FUTURE OF THE CANAL: United States: Big Business vs. the "Big Stick"
Horowitz, Paul
What more visible symbol of national sovereignty than a flag? Throughout history the culmination of anti-colonialist struggles has been embodied in lowering the oppressor's banner and flying in...
...cit., p. 14...
...THE REACTION FACTION The intensity of the Administration's efforts on behalf of the treaties was conditioned by the all-out attack against the treaties organized by the American right-wing...
...ASC's National Strategy Committee counted among its 33 listed members 15 retired top military brass, three former ambassadors and six university professors in the departments of physics or government...
...Charles Maechling, Jr., "The Panama Canal: A Fresh Start," Orbis, Vol...
...cit., p. 55...
...From the U.S...
...The Report, which became the initial policy guide for hemispheric relations, listed Panama as the Most Urgent Issue...
...It began when Zonians refused to allow Panamanian students to fly their flag beside the American one at a Zone high school, a right given them over four years earlier...
...cit...
...The most outspoken opponents of concessions to Panama, on the other hand, were the political organizations of the right-wing...
...Rep...
...Toyota, which used to ship cars via the Canal to Gulf Coast ports, now ships from Japan to Portland, Oregon, and then by truck to a Chicago processing center, with a two-week time savings...
...cit., p. 10...
...The author is on the faculty of the Inter-American Defense College, Fort McNair, Washington, D.C...
...IN THE BEGINNING The United States has traditionally defined its interests in the Canal and the Canal Zone in military and economic terms, with direct control a political imperative...
...economic stake in the Canal has also changed, according to treaty proponents...
...Business Week, September 12, 1977, op...
...Steel, op...
...Using a standard tactic, the United States closed the bridge across the Canal, cutting off the food supply from the interior to Panama City...
...26 The concessions turned even such conservatives as Barry Goldwater and California Senator S.I...
...Price controls, for example, are limited to 20-30 basic goods...
...security planning assumes that use of the Canal will be denied the United States in time of war.' Since the military assesses that the most likely threat is from within Panama (guerrilla raids, sabotage, riots, etc...
...The new treaties give us what we do need- not ownership of the Canal but the right to use it and to protect it...
...One publication explained the conclusion of the long negotiating process this way: "The economic blight of the past few years has worn down the country's will to insist on negotiated miracles...
...3 s These groups plus the American Security Council, Young Republicans, and the Council for National Defense formed the Committee to Save the Panama Canal, and this committee in turn organized the Emergency Coalition to Save the Panama Canal with additional organizations (e.g., Stop ERA, Young Americans for Freedom, etc...
...Commission on United States-- Latin American Relations, "The United States and Latin America: Next Steps...
...troops who had orders to fire warning shots before shooting to kill...
...Dennis DeConcini, D-Ariz...
...The most blatantly interventionist concession, the DeConcini reservation (for its sponsor, Sen...
...is representative of the "can-do" psychology that sustains our national morale...
...permanent right of unilateral intervention--even into internal Panamanian affairs--to protect the Canal...
...Carter himself gave a nationally televised "fireside chat" on the treaties on February 1, 1978, as the Senate began its debate on the accords...
...Watson is the former chief executive officer of IBM...
...Latin America Economic Report, (LAER) Vol...
...cit., p. 1560...
...Senate for ratification...
...By the time this explosion of anti-Yankee fury was contained, over $2 million in property had been burned or otherwise destroyed-almost all of it American...
...The various polls on the Canal issue revealed a great deal of support for the right-wing position on the treaties, although the Administration did win grudging acceptance of the treaties by close to a plurality of voters...
...The cooperation of the two million people in whose territory the Canal lies...
...Whether through guerrilla sabotage or nuclear attack, U.S...
...F. Buckley On the basis of these military factors, as well as the political repercussions from continued military presence at the same level, the Joint Chiefs of Staff ultimately came out in favor of the treaties, concluding that "basic U.S...
...Floyd Spence (R-S.C...
...NACLA, op...
...Newsweek, September 19, 1978, p. 46...
...These snowballing challenges resulted in sharp criticism by the foreign policy establishment of Kissinger's failure to foresee emerging third world demands and his handling of them as they arose...
...Xabier Gorostiaga, Los centros financieros internacionales en los paises subdesarrollados (Mexico City, 1978), p. 115...
...2 THE CONTENDERS The massive uprising in Panama forced the major transnational corporations, especially those with Latin American investments, to reassess their stake in the old relationship...
...Kahn, Jr., "Letter From Panama," The New Yorker, August 16, 1976, p. 70...
...Import duties are low and borders are closed only for goods produced locally...
...treaty debates, the question is obviously raised as to whose interests were really being addressed by the new treaties and what those interests reflected...
...A convenient summary of the survey data is found in B. Roshco, "Polls...
...Pres...
...s3 9 The themes evoked by the Right--defense of the American empire, national chauvinist put-downs of Panamanian capabilities and Panamanian interests--were themes that had been advanced by America's corporate elite when they were useful and even necessary to generate popular acceptance of an earlier, more brazenly colonialist policy in Panama...
...Business Week, October 3, 1977, op...
...Public Opinion Quarterly, Vol...
...See also, "Panama," NACLA Report, Vol...
...BETWEEN ACCOMMODATION AND A HARD PLACE The struggle between corporate forces pressing for concessions and those favoring a hard line has been played out continuously during the decade between the negotiation of a new treaty by Johnson and Robles (rejected by the Panamanian masses) and the 1977 accords...
...Indeed it was estimated that 70% of all cargo destined for the combat zone during the war in Vietnam moved through the Canal...
...William J. Lanouette, "The Panama Canal Treaties- Playing in Peoria and the Senate," National Journal, Vol...
...Panama Canal: Focus of Power Politics," Strategic Review Magazine, Spring, 1974...
...1978), p. 14...
...Within hours 30,000 Panamanians were in the streets of Panama City, confronting U.S...
...Business Latin America, September 14, 1977, op...
...In the late 1890s the U.S...
...V, op...
...7. "Canal Without Rhetoric," Forbes, Vol...
...cit., p. 10...
...7 (September, 1974...
...With this amendment, the treaties gained the necessary two-thirds by a one-vote margin...
...LVIII (July 31, 1978), p. 21...
...Northville Industries of Huntington Station, New York, has put $47 million in an oil transshipment terminal to handle expected shipments of Alaskan oil to the East Coast of the United States.' Two features of the Panamanian economy have been attractive to U.S...
...2 And, echoing the larger concerns of the Linowitz Commission, Business Week noted that, "The unspoken fear of many corporations is that a treaty deadlock would enflame passions throughout the hemisphere, possibly leading to political unrest or nationalization of American commercial interests beyond Panama itself...
...It must be said that the themes evoked by the Right still resonate in the American popular mind to a considerable, unfortunately very considerable, degree...
...Their *The American Security Council's National Voter Advisory Board, for example, listed among its 80 most prestigious members (of a claimed 42,946 membership) only nine affiliated with transnational corporations...
...Panama needs the treaty...
...Julio Manduley, Panama: A cerca de la Estructura, la Coyuntura y las Perspectivas (Panama, 1978), p. 19...
...cit., p. 179...
...This empire was based largely on commercial domination and backed by gunboat diplomacy...
...9. Ronald Steel, "Rough Passage," New York Review of Books, Vol...
...The business Community understands that the political climate has a direct tie to the investment climate...
...They are set up to facilitate transfer pricing, tax-free channels for executive salary benefits, and other forms of corporate accounting practices designed to avoid regulations in the center of the system...
...Their impact on the Canal ratification struggle itself was so significant as to very nearly derail it...
...polling on Panama: Si, don't know, hell, no...
...The unarmed students were met by 500 intransigent Zonians, then by Zone police...
...VIII, no...
...Business Week quoted a U.S...
...vital interests would come from nationalist Panamanian resentment, and from the increasing isolation the United States was experiencing from its closest allies and most frequent users of the Canal (other Latin American countries...
...interest in nondiscrminatory access to the Canal...
...rights to permanent intervention in the isthmus...
...Millions of dollars were spent on radio, television and newspaper advertising, and for a direct mail effort totaling over seven million pieces...
...ruling class...
...38 The U.S...
...As the self-appointed guardians of American capitalism, they paradoxically stood opposed to the new treaties' giant corporate sponsors...
...551-562...
...In this sense they fear not only a rising mass movement per se, but also weak and divided bourgeoisies who cannot effectively rally to control the domestic contradictions...
...One such crucial lever was Panama's foreign debt...
...In their view the continued importance of the Canal demanded direct U.S...
...XV (March, 1978), pp...
...Throughout history the culmination of anti-colonialist struggles has been embodied in lowering the oppressor's banner and flying in its place the colors of the newly liberated...
...naval forces around the world has been reduced...
...High Economic Hopes if Ratification Comes," Business Week, October 3, 1977, pp...
...20, May 27, 1977), p. 78...
...LAER, Vol...
...I want history to record that I had no part in this giveaway of American property...
...Only a small portion of U.S...
...4 By and large, however, the U.S...
...It is a lifeline of trade and national security...
...One doesn't have to question the sincerity of the Right to understand that the Canal debate was also a major opportunity for it to increase its visibility, broaden its popular base and gain influence in the political process...
...In order to understand this, it is first necessary to evaluate the changing role of Panama and the Canal for sectors of the U.S...
...3 In addition, they argue, the Canal itself is extremely vulnerable...
...Minibridge is now penetrating as far east as Cleveland...
...In all, the United States' successful maneuvers to build and control a trans-isthmian canal capped its climb to the position of hegemonic power in the Western Hemisphere...
...This leverage was, of course, fully exploited...
...trade passes through the Panama Canal, down in recent years to 10...
...Carter's major task was to dislodge the notion, instilled in every American child, that the Canal was American-owned property...
...There are no restrictions on foreign equity...
...The Council, the Chamber of Commerce and other corporate associations, with tacit 8SeptlOct 1979 White House endorsement, helped form the Business and Professional Committee for a New Panama Canal Treaty...
...Sol Linowitz, treaty negotiator A clear expression of this was a resolution supporting the treaty negotiations passed in August 1976 by the Council of the Americas, representing 220 of the most important corporations in the United States and 90% of the North American investment in Latin America...
...The key to transnational corporate confidence in a given country is political stability...
...LAER, Vol...
...Business Week, October 3, 1977, op...
...V (no...
...interests in Panama are quantifiable and clear, the political relationship between these interests and the Canal Treaty is more complex...
...4. Ibid., p. 181...
...The failure of the treaties to finally address their fundamental aspirations is becoming each day more clear...
...SNACLA Report established in 1953, contained by 1977 more than 350 firms representing 700 international brands...
...Echoing their Vietnam strategy, they argued that the United States should stand firm against third world demands in general and Panamanian aspirations in particular...
...policy vis-a-vis Panama has been so decisive, ultimately became convinced that some concessions to Panamanian demands could be made, and in fact would enhance the stability of their operations in the country...
...Appended to the neutrality agreement, it made explicit U.S...
...2 5 Not losing sight of the loudest opponents of this approach, the Commission counseled regular consultation during neotiations both with opposition Congressional leaders and American "Zonians" (some 50,000 Canal workers, military and dependents living in the Zone--virulently against a new treaty all of them...
...76-79...
...The most influential figure in the Council is David Rockefeller, president of Chase Manhattan Bank, founder of the Trilateral Commission and ardent champion of the new treaties...
...Kissinger responded to internal and international pressures vis-a-vis Panama by signing a new agreement of negotiating principles with the Panamanian Foreign Minister (the Tack-Kissinger Agreement of 1974), whereupon the real hardliners in the United States mounted a counterattack...
...V, op...
...But what of the U.S...
...5 They also emphasized the question of toll rates, arguing that increased tolls to pay the higher annuity granted to Panama in the new agreements, as well as Panamanian control of the Canal after 1999, will mean sharply higher shipping costs for the United States...
...Carter, February 1, 1978 The Carter Administration used the full power of the state apparatus in its campaign to win support for the treaties...
...Local attitudes on business in general and foreign investors in particular are quite favorable, and legislation reflects this...
...military and economic interests in the Canal that had been put forward...
...7NACLA Report For the next two years this rightist momentum continued to build in the United States, represented most crudely in Reagan's early campaign statements, which echoed the "we paid for it, we own it," line of argument...
...Steel, op...
...opinion leaders" and the Latin American heads of state (including dictators Pinochet, Videla and Stroessner) invited by Carter and Torrijos to witness the treaty signing...
...Panama's Free Zone is Gearing Up For Major Expansion," Business Latin America, October 5, 1977, p. 319...
...41 (October 8, 1977), p. 1560...
...interests emerged...
...For that Panama needed control over the Canal...
...7 Transcontinental trucking and rail shipments between the eastern United States and containerized ports on the West Coast (known as "minibridging") are cutting extensively into the Canal trade as well...
...By 1978 Panama owed U.S...
...people were not actors in the treaty ratification drama, at least not as passionately as one might have expected given the enormous propaganda expenditures by both sides...
...It played its characteristic role as the instrument through which the long-term interests of the ruling class were defined and mediated and through which policies reflecting those interests were sold to the American people...
...warship Oregon around Cape Horn during the Spanish-American War of 1898 reinforced this perception...
...This is based on their assessment that the United States has developed an adequate two-ocean Navy...
...While the State Department handled Congress, the White House worked on building public support...
...foreign policy establishment...
...3 2 An informal grouping headed by right-wing fundraiser Richard Viguerie, including representatives from the Conservative Caucus, the American Conservative Union, Citizens for the Republic, the Committee for 50 Taking the steps of the Capitol...
...perspective, Torrijos was the perfect collaborator for the move from colonialism to neo- colonialism...
...FROM TRADE TO FINANCE As the commercial importance of the Canal itself has declined, the U.S...
...Time, August 22, 1977...
...The majority were heads of domestic businesses, educational and religious institutions or were government representatives...
...banks $1.8 billion, the highest per capita debt level in Latin America and more than ten times its 1968 debt...
...20 NEW MECHANISMS OF CONTROL The contradiction for Panama is that this entrenched reliance on foreign and in particular U.S...
...CXX (November 16, 1977), p. 93...
...A steady stream of press releases and propaganda poured out of the White House and State Department in support of the treaties...
...This may have been no more than a maneuver to pressure Panama into accepting less favorable terms in the new treaty, or it may have been part of an exercise to reduce United States exposure in the face of the likely collapse of the talks.22 In either case the effect on Panama of this potential financial boycott would be the same...
...investment gave foreign capital and its political representatives a formidable leverage in the negotiations...
...the Carter Administration, which necessarily took command of the poli- tical struggle inside the United States concer- ning treaty ratification...
...5, 6. 26...
...intercoastal trade passes through the Canal that still amounts to $5 billion worth of merchandise a year...
...Among top-ranking military officers who are retired--and thus free to speak their minds--I have seen a figure that 324 are opposed to the treaties...
...They also pointed out that twenty-four of the largest U.S...
...8. Forbes, op...
...1 (October 1975), p. 3 20...
...is, to put the matter unobtrusively, desirable...
...In particular they aimed to use the Canal issue to gain hegemony within the floundering Republican Party...
...Canal Zone residents and elements of the military, as well as conservative politicians of both parties, opposed any changes whatsoever in the 1903 treaty...
...Their demands were not only consistent with a traditional geo-political outlook but also reflected their own self-interest...
...The accumulated resentment of American presence exploded into a full-scale riot on January 9, 1964...
...PART ONE: UNITED STATES 1. Walter LeFeber, The Panama Canal...
...NACLA files...
...Watson, Jr., "Realities of the Panama Canal," Across the Board, Vol...
...see also the New York Times, August 20, 1979, p. Dl...
...Negotiations were stalled by the Nixon Administration until, as the result of astute political and diplomatic action by Torrijos, the United States was isolated on the issue at a 1973 meeting of the United Nations Security Council in Panama...
...Ibid...
...2 9 The Council of the Americas kicked off the corporate lobbying drive with a gala reception for U.S...
...6 Nevertheless, during the negotiations the Pentagon lobbied for maximum concessions from Panama concerning U.S...
...7 Speaking in Panama City in 1974, Chase Manhattan Bank Chairman David Rockefeller said: Our increasingly interrelated global economy needs additional stable money centers to mobilize efficiently the very vast amounts of productive capital now flowing around the world . . Panama is an ideal new center in the Western Hemisphere...
...NO MIRACLES THIS TIME The treaty finally signed in September 1977 made many of the internal U.S...
...In the first place, they claim, the Canal's role in providing for flexible deployment of U.S...
...In fact, during the war in Southeast Asia, the carriers Enterprise, Independence, Boxer and Annapolis were all deployed from the Atlantic Coast to the South China Sea without traversing the Canal...
...Gorostiaga, op...
...role had also mushroomed...
...Kissinger's hard line, it was argued, only exacerbated internal instability and anti-American sentiment in third world countries...
...They pointed to the role the Canal was expected to play in the transport of Alaskan oil to the eastern United States, and argued that 96% of the world's 63,000 or so ocean-going vessels can still pass through the Canal...
...In 1977, $1.2 billion worth of goods were exported from the Free Zone, the second largest in the world after Hong Kong.' 3 A common practice in Panama, which grows out of its status as a tax haven, is the creation of "paper companies", or as they are more pejoratively known, "Panamanian companies...
...cit., p. 41...
...But if corporate influence was decisive, it was the state, i.e...
...Business Week, December 6, 1976, p. 86...
...Torrijos, it was argued in a prominent foreign policy journal, uses populist social policies, nationalistic rhetoric and hip friendship with Fidel Castro to hold in check the popular emotions and political challenges that otherwise might roar through the gates and make negotiations with the United States impossible.'9 The corporate world took particular note of Torrijos' role in establishing the legal basis for the development of Panama as an international finance center, and his positive view of the role of foreign capital in the development of the country...
...By the 1960s, military analysts were suggesting that while the Canal is of continuing strategic significance, it is no longer vital...
...If we lose the vote in the Senate we will have had the issue for eight or nine months...
...Large capacity ships - especially oil tankers-that are too big to use the Canal are carrying an increasing share of world trade...
...29 (July 27, 1979), p. 227...
...Wm...
...The presence of ex-Prsident Ford, former Secretaries of State Rogers, Rusk and Kissinger, Nelson Rockefeller and Lady Bird Johnson demonstrated the support this policy now received from sectors of both parties...
...The right-wing hoped to capitalize by playing on these same ideological vestiges...
...The Panama Canal...
...interests in Panama had been protected since 1903...
...The Crisis in Historical Perspective (New York, 1978), pp...
...10SeptlOct 1979 retrograde and myopic concept of "big stick" domination dates from an era when there were no companies whose worldwide employee figures and annual income exceeded that of many nations...
...Furthermore, it has been estimated that even a 200% increase in tolls would result in only a 5 % rise in the price of products shipped through the Canal...
...Lanouette, op...
...banker in Panama in the fall of 1977 as arguing that if the treaties were not ratified, "This will not be a safe place to do business any more...
...VII, no...
...The dominant view now holds that conditions have changed in each of those spheres such as to make continued direct control over the Canal anachronistic...
...There are some 55,000 of these intermediaries in Panama, often affiliates of major transnational firms...
...In the forefront of pro-treaty activity were Braniff, Gulf Oil, Rockwell International, Pan American Airlines and several banks with Panamanian operations: Chase, Citibank, Bank of America and Marine Midland.30 "The United States has got itself a cracker of a deal in the treaty, ending its 74 year old control of the Panama Canal Zone...
...COMPANIES OF PAPER...
...So we might as well hand it over...
...2 The role of 6SeptiOct 1979 this debt in the Canal negotiations surfaced in this report from May 1977 as talks neared a climax and final bargains were being struck: There have already been one crop of "wellinformed reports" to the effect that the United States Department of State has advised United States banks to hold off from lending more money to Panama...
...A Second Report", December 20, 1976, pp...
...James P. Lucier Strategic Review Magazine While the treaties, even as signed in 1977, went a long way toward undercutting the conservative opposition of the past decade, the more tenacious opponents still disagreed with the basic assessment of U.S...
...and "Panama Seeks Ways To Keep Transient Dollars At Home," LAER, Vol...
...direct investment in Panama of $1.6 billion (1977) exceeds that in Peru, Argentina or Colombia.' Business Latin America gave an enthusiastic report on investment opportunities in Panama in an August 1977 article entitled, "Panama Canal Treaty Faces Major Obstacles, But Good for U.S.'s LA Policy:" The prospects for rapid economic growth are a major argument in favor of foreign investment in Panama, but they are not the only strong point the country has to offer...
...The annuity increase granted to Panama was in fact expected to require a toll increase of only 25-46% over prior rates...
...5 3 From a military standpoint, the Right recognized the vulnerability of the Canal to nuclear attack or sabotage, but pointed to its use by military transports during the two conventional wars the United States has fought since the Second World War as evidence of its continued value...
...3. Thomas M. Franck and Edward Weisband, "Panama Paralysis," Foreign Policy, #21 (Winter 1975-76), p. 182...
...Ibid...
...see also, ThomasJ...
...Economically, they placed a higher value on the 10% of U.S...
...This complex web, in which the United States clearly had the upper hand, was the basis for a recognition of mutual interests between the American transnational corporate world and the Torrijos regime, a recognition which was expressed, indeed consummated, in the 1977 treaties...
...Panama's Business Prospects Are Brightening in Wake of Treaty Accord," Business Latin America, September 14, 1977, p. 289...
...Barron's summed it up this way: The fact is that Panama's economy and management style are already dominated by U.S...
...2. Ibid., p. 146...
...Once Carter was elected, the more accommodationist approach was rearticulated in the second report of the trilateralist Commission on United States-Latin American Relations (informally known as the Linowitz Commission for its chair, Sol Linowitz...
...David Rockefeller, remarks, March 12, 1974, at the Chase Manhattan Bank, Panama City, Panama...
...John D. Harbon, "Yankee Dollars Wanted...
...But the Viet Nam years have taught me that we wouldn't...
...Treaty proponents argue that the market would place limits on toll charges because of minibridging and the cheaper, if longer, route around Cape Horn...
...In their corner, at least initially, was the U.S...
...THE VIEW FROM THE TOP During the 1965-1977 period a new appraisal of U.S...
...corporations) and the president of the National Association of Manufacturers both supported the treaty, as well as the chairman of United Brands (formerly United Fruit and Panama's largest taxpayer), American Ex- press, Union Pacific, Atlantic Richfield, Squibb and Celanese, to cite just a few...
...investors: The Colon Free Zone and Panama's legal framework for international banking...
...The Southern Command, headquartered in the Canal Zone, is known in military circles as "Southern Comfort" because of the relatively privileged lifestyle of the military command there, retired generals included...
...The Colon Free Zone, a tax-free area for assembly, re-export and commercial services Colon Free Zone- miles and miles of warehouses for the coming and going of goods produced elsewhere...
...9NACLA Report the Survival of a Free Congress, and the National Conservative Political Action Committee met several times a week beginning in the fall of 1977 to plan strategy...
...Steel, op...
...but its very dependence undercut its ability to gain this measure of freedom from its international financial overlords...
...Panama...
...trade with Latin America, as well as trade between East and Gulf Coast ports, the developing Pacific region and the Far East, where the U.S...
...TORRIJOS AND THE ROAR AT THE GATE If the economic elements of the growing U.S...
...corporate stake in Panama as a whole has grown...
...these strategists concede that the best defense is to involve the Panamanian military in a cooperative protective arrangement...
...3NACLA Report military establishment, which pushed hard to protect its particular stake in the 1903 treaty...
...and Time, op cit., p. 12...
...In December of the same year as the Flag Riots, Lyndon Johnson, secure in his presidential victory, contemplated the strength of his negotiating hand, lined up his political support, then responded to newly-elected Panamanian president Marco Robles that he would seek "an entirely new treaty," terminating the 1903 agreement...
...136-141...
...XXV (March 23...
...So much was admitted by key treaty opponent Richard Viguerie: This is a cutting issue...
...The criticism reflected a growing tendency within the ruling class, soon to be crystallized in the Trilateral Commission, which advocated an accommodationist approach on a wide range of issues between the United States and the third world...
...corporations flowing...
...Business Latin America, August 10, 1977, p. 289...
...5. Jack Child, "Military Aspects of the Panama Canal Issue," paper delivered to the Latin American Studies Association, April, 1979...
...Twenty-eight people had been killed, 300 wounded and 500 arrested-almost all of them Panamanian...
...Is the Panama Canal Worth It...
...Thus the Canal not only facilitated but dramatically reduced the cost of U.S...
...and other foreign banks have flocked to Panama, making it an important regional center in the global money market of the 1970s...
...We will have given our supporters an issue, a cause to work for...
...The Economist, August 20, 1977 In addition, the head of the Business Roundtable (the lobbying arm of the largest U.S...
...This was aided by the direct application of American military power, a vital component of American corporate penetration of the vast continent to the south so rich in natural resources and newly "liberated" markets...
...Their position reflects the ideologv of basically U.S.-centered business, professional and military interests, who in general have not experienced the power of transnational manipulation which informed the opposition's "magnaminity...
...6. Ibid., p. 13...
...Ronald Reagan Putting these various issues to one side, the Right fundamentally disagreed with the transnationals' strategy of "modernizing" the structures through which U.S...
...2 (To be sure, the accommodationists were as threatened as the Kissinger faction by a potential radical restructuring of global class relations...
...XLIV (February, 1977), p. 67...
...7 THE SELLING OF THE TREATIES Once the treaties were signed, the transnational corporations and their foreign policy apparatus of foundations, journals, study centers, etc., moved into high gear to exert pressure on the U.S...
...It warned that, on balance, the greater danger to U.S...
...For Panamanians, on the other hand, the issue had a bedrock level of importance...
...And sold they were...
...The consolidation of their influence in the Republican Party helped set the tone for public debate on subsequent foreign policy issues such as SALT II, the Mid-east, and more recently Nicaragua...
...military interest is in the use of the Canal, not in ownership or presence...
...We will have rallied many new people to our cause...
...91-94...
...Time, op...
...While Ford, Rockefeller, Kissinger and others supported the treaties, the Reagan forces won Republican National Committee support for their anti-treaty position...
...The 68-day passage of the U.S...
...It symbolized a divided nation, the rape of a country's most valuable resources, and perhaps most of all it symbolized the arrogance and insular self-satisfaction of the Zonians--Americans living so comfortably behind cyclone fences...
...shipping that passes through the Canal and noted that while only 4% of U.S...
...ASC's direct mail propaganda for Operation Alert, 1970 and 1974...
...Strategic Institute held up the Suez Canal as "a case record of a vital waterway in possession of a sovereign unable to provide security for the facility...
...took a 20% share...
...1977, p. 41...
...A second, painfully ironic, lever was that potential revenue from the Canal was Panama's major alternative to dependence on international loan capital for financing its development...
...Prior to the creation of Panama's financial center these same interests had firmly opposed any concessions to Panamanian demands...
...the Canal Aside, Panama Welcomes American Investment," Barron's, Vol...
...it was forced to squeeze 39% of its national budget for debt servicing (vs...
...reprinted in EPICA, PANAMA: Sovereignty For A Land Divided (Washington, D.C., 1976), pp...
...The Fourth of July Avenue, bordering the Canal Zone, was renamed Avenue of the Martyrs, Panama broke relations with Washington, and the Panamanian flag was raised over the school.' By the mid-1960s this anti-colonial struggle, as in other parts of the world, had reached a level of intensity such that it could not be ignored, either by the Panamanian oligarchy through which the United States maintained its privileges, or by the United States itself...
...Deposits in these banks mushroomed from a few hundred million dollars to over eight billion dollars in the same period--over 90% of all bank deposits in the country...
...Said Gary Jarman, legislative director of the American Conservative Union: It's a good issue for the future of the conservative movement...
...A Bid For Votes On Panama," Business Week, September 12...
...3 4 And of course the John Birch Society made its views loudly known...
...The prevailing mythology passes on to a new generation of Zonians...
...Steven S. Rosenfeld, "The Panama Negotiations A Close Run Thing," Foreign Affairs, Vol...
...With these dubious forces the main protagonists in the U.S...
...2 3 But by 1976 they had moved to the view that global penetration of finance capital provided better mechanisms of control than gunboats...
...Direct control of the Canal was considered vital because no lesser arrangement provided the security necessary to keep trade moving and profits to U.S...
...From the very beginning we have caved in to threats from tinhorn dictators...
...The next article looks at the treaties as finally ratified, and evaluates their impact on the class struggle in Panama...
...It's an issue the conservatives can't lose on...
...It's not just the issue we're fighting for...
...aircraft carriers exceed the capacity of the Canal in any case...
...Today, as much as 25% of the 4Sept/Oct 1979 coal shipped from the eastern United States to the Far East (primarily Japan) is in such vessels and goes around the Cape of Good Hope or Cape Horn rather than through the Canal...
...Their operation was indeed impressive...
...IX, no...
...people...
...Moreover, the kinds of operating curbs that hamper business operation in other countries are minimal...
...attitudes and business methods at a level found nowhere else in Central America, which the unpredictable Torrijos, though often appearing to be far leftward leaning, has encouraged...
...Channeled through the Reagan presidential campaign, their efforts to block accommodation grew in effectiveness as Gerald Ford sought some new basis for consensus in the Watergate-shattered Republican Party...
...This diplomatic defeat was followed by the OPEC oil embargo later that year, the emerging victory of the Vietnamese and a rising chorus from the nonaligned movement for a new economic relationship with the advanced industrial countries...
...That used to be our territory," Port of Baltimore administrator Joseph Stanton complained...
...7% in the United States...
...cit., p. 10...
...Also offshore transactions are not subject to Panamanian taxes.' 0 One of the most significant future investment opportunities is the $850 million Cerro Colorado Copper Mine, in which Texas Gulf Inc...
...LIV, no...
...Fiscal incentives are granted liberally to both locally and foreign owned companies...
...Hayakawa into defectors...
...They differed merely on the strategy to best contain it...
...cit , p. 14...
...XLII (Winter, 1978), pp...
...This is an excellent opportunity for conservatives to seize control of the Republican Party.' 4 They did succeed in polarizing it...
...military, bolstered by such important political allies as President Theodore Roosevelt, viewed a transoceanic canal as vital to its mission of protecting the newlywon hemispheric empire...
...flag flying alone over the great swath called the Canal Zone has rankled Panamanians deeply...
...XX (Winter, 1977...
...The Commission thus recommended that the new Administration "move quickly toward a new treaty with Panama which recognizes that country's sovereignty while protecting as well the U.S...
...As 1976 presidential candidate Ronald Reagan put it, "No one can guarantee that we can keep this waterway open to the world without the right of sovereignty which we are giving away...
...divisions of the previous decade academic since it gained from Panama a number of the concessions the Right and the military had been demanding...
...Briefings for Senators began in the spring of 1977, with treaty negotiators Sol Linowitz or Ellsworth Bunker, a military representative (often the Chairman of the Joint Chiefs of Staff himself) and representatives of the White House Congressional liaison office present...
...cit., p. 55...
...By the same measure then the sight of the U.S...
...1' South Africa uses such companies registered in the Free Zone to avoid the blockade of products resulting from South Africa's apartheid practices.'" Among the many American companies that take advantage of the Zone's tax-free status are Coca Cola, Colgate Palmolive, Firestone, ITT, McGraw-Hill, Pfizer, Polaroid and Xerox.16 . . BANKS OF MARBLE Both as cause and effect of a new Panamanian banking law in 1970, U.S...
...David M. Maxfield, "Panama Canal Treaties: The Battle for Public Support", In These Times, February 8-14, 1978, p. 7. 35...
...While only a handful of foreign banks were present in the mid-60s (including Chase Manhattan, which had arrived in 1919), 74 foreign banks were operating with minimal taxes and regulatory oversight by 1977...
...Touching on the political complexities of the period, Goldwater claimed, "I would have said that we should fight for the canal if necessary...
...General Omar Torrijos' consolidation of power following such a breakdown of traditional oligarchic rule and his favorable attitudes toward foreign capital impressed some corporate leaders and a sector of the U.S...
...cit., p. 12...
...Franck and Weisband, op...
...3 7 In these arguments, the Right had the vocal support of the military based in the Canal Zone, including a number of retired generals...
...Franck and Weisband, op...
...control...
...The riot soon spread to Colon, on the Atlantic side of the Zone, then deep into the interior...
...Details on the maximum ship size capacity of the canal can be found in "Alaskan Oil Through Panama Canal," Petroleum Economist, Vol...
...These corporations, whose influence on U.S...
...The U.S...
...three are in favor...
...has certainly added another permanent scar to U.S.-Latin American relations...
Vol. 13 • September 1979 • No. 5
