The White House Briefing Room
August 12, 1999
PRESS BRIEFING BY BARRY TOIV AND DAVID LEAVY
THE WHITE HOUSE
Office of the Press Secretary
____________________________________________________________
For Immediate Release August
12, 1999
PRESS BRIEFING BY
BARRY TOIV AND DAVID LEAVY
The Briefing Room
12:57 P.M. EDT
...................
Q What about the sale of the Panama Canal?
MR. TOIV: Panama Canal. David, you want to get right up there
and --
MR. LEAVY: Okay. The United States is satisfied our interests
will be protected after the canal is turned over this December. We have
seen no capability on the part of the PRC to disrupt the canal's
operations. I just mentioned the so-called Neutrality Act, provides a
guarantee for the security of the canal and that a law was passed to
implement the Hong Kong-based firms who were in question, and part of that
implementing law are provisions that insures that no vessel -- that the
canal will remain open to vessels of all nations.
Q Whose law is that?
MR. LEAVY: My understanding is that the contract -- Panama's
contract with the Hong Kong-based firm to operate the two ports of the
canal was passed into law in January 1997, and that law contains the
provision --
Q Panamanian law?
MR. LEAVY: Yes. Let me check on that, but that's my --
Q Any bid on this before we let the Chinese have it?
MR. LEAVY: Well, it's two -- they're Hong Kong-based firms. I
believe we did bid on that. I believe there actually were some questions
about the bidding. But we protested that and our team has been aware of
the issue and looked into it, and as I said earlier, we're satisfied that
our interests will be protected.
Q Is the U.S. and American vessels -- are they guaranteed
access and transit through the canal?
MR. LEAVY: Yes, they are. There's the so-called Neutrality
Treaty which provides for the security of the canal and the law that
governed the contract of these two Hong Kong-based firms have a provision
that allows all vessels from all nations to pass through.
I would also just note, too, that the container -- the firms are
container shipping firms, and while they have ports on both ends of the
canal, they're not the only ones, they don't have a monopoly or --
Q What about -- there was another issue raised, and that was
intelligence matters. Will this give the PRC an added ability to monitor
shipping that goes through the canal?
MR. LEAVY: I don't want to comment specifically on intelligence
matters, Alec, though just to say that our national security team has
looked into the matter and we're confident that our interests will be
protected and guaranteed.
Q What do you mean by no capability?
Q David, does this company have ties to the Chinese military?
MR. LEAVY: I don't know if -- I know it's a Hong Kong-based
company, but I'm not sure what, if any, ties they have to the PLA.
Q When does all this happen now?
MR. LEAVY: The actual official transfer I believe is in early
December of this year. There will be a transfer, a ceremony. I'm not sure
when the actual company contract goes into effect, but there will be a big
ceremony in Panama this December to actually commemorate the official
transfer.
Q And the U.S. actually approved of this?
MR. LEAVY: This was an open commercial contract. U.S. firms bid
on it, the Panamanian government --
Q What, they bid too low?
MR. LEAVY: This was several years ago, so I don't have the exact
specifics of the bidding process here. But there actually -- there were
some questions just about the transparency of the bidding process. We
raised our concerns at the time, but subsequently our team has looked into
it and we feel that our interests will be protected.
And I would just note, too, that we've seen no capability on the
part of the PRC, which is a heavy user of the canal, to disrupt its
operations. So I would caution people not to get too alarmed over this
issue.
Q You may think so, but it was very, very important in World
War II. It might not be important in the next war, but I cannot understand
how we could relinquish all of our interests in the canal. Well, you don't
seem concerned.
MR. LEAVY: Helen, it's not relinquishing our interests at all in
the canal. It's been a policy of this government for almost two decades
now, to transfer authority of the canal back to the Panamanians. We've
worked closely to ensure that that's done consistent with our interests.
We're confident that it will be -- these are commercial contracts for port
container processing. This company does not have a monopoly over that.
We've looked into it. We think --
Q They control both ends of the canal.
MR. LEAVY: They control ports on both ends, but they're not the
only ports, they're not the only shipping container company, so I think our
commercial interests will be able to be protected and won't be a problem.
Q And on what do you base your confidence --
MR. LEAVY: Well, again, as I said, our team looked into this,
analyzed it and made a judgment, and we're satisfied that our interests
will be protected both in terms of national security and commercial.
Q David, you said no capability on the part of the PRC to
disrupt. How do you know they have no capability, and can you put this in
the context of the question I asked yesterday, the very bellicose
statements by the Chinese Defense Minister threatening a high-tech war with
the United States?
MR. LEAVY: Well, I wouldn't link the two here. The issue about
the commercial viability of the canal and the transfer has been an issue
that we've been dealing with literally for years. The Chinese are a major
user of the canal as are we, as are other countries. There are significant
legal provisions built into the transfer to make sure that all vessels will
be able to transfer in. Again, these companies do not have a monopoly over
the port container issue.
Q How many others have control?
MR. LEAVY: Let me check on that. The people I checked with
today were pretty confident that our interests -- again, both commercial
and security -- will be protected here.
Q Are U.S. soldiers out of the canal zone by the end of the
year?
MR. LEAVY: I don't know. We had Howard* Air Force Base in
Panama. I know that we're closing down. I don't know, Mike, what, if any
U.S. personnel -- they're all checked out --
Q Senator Lott said you've given away the farm on this. He
wrote a letter to Secretary Cohen. Is Cohen responding to that, or how do
you answer him?
MR. LEAVY: I'm not aware the letter has been received. Again,
our folks are well aware of this issue. This has literally been something
that's been in the works for years. We've looked into it, and everyone
seems pretty confident that --
Q It seems to me that we have really missed the ball on this,
because the Panama Canal Commission has been warning and warning the U.S.
that this was about to happen. And it seems that we would want to keep our
stake in this canal that we built.
MR. LEAVY: I think our stake in the canal is preserved, Helen.
Again, we have legal remedies for the commercial transport. Our national
security team feels confident that our security interests are protected, so
I don't think that we're losing or damaging any --
Q I don't know what you base your confidence on.
MR. LEAVY: This is an issue that comes as no surprise. We've
looked closely at it, and our team feels pretty confident.
Q And did the U.S. conclude that the bidding process was fair?
MR. LEAVY: I think there were some concerns back in '97. I
believe the actual bidding -- that the bidding process wasn't as
transparent as we would have liked. We protested that to the Panamanians.
Q And what came of it?
MR. LEAVY: I'm not aware of any actual remedy that was changed,
but our protests were noted. I mean, the contract went forward to the Hong
Kong-based company, so I don't think there's any --
Q Do you know at what level the U.S. will be represented at
the transfer ceremony in December?
MR. LEAVY: No. No, I don't think that decision's been made.
Q David, one more. In 1956, the British and French went to
war over the Suez Canal, when the Egyptians nationalized it. What's going
to happen if --
MR. LEAVY: Well, I think we're sort of talking past each other a
little bit. Let me just take one or two more on this and let's move on.
This isn't -- the Canal's not being nationalized by the PRC. This is a
private company that has several contracts to work out of the canal in
terms of shipping containers of commercial products. We bid on that
contract --
Q How many private companies does the PRC have?
MR. LEAVY: Well, I can't confirm any specific PRC or PLA links
to these companies. But let me just say, as I've said many times so far,
is that these are private companies. We've got legal remedies. Our
interests, both commercial and security, will be protected. Okay? Last
one on this.
Q Kind of a related issue. There's also these reports that
the PRC is refurbishing a former Soviet listening post in Cuba. Are you at
all concerned that the PRC is heightening its presence in the Western
hemisphere somehow?
MR. LEAVY: I'm not aware of that specific report, Alex, and no
one's informed me of any heightened state of alert.
Q No, no. Are you concerned that the PRC is moving as a more
aggressive presence in the Western hemisphere?
MR. LEAVY: Not that I'm aware of, no.
................
END 1:27 P.M. EDT
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