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 U.S. Department of State
 Bureau of Western Hemisphere Affairs

Transfer of the Panama Canal On December 31, 1999, the United States formally transferred control of the Panama Canal to the Republic of Panama, thereby fulfilling its obligations under the historic 1977 Panama Canal Treaty (Official Presidential Delegation List for the December 14th Ceremony). The Panama Canal Treaties The 1977 Panama Canal Treaties entered into force on October 1, 1979. They replaced the 1903 Hay/Bunau-Varilla Treaty between the United States and Panama and all other United States-Panama agreements concerning the Panama Canal which were in force on that date. The treaties comprise: A basic treaty governing the operation and defense of the Canal from October 1, 1979, to December 31, 1999 (Panama Canal Treaty); and A treaty guaranteeing the permanent neutrality of the Canal (Neutrality Treaty). The details of the arrangements for U.S. operation and defense of the Canal under the Panama Canal Treaty are spelled out in separate implementing agreements. Purpose of the Treaties In negotiating the Panama Canal Treaties, four successive United States administrations acted to protect a fundamental national interest in long-term access to a secure and efficient Canal. Panama's cooperation is fundamental to this objective. By meeting Panamanian aspirations for eventual control of the Canal, the United States sought a new relationship with Panama based on friendship and mutual respect. The treaties make Panama a partner in the continued safe and efficient operation of the Canal. In serving the best interests of both nations, the treaties serve the interests of all users of the Canal. History of the Negotiations The United States' bilateral relationship with Panama has centered on the Panama Canal since the beginning of the century. Under the 1903 treaty, the United States acquired unilateral rights to build and operate a canal in perpetuity. It also acquired the Canal Zone -- a 553 square-mile area in which the United States exercised the rights, power, and authority of a sovereign state. In January 1964, Panamanian dissatisfaction with this relationship boiled over into riots which resulted in the deaths of four U.S. Marines and more than 20 Panamanians. A 3-month suspension of diplomatic relations followed. The growing bilateral tension in the 1960s gave weight to the views of those who believed that a new Canal Treaty was needed to replace the 1903 treaty and to establish a new relationship with Panama. In June 1967, United States and Panamanian negotiators completed draft treaties dealing with the existing Canal, a possible sea-level Canal through Panama, and defense matters. Neither country ratified the treaties, however, and they were publicly rejected by the new Torrijos Government in 1970. A resumption of treaty negotiations led to a declaration of principles signed in 1973 by Secretary of State Henry Kissinger and his Panamanian counterpart, Juan Antonio Tack. On September 7, 1977, President Carter and General Torrijos signed the Panama Canal Treaties at the headquarters of the Organization of American States in Washington, DC. The Panamanian people approved the new treaties in a plebiscite held on October 23, 1977. The U.S. Senate ratified the Neutrality Treaty on March 16, 1978, and the Panama Canal Treaty on April 18, 1978. The treaties entered into force on October 1, 1979. The protocol to the Neutrality Treaty is open to accession by all nations, and more than 35 have subscribed. || Western Hemisphere Affairs | State Department Home Page ||