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The Panama Canal: Can We Afford To Give It Up

The Panama Canal: Can We Afford To Give It Up?


AUTHOR Major Frank M. Stewart, USMC


CSC 1988


SUBJECT AREA National Security










I. Purpose: To identify the strategic, political, and

military importance of the Panama Canal, to identify present

problems in each area, and to propose a solution to these



II. Thesis: Although the Panama Canal Treaty of 1977

outlines the return of the Canal to Panama and initially

improved diplomatic relations, the return of the Canal will

have significant strategic, political, and military reper-

cussions for the long-range interests of the United States.


III. Data: The present political situation in Panama has

deteriorated to the point where the security of the United

States and its allies is questionable. The security of the

Panama Canal continues to be the main issue. Critics have

argued that the Canal is no longer strategically important

while others have strongly supported the Canal's strategic

importance. Panamanian politics have degenerated to a

"Mafia-like" government ruled by a dictator, General Manuel

Noriega. As a result, the government is closely compared to

an organized crime family. The U.S. government has cut off

all economic aid and has charged General Noriega with crimi-

nal charges. Additionally, one hundred U.S. Marines have

been sent to Panama to emphasize the importance of the Canal

to the U.S. The United States has refused to recognize the

present government of Panama and recognized only the exiled

government as the true government of Panama. Strategically,

Panama governs our southern flank and is the key to the

security of the Caribbean and the Gulf of Mexico. The U.S.

cannot allow a communist presence in Panama. If General

Noriega continues in power, the United States could be

forced to take military action. Militarily, the Canal is of

tremendous importance for moving militay forces from ocean

to ocean, rapid deployment of forces, and training forces in

jungle warfare. The U.S. cannot allow a corrupt government

to continue, or a communist power to control the Canal. The

United States must take action now before it is too late and

war comes to this hemisphere.


IV. Summary: The Panama Canal plays an important role in

the security of the United States. Political changes must

occur in Panama with a democratically elected government

that is friendly to the United States. The United States

must continue to emphasize the strategic importance of the

Canal and not allow communist influence to continue Mili-

tarily, the Canal must continue to be defended with U.S.

forces and the military bases used for training U.S. forces.

Then and only then will the strategic, political, and mili-

tary objectives of the United States be met.


V. Recommendations: General Noriega must be removed as the

leader of Panama. Democracy must be reinstituted and a

President elected who is friendly to the United States. The

Panama Canal Treaty of 1977 must be declared invalid and a

new treaty negotiated. The defense of the Canal should be a

joint function of both Panamanian and U.S. forces. The

United States must have indefinite basing rights for U.S.

armed forces in Panama.







Thesis: Although the Panama Canal Treaty of 1977 outlined

the return of the Canal to Panama and initially improved

diplomatic relations, the return of the Canal will have

significant strategic, political, and military repercussions

for the long-range interests of the United States.


I. Strategic Importance of the Panama Canal

A. Security of the United States

1. Flexibility and mobility of naval forces

2. Two-ocean Navy concept

B. Security of the Caribbean and Gulf of Mexico

1. Southern flank

2. Facilities in Panama

C. Communist Control of Canal

D. Panama Canal - Maritime bottleneck of the world

E. Loss of Canal - Strategic significance


II Political Importance of the Panama Canal

A. Panamanian Political Victory

B. 1977 Treaty

C. Panamanian Political Problems

1. Corruption of military

2. Election fraud

D. U.S. and Panamanian Relations

E. Communist Presence

F. Present Political Situation


III. Military Importance of the Canal

A. Transfer of Combat Power

B. Economic Considerations

C. Training Facilities

D. Deployment of Combat Power

E. Defense of Canal

F. Use of Combat Power

1. Against Panamanians

2. Limited Intensity conflict

3. Costly

4. Prolonged conflict







It is now December 30, 1999. Tomorrow the Panama Canal


will belong officially to the Republic of Panama. A General


Manuel Noriega-type dictator publicly declares himself ruler


for life. Furthermore, he announces that the government of


Panama now will be considered communist and modeled after


Cuba. Additionally, he states that on January 1 all diplo-


matic relations will be broken with the United States.


Furthermore, he orders all American armed forces out of the


Republic of Panama and denies the use of the Panama Canal to


the United States. Cuba, Nicaragua, and the Soviet Union


support him politically and militarily. General Noriega is


now master of a waterway that is of enormous importance to


the United States and other maritime nations.


In Washington, the President of the United States calls


an emergency meeting with his top military and political


advisors. The subject is Panama, the Canal, and "the little


dictator." What will be the outcome of this meeting? Will


the President commit military forces? Is the Canal still


important to the defense of the United States? Is the Canal


worth going to war over? All of these questions must be


answered if action is to be taken. Although the Panama


Canal Treaty of 1977 outlined the return of the Canal to


Panama and initially improved diplomatic relations, the


return of the Canal will have significant strategic, politi-


cal, and military repercussions for the long-range interests


of the United States.


Strategically, the Panama Canal plays an important role


in the security of the United States. The Panama Canal


provides the United States with the ability to rapidly move


its naval forces from the Pacific to the Atlantic, thus


providing flexibility and mobility to our naval forces in


peace and war.1 If the Panamanian government closed the


Canal to the United States, our naval forces would have to


rely on what naval forces were available in theater. Addi-


tional forces could be introduced only by transiting the tip


of South America or traveling long distances across other


waterways. Critics of the Canal have argued that since the


United States now has a "two-ocean Navy," the Canal is no


longer important. Retired Marine General Victor H. Krulak


refuted critics of the Canal when he blasted the argument


that the Canal was no longer needed because of the "two-


ocean Navy." He further stated that the only way the Navy


could exercise flexibility in times of emergency is by


shuttling ships through the canal. If the Navy could do


this, only then could it be described as a "two-ocean




Another strategic consideration is the security of the


Caribbean and the Gulf of Mexico. If the use of the Panama


Canal and its facilities were denied to the United States,


the United States would lose its southern and western anchor


in the Caribbean. Additionally, when we consider the impor-


tance of southern Florida, the Florida Keys, Guantanamo Bay,


and Puerto Rico, Panama offers air and land facilities which


strengthen the security of our southern flank. It is within


the above framework that Panama is of greatest significance


to the control of the Caribbean and the Gulf of Mexico.3


The scenario mentioned earlier that the Canal could be


owned and operated by a Communist government. Strategic-


ally, this would be a serious blow to the security of


America. As long as the United States can own and operate


the Canal, it will always be an asset to our strategic


interests. Once a nation or nations, actively or poten-


tially hostile to he United States, takes complete control


of the Canal, it will be a menace to the security of the


United States.4 This could become a reality if the United


States fails to act now before the treaty expires.


The Panama Canal is recognized as one of the main


maritime bottlenecks of the world. The Canal allows ships


of all nations to transit easily from one ocean to another.


Strategically, these sea routes are vital arteries connec-


ting the United States with its allies and trading partners.


Hemispheric safety of the United States depends on the


ability of the United States Navy to control the trade


routes of the Caribbean Sea, the Atlantic, and the Pacific.5


The loss of the Canal will certainly interfere with the


security of the United States and many other nations.


Furthermore, the ability of the United States to react in


crisis or war would certainly be reduced.


Turning over of the Panama Canal to the Republic of


Panama could prove to be an unacceptable strategic loss to


the United States. General Krulak wrote the following:


The idealist who negotiated the surrender of this

great strategic asset, through which two-thirds of

our imported strategic minerals pass, did so on

the fragile assumption that Panama could handle

their responsibility.6


It appears that our strategic interests are now gov-


erned by how Panama handles its responsibilities. Histor-


ically, the Panamanian government has had problems maintain-


ing and operating even the smallest of facilities. I lived


in the Republic of Panama during the last three years.


During this time, I noticed that every facility that was


turned over to the Panamanian government quickly became


poorly maintained. For example, the United States Embassy


put the Panama Railroad off limits to all United States


personnel. The Railroad was run down and declared unsafe.


Additionally, other facilities in the Zone, under Panamanian


control, quickly became poorly maintained. The list could


go on and on. I believe the only reason the Canal continues


to work is that we still operate it. If the Panamanian


government cannot responsibly handle even the smallest fa-


cility, I seriously doubt they can handle the responsibility


of operating the Canal.


The Panama Canal Zone unites Panama politically and


emotionally.7 The 1977 Panama Canal Treaty was a boost to


Panama's sense of pride and nationalism. The treaty trans-


ferred ownership of the canal to Panama on 31 December 1999.


Additionally, it turned over the defense of the Canal to


Panama's military. This was a major political victory for




Politically the validity of the 1977 Treaty has often


been debated in the United States. Opposition to the Treaty


was intense. The only way the Treaty was ratified by the


Senate was the addition of a reservation to the Treaty. The


reservation asserted the United States' right, if anyone


interfered with Canal operations, to use military force to


restore its integrity. However, after the Senate approved


the treaty, the Panamanian government declared that the


United States had no right to use force. The Panamanian


government's declaration against the U.S. right to use force


certainly raised the question of whether or not the Treaty


was valid.8


Panama's political and internal problems began with the


death of Panama's ruler Omar Torrijos in a mysterious plane


crash in 1981. After the accident, General Noriega quickly


manipulated his own appointment to the top military position


in Panama. In 1983 he succeeded Dario Paredes as Commander-


in-Chief, and promised Paredes his support in the 1984


presidential elections. Noriega then withdrew the military


support for another candidate, Nicolas Barletta. Barletta


won the election, but not without many charges of voting


fraud. He later was forced to resign by General Noriega in


1985 as a result of Barietta's attempt to investigate the


death of the opposition leader, Mr. Hugo Spadafora.


In 1985, United States intelligence sources revealed


that Noriega himself planned the late 1985 murder of Mr.


Spadafora, the opposition leader. Spadafora had publicly


accused Noriega of drug trafficking. Shortly thereafter,


Spadafora's body was found, tortured and headless.9 This


was just the beginning of political corruption in Panama.


In order to pressure General Noriega to resign, a


Federal grand jury in Miami indicted him on charges of drug


trafficking, money laundering, and racketeering. This is


the first time the United States has charged the leader of


an allied country with criminal acts.10


Since the resignation of Panama's President Barletta in


1985, and the appointment of Vice-President Delvalle as


President of Panama, General Manuel Noriega emerged as the


true head of government. He rules the government with a


"Mafia style" of leadership. According to US News and World


Report, dated 21 July 1987, General Noriega's accusers


charge him with political murder, election fraud, drug traf-


ficking, money laundering, gun-running, and selling United


States secrets and technology to Cuba's Fidel Castro and


Libya's Muammar Qadhafi. Furthermore, General Noriega's


senior command has been compared to an "organized crime"


family. United States officials suspect that General


Noriega and other senior officers get a cut of all illicit


cash flowing through Panama.11


Recently, Panamanian politics have taken a dramatic


turn. President Eric Delvalle publicly demanded that


General Noriega resign and step down as Commander of the


Panama Defense Force. In less than an hour, General Noriega


convened the National Assembly, and had President Delvalle


voted out as President. He then appointed Manuel Palma, a


friend and ally of Noriega, as Acting President. Later,


Delvalle was ordered out of the country, but refused to


leave. He is now in hiding somewhere in Panama; however,


he stills claims to be the legitimate President of Panama.


Politically, President Delvalle's ouster appears to


have stripped Noriega's government of international support,


and has isolated the new government. As a result, the


Organization of American States (OAS) will have to decide


which government to officially recognize.12


The United States has also refused to recognize


Panama's new government. Additionally, according to many


news reports, the United States has instituted economic


sanctions, and has sent an additional one hundred U. S.


Marines to Panama. This clearly tells Noriega that the


United States is not leaving Panama. Even with the con-


tinued focus on politics, the Panama Canal continues to be


the focal point of everyone's discussion. On 28 February


1988, Senator Lugar, on Meet the Press, stated the United


States should rethink its position on the Panama Canal if


Noriega is still in power in 1999. This is a clear indica-


tion that if Noriega is still in power in 1999, the validity


of the treaty must be re-examined. The United States should


not turn the Canal over to a power hostile to the United


States; to do so would be a tremendous blow to the security


of the United States and its allies.


Politically, the main fear is the Communist presence in


Panama. General Noriega himself has been a noted Communist


since he was a student. He has turned over the former


United States Naval Air Station at Coco Solo to the Soviets


and appointed many Communists to the local government.


Additionally, he has increased relations with Cuba and


Nicaragua. It certainly appears that democracy is history.


It is also apparent that the Panamanian government has


neither the strength or stability that would ensure the


safety of the Panama Canal.13


The United States cannot retreat from the political


arena in Panama. To do so would probably put the last nail


in the coffin of the Monroe Doctrine.14 Politically, the


United States must remain a dominant force in Panama.


America cannot allow Communist domination of Panamanian


politics and Communist control of the Panama Canal.


Panamanian politics will play an important role in the


future. The Panama Defense Force (PDF), even though plagued


by a corrupt leader, General Noriega, will be a strong


political force. Secondly, the National Civic Crusade (NCC)


has become a dominant political party. The NCC has called


for the removal of General Noriega and the return of democ-


racy. It has also refused to negotiate with the government


until General Noriega is removed. The NCC has stated that


Noriega's actions have systematically undermined the values


of Panama as a civilized community.15 Both the NCC and the


POF, coupled with United States politicians, will play an


important role in the political solution to the problems in




Militarily, the Canal is essential for the rapid trans-


fer of combat power from one ocean to another. The Canal


allows logistics to flow quickly and efficiently from one


part of the globe to another. Economically, it is the most


economical route for shipping equipment and supplies to


support military activities. Simply put, the Canal allows


the United States military the speed and flexibility to


deploy anywhere in the world in both peacetime and war.16


Panama has some of the best military training facili-


ties available for United States forces. The Army Jungle


Warfare School trains United States forces year-round.


Live-fire ranges are also available. Training areas are


available for tactical field operations. The loss of these


facilities would limit the United States' ability to train


its forces in jungle operations and survival techniques.


The ability to rapidly deploy combat forces in times of


military crises is of prime importance. United States mili-


tary forces stationed in Panama can quickly deploy to any


potential crisis area in Latin America. The loss of this


capability will limit our capability to react. If United


States forces are ordered to leave Panama in 1999, plans


must be made on how the United States forces will be employ-


ed in Latin America.


The defense of the Canal, after all United States


military forces leave Panama, concerns all branches of the


Armed Forces. How are we going to defend the Canal with no


forces stationed ashore? This is a question that must be


answered. My answer to this question is the employment of a


Marine Expeditionary Brigade (MEB), combined with United


States Navy, United States Army, and United States Air Force


forces. If Panama fails in defending and operating the


Canal, an operation of this type could be executed quickly.


Furthermore, if Cuba, Nicaragua, and the Soviet Union become


the dominant forces in Panama, the United States may have no


other choice than to use military force. The use of "the


bayonet" may be the only way to regain this strategic asset


if other means fail.


Even though the use of military force may be the solu-


tion to the Panamanian problem, it will have serious reper-


cussions for the United States. People sometimes forget


that the Panamanians have a tremendous sense of nationalism.


United States military intervention into internal Panamanian


politics could turn this nationalism against the United




If the Panamanian people unite against the United


States, it would cause serious problems in defending the


Canal. The United States would have a long land mass to


defend and a hostile population to deal with. This could


result in the building of a concrete fortress around the


Canal to prevent the populace from taking hostile action


against United States personnel and the Canal.


Another military consideration is the number of mili-


tary personnel necessary to defend the Canal. If the Pana-


manian population is hostile, it could take as many as


100,000 United States troops to defend the area. This would


be a significant drain of personnel and equipment. Further-


more, to support a force of this size would be costly to the


United States government. As a result, the use of military


force must be a last resort tactic.


Combat readiness in Latin America depends largely on


United States military bases in Panama. Presently, the


United States has over 10,000 personnel stationed permanent-


ly in Panama. These forces can quickly be deployed in


Central America, South America, and the Caribbean. If these


bases were lost, the United States would have to deploy


troops from home bases or the sea. U.S. bases in Panama


must be considered vital to the security of the United


States, and be extended beyond the year 2000 deadline speci-


fied in the Panama Canal Treaty of 1977.


If armed conflict between the United States and Panama


occurred, the United States would be at war with a Panaman-


ian defense force of over 15,000. Additionally, the United


States would have to deal with Cuba, Nicaragua, and the


Soviet Union. Furthermore, other Latin American countries


would probably side with Panama, which would damage United


States relations with other countries, and further compli-


cate military operations. l seriously doubt-whether mili-


tary operations would be simple to plan or execute. Jungle


operations would be a big player in the outcome of a mili-


tary solution. Military operations in urban terrain would


also have to be conducted, since Panama City is heavily


populated. Military forces would have to prepare themselves


for prolonged low-intensity conflict operations. As anyone


can easily deduct, a military solution would be the most


costly in both American and Panamanian lives.


The solution to this complex problem will involve both


diplomats and military forces. General Victor H. Krulak


addressed both a political and a military approach to the


problem as follows:


We should openly support the many responsible

Panamanians who are dedicated to establishing a

free and democratic government, while withholding

all support whatsoever from the Noriega govern-

ment. And we should make our position doubly

emphatic by a substantial increase in the United

States forces in the Canal Zone.17


Additionally, the United States Ambassador to Panama,


Arthur Davis, related the future of the Canal to democrati-


zation. He addressed the fact that Panamanian democratic


functioning institutions are the best guarantee to Americans


and Panamanians alike for the successful turnover of the




Both of the above solutions point directly to a change


of government in Panama as the key to the security of the


Panama Canal. A democratic outcome is only possible if the


Panama Defense Force steps down and is no longer the decis-


ive element in national politics.19


I believe the solution to this problem is the immediate


resignation and departure from Panama of General Noriega and


his staff of corrupt officers and followers. Secondly, the


United States must back Panamanian political leaders who


will restore democracy to Panama and who will be friendly to


the United States. Furthermore, the validity of the Panama


Canal Treaty of 1977 is questionable. It must be considered


invalid and a new treaty negotiated. This new treaty must


require a joint defense consisting of U.S. and Panamanian


armed forces and indefinite basing rights for United States


Armed Forces. Then and only then will the strategic, polit-


ical, and military objectives of the United States be served.


The failure to obtain a solution to the Panamanian


problem before the year 2000 will create a serious problem


for the security of the United States. If democratization


fails to take place, and General Noriega and his "Mafia-


like" followers continue in power until the year 2000, the


United States will be forced to make a strategic, political,


and military decision that may bring war to Latin America.





1Paul Ryan, The Panama Canal Controversy (Stanford,

California: Hoover Institutional Press, 1977), p. 142.

2Ibid., p. 145.

3Hanson Baldwin, "The Panama Canal: Sovereignty and

Security," American Enterprise Institute Defense Review, 4

(August 1977), p. 14.

4Ibid., p. 13.

5Ryan, p. 135.

6Victor Krulak, "Panama, Ten Years Later," Strategic

Review, XV (Summer 1987), p. 5.

7Abraham Lowenthal and Milton Charlton, "The United

States and Panama: Confrontation of Cooperation," American

Enterprise Institute Defense Review, 4 (August 1977), p. 7.

8Krulak, p. 5.

9Nancy Cooper, et al. "Drugs, Money and Death," News-

week, 15 February 1988, p. 35.

10Ibid., p. 32.

11Ibid., p. 33.

12William Branigan, "Panama's President in Hiding," The

Washington Post, February 28, 1988, Section A, p. 1.

13Krulak, p. 5.

14Baldwin, p. 5.

15Ricardo Calderon, "Panama: Disaster of Democracy,"

Foreign Affairs, (Winter 1987/1988), p. 336.

16Lowenthal and Charlton, p 6.

17Krulak, p. 6.

18Calderon, p. 6.

19Fred Woerner, "U.S. Southern Command - Shield of

Democracy in Latin America," Defense 87 (Nov-Dec 1987), p.






Baldwin, Hanson. "The Panama Canal: Sovereignty and Secur-

ity." American Enterprise Institute Defense Review, 4

(August 1977), 12-34.


Branigan, William. "Panama's President is Hiding." The

Washington Post, February 28, 1988, Section A, p. 1.


Calderon, Ricardo. "Panama: Disaster of Democracy." Foreign

Affairs, (Winter 1987/1988), 328-347.


Cooper, Nancy et al. "Drugs, Money and Death." Newsweek, 15

February, 1988, pp. 32-38.


Krulak, Victor. "Panama, Ten Years Later." Strategic Re-

view, XV (Summer 1987), 5-6.


Lowenthal, Abraham and Milton Charlton. "The United States

and Panama: Confrontation of Cooperation." American

Enterprise Institute Defense Review, 4 (August 1977),



Ryan, Paul. The Panama Canal Controversy. Hoover Institu-

tional Press, 1977.


Woerner, Fred. "U.S. Southern Command - Shield of Democracy

in Latin America." Defense 89 (Nov-Dec 1987), 20-27.

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