level of nuclear armaments; 
and secondly, to have an assurance that there 
is an equivalent capability in the future to 
give a reasonable sense of security to both na- 
tions. And I think, at the same time, inte- 
grally with this is to let the Soviets know that 
we are negotiating in good faith, that we are 
not trying to pull a trick or to take unfair ad- 
vantage over them. 

At the same time, I recognize that progress 
on SALT leads to further progress on com- 
prehensive test ban, on the matter of non- 



proliferation, on general reductions in arma- 
ment sales around the world. And I think it 
would lessen tensions between us and the 
Soviets that have existed historically. 

So, we are making some progress. An im- 
mediate agreement is not in prospect. We 
have narrowed down the differences to a rela- 
tively small number which could take quite a 
long time to resolve. Our negotiators are now 
going back to Geneva to try to eliminate as 
many of the differences as possible. So, rea- 
sonable progress has been made. 

I wouldn't be too optimistic about an early 
settlement. And there is no plan at this time 
for a meeting with Mr. Brezhnev. 



President Carter Signs 
Covenants on Human Rights 

Following are remarks made by President 
Carter upon signing the International Coven- 
ant on Economic, Social and Cultural Rights 
and the International Covenaiit on Civil and 
Political Rights at the Economic and Social 
Chamber of U.N. Headquarters on October 5. 1 

I am honored to sign, on behalf of the 
United States of America, these two interna- 
tional covenants on human rights. 

Of the many affinities between the United 
States and the United Nations, perhaps the 
most important is that both had their origins 
in a vision of the greatness of the human pos- 
sibility. The American Declaration of Inde- 
pendence speaks of the idea that, and I quote: 
". . .all Men are created equal . . . endowed 
by their Creator with certain unalienable 
Rights . . . Life, Liberty, and the Pursuit of 
Happiness. ..." The Charter of the United 
Nations speaks of ". . .faith in fundamental 
human rights, in the dignity and worth of the 
human person, in the equal rights of men and 
women and of nations large and small. ..." 



'For the texts of the covenants, see Bulletin of 
January 16, 1967, p. 107; President Carter did not sign 
the Optional Protocol to the International Covenant on 
Civil and Political Rights (text from Weekly Compilation 
of Presidential Documents dated Oct. 10, 1977). 



586 



Department of State Bulletin 



Though separated by a century and a half in 
time, these visions are identical in spirit. The 
covenants that I sign today are unusual in the 
world of international politics and diplomacy. 
They say absolutely nothing about powerful 
governments or military alliances or the 
privileges and immunities of statesmen and 
high officials. Instead, they are concerned 
about the rights of individual human beings 
and the duties of government to the people 
they are created to serve — the rights of 
human beings and the duties of government. 

The [International] Covenant on Civil and 
Political Rights concerns what governments 
must not do to their people, and the [Inter- 
national] Covenant on Economic, Social and 
Cultural Rights concerns what governments 
must do for their people. 

By ratifying the covenant on civil and politi- 
cal rights, our government pledges, as a mat- 
ter of law, to refrain from subjecting its own 
people to arbitrary imprisonment or to cruel 
or degrading treatment. It recognizes the 
right of every person to freedom of thought, 
freedom of conscience, freedom of religion, 
freedom of opinion, freedom of expression, 
freedom of association, and the rights of peace- 
ful assembly, and the right to emigrate from 
that country. 

A government entering this covenant states 
explicitly that there are sharp limits on its 
own powers over the lives of its people. But as 
Thomas Jefferson once wrote about the Bill of 
Rights which became part of our own Ameri- 
can Republic, and I quote again from Thomas 
Jefferson: "These are fetters against doing 
evil which no honest government should 
decline." 

By ratifying the other covenant on eco- 
nomic, social, and cultural rights our govern- 
ment commits itself to its best efforts to 
secure for its citizens the basic standards of 
material existence, social justice, and cultural 
opportunity. This covenant recognizes that 
governments are the instruments and the serv- 
ants of their people. Both of these covenants 
express values in which the people of my 
country have believed for a long time. I will 
seek ratification of these covenants by the 
Congress of the United States at the earliest 
possible date. 



It would be idle to pretend that these two 
covenants themselves reflect the world as it 
is. But to those who believe that instruments 
of this kind are futile, I would suggest that 
there are powerful lessons to be learned in the 
history of my own country. 

Our Declaration of Independence and the 
Bill of Rights expressed a lofty standard of 
liberty and equality. But in practice these 
rights were enjoyed only by a very small seg- 
ment of our people. 

In the years and decades that followed 
those who struggled for universal suffrage, 
those who struggled for the abolition of slav- 
ery, those who struggled for women's rights, 
those who struggled for racial equality — in 
spite of discouragement and personal 
danger — drew their own inspiration from 
these two great documents — the Declaration 
of Independence, the Bill of Rights — and our 
own Constitution because the beliefs ex- 
pressed in these documents were at the heart 
of what we Americans most valued about our- 
selves, they created a momentum toward the 
realization of the hopes that they offered. 

Some of these hopes were 200 years in 
being realized. But ultimately, because the 
basis was there and the documents signed at 
the origins of our country, people's discour- 
agements and disappointments were overcome 
and ultimately these dreams have prevailed. 
My hope and my belief is that the interna- 
tional covenants that I sign today can play a 
similar role in the advancement and the ulti- 
mate realization of human rights in the world 
at large. 

The last time I was here at the United Na- 
tions [March 17], shortly after I became Pres- 
ident, I made an entire speech on the subject 
of human rights. Yesterday I made a speech 
on peace. Today I have taken tangible steps 
toward the realization both of peace among 
nations and the preservation of human rights 
for individual men and women throughout the 
world. 

My hope and my prayer is that the high and 
noble expressions in these documents will be 
realized throughout all nations and the high 
and noble expressions of hope in our own Bill 
of Rights 200 years ago is being realized in 
our great country. 



October 31, 1977 



587 



Approach to Latin American Policy: Creative Developments 



Following is an address by Terence A. 
Todman, Assistant Secretary for Inter- 
American Affairs, before the Department of 
State Media Seminar on U.S. -Latin Ameri- 
can Relations on July 21. 

I am very pleased you could all be here. We 
in the Bureau of Inter-American Affairs are in 
the midst of a highly creative period of policy 
development. I welcome this opportunity to 
tell you what we are doing and why. I hope 
you will give us your reactions and your help. 

My colleagues and I want and need to re- 
flect your understanding of Hispanic culture 
and values in our dealings with Latin 
America. We need a feel for your deepest con- 
cerns and highest priorities when we formu- 
late policy. We want to enlist your own efforts 
in helping the people of this country get to 
know Latin America and appreciate its 
importance. Finally — and perhaps most 
important — we want to draw more Hispanic- 
Americans directly into positions where they 
can affect U.S. foreign policy in all stages of 
its development and implementation. 

The United States has changed its basic ap- 
proach to Latin America and the Caribbean. 
The individual strands of our policy now 
include: 

— Respect for the rights of individuals and 
for the sovereignty and independence of 
states; 

— Recognition that our national interests 
require a strong global economy; and 

— Awareness that the immense potential of 
modern technology imposes an obligation to 
halt destructive side effects like nuclear pro- 
liferation, the uncontrolled spread of arma- 
ments, or the sacrifice of the environment. 

What has changed most of all is our aware- 
ness that the countries of Latin America and 



588 



the Caribbean are critical to the central issues 
of our times. President Carter summed it up 
at Notre Dame [on May 22] when he said we 
must widen our approach to encompass the 
problems and contributions of all countries, 
not just those of the industrialized Northern 
Hemisphere. 

In Latin America, we have begun to do just 
that. We have discarded the outworn pater- 
nalism of a parochial special relationship that 
usually meant we took our relations for 
granted and as an afterthought. When Presi- 
dent Carter spoke before the Permanent 
Council of the OAS [Organization of American 
States] in April, he did not just talk about 
Latin America; he outlined our overall global 
policy directions, and he pledged to consult 
closely with the nations of Latin America and 
the Caribbean in developing our policies. 

Our efforts to make this approach a reality 
are barely 6 months old. This morning, I 
would like to highlight some of the dynamics 
briefly for you. 



Movement on Basic Issues 

We have moved decisively to make the 
United States a leader in the effort to pro- 
mote human dignity and human rights in this 
hemisphere. President Carter has signed the 
American Convention on Human Rights [on 
June 1], and we are working to attract addi- 
tional signatories. We are determined to 
strengthen the Inter-American Human Rights 
Commission. At the OAS General Assembly 
this June in Grenada, a resolution we cospon- 
sored in support of the commission won major- 
ity support. After 6 months, it is fair to say 
that our human rights initiatives are set and 
set well. And they are attracting genuine and 
growing support. 



Department of State Bulletin 



The enhancement of human rights must, of 
course, be accomplished internally by the 
people and government of each country. But 
our leadership and our cooperation with other 
hemisphere states are essential to develop a 
climate that supports the hopes and aspira- 
tions felt by all peoples and acknowledged by 
all governments. 

Evidence that the trend away from demo- 
cratic government might be coming to an end 
is, I believe, quite encouraging. Ecuador has 
scheduled a return to constitutional govern- 
ment by next year; Honduras by 1979; Bolivia 
by 1980. Recently the Government of Chile 
also made a public commitment to a timetable. 
Peru's plan, "Tupac Amaru," also con- 
templates a return to elected government and 
stresses human rights. 

Political progress is best assured in a cli- 
mate where no nation feels threatened and 
where all nations see their own interests 
served by a reduction in armaments and 
peaceful resolution of disputes. 

We have moved actively on three fronts to 
support regional peace and arms restraint: 

— First, we have announced and put into ef- 
fect a new policy on arms sales. We will not be 
the first to introduce new weapons systems 
into the area. We will respect and support 
local arms control initiatives. Beyond that, we 
will actively seek restraint from suppliers 
outside the hemisphere. 

— Second, President Carter has signed Pro- 
tocol I of the treaty of Tlatelolco [on May 26], 
which pledges us to ban nuclear weapons from 
the region. This is a major step but only a 
first one. We are discussing ways to prevent 
proliferation of nuclear weapons technology 
while preserving Latin American options for 
the peaceful use of the atom. 

— Finally, we are working to prevent the 
escalation of local disputes into military con- 
frontations. Secretary Vance has met with the 
parties to the Belize dispute in an effort to 
discourage resort to a military solution. In El 
Salvador and Honduras we are cooperating 
closely with the OAS peacekeeping team 
maintaining the cease-fire between them. 

Our steps to support human rights and to 
reduce the risks of war reflect our fundamen- 



tal concern for the well-being of the person. 
Individual well-being has yet another 
dimension — economic progress. Our most cru- 
cial policy decisions in Latin America are 
often economic ones. A central issue here is 
trade. Most nations of the region want export 
opportunities more than aid. 

President Carter has firmly endorsed a lib- 
eral approach to trade policy. He has backed 
it up when facing individual decisions. His 
support of adjustment assistance rather than 
tariff quotas in response to resistance to shoe 
imports was good news for Brazil and 
Uruguay. His refusal to espouse a more pro- 
tectionist course on sugar has prevented se- 
vere damage to economies in the Caribbean. 

We are actively pursuing the multilateral 
trade negotiations and would support a com- 
mon funding arrangement for stabilizing 
commodity prices in the context of individu- 
ally negotiated agreements. 

But trade alone is not enough. The Presi- 
dent has indicated we will be responsive to 
human needs both in the poorest countries and 
in the majority of Latin American countries 
that no longer fall in the "poorest" category. 
We have done much this year to support the 
international financial institutions, including a 
$525 million replenishment for the Inter- 
American Development Bank. 

We are also committed to substantial future 
increases in bilateral aid. As you know, to 
achieve this objective will require active sup- 
port in the country and on the Hill. I would 
appreciate your views on how this issue is 
seen by the American people in the light of 
other pressing needs. 

Movement on Bilateral Issues 

The Administration's first study on taking 
office — Presidential Review Memorandum No.l 
— led to renewed efforts to conclude a new 
Panama Canal treaty. You will hear this af- 
ternoon from Ambassadors Bunker and 
Linowitz about the very substantial progress 
made toward a treaty that will insure an open 
and secure canal. We look forward to your ac- 
tive analysis and counsel on this issue. 

We have established direct contact with 
Cuba for the first time in 16 years. The suc- 



October 31, 1977 



589 



cess of our limited talks last spring in estab- 
lishing maritime boundary and fishery rights 
has led to agreement to open an Interest Sec- 
tion in a friendly embassy in each other's capi- 
tal as of September 1. While many serious dif- 
ferences remain between the United States 
and Cuba, we believe that difficult problems 
can be dealt with more effectively— and 
perhaps only — by governments that are talk- 
ing to each other. 

The entire Caribbean basin has become a 
major focus of U.S. interest, something that 
never really happened before even during 
times of crisis. The Caribbean nations, though 
small in size, present challenging economic di- 
lemmas as well as many flourishing examples 
of democracy and respect for human rights. 

Jamaica's balance-of-payments difficulties 
illustrate the type of problems we must over- 
come. With other interested governments we 
are moving to help. A joint U.S. -Jamaican 
economic team met in Kingston in May. We 
expect to announce a package as soon as our 
consultations with Congress are completed. 

Another major development in inter- 
American affairs has grown out of our close 
and rewarding relationship with our nearest 
Latin neighbor, Mexico. The very first head of 
state to be received by President Carter was 
President Lopez Portillo. This most successful 
visit has now led to the formation of govern- 
ment working groups to carry out continuing 
practical consultations. Secretary Vance and 
Foreign Minister Roel [Santiago Roel Garcia] 
met here in Washington last week, their 
fourth private meeting since February. At 
almost the same time, one of the economic 
subgroups met in Mexico. The social group — 
tackling such topics as narcotics, immigration, 
and migration problems — will meet in August. 

High-Level Consultations 

The intensified contacts between the U.S. 
and Mexican Governments are typical of the 
closer relations developing among hemisphere 
leaders. 

President Carter received a state visit 2 
weeks ago from President Perez of Venezuela, 
one of the hemisphere's most important lead- 
ers who shares many of our goals. The two 



Presidents discussed our mutual efforts in 
arms control and human rights and confirmed 
their conviction that free democratic institu- 
tions and concern for social welfare go hand in 
hand. Follow-up activities are planned on a 
wide range of global issues, including energy. 

First Lady Rosalynn Carter visited seven 
countries in June. Her itinerary included 
Jamaica, Costa Rica, Ecuador, Peru, Brazil, 
Colombia, and Venezuela. Mrs. Carter was 
able to convey the deep concern of our people 
for human rights and arms control and to hear 
the concerns of her hosts, who knew her re- 
ports would have the personal and undivided 
attention of President Carter. 

One of Mrs. Carter's most important stops 
was Brazil. Both she and Secretary Vance 
have confirmed the 1976 Memorandum of Un- 
derstanding with Brazil that regularized con- 
sultations between our two nations. Brazil is a 
nation of immense importance in South 
America. We have a number of very sensitive 
issues to face together. Talks on the serious 
and overlapping issues of energy needs and 
nonproliferation concerns are continuing. 

The Secretary of State is directly involved 
in the affairs of the hemisphere. Secretary 
Vance had very useful discussions with Latin 
American leaders on North-South issues in 
Paris and has met on separate occasions with 
several Foreign Ministers here in Washing- 
ton. But it was the Secretary's intense par- 
ticipation in the OAS session in Grenada — 
where he met individually and privately with 
18 Latin and Caribbean Foreign Ministers — 
that best indicates the importance he ascribes 
to the region. 

Many other Administration officials are 
personally involved as well. Treasury Secre- 
tary Blumenthal participated in the meeting 
of the Inter-American Development Bank in 
Guatemala and has met with the Finance 
Ministers of hemisphere nations including 
Brazil and Argentina. Ambassador [to the 
United Nations Andrew] Young represented 
the United States at the ECLA [Economic 
Commission for Latin America] meeting in 
Guatemala and will shortly visit the Carib- 
bean. Under Secretary of State [for Political 
Affairs] Philip Habib accompanied Vance to 
Grenada and then to Trinidad and sub- 



590 



Department of State Bulletin 



sequently visited Barbados and Guyana as 
well. Presidential adviser Dr. Peter Bourne 
and Mr. Bensinger of the Drug Enforcement 
Administration are in Bogota today meeting 
with Colombian officials as part of a new ini- 
tiative on narcotics. 

Finally, quite apart from my travels with 
Secretary Vance and Mrs. Carter, I have my- 
self already visited several countries in the 
hemisphere since becoming Assistant Secre- 
tary. I have met with key leaders as well as 
university professors, businessmen, and 
people of all political persuasions. 

These contacts — remarkably intensive for a 
half-year period — are not intended to convey 
token interest or surface good will. They are 
an important part of our policy approach. We 
cannot solve problems with American-made 
solutions; we will not reduce our relations 
with the hemisphere to a slogan. What we can 
hope for is to try to understand each other's 
perspectives and to work together on the 
many issues that face us. 

As a result, the United States is beginning 
to respond to initiatives that began with the 
Latin nations themselves, like the Tlatelolco 
treaty and the American Convention on 
Human Rights. We feel that the major thrusts 
of our present policy — close consultation, eco- 
nomic cooperation, advancement of human 
rights, and arms control — will succeed be- 
cause they are fundamentally in tune with the 
needs and values of all Americans, both North 
and South. 



U.S. Citizen Involvement 

This Administration considers increased 
citizen awareness and involvement in the pol- 
icy process a key element of our approach to 
foreign affairs. By this I mean not just 
another way of explaining or seeking support 
for our policy, but seeking your views and 
your wisdom before policies are launched. 

The Department of State, and particularly 
our Bureau, is actively seeking to build and 
strengthen such relationships. We now meet to 
exchange views with a variety of leadership 
groups, such as yourselves; we participate ac- 
tively in academic and professional forums; 



and we have launched "business and develop- 
ment" conferences in key U.S. cities. 

This Administration is particularly anxious 
that we draw more upon the resources of the 
American Hispanic community, not only 
through wider public outreach programs but 
by drawing more and more Hispanic- 
Americans into the policy process and into the 
government itself. 

The representation of Hispanic-Americans 
in our government when this Administration 
took office was grossly inadequate and — as I 
need not tell you — it still is. Here at State, 
the underrepresentation of Hispanics has been 
a serious problem for some time. At present 
there are only 36 Hispanic officers in the en- 
tire regular Foreign Service. Another 34 His- 
panic officers serve under reserve appoint- 
ments. In the history of the Republic we have 
had only 14 U.S. Ambassadors of Hispanic 
descent. 

Secretary Vance convened an executive 
task force in March to find ways to reverse 
this record. Special recruiting teams were 
sent to universities in areas with high His- 
panic student populations — in the Southwest, 
in Miami, and in Puerto Rico to name a few — 
and more efforts like that are now underway. 
In short we plan to make a concerted effort to 
bring Hispanic-Americans into the Depart- 
ment of State at all levels of responsibility. 
We are enlarging both our junior and mid- 
level entry programs to assure that progress 
will be made. 

To have an immediate impact, we are also 
starting at the top. The President has already 
announced the appointment of two Hispanic- 
Americans — one of Mexican and one of Cuban 
descent — as Ambassadors. The top AID 
[Agency for International Development] ad- 
ministrator for Latin America [Abelardo D. 
Valdez] — who will speak right after me — and 
the Senior Advisor to the Secretary of State 
for International Narcotics Matters [K. 
Malthea Falco] are Hispanic-Americans. 

In my Bureau I am proud to say that one of 
my first decisions was to convince Dick 
[Richard G.] Arellano to join me as Deputy 
Assistant Secretary for Inter-American Af- 
fairs, with special responsibilities across the 
board for economics, military, and other so- 



October 31, 1977 



591 






called functional issues. I was also somewhat 
shocked to learn upon taking office that this 
Bureau, which has the basic responsibility for 
inter-American affairs, had barely a half- 
dozen Hispanic officers altogether. Given the 
personnel ceilings and budgetary restraints 
under which we operate, I expect progress to 
be slow. But I intend to use every possible 
opportunity to bring more Hispanic-Amer- 
icans into the Bureau. 

Our country needs the talents and insights 
of all its citizens. And in dealing with this 
hemisphere we need more than ever the in- 
sights, the talents, and the special wisdom of 
the American Hispanic community and its 
leaders. 

Now I would like to hear your views — for I 
am sincere in saying that I want and need all 
the wisdom you can impart as we approach 
the task of trying to strengthen the ties which 
bind us together. As that distinguished Mexi- 
can writer and diplomat Luis Quintanilla said 
in describing this hemisphere: "From pole to 
pole, from ocean to ocean, we are all in the 
same boat; we were created to live together." 



Department Testifies on 
Undocumented Aliens 

Following is a statement by Richard G. 
Arellano, Deputy Assistant Secretary for 
Inter-American Affairs, made before the 
Subcommittee on International Development 
Institutions and Finance of the House Com- 
mittee on Banking, Finance, and Urban Af- 
fairs on September lb. 1 

At present the problem of undocumented 
aliens is the most important and the most 
serious which we have with Mexico. From the 
U.S. domestic point of view, it is charged that 
illegal immigration from Mexico exacerbates 
our own unemployment problem, depresses 
wages, puts a drain on our social welfare pro- 



'The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 



gram, and results in a considerable public ex- 
penditure for policing the border and ap- 
prehension of illegals and represents a drain 
of foreign exchange through remittances. 

From the Mexican viewpoint illegal immi- 
gration is a safety valve for the Mexican econ- 
omy which relieves the pressures created by 
its domestic unemployment and the lack of 
development in its rural areas. In this context 
the Mexicans view the problem of un-docu- 
mented workers as a mutual one which 
must be solved through joint effort with the 
United States rather than merely through uni- 
lateral sanctions and regulations by the 
United States which would treat the illegals 
as criminals. Until we are able to solve this 
problem amicably and cooperatively with 
Mexico, it will be a festering sore which will 
adversely affect the totality of our bilateral 
relations with Mexico and less directly the 
other nations of Latin America which depend 
on emigration to the United States to relieve 
their unemployment pressure. 

As the President said in his message to 
Congress August 4: 

The economies of most of the source countries are still 
not sufficiently developed to produce, even with signifi- 
cant U.S. aid, enough jobs over the short term to match 
their rapidly growing workforce. 

Over the longer term, however, I believe that marked 
improvements in source countries' economies are 
achievable by their own efforts with support from the 
United States. I welcome the economic development ef- 
forts now being made by the dynamic and competent 
leaders of Mexico. To further efforts such as those, the 
United States is committed to helping source countries' 
means of providing such assistance. In some cases, this 
will mean bilateral or multilateral economic assistance. 2 

In the short run, external assistance either 
from the United States or the international fi- 
nancial institutions is unlikely to have a major 
effect in reducing illegal immigration from 
Latin America — the level of which has not 
been accurately determined. In the long term, 
assistance directed toward increasing rural 
employment opportunities, particularly in 
Mexico, will have more positive effects in re- 
ducing the economic incentives to emigrate. 
The United States has encountered consider- 
able difficulty in its efforts to reduce un- 
employment. The problems of reducing un- 



2 For full text, see Bulletin of September 5, 1977, p. 
315. 



592 



Department of State Bulletin 



employment and raising the standard of living 
in Mexico are even more formidable. 

Discussion of the character of migration 
across national frontiers in Latin America 
may shed some light on the complexity of this 
problem. 

Over the last two decades, Latin America 
has become a region of net outward migration. 
Additionally, migration among countries 
within the region, previously very small, has 
increased considerably. The flow of migration 
from Latin America to the rest of the world 
and the currents from one country to another 
both are made up of very different types of 
migrants. 

The most numerous category is that of un- 
skilled workers. This group comes mainly 
from the rural poor of countries with high un- 
deremployment. These people move directly 
across land frontiers seeking work — mainly in 
agriculture, construction, and domestic serv- 
ice. The main movements within Latin 
America of this type are from Bolivia, Chile, 
and Paraguay into Argentina; from Colombia 
into Venezuela and Panama; and from El Sal- 
vador into Honduras. By far the largest 
movement of this category of migrants is from 
Mexico to the United States. 

The main attraction of the United States for 
the unskilled migrant is the higher level of 
U.S. wages. A typical worker can earn more 
in 3 months in the United States than he can 
in a year in Mexico. Recent studies indicate 
that the vast majority of these unskilled mi- 
grants do not consider staying permanently in 
the United States. They come to work 
temporarily — usually for periods of 4-6 
months — and then return to their home com- 
munities. Credence to this finding is given by 
an understanding of the nature of traditionally 
strong Mexican family ties. 

A crucial factor in this migration is, of 
course, the general economic situation within 
Mexico. Historically, sharp increases in the 
rate of migration to the United States have 
resulted after severe drought, flooding, or 
other adverse conditions affecting agriculture 
in Mexico. 

Mexico's high levels of unemployment and 
underemployment, as I have previously 
suggested, contribute to migrant flows; how- 



ever, empirical research indicates that it is 
not just the lack of jobs but the lack of steady, 
relatively well-paid jobs which fuels migra- 
tion. The consensus of scholarly opinion is 
that large wage differentials are more impor- 
tant than simply the level of unemployment in 
Mexico in promoting migration of temporary 
workers to the United States. 

A different category of migrant are those 
skilled and semiskilled workers seeking vari- 
ous kinds of urban employment who move on a 
more limited scale to a wide variety of desti- 
nations; they are not concentrated in border 
areas as are most of the unskilled. These mi- 
grants are far more likely to become permanent 
residents of the United States than the un- 
skilled workers. However, I should note that 
this group primarily is comprised of migrants 
from source nations other than Mexico. 

Of course, substantial numbers of Mexican 
illegals do become permanent residents of the 
United States either by blending into predom- 
inantly Mexican-American neighborhoods or 
by eventually legalizing their status. But em- 
pirical research indicates that they are 
outnumbered — probably by a margin of about 
10 to 1 — by illegals who maintain a pattern of 
seasonal or shuttle border migration. 

Migrants in the skilled category are much 
more likely to speak English, have more for- 
mal education, and hence are less likely to be 
detected by the Immigration and Naturaliza- 
tion Service. 

The third and presumably smallest group of 
illegal migrants are those who come for 
sociopolitical reasons. This group originates 
mainly in the urban middle-class. Movements 
in this class include persons suffering from 
some degree of discrimination either because 
of lack of adequate educational opportunities, 
access to public or private employment, be- 
cause of economic insecurity, or the incom- 
patibility of their values with those dominant 
at home. 

There are several myths which have grown 
up concerning the character of illegal aliens. 
David S. North of the Center for Labor and 
Migration Studies has examined some of these 
myths and has concluded the following: Illegal 
aliens are a more polyglot and sexually inte- 
grated population than is generally realized 



October 31, 1977 



593 



(i.e., illegals are not primarily young men 
from Mexico); the principal impact of illegals 
on American life is to depress the labor mar- 
ket through acceptance of low paying jobs; 
and illegals are net contributors to the U.S. 
Treasury in that through automatic payroll 
deductions they pay taxes and make Social 
Security payments but they seldom take wel- 
fare payments due to a reluctance to become 
enmeshed in a bureaucratic structure which 
they fear could lead to detection by the 
authorities. 

As can be seen from this short discussion, 
illegal migrants are not a monolithic group. 
They cross national borders to satisfy a wide 
variety of goals. They are impelled by many 
different motivations. The problem is too 
large, too complex, and has existed far too 
long to permit simple, painless solutions. The 
flow of illegal aliens is likely to continue in the 
foreseeable future no matter what measures 
are taken. However, the rate of this flow de- 
pends in part on whether adequate steps to 
create attractive alternatives to migration can 
be taken within Mexico and other source coun- 
tries. Assistance from the United States and 
other donors, including the international fi- 
nancial institutions, can provide help to the ef- 
forts of source countries to deal with the fac- 
tors which stimulate emigration. 

For instance, the Mexican Government has 
requested the assistance of the World Bank to 
devise programs for channeling more credits 
and other forms of help to small and medium 
industries in that country. This is in an effort 
to reorient their development policies more 
toward small-scale, labor-intensive rural in- 
dustrialization. A World Bank mission visited 
Mexico in October 197(5 to survey the whole 
small- and medium-scale sector and analyze 
the operations of existing financial institu- 
tions. The mission has proposed a project for 
expanding credits to smaller industries linked 
to a program of technical assistance. 

While programs like this are a step in the 
right direction, Mexico's demographic position 
may vitiate the benefits they can bring. About 
7(iii,i)00-800,000 new workers will enter the 



labor force annually over the next 15-20 
years. According to World Bank estimates, 
even if Mexico could quickly resume its histor- 
ically high rate of economic growth (about 6 
percent), the economy could absorb only about 
half the new entrants. 

Recent economic literature has suggested 
that "intermediate" or "appropriate" technol- 
ogies could be used to create more labor- 
intensive development. However, it is difficult 
for development banks to design projects us- 
ing "appropriate" technologies when 
such alternatives are by no means obvious and 
usually do not exist in forms ready for im- 
mediate application. These technologies are 
new and innovative; therefore, they entail a 
higher level of risk than proven industrial de- 
signs and techniques. Experienced bankers 
are, properly, somewhat reluctant to place 
excessive reliance on these concepts. 

In closing, I would like to reiterate that it is 
really the source countries who must take the 
lead in solving their basic structural 
problems — problems such as maldistribution 
of income, high population growth, and low 
rural productivity. However, we believe the 
international financial institutions can assist 
these efforts toward improving overall eco- 
nomic conditions and, by so doing, reduce the 
pressure for emigration. 



Letters of Credence 

On October 7, the following newly ap- 
pointed Ambassadors presented their creden- 
tials to President Carter: j 

Guinea — Ibrahima Camara 
India — N. A. Palkhivala 
Nigeria — Olujimi Jolaoso 
Oman — Farid Mubarak Ali al-Hinai 
Zaire — Kasongo Mutuale 



1 For texts of the Ambassadors' remarks and the 
President's replies, see Department of State press re- 
leases dated Oct. 7. I!i77. 



594 



Department of State Bulletin 



United States and ASEAN Hold Economic Consultations in Manila 



Following is a statement by Richard N. 
Cooper, Under Secretary for Economic Af- 
fairs, made at the U.S. -Association of South 
East Asian Nations (ASEAN) economic con- 
sultations in Manila on September 8, 1977, 
together with the transcript of a joint news 
conference by Carlos P. Romulo, Philippine 
Secretary of Foreign Affairs, and Under Sec- 
retary Cooper on September 10 and the text of 
a joint press release issued that day. 



STATEMENT BY UNDER SECRETARY COOPER 

I and members of my delegation, on behalf 
of the U.S. Government, very much ap- 
preciate your kind words of welcome and take 
great pleasure in joining with you in this first 
meeting between the United States of 
America and the states of the Southeast Asian 
nations. Looking around the room, it is par- 
ticularly gratifying to note that I and my col- 
leagues are meeting today with many friends 
whom we have known before, representing 
nations with which the United States has had 
long and friendly relations. For the first time, 
we are meeting with you not as representa- 
tives of individual countries but of representa- 
tives of ASEAN as a collective institution. 

Before going further, I wish to state that 
my delegation and I are most appreciative of 
the hospitality being extended by President 
Marcos and the Government of the Philippines 
in hosting these consultations. It is our com- 
mon good fortune to partake of the warm 
friendship and support being provided by your 
government. 

Looking back on ASEAN's first 10 years, 
the United States is struck by the steady 
growth in cohesion, self-reliance, and political 
and economic strength on the part of 
ASEAN's members. They have met and mas- 



tered the immense challenge posed for South- 
east Asia by the tragic events of Indochina 
and the major readjustment of U.S. military 
strength in this region. The success of 
ASEAN as an organization has paralleled and 
reinforced the economic growth and rising 
world importance of its individual members. 
We salute these developments and believe 
that they bode well for the peace and prosper- 
ity of all the nations of Asia. 

We have long enjoyed with each ASEAN 
member country cooperative and fruitful rela- 
tionships. These have become increasingly 
economic in emphasis involving trade, aid, in- 
vestment, and issues of global interest. This 
meeting brings to these old relationships an 
important new dimension. It represents an 
experiment aimed at determining whether a 
regional approach to matters of mutual inter- 
est can bring additional advantages to exist- 
ing relationships. This is the central question 
our nations will jointly attempt to begin to an- 
swer this week. 

In that context, the United States believes 
that ASEAN has importance for global as well 
as for Asian economic development. We attach 
particular significance to ASEAN's present 
and prospective roles in four respects. 

— First, ASEAN is a pragmatic force, in- 
tent on pursuing a constructive rather than a 
confrontational role in international economic 
forums. In consequence, ASEAN has 
achieved growing influence and leadership 
both among developing nations and in the 
overall North-South dialogue. 

— Secondly, ASEAN is a source of numer- 
ous commodities important for industrializing 
and industrialized nations alike. ASEAN's 
workmanlike approach and its concern to be 
realistic in seeking improved international 
commodity arrangements should help achieve 



October 31, 1977 



595 



mutual benefits for producing and consuming- 
nations alike. 

— Thirdly, ASEAN is an area with unusual 
growth potential — one which offers economic 
opportunities for itself and its economic 
partners within a world system of liberalized 
trade and investment. 

— Finally, ASEAN is a group which has 
gained recognition for its emphasis on mutual 
cooperation for development. 

In terms of development in Asia, it may fur- 
ther assist our discussions if I note that ear- 
lier this year Secretary of State Vance enun- 
ciated five basic principles which guide the 
policies of the United States toward the 
peoples and nations of Asia: 1 

— First, the United States is and will re- 
main an Asian and Pacific Power; 

— Second, the United States will continue 
its important role in contributing to peace and 
stability in Asia and in the Pacific; 

— Third, the United States seeks normal 
and friendly relations with countries in the 
area on the basis of reciprocity and mutual 
respect; 

— Fourth, the United States will pursue 
mutual expansion of trade and investment 
across the Pacific, recognizing the growing- 
interdependence of the economies of the 
United States and the region; and 

— Fifth, we will use our influence to im- 
prove the human condition of the peoples of Asia. 

Each of these principles has concrete mean- 
ing as we meet together in Manila. 

Concerns have been expressed that the 
United States might withdraw from this part 
of the world or that we would abandon an ac- 
tive role in support of peace and stability in 
Southeast Asia. On the contrary, we are and 
will remain engaged with the nations of this 
region and with ASEAN. Our commitment 
comprises far more than our military 
presence — we are partners in trade, in mul- 
tilateral development institutions, and in the 
continuing dialogue about the management of 
the world economy. Our current meeting is in 
itself an expression of our growing and fruit- 



1 For Secretary Vance's address before the Asia So- 
ciety on June 29, see Bulletin of Aug. 1, 1977, p. 141. 



ful interdependence with our longstanding 
friends in Southeast Asia. Our interest in es- 
tablishing an accommodation with other na- 
tions in this region will be pursued prudently 
with careful attention to priorities. I would 
also add that the recent visit of Secretary of 
State Vance to the People's Republic of China 
[August 20-26] reflects our belief that a con- 
structive relationship with China is also im- 
portant for global and regional equilibrium. 

Our economic relations with the ASEAN 
are founded on a recognition of interdepend- 
ence. Indeed, interdependence is the theme 
which harmonizes and gives the most meaning 
to our mutual objectives at these talks; our 
agenda of discussions reveals the wide range 
of this interdependence. So too do the data. 

In 1976 the United States was ASEAN's 
second largest trading partner accounting for 
about 18 percent of ASEAN's two-way global 
trade. For our part, we are highly dependent 
on the ASEAN states for our imports of tin, 
vegetable oils and fats, and rubber. Signifi- 
cantly, the growth in U.S. trade with ASEAN 
between 1970 and 1976 was greater than the 
growth of overall U.S. trade — while our trade 
tripled, our trade with ASEAN more than 
quadrupled during this period of time. The 
book value of our investments in ASEAN tri- 
pled between 1970 and 1975. 

Behind these statistics is a network of eco- 
nomic relationships involving not simply the 
exchange of goods and services but also the 
transfer of technology, growth in communica- 
tions and travel, and the development of busi- 
ness ties. We approach ASEAN with a desire 
to complement and supplement our bilateral 
relations wherever we can in areas of our 
mutual interests. We can jointly advance 
many of these interests in our global efforts. 
But reflecting our recognition of the value and 
strength of regional cooperation, we are also 
exploring ways of enhancing our support of 
organizations, such as the Asian Development 
Bank, which have a special value and role in 
Southeast Asian nations. 

Interdependence, which offers great bene- 
fits, also imposes responsibilities. The pros- 
perity of the world economy is not guaranteed 
by any automatic or self-regulating process. 
The play of market forces must be 



596 



Department of State Bulletin 



supplemented with thoughtful and deliberate 
economic management. At a national level, 
policies of full employment and price stability 
are necessary to assure that prosperity is 
widespread and enduring. Moreover, the 
major industrial nations of the world have a 
special responsibility toward their trading 
partners and toward each other. Inflation or 
unemployment in the industrial centers can 
create disturbances in the economic life of the 
entire world, just as instability, sharp price 
increases, or supply disruptions in raw mate- 
rials or energy can disrupt the international 
economy. 

In a world of interdependence, the guiding 
principles must be cooperation and mutual 
benefit. Only through a growing process of 
consultation and mutual concern can national 
economic policies be brought into harmony. 
And only through a search for measures of 
mutual benefit and rejection of measures 
which help one nation at the cost of another 
can the full potential of the world economy be 
realized. 

These principles have direct application to 
today's economic problems. The recent period 
of uncertainty and disruption in the world 
economy has created a new impetus for pro- 
tectionism in both developed and developing 
countries. To a great degree, this self- 
defeating impulse has been successfully 
resisted. The great benefits of an open, non- 
discriminatory trading system have been rec- 
ognized and preserved. But all of us must con- 
tinue to defend the principles of open trade 
and to expand their application in an orderly 
and reciprocal way. For our part, the United 
States pledges to give special attention to the 
means of improving market access for the 
products of interest to ASEAN. And we hope 
that the nations of ASEAN will be alert to the 
prospects of mutual benefits from a reduction 
in protection of your economies. 

These measures of trade expansion should 
not be seen as concessions — as in the tradi- 
tional language of trade negotiations — but 
rather as a means of improving economic effi- 
ciency to the gain of all concerned. A tariff re- 
duction in one country is of benefit not simply 
to producers of another country but also to 
consumers at home and, in the long run, to the 



ASSOCIATION OF SOUTH EAST 
ASIAN NATIONS (ASEAN) 

ASEAN was established on August 8, 1967, by 
the Foreign Ministers of the member states (In- 
donesia, Malaysia, Philippines, Singapore, and 
Thailand) meeting at Bangkok. Its purpose is to 
accelerate the economic growth, social progress, 
and cultural development in the region; to promote 
active collaboration and mutual assistance on mat- 
ters of common interest in the economic, social, 
cultural, technical, scientific, and administrative 
fields; to collaborate more effectively for the 
greater utilization of their agriculture and indus- 
tries, the expansion of their trade — including the 
study of the problems of international commodity 
trade — the improvement of their transportation 
and communication facilities, and the raising of liv- 
ing standards. The Secretariat for this organiza- 
tion is in Djakarta, Indonesia. 



vigor and competitiveness of domestic 
industry. 

While an open trading system offers great 
benefits which go with interdependence, it 
also poses some characteristic problems. In 
the last year, there has been a growing con- 
sensus among the nations of the developed 
and developing world that wide fluctuations of 
commodity prices do not promote economic ef- 
ficiency. We are now together engaged in a 
process of commodity discussions, and discus- 
sions of the formation of a common fund, 
which are designed to introduce greater order 
and stability into commodity markets. We in 
the United States see this effort as an oppor- 
tunity to put into practice the principles of 
cooperation and mutual benefit. We particu- 
larly appreciate the constructive role which 
ASEAN and its members have pursued in the 
various forums where discussions are taking 
place. 

Private investment also offers opportunities 
for mutual benefit. The United States believes 
that private investment can make a major 
contribution to economic development. But it 
is up to the host country to set the rules for 
investment. As a government, we have an 
interest that the rules, once set, be fairly 
applied; but we have no desire to foist any in- 
vestment on a country which does not wish to 
receive it. 



October 31, 1977 



597 



The goal of all these policies — sensible mac- 
roeconomic management, open trade, com- 
modity stabilization, private investment — is 
economic growth and development. The 
United States is fully committed to the 
economic development of the nations of 
ASEAN and will continue its efforts toward 
this objective. 

Development, however, is not an end in it- 
self but a crucially important means of im- 
proving the human condition. The United 
States will continue to work toward the ful- 
fillment of basic human needs, protection of 
the integrity of the individual, and promotion 
of popular participation in government. Our 
policies will be implemented with a careful re- 
gard for the situation in each country, having 
in mind the trend of governmental efforts as 
well as the nature of their problems. 

Economic relations involve more than an 
exchange of money and products. The prog- 
ress of ASEAN over the last decade reminds 
us of the intangible benefits of economic coop- 
eration. In my view, these "invisibles" — to 
use an economic expression — reflect a new 
sense of community in this region which is 
manifested: 

— By the strengthening links binding the 
members of this community together; 

— By the growing importance of ASEAN's 
collective economic strength; 

— By ASEAN's influence and contributions 
to international political and economic 
deliberations; 

— By the high interest that ASEAN shows 
in constructive efforts to increase the benefits 
of economic interdependence, an interest re- 
ciprocated in your recent dialogues with Aus- 
tralia, Canada, Japan, New Zealand, and with 
the European Community; and 

— By the growing determination of its 
members to sustain and strengthen the 
ASEAN community. In that regard, we have 
noted the willingness of members to put an 
end to territorial uncertainties. 

I was impressed by the breadth of the sub- 
jects addressed at the recent second ASEAN 
summit in Kuala Lumpur as outlined in the 
communique issued by the heads of your gov- 
ernment following these sessions. Its scope 



reflects the many facets of interchange which 
concern the states of ASEAN. 

Although they are not included in our 
agenda today, I wish to comment that two 
items included in the ASEAN communique 
have a special interest for the United 
States — the campaign to limit and control the 
production and spread of illicit narcotics and 
drugs which create human misery while sap- 
ping our most precious resource, human tal- 
ent, and the need to provide humanitarian re- 
lief and assistance to refugees who, along with 
their torments and problems, also provide us 
with new human resources. 

As you know the United States is actively 
engaged in both of these matters with the 
states of ASEAN in their individual 
capacities. We are impressed by the attitude 
of these states and the tangible progress they 
have made in dealing with these problems, 
often at great difficulty and cost to them- 
selves. We are prepared to be of further as- 
sistance in ways that best suit the states most 
directly concerned. 

In conclusion I wish to note that our meet- 
ing today, although historic in terms of being 
first, is in fact an extension of progressive 
cooperation between the United States and 
ASEAN in learning from each other how best 
to conduct our affairs for mutual benefit. 

The meeting comes at a good time. While 
the general direction of President Carter's 
Administration has been firmed, numerous 
details have yet to be worked out. This 
means, on the one hand, that we cannot make 
definitive statements here on many issues of 
mutual interest. But it means also that what 
we learn here can have a bearing on the deci- 
sions actually taken. While I cannot assure 
that every decision will accord with the 
wishes of ASEAN countries, I can assure you 
that your voice will be heard in the delibera- 
tions. In that sense, these represent true con- 
sultations on our side, and I hope too that our 
views are taken into account in your delibera- 
tions on many issues of mutual interest. 

I wish to emphasize that for my delegation 
the success of our discussions is not dependent 
upon the achievement of specific goals or spe- 
cific agreements. While such results would be 
welcome, we believe that a signal benefit for 



598 



Department of State Bulletin 



all of us at this time is the valuable process of 
consultation. 

We thus join these talks in the same spirit 
that has brought such strength to the Associa- 
tion of South East Asian Nations — that of 
honest recognition of diverse interests, 
coupled with a determination to seek areas for 
cooperation and mutual benefit. 



NEWS CONFERENCE BY SECRETARY ROMULO 
AND UNDER SECRETARY COOPER 

Secretary Romulo: We discussed for about 
3 days every single point of the 11 memoranda 
that the ASEAN nations submitted to the 
American delegation. They met every point 
four-square. They dodged no questions. They 
had every answer that we put up to them. It 
was really refreshing to discuss with men 
conversant with the subject. 

It was an historic dialogue — the first time 
that the United States dealt with an Asian 
group. In the past the United States dealt 
with the nations here bilaterally. This is the 
first time that the U.S. Government discussed 
economic issues with the ASEAN as a group. 
And so I believe this was really an historic 
occasion. 

The ASEAN, in its memoranda, did not ex- 
pect any quantified amount. I want to begin 
by saying that; don't ask us any question 
about sums of money. The American delega- 
tion did not come out here as Santa Claus, nor 
did we expect them to be. They came here to 
discuss with us economic issues and prepare 
the ground for future discussions. Don't 
forget this is the first time that we have had 
face-to-face dialogue with competent Ameri- 
can economists. We did not expect them to 
hand out anything, but we wanted to have a 
heart-to-heart, frank, dispassionate discus- 
sion on economic issues here in our region. 

And certainly Under Secretary of State 
Cooper gave us a true picture, not only of the 
economic situation of the United States but of 
the world; and what is more important to us, 
the economic policies of the Carter Adminis- 
tration which we could not have had merely 
by reading newspapers. It was a frank, mas- 
terful discussion of issues of common concern 



to the United States and to the Philippines 
and to the ASEAN nations, and we profited a 
lot from such discussions. It is different to 
deal with the United States across 10,000 
miles or to read newspapers with their re- 
spective slants. It is quite different to deal 
with men who come fresh from Washington, 
who know the attitudes and the policies of 
President Carter, who are close advisers to 
the President of the United States, and whose 
opinions really carry weight. 

And so after discussions for several days I 
find that there has been added a new dimen- 
sion in the relationship of the United States 
with the member countries of the ASEAN. 

The United States and ASEAN welcomed 
the addition of the United States to the ex- 
panding linkage of cooperative endeavor be- 
tween ASEAN and the developed world. The 
United States and ASEAN agreed that all 
countries should reject protectionism. The 
United States declared its readiness to par- 
ticipate with ASEAN in developing coopera- 
tion supplementary to the assistance extended 
bilaterally to ASEAN member countries, 
primarily in areas which satisfy basic human 
needs such as agriculture, rural development, 
health and nutrition, and education and 
human resource development. 

ASEAN accepted the invitation of the 
United States to meet in Washington, D.C., 
tentatively in June 1978 and in the interim 
period to carry on discussions on economic 
matters of special interest at technical levels 
as opportunities might warrant. 

ASEAN announced its interest in establish- 
ing at ambassadorial level an ASEAN Wash- 
ington committee in Washington. D.C., which 
shall serve as a channel of communication and 
follow-on activities related to ASEAN- 
United States. 

Specific areas for follow-up and further 
discussions: 

— On multilateral trade negotiations: Fur- 
ther discussions on the subject of this confer- 
ence shall continue in Geneva between 
ASEAN and the United States. 

— On the generalized system of preferences 
(GSP): The United States indicated that the 
U.S. Government would take into account 



October 31, 1977 



599 



ASEAN's proposals in considering improve- 
ment of its GSP system. 

— On commodity issues and policies: The 
United States and ASEAN agreed on continu- 
ing their consultations on the various issues 
raised on this subject, including international 
commodity stabilization agreements and on 
the negotiations of a common fund. 

— On developmental cooperation: The set- 
ting up of a joint working group to define spe- 
cific projects in a developmental cooperation 
group. 

— On promotion of investment relations and 
business cooperation between ASEAN and 
the United States. 

May I give the floor to our guest, Under 
Secretary Cooper. 

Under Secretary Cooper: Thank you. I can 
be very brief. We found in these meetings 
that Gen. Romulo was a very effective 
spokesman for the ASEAN countries on all of 
the topics which we discussed, and I find this 
morning that he is also a very effective 
spokesman for the United States in charac- 
terizing the meetings that we have just con- 
cluded. And so I only add briefly to what he 
said; we attach great importance to these 
meetings. 

The United States holds periodic consulta- 
tions with other industrial countries — with 
the European Community and with Japan. 
But we felt that, given today's increasingly 
complex and interdependent world, we should 
broaden the base of those consultations and it 
is significant that in doing that, we have 
begun with ASEAN, which is a highly promis- 
ing economic organization, both representa- 
tive of and adding to the cohesion of this 
region — Southeast Asia — to which we attach 
great importance. The meetings have added 
considerably to our understanding of 
issues — of the same economic issues — that we 
observe from Washington with a very differ- 
ent prospective, and it seems to me the value 
of such meetings is precisely to get different 
focal points or vantage points on the same set 
of phenomena and compare notes from time to 
time. 

It is very useful to have the different 
perspectives which we have gotten here in 



Southeast Asia. I think the consultations were 
exceedingly useful, and we look forward very 
much to having them continue in Washington 
and beyond that from time to time, sharing 
views at the policy level. In the meantime, as 
Gen. Romulo has mentioned, we set up a 
series of consultative arrangements at the 
working-group level which will continue on a 
more or less continuous basis between now 
and the time for our next meeting. I think we 
should invite questions and comments. 

Q. In the opening statement of Secretary 
Romulo the other day he made it clear that 
ASEAN wants U.S. cooperation in industrial 
projects of the region. In the highlights of the 
meeting, I don't see it here, is it. part of this 
developmental cooperation that you have 
here? 

Under Secretary Cooper: We took occasion 
to explain the new directions of our bilateral 
foreign assistance program mandated by Con- 
gress 3V2 years ago and with which President 
Carter is, in fact, in strong sympathy, so it's 
not likely to be turned around. And these new 
directions call, in our bilateral aid program, 
for the emphasis to be predominantly, indeed 
overwhelmingly with few exceptions, in three 
areas — nutrition, considered very broadly, 
that is including improvements in rural de- 
velopment, improvements in the rural sector 
of economies; public health, also considered 
very broadly, including potable water, sanita- 
tion, and so forth; and education. And those 
are the major directions of our aid program. 

And, as I say, while the aid program is sub- 
ject to change from time to time, that em- 
phasis happens to conform well with President 
Carter's own approach to economic develop- 
ment. And, therefore, we do not see scope in 
our bilateral aid program for direct support 
for industrialization projects that have been 
identified so far. 

However, we view our own aid program as 
complementary to two other sources of funds 
which are suitable for the industrialization 
program. One is the private capital markets 
which countries of ASEAN have used increas- 
ingly in the recent years along with other de- 
veloping countries; and second, and perhaps 
more important to the case at hand, the inter- 



600 



Department of State Bulletin 



national lending institutions to which the 
United States is a major contributor. And it 
seems to me that the kind of projects which, 
without having gotten into the details of 
them — the kind of projects which ASEAN has 
identified as industrialization projects are a 
natural for the kind of large capital lending 
that the ADB [Asian Development Bank] and 
IBRD [International Bank for Reconstruction 
and Development] do, both for infrastructure 
and for productive processes in countries, and 
so that's how we approach those particular 
projects. 

Q. [Inaudible — referred to U.S. role in 
Southeast Asia after Under Secretary 
Cooper's visit.] 

Secretary Romulo: Well I must say that as 
explained by Under Secretary of State Cooper 
in our private sessions, I am fully satisfied 
that the United States is here in a manner 
that will be helpful and of assistance to the 
ASEAN nations. 

Q. Could you explain U.S. reservations 
about the proposals from ASEAN for stabex- 
type commodity income stabilization ar- 
rangements? And secondly could you explain 
what you mean when the joint statement says 
that the United States believes that the objec- 
tive of commodity export earning stabiliza- 
tion could be achieved by other means? 

Under Secretary Cooper: Yes, I am afraid I 
cannot be completely brief, but if you are will- 
ing to tolerate an expansive answer, I am 
happy to give it. 

Let me state at the outset that there is no 
disagreement at all on the objective of 
stabilizing export earnings; that we agreed 
fully was a shared objective. I see it as a 
major feature of a world economy. The ques- 
tion is how best to do it. The term "stabex" 
has to come to be associated with a particular 
arrangement between the European Commu- 
nity and a number of its former colonial ter- 
ritories, most new countries, most of them are 
very small, most of them monocultures — that 
is, relying heavily for their export earnings on 
a single product, for example sugar. Under 
those circumstances the stabex-type scheme 
makes considerable sense, I think. It corre- 



sponds closely to dealing with the export earn- 
ings of the particular countries. 

Here in Southeast Asia we find a somewhat 
different situation. All of the countries except 
for Singapore — and Singapore even 
indirectly — are highly dependent on the ex- 
port of commodities, but they are also rela- 
tively diversified in their dependence on 
commodities; that is, no single commodity on 
which each economy is highly dependent. And 
under those circumstances it seems to me, to 
us, that an approach to export stabilization 
other than stabex is an appropriate one, that 
stabex is not an especially appropriate tech- 
nique for dealing with the economic structure 
found in these countries. And, indeed, to fill 
out the general allusion to which you refer, we 
think that any kind of a scheme which focuses 
on the overall export earnings of the country 
is better suited to stabilization of export earn- 
ings than the stabex scheme which focuses 
commodity by commodity. 

We have one such arrangement facility. I 
think that is a good facility. If it's not good 
enough, it should be improved, and we do not 
have a closed mind at looking to alternatives 
for that. But we do think that the commod- 
ity-by-commodity approach for highly diver- 
sified economies, as represented in stabex, is 
not the best approach. The situation in the 
world today is one in which prices of com- 
modities like sugar are greatly depressed, 
while prices of other commodities like tin and 
coffee are at their all time highs, or near 
them. And diversification of economy means 
that one can be offset against another. That is 
not true for a single commodity country. 

Q. [Inaudible — referred to human rights 
a ml U.S. -ASEAN economic relations.] 

Under Secretary Cooper: Well I don't know 
how closely you've followed the President's 
statements on human rights and the elabora- 
tion of that by Secretary of State Vance in his 
Law Day speech [April 30]. But if you read 
those texts carefully, you'll discover that we 
have a broad definition of human rights which 
indeed is drawn from — similar to the broad 
definition of human rights expressed in the 
U.N. Universal Declaration on Human 
Rights. And we do not, therefore, see any 



October 31, 1977 



601 



fundamental incomparability between an ex- 
pressed concern by our government on the 
treatment by governments of persons, dissi- 
dents, physical abuse of persons on the one 
hand, and the policy which we support of im- 
proving the material well-being, the economic- 
well-being of individuals. 

We are in the process of articulating in 
more detail the exact relationship between 
economic assistance, which is concerned with 
the economic side of human rights, and other 
aspects of human rights. And so far we have 
not seen any deep conflict between them. And 
in our conversations in these last few days, we 
focused heavily on the economic aspects and 
have not, except for a brief reference in open- 
ing remarks, referred to more general ques- 
tions of human rights. 

Let me just add to that. I think there 
should be no doubt, and I would like to under- 
line that here, in President Carter's firm per- 
sonal commitment to the question of human 
rights everywhere in the world, he felt that 
his predecessors in Washington did not give 
adequate expression to that widely shared 
American sentiment. He is trying to correct 
that, but that is not to say that that becomes 
the be-all and end-all of all American policy. 

Q. Please elaborate on the common fund. 
How much will each ASEAN member country 
contribute? How will each country avail itself 
of the fund and foe what specific purpose? 

Under Secretary Cooper: I can't really an- 
swer any of your questions at this stage be- 
cause we have not negotiated a common fund 
yet, and the answer to your question depends 
very much on its specific character. We had 
brief discussions at these meetings of the 
common fund and its merits, its role — its 
possible role — but it would not have been ap- 
propriate for either the ASEAN countries or 
the United States to engage here in detailed 
negotiation of the common fund. That's being 
undertaken under the auspices of UNCTAD 
[U.N. Conference on Trade and Develop- 
ment] in a session that will start again in 
November. And really until we see the shape 
of the common fund as it emerges from those 
negotiations, we cannot answer in concrete 
detail your questions — what contribution it 
will be, what exact purposes it will serve, 



and so forth. In general terms, the common 
fund is designed to support the program to 
improve the world economic situation as far 
as commodities are concerned, and the mo- 
dailities whereby that will be done have yet 
to be worked out in negotiation among the 
some 140 countries. 

Q. [Inaudible — referred to tax deferral 
proposals made by the ASEAN delegation. ] 

Under Secretary Cooper: For those of you 
who may not be conversant with the issue; 
under present U.S. tax law the earnings of 
American-owned equity corporations abroad 
are taxed by the United States only after they 
are remitted to the United States and, of 
course, allowing for taxes that have already 
been paid to other countries. As long as the 
corporations keep the income out of the 
United States, it's not taxable in the United 
States, and that is called tax deferral — that is 
where the name comes from. 

President Carter campaigned last fall on a 
program of major tax reform in the United 
States — a comprehensive overhaul of the en- 
tire U.S. tax system. Tax deferral is one fea- 
ture of that tax system — only one feature — 
but one feature and a feature that is impor- 
tant to the countries of ASEAN as was made 
amply clear to us during the discussions. 

And what I said here was I could not give 
any assurances one way or the other. What I 
reported was that the comprehensive propos- 
als for tax reform are being submitted to 
President Carter within this week — it could 
have been even today or early next week. The 
Treasury Department has been working on 
them. The President will review those pro- 
posals, make such changes that he wants to in 
them, and submit his proposals for tax reform 
to the Congress by the end of the month. At 
this stage I do not know what his position will 
be on the tax deferral questions, but what I 
did assure our colleagues was that the views 
of ASEAN would be put directly to the Presi- 
dent on this question, so that he takes them 
into account in making his decision. 

Q. [Inaudible.] 

Under Secretary Cooper: I think that his 
was one of the most fruitful parts of our dis- 
cussion these davs. The ASEAN countries 



602 



Department of State Bulletin 



r (lis- 



were extremely concrete in their proposals to 
the United States for increasing the coverage 
of generalized tariff preferences and for other 
changes in our trade policies, and we estab- 
lished a working group on trade issues and, 
indeed, the working groups started to meet 
right during our meetings and reached sub- 
stantial agreement on how to proceed both on 
the bilateral issues between ASEAN and the 
United States concerning the GSP and for 
generally how to proceed and cooperate to- 
gether in the multilateral trade negotiations 
to which we both attach such importance over 
the next year. And that was a highly concrete 
result of these discussions. 

Q. [Inaudible.] 

Undersecretary Cooper: Yes, ASEAN pre- 
sented a detailed list of commodities in which 
it expressed an interest in having liberaliza- 
tion under the U.S. generalized tariff prefer- 
ences, and we promised to put that list into 
our process. We have a formal process for 
changes of that type which involve public 
hearings and so forth. We promised to put 
that list, subject to the provision of some ad- 
ditional information, into a formal process for 
consideration of changes. We don't know how 
that will come out, but at least we got this 
process started. 

Q. Me>itio>i has been made several times of 
a working group. Is this one working group or 

several working groups? 

Secretary Romulo: Well to begin with there 
will be a working group based in Washington 
composed of our ambassadors. Then possibly 
there may be other working groups, as cir- 
cumstances may warrant, that will then be 
appointed from here, in communication with 
the United States. But the one permanently 
based will be in Washington — our ambassador 
there. 

Under Secretary Cooper: I would not want 
to comment on internal U.S. Government po- 
sitions on a question of this type, either the 
State Department or the Treasury's. 

Q. Some American businessmen raised 
questions about the proposed ASEAN indus- 
trial complementation scheme. They don't 
seem to be sure whether or not outside firms 
will be allowed to participate, and if they are 

October 31, 1977 



whether or not this will be violation of U.S. 
antitrust law. Secretary Cooper, did you 
raise this point to your colleagues anil I 
wonder if I could ask Secretary [of Finance] 
Virata or Secretary [of Trade] Quiazon to re- 
spond lo this? 

Secretary Romulo: I think Secretary 
Cooper will answer the first and then Secre- 
tary Virata. 

Under Secretary Cooper: Well I would 
suggest reversing it. I'll comment on the an- 
titrust aspect. 

Secretary Virata: Well, with reference to 
the ASEAN industrial projects, the guidelines 
that have been set by the committee of indus- 
try of ASEAN is that foreign investors could 
invest through the respective national organi- 
zations of the countries that will participate in 
these projects, and this means we will accept 
foreign investments. There have been 
guidelines saying that at least one-third of 
each national participation must be owned by 
the government and then the two-thirds could 
be owned either by the domestic investors of 
the respective countries or by foreigners. So 
this is the make-up of equity contributions in 
the respective industrial projects of ASEAN. 

Under Secretary Cooper: We did touch on 
this question briefly in our discussions, and 
what I said with respect to the antitrust as- 
pects was that the United States has a long 
tradition — going back to 1890 — of wanting to 
maintain, preserve competition in the U.S. 
market; and, therefore, that any arrange- 
ment, either for price-fixing or market- 
sharing, which tended to diminish competition 
in the U.S. market would be subject to pen- 
alty for the participants by the U.S. au- 
thorities. And that will certainly apply to 
American firms. 

The legal injunction under which we oper- 
ate, however, does apply to the U.S. market 
and not to the world market, and from time to 
time it is true that in their proselytizing fer- 
vor American antitrust people reached out 
beyond national boundaries. As long as the 
U.S. market is not influenced by these ar- 
rangements, there will be no special problem 
in American-owned firms participating in 
them as I understand them. Obviously, there- 
fore, each thing will have to be looked at on a 

603 






case-by-case basis and the importance of 
foreign trade — in particular, trade with the 
United States — becomes a factor. 

Q. [Inaudible.] 

Under Secretary Cooper: We did not discuss 
either political or human rights questions in 
the dialogue beyond the references in the 
statement which you have already seen. 



JOINT PRESS RELEASE 

The first meeting of the ASEAN-United States 
dialogue was held in Manila on 8-10 September 1977. 

Gen. Carlos P. Romulo, Secretary of Foreign Affairs of 
the Philippines, was the ASEAN spokesman. The 
ASEAN delegations were led by: for Indonesia, H.E. 
Radius Prawiro, Minister of Trade; for Malaysia. H.E. 
Datuk Haji Hamzah Bin Datuk Abu Samah, Minister of 
Trade and Industry, and H.E. Datuk Musa Hitam, Minis- 
ter for Primary Industries; for Singapore, H.E. Goh 
Chok Tong, Senior Minister of State for Finance; for 
Thailand H.E. Vicharn Nivatvongs Under Secretary for 
Commerce; for the Philippines, H.E. Gen. Carlos P. 
Romulo, Secretary of Foreign Affairs, H.E. Dr. Cesar 
E.A. Virata, Secretary of Finance, H.E. Dr. Gerardo P. 
Sicat, Secretary of Economic Planning and Director Gen- 
eral, National Economic and Development Authority, 
H.E. Mr. Troadio T. Quiazon, Jr., Secretary of Trade, 
H.E. Mr. Vincente T. Paterno, Secretary of Industry, 
H.E. Mr. Jose Leido, Jr., Secretary of Natural Re- 
sources. The United States delegation was led by H.E. 
Richard N. Cooper, United States Under Secretary of 
State for Economic Affairs. The ASEAN Secretariat was 
represented by the Director of the Economic Bureau, Dr. 
Amado A. Castro. 

The first meeting between the countries of the Associ- 
ation of South East Asian Nations and the United States 
of America was an important occasion which added a new- 
dimension to a long experience of friendly cooperation 
and fruitful bilateral relationships. Both sides welcomed 
the addition of the United States to the expanding link- 
age of cooperative endeavors between ASEAN and the 
developed world. 

The United States welcomed the success of ASEAN as 
a regional organization which has paralleled and rein- 
forced the rising world importance of its members. In 
that regard, the meeting noted the importance of 
ASEAN as a positive force for peace, development and 
prosperity in the region. 

The discussions were held with the common goal of 
facilitating mutual interests and relationships through a 
regional approach. The meeting agreed that a successful 
beginning had been made in initiating the all-important 
process of continuing consultation and cooperation. 

The meeting emphasized the interdependence of the 
world economy including ASEAN and the United States. 
The meeting recognized the benefits and concomitant 



responsibilities of dynamic economic interdependence 
which would be conducive to the prosperity of national, 
regional and world economies. 

The meeting exchanged detailed views on a wide range 
of economic issues. The discussions were based on eleven 
memoranda presented by ASEAN and which dealt with 
general issues in the North-South dialogue, commodity 
issues and policies, trade questions, investments and de- 
velopment cooperation. 

Under Secretary Cooper presented a U.S. overview of 
the world economic situation as well as an outline of U.S. 
foreign economic policies. He stressed the importance of 
promoting world economic recovery and resisting the 
threat of protectionism. 

The ASEAN spokesman on North-South issues stated 
that one of the main problems confronting the interna- 
tional community was how to ensure sustained growth of 
the world economy on the basis of equitable sharing by 
all countries, developed and developing. There was gen- 
eral agreement on the objectives of a new international 
economic order and on the need for constructive meas- 
ures to effect necessary changes and adjustments. 

The meeting agreed that the discussions on commodity 
stabilization agreements should be continued and inten- 
sified. The meeting discussed the conditions necessary 
for meaningful negotiations at the forthcoming recon- 
vened negotiating conference on a common fund so as to 
ensure its successful conclusion. 

In addition, ASEAN urged the establishment of a 
stabex-type commodity earnings stabilization program. 
The U.S., while fully in support of the desirability of ex- 
port earning stabilization in general, believed that the 
objective of commodity export earning stabilization could 
be achieved by other means. 

The meeting agreed that all countries should reject 
protectionism. The U.S. recognized ASEAN's need to 
seek improved access to the U.S. market. Both sides un- 
derscored the importance of the multilateral trade 
negotiations (MTN). The meeting also agreed that sub- 
stantial progress should be made in tropical products and 
looked forward to intensified negotiations in Geneva. The 
meeting stressed the necessity on both sides of using 
maximum efforts to fulfill the aims and objectives of the 
Tokyo declaration, particularly to secure more meaning- 
ful benefits than at present for international trade of de- 
veloping countries. 

ASEAN made a number of proposals for the improve- 
ment of GSP. The U.S. outlined the new procedures for 
receiving applications for expansion of GSP coverage and 
indicated that ASEAN views would be taken into account 
in United States Government consideration in improving 
its GSP system. 

ASEAN outlined the agreement on ASEAN preferen- 
tial trading arrangements and informed the U.S. that 
ASEAN has submitted its notification to GATT [General 
Agreement on Tariffs and Trade]. The U.S. delegation 
welcomed the objective of trade liberalization with 
ASEAN and, while it reserved its rights under the 
GATT, recognized the ASEAN preferential trading ar- 
rangement as a useful step in that direction and for 
strengthening intra-ASEAN economic cohesion. It ex- 



604 



Department of State Bulletin 



pressed the hope that ASEAN, in pursuing this goal, 
would not be creating trade barriers vis-a-vis third coun- 
tries. 

The United States declared its readiness to participate 
with ASEAN in regional development cooperation 
supplementary to the assistance extended bilaterally to 
ASEAN member countries, primarily in areas which 
satisfy basic human needs such as agriculture, rural de- 
velopment, health and nutrition and education and 
human resource development. , 

The United States assured ASEAN of its continuing 
strong support of the international financial institutions 
and specifically of the Asian Development Bank. 

The United States delegation indicated that the U.S. 
Government recognizes the important role of private 
foreign investment in contributing to development and is 
willing, within the framework of its general policies, to 
facilitate investments which contribute to ASEAN 
member countries' development objectives. However, 
the United States believes that investment decisions 
would be made by the private investor primarily in 
response to the existing investment opportunities and 
climate. 

In response to ASEAN concern that the removal or 
limitation of tax deferral provisions of the U.S. tax law 
would discourage overseas investment flows, the U.S. 
delegation indicated that a tax reform package is now 
being reviewed by the President before submitting it to 
the Congress for ultimate decision. Regarding ASEAN's 
concern for the continued operation of OPIC [Overseas 
Private Investment Corporation], the U.S. delegation in- 
formed ASEAN that the U.S. Administration favors the 
extension of OPIC's mandate with a greater development 
focus. 

The meeting agreed that the process of consultation 
which had now begun should be pursued on a periodic 
basis. The ASEAN states accordingly accepted the invi- 
tation of the United States to meet in Washington, D.C., 
tentatively set for June 1978. In the interim, discussions 
on economic matters of specific interest would be carried 
out at technical levels as opportunities might warrant. 
ASEAN announced its intention to establish an ASEAN 
Washington committee in Washington, D.C., which shall 
serve as a channel of communication and follow-on ac- 
tivities related to ASEAN-United States matters. 

Specific areas designated for follow-up discussions 
were: 

— Multilateral trade negotiations: The meeting agreed 
that discussions on this subject had contributed to a bet- 
ter understanding of the views of all participating coun- 
tries on pending trade and MTN questions. The meeting 
agreed that consultations between ASEAN and the U.S. 
on the MTN should continue in Geneva. 

— Commodity issues: Acknowledging ASEAN's impor- 
tance as a major supplier of many key commodities es- 
sential to industrial and developing nations alike, the 
United States and ASEAN agreed on continuing their 
consultations on the various issues raised, including in- 
ternational commodity stabilization agreements, and on 
the negotiation of a common fund. 

— Developmental cooperation: Recognizing the continu- 



ing need of ASEAN countries for concessional develop- 
mental assistance and the additional dimension and 
strength which regionally based projects can bring to na- 
tional development efforts, ASEAN and the United 
States agreed to a joint working group to be set up to 
define specific projects within mutually agreed program 
areas, so that project proposals could be developed and 
funding preparations made. The working group will also 
consult on how international financial institutions, specif- 
ically the ADB, can best meet the development require- 
ments of ASEAN. 

— Private investment and business cooperation: Both 
sides agreed on the importance of contributions by 
foreign investment to development in the region. At the 
request of ASEAN, the U.S. agreed to consult on the 
facilitation of private investment flows from the United 
States to the ASEAN region. The delegates agreed to 
form a working group to explore specific ways in which 
investment relations and business cooperation could be 
promoted. 

The ASEAN and United States delegations expressed 
their sincere appreciation to the Government and people 
of the Philippines for the cordial and warm hospitality 
extended to them during their stay in the Philippines. 



Dealing With International 
Terrorism 

Following is a statement by John E. Kar- 
kashian, Acting Director of the Office for 
Combating Terrorism, made before the Sub- 
committee on Foreign Assistance of the Sen- 
ate Committee on Foreign Relations on Sep- 
tember 14. 1 

I appreciate the opportunity to appear be- 
fore this committee today to discuss the prob- 
lem of international terrorism and our efforts 
to protect our citizens at home and abroad and 
the citizens of other countries in the United 
States from this threat. 

I should point out that in addition to my 
Department of State responsibilities, I am 
also the chairman of the interagency Working 
Group for Combating Terrorism. That body is 
responsible for developing and coordinating 
effective working relationships among the 
Federal agencies which have operational re- 



'The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 



October 31, 1977 



605 






sponsibilities for dealing with terrorist 
incidents. 

My office in the Department of State is re- 
sponsible for developing and refining the pol- 
icy and operational guidelines for dealing with 
terrorist threats to American citizens and 
interests abroad. In operational terms, this 
means that my office provides the leadership 
and the core personnel for the crisis manage- 
ment task forces which are organized when- 
ever an international terrorist incident involv- 
ing the United States takes place. Whenever 
necessary, we immediately mobilize the re- 
gional and functional specialists available to us 
in the Department and in other Federal agen- 
cies and carry on our task force activities on a 
24-hour basis until the incident is either re- 
solved or under control. 

Our objective is to protect American citi- 
zens and interests by preventing or control- 
ling terrorist attacks. Our methods include in- 
telligence on terrorist movements and plans, 
physical security measures for our people and 
installations, effective crisis management pro- 
cedures during an incident, and cooperation 
with other governments — including the ap- 
prehension and prosecution of those who carry 
out terrorist acts. 

Terrorism is neither a new nor an easily de- 
fined phenomenon. But modern society is par- 
ticularly vulnerable to such violent acts due to 
several factors, including: 

— The political fragmentation which is tak- 
ing place around the world; 

— Disaffected national groups which have 
grievances against the established order; 

— Modern weapons which enhance the strik- 
ing power of the few; 

— Commercial aircraft which not only pro- 
vide readymade hostages but also the place to 
confine them and the means to transport them 
and their captors anywhere in the world; 

— Additionally, there are states which fi- 
nance, arm, and train terrorists and also give 
them sanctuary; and 

— Finally, there is worldwide media cover- 
age which attends every major terrorist inci- 
dent thus satisfying a principal terrorist ob- 
jective, world attention for their cause. 



Terrorism has been defined in various ways 
and yet there is no universally accepted defi- 
nition. One man's terrorist is often another's 
"freedom fighter." It is precisely for that rea- 
son that we have been frustrated in various 
efforts to achieve comprehensive multilateral 
agreement on effective international proscrip- 
tion of terrorist acts and appropriate sanc- 
tions. And yet we know the degree of fear and 
human tragedy that is caused by terrorist at- 
tacks, kidnappings, and the indiscriminate 
murder of innocent victims whose only fault 
was to have been in the wrong place at the 
wrong time. 

Despite the definitional problem, the conse- 
quences of terrorism are clearly incompatible 
with a humane world order. Such acts, what- 
ever their motivation, are criminal and intol- 
erable. Thus, it is the firm policy of the 
United States to take all lawful measures to 
prevent acts of terrorism and to bring to jus- 
tice those who commit them. 

Terrorism today clearly transcends national 
boundaries and is a matter of international 
concern. What then are the dimensions of the 
problem? Between January 1968 and De- 
cember 1976, there were approximately 1,150 
separate international terrorist incidents. 
While the progression has not been even, the 
overall trend in the annual totals of these in- 
cidents is increasing; 1976 saw a record of 239 
separate incidents. 

I referred earlier to various means which 
are being used in our efforts to deal with the 
terrorist threat. I would like to expand on 
those comments. We have greatly improved 
on the physical security measures now avail- 
able against terrorist attacks both at home 
and abroad. For example, civil aviation secu- 
rity in the United States has been 
strengthened to the point that there has been 
only one successful hijacking of a regularly 
scheduled commercial flight in the United 
States in the past 5 years. Unfortunately, the 
situation is not as favorable elsewhere in the 
world. The downward trend in worldwide 
hijackings which was experienced in 1976 has 
been reversed in 1977. 

We have also greatly improved our ability 



606 



Department of State Bulletin 



to safeguard our Foreign Service personnel 
and our diplomatic and consular installations 
overseas. I would like to express on behalf of 
all Foreign Service personnel and their de- 
pendents our sincere appreciation to the Con- 
gress for the funds appropriated in recent 
years to make those safeguards possible. 

We are vitally interested in the safety and 
welfare of all American citizens abroad — 
tourists, businessmen, students, and resident 
Americans. In recent years, American busi- 
nessmen working abroad have increasingly 
become targets of terrorist attacks. To coun- 
teract that threat, we have developed a close 
working relationship with the Department of 
Commerce and with other Federal agencies to 
counsel and provide information to busi- 
nessmen and corporate interests which will 
assist them to protect themselves against ter- 
rorist attacks. This is done both here in the 
United States and through our Embassies and 
consulates abroad. 

Multilateral Efforts 

Since the nature of the threat transcends 
national boundaries, it must be dealt with on 
the international as well as the national level. 
In the field of antihijacking, the United States 
played a major role in negotiating three con- 
ventions on the hijacking and sabotage of 
commercial aircraft — the 1963 Tokyo conven- 
tion, the 1970 Hague convention, and the 1971 
Montreal convention. These agreements, now 
ratified or adhered to by more than 70 coun- 
tries, play an important role in our efforts to 
deter aircraft sabotage and hijackings by pro- 
viding for the apprehension, prosecution, or 
extradition of those who commit such crimes. 

The United States was also instrumental in 
having the International Civil Aviation Or- 
ganization (ICAO) adopt technical security 
standards for use by its 140 member countries 
in preventing aviation crimes. We support and 
seek adoption by ICAO of even stronger secu- 
rity standards and recommended practices. 
Also, we will continue bilateral programs to 
provide technical assistance to, and to ex- 
change information with, foreign nations to 



improve security at foreign airports having a 
direct impact on the safety of U.S. citizens 
abroad. 

Unfortunately, there are some basic obsta- 
cles to our efforts to expand other areas of 
multilateral cooperation against terrorism. 
Too many governments are predisposed to ac- 
cept the arguments advanced by terrorist 
groups that the weak and the oppressed have 
no effective alternative to using terrorist 
methods as a means of seeking justice or of 
publicizing and advancing their cause. 

Other more developed countries are some- 
times inhibited by political or economic con- 
siderations from taking actions which might 
offend governments which support or condone 
specific terrorist organizations. Some gov- 
ernments appear to be fearful that the ap- 
prehension or prosecution of terrorists will 
provoke new terrorist incidents in order to 
obtain the release of jailed comrades. 

Because of differing attitudes on the nature 
of terrorism, a U.S. proposal for a convention 
to prevent the export of terrorism from one 
country to another was not even considered 
by the 1972 U.N. General Assembly. How- 
ever, a narrower Convention on the Preven- 
tion and Punishment of Crimes Against Inter- 
nationally Protected Persons, Including Dip- 
lomatic Agents was approved at the 1973 
General Assembly session and has since been 
implemented by the United States and other 
governments. 

At present, the United States is actively 
supporting a West German initiative in the 
United Nations to draft a convention against 
the taking of hostages. We had hoped that this 
initiative would be considered in the forthcom- 
ing United Nations General Assembly. How- 
ever, the 35-member drafting committee has 
been unable to reach agreement and will ask 
for a renewal of its mandate from the General 
Assembly. 

There have been two regional efforts to deal 
with the threat of terrorism. In February 
1971, the Organization of American States 
(OAS) adopted a convention to prevent and 
punish acts of terrorism against persons enti- 
tled to special protection under international 



October 31, 1977 



607 



law, i.e., diplomats and international civil ser- 
vants. We ratified this convention in October 
1976. The OAS convention preceded the U.N. 
initiative on internationally protected persons 
and contains similar provisions. 

In November 1976, the Council of Europe 
adopted a Convention on the Suppression of 
Terrorism. This convention is a positive effort 
to deal comprehensively with terrorism under 
international law. It has been signed by every 
member of the Council of Europe, save Ire- 
land and Malta, and is now in the ratification 
process. The convention addresses a broad 
spectrum of terrorist acts, including such of- 
fenses as the use of letter bombs, automatic 
weapons, and the taking of hostages. The con- 
vention seeks to depoliticize such designated 
acts of terrorism and will facilitate extradition 
of terrorists within the European Community. 
It can serve as an important precedent for 
similar regional agreements in other parts of 
the world. 

Further on the multilateral level, the 
American Society of International Law 
(ASIL) is completing a study for the Depart- 
ment of State on the application of interna- 
tional and domestic law to the terrorist 
phenomenon. The study indicates that most 
countries have done little to enact legislation 
dealing specifically with acts of terrorism. 
Some countries which have assumed interna- 
tional obligations have not, as yet, undertaken 
to implement those obligations by enacting 
domestic legislation. In this regard, I would 
like to call attention to the fact that while the 
United States ratified the Montreal conven- 
tion in 1972, we have not yet implemented the 
convention by enacting enabling legislation. 
We sincerely hope that such legislation will be 
approved by the Congress at the earliest 
opportunity. 

Other initiatives which the ASIL study 
suggests are needed if we are to develop the 
legal bases for circumscribing terrorist activ- 
ity include conventions to deal with terrorism 
affecting airports, ocean vessels, and offshore 
structures. 

Bilateral Efforts 

In addition to regional and international ef- 
forts, we have undertaken to develop effective 



bilateral relationships with other govern- 
ments to improve our respective efforts to 
prevent and control international terrorist ac- 
tivities. These include the review of respec- 
tive crisis management techniques and the 
sharing of practical "lessons-learned" from 
past terrorist incidents; the exchange of re- 
search data; improved channels of communica- 
tion; and closer cooperation on legal measures 
for controlling, apprehending, and prosecut- 
ing those who commit acts of international 
terrorism. 

State support for terrorists spans a wide 
spectrum of activities and is subject to change 
with the passage of time. It ranges from gov- 
ernments which ignore the presence within 
their territory of known terrorists to govern- 
ments which actively finance, arm, train, and 
give sanctuary to terrorist organizations. 

As the subcommittee is aware, there are 
provisions of the Foreign Assistance Act and 
the Arms Export Control Act which prohibit 
or limit economic and security assistance to 
countries which grant sanctuary to terrorists. 
However, those countries which are most ac- 
tive in this regard are not generally recipients 
of such assistance. Thus, we must review our 
overall relations with such countries to de- 
termine what effective actions can be taken to 
reduce the safe havens now available to 
terrorists. 

In addition to diplomatic suasion, there are 
a variety of economic and commercial meas- 
ures which conceivably could be taken against 
governments which support terrorist groups. 
However, the latter represent imperfect in- 
struments at best which may not produce the 
desired results and, in fact, could provoke un- 
desired consequences. The application of eco- 
nomic or commercial sanctions, for example, 
could prove counterproductive in economic 
terms and might increase rather than diminish 
the threat of terrorist incidents directed 
against American citizens. 

Whatever course of action we choose, it 
should be carefully tailored to the circum- 
stances and designed to achieve specific objec- 
tives. Moreover, our efforts are more likely to 
succeed if done without fanfare. Finally, such 
measures cannot be considered in a vacuum; 
they must conform to the totality and the 
overall priorities of our foreign policy objec- 



608 



Department of State Bulletin 



tives in a given country or geograhic area of 
the world. These caveats necessarily require a 
degree of patience and restraint which is frus- 
trating but necessary if we are to maximize 
the chances of achieving our purpose. 



U.S. Government is totally opposed to all 
forms of terrorism, regardless of the source or 
purpose, and we will take all appropriate 
measures to deal with this threat. 



Recent Trends 

Let me give a brief assessment of some re- 
cent trends in international terrorists inci- 
dents. The past year and a half have seen: 

— A higher number of incidents worldwide 
than for any previous corresponding period; 

— A reversal of the downward trend in the 
hijacking of foreign commercial aircraft out- 
side the United States; 

— A decline in the more complicated and 
risky hostage-barricade type of operation and 
a marked increase in simpler but more lethal 
attacks such as bombings, assassinations, and 
armed assaults; and 

— A decline in the proportion of interna- 
tional terrorist incidents directed against U.S. 
citizens or interests from one-third to one- 
fourth of the total incidents. However, there 
has been a shift from targetting U.S. Gov- 
ernment officials and facilities abroad to 
American businessmen and corporate facilities 
or to the foreign managers of these facilities. 

International terrorist activity and gov- 
ernments which support it are in constant 
flux. Thus, any predictions about the future 
dimension or nature of the threat are specula- 
tive at best. It seems quite likely, however, 
that the problem will be with us for some 
years to come. 

So far, we have been fortunate in the 
United States for having experienced few 
major international terrorist incidents within 
our borders. The targetting of American citi- 
zens for terrorist attack has occurred largely 
in other countries. That situation could 
change. 

Terrorism is incompatible with our concep- 
tion of human worth. Thus, regardless of the 
motivations which terrorists advance to jus- 
tify their actions, we cannot accept or condone 
the taking of lives or the threat to do so in the 
name of some political or other cause. Such 
actions are criminal and represent the ulti- 
mate violation of human rights. Therefore, the 



U.S. -Canada Agreement 
on Natural Gas Pipeline 

Following are a joint statement by Presi- 
dent Carter and Canadian Prime Minister 
Pierre-Elliott Trudeau, a message to Con- 
gress from President Carter, and a summary 
fact sheet concerning the Alaska Natural Gas 
Transportation System . 

JOINT STATEMENT, SEPTEMBER 8 ' 

Today, we have agreed in principle on the 
elements of a joint proposal to construct the 
Alcan-Foothills [Alcan Pipeline Co. -Foothills 
Pipe Lines Ltd.] pipeline along the Alaska 
Highway to transport Alaskan natural gas 
through Canada to the lower 48 States and, at 
a later time, Canadian gas to Canadian 
markets. 

This joint undertaking will be the largest 
single private energy project in history. The 
detailed agreement we hope to sign next week 
is an example of how both countries can work 
together to meet their energy needs. After 
the agreement is signed, each of us intends to 
submit our decisions to our respective legisla- 
tive bodies for the appropriate authorizations 
and assurances. We are both hopeful the proj- 
ect will be approved. 

Major benefits from this project will accrue 
to both countries. When the pipeline is built, 
Canada will have a much greater ability to de- 
velop its own gas reserves, particularly in the 
frontier regions of the Mackenzie Delta. The 
United States, in turn, will have the enor- 
mous benefit of new natural gas supplies from 
the North Slope of Alaska at a significantly 
lower cost-of-service price than could have 
been achieved through an all-U.S. route. 



1 Text from Weekly Compilation of Presidential 
Documents dated Sept. 12, 1977 (for remarks by Presi- 
dent Carter and Prime Minister Trudeau announcing 
the agreement, see p. 1301). 



October 31, 1977 



609 



This agreement serves the mutual interest 
of both countries and the national interest of 
each. Its underlying rationale is that both 
countries, working together, can move more 
energy, more efficiently, than either country 
working by itself. Under the expected cost es- 
timates, this agreement improves the 20-year 
cost-of-service average price in 1975 dollars to 
the American consumer by at least $.08 per 
thousand cubic feet over the price that would 
have resulted from the route through Dawson 
and $.12 per thousand cubic feet for the Cana- 
dian consumer. At the expected volumes, the 
project will result in a $6-billion savings for 
American consumers over the life of the proj- 
ect when compared to the proposal to liquefy 
and ship the gas from Alaska. 

While providing Canada the opportunity to 
accelerate development of its gas reserves and 
providing for billions of dollars of additional 
investment in the Canadian economy, this 
pipeline will stimulate the gas industry in 
Canada and, together with the early prospect 
of connecting new sources of supply, will gen- 
erally enhance the availability of gas to meet 
market needs. 

The potential to secure increased Canadian 
as well as Alaskan supplies and the magnitude 
of consumer savings that can be achieved by 
an all-pipeline route guarantee the superiority 
of this proposal. We have decided to embark 
together on this historic project which holds 
the promise of great benefits to both countries 
and which confirms anew the strength of the 
ties that link us. 



MESSAGE TO THE CONGRESS 2 

To the Congress of the United States: 

Natural gas has become the Nation's scar- 
cest and most desired fuel. It is in our interest 
to bring the reserves in Alaska to market at 
the lowest possible price. Consequently, I am 
today sending the Congress my decision and 
report on an Alaska Natural Gas Transporta- 
tion System. 



The selection of the Alcan project was made 
after an exhaustive review required by the 
Alaska Natural Gas Transportation Act of 
1976 determined that the Alcan Pipeline Sys- 
tem will deliver more natural gas at less cost to 
a greater number of Americans than any other 
proposed transportation system. 

The Alcan proposal, taken together with the 
recently signed Agreement on Principles with 
Canada, demonstrates that our two countries 
working together can transport more energy 
more efficiently than either of us could trans- 
port alone. 

Unnecessary delay would greatly increase 
the total cost of the pipeline system. I urge 
the Congress to act expeditiously to approve 
this important project. 

Jimmy Carter. 

The White House, September 22, 1977. 



FACT SHEET 

General Description 

The United States and Canada have 
reached agreement in principle on the Alcan 
joint pipeline project to transport natural gas 
from Alaska and from the Canadian Arctic to 
U.S. and Canadian markets. The main 
pipeline from Alaska will cover 3,594 miles, 
plus 1,198 miles for the Western Leg. A 
Western Leg directly serving West Coast gas 
markets will be authorized by the President's 
decision, but its exact capacity will be deter- 
mined at a later date consistent with an oper- 
ational Western Leg at the time the main line 
comes on stream. 

The main pipeline, including both Eastern 
and Western Legs, is currently estimated by 
the applicant to cost $9.6 billion in current dol- 
lars. The lateral pipeline to the Mackenzie 
Delta would be approximately 740 miles long 
and is estimated by the applicant to cost $1.4 
billion; another $0.4 billion will be required for 
additional compression on the main line at the 
time the lateral is connected. 



2 Transmitted on Sept. 22, 1977 (text from Weekly 
Compilation of Presidential Documents dated Sept. 26; 
message, together with accompanying papers, also 
printed as H. Doc. 95-225 dated Sept. 23). 



Elements of the Agreement 

The basic components of the agreement in 
principle include: 



610 



Department of State Bulletin 



Routing 

The main gas pipeline from Alaska will fol- 
low the original Alaska Highway route with 
no diversion of the route to Dawson. When 
the Dempster Highway lateral pipeline is built 
to connect Canada's Mackenzie Delta gas re- 
serves, this line will be extended from Daw- 
son, Yukon Territory, to connect with the 
Alaska Highway line at Whitehorse, in the 
Yukon Territory. 

System Efficiency 

A higher capacity pipeline system than was 
proposed by the applicant will be installed 
south of Whitehorse, the interconnection 
point for the two lines, to carry higher vol- 
umes of both U.S. and Canadian gas until the 
line bifurcates at Caroline in Alberta. A joint 
testing program would evaluate the technical 
feasibility, safety, and reliability of the two 
alternatives to the proposed 1,260 psi [pounds 
per square inch], 48-inch pipeline design: a 
design for higher system pressure (1,680 psi 
in a 48-inch diameter pipe) or a design for a 
larger diameter pipe (54-inch pipe at 1,120 psi 
system pressure). 



Cost-Sharing 

For that part of the pipeline in Canada 
through which both U.S. and Canadian gas 
will flow, cost of service will be allocated in 
proportion to the volumes of gas transported 
for each country. 

The proposal provides for construction of 
the original prime route through Alaska and 
Canada, without the route diversion required 
by the Canadian National Energy Board 
(NEB) in its July 4, 1977, decision. In ex- 
change for not building the diversion to Daw- 
son, the United States has agreed to pay be- 
tween two-thirds and 100 percent of the 
Dempster Highway lateral from Dawson to 
Whitehorse in the Yukon Territory, which 
will connect at that point with the main line 
and transport additional volumes of Canadian 
gas from the Mackenzie Delta. 

The exact share of the U.S. cost for the ex- 
tension will be determined by the percent of 
cost overruns on construction of the main line 
in Canada. From to 35 percent cost over- 
runs, the United States would pay 100 percent 
of the Whitehorse to Dawson section. At the 
expected 40 percent case, the United States 



Prudhoe Bay 
Gas 




Pacific 
Ocean 



EL PASO 
ALASKA PROJECT 



2825 10 77 STATEIflGEI 




October 31, 1977 



611 



would pay 83V3 percent or the ratio of U.S. to 
Canadian volumes at Whitehorse, whichever 
is higher. At 45 percent and over the United 
States would pay 66% percent or the ratio of 
U.S. to Canadian volumes at Whitehorse, 
whichever is higher. 

In the cost overrun range of 35-45 percent, 
the U.S. share would vary linearly from 100 
percent to 66% percent, unless the actual vol- 
umes of U.S. gas in the line commit the 
United States to provide a greater share. 

In the lower cost overrun case of 35 percent 
or below, under which the United States 
would be required to pay the entire cost, the 
cost of service reduction from such overrun 
savings on the main line would more than 
offset any increase in cost of service resulting 
from increasing to 100 percent the U.S. share 
of the Dawson to Whitehorse segment. For 
example, with an overrun of 25 percent in 
Canada, the United States pays 100 percent. In 
this example, the average U.S. cost of service 
over a 20-year period would be approximately 
$1.00 per mcf [thousand cubic feet] (1975 dol- 
lars). This is over $.20 below the El Paso cost 
estimate. With a 35 percent overrun, it is just 
about $1.04. With the expected case of 40 per- 
cent, it is slightly above $1.04. 

The agreement also imposes a ceiling on 
U.S. liability for the Dawson spur of 35 per- 
cent above filed costs. The Canadians, in turn, 
can credit any savings they achieve on the 
main line system against their cost overruns 
on the Dawson to Whitehorse section. 

This agreement creates new incentives — on 
a portion of the project within Canada's juris- 
diction and not otherwise subject to our 
control — which could significantly lower the 
cost of service to the United States and at the 
same time enhance the project's financibility. 

Taxation 

Under the Transit Pipeline Treaty, recently 
approved by the Senate, taxation of the 
pipeline in Canada would be limited to the 
levels charged against similar pipelines in the 
respective provinces. 3 Ad valorem (property) 
taxation in the Yukon Territory is to be gov- 

3 The United States and Canada exchanged ratifica- 
tions of the treaty on Sept. 15, and it entered into force 
on Oct. 1, 1977. 



612 



erned by a new agreement because there are 
no similar pipelines there. The agreement 
provides for a fixed maximum amount after 
the pipeline begins operation — $30 million 
Canadian annually — that will be adjusted for 
inflation. The Yukon property tax would be 
levied at the same rate as the property tax in 
Alaska. 

Other Charges 

Other charges will include only those direct 
costs normally paid by pipelines, such as 
highway maintenance caused by moving of 
heavy equipment. 

Financing and Tariffs 

Both governments agree that the joint proj- 
ect can be privately financed without the aid 
of an "all-events" tariff which would require 
gas consumers to pay for the pipeline regard- 
less of whether or not gas is ever shipped. 
Both governments also agree that a variable 
rate of return on pipeline company equity cap- 
ital should be used to provide incentives to 
avoid cost overruns. The U.S. Federal Power 
Commission (FPC) and the Canadian National 
Energy Board (NEB) will structure the tariffs 
in the two countries to incorporate this 
feature. 

These provisions have been incorporated 
into an Agreement on Principles for a north- 
ern natural gas transportation system to be 
signed by representatives of both countries. 
The agreement provides that both govern- 
ments will seek whatever legislative au- 
thorities are necessary and appropriate to in- 
sure timely and efficient construction of a 
joint project. The agreement also provides a 
mechanism for periodic consultations on the 
implementation of the agreed principles. 

The joint project has a number of advan- 
tages over the alternatives being considered 
by each country. 



Project Advantages for United States 

1. Lower cost — The expected 20-year aver- 
age cost-of-service price for the gas to the 
U.S. consumer for the Alcan proposal is 
$1.03-$1.05 per million Btu's [British thermal 
unit] (thousand cubic feet), while the cost- 



Department of State Bulletin 



of-service price for El Paso is estimated to be 
$1.19-$1.21 per million Btu's. 

2. Higher efficiency — When both Canadian 
and U.S. gas are flowing, the Alcan system 
will deliver 92.1 percent of the Alaska gas en- 
tering the system, while El Paso will deliver 
only 89.1 percent. The difference is 600 tril- 
lion Btu's (600 billion cubic feet) over the first 
20 years or the energy equivalent of almost 5 
billion gallons of gasoline. 

3. Security of supply — The all-pipeline sys- 
tem is inherently more reliable than El Paso's 
combined pipeline-and-marine route. 

4. Length of service — The all-pipeline sys- 
tem has a substantial advantage over El 
Paso's LNG [liquefied natural gas] tankers 
and facilities in having a useful life in excess 
of 40 years. 

5. Delivery to markets — The Alcan project 
will deliver gas directly to both Midwestern 
and West Coast markets — rather than to the 
western U.S. market only — to be delivered 
further by displacement. 

6. Environmental considerations — Almost 
all Federal agencies and private parties have 
found the Alcan route environmentally 
superior to El Paso. 

7. Other charges — A limitation is placed on 
extra charges which can be assessed to the 
project. Additionally, the Canadian Govern- 
ment has made it clear to the United States 
that it regards the settlement of native claims 
in the Yukon as an exclusive Canadian re- 
sponsibility and that no charges against the 
pipeline related to the settlement of such 
claims will be levied. 

Project Advantages for Canada 

1. Lower cost — The joint project will lower 
the transportation cost for Canada's current 
proven Mackenzie Delta reserves by $.12/ 
million Btu's in 1975 dollars from the cost of 
the rerouted Alcan project approved by the 
NEB. 

2. Further exploration — By postponing the 
decision to connect the Mackenzie Delta re- 
serves, selection of the joint project will allow 
additional exploration prior to a final decision 
on the design and routing of that connection. 

3. Phased development — The construction 



October 31, 1977 



of the Mackenzie Delta line will benefit from 
construction experience on the main line. Fur- 
thermore, the sequential construction of the 
main line and lateral line projects will facili- 
tate financing and extend the economic 
stimulus created by the construction. 

4. Social impact — The Mackenzie Delta re- 
gion will have additional time to prepare for 
the social impact of pipeline access to the 
Mackenzie Delta gas fields. Under the joint 
project, early pipeline construction is confined 
to the more developed areas of the Yukon 
along the Alcan Highway. 

5. Socioeconomic impact assistance — 
Arrangements have been made for advance 
payment of Yukon Territory property taxes 
by the pipeline company. These loans can be 
repaid with interest from future tax liabilities 
with no U.S. cost-of-service effect. 

General Analysis 

In return for routing the main line along the 
original Alcan route, the United States agreed 
to share the costs of extending the Dempster 
Highway lateral from Dawson to Whitehorse. 
Whitehorse will be the point at which the 
lateral pipeline from the Mackenzie Delta gas 
fields connects to the main line. 

Both Canadian and U.S. cost of service will 
be lower in the agreed upon project than 
either would have been under the NEB deci- 
sion. The U.S. commitment to share in the 
cost of service of the Dawson-to- Whitehorse 
extension of the Dempster Highway lateral 
would require actual outlays if, and only if, 
that lateral was built. The NEB decision 
would have required Alcan to reroute the 
main line through Dawson at considerable 
extra expense even if the Dempster Highway 
lateral was never built. Furthermore, under 
the new agreement, the cost of extending the 
Dempster lateral from Dawson to Whitehorse 
is estimated to be about $100 million lower 
than the cost of the NEB rerouting. 

The proposed Agreement on Principles pro- 
vides assurances on routes, taxation levels, 
project delays, and other critical matters. 
This new agreement, along with the Transit 
Pipeline Treaty, protects the project from un- 
fair or discriminatory charges that would 



613 



otherwise threaten the savings to U.S. 
consumers. 

In addition to lower cost of service, there 
are a number of other joint benefits for both 
countries from the Alcan proposal. These 
include: 

—The large and positive net national eco- 
nomic benefit from the project for both 
countries; 

—Substantial stimulus from the project to 
the economies of both countries; 

—Access for Canada to its frontier gas re- 
serves will place Canada in a better position 
to fully meet existing export commitments to 
the United States; 

—The opportunity through early project 
construction to increase export levels to the 
United States over the next few years to al- 
leviate critical natural gas shortages in the 
United States, provide additional incentives 
for western Canadian gas producers, and im- 
prove the long-run availability of Canadian 
gas; 

— Possible increased cooperation on other 
energy issues, such as oil swaps, pipelines, 
and strategic reserves; and 

— The opportunity to develop a new era of 
mutually beneficial collaboration between the 
two countries on a broader range of concerns. 



Current Treaty Actions 



MULTILATERAL 

Aviation 

Protocol on the authentic trilingual text of the convention 
on international civil aviation, Chicago, 1944 (TIAS 
1591), with annex. Done at Buenos Aires September 
24, 1968. Entered into force October 24, 1968. TIAS 
6605. 



Acceptance deposited: Jamaica, October 5, 1977. 
Protocol relating to an amendment to the convention on 
international civil aviation (TIAS 1591). Done at 
Montreal October 16, 1974. J 
Ratification signed by thePresident : October 6, 1977. 

Inter-American Development Bank 

Agreement establishing the Inter-American Develop- 
ment Bank, with annexes. Done at Washington April 8, 
1959. Entered into force December 30, 1959. TIAS 
4397. 

Signature and acceptance deposited: Sweden, Sep- 
tember 19, 1977. 

Wheat 

Protocol modifying and further extending the wheat 
trade convention (part of the international wheat 
agreement) 1971. Done at Washington March 17, 1976. 
Entered into force June 19, 1976, with respect to cer- 
tain provisions and July 1, 1976, with respect to other 
provisions. 
Accession deposited: Belgium, October 4, 1977. 

Protocol modifying and further extending the food aid 
convention (part of the international wheat agreement) 
1971. Done at Washington March 17, 1976. Entered 
into force June 19, 1976, with respect to certain pro- 
visions and July 1, 1976, with respect to other 
provisions. 
Accession deposited: Belgium, October 4, 1977. 



BILATERAL 



Canada 

Agreement relating to the addition of Annex IV concern- 
ing the Beaufort Sea to the joint marine pollution con- 
tingency plan promulgated pursuant to the agreement 
of June' 19, 1974 (TIAS 7861). Effected by exchange of 
notes at Ottawa July 28 and August 30, 1977. Entered 
into force August 30, 1977. 

Portugal 

Agreement extending the loan agreement of January 19, 
1977, relating to T-38 aircraft, spare engines, and flight 
support equipment. Signed at Washington September 
29, 1977. Entered into force September 29, 1977. 

Agreement extending the loan agreement of June 11, 
1976, relating to M48A5 tanks and M113A1 armored 
personnel carriers. Signed at Washington September 
29, 1977. Entered into force September 29, 1977. 



1 Not in force. 



614 



Department of State Bulletin 



JDEX October 31, 1977 Vol. LXXVII, No. 2001 



is Control and Disarmament 

resident Carter's News Conference of Sep- 
tember 29 (excerpts) 

ecretary Vance Interviewed on "Meet the 
?ress" 

ia 

Bsociation of South East Asian Nations 

LSEAN) 

nited States and ASEAN Hold Economic Con- 
sultations in Manila (Cooper, Romulo) 

|anada. U.S. -Canada Agreement on Natural 
Jas Pipeline (joint statement, message from 
President Carter, fact sheet) 

igress 
aling With International Terrorism 

arkashian) 

ipartment Testifies on Undocumented Aliens 

^Arellano) 

Canada Agreement on Natural Gas Pipeline 
oint statement, message from President 
arter, fact sheet) 

inomic Affairs 

'proach to Latin American Policy: Creative 

developments (Todman) 

nited States and ASEAN Hold Economic Con- 
sultations in Manila (Cooper, Romulo) 

nergy 

ecretary Vance Interviewed on "Meet the 

Press" 

.S. -Canada Agreement on Natural Gas Pipeline 
(joint statement, message from President 
arter, fact sheet) 

ninea. Letters of Credence (Camara) 



iiman Rights 

pproach to Latin American Policy: Creative 

Developments (Todman) 

resident Carter Signs Covenants on Human 

Rights (Carter) 

ecretary Vance Interviewed on "Meet the 

Press" 

lited States and ASEAN Hold Economic Con- 
izations in Manila (Cooper, Romulo) 

■ migration. Department Testifies on Un- 
documented Aliens (Arellano) 

ia. Letters of Credence (Palkhivala) 

itin America and the Caribbean 

ipproach to Latin American Policy: Creative 
Developments (Todman) 

)epartment Testifies on Undocumented Aliens 
(Arellano) 

liddle East 

'resident Carter's News Conference of Sep- 
tember 29 (excerpts) 

ecretary Vance Interviewed on "Meet the 
Press" 

Nigeria. Letters of Credence (Jolaoso) 

)man. Letters of Credence (Hinai) 



anama. Secretary Vance Interviewed on 
the Press" 



Meet 



residential Documents 

'resident Carter Signs Covenants on Human 

Rights 

'resident Carter's News Conference of Sep- 
tember 29 (excerpts) 

S. -Canada Agreement on Natural Gas Pipeline 
joint statement, message, fact sheet) 



■fer 

I" 



errorism. Dealing With International Ter- 
rorism (Karkashian) 



584 
579 

597 
595 

609 

605 
592 

609 

588 
595 

579 

609 

594 

588 
586 
579 
595 

592 

594 

588 
592 

584 

579 
594 
594 

579 

586 
584 
609 

605 



Treaty Information 

Current Actions 614 

President Carter Signs Covenants on Human 
Rights (Carter) 586 

U.S.S.R. 

President Carter's News Conference of Sep- 
tember 29 (excerpts) 584 

Secretary Vance Interviewed on "Meet the 
Press" 579 

United Nations. President Carter Signs Coven- 
ants on Human Rights (Carter) 586 

Zaire. Letters of Credence (Mutuale) 594 

Name Index 

Arellano, Richard G 592 

Camara, Ibrahima 594 

Carter, President 584, 586, 609 

Cooper, Richard N 595 

Hinai, Farid Mubarak Ali al- 594 

Jolaoso, Olujimi 594 

Karkashian, John E 605 

Mutuale, Kosongo 594 

Palkhivala, N.A 594 

Romulo, Carlos P 595 

Todman, Terence A 588 

Trudeau, Pierre-Elliott 609 

Vance, Secretary 579 



Checklist of Department of State 

Press Releases: October 10-16 

Press releases may be obtained from the Office 
of Press Relations, Department of State, Washing- 
ton, D.C. 20520. 

No. Date Subject 

*460 10/11 Advisory Committee on "Foreign 
Relations of the United States," 
Nov. 11. 
4i'.l 10/12 Deputy Assistant Secretary Arel- 
lano, in speech before the Illinois 
Federation of Hispanic Cham- 
bers of Commerce in Chicago, 
outlines safeguards new Panama 
Canal treaties provide American 
business in Latin America, 
Oct. 15. 

"462 10/12 U.S., India amend textile agree- 
ment, Sept. 28-29. 

t463 10/14 Organizing Conference on the In- 
ternational Nuclear Fuel Cycle 
Evaluation, Oct. 19-21. 
464 10/14 Ambassador Popper to discuss 
Panama Canal treaties in ad- 
dress before the World Affairs 
Council. Philadelphia, Oct. 18. 

"465 10/14 Assistant Secretary Todman to 
discuss Panama Canal treaties in 
address in Brattleboro. Vt., 
Oct. 22. 

t466 10/14 U.S. airlifts tents to refugees in 
Djibouti. 
J67 10/16 Vance: interview on "Meet the 
Press." 

* Not printed. 

+ Held for a later issue of the Bulletin. 



Superintendent of Documents 

u.s. government printing office 

washington, dc. 20402 



OFFICIAL BUSINESS 



POSTAGE AND FEES PAID 
DEPARTMENT OF STATE STA-501 

Third Class 







Subscription Renewals: To insure uninterrupted 
service, please renew your subscription promptly 
when you receive the expiration notice from the 
Superintendent of Documents. Due to the time re- 
quired to process renewals, notices are sent out 3 
months in advance of the expiration date. Any prob- 
lems involving your subscription will receive im- 
mediate attention if you write to: Superintendent 
of Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. 



IS 



c 



77; 

'MS- 




THE DEPARTMENT OF STATE 

BULLETIN 



Volume LXXVII • No. 2002 • November 7, 1977 



SECRETARY VANCE AND OTHER ADMINISTRATION OFFICIALS 
URGE RATIFICATION OF PANAMA CANAL TREATIES 615 

PRESIDENT CARTER HOLDS MEETINGS WITH MIDDLE EAST OFFICIALS 634 

ADMINISTRATION URGES U.S. PARTICIPATION 
IN THE IMF SUPPLEMENTARY FINANCING FACILITY 

Statement bi/ Under Secretary Cooper 645 



DEPOSITORY 
THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY 

For index see inside back cover 



THE DEPARTMENT OF STATE g [J £ "| 



Vol. LXXVII, No. 2002 
November 7, 1977 



For sale by the Superintendent of Documents 

U.S. Government Printing Office 

Washington. D.C. 20402 

TRICE 

52 issues plus semiannual indexes, 

domestic $42. "ill. foreign $53 IS 

Single copy 85 cents 

The Secretary of State has determined that the pub- 
lication of this periodical is necessary in the transac- 
tion of the public business required by law of this 
Department. Use of funds for printing this periodi- 
cal has been approved by the Director of the Office 
of Management and Budget through January 31, 
1981. 

\ote: Contents of this publication are not 
copyrighted and items contained herein may be re- 
printed. Citation of the DEPARTMENT OF STATE 
BULLETIN as the source will he appreciated. The 
BULLETIN is indexed in the Readers' Guide to 
Periodica! Literature. 



The Department of State HILLETIS 
a weekly publication issued by 
Office of Media Services, Bureau of 
Public Affairs, provides the public and 
interested agencies of the government 
with information on developments in 
the field of L'.S. foreign relations and 
on the work of the Department and 
the Foreign Service. 

The BULLETIN includes select 
press releases on foreign policy, issue 
by the White House and the Depart 
ment, and statements, addresses, and 
news conferences of the President an 
the Secretary of State and other 
cers of the Department, as well as spe 
cial articles on various phases of in 
ternational affairs and the functions i 
the Department. Information is in 
eluded concerning treaties and inter 
national agreements to which 
United States is or may become a parti 
and on treaties of general interna- 
tional interest. 

Publications of the Department 
State, L'nited Xations documents, ai 
legislative material in the field 
international relations are also listea 



Ill 



/./.»",: 



Secretary Vance and Other Administration Officials 
Urge Ratification of Panama Canal Treaties 



Following are statements made before the 
Senate Foreign Relations Committee by Sec- 
retary Vance on September 26; Secretary of 
Defense Harold Brown, Chairman of the 
Joint Chiefs of Staff Gen. George S. Brown 
(USAF), and Chief of Naval Operations 
Adm. James L. Holloway III on September 
27; U.S. Ambassador to Panama William J. 
Jorden on September 29; and Under Secretary 
for Economic Affairs Richard N. Cooper on 
Septeniber SO. 1 



SECRETARY VANCE, SEPTEMBER 26 

Press Release 433 dated September 26 

Today I seek your support for new treaties 
governing the Panama Canal. 

— First, these treaties protect and advance 
the national interests of both the United 
States and Panama. 

— Second, they provide for an open, neu- 
tral, secure, and efficiently operated canal for 
this hemisphere and for other nations 
throughout the world. 

— Third, they will promote constructive and 
positive relationships between the United 
States and other nations in this hemisphere. 

These treaties, in my judgment, will gain us 
respect among other nations of the world — 
both large and small — because of the respon- 
sible way they resolve complex and emotional 
issues which have been with us for most of 
this century. 

The treaties are a culmination of 13 years' 
work by four American Presidents of both 
major political parties and their Secretaries of 



'The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 

November 7, 1977 



State. They are the outcome of patient and 
skillful negotiations since 1964 by a number of 
dedicated political leaders, diplomats, and 
military men. They have been achieved be- 
cause of valuable counsel and support offered 
by members of this committee, by representa- 
tives of American business and labor who 
have seen these new treaties as being in their 
own interest and in the larger national inter- 
est. 

They are, above all, a triumph for the prin- 
ciple of peaceful and constructive settlement 
of disputes between nations. That is a princi- 
ple we seek to apply in all aspects of Ameri- 
can foreign policy. 

It's quite proper that this committee, the 
Senate, the American people should consider 
carefully the content and implications of 
these treaties. For they should not at some 
later time be made the subject of partisan or 
divisive debate. In my opinion, they should 
be beyond partisanship. They should now be 
examined in detail by this committee and by 
the nation. Basic questions are being 
asked — and should be asked — about them. 
These questions express the same concerns 
and goals that have been on our minds during 
these negotiations. 

— Do these treaties safeguard our national 
security interests in the canal? 

— Do they establish a long-term basis for 
open and effective operation of the canal? 

— Do they enhance our relationships with 
nations of the hemisphere? 

— Do they place any new burden on the 
American taxpayer? 

— Do American workers in the Canal Zone 
get a fair shake? 

— And, without the treaties, what might 
happen? 

I am satisfied in my own mind that these 

615 



questions have been properly answered, 
thanks to the skilled and hard bargaining by 
our negotiators. I will discuss these ques- 
tions briefly this morning. 

Long-Term Operation of the Canal 

The United States will control canal opera- 
tions through a new U.S. Government 
agency — the Panama Canal Commission — to 
be supervised by a board composed of five 
Americans and four Panamanians. The com- 
mission will operate the canal until the end of 
this century. The present Panama Canal 
Company will be discontinued. 

The United States will maintain responsi- 
bility for managing the canal, setting tolls, 
and enforcing rules of passage until the year 
2000. Until the year 2000 the United States 
will also maintain primary responsibility for 
defense of the canal. After that, the United 
States will have responsibility to maintain 
the permanent neutrality of the canal to as- 
sure that it will remain open to our ships and 
those of all other nations on a nondis- 
criminatory basis. 

The treaties further allow for moderniza- 
tion of the canal through construction of a 
third lane of locks and foresee the possibility 
of construction in Panama of a new sea-level 
canal. This would provide access for many 
modern supertankers and warships which are 
too large to pass through the present canal. 

As to hemispheric relations, I believe the 
ratification and implementation of these 
treaties will be the single most positive ac- 
tion to be undertaken in recent years in our 
relations with Latin America. Only last 
month in Bogota, the democratic govern- 
ments of Venezuela, Costa Rica, Colombia, 
Mexico, and Jamaica issued a joint com- 
munique urging the United States and 
Panama to conclude the new treaties rapidly. 
For years, Latin American peoples and gov- 
ernments have viewed our negotiations with 
Panama over the canal as a litmus test of our 
intentions toward their countries. 

These treaties, as negotiated, represent a 
fair and balanced reconciliation of the inter- 
ests of the United States and Panama. They 
create, as has been said already this morn- 
ing, a partnership under which our two coun- 



tries can join in the peaceful and efficient op- 
eration of the canal. They symbolize our in- 
tentions toward the hemisphere. And they 
prove, once and for all, the falsity of the tired 
charges that we are imperialistic exploiters 
bent only on extracting Latin American raw 
materials and using the continent for our own 
economic interests. 

National Security Aspects 

As to national security aspects, represen- 
tatives of the Joint Chiefs of Staff worked 
closely with the treaty negotiators on the se- 
curity provisions and played a major role in 
drafting the neutrality treaty. The United 
States will retain all military bases and 
facilities — all the lands and waters — that we 
require for the canal's defense until the year 
2000. We may keep the same force levels 
which we now maintain in the zone — about 
9,300 — and can increase them if that is 
necessary. 

After the year 2000, as I indicated earlier, 
the United States will have a permanent 
right to maintain the canal's neutrality, in- 
cluding the right to defend the canal if neces- 
sary. Our warships are given the right to use 
the canal expeditiously. Article IV of the 
neutrality treaty says: 

The United States of America and the Republic of 
Panama agree to maintain the regime of neutrality es- 
tablished in this Treaty, which shall be maintained in 
order that the Canal shall remain permanently neutral, 
notwithstanding the termination of any other treaties 
entered into by the two Contracting Parties. 

This means that there is no limit under the 
treaty on the freedom of the United States to 
assure permanently the canal's neutrality. 

Economic Aspects 

Under the treaties, Panama will receive 
payments which more fairly reflect the fact 
that it is making available its major national 
resource — its territory. But the treaties re- 
quire no new appropriations nor do they add 
to the burdens of the American taxpayer. 

The treaties provide that Panama will re- 
ceive 30^ per canal ton for traffic transiting 
the canal; a fixed annuity of $10 million per 
year; and an additional $10 million per year 






616 



Department of State Bulletin 



rorke 

tlie - 



:: w 
t yea 
leve 
-abi 

tat 

arliet 

alien 1 
)', it 
neces 
In 
if till 



j es 






!! re 



top 

1 provided canal revenues permit. Panama 
would initially receive about $60 million per 
year under this formula which will apply until 
the year 2000. All of these payments are to 

i! be made from canal revenues. Panama will 
thus have a strong interest in insuring unim- 
peded and efficient use of the canal. 

We have agreed, outside the treaty, to cer- 
tain arrangements which will assist the gen- 
eral economic development of Panama and 
enhance its stability. We have formally told 
the Panama Government that we are pre- 
pared to develop a program of loans, loan 
guarantees, and credits to Panama — 
including up to $200 million in Export-Import 
Bank credits over a 5-year period; up to $75 
million in AID [Agency for International De- 
velopment] housing investment guarantees 
over the same period; and a loan guarantee of 
up to $20 million from the Overseas Private 
Investment Corporation. All these loans con- 
cerned require repayment. There are no 
grants. In addition, over a 10-year period, 
Panama will receive up to $50 million in 
foreign military sales repayment guarantees 
so that its armed forces can be better pre- 
pared to help defend the canal. Most of this 
assistance will be used to purchase American 
equipment. These programs will be subject 
to all relevant U.S. legal requirements and 
program criteria. 



U.S. Workers in the Zone 

Turning to American workers in the Canal 
Zone, some 3,500 American employees of the 
canal enterprise and their dependents live in 
the Canal Zone. Some have spent all their 
working lives there; most of these American 
workers will continue to be employees of the 
U.S. Government until their retirement. The 
treaties protect their basic conditions of 
employment. If they remain they will be free 
to continue living in government housing and 
to use the American schools and hospitals in 
the areas. Until the year 2000, the treaties 
guarantee American employees and their de- 
pendents basic civil rights, similar to those 
that apply in the United States, in Panama- 
nian courts and other benefits and protec- 
tions similar to those enjoyed by other U.S. 
Government employees overseas. The 

November 7, 1977 



AFL-CIO, which represents both Panama- 
nian and U.S. workers in the Canal Zone, 
supports these treaties. 

What If the Treaties Are Rejected? 

Now, what if the treaties are rejected? It 
would be all too easy for me to emphasize 
today that if 13 years of effort were lost, and 
these treaties were rejected, our relations 
with Panama would be shattered, our stand- 
ing in Latin America damaged immeasurably, 
and the security of the canal itself placed in 
jeopardy. 

Indeed, all of these things could and might 
happen if these treaties were not ratified. But 
that is not the major reason for supporting 
them. They deserve support because they are 
in our interest, as well as the interest of 
Panama. 

For the people and the Government of 
Panama, there is the knowledge that they, 
eventually, will assume full jurisdiction of 
their own territory. There are also the eco- 
nomic benefits to be gained from canal rev- 
enues, from guarantees, loans, and credits — 
not grants — we have pledged to consider on 
their behalf. Panama, as a result, will be a 
more stable and more prosperous country. 

For us, there is our knowledge that the 
canal will be open, neutral, secure, and effi- 
ciently operated for our benefit and for other 
nations in the world. We are not appropriat- 
ing American taxpayers' money to accomplish 
this. And we will have gained the respect 
throughout Latin America and the world for 
addressing this issue peacefully and construc- 
tively. It is our interests, not foreign pres- 
sures, that led us to these treaties. 

Other Questions 

Let me address, very briefly, some doubts 
about the treaties that have been raised but 
can be dispelled as the facts become better 
known. 

We are asked whether the new treaties may 
encourage Panama to nationalize the canal. 
But our new treaty rights would be no less 
binding than our rights under the existing 
treaty. Moreover, a Panama which is 
cooperating with us in canal management and 
will eventually exercise full management re- 

617 



sponsibility has no reason to seize or obstruct 
the canal. Any Panamanian Government will 
have an interest in preserving the treaties be- 
cause the treaties are in the interest of 
Panama — as well as ourselves. These treaties, 
in my opinion, will reduce the chance of such 
an event. 

It's been suggested that the new treaties 
could diminish our ability to maintain the neu- 
trality of the canal. But, in fact, the Joint 
Chiefs of Staff are satisfied that the treaties 
enable us to keep the canal open indefinitely. 

It has been suggested that we are paying 
the Panamanians to take the canal away from 
us. But payments to Panama will come from 
canal revenues, not from American taxpayers. 

Finally, let me address briefly another 
question which has been raised — human rights 
in Panama. The Panamanian Government has 
in the past been charged with abusing civil 
and political rights of some of its citizens. And 
we have discussed this issue with that gov- 
ernment. The closer relations between our 
two countries that will grow out of the new 
treaties will provide a more positive context 
in which to express such concerns, should it 
be necessary to do so in the future. 

Already, there are encouraging signs. On 
September 13 Panama invited the Inter- 
American Human Rights Commission to send 
a team to investigate human rights conditions 
in Panama. In addition, it has invited the 
United Nations to send observers to its 
plebiscite which will be held on the new 
treaties next month [October 23]. At the same 
time, the Panamanian Government has made 
continuing and real commitments to the eco- 
nomic and social rights of its citizens. Its eco- 
nomic development plans give priority to up- 
grading the housing, nutrition, health care, 
and education of the ordinary Panamanian 
citizen. 

How we respond to an issue such as these 
Panama Canal treaties will help set the tone 
for our relations with the rest of the world for 
some time to come. Both we, and others, are 
under considerable pressure in our domestic 
economies. There is a tendency toward eco- 
nomic protectionism. And there is a question 
about the most appropriate ways to use our 
power in a world grown so complex. 



Panama is a small country. It would be all 
too easy for us to lash out, in impatience and 
frustration, to tell Panama and Latin 
America — and other countries around the 
world — that we intend both to speak loudly 
and to carry a big stick and to turn away from 
the treaties four Presidents have sought over 
so long a time. 

But that, in my judgment, would not be 
conduct appropriate to a responsible world 
power or consonant with the character and 
ideals of the American people. Any nation's 
foreign policy is based, in the end, not just 
upon its interests — and, in Panama, our inter- 
ests are clear and apparent— it is also based 
upon the nature and will of its people. 

I believe the American people want to live 
in peace with their neighbors; want to be 
strong, but to use their strength with re- 
straint; want all peoples, everywhere, to have 
their own chance to better themselves and to 
live in self-respect. That is all part of our 
American tradition. That is why I am con- 
vinced that after the national debate they de- 
serve, these treaties will be approved without 
reservations by the Senate with the strong 
support of the American people. 



SECRETARY BROWN, SEPTEMBER 27 

Just over 63 years ago the first U.S. vessel 
crossed through the Panama Canal from one 
to the other of the two great oceans which 
border our country. 

Let us strip the matter to its essentials. 
Your deliberations in this committee room 
today are vital. As much as any other factor, 
they will determine whether we can be confi- 
dent that our ships of war and vessels of 
commerce will continue to use that important, 
but fragile, waterway during and beyond the 
last quarter of the 20th century as they did in 
the first. 

We have always been a practical people — 
proud of our history but not sentimental; re- 
membering where we have been but oriented 
toward the future. You all are practical men 
or you would not hold the offices you do. In 
m y judgment, the issues before you are prac- 
tical ones and it is in practical terms that I 
shall address them. 






•J 



618 



Department of State Bulletin 



On September 7, 1977, the President signed 
two treaties affecting the operation and con- 
trol of the Panama Canal. I am pleased to ap- 
pear before you this morning with Gen. 
George Brown, Chairman of the Joint Chiefs 
of Staff, to state that the Department of De- 
fense wholeheartedly and fully supports these 
treaties and to explain why I believe they de- 
serve our — and your — full support. 

Quite properly, the focus of your delibera- 
tions must be on whether these treaties pro- 
mote the national interest — and specifically 
the national security interest — of the United 
States. To help in answering that question, 
there are three points that I consider critical. 

— Use of the canal is more important than 
ownership. 

— Efficient operation of the canal in the 
years ahead is more important than nostalgia 
for a simpler past. 

— Ability to defend and control access to the 
canal is essential. But the issue is how that 
ability can best be assured — by a cooperative 
effort with a friendly Panama or by a garrison 
amid hostile surroundings. 

I have examined these issues personally and 
in detail. So have the Joint Chiefs of Staff. 
The Department of Defense has been fully in- 
volved in all stages of the drafting and negoti- 
ation of these treaties. I believe personally, 
and in the light of my responsibilities as Sec- 
retary of Defense, that these treaties fully 
serve and greatly promote our national secu- 
rity interests. The Joint Chiefs of Staff, as 
General Brown will tell you, share that as- 
sessment. These treaties deal with today's 
realities. They provide the security which we 
need for the future. 

I see three elements which together make 
up our national security concerns relating to 
the canal. These are: 

— First, unimpeded use; 

— Second, effective operation; and 

— Finally, physical security of the canal. 

These are our paramount objectives. The 
first requirement includes free and unimpeded 
use of the canal both by our Navy and by our 
merchant ships. Free use of the canal is es- 
sential to assure optimum ability to shift our 
forces and materiel rapidly between the At- 

November 7, 1977 



lantic and Pacific Oceans. That capability en- 
hances our defense posture in both the Euro- 
pean and Pacific regions. 

The neutrality treaty — more formally, the 
Treaty Concerning the Permanent Neutrality 
and Operation of the Panama Canal — provides 
that the canal shall be open permanently to all 
vessels of all nations. Moreover, it contains an 
important additional provision. The United 
States is given a preferred position with re- 
spect to use of the canal, a position which no 
other country except Panama will enjoy: U.S. 
vessels of war and the U.S. auxiliary fleet 
(important examples of which are oilers and 
supply ships) are guaranteed rapid transit 
through the canal. This is so irrespective of 
the cargo they carry. These provisions assure 
us that the United States will remain able to 
use the canal in timely fashion whenever mili- 
tary necessity dictates, just as we can today. 

Our second national security requirement is 
that the canal operate effectively. The 
Panama Canal Treaty provides that during its 
term the United States will operate the canal 
with increasing participation of Panamanian 
managers and workers operating under the 
treaty terms according to U.S. laws and regu- 
lations. Thus, the United States can continue 
the present efficient operation of the canal for 
many years to come and the Panamanians will 
be in a position to operate it successfully when 
the treaty expires. 

Our third national security requirement is 
that we must be able to defend the canal from 
hostile acts. Our armed forces now control — 
and they will continue to control with over- 
whelming forces — the sea approaches to the 
canal on both the Pacific and Caribbean ends. 
This is not affected by the treaty. 

The treaty goes even further, however. It 
states unequivocally that during the life of the 
treaty, the U.S. Armed Forces shall enjoy the 
right and the primary responsibility to defend 
the canal itself. It further provides that dur- 
ing that period the United States may station, 
train, and support units of our armed forces in 
Panama and that the United States will decide 
unilaterally whether and how to modify the 
force levels we maintain there. All key mili- 
tary bases and training areas which we now 
operate in the Canal Zone will remain under 
U.S. control. 

619 



When the Panama Canal Treaty expires, as 
the year 2000 dawns, the neutrality treaty 
provides that the United States and Panama 
are to maintain jointly the permanent neu- 
trality of the canal and that no troops other 
than Panamanian may be stationed in 
Panama. The United States is also made a 
guarantor of the neutrality of the canal. In 
that capacity, we have the right to take ap- 
propriate measures to enforce this guarantee. 
In my judgment, these provisions insure that 
the U.S. ability and unilateral right to defend 
the canal against any external threat remain 
unimpaired. 

There is another aspect of the third national 
security requirement — ability to defend the 
canal from hostile acts — which cannot be ig- 
nored. Such hostile acts might not be exter- 
nal. If Panama and other Latin American 
countries, or major elements of the Panama- 
nian population, became hostile to the United 
States, then protecting the canal against 
internal threats, terrorism, and guerrilla ac- 
tions would become much more difficult. Such 
occurrences are far less likely under the new 
treaty than they would be if the long unset- 
tled status quo were to continue. 

The treaty is a gauge of our good faith to- 
ward Panama and all of Latin America. It also 
provides Panama with a tangible stake in the 
continued effective operation of the canal. 
Further, the treaty contemplates a combined 
defense agreement between the United States 
and Panama as a result of which Panama's 
Armed Forces will be able to protect the canal 
against threats from within Panama more ef- 
fectively than they can at present. Nothing in 
life, and still less in international life, is cer- 
tain. But all these elements should add to the 
real security of the canal and make its avail- 
ability for U.S. use much more sure than any 
alternative course of action. 

As I see it — and I do not think anyone with 
national security responsibilities disagrees — 
the Panama Canal will, for the foreseeable fu- 
ture, be an important defense artery for the 
United States. The treaties which you are 
examining provide real security, not paper 
claims. They offer the firmest and most prac- 
tical guarantees obtainable that the canal will 
remain operational, secure, and available to 
the United States. 



The canal was built for shipping, not slo- 
gans. We seek to guarantee transit of vessels, 
not theoretical claims of title. These goals we 
have sought, as I said at the beginning, are 
practical. The issues before you are practical 
ones. Our negotiations have obtained instru- 
ments which — more certainly than thousands 
of forces and their armaments on the spot — 
will assure those practical objectives for gen- 
erations to come. I am convinced that ap- 
proval of these treaties will best provide for 
our national security. 



GENERAL BROWN, SEPTEMBER 27 

I am here to discuss the security aspects of 
the proposed Panama Canal Treaty. 

The Joint Chiefs of Staff recognize the 
Panama Canal as a major defense asset, the 
use of which enhances U.S. capability for 
timely reinforcement of U.S. Forces. The 
strategic military value of the canal is re- 
flected in our ability to accelerate the shift of 
military forces and logistic support by sea be- 
tween the Atlantic and Pacific Oceans. The 
strategic value of the canal is not expected to 
change substantially throughout the life of the 
new Panama Canal Treaty and beyond, so 
long as the canal provides the sole means of 
transiting ships across the American Conti- 
nent. 

U.S. military interests in the Panama Canal 
are in its use, not its ownership. Therefore, 
any new treaty must assure that access to and 
security of the Panama Canal are protected in 
times of war and peace. This assurance is pro- 
vided by a permanent regime of neutrality to 
be maintained by the United States and 
Panama which specifies that the canal will 
remain open to all world shipping at reason- 
able tolls, without discrimination, in accord- 
ance with specific rules of neutrality and that 
it will always be operated efficiently under 
rules that are just, equitable, and reasonable 
and necessary for safe navigation and effi- 
cient, sanitary operation. 

Defense of the Panama Canal has two com- 
ponents: internal security and external de- 
fense. Both are presently the responsibility of 
the U.S. Government. 

Internal security entails surveillance and 



620 



Department of State Bulletin 



control. It is primarily concerned with coun- 
tering sabotage and terrorist activities. Cur- 
rently the Canal Zone's police and security 
forces are responsible for internal security. 
When required, reinforcement is provided by 
the U.S. military units assigned to U.S. 
Southern Command. Under the new Panama 
Canal Treaty there will no longer be a Canal 
Zone, and police functions will become the re- 
sponsibility of the Government of Panama. 
However, the Canal Commission will continue 
to provide security for canal installations. The 
military units of U.S. Southern Command will 
be available to augment the Panamanian 
forces and Commission guards. 

External defense is concerned with defense 
against armed attack by hostile forces using 
guerrilla or conventional tactics. Our current 
plans will be described by General McAuliffe 
[Dennis P. McAuliffe, Commander in Chief, 
U.S. Southern Command]. Under the new 
Panama Canal Treaty, the United States will 
have primary responsibility for the defense of 
the canal during the balance of this century. 
Under the new Panama Canal Treaty, the 
Panamanian Guardia Nacional and appro- 
priate U.S. Forces commander will develop 
plans in concert to provide for mutual defense. 
The Joint Chiefs of Staff will continue to plan 
for rapid reinforcement of U.S. Southern 
Command in the event of emergency need. 

Our capability to defend the Panama Canal 
will be enhanced through cooperation with the 
Government of Panama. The new treaty pro- 
vides a basis for such cooperation between the 
United States and Panama. The alliance rela- 
tionship should develop and strengthen during 
the life of the Panama Canal Treaty and be 
further enhanced by the neutrality treaty. 
The regime of neutrality provided in the neu- 
trality treaty calls for a canal open to all ships 
of all nations in times of peace or war. It spe- 
cifically provides that U.S. and Panamanian 
naval ships shall transit expeditiously without 
impediments or preconditions. Since both the 
United States and Panama agree to this re- 
gime, our right to take the measures that we 
may deem to be necessary to maintain the 
canal's neutrality is assured. 

For these reasons, the Joint Chiefs of Staff 
support the treaty as being protective of the 
military interests of the United States and as 

November 7, 1977 



providing an effective basis for defense of the 
canal. 



ADMIRAL HOLLOWAY, SEPTEMBER 27 

I have gone on record with the other mem- 
bers of the Joint Chiefs of Staff in supporting 
the Panama Canal treaties. 

The Joint Chiefs of Staff are unanimous in 
their position supporting the Panama Canal 
Treaty and the Treaty Concerning the Per- 
manent Neutrality and Operation of the 
Panama Canal, although each of us may have 
reached this conclusion on the basis of our in- 
dividual line of reasoning. I would like to pro- 
vide the committee, in this statement, with 
my own rationale. 

The Panama Canal is and will remain of 
major importance to the United States. Its 
use is a key factor in the Navy's ability to 
accomplish its responsibilities in connection 
with essential war plans and other con- 
tingencies involving our national security. 
While I cannot state that loss of the canal 
would result in the failure of these plans or 
in the inability of the Navy to carry out 
these responsibilities, it would certainly 
make these tasks enormously more difficult. 
We would be much better off with the use of 
the canal than without it. 

The importance of the canal to the Navy 
for defense purposes lies in its assured use, 
not in its ownership. There are two threats 
to the continued use of the canal by our 
naval forces and essential shipping: the ex- 
ternal threat and the internal threat. 

The external threat is represented by a 
general war situation. In a conventional con- 
flict, our capabilities to defend the ap- 
proaches of the canal are adequate to pro- 
vide me with reasonable confidence that 
defense of the canal against an external 
threat is practicable. In the case of a nuclear 
conflict, defense of the canal would be virtu- 
ally impossible as would be defense of al- 
most any other major installation of impor- 
tance to the United States. However, in a 
strategic nuclear war, the importance of the 
canal in relative priorities diminishes to an 
inconsequential position. 

The second threat to our continued use of 

621 



the canal is the internal threat from subver- 
sive, clandestine, or local guerrilla activities. 
The defense against such a threat in the 
formidable jungle terrain of the canal area 
would be extremely difficult, particularly in 
view of the vulnerability of the lock system 
to disruption as the result of relatively 
minor damage to critical mechanical compo- 
nents. Defense against a persistent and con- 
tinuing internal threat would be particularly 
difficult. 

Therefore, defending against this internal 
threat is significantly enhanced if the coop- 
eration of the local interests, the Panama- 
nians and Central Americans, can be 
maximized. On the other hand, our ability to 
defend and protect the canal so as to insure 
its continued operation would become ex- 
tremely difficult in the face of an adversary 
relationship with our Latin neighbors or an 
active hostility on the part of the local popu- 
lation. Our adherence to these treaties, 
which make the Panamanians our direct 
partners in the defense of the canal, will 
substantially contribute to a friendly and co- 
operative attitude among all Latin Ameri- 
cans toward the United States on the 
Panama Canal issue. 

The specific provisions in the Panama 
Canal Treaty providing for the defense of 
the canal by the United States until the year 
2000, and in the treaty of neutrality which 
will guarantee our use of the canal after the 
turn of the century, are considered by the 
unified commander, Commander in Chief 
Southern Command, to be adequate. That 
view is shared by the Joint Chiefs of Staff, 
based upon the analysis of the Services and 
the unified commander. 

It is my judgment that the favorable ef- 
fect which I believe the treaties will have on 
the attitudes of the Panamanians and Cen- 
tral Americans toward our continued use of 
the canal for national and hemispheric secu- 
rity purposes will substantially assist the 
United States to defend the canal against 
the internal threat. On this basis, it is my 
view that the continued use of the Panama 
Canal for military purposes in our national 
defense plans is best assured through the 
provisions of the new treaties. 



AMBASSADOR JORDEN, SEPTEMBER 29 

A few brief biographic notes might be in 
order. I have been the U.S. Ambassador in 
Panama since April 1974. Before that, I was 
a senior member of the staff of the National 
Security Council dealing with Latin Ameri- 
can affairs in general. Before that, I was a 
special assistant to former President Lyndon 
Johnson helping him to organize his presi- 
dential library and write his memoirs. I 
have been in the foreign affairs area of gov- 
ernment for 16 years — in the Department of 
State and the White House. Before that I 
was a newspaperman for 14 years, almost 
wholly in the foreign policy area — first for 
the Associated Press and then for the New 
York Times. 

Let me say at the outset that I have fol- 
lowed the course of the treaty negotiations 
fairly closely over recent years. I am also 
generally familiar with the history of our re- 
lations with Panama over the years since the 
1903 treaty was adopted. Based on my own 
observations of the situation in Panama and 
my awareness of our deep interest in the 
canal, I wish to say that I am wholeheart- 
edly in favor of the proposed treaty and the 
related Treaty Concerning the Permanent 
Neutrality and Operation of the Panama 
Canal. I believe they represent the best, the 
wisest, the most statesmanlike course we can 
follow at this juncture of history. 

When I was invited to appear before this 
committee, I asked myself what I could pro- 
vide that would be most useful. I knew you 
would have heard from the Secretary of 
State regarding the foreign policy implica- 
tions of the new treaties. You would have 
heard a detailed report on the treaties 
themselves from my two distinguished col- 
leagues who negotiated the agreements, 
Ambassadors Bunker and Linowitz. You 
have explored the security and military im- 
plications of the treaties with the Secretary 
of Defense and the Chairman of the Joint 
Chiefs of Staff. As for the technical opera- 
tions of the canal itself, now and in the fu- 
ture, my colleagues at this session, Secre- 
tary [of the Army Clifford L.] Alexander 



622 



Department of State Bulletin 



and Governor [of the Canal Zone Harold R.] 
Parfitt, can provide more detailed informa- 
tion than I can. 

What I would like to do is to look at this 
matter from the vantage point of the Isth- 
mus of Panama. How did we get where we 
are? Where do we go from here? What 
course best serves our fundamental inter- 
ests? How do Panamanians look at all this? 
What are the prospects for a reasonable 
working relationship between our countries? 
These are some of the questions I would like 
to address with you. 

I am sure the members of this committee 
are familiar with the dubious history of the 
treaty of 1903 which the present agreements 
would replace. That treaty, written and 
signed in unseemly haste, is what Panama- 
nians call "the treaty no Panamanian ever 
signed." As you know, it was developed and 
approved by a Frenchman who — it is fair to 
say — had little interest in the future of 
Panama but a great interest in salvaging 
what he could of the financial interests of 
the defunct French Canal Company. It gave 
the United States rights it would have "if it 
were the sovereign of the territory" — and it 
gave us those rights "in perpetuity." We 
agreed to pay Panama $10 million and the 
munificent sum of $250,000 a year and, in 
the debate in the Senate which followed, one 
member of this august body said: "We have 
never had such a concession so extraordi- 
nary in its character as this. In fact, it 
sounds very much as if we wrote it our- 
selves." Incidentally, the payment to the 
French Company was $40 million — four 
times what we paid Panama. 

It was an arrangement greatly advanta- 
geous to the United States and vastly profit- 
able to the French Canal Company. But it 
was not much of a deal for Panama. It was 
an arrangement which — as the Secretary of 
State admitted at the time — was "we must 
confess, with what face we can muster, not 
so advantageous to Panama." 

"You and I know too well," he wrote his 
senatorial friend, "how many points there 
are in this treaty to which a Panamanian pa- 
triot could object." And object they did. 
There is a notion widespread among our fel- 



November 7, 1977 



low Americans that Panamanian resistance 
to the 1903 treaty is something of recent 
origin, a development of the last few years. 
And some have portrayed opposition to the 
1903 treaty as merely a product of "leftists" 
and "extremists." That is the wildest kind of 
distortion of history. If one takes the trou- 
ble to go back to the files of the Panamanian 
press of the period, you quickly find that re- 
sistance to the 1903 treaty began in 1903. 
And it has never ceased since. 

This is an issue — probably the only 
issue — which brings Panamanians together 
in a kind of national unanimity that is rare 
in history. Some members of this committee 
have been in Panama; I urge those who have 
not to make the trip. Talk with Panama- 
nians. You will find that whether they are 
rich or poor, city men or campesinos, uni- 
versity graduates or day laborers, they are 
as one in their dream of a Panama that is 
unified and sovereign, a country that is no 
longer divided in half by a foreign enclave. 

And. this brings me to one of the central 
points I wish to make today. For us Ameri- 
cans the key goal in this situation — it seems 
to me — is to assure that the Panama Canal is 
open and efficient, available to us and to 
world commerce, and that it be properly 
protected against external attack. I believe 
the treaties before you give us that 
assurance. 

Opponents of those treaties would have 
you believe that Panama's key goal is to 
take over -the canal. That, I submit, misses 
the whole point, the whole explanation of 
Panamanian attitudes. They want a canal 
that works well as much as we do. They 
have pride in it; they benefit from it. The is- 
sue, as seen through Panamanian eyes, is 
not the canal at all. Rather it is the presence 
in a friendly country of a zone governed by 
the United States. It is an area over which 
Panama — the country in which it is 
located — has absolutely no control of any 
kind. If a Panamanian is caught speeding or 
is involved in an accident, he gets a ticket 
from a foreign policeman. If the offense is 
serious enough, he is tried in a foreign court 
under a foreign code of laws. 

You and I can well imagine what the reac- 



623 



tion would be of Americans faced with such 
a situation. Suppose, for example, that his- 
tory had dictated that the Mississippi River 
and a strip of territory on each side were 
controlled by a foreign power. Suppose that 
in going from Illinois to Missouri or from 
Louisiana to Texas you had to cross that 
strip. And imagine, if you will, that you 
broke the law in some fashion — by speeding 
or having a tail light out or whatever — and 
you were arrested by a French gendarme or 
a Mexican policeman. It does not take great 
imagination to know what our reactions 
would be. Yet that is the situation that our 
Panamanian friends have found themselves 
in for the past 70 years. That is what they 
have for so long wished to see changed. That 
is what the treaty now before you will 
change. And I for one say that it is high 
time for such change. 

What is our central interest in Panama? I 
submit that it has not changed essentially 
since President Theodore Roosevelt's day. It 
is to maintain between the two great oceans 
a passageway that is open, efficient, safe, 
and neutral. Our commercial interest in that 
waterway continues to be significant — 
though in a world of changing trade patterns 
and changing technology, it is less than it 
once was. Our military interest, too, con- 
tinues — though, again, it is not what it once 
was. I think that all of us are agreed that 
the maintenance of the canal in an efficient 
and open way is a great advantage to us and 
to the other nations of the world. 

How do we best achieve that end? Not, I 
think, by being inflexible and bullheaded. 
Not by simplistic formulas like "it's ours and 
we're going to keep it." No waterway or 
road, no military base or business can long 
remain open and efficient if it is surrounded 
by a sea of public hostility and resentment. 
But, you may well ask, don't the Panama- 
nians realize that the canal is a major re- 
source that produces great benefits for 
them? Of course they do. They want to have 
the canal open and operating well just as 
much as we do, perhaps more. They know 
better than we do what it means to them 
and their country. 

Their feeling — and I share it — is that the 



best guarantee of a canal that is working 
well and serving us all is one in which the 
American people and the Panamanian people 
are working as partners. And that is pre- 
cisely the goal of the treaty that is before 
you. There can be no better security for the 
Panama Canal than to have the people who 
live around it, who work on it feel that it is 
part of them and that any effort to attack it 
or disrupt its operation is an attack on them 
and on their best interests. 

I am sometimes asked whether we can "do 
business" with Panama? My answer is 
yes — at least if in dealing with this small 
country we try to understand what it is 
really like and if we treat it as a powerful 
yet fair nation must treat a neighbor. I be- 
lieve it is fair to say that Panama has deeper 
and closer ties with the United States than 
has any other country in Latin America. In 
large part that is because of the presence of 
the canal and because of the many ties that 
have developed between us stemming from 
that fact of geography. 

Thousands of Panamanians have attended 
our colleges and technical schools. They 
have come to know us well and to develop a 
respect for our way of life, for its freedom, 
and its fairness. And if they feel some bit- 
terness over the historical record, it is, in 
part, because they see such a gap between 
what we have sometimes done and what we 
have professed. 

Despite some rhetorical outbursts and oc- 
casional incidents and demonstrations, 
there is remarkably little anti-Americanism 
in Panama. The vast majority of Panama- 
nians harbor warm and friendly feelings to- 
ward our country and our citizens. They 
want us as friends, not enemies. 

Nonetheless, I realize that some Ameri- 
cans living in the Canal Zone feel otherwise. 
They are nervous and concerned. I think we 
can all understand that. For they see in a 
new treaty an end to the very special and 
protected way of life they have enjoyed. 
They have gone through a very trying 
period in which they felt their future was 
being changed and they were not at all sure 
in what direction. In the absence of hard in- 
formation, many of them imagined the 



624 



Department of State Bulletin 



worst. They became vulnerable to every 
rumor and exaggerated prediction. And 
there has been no shortage of rumors and 
exaggerations. 

Now, I think, the situation is changing 
drastically. With the publication of the text 
of the treaties, Americans in the Canal Zone 
realize they have not been sold down the 
river. They understand that their basic 
employment rights, job security, and the 
like are preserved. Thanks to the efforts of 
Governor Parfitt and Secretary Alexander 
there is a vastly better perspective as to 
what a new treaty means and will not mean. 

One thing that has greatly bothered many 
people in the zone is the prospect of being 
subject to Panamanian laws and jurisdiction. 
To meet this concern, the treaty negotiators 
reached agreement on certain procedural 
guarantees — set forth in an annex to the 
treaty — that assure certain special protec- 
tions to any American who, in the future, 
may face prosecution. Those protections in- 
clude the right to a speedy trial, to a lawyer 
of choice, to full disclosure of charges, to 
have a representative of the U.S. Govern- 
ment present at any trial, etc., etc., down a 
very long list. 

I believe the Government of Panama has 
every intention of living up to these guaran- 
tees. I am sure they would not have agreed 
to these special features at all if they had no 
intention of abiding by them. Moreover, it is 
clear that the Panamanians want as many 
Americans as possible to remain in their 
country for some time — to provide the skills 
needed to keep the canal operative and to 
train Panamanians to do those jobs. 

My clear impression is that, as these vari- 
ous features of the new treaty have become 
known, the outlook among Americans in the 
zone has moderated. I believe that the vast 
majority — while still harboring reservations 
about the future — are ready to see how such 
a treaty works in practice, to give it a fair 
chance. 

In this connection, I should point out to 

this committee that there are some 3,000 

■American employees of the Canal Company 

who will be affected by a change in their 

lifestyle and in the rules of the game. At the 



November 7, 1977 



same time there are some 6,000 Americans 
living and working peacefully in Panama in 
banks and businesses, selling and buying, 
teaching and preaching; in short doing all 
the things that Americans are doing in most 
other countries around the world day in and 
day out — without special privileges or spe- 
cial rules. With time — and with good will on 
both sides — I think our citizens now in the 
zone will find that it is not that difficult to 
live and work in another country. 

I have been asked by friends here and in 
Panama how the various joint boards and 
committees provided for in the treaty will 
work out. As you know, there is provision 
for a consultative committee to act as a kind 
of policy advisory board to the Panama 
Canal Commission. There will also be a 
coordinating committee of both Americans 
and Panamanians to help see that the provi- 
sions of the treaty are carried out in an or- 
derly and reasonable fashion. Similarly, on 
the military side, there will be a combined 
board of senior military representatives as 
well as a joint committee to help carry out 
the military provisions of the treaty. I can- 
not say, of course, how these various bodies 
will conduct their business. They will be 
breaking new ground and carrying out func- 
tions that have not previously existed. 

What is clear, of course, is that the work- 
ing of any body of men and women depends 
on the quality of people selected to do the 
job and on the spirit in which they under- 
take their tasks. I have been assured by the 
highest levels of the Panamanian Govern- 
ment that they want these various groups to 
be efficient and to work in harmony. For 
that purpose, they have told me, they intend 
to pick the best possible and most highly 
qualified people available. Given that spirit, 
I see no reason why these joint groups 
should not work in harmony and in the best 
interest of both countries. 

A related question is whether the 
Panamanians will ever be able to run the 
canal. There is a kind of arrogance in the 
very question that I do not like. It reminds 
me of the way some people used to talk of 
the impossibility of Egyptians ever running 
Suez. In an earlier period, you will recall 



625 



how unthinkable it was in London that a 
bunch of ragtag colonists could ever run 
their own affairs. The short answer is that 
of course Panama will be able to run the 
canal. Seventy percent of the work force 
now operating the canal is Panamanian. 
They could doubtless fill many of the admin- 
istrative and technical jobs tomorrow. As for 
some of the more highly developed skills, 
there is no reason why Panamanians cannot 
acquire them in a reasonable time. And we 
can help greatly in providing the necessary 
technical training. 

One final question that is frequently 
asked: In giving the canal to Panama, 
wouldn't we be turning it over to a leftwing 
military dictatorship? My answer to that 
loaded question is, first, to note that under 
the treaty we are discussing, the United 
States retains the responsibility for operat- 
ing and the primary responsibility for de- 
fending the canal for the remainder of this 
century. The government that finally will 
take control of canal operations will not be 
the present government. And we cannot 
know precisely what form of government 
that will be any more than we know what 
our own condition will be in the year 2000. 

But more than that, I would say that the 
American people have been given a quite 
distorted picture of the present Government 
of Panama. It is not a full-blown democracy 
as you and I understand that term. Frankly, 
there are things I would like to see changed 
in the system. But I am not a Panamanian 
and it is not for me to prescribe what is 
good or bad for others. That is a judgment 
only the Panamanian people can make — as 
they will over time. We can perhaps explore 
these matters more fully if you like. 

One thing I do know if we wish to encour- 
age change in what we regard as a positive 
and constructive direction — in Panama or in 
any other country — we can only do so in an 
atmosphere of friendship and trust, of coop- 
eration and mutual advantage. We cannot 
hope to see our values flourish, we cannot 
expect to have our suggestions heeded, we 
cannot work effectively with others toward 
the goals we cherish if we try to do so in an 
atmosphere of bitterness and frustration. 



626 



It is to the goal of eliminating the bitter- 
ness of the past and the frustrations of the 
present that the treaty now before you is so 
largely aimed. I hope it will receive your 
thoughtful and favorable consideration. 



UNDER SECRETARY COOPER, SEPTEMBER 30 

I appreciate the opportunity to discuss 
with the committee the plans for improved 
economic cooperation between the United 
States and Panama which will complement 
the process of implementing the new canal 
arrangements. The programs that Under 
Secretary Solomon [Anthony M. Solomon, 
Under Secretary of the Treasury for Mone- 
tary Affairs] and I will discuss today are en- 
tirely separate and independent from the 
new treaty, although the idea of having this 
associated package arose during the last few 
weeks of the treaty negotiations. 

Secretary Vance and Ambassadors Bunker 
and Linowitz have already described for the 
committee the provisions within the treaty 
which will provide for Panamanian participa- 
tion in canal revenues. The arrangements we 
discuss today are not directly related to the 
canal but, rather, are an expression of our 
friendship and cooperation with the people 
of the Republic of Panama and reflect our 
interest in the economic well-being of that 
country. 

As this committee is aware, the discussion 
of economic arrangements associated with 
the treaty were among the most difficult is- 
sues encountered in the negotiations. Pana- 
ma's negotiators proposed that the United 
States pay Panama a large initial lump-sum 
payment and a very sizable annuity, either 
of which far exceeded the most optimistic 
estimates of gross canal revenues. The 
Panamanian negotiators sought to justify 
these proposals by assigning high economic 
value to the economic and security benefits 
derived by the United States from the canal 
without comparable benefits to Panama. 

They further suggested that, as a coun- 
terpart to U.S. investment in the Panama 
Canal, Panama had provided its unique geo- 
graphic location, much of its prime land and 



Department of State Bulletin 



water resources, as well as the labor of its 
people to the canal effort. Panama also cited 
the low remuneration received by Panama 
under the present treaties and the value to 
our security interests of the military bases 
and the new neutrality arrangements. In a 
more compelling argument, Panama's 
negotiators maintained that Panama's na- 
tional priority lies in the rapid social and 
economic development of its people with 
wide distribution of the benefits. 

Both the economic provisions within the 
treaty and the economic arrangements out- 
side it are based on our shared recognition 
of the special relationship created by the 
interest in the canal. Panama's development 
would serve the interests of the United 
States by fostering the stability which is the 
underpinning for an open, safe, efficient, 
and accessible canal before and after the ex- 
piration of the treaty which you are now 
considering. 

Giving the Panamanians a stake in the op- 
eration of the canal makes political and eco- 
nomic sense — it will insure Panamanian 
cooperation in the efficient running of the 
canal operation while also building broad 
political support for the enterprise in 
Panama. The broader program for improved 
economic cooperation with Panama rests on 
a similar assumption — that improving the 
welfare of an increasing number of Panama- 
nians will result in a stable political climate 
in which the sound administration of the 
canal can continue. 

As was covered in earlier testimony, for 
the purposes of the annuity payments in the 
treaty, the economic provisions in the treaty 
reflect the U.S. position that the canal 
operating revenues would be the source of 
financing. The purpose of this formula is to 
give Panama an equitable share of canal 
benefits and assure a vital Panamanian 
interest in the efficient operation of the 
canal. 

The arrangements outside the treaty also 
reflect the perception that Panama and the 
United States have mutual interests — 
specifically, in fostering economic develop- 
ment and the well-being of the Panamanian 
people. Since we believe that Panamanian 



development during the new treaty period 
could serve as a means of promoting an en- 
vironment helpful in the operation of the 
canal during and after the new treaty 
period, the U.S. negotiators arranged for 
the Panamanian negotiators to meet with 
representatives of the Departments of State 
and Treasury, AID [Agency for Interna- 
tional Development], and the Export-Import 
Bank to discuss Panama's development 
needs. 

Out of these discussions emerged a pro- 
gram which will be undertaken outside the 
treaty, which will introduce no special as- 
sistance devices, and which is subject to all 
applicable procedures under existing pro- 
grams. Its contents were outlined to the 
Panamanian Government in the form of a 
diplomatic note [Note Regarding Economic 
and Military Cooperation] signed by Secre- 
tary Vance on September 7, the date of the 
signing of the two treaties concerning the 
Panama Canal. I understand that a copy of 
this diplomatic note has already been pro- 
vided the committee. 2 

The note outlines a program, to be under- 
taken on a best efforts basis, which seeks to 
enhance Panamanian development with the 
participation of the private sector in the 
United States as well as Panama. It is com- 
posed of the following elements: 

— Up to $200 million in Export-Import 
Bank loans, loan guarantees, or insurance 
over a 5-year period subject to approval by 
the bank; 

— Up to $75 million in AID housing 
guarantees over a 5-year period; and 

— A guarantee by the Overseas Private 
Investment Corporation of $20 million in 
U.S. private capital to the Panamanian Na- 
tional Finance Corporation (COFINA) for 
use in productive projects in the Panama- 
nian private sector. 

The Secretary's note of September 7 also 
proposes issuance of repayment guarantees 
under our foreign military sales program not 



2 A copy of the note is included in State Department 
publication Selected Documents No. 6B available from 
Public Correspondence Division, Bureau of Public Af- 
fairs, Department of State, Washington, D.C. 20520. 



November 7, 1977 



627 



to exceed $50 million over a 10-year period. 
This aspect of the program is to assist 
Panama in assuming its increased responsi- 
bility for canal defense during the new 
treaty period. It too is designed to further 
the spirit of cooperation between the two 
countries. Like the other parts of the pro- 
gram outside the treaty, the military sales 
program is not a grant to be financed by the 
American taxpayer. The only appropria- 
tions required would be to cover 10 percent 
of the annual program in the form of depos- 
its in a special reserve account. 

Under Secretary Solomon will discuss the 
Overseas Private Investment [Corporation] 
guarantee and the Ex-Im Bank program. I 
would like to expand on the rationale for the 
AID housing guarantee program proposed in 
the Secretary's note. 

The purpose of the AID housing program 
is to provide housing to lower-to-medium in- 
come groups in less developed countries. 
The program provides a full faith and credit 
U.S. Government guaranty to private U.S. 
lenders who make loans for housing projects 
in less developed countries. The program 
demonstrates the valuable contribution of 
private capital and foreign investment to the 
social and economic development of such 
countries. 

The 5-year program proposed for Panama 
in the economic cooperation proposal 
would — as other elements of the package — 
fit within existing statutory authorization. 
The guarantee program was proposed in the 
early 1960's and is designed to be self- 
sufficient and has not required congressional 
appropriations. Total current housing 
guarantee authority is $1,055 billion. The 
proposed Panama program would conform to 
the statutory limitations of $25 million per 
year to any one country and an average an- 
nual face value of $15 million. In other 
words, we are using existing programs — 
which are proven tools for furthering U.S. 
interests in many overseas economic 
areas — to strengthen Panamanian develop- 
ment and the cooperative relationship be- 
tween the two countries. 

Panama has had several successful AID 
housing guarantee projects. To date, AID 



has guaranteed a face amount of approxi- | 
mately $20 million in loans. Another $15 mil- 
lion project is now under consideration. This 
represents an 11-year course of activity in- 
volving eight projects. 

Moreover, the proposed housing guarantee 
program addresses an area of social and eco- 
nomic development in which Panama has 
placed a high priority within its development 
plan. This priority is felt because of the as- 
tonishing urban growth in Panama. Much of 
the poor population in Panama City and 
Colon dwell in decrepit, unsafe, barrack- 
type buildings which were actually used by 
the workforce of the French Canal Company 
almost a century ago. 

The housing guarantees are an example of 
the kind of program that is in the mutual 
interest of both countries. The economic 
cooperation program as a whole is designed 
to assist Panama's social and economic de- 
velopment and improve prospects for stabil- 
ity with the participation of the private sec- 
tor. Moreover, the economic cooperation 
program does not represent a grant to be fi- 
nanced by the American taxpayers. 

Before closing my testimony, I would like 
to add brief comments on two other areas of 
interest to the committee — the new Panama 
Canal Commission and the provisions on the 
sea-level canal. 

Under Secretary Solomon and I were both 
recently appointed directors of the Panama 
Canal Company. In this respect, we have an 
interest in the structure of the new Panama 
Canal Commission which will replace the 
company as the canal operator. Under Sec- 
retary Solomon will express his views on 
some financial aspects of the new commis- 
sion and I would like to share a few observa- 
tions on its methods of operation. 

The United States and Panama have 
agreed that the canal should continue to be 
operated in an efficient manner and every 
effort should be made to insure that the 
commission is designed to run in a business- 
like fashion. This is an important shared 
interest since the economic provisions of the 
new treaty as well as the operating costs of 
the canal are to be sustained from canal rev- 
enues. The commission should be structured 



628 



Department of State Bulletin 



as a self-sustaining business which would fi- 
nance the payments to Panama under the 
treaty as operating expenditures. The 
executive branch will submit to the Con- 
gress implementing legislation to the treaty 
which will execute these requirements. 

Finally, I would like to say a few words 
about the treaty provisions concerning the 
sea-level canal. Both Panama and the United 
States are committed to study jointly the 
feasibility of such a canal. Any arrangement 
for the construction of a sea-level canal must 
be agreeable to both countries. Panama 
agreed that no third country be permitted to 
build a sea-level canal in Panama except with 
our consent. In exchange, Panama asked the 
Linked States to agree to limit any sea-level 
canal construction to Panama. This was an ac- 
ceptable stipulation — as the committee is 
aware — in light of the 1970 study by the 
[Atlantic-Pacific] Interoceanic Canal [Study] 
Commission which concluded that the two pre- 
ferred routes for a sea-level canal excavated 
by conventional means are both in Panama. 
Again, it appears to us that the interests of 
both countries are secured by the outcome of 
the negotiation. 



Panama — Clarification of 
Current Talks 

Department Statement 1 

Yesterday's meeting of Ambassadors 
Linowitz and Bunker with Panamanian Am- 
bassador Gabriel Lewis was the second in a 
series which is likely to continue during the 
next week or two. 

The purpose of these meetings is to re- 
view matters which have been of concern to 
Members of Congress during the Senate 
Foreign Relations Committee hearings. 

Issues being reviewed cover the full range 
of those which have come up during the 
hearings. The talks at this stage are explor- 
atory. It is premature to speculate as to the 
results of these meetings. We would, of 



'Read to news correspondents on Oct. 7, 1977, by 
acting Department spokesman Kenneth Brown. 



November 7, 1977 



course, be in touch with Congress regarding 
the results. I would note that the most re- 
cent statement of our view on the neutrality 
of the canal and passage of warships was 
expressed by Acting Secretary [of State 
Warren] Christopher in a letter to the 
Chairman of the Senate Foreign Relations 
Committee [John J. Sparkman] dated 
October 5. 

On the matter of the expeditious passage 
of warships we have interpreted the lan- 
guage of the treaty to mean that our ships 
go to the head of the line. 



LETTER TO THE SENATE 

Dear Mr. Chairman: 

The explanation of the Panama Canal 
Treaties offered by Administration witnes- 
ses before your Committee last week is 
accurate. 

Under the new Treaties, and particularly 
the Neutrality Treaty, Panama and the 
United States have the responsibility to as- 
sure that the Panama Canal will always re- 
main open, secure and accessible to ships of 
all nations. Accordingly, Panama and the 
United States each will have the right to 
take any appropriate measures to defend the 
Canal against any threat to the regime of 
neutrality established in the Treaty. 

The Treaty does not give the United 
States any right to intervene in the internal 
affairs of Panama, nor has it been our inten- 
tion to seek or to exercise such a right. 

We firmly believe that the Treaty ar- 
rangements amply protect the Panama Canal 
as an international waterway, serve the 
interests of both countries, and form the 
basis of a new partnership based on mutual 
respect between Panama and the United 
States. 

We are, of course, in continuing contact 
with the Panamanian Government to clarify 
any points of interpretation regarding the 
Treaties which may arise in either country. 

Sincerely, 

Warren Christopher. 
Department of State, October 5, 1977 



629 



President Carter's News Conference 
of October 1 3 

Following are excerpts relating to foreign 
policy from the transcript of a news confer- 
ence held by President Carter oti October 
IS. 1 

Q. Panama's General Torrijos will come 
to this country late this week in an atmos- 
phere in which a lot of confusion has been 
generated over the language of the treaty 
and how that will be used. 

How are you going to use his visit? What 
is he going to do here? And will you perhaps 
get into the language of the treaty itself in 
terms of trying to clarify what he thinks? 

President Carter: I think the language of 
the treaty is adequate. I've had a chance to 
meet with General Torrijos at length on his 
other visit here and also to meet on one oc- 
casion with both the negotiators from 
Panama and our own country when the 
negotiations were at a crucial stage. Both 
General Torrijos and I are faced with a dif- 
ficult political problem — as he described it 
accurately— to sell the same product in two 
different markets. 

We are determined that the canal will be 
open, neutral, and free for use as long as it 
is there beyond the end of this century. We 
do not have an inclination to intervene in the 
internal affairs of Panama. And when we say 
in this country, "We reserve the right to 
take action to keep the canal open," when 
they say in their country, "We do not intend 
to permit the United States to intervene in 
the internal affairs of Panama," we are both 
right. But the language didn't go into that 
much detail. 

We agreed for expeditious passage of 
American and Panamanian ships through the 
Panama Canal when necessary. That lan- 
guage to me is adequate. But that particular 
phrase, "expeditious passage," has been in- 



■For the complete transcript, see Weekly Compila- 
tion of Presidential Documents dated Oct. 17, 1977, p. 
1537. 



terpreted differently here than it has in 
Panama. 

I want to be sure that the American 
people, when the Senate votes ratification, 
and the Panamanian people, when they have 
a plebiscite or referendum on the same 
treaty the 23d day of this month, both un- 
derstand the terms of the treaty very 
clearly. 

So, General Torrijos and I will be meeting 
tomorrow to make sure that we have a 
common agreement on what the treaty 
means and we may or may not issue some 
clarifying statement. But it's a constructive 
proposal, because both of us want to be sure 
that our people don't labor under any misap- 
prehensions about the intentions or in- 
terpretation of the other country. 

Q. Back on the canal issue, if you cannot 
come to some mutually agreeable statement 
with General Torrijos tomorrow, aren't the 
canal treaties doomed? 

President Carter: Well, I think it would 
be very difficult to get ratification of the 
treaties if there is any doubt that General 
Torrijos and I, the Panamanian people, and 
the U.S. citizens agree on what the canal 
treaties mean. 

I don't believe there's any need to amend 
the treaty language. To me it's clear because 
I've been involved in the discussions with 
the negotiators and also with General Tor- 
rijos. But it may be necessary, after he and 
I discuss the situation, to issue some clarify- 
ing statement. I've not talked to him per- 
sonally the last few days. I did extend an 
invitation by letter. He has been in the Mid- 
dle East, the Scandinavian countries, 
Europe, and he's coming back here tonight, 
I think. 

But I did extend a written letter to him 
asking him to meet with me. He was eager 
to do so. And we will be meeting tomorrow. 
But I think the clarification is crucial. A 
written agreement or modification to the 
treaty may or may not be necessary. I don't 
think we need to modify the treaty itself. 



630 



Department of State Bulletin 



U.S. -Panama Statement 
of Understanding 

Following is a transcript of a briefing 
held by Sol M. Linowitz, consultant for the 
Panama Canal treaty negotiations, on Oc- 
tober H which includes the statement of un- 
derstanding between the United States and 
Panama on the Panama Canal treaties. 

White House press release dated October 14 

Ambassador Linowitz: President Carter 
and General Torrijos of Panama agreed on a 
statement of understanding with respect to 
several provisions in the permanent neu- 
trality treaty which was signed by them on 
September 7th. 

Let me say at the outset that there has 
never been any misunderstanding between 
President Carter and General Torrijos as to 
the exact meaning of the language of the 
treaties. But as you know, some questions 
were raised in the Senate and it was felt de- 
sirable that this statement be issued to put to 
rest any question with respect to what was 
actually intended. 

Within a couple of hours, I believe, the 
same statement will be released in Panama 
by General Torrijos. This is the statement [of 
understanding]: 

Under the Treaty Concerning the Permanent Neu- 
trality and Operation of the Panama Canal (the Neu- 
trality Treaty), Panama and the United States have 
the responsibility to assure that the Panama Canal 
will remain open and secure to ships of all nations. 
The correct interpretation of this principle is that 
each of the two countries shall, in accordance with 
their respective constitutional processes, defend the 
Canal against any threat to the regime of neutrality 
and consequently shall have the right to act against 
any aggression or threat directed against the Canal or 
against the peaceful transit of vessels through the 
Canal. 

This does not mean, nor shall it be interpreted as 
the right of intervention of the United States in the 
internal affairs of Panama. Any United States action 
will be directed at insuring that the Canal will re- 
main open, secure and accessible, and it shall never 
be directed against the territorial integrity or politi- 
cal independence of Panama. 

The Neutrality Treaty provides that the vessels of 
war and auxiliary vessels of the United States and 



November 7, 1977 



Panama will be entitled to transit the Canal expedi- 
tiously. This is intended, and it shall be so interpreted, 
to assure the transit of such vessels through the 
Canal as quickly as possible, without any impedi- 
ment, with expedited treatment, and in the case of 
need or emergency, to go to the head of the line of 
vessels in order to transit the Canal rapidly. 

That is the end of the statement. I will be 
glad to take your questions. 

Q. Will it be a joint statement? 

Ambassador Linowitz: It will be issued 
jointly by the United States and Panama. 

Q. How was this negotiated? 

Ambassador Linowitz: Ambassador Es- 
cobar Bethancourt, the chief Panamanian 
negotiator, and I worked out the terms of the 
arrangement which we then submitted to 
President Carter and General Torrijos. 

Q. Has the Senate been informed or made 
any reaction? 

Ambassador Linowitz: After the instru- 
ment was agreed to by the respective chiefs 
of state, I went to the Hill and met first with 
Senator Robert Byrd, the Majority Leader, 
and then with the members of the Senate 
Foreign Relations Committee who were able 
to attend. They had a chance to study the 
statement and I had an opportunity to dis- 
cuss it with them. 

Q. What was the reaction? 

Ambassador Linowitz: The reaction was 
generally very favorable, I am pleased to 
say. 

Q. Can you tell us more about the negotia- 
tions today? What ivas the mood of the other 
side, the Panamanian*? 

Ambassador Linowitz: Cooperative, shar- 
ing our feeling that these misconceptions had 
arisen which should be laid to rest. They 
were perfectly understanding of the fact that 
there were people in this country, in the 
Senate, and elsewhere who did not appreciate 
the fact that indeed we were agreed on what 
the treaty was supposed to say and therefore 
joined with us in feeling that this kind of 
clarifying statement would be mutually bene- 
ficial. 



631 



Q. General Torrijos, as he left Washington, 
said it was his understanding that the United 
States would be able to intervene only if 
Panama or the canal came under attack by a 
major power. Was that distinction made in 
your negotiations, and is that meant to be in- 
ferred i)t your statement? 

Ambassador Linowitz: No. I am sure he 
didn't use the word "intervene" either. No, 
the fact is that as we have expressed it here, 
it is against any aggression or threat directed 
against the canal and that is precisely what 
we understood in the negotiation. 

Q. What took so long for us to get it after — 

Ambassado)' Linowitz: We were consulting 
on the Hill. Questions were raised about one 
or two things and we thought it best to 
clarify them. As a result, I am sorry to say, 
we didn't get it to you as early as we would 
have liked but we did have a later opportu- 
nity to consult with people in the Senate. 

Q. Was it rewritten this afternoon to some 
extent? 

Ambassador Linowitz: No, sir. 

Q. Is this exactly what you presented this 
morning before the meeting? 

Ambassador Linowitz: Yes, sir. 

Q. Does this mean the Senate will approve 
or ratify this treaty? 

Ambassador Li>iowitz: I hope so but ob- 
viously I can't judge. I was pleased when 
Senator Sparkman [John J. Sparkman of 
Alabama] said earlier that he felt that this 
would be helpful in connection with the ratifi- 
cation process. 

Q. Did Mr. Escobar Betha>icourt say this 
might jeopardize approval of the treaty in the 
plebiscite? 

Ambassador Linowitz: No. They recog- 
nized this is going to be a factor which people 
will take into consideration but there was not 
the suggestion this would jeopardize the 
ratification of the treaty in plebiscite. 

Q. As far as you are concerned, does this 
resolve all the questions that have been raised 
about the treaty? 

Ambassador Linowitz: As far as I was con- 
cerned, there weren't any questions to be re- 



solved before this. But to the extent they 
have now been raised, I would hope they now 
permit us to go ahead with the substance of 
the treaties rather than be involved in 
semantics. Certainly the reactions of the 
members of the Senate Foreign Relations 
Committee were very gratifying. 

Q. Does that include the opponents? 

Ambassador Liyiowitz: Well, we haven't 
talked to — 

Q. I mean on the committee. Did they seem 
to be — 

Anibassador Linowitz: I wouldn't want to 
characterize those who were there. Some of 
those who have been opponents might not 
end up being opponents. I would merely say 
the people who were there, some of whom 
had questions about the treaty, seemed 
to be in general satisfied about these 
questions. 

Q. Senator Byrd said he couldn't support 
the treaties until these points were clarified. 
Did he say he would support the treaties now 
after hearing your statement? 

Ambassador Linowitz: He didn't 
particularly — I didn't ask him specifically for 
that. But Senator Byrd was certainly 
pleased. 

Perhaps it would be useful if I do indicate a 
little more precisely what it is we tried to get 
clarified after our discussions with the Mem- 
bers of the Senate. Questions were raised by 
several members of the Senate Foreign Rela- 
tions Committee about the phrase "territorial 
integrity" which appears in the statement. 
And I was asked and indicated that that 
meant that Panama wanted to be assured 
that its territorial sovereignty and integrity 
would be respected and there would be no ef- 
fort to do anything to take over or to occupy 
territory as such. 

The question was, would that in any man- 
ner interfere with the U.S. right if circum- 
stances should arise making it necessary to 
land troops or forces on Panamanian terri- 
tory. I indicated to the members of the Sen- 
ate Foreign Relations Committee that it 
would not affect such a right and I wanted to 
consult with Panamanian representatives to 
be certain that that interpretation was 



632 



Department of State Bulletin 



shared. I ascertained that it was and there- 
fore there was no need to do anything further 
with reference to the language. 

Q. Who did you consult on that point? 

Ambassador Linowitz: With the Panama- 
nian Ambassador. 

Q. What other reactions were there from 
the Senators? What did Senator Baker [Ho- 
ward H. Baker of Tennessee] say about it? 

Ambassador Linowitz: I think he will 
probably make his own statement. But I 
think it is fair to say he regarded this as a 
significant step forward. 

Q. Did the members of the Foreign Rela- 
tions Committee or the chairman say that 
they might be able to vote more quickly on it 
because of this? 

Ambassador Linowitz: That didn't pre- 
cisely arise but, as I say, the statement that 
Senator Sparkman made was certainly 
upbeat. 

Q. Sparkman has never been against it, 
though, has he? 

Ambassador Linowitz: No, not so far as I 
know, and I would hope not. 

Q. Well, but aren't you really trying to as- 
suage or calm the fears of the real Goldwa- 
ters and — 

Ambassador Linowitz: I think he was try- 
ing to state what he perceived to be the feel- 
ing of the committee as a whole, those who 
were present. 

Q. Do you expect that as a result of this 
agreement there will be no more objections 
raised about possible varied interpretation* 
of the treaty? 

Ambassador Linowitz: God and the Senate 
willing. [Laughter] 

Q. Do you think this statement should be 
approved by any formal action of the Senate? 

Ambassador Linowitz: I think it is clear 
enough that what we have said about the 
treaty is indeed the fact. When we said the 
language was intended to cover certain situa- 
tions in a particular matter, that is precisely 
what we have here said in the statement of 
understanding and we are hoping it will lay to 

November 7, 1977 



rest the questions that have been raised so we 
can go forward in the approval of the treaties 
and I don't think personally that any further 
action ought to be required. 

Q. Did this become an appendage to the 
treaty or any kind of legal document in the 
treaty sense? 

Ambassador Linowitz: We are just thinking 
for the moment that it is a statement which 
says this is what we have both understood 
the treaties to mean on these two points. 

Q. What would it state in the future when 
you deal with Presidents and so on. Would it 
have any standing? 

Ambassador Linowitz: Part of the legisla- 
tive history, part of the interpretation, 
clearly a part of the record so there can be no 
mistaking what both parties intended by the 
language that was used. 

Q. What do you plan to do now or whai 
does President Carter plan to do? Will you 
continue to meet with groups and explain the 

treaty? 

Ambassador Linowitz: My status — as you 
know, I am now a private citizen trying to be 
helpful as a former co-negotiator. I will help 
in every way I can in the future. I would ex- 
pect that President Carter, members of the 
Administration, Ambassador Bunker, and all 
the others involved will make every effort 
they can to assure, first, that there is an under- 
standing of the treaty and, secondly, that 
people who understand what the treaties are all 
about would want to express their support for it. 

Q. Is there somewhere a copy of this docu- 
ment with your signature and that of Mr. 
Bethancourt? 

Ambassador Linowitz: No, sir. Actually, 
this was not our understanding. It is the un- 
derstanding between President Carter and 
General Torrijos. 

Q. Did they sign it? 

Ambassador Linowitz: No, sir. 

Q. Did the Panamanians sign anywhere on 
a dotted line? 

Ambassador Linowitz: No. 

Q. In other words, nobody signed this 
statement? 

633 



Ambassador Linowitz: The statement was 
not signed but the exact same statement will 
be made in both countries. 

Q. They sa -id before that the concept "head 
of the line" violates the spirit of the neu- 
trality treaty. Did they change their position 
on that, the Panamanians? 

Ambassador Linowitz: I will leave that for 
you to surmise. It is quite right, we do think 
that we have achieved what we have believed 
to be implicit and which has now become 
explicit. 

Q. Will this hurt the chances for the plebis- 
cite being approved? 

Ambassador Linowitz: It is hard to conjec- 
ture but, as I said earlier, there was no indi- 
cation that they believed that the treaties 
would not be approved by plebiscite, but I 



guess no one yet can judge what the impact 
of this might be. 

Q. One clarifying question, Mr. Ambas- 
sador. Did I understand you to say no 
changes of the language in this statement oc- 
curred as a result of your consultations on 
the Hill? 

Ambassador Linowitz: Yes, sir. 



Correction 

The editor of the Bulletin wishes to clarify an 
item which appeared in the Oct. 17 edition. On 
page 487 the "Message From the Mexican Ob- 
server" should have been printed as a footnote to 
the Declaration of Washington (p. 502). Foreign 
Secretary Roel wrote the message on the Decla- 
ration when he initialed the latter for Mexico. 



President Carter Holds Meetings With Middle East Officials 



President Carter held meetings with Is- 
raeli, Egyptian, Syrian, a>id Jordanian of- 
ficials on September 19, 21, and 28 in Wash- 
ington. Following are statements issued by 
the White House following those meetings. 



Weekly Compilation of Presidential Documents dated September 26 

ISRAEL, SEPTEMBER 19 

President Carter and Israeli Foreign 
Minister Moshe Dayan met in the Cabinet 
Room for 1 hour, 35 minutes. The meeting 
was also attended by Vice President Walter 
Mondale; Secretary of State Cyrus Vance; 
Zbigniew Brzezinski, Assistant to the Presi- 
dent for National Security Affairs; Hamilton 
Jordan, Assistant to the President; Robert J. 
Lipshutz, Counsel to the President; David 
Aaron, Deputy Assistant for National Secu- 
rity Affairs; Alfred L. Atherton, Jr., Assist- 
ant Secretary of State for Near Eastern and 
South Asian Affairs; Samuel Lewis, U.S. 
Ambassador to Israel; and William Quandt, 
National Security Council staff member, on 



the American side; and His Excellency 
Simcha Dinitz, Ambassador of Israel to the 
United States; The Honorable Ephraim Ev- 
ron, Director General, Ministry of Foreign 
Affairs; The Honorable Hanan Baron, Minis- 
ter, Embassy of Israel; Mr. Meir Rosenne, 
Legal Advisor to the Foreign Minister; Mr. 
Naphtali Lavie, Foreign Ministry Spokesman 
and Advisor to the Foreign Minister; and Mr. 
Elyakim Rubinstein, Director, Foreign 
Minister's Bureau, and Advisor to the 
Foreign Minister, on the Israeli side. 

The President began by expressing per- 
sonal pleasure at his first opportunity to wel- 
come Foreign Minister Dayan to the White 
House. He noted that his talks today inaugu- 
rate a series of detailed and concrete discus- 
sions with foreign ministers from the Middle 
East in the intensive search for a comprehen- 
sive peace settlement. The President re- 
peated his determination to help the parties 
reach that settlement. He underlined his 
conviction that a just and lasting peace 
in this vital area of the world requires 
compromise and courageous leadership 



634 



Department of State Bulletin 



from all the parties to the negotiations. 

The President and Foreign Minister em- 
phasized the importance of instituting negoti- 
ations between the parties through resuming 
the Geneva conference. The President and 
the Foreign Minister reviewed the substan- 
tive issues of a settlement and discussed 
questions related to organizing the confer- 
ence. There was an exchange of views on the 
question of the Palestinian representation 
and the question of Israeli settlements. The 
Foreign Minister elaborated on the draft 
treaty of peace the Government of Israel had 
submitted to us for a comprehensive settle- 
ment. As a follow-on to this meeting, Secre- 
tary Vance will discuss the Israeli plan in 
depth with the Foreign Minister and will also 
discuss with him some specific American 
suggestions for reconciling the differences 
between the parties. 

The talk between the President and the 
Foreign Minister will be useful in proceeding 
with the discussions the President, and later 
the Secretary of State, are having with the 
other foreign ministers. 

Their talk was conducted in the open and 
friendly spirit of relations between our two 
countries which permits differences to be dis- 
cussed candidly and in the knowledge that 
both the United States and Israel have a 
heavy stake in achieving their shared goal of 
peace in the Middle East. In this connection, 
the President reaffirmed the commitment of 
the United States to the security of Israel. 



EGYPT, SEPTEMBER 21 

President Carter and Egyptian Foreign 
Minister Ismail Fahmy met in the Cabinet 
Room for 1 hour, 5 minutes. The meeting was 
also attended by Vice President Walter Mon- 
dale; Secretary of State Cyrus Vance; Zbig- 
niew Brzezinski, Assistant to the President 
for National Security Affairs; Hamilton Jor- 
dan, Assistant to the President; Robert Lip- 
shutz, Counsel to the President; David 
Aaron, Deputy Assistant to the President for 
National Security Affairs; Alfred L. Ather- 
ton, Jr., Assistant Secretary of State for 
Near Eastern and South Asian Affairs; Her- 
man Eilts, U.S. Ambassador to Egypt; and 



William Quandt, National Security Council 
staff member, on the American side; and Ash- 
raf Ghorbal, Egyptian Ambassador to the 
United States; Minister of Foreign Affairs, 
Under Secretary Osama al-Baz; First Secre- 
tary Dr. Mohammed Baradai, Executive Sec- 
retary of Foreign Minister's Cabinet; and 
Minister Counselor Mohammed Shaker, 
Egyptian Embassy, on the Egyptian side. 

The President began by expressing his pleas- 
ure at welcoming Foreign Minister Fahmy 
to the White House in this latest round of his 
meetings with Middle Eastern foreign minis- 
ters. The President was gratified to receive a 
personal letter from President Sadat con- 
veyed by the Foreign Minister. He repeated 
to the Foreign Minister his support for the 
key role Egypt continues to play in efforts to 
reach a negotiated peace settlement of the 
Middle East conflict. The President under- 
lined his own conviction that a just and last- 
ing peace in this vital area of the world re- 
quires compromise anc> courageous leadership 
from all the parties to the negotiations. 

The President and Foreign Minister agreed 
on the importance of reconvening the Geneva 
conference by the end of this year, thus be- 
ginning the process of negotiations between 
the parties. To that end, they discussed the 
substantive issues of a settlement. Secretary 
Vance will pursue the discussion of these is- 
sues with the Foreign Minister, both to hear 
Egypt's concrete ideas on these issues and to 
explain some specific American suggestions 
on the elements of a peace treaty designed to 
help reconcile the differences between the 
parties. The President and the Foreign 
Minister also addressed the problem of Pales- 
tinian representation at Geneva, with a view 
to finding a solution during the course of 
these current talks the President and Secre- 
tary Vance are holding with Middle East 
foreign ministers. 

The President reaffirmed the importance 
he attaches to U.S. relations with Egypt and 
continued American support for Egyptian 
economic development efforts. Finally, the 
President asked the Foreign Minister to con- 
vey to President Sadat assurances that the 
United States remains committed to the 
search for a comprehensive peace settlement 
in the Middle East. 



November 7, 1977 



635 






Weekly t lompilation of Presidential Documents dated October 3 

SYRIA, SEPTEMBER 28 

The President and Syrian Deputy Prime 
Minister and Foreign Minister Abd al Halim 
Khaddam met in the Cabinet Room for 1 hour 
and 5 minutes. The meeting was also at- 
tended by Vice President Mondale; Secretary 
of State Cyrus Vance; Hamilton Jordan, As- 
sistant to the President; David Aaron, Dep- 
uty Assistant to the President for National 
Security Affairs; Alfred L. Atherton, Jr., 
Assistant Secretary of State for Near East- 
ern and South Asian Affairs; Richard Mur- 
phy, U.S. Ambassador to Syria; and William 
Quandt, National Security Council staff 
member, on the American side; and His Ex- 
cellency Dr. Sabah Kabbani, Ambassador of 
the Syrian Arab Republic to the United 
States; and Mr. Abd al-Salam Aqil, private 
secretary to the Deputy Prime Minister, on 
the Syrian side. 

The President began by expressing his pleas- 
ure at this opportunity to meet again with 
Minister Khaddam, recalling their friendly 
talks at the White House last April and at 
the time of President Carter's meeting with 
President Asad in Geneva in May. The Presi- 
dent underlined the importance he attributes 
to Syrian participation in the peace efforts 
underway in the Middle East and reaffirmed 
his determination to continue those efforts to 
reach a comprehensive settlement of the 
Arab-Israeli conflict. In this connection, the 
President repeated his own conviction that a 
just and lasting peace in this vital area of the 
world requires compromise and courageous 
leadership from all the parties to the negotia- 
tions. 

The President and the Minister agreed on 
the importance of working to reconvene the 
Geneva conference by the end of this year. 
They discussed the substantive issues of a 
settlement and, while noting that differences 
exist between our respective views on some 
points, they agreed that these efforts at find- 
ing concrete solutions to the core issues of 
the conflict should continue. Secretary Vance 
will pursue the discussion with the Minister, 
listening to his ideas and explaining in detail 
American suggestions for reconciling differ- 
ences between the parties on the key ele- 



ments of a settlement. The President and the 
Minister also discussed the problem of Pales- 
tinian representation at Geneva, agreeing 
that this question must be resolved if the 
Geneva conference is to be reconvened. 

The President concluded by expressing his 
gratification with the steady improvement in 
relations between Syria and the United 
States. He emphasized that these good rela- 
tions aid the cause of reaching a just and last- 
ing peace in the Middle East. The President 
asked the Minister to assure President Asad 
that he intends to carry on American efforts 
to that end. 

The President and Jordanian representa- 
tives agreed on the importance of finding a 
formula to begin negotiations through recon- 
vening the Geneva conference by the end of 
the year. They discussed procedural issues 
involved in resuming the conference and the 
substantive issues to be resolved in an over- 
all settlement. The Jordanian representatives 
presented Jordan's ideas for a just settle- 
ment. The President responded that the Jor- 
danian ideas will be useful in the continuing 
talks with Middle East foreign ministers. 
Secretary Vance, who had begun talks with 
the Jordanians here at an earlier meeting, 
will be pursuing the discussion both of then- 
ideas and American suggestions for reconcil- 
ing differences between the parties. The 
meeting today devoted some time to the spe- 
cific problem of how the Palestinians should 
be represented at the Geneva conference. 
The President and Jordanian representatives 
agreed that this current round of talks should 
seek a solution to this question, so as to 
achieve the common goal of reconvening 
Geneva as soon as possible. 

The President concluded by asking the 
Jordanian representatives to convey to King 
Hussein his assurances that he remains com- 
mitted to doing all possible in continuing ef- 
forts toward a comprehensive settlement in 
the Middle East. 



JORDAN, SEPTEMBER 28 

The President and Chief of the Royal 
Court Sharif Abdul Hamid Sharaf and Jorda- 
nian Minister of State for Foreign Affairs 



636 



Department of State Bulletin 



Hassan Ibrahim met in the Cabinet Room for 
1 hour and 20 minutes. The meeting was also 
attended by Vice President Mondale; Secre- 
tary of State Cyrus Vance; David Aaron, 
Deputy Assistant to the President for Na- 
tional Security Affairs; Alfred L. Atherton, 
Jr., Assistant Secretary of State for Near 
Eastern and South Asian Affairs; Thomas 
Pickering, U.S. Ambassador to Jordan; and 
William Quandt, National Security Council 
staff member, on the American side; and by 
Jordanian Ambassador to the United States 
Abdullah Salah. 

The President welcomed the two Jordanian 
representatives to the White House by reaf- 
firming the longstanding friendship and sup- 
port of the Government and people of the 
United States for His Majesty King Hussein 
and the people of the Hashemite Kingdom of 
Jordan. The President noted that these 
strong ties are a firm basis for our mutual 
search for a just and lasting peace in the 
Middle East. As he had in his earlier meet- 
ings here with foreign ministers from the 
area, the President underlined his own con- 
viction that peace requires compromise and 
courageous leadership from all the parties to 
the negotiations. 



Secretary Vance Reaffirms 
Factors for Mideast Conference 

Following is an exchange of remarks by 
Secretary Vance and Mahmoud Riad, Secre- 
te r// General of the Arab League, at a 
luncheon hosted by Secretary Vance at the 
U.S. Mission to the United Nations on Oc- 
tober 6, with introductory comments by U.S. 
Ambassador to the U.N. Andrew Young. 

Press release 455 dated October 7 

AMBASSADOR YOUNG 

Let me welcome you to the U.N. Mission 
to the United Nations and thank you for join- 
ing in this lunch with us. We've had a series 
of very good lunches in the last few days as a 
result of the President of the United States 
and the Secretary of State being with us. 



And I think they've all gone very well be- 
cause, as I said, it's been a long time since 
the United States had an Ambassador who 
had policies good enough to work with that 
made it possible for him to be popular at the 
United Nations. [Laughter.] 

I think the man who in good measure is re- 
sponsible for those policies is a man who was 
committed to the United Nations long before 
he became Secretary of State and who, as a 
practicing attorney in New York, was an ac- 
tive participant in U.N. affairs in the Eco- 
nomic Policy Group of the United Nations 
Association and who has actively concerned 
himself, both as private citizen as well as 
public servant, with peacemaking around the 
world. 

And so we're very glad that we've been 
able to have our Secretary of State here with 
us for the past 2 weeks — and especially glad 
that he can be with us for this meeting. So 
I'd like to welcome Secretary of State Cyrus 
Vance to be with us at this time. [Applause.] 



SECRETARY VANCE 

Let me say what a pleasure it is for me to 
be here today at the United Nations and 
what a great pleasure it is for me and for the 
President to have an Ambassador to the 
United Nations such as Andy. 

I also want to echo Andy's welcome to all 
of our Arab colleagues and friends who are 
with us today. It's a great pleasure to wel- 
come you here at the U.S. Mission. And I ex- 
tend the President's best wishes and welcome 
to you. He only wished that he could have 
been here himself. 

This lunch has become an annual event, 
and I think a very useful annual event, to 
which all of us look forward. It's become an 
occasion for us to take stock of the past year 
and to take a very brief look at the year ahead. 

Many uncertainties and many difficulties lie 
ahead of us as we look into the coming year. 
But when we look back at last autumn, I 
think that we can rightly feel that the situa- 
tion and the outlook in the Middle East have 
improved. 

A year ago, the conflict — the civil con- 
flict — was raging in Lebanon, and Middle 



November 7, 1977 



637 






East negotiations appeared a distant pros- 
pect. The statesmanship of the key Arab 
leaders at the Riyadh and Cairo conferences 
and the leadership of President Sarkis sub- 
sequently ended the conflict in Lebanon and 
made it possible for the Arab states to devote 
their attention and their energies in the 
search for peace. 

Let me say that the new Administration 
has placed the highest priority on joining 
with others in the search for a just and last- 
ing peace in the Middle East, and we shall 
continue to devote our efforts to that end. 

We don't underestimate the depth of the 
roots of this conflict. Nevertheless, I think in 
the past 9 months steps have been taken 
which have helped to clear the air on some of 
the fundamental disputes that lie in these 
roots of the conflict. And today I can say that 
all of the parties are seeking ways to find so- 
lutions to these problems. 

I'd like to mention just briefly three 
factors — and the fact that I mention only 
three should not be taken as any change in 
U.S. policy. [Laughter.] But there are three 
that I want to mention very briefly. 

The first is that if we're to succeed in con- 
vening a Geneva conference, all the parties 
will have to subordinate their particular 
interests and concerns to a degree to this 
overriding goal. This means that there must 
be decisions as to what is most important and 
what is less important. And we must concen- 
trate on those things which are essential and 
most important. 

Second, it's important for all of us not to 
lose sight of the fact that the agreed basis 
for the Geneva conference is Resolution 242 
and Resolution 338. 

And thirdly, the Palestinians must be rep- 
resented at the conference if we are to 
achieve a just and lasting peace. 

I'm looking forward to continuing the in- 
tensive consultations which have been going 
on here in New York with the various foreign 
ministers, and we will be keeping in close 
touch in the weeks ahead. 

Looking into the year ahead, I would not 
be so rash as to say that it will see the con- 
clusion of peace treaties. But I am optimistic 



enough to say that in my judgment it will see 
progress toward that goal. 

Now, I have focused these remarks on the 
subject of the Middle East conflict and its 
resolution, but this does not mean that we 
have not a tremendous interest in all of the 
concerns of the Arab world. I want to say a 
word about how much the United States val- 
ues its relations to each of your countries 
who are here, and we wish in every way to 
work with you to improve our bilateral rela- 
tionships and to develop an ever-closer un- 
derstanding and cooperation with you. 

We take seriously the problems and con- 
cerns of the entire Arab world, and I person- 
ally look forward to working with your gov- 
ernments and with your foreign ministers to 
achieve these ends. 

Thank you again very much for coming and 
for being with us here today. We appreciate 
it very much. [Applause.] 



SECRETARY GENERAL RIAD 

Mr. Secretary of State, it gives me pleas- 
ure to extend to you, on behalf of the Arab 
foreign ministers and for myself, our thanks 
for your kind invitation. It adds yet another 
opportunity for a meeting to exchange views 
and discuss the common issues that not only 
interest all of us but are closely related to 
the cause of peace and security in the world. 

At the very moment we address our talks 
to peace, we get immediately attracted to the 
Middle East. This area, for the last 30 years, 
has witnessed several wars and destruction. 
Above all, it is still living the tragedy of the 
Palestinian people who have been expelled 
from their own land — this land which stands 
now under the Israeli occupation. It is a fact 
that the cause of peace and security in the 
Middle East has become demanding enough 
to bear any more delay. With the situation of 
no peace-no war dragging on in the Middle 
East, the region is only being prepared dur- 
ing this armed truce to face another explo- 
sion whose threat will not be only limited to 
the area. 

Since 1947, in dealing with the situation in 



638 



Department of State Bulletin 



the Middle East, the United Nations has set 
up the foundations on which peace can be 
built in this area. 

On one hand stands the issues of restora- 
tion of the national inalienable rights of the 
Palestinian people, including its right to re- 
turn compensation, self-determination, and 
establishing its own independent state in 
Palestine. 

On the other hand stands the withdrawal 
by Israel from all Arab territories occupied 
since June 5th, 1967. 

The United States surely is aware of the 
dimensions of the Middle East problem and 
will understand the need to uproot the rea- 
sons behind the situation to establish a just 
and solid peace in the area. 

When President Carter said in his speech 
to the General Assembly on October 4th, 
1977, "Negotiations cannot be successful if 
any of the parties harbor the deceitful view 
that peace is simply an interlude in which to 
prepare for war," he really took the crux of 
the present situation in the Middle East. His 
words precisely describe what happened in 
this area since the arms agreements of 1949. 

That's why we hope that we shall have a 
clear basis for a just and peaceful settlement. 
We believe that this peace can never be at- 
tained while the Arab lands occupied since 
1967 will remain, even in a fraction of it, 
under Israeli occupation. No peace could be 
attained as long as the Palestinian people will 
continue to live in exile without the full re- 
storation of its national rights. 

Mr. Secretary, I wish to express our ap- 
preciation for the sincere efforts President 
Carter and your good self maintain to achieve 
peace and make human rights a reality in the 
Middle East. 

We are also confident that the good faith 
and the prominent role, coupled with the spe- 
cial responsibility of the United States as a 
superpower, will always stand as a great 
motivation to guide your efforts on the right 
path in order to achieve peace, security, and 
human rights for all the peoples of the area. 
No doubt this contribution will enhance our 
work for a better future for all our peoples 
and the peoples of the world. 



U.S., U.S.S.R. Issue Statement 
on the Middle East 

Joint U.S. -Soviet Statement ' 

Having exchanged views regarding the 
unsafe situation which remains in the Middle 
East, U.S. Secretary of State Cyrus Vance 
and Member of the Politbureau of the Cen- 
tral Committee of the CPSU, Minister for 
Foreign Affairs of the U.S.S.R. A. A. 
Gromyko have the following statement to 
make on behalf of their countries, which are 
cochairmen of the Geneva Peace Conference 
on the Middle East: 

1. Both governments are convinced that 
vital interests of the peoples of this area, as 
well as the interests of strengthening peace 
and international security in general, ur- 
gently dictate the necessity of achieving, as 
soon as possible, a just and lasting settle- 
ment of the Arab-Israeli conflict. This set- 
tlement should be comprehensive, incor- 
porating all parties concerned and all questions. 

The United States and the Soviet Union 
believe that, within the framework of a 
comprehensive settlement of the Middle 
East problem, all specific questions of the 
settlement should be resolved, including 
such key issues as withdrawal of Israeli 
Armed Forces from territories occupied in 
the 1967 conflict; the resolution of the Pales- 
tinian question, including insuring the 
legitimate rights of the Palestinian people; 
termination of the state of war and estab- 
lishment of normal peaceful relations on the 
basis of mutual recognition of the principles 
of sovereignty, territorial integrity, and 
political independence. 

The two governments believe that, in ad- 
dition to such measures for insuring the se- 
curity of the borders between Israel and the 
neighboring Arab states as the establish- 
ment of demilitarized zones and the agreed 
stationing in them of U.N. troops or obser- 
vers, international guarantees of such bor- 
ders as well as of the observance of the 
terms of the settlement can also be estab- 



1 Issued on Oct. 1, 1977, in New York. 



November 7, 1977 



639 






lished should the contracting parties so de- 
sire. The United States and the Soviet 
Union are ready to participate in these 
guarantees, subject to their constitutional 
processes. 

2. The United States and the Soviet Union 
believe that the only right and effective way 
for achieving a fundamental solution to all 
aspects of the Middle East problem in its en- 
tirety is negotiations within the framework 
of the Geneva peace conference, specially 
convened for these purposes, with participa- 
tion in its work of the representatives of all 
the parties involved in the conflict including 
those of the Palestinian people, and legal 
and contractual formalization of the deci- 
sions reached at the conference. 

In their capacity as cochairmen of the 
Geneva conference, the United States and 
the U.S.S.R. affirm their intention, through 
joint efforts and in their contacts with the 
parties concerned, to facilitate in every way 
the resumption of the work of the conference 
not later than December 1977. The cochair- 
men note that there still exist several ques- 
tions of a procedural and organizational na- 
ture which remain to be agreed upon by the 
participants to the conference. 

3. Guided by the goal of achieving a just 
political settlement in the Middle East and 
of eliminating the explosive situation in this 
area of the world, the United States and the 
U.S.S.R. appeal to all the parties in the con- 
flict to understand the necessity for careful 
consideration of each other's legitimate 
rights and interests and to demonstrate 
mutual readiness to act accordingly. 



Middle East Peace Conference 

Joint U.S. -Israel Statement 1 

The United States and Israel agree that 
Security Council Resolutions 242 and 338 
remain the agreed basis for the resumption 



of the Geneva peace conference and that all 
the understandings and agreements between 
them on this subject remain in force. 

Proposals for removing remaining obsta- 
cles to reconvening the Geneva conference 
were developed. Foreign Minister Dayan 
will consult his government on the results of 
these discussions. Secretary Vance will dis- 
cuss these proposals with the other parties 
to the Geneva conference. 

Acceptance of the Joint U.S. -U.S.S.R. 
Statement of October 1, 1977, by the parties 
is not a prerequisite for the reconvening and 
conduct of the Geneva conference. 



Secretary Vance's Activities 
at the United Nations 

Department Statement 1 

During the past 2 weeks [September 26- 
October 8] of intensive diplomacy in New 
York, Secretary of State Vance has had a 
unique opportunity to deal in a short period 
of time with representatives from all over 
the world. The setting, at the opening of the 
U.N. General Assembly, was particularly 
suited for concentrating on the major issues 
of U.S. foreign policy. There has been no 
important bilateral or multilateral issue 
which has not been discussed in some fash- 
ion. Our attention has been devoted to such 
regional issues as the Middle East, Africa, 
and Cyprus, as well as to broader questions 
such as the Strategic Arms Limitation Talks 
(SALT), North-South economic relations, 
arms control, nuclear nonproliferation, and 
human rights. In addition Mr. Vance met 
many foreign leaders for the first time and 
strengthened his relationship with others 
with whom he has dealt in the past. Through 
these meetings attention was focused on de- 
cisions and endeavors which the United 
States and other nations face around the 
world. 

President Carter's presence in the city for 



'Issued on Oct. 5, 1977, in New York following a 
meeting between President Carter and Foreign Minis- 
ter Dayan (text from Weekly Compilation of Presiden- 
tial Documents dated Oct. 10). 



'Released to the press on Oct. 8, 1977, by acting 
Department spokesman John H. Trattner. 



640 



Department of State Bulletin 



2 days, of course, brought a particular- 
dynamic to U.S. diplomatic activity. It pro- 
vided an unparalleled opportunity for the 
United States to demonstrate our faith in 
the United Nations and to expound our 
views on the many issues that confront us. 



PRESIDENT CARTER'S MEETINGS 
AT THE UNITED NATIONS 

During President Carter's visit to the United 
Nations, October 4-5, he held working lunches 
and dinners for officials from Africa, Western and 
Eastern Europe, and Asia. For the texts of his 
remarks on those occasions, as well as those made 
to members of the U.S. delegation and U.S. offi- 
cials of the U.N. Secretariat, see Weekly Compi- 
lation of Presidential Documents dated October 
10, 1977. 



The Secretary spent a substantial amount 
of time on the Middle East problem, as did 
the President during his stay. Through in- 
tensive negotiations with all the parties we 
have pursued our task of narrowing differ- 
ences and seeking consensus and under- 
standing. Our efforts in this regard will con- 
tinue. We believe we are closer today than 
we were 2 weeks ago to bringing the parties 
to the conference table. In our joint state- 
ment with the Soviet Union, resulting from 
Mr. Vance's meetings with the Soviet 
Cochairman of the Geneva conference, we 
set forth common views concerning peace in 
the Middle East. This, in addition to our 
discussions with the parties concerned, helps 
to sustain the momentum to bring us to 
Geneva. 

The Secretary's meetings here and in 
Washington with the Soviet Foreign Minis- 
ter brought us closer to our common objec- 
tive of a new SALT agreement. Our repre- 
sentatives are at work in Geneva as a result 
of the understandings we reached, and we 
believe we can say that a new SALT agree- 
ment is within sight. 

The Secretary devoted substantial effort 
to other regional problems as well. 

While much time was devoted to fur- 
therance of our efforts to secure independ- 
ence and majority rule for Zimbabwe and 



Namibia, equally serious attention was di- 
rected to our bilateral relations with indi- 
vidual governments throughout Africa. 

The British proposal on Zimbabwe was 
endorsed by the African states and approved 
by the Security Council. It names a U.N. 
representative who, together with the 
British Resident Commissioner-designate, 
will negotiate military arrangements for the 
proposed transition to majority rule in Zim- 
babwe. Our consultations with the frontline 
states included a review of further progress 
realized by the Western contact group in its 
most recent discussions with the South Afri- 
can Government on Namibia. Mr. Vance 
came away from these meetings with a sense 
that the momentum of our policies in south- 
ern Africa is being maintained and that in- 
dependence and majority rule for Zimbabwe 
and Namibia are within our reach. 

Regarding the conflict in the Ogaden re- 
gion of Ethiopia, he emphasized to the Afri- 
can leaders the solid support of the United 
States for their efforts through the Organi- 
zation of African Unity to end this tragic 
episode. 

The Secretary was gratified by the re- 
peated assurances he received that African 
governments are coming to understand the 
Carter Administration's concern and respect 
for the various paths which they have cho- 
sen in the pursuit of their national goals. 

In his conversations with Latin American 
and Caribbean Ministers, the Secretary fur- 
ther developed some of the themes Presi- 
dent Carter discussed last month with their 
Presidents and Prime Ministers. These par- 
ticularly included our efforts to reduce re- 
gional tensions, to make more effective our 
future discussion of North-South economic 
issues, and to deepen our consultations 
within the hemisphere. 

In meetings with foreign ministers and 
heads of governments from Asia and the 
Pacific, Mr. Vance outlined our evolving pol- 
icy in that region. He found a growing ap- 
preciation among these leaders that we will 
sustain our interest in this vast and impor- 
tant area. There was general acceptance of 
our Korea policy. We explained our com- 
mitment to seek normalization of relations 



November 7, 1977 



641 



with the People's Republic of China within 
the framework of the Shanghai communique. 
The Secretary found a new sense of purpose 
and regional cooperation, which he strongly 
supported, among leaders of the Association 
of South East Asian Nations. 

To sum up there is no question that these 
2 weeks, by the very intensity and concen- 
tration of the diplomatic activity with such a 
broad range of foreign governments, have 
brought returns to American policy and to 
our own understanding of issues throughout 
the world that could not have been dupli- 
cated in any other way. 



U.S. Intent With Regard 

to SALT I Interim Agreement 

Following is a statement by Paul C. 
Warnke, Director of the Arms Control and 
Disarmament Agency and Chairman of the 
U.S. delegation to tin- Strategic Arms Lim- 
itation Talks (SALT), made before the Sen- 
ate Foreigyi Relations Committee on Sep- 
tember 26. ' 

I appreciate the opportunity to appear be- 
fore the committee today to discuss the ex- 
piration of the SALT I Interim Agreement 
on Certain Measures With Respect to the 
Limitation of Strategic Offensive Arms. The 
1972 Interim Agreement expires on October 
3, and it is clear that a SALT II agreement 
to replace it cannot be concluded by that 
date. 

In recent days, there has been much dis- 
cussion in the press about the Administra- 
tion's plans with respect to this matter. On 
September 23, Secretary Vance issued a 
statement to the effect that, in order to 
maintain a stable situation while the SALT 
II negotiations are being completed, the 



United States intends not to take any action 
inconsistent with the Interim Agreement or 
the goals of the ongoing negotiations, pro- 
vided that the Soviet Union exercises simi- 
lar restraint. The Soviets have now issued a 
policy statement along the lines of our state- 
ment. 



STATEMENT BY SECRETARY VANCE, 
SEPTEMBER 23 

In order to maintain the status quo while 
SALT II negotiations are being completed, the 
United States declares its intention not to take 
any action inconsistent with the provisions of the 
Interim Agreement on Certain Measures With 
Respect to the Limitation of Strategic Offensive 
Arms which expires October 3, 1977, and with 
the goals of these ongoing negotiations provided 
that the Soviet Union exercises similar 
restraint. 



1 The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 



It should be noted that U.S. defense plans 
would not cause us to exceed any of the 
Interim Agreement limits in the near future, 
while the Soviets are in a position to do so 
because of their active ongoing SLBM 
[submarine-launched ballistic missiles] con- 
struction program. 

We carefully considered what action 
should be taken in view of the fact that the 
October 3 date would pass before the com- 
pletion of negotiations on a new agreement. 
In our deliberations, we concluded, after 
consultation with a number of Members of 
both the Senate and House, that an exten- 
sion of the Interim Agreement would be in- 
appropriate for two reasons: 

— First, it would have reduced the pres- 
sure on the Soviets and on us to pursue a 
SALT II agreement based on equal aggre- 
gates of strategic offensive arms and 

— Second, it would formally reaffirm ac- 
ceptance of the disparity in numbers of 
strategic weapons established in the Interim 
Agreement. 

Our policy statement is exactly what it 
says — a declaration of present intent. It is 



642 



Department of State Bulletin 



nonbinding and nonobligatory. The Interim 
Agreement will expire on October 3 and will 
not be extended; no agreement limiting 
strategic offensive arms will be in force 
after next Monday. The United States will 
be free to change the policy announced in its 
statement of September 23 at any time. 

Because our nonbinding statement is not 
part of an international agreement and does 
not impose any obligation on the United 
States, we have not requested congressional 
approval for it. We will carefully and con- 
tinually monitor Soviet activities. 

If these activities or any other circum- 
stances warrant, we will be free to take 
whatever actions are appropriate, irrespec- 
tive of the provisions set forth in the 
Interim Agreement. 

We will, of course, continue to consult 
closely with members of this committee and 
other Members of Congress on the progress 
of SALT. We hope you will support our ef- 
forts in this regard. 



Soviet Foreign Minister Gromyko 
Visits Washington 

Press release 432 dated September 24 

COMMUNIQUE 

On September 22 and 23, 1977, talks were 
held in Washington between Jimmy Carter, 
President of the United States of America, 
and Cyrus Vance, Secretary of State of the 
United States of America, and Andrei A. 
Gromyko, Member of the Politburo of the 
Central Committee of the Communist Party 
of the Soviet Union and Minister of Foreign 
Affairs of the USSR. 

A useful exchange of views took place on 
key questions of US-Soviet relations and on 
several international issues of interest to 
both sides. 

Both sides expressed their desire for a 
constructive and stable development of rela- 
tions between the United States and the 



Soviet Union, building on existing treaties 
and agreements. To this end, both sides con- 
sider it necessary to intensify their efforts 
to find mutually acceptable solutions to 
existing problems. Both sides agreed that 
such efforts, which can assure progress in 
various spheres of US-Soviet relations, 
serve the interests of their peoples as well 
as contributing to the strengthening of 
peace and the lessening of international ten- 
sions. 

Both sides attach particular importance to 
the development and implementation of fur- 
ther measures aimed at the effective pre- 
vention of nuclear war and the limitation of 
armaments, thereby contributing to prog- 
ress toward real disarmament. 

In their discussions, the two sides focused 
on issues relating to the limitation of 
strategic arms, particularly those pertaining 
to the preparation of a new agreement on 
the limitation of strategic offensive arms. 
Progress was achieved in bringing closer to- 
gether the positions of the two sides. How- 
ever, there are still issues requiring agree- 
ment. They have issued additional state- 
ments on this subject. 

Other specific arms limitations issues 
which are the subject of negotiations be- 
tween the US and the USSR were also dis- 
cussed: negotiations for a comprehensive ban 
on nuclear testing; the non-proliferation of 
nuclear weapons; the prohibition of chemical 
weapons; the prohibition of radiological and 
other new types and systems of mass de- 
struction weapons; and questions relating to 
the Indian Ocean. The two sides noted the 
utility of the negotiations on these issues 
that have so far taken place and expressed 
their intention of continuing their active ef- 
forts to achieve practical results. 

Both sides emphasized the great impor- 
tance they attach to achieving real progress 
in the negotiations on the mutual reduction 
of forces and armaments in Central Kurope 
in accordance with the agreed principle of 
undiminished security for all parties. They 
expressed their intention to continue efforts 
to achieve agreement. 



November 7, 1977 



643 



The two sides also expressed their inten- 
tion to work for a successful and construc- 
tive Belgrade meeting of representatives of 
states parties to the Conference on Security 
and Cooperation in Europe. 

Pursuant to their previous discussions, the 
two sides reviewed the situation in the Mid- 
dle East. The US and the USSR affirmed 
that they will continue their determined ef- 
forts to convene the Geneva Conference by 
the end of this year at the latest. 



JOINT STATEMENT 

In discussions between Secretary Vance 
and Minister Gromyko on the questions re- 
lated to strategic arms, both sides — the 
Soviet Union and the United States of 
America — have reaffirmed their determina- 
tion to conclude a new agreement limiting 
strategic offensive arms and have declared 
their intention to continue active negotia- 
tions with a view to completing within the 
near future the work on that agreement. 

The United States and the Soviet Union 
agree that the Treaty on the Limitation of 
Anti-Ballistic Missile Systems, signed in 
Moscow in 1972 and amended in 1974, serves 
the security interests of both countries. 
They share the view that this treaty de- 
creases the risk of nuclear war and facili- 
tates progress in the further limitation and 
reduction of strategic offensive arms. Both 
sides also agree that the ABM treaty has 
operated effectively, thus demonstrating the 
mutual commitment of the U.S.S.R. and the 
U.S.A. to the goal of nuclear arms lim- 
itations and to the principle of equal secu- 
rity. 

Accordingly, in connection with the 5-year 
review of the ABM treaty, the two sides 
reaffirm their commitment to the treaty. It 
is agreed that this review will be conducted 
in the Standing Consultative Committee 
after its regular fall meeting. 



U.S. Joins U.N. Fund 

For Agricultural Development 

Following is a statement by Andrew Young, 
U.S. Ambassador to the United Nations, 
made on October U in New York upon the de- 
posit of the U.S. instrument of acceptance of 
the agreement establishing the International 
Fund for Agricultural Development. 

USUN press release 69 dated October 4 

I am pleased to be able to deposit with you 
the U.S. instrument of acceptance of the 
agreement establishing the International 
Fund for Agricultural Development (IFAD). 
This instrument, in addition to signaling U.S. f 
willingness to accept the responsibilities of 
membership in the Fund, provides for the 
U.S. subscription of $200 million as its contri- 
bution to $1 billion pledged for IFAD. We are 
pleased to be participating in the Fund and 
look forward to assisting it in its efforts to 
improve agricultural production and help meet 
the nutritional needs of the world's people. 

IFAD is an exciting new concept of interna- 
tional cooperation. We have all said in many 
fora that meeting critical world problems is a 
joint responsibility, and effective action will 
require full cooperation between developed 
and developing countries. That has been one 
of the principal themes of the North-South 
dialogue. IFAD demonstrates that construc- 
tive ways can be found for industrialized, oil- 
exporting, and developing nations to work 
together as partners to speed agricultural de- 
velopment and improve the conditions of life 
of the world's poor. 

We believe IFAD, which soon will be the 
U.N.'s newest specialized agency, can make a 
valuable contribution to the work of the whole 
system. We are pleased to be able to join with 
the other countries who already have ratified 
and hope enough other ratifications will be 
forthcoming shortly so that IFAD can com- 
mence its operations by the end of this year. 



644 



Department of State Bulletin 



THE CONGRESS 



Administration Urges U.S. Participation 

in the IMF Supplementary Financing Facility 



Statement by Richard N. Cooper 
Under Secretary for Economic Affairs 1 



I am pleased to have this opportunity to 
appear before this subcommittee today to 
discuss legislation which will authorize the 
United States to participate in the 
supplementary financing facility of the In- 
ternational Monetary Fund (IMF). I con- 
sider the success of this initiative of major 
foreign policy significance as a demonstra- 
tion of our commitment to foster greater in- 
ternational cooperation. It is an important 
manifestation of our willingness to collabo- 
rate with other countries to assure interna- 
tional economic recovery. 

I would like to take this opportunity to 
make some observations on recent develop- 
ments in the world economy, most particu- 
larly, the unprecedented imbalance in exter- 
nal payments. I will discuss the ways these 
imbalances have been financed and examine 
the outlook for the period ahead. This analy- 
sis leads to conclusions on the importance of 
the supplementary financing facility in meet- 
ing the financial needs of countries which 
are still adjusting to the economic shocks of 
the recent past and, equally as important, in 
demonstrating our commitment to interna- 
tional cooperation to resolve the problems 
which face the world. 



1 Made before the Subcommittee on International 
Trade, Investment, and Monetary Policy of the House 
Committee on Banking, Finance, and Urban Affairs on 
Sept. 20, 1977. The complete transcript of the hearings 
will be published by the committee and will be avail- 
able from the Superintendent of Documents, U.S. Gov- 
ernment Printing Office, Washington, D.C. 20402. 



World Economy and Balance of Payments 

The world economy has experienced tur- 
bulent times during the last several years. 
To overcome the widespread recession of 
1970-71, most of the major countries 
adopted expansionist economic policies in 
1972. These policies contributed to a 
worldwide economic boom, which continued 
into 1973. This boom produced excessive in- 
flation as a companion to increased economic 
growth. In the face of this inflation, many 
countries reversed their economic policies. 
The simultaneous adoption of contractionary 
policies and the concomitant OPEC [Organi- 
zation of Petroleum Exporting Countries] 
oil embargo and abrupt fourfold increase in 
oil prices combined to provoke the worst 
economic recession since the 1930's. In 1975 
the real GNP in the OECD [Organization for 
Economic Cooperation and Development] 
area declined by 1.3 percent, unemployment 
in the OECD countries exceeded 15 million 
people, and inflation rates soared to above 
10 percent in almost every country. 

Despite the magnitude of these problems, 
and in contrast to the 1930's, the 1970's saw 
a cooperative response by countries to solve 
their mutual problems rather than attempts 
to pass these problems onto others. All of 
the major countries cooperated to maintain 
our liberal trade and payments system by 
avoiding import restrictions and competitive 
devaluations. They took steps to adjust their 
economies to the new situation and to fi- 
nance their payments deficits while their ad- 



November 7, 1977 



645 






justment policies were taking hold. To fi- 
nance their deficits, developed countries and 
less developed countries alike borrowed 
from international capital markets and from 
official financial institutions. 

By such borrowings, individual countries 
were able to sustain larger imports of goods 
and services than would otherwise have 
been possible and thereby softened the im- 
pact of the recession on the world economy. 
In doing so, they buoyed export demand in 
other countries and thus prevented the 
world slump from deepening further. 

The world economy is on the recovery 
path from the depths of the 1974-75 reces- 
sion, but progress has been slower than was 
hoped. The foreign payments problems 
which countries have experienced since 1973 
have, on an aggregate basis, become more 
manageable as OPEC surpluses have de- 
clined from the peak reached immediately 
after the 1973-74 oil price jumps. Individual 
countries, however, still confront large 
payments deficits, slow growth and high un- 
employment, and continued high inflation 
rates. The magnitude and duration of these 
problems reflect the seriousness of the 
shocks the world economy has suffered. At 
the same time, our ability to adjust to these 
shocks and to finance foreign payments defi- 
cits in the interim reflects the resilience of 
the world economic system. 

During the past several years, the inter- 
national financial system has had to cope 
with the financing of the large payments 
deficits of countries which previously had 
manageable deficits. The table, which is re- 
peated in the National Advisory Council's 
Special Report submitted to the Congress 
with the proposed legislation, shows clearly 
the impact large oil price increases and 
world recession have had on world pay- 
ments, and hence on the need for external 
financing. 

Financing the Deficits 

It would have been impossible for gov- 
ernments to eliminate these deficits quickly 
without incurring massive dislocations in 
their economies and major hardships for 
their citizens. Instead policymakers rightly 



WORLD PAYMENTS PATTERNS 

Balances on Goods, Services, 

and Private and 

Governmental Transfers 

($billions) 





Average 


Average 




1971-73 


1974-76 


Surplus Countries 






OPEC 


2.8 


49.0 


OECD 


12.3 
15.1 


15.3 
64.3 


Deficit Countries 






OPEC 


- 1.4 


-2.0 


OECD 


- 6.7 


-37.3 


Non-OPEC LDCs 


- 4.1 


-23.0 


Other* 


- 2.7 
-14.9 


-12.3 
-74.6 



* Israel, South Africa, and nonmarket economies 
of U.S.S.R., China, and Eastern Europe. 



chose to finance the deficits in order to 
spread out the adjustment process over a 
period consistent with maintaining a liberal 
economic system internationally and main- 
taining political and social stability domesti- 
cally. 

Reliance on external finance has long been 
the means of supplementing domestic sav- 
ings for investment and thus increasing eco- 
nomic growth. The oil price rise, coupled 
with world recession, added a strikingly new 
dimension to the external financing needs. 
Given the alternatives, borrowing abroad to 
avert what would have been a disastrous 
economic contraction can be judged to be 
prudent. This is true even though a substan- 
tial portion of the borrowing was of neces- 
sity utilized for consumption rather than in- 
vestment. 

From the rough data which are available, 
we can see how countries carried out this 
financing. During the 1974-76 period, the 
total current account deficits financed were 
about $225 billion. Fully three-fourths of 
this amount — some $170 billion — plus about 
$40 billion for the repayment of outstanding 
external debt, was obtained through borrow- 
ing from private banks and securities mar- 
kets. An additional $40 billion, or about 18 



646 



Department of State Bulletin 



percent of the total, was obtained primarily 
by less developed nations from official 
sources — such as government loans — and 
loans by the IBRD [International Bank for 
Reconstruction and Development, or World 
Bank], regional development banks, and 
other sources. The remaining $15 billion, or 
about 7 percent of the total financing, was 
obtained through the International Monetary 
Fund, principally from the IMF's Oil Facil- 
ity and Compensatory Financing Facility. 

As these data demonstrate, the interna- 
tional financial system has performed re- 
markably well under severe strains. Without 
adequate financing, the efforts of the deficit 
countries to adjust would have necessitated 
curtailing economic growth so abruptly that 
recovery of the world economy as a whole 
would have been completely aborted. With- 
out extensive external borrowing, the world 
economy would have fragmented into a 
series of national "siege economies," a 
situation reminiscent of the 1930's, with 
even greater economic dislocation than we 
experienced. 

The data also demonstrate that the use of 
official financing, particularly financing from 
the International Monetary Fund, has met 
only a small part of the total need during 
this period. Against a backdrop of some in- 
crease in the availability of official financing 
over the past few years, deficit countries 
have turned primarily to private markets to 
help meet the major portion of their in- 
creased financial requirements. For exam- 
ple, in 1975 and 1976, private markets 
supplied approximately one-half of the new 
credit to oil-importing developing countries. 
The share of financial needs of developed 
countries which private markets satisfied 
was, of course, much higher as these coun- 
tries are not candidates for official develop- 
ment assistance. 

In the wake of unprecedented lending, the 
question has arisen whether the increased 
international lending of private banks has 
left them overextended and prone to crisis. 
The evidence is to the contrary. In general, 
the lending standards of banks have been 
high. Most lending has gone to countries 
which will have little difficulty meeting their 

November 7, 1977 



obligations. Bank loans to countries with 
limited ability to service external debt have 
been modest in total. On a country-by- 
country basis, the amount of lending to 
these countries with limited debt-servicing 
capacity has been generally prudent, al- 
though there have been isolated exceptions. 
In fact loan losses from foreign loans have 
been considerably less than losses from 
domestic loans in recent years. Foreign 
loans cannot, therefore, be considered as 
jeopardizing bank stability. The Acting 
Comptroller confirmed this judgment in his 
testimony this April before a House commit- 
tee. He reported that his agency's examina- 
tions of banks with extensive international 
lending did not uncover cause for serious 
concern. 

A close look at the international portfolios 
of private banks reveals that a high percent- 
age of loans represent self-liquidating trade 
credits with maturities of less than 1 year. 
This, plus the fact that some loans are 
guaranteed either by a government agency 
or by a multinational corporation headquar- 
tered in the lending country, further al- 
leviates cause for concern about financial 
markets. 

In fact, bank capital-to-loan ratios have 
increased, indicating that the current situa- 
tion has improved since the very active 
period of a few years ago. For example, the 
ratio of equity capital to loans for the 25 
largest U.S. banks for the first quarter of 
1977 was 7.6 percent, an improvement over 
the 7.4 percent of the same quarter of 1976 
and the 7.1 percent for the full year 1975. It 
is a significant increase over the 6.2 percent 
average ratio for 1974. 

There has also been a notable decrease in 
write-offs as a percentage of total loans. The 
figure for the first quarter of 1977 for the 25 
largest U.S. banks, which together account 
for the vast bulk of foreign lending from the 
United States, was 0.4 percent, which com- 
pares very favorably with the 0.6 percent 
for the same period in 1976 and with the 
0.63 percent average for all of 1975. 

I hasten to add, however, that we cannot 
be complacent, for this is an area which will 
require continual watchfulness. While there 

647 



is little evidence to support predictions of 
doom and imminent collapse, the interna- 
tional financial system continues to warrant 
attention. There are continuing problems 
which can be resolved only through interna- 
tional cooperation — cooperation such as this 
joint effort to increase the financial re- 
sources of the International Monetary Fund. 

The Period Ahead 

It has long been apparent to American 
foreign policy makers that the accomplish- 
ment of our foreign objectives depends in 
large measure on the existence of a strong 
and healthy world economy, which in turn 
depends on a viable international monetary 
system. The most important relations we 
have with most countries are in the eco- 
nomic sphere — trade, investment, tourism, 
finance. These relations in turn have an ex- 
tremely important impact on the U.S. econ- 
omy, the strength of which is itself an es- 
sential ingredient of our ability to carry out 
an effective foreign policy. 

Many people at present have a feeling that 
the international economic system does not 
work very well. I think this feeling is due, 
to a large extent, to a failure to realize just 
how rocky the path of adjustment has been 
over the past several years. For example, 
the increase in oil prices in early 1974 repre- 
sented a major redirection of payments for 
world trade, to the OPEC countries, to the 
extent of 15 percent of the value of world 
trade. Moreover major divergences have de- 
veloped in national rates of inflation, even 
among industrial countries, ranging in 1976 
from a low of 1 percent for Switzerland to a 
high of 20 percent for Italy. 

With data like these, I do not deny that 
serious problems remain, but I am im- 
pressed how well the system has responded. 
In the face of the severe shocks of recent 
years, which had to be handled at the same 
time as negotiations continued on the basic 
reforms which resulted in the pending 
amendment of the IMF charter, the interna- 
tional financial system has performed re- 
markably well. We managed the sudden 



strains which were imposed on the system 
by the current account surpluses of the 
OPEC nations because the oil-importing 
countries' external financing needs could be 
met on adequate terms. External borrowing, 
in effect, has cushioned the economic ad- 
justments by enabling the necessary reduc- 
tion in consumption to be distributed over a 
number of years. 

However, the potential for serious disrup- 
tion of the world economy is still great. 
Many countries have adopted policies which 
are bringing their balance of payments into 
a sustainable pattern. In other countries, 
however, stabilization programs have 
achieved only limited progress to date, and 
additional time is necessary to restore 
equilibrium. There are other countries which 
still face large payments deficits but have 
only begun to develop adjustment policies. 

The large current account surpluses which 
the OPEC oil exporters have had since 1973, 
while already diminished, will persist at 
least through the rest of this decade. This 
means that oil-importing countries as a 
group will continue to have large deficits. 
Some countries, such as the United States, 
can autonomously attract sufficient funds to 
finance their deficits, but most governments 
will have to seek external financing. If 
adequate financing is not available to the 
countries which need it, they may still be 
forced to adopt restrictive trade and capital 
policies, a temptation to which few countries 
have succumbed up to now. In today's inter- 
dependent world, the adoption of such 
policies, particularly because it could lead to 
emulation by other countries, would have 
worldwide repercussions which would affect 
all countries. 

While no general financing crisis is pre- 
dicted, there is no justification for compla- 
cency about the future of the international 
financial system. Some countries appear 
fully capable of sustaining increased private 
borrowing to cushion further adjustment. 
But there are other countries which already 
have difficulty attracting sufficient private 
funds or are expected to have difficulty in 
the next few years. These countries will 



648 



Department of State Bulletin 



the 



i 
lead- 
reduc- 
over a 



great. 
which 
Is into 
ntries, 
have 
e, and 
(store 
which 
t have 
;ies. 
which 

tins 

iist at 
!, This 
s as a 

jficits 

States, 
inds to 
raients 
n?.II 

itill be 

capita 1 
antries 
; inter 
fsucl 
lead to 
j have 



is pi 
■ompl 

ational 
appear 

private 
went, 
ilready 
private 

ulty i 



have to adopt appropriate adjustment 
policies. They will also require significant 
external financing to facilitate internal ad- 
justments in an orderly fashion. 

Private capital markets have provided the 
bulk of balance-of-payments financing to 
deficit countries. We fully expect this trend 
to continue in the period ahead. But because 
some individual countries may have only lim- 
ited access to private financing while they 
implement effective adjustment policies, 
there is also a critical need for adequate 
official financing to support adjustment 
programs. 



Role for the Supplementary Financing Facility 

The International Monetary Fund is the 
principal source of official balance-of- 
payments financing for its members. This 
financing provides members with an oppor- 
tunity to correct maladjustments in their ex- 
ternal sector and to do so without resort to 
protectionist measures. Since 1973 extensive 
use of IMF credit has greatly eased adjust- 
ment problems. At the same time, the IMF's 
greatly increased activity has caused a de- 
pletion of its available resources. As we 
lave seen, there will be a continuing need in 
the period ahead for IMF lending because 
arge payments imbalances will continue. 

Since 1973 the IMF has supplied about $15 
jillion of balance-of-payments financing to 
nember countries. Most of the financing was 
obtained from the IMF's Oil Facility and 
Compensatory Financing Facility. The Oil 
Facility provided funds largely on the basis 
}f a country's need for financing due to the 
irst-round impact of oil price increases; the 
Compensatory Financing Facility provides 
'unds on the basis of a country's need for 
inancing for a cyclical downturn in its ex- 
)orts earnings. Properly these facilities 
ilaced relatively less emphasis on the pro- 
onged adjustment process. The supplemen- 
tary financing facility is a sensible next 
stage in our response and will place greater 
mphasis on appropriate adjustment 
policies, rather than simply financing exist- 
ng deficits. The new facility, with its 



November 7, 1977 



phased drawings and longer pay-back 
period, offers the flexibility to take account 
of the difficult adjustment process which 
countries will have to go through. Financing 
from the supplementary facility is likely to 
be particularly critical for a small number of 
countries that face unusually large balance- 
of-payments deficits which can be reduced to 
sustainable levels only over a period of sev- 
eral years. 

As we have just seen in the case of Por- 
tugal, we and a large number of other coun- 
tries recognized the clear need to provide 
extraordinary balance-of-payments support 
far exceeding that country's quota in the In- 
ternational Monetary Fund. Over a dozen 
countries put together an exceptional mul- 
tilateral effort to provide Portugal medium- 
term balance-of-payments support to meet 
just the kind of requirement that the 
supplementary IMF facility is designed to 
meet on a more institutionalized basis in the 
future. The House and Senate approved au- 
thorization and appropriation of a $300 mil- 
lion U.S. contribution to this multilateral ef- 
fort for Portugal. In the coming years, the 
supplementary financing facility should be 
able to deal with this kind of situation on a 
systematic basis, assuring burden sharing 
among donors and negotiation of effective 
economic adjustment policies between the 
IMF and borrowing countries. 

The supplementary financing facility will 
also meet a less tangible but no less impor- 
tant need of the international economic sys- 
tem. It will increase confidence in the sys- 
tem by providing a signal to other countries 
and to private financial markets that public 
policy and institutions of the countries par- 
ticipating in the facility are not attempting 
to shift responsibility for financial stability 
to weaker countries or to the private market- 
place. 

More generally, it is a concrete manifesta- 
tion of the willingness of financially strong 
countries to cooperate on the strengthening 
of the present system for the benefit of all 
members. It is significant that all of the in- 
dustrial countries which are financially able 
to do so will participate with the United 



649 



States in the facility. The participation of 
the OPEC nations is also noteworthy. By 
channeling a portion of their financing 
surplus through the International Monetary 
Fund they also demonstrate their commit- 
ment to a viable international financial 
system. 

By showing that the major countries, both 
industrial nations and OPEC members, are 
not neglecting the well-being of other coun- 
tries and of the international economic sys- 
tem, the new facility will make an important 
and positive contribution to the international 
atmosphere as a whole. If financial problems 
can be resolved amicably, the spirit of coop- 
eration can impart a sense of hopefulness to 
other economic negotiations and to the polit- 
ical sphere as well. 

I would like to emphasize this point by not- 
ing again that official financing of balance-of- 
payments deficits is limited relative to the 
total financing of these deficits and very small 
relative to all international financial transac- 
tions. Yet official financing is an extremely 
important psychological factor. There is a 
perceived need for official backstopping of the 
financial system. This means the supplemen- 
tary financing facility is necessary not only to 
augment the capacity of the International 
Monetary Fund to meet the financial needs of 
member nations but also to assure that a 
source of official finance exists on a scale 
which is sufficient to cope with whatever fi- 
nancial turbulence we are likely to encounter. 

It is, in short, as important to our foreign 
policy in its backstopping role and the spirit of 
cooperation it instills as in its role as a source 
of funds to be used. The prompt enactment of 
legislation authorizing the United States to 
participate in the supplementary financing 
facility will demonstrate our commitment to 
international cooperation and will be a major 
contribution to the maintenance of a strong 
and healthy economy. For these reasons, the 
Administration strongly urges the Congress 
to authorize the United States to join with 
other strong industrial nations and major oil- 
exporting nations to establish the supplemen- 
tary financing facility. 



Proposed Sales of Military 
Equipment to Egypt 

Following is a statement by Alfred L. 
Atherton, Jr., Assistant Secretary for Near 
Eastern and South Asian Affairs, before the 
Subcommittee on Europe and the Middle 
East of the House Committee on Interna- 
tional Relations on September 15. 1 • 

I am pleased to appear before you this af- 
ternoon to discuss the Administration's pro- 
posal to sell certain items of military equip- 
ment to Egypt. 

In early August, following a number of in- 
formal consultations with Members, the De- 
partment of Defense sent letters of pre- 
notification to the Congress outlining the 
Administration's intention to sell to Egypt 
C-130 transport aircraft and pilotless recon- 
naissance drones. On September 7, formal 
notification pursuant to section 36(b) of the 
Arms Control and Export Act was sent to 
the Congress relative to the proposed sales. 

Although this formal notification pertains 
only to the sale of transport aircraft and re- 
connaissance drones, these items are part of 
a package which also includes camera 
equipment for reconnaissance use, a hy- 
drographic survey of the approaches to the 
Suez Canal, and a program of military train- 
ing for Egyptian officers. I will address my 
remarks to those items requiring section 
36(b) consideration, but I will be glad to an- 
swer questions you may have concerning the 
rest of the package. 

Before discussing some of the specifics of 
the items proposed for sale to Egypt, I 
would like to say a few words about the his- 
torical and political background of this 
program. 

Egypt, under President Sadat, and the 
United States have cooperated closely in the 
peace process initiated in the Middle East 



'The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Documents, U.S. Government Print- 
ing Office. Washington, D.C. 20402. 



650 



Department of State Bulletin 



a. 

Near 

n >i 



11s if- 



of in- 

ie De- 

f pre- 
if the 
Egypt 



of the 



■rtains 

nd re- 

iart of 
imera 
a hy- 
to the 

train- 



loan- 
ne the 



: the 



rum tin 
; Print- 



almost 4 years ago. Egypt continues to play 
a key role in the efforts currently under way 
to make significant progress in the near fu- 
ture to move the area toward peace. Egyp- 
tian policy serves the interests not only of 
Egypt but of the Arab world, reflecting 
Egypt's historical leadership role in the 
region. 

In this context President Sadat and his 
government are seeking to provide a better 
life for the Egyptian people, and economic- 
development is at the very top of the Egyp- 
tian agenda for action. During the past few 
years, Egypt's contacts with the United 
States and Western Europe have expanded 
as various friendly countries have responded 
to the opportunity dramatically to improve 
relations with Egypt on all levels, including 
economic and commercial relations. A cen- 
terpiece of President Sadat's commitment to 
the future of his people, and the response of 
Egypt's friends, is the Consultative Group 
which, under the leadership of the World 
Bank, is coordinating the international re- 
sponse in support of Egypt's development 
plans. 

This dramatic shift in Egyptian policy has 
opened new prospects for peace in the Mid- 
dle East as well as new hope for future gen- 
erations of Egyptians and for the Arab 
world generally. This policy, however, has 
had its cost, particularly in the field of mili- 
tary supply. In this respect, the Soviet 
Union has ceased its role as a supplier of 
major equipment and, to a large degree, has 
also ceased its maintenance support for the 
equipment which was previously provided. 
In these circumstances, the Government of 
Egypt has sought to diversify its sources of 
is supply for certain military equipment, as it 
seeks to meet perceived requirements for its 
own security. We believe that the proposals 
currently before you represent a measured 
response to some of these requirements and 
are also a sign of confidence in Egypt's 
peace policies. 

We firmly believe these sales are in the 
national interests of the United States. If 
we did not believe that, we would not be 



ulleliit 



proposing them. The reasons are clear. 
Egypt, since 1973, has opted for a 
negotiated peace in the Middle East and, as 
part of this policy, for improved relations 
with the United States. In doing so, it has 
sacrificed an assured source of military sup- 
ply and assumed a risk to its immediate na- 
tional security for the longer term gains of 
permanent peace. This is not a tenable posi- 
tion for any protracted period for any 
government. 

In the absence of demonstrable alternative 
sources of military supply, Egypt will be 
faced with the difficult choice of permitting 
the deterioration of its defense posture, di- 
versifying its sources of supply, or returning 
to the Soviets as its sole source of supply. It 
has opted for seeking alternative sources. 
Given American interest in supporting 
Egypt's cooperation in our search for a 
genuine peace in the Middle East, we clearly 
have a major interest in helping Egypt meet 
its legitimate defense needs. 

Now I would like to turn to a more de- 
tailed review of the items which are the sub- 
ject of today's proceedings. 

The Administration proposes to sell 14 
C-130 aircraft to Egypt. The approximate 
value of this sale would be $-184.4 million. 
Together with the six C-130 aircraft sold to 
Egypt in early 1976, this will provide the 
Egyptian Air Force with two 10-aircraft 
squadrons of modern transport aircraft; it 
may permit the retirement of some older 
Soviet-supplied transports that are known to 
be uneconomical to maintain and operate. 
The additional C-130 aircraft for Egypt 
would support the logistical and scheduling 
flexibility of the Egyptian armed forces — an 
important consideration given Egypt's 
strategic position as an African as well as a 
Middle Eastern power. It is anticipated that 
the first aircraft can be delivered in De- 
cember 1978 with delivery to be completed 
in mid-1979. 

The Egyptian Air Force has the ability to 
absorb the additional transport aircraft. The 
recommended program provides for training, 
adequate ground support equipment, and 



November 7, 1977 



651 



spare parts for the first 2 years of operation. 
Accordingly we anticipate no significant op- 
erational or maintenance problems in in- 
creasing the Egyptian Air Force level of this 
aircraft to 20. 

With respect to the sale of remotely- 
piloted vehicles (RPV's), this proposed sale 
is valued at approximately $66.5 million. 
President Sadat requested RPV's as a 
generic system rather than identifying his 
preference for a specific model. Therefore, 
we are not certain which system the Egyp- 
tians eventually will select, nor have we dis- 
cussed this with them pending congressional 
consideration of the proposed sale. How- 
ever, in order to provide you with represen- 
tative data, we have developed information 
for a program consisting of 12 Teledyne 
Ryan model 124-R (Firebee) remotely- 
piloted drones. Such drones would enable 
Egypt to meet requirements for an un- 
manned airborne camera platform for recon- 
naissance to the midline of the Sinai buffer 
zone as authorized in the Sinai II accords, as 
well as to carry out reconnaissance missions 
along other frontiers. 

The Firebee is a subsonic, radio-command 
controlled, single engine vehicle. The first of 
12 such RPV's could be delivered approxi- 
mately 14 months after agreement to a let- 
ter of offer and acceptance, and the remain- 
ing 11 vehicles would be ready within the 
following 4 months. 

The program envisaged includes mainte- 
nance, training, and spares support suffi- 
cient to permit introduction of the system 
into the Egyptian Air Force inventory. 

None of the equipment proposed for sale 
to Egypt materially will affect the regional 
balance of power. Rather, by improving 
Egypt's capability for collection of informa- 
tion and for movement of troops and supply, 
the items should enhance regional stability. 
The Arms Control and Disarmament Agency 
has examined the proposed sales and inter- 
poses no objections. 

Both of the items I have discussed with 
you today will be sold to the Egyptians on a 
foreign-military-sales cash basis. 



Human Rights in Panama 

Following is a statement by William P. 
Stedman, Deputy Assistant Secretary for 
Inter-American Affairs, made before the 
House Committee on International Rela- 
tions on October 11. l 

President Carter has stated that human 
rights is a central component of our foreign 
policy. We have an interest in the obser- 
vance of basic human rights in all countries 
of the world. If we are to be true to the best 
and most deeply held traditions and beliefs 
of our nation, expressed in our Declaration 
of Independence and Constitution, then we 
must infuse our foreign policy with our con- 
victions. We believe that the human rights 
situation in Panama should be viewed in this 
context and for these reasons the Depart- 
ment of State has followed the human rights 
situation in Panama closely. 

I would like to state at the beginning that 
one of the tests of a commitment to human 
rights which can be applied to any govern- 
ment is its receptivity and willingness to re- 
ceive outside observers genuinely concerned 
about human rights. It is therefore gratify- 
ing that on September 13, 1977, the 
Panamanian Government invited the Inter- 
American Human Rights Commission to 
visit Panama to investigate the various 
charges of human rights violations which 
have been made and to report its findings. 
[General] Torrijos promised that if any polit- 
ical prisoners were found, they would be 
released. 

Another positive indication of the gov- 
ernment's attitude toward human rights in 
Panama is that in May 1977 in response to 
criticism from a Venezuelan youth group, 
Copei Juventud, General Torrijos personally 
invited the group to visit Panama to see for 
themselves what the state of human rights is 
in Panama. The group has not yet acted on 



•The complete transcript of the hearings will be pub- 
lished by the committee and will be available from the 
Superintendent of Docments, U.S. Government Print- 
ing Office, Washington, D.C. 20402. 



652 



Department of State Bulletin 



p 



lebesl 



.en we 

IT 



:overn 
! to re^ 
cernet 

iratily- 

;. the 

Inter- 
lion t» 
arions 
which 



ghts in 
jnse til 



see for 
iehtsis 



Ikep 



that invitation. The government has also in- 
vited the Secretary General of the United 
Nations and several Latin American and 
U.S. universities to observe the national 
plebiscite on October 23 on whether to ratify 
the proposed Panama Canal treaties. 

We welcome these invitations because of 
the charges that have arisen and expect that 
these visits and the resultant studies and 
observations will provide an objective 
standard against which to test the accusa- 
tions regarding conditions there. We further 
welcome it as an indication that Panama 
takes its obligations seriously. 

Our own assessment at the present time is 
that Panama is neither a model open society, 
a traditional liberal democracy, nor a re- 
pressive totalitarian government. I should 
say candidly that this assessment differs 
with those of some other reports. 

At this time Panama is ruled by an au- 
thoritarian government but its control of 
Panama is by no means total or heavy 
handed. Amnesty International's interna- 
tional report for 1975-1976 did not have a 
section on Panama. Occasional police brutal- 
ity does arise as a problem as it does in 
many countries. 

There is a reasonable guarantee of a fair 
public trial. In certain cases involving state 
security when the government does not de- 
sire a trial, the accused may be interro- 
gated, judged, and sentenced without due 
process as we understand it. Instead the 
procedure is administrative. The govern- 
ment does not take this kind of action often. 

Exile has been the most commonly used 
measure to deal with certain dissent that the 
government did not wish to tolerate, despite 
the fact that expatriation is prohibited under 
Article 29 of the 1972 Panamanian Constitu- 
tion. In 1976 there was a case of multiple 
exilings. It involved 14 men who were exiled 
by the government in January after public 
antigovernment activity. After a short 
detention — in all cases a matter of a few 
hours — they were sent to Ecuador without 
any trial. Many of these men were conserva- 
tives; some were leftists. The government 



Bulletin 



charged at the time that most of them had 
been engaged in an active conspiracy with 
exiled opponents of [General] Torrijos to 
overthrow the regime. 

In addition, during the student demon- 
strations and riots of September 1976 in 
Panama City, three more people left Panama 
under duress. We know of no incidents of 
forced exile in 1977. To the best of our 
knowledge, the government has not expro- 
priated any property belonging to these men. 
Nor has it stripped them of their Panama- 
nian citizenship. 

The Panamanian Government has allowed 
5 of the 14 people exiled in January 1976 to 
return to their country. In addition, it has 
published a list of 82 exiles — mostly lesser 
known individuals from the politically turbu- 
lent period of 1968-1972 — who are now per- 
mitted to return if they choose to do so. 

Worship, internal movement, foreign 
travel, emigration, and the import and ex- 
port of currency are entirely free. Freedom 
of assembly is limited and rallies or open 
meetings of those opposed to the govern- 
ment have not generally been permitted. 
However, it is noteworthy that for the de- 
bate on the proposed treaties in Panama 
many of these controls have been relaxed. 

Political parties are banned although this 
is not strictly enforced. They have main- 
tained their organizational identities and 
structures and operate informally as 
"movements" or under the camouflage of 
business, labor, or trade groups. The 
Panamanian Communist party, the Partido 
del Pueblo (PdP), may operate semi-openly 
but only on the condition that it support the 
government. The government monitors the 
party's activities and harasses them from 
time to time to the extent necessary to keep 
the PdP in line. 

Students are permitted more leeway and 
on many occasions the student de- 
monstrators have criticized government 
policies and officials sharply. Such public 
criticism of specific government policies 
often occurs at public meetings of interest 
groups such as business or labor. 



November 7, 1977 



653 



In the past several weeks, controls over 
political activity have been significantly re- 
duced in order to allow free debate of the 
proposed Panama Canal treaties. The Lib- 
eral and Panamenista Parties have held pub- 
lic meetings which have been reported freely 
in the press. There have also been calls for 
full restoration of political and civil rights 
and a return to full democracy. 

Regardless of the context or the speaker, 
however, sharp, direct criticism of General 
Torrijos or public attack on the legitimacy of 
his government is not accepted. 

The press and broadcast news media, 
while not subject to prior government cen- 
sorship, practice self-censorship. Periodi- 
cally, the government cautions them. The 
media avoid direct criticism of the top-level 
officers of the National Guard and sensitive 
topics which might tend to disturb public 
order. Despite an overall caution, on occa- 
sion the media — particularly radio and 
television — do discuss controversial issues. 
The most celebrated recent example was a 
television panel discussion, in unusually 
frank terms, of human rights in Panama on 
May 26 of this year. Following this, there 
was a fair amount of discussion in the press 
regarding the existence of racial prejudice in 
Panama, in which existence of such prejudice 
in Panamanian society was discussed with 
considerable frankness. The country's present 
economic slump has been frequently dis- 
cussed. 

The Torrijos government has made major 
strides in extending economic and social 
benefits to its people. It is expanding eco- 
nomic development to those areas of the 
country previously outside the nation's eco- 
nomic life. The government is also expand- 
ing educational benefits, medical facilities 
and services, and economic development 
projects to wide sectors of the population 
which had been previously ignored. 

Panama is governed by the Constitution of 
1972. Under that charter, there is a Na- 
tional Assembly of Community Representa- 
tives whose 505 members were elected by 
popular vote in 1972 for 6-year terms. The 



executive and legislative organs of the gov- 
ernment, which hold the real power in 
Panama — Presidency, Cabinet, Judiciary, 
and National Legislative Commission — are 
either elected indirectly or appointed. Under 
the terms of the Constitution, General Tor- 
rijos holds special temporary powers as Su- 
preme Chief of the Revolution for a 6-year 
period which will end in 1978. 

General Torrijos is clearly the leader of 
the Panamanian Government. When he 
chooses to make decisions, his will prevails. 
However, he does not involve himself in all 
areas of the government, and the President 
and cabinet exercise considerable influence 
of their own. Only one member of the 
cabinet is a military man. The rest are 
civilians — many educated in the United 
States. 

The National Assembly of Community 
Representatives was intended to foment 
greater grass-roots participation in national 
political life. The assembly does not reflect 
the one man, one vote philosophy, but is 
skewed to favor the rural population whose 
interests were poorly represented in the 
past. The assembly serves and is intended to 
serve primarily as a consultative mechanism; 
its affirmative powers are limited to election 
of the President and Vice President, ap- 
proval of treaties and international agree- 
ments, and passing nonbinding resolutions 
on the activities of the government. 

The government also normally consults 
with a broad range of sectoral groups and 
associations during the formulation of policy 
initiatives. These groups are more or less 
analogous to our National Association of 
Manufacturers, Chambers of Commerce, and 
AFL-CIO, but they also play a limited polit- 
ical role partially comparable to political 
parties. 

In terms of democratic participation, 
therefore, the results are mixed. There are 
elected representatives but with little influ- 
ence on major national policy formulation. 
There is broad consultation and major op-