Tension over ownership and management of the Panama Canal dated from early in the twentieth century. In 1903, American eagerness to construct a waterway through the Central American isthmus led President Theodore Roosevelt's administration to sponsor a secessionist rebellion in the Colombian province of Panama. Once the rebellion had succeeded, Washington then signed the highly advantageous Hay–Bunau-Varilla Treaty with the new Panamanian government. The deal gave the United States not only the right to operate the canal in perpetuity but also a protectorate over Panama and control over a 10-mile ribbon of territory (569 square miles) surrounding the canal. In return, the United States paid the Panamanian government $10 million and promised annual payments of $250,000.
Panamanians protested that this deal conceded too much to the United States and soon began demanding revisions. Above all, they objected to discriminatory labor practices in the Panama Canal Zone, the paltry sum paid to Panama, and American infringements on local sovereignty. In the 1930s, President Franklin D. Roosevelt took note of these complaints and, invoking his Good Neighbor policy toward Latin America, agreed to revise the treaty. Under accords signed in 1936, the United States ended its protectorate over Panama, increased its annual payments, and promised more evenhanded treatment of Panamanian employees in the Canal Zone. The arrangement did not alter basic inequities in the U.S.-Panamanian relationship, however, and serious tensions erupted again during the early Cold War.
Renewed Panamanian agitation presented U.S. leaders with conflicting priorities. On the one hand, the canal remained a potent symbol of U.S. power and ingenuity. No president could bargain away U.S. control without serious political risks. On the other hand, continued Panamanian resentment against the United States seemed to invite political instability that might benefit the Soviet Union or, after 1959, Fidel Castro's Cuba. In 1955, President Dwight D. Eisenhower's administration sought to split the difference by agreeing to minor treaty revisions connected mainly to financial and labor aspects of canal operations.
Such tinkering proved to be too little, too late. Anti-American demonstrations and riots, provoked partly by confrontational U.S. residents of the Canal Zone, exploded in 1958 and 1959. When another round of deadly rioting broke out in early 1964, President Lyndon B. Johnson's administration feared serious damage to the U.S. image across the Western Hemisphere and worried that Panamanian leftists might capitalize on the chaos to take charge of the country. Convinced of the need to deprive the radicals of such a potent grievance, Johnson delivered a landmark speech in December 1964 promising to negotiate an entirely new relationship with Panama.
In June 1967, the two sides appeared poised to reach a deal calling for joint administration of the canal and the abolition of the Canal Zone. The agreement unraveled, however, when the Panamanian government, under attack for achieving too little, withheld the accord from the Panamanian legislature. Political turbulence in Panama, including a military coup in 1968, prevented any new progress until the early 1970s. By then, charismatic Panamanian dictator and colonel of the National Guard Omar Torrijos had consolidated sufficient power to make another attempt at gaining control over the canal.
In 1973, the Panamanian government took its case to the United Nations (UN) and won a moral victory when the UN Security Council voted overwhelmingly to demand major U.S. concessions. Washington vetoed the measure but, recognizing its worsening position in international opinion, agreed in 1974 on a series of principles that met key Panamanian desires. U.S. National Security Advisor Henry Kissinger and Panamanian Foreign Minister Juan Antonio Tack declared that their countries would work toward a treaty providing for the gradual turnover of both the canal and the Canal Zone to Panamanian control. Most importantly, they agreed to set a termination date after which Panama would exercise full sovereignty.
Solutions slowly fell into place to numerous remaining disagreements. Above all, Torrijos grudgingly accepted President Jimmy Carter's insistence in early 1977 that the United States must retain the right to intervene unilaterally if it judged that the canal was under threat, a key demand of the Pentagon and conservatives in Congress. Finally, on 11 August 1977, thirteen years after the process had begun, the two sides met in Panama City and signed new treaties with a termination date of 31 December 1999.
The deal won overwhelming Panamanian and international approval but encountered fierce American resistance during the ratification process. Opponents in the United States had already begun organizing for a fight in previous years, especially during the 1976 presidential campaign when Ronald Reagan denounced the emerging deal as a humiliating surrender of American rights. Public opinion polls in 1977 showed that many Americans shared Reagan's skepticism, but careful maneuvering by the treaties' supporters kept the agreements alive. Most importantly, backers in the Senate eased some of the criticism by adding a proviso strengthening the U.S. right to intervene in Panama to protect the canal. The Senate ratified the last of the treaties on 18 April 1978.
U.S.-Panamanian relations suffered a major setback in the 1980s when the United States first encouraged the rise of military strongman Manuel Noriega and then pressured him to step down, a process that culminated in a U.S. invasion of Panama in December 1989. Despite this disruption, however, both sides have adhered to the treaties, with Panamanians gradually taking responsibilities for maintaining, operating, and defending the canal during the 1980s and 1990s. On 31 December 1999, Panama took full control of the waterway. President Bill Clinton, apparently anxious about the lingering political explosiveness of the canal issue, avoided the handover ceremonies.
Mark Atwood Lawrence
Jorden, William J. Panama Odyssey. Austin: University of Texas Press, 1984.; Lawrence, Mark Atwood. "Exception to the Rule? Lyndon Johnson and the Panama Canal." Pp. 22–52 in The Johnson Years, edited by Mitchell Lerner. Lawrence: University of Kansas Press, 2005.