On Both Sides of the Canal – From a Diplomatic Treaty to Prosperous Relations With Panama

Secretary of State Antony J. Blinken’s visit to Panama is a great opportunity to take a quick look into the history of the United States relations with Panama and the region. 

U.S. consular relations with Panama go back to 1823 with the appointment of a Consular Commercial Agent in Panama, which at the time was part of Colombia. When Panama declared independence in 1903, the United States was one of the first countries to recognize the new nation. On November 6, 1903, former Secretary of State John Hay instructed the U.S. Vice Consul General in Panama City Felix Ehrman to “enter into relations” with the Government of the Republic of Panama, when it appeared to meet conditions of a de facto government having the support of its own people. 

The Panama Canal 

The first few attempts among U.S. and European powers to reach an agreement to construct a canal that would connect the Pacific and Atlantic oceans were not successful. An 1850 agreement between the U.S. and Britain to construct a canal through Nicaragua never went beyond the planning stages. In 1889, a French attempt to build a canal through Panama went bankrupt, after nine years of casualties from yellow fever and other diseases. And although the U.S. Senate authorized the government to build a canal, the Colombian Senate failed to ratify the 1903 Treaty that would have allowed to project to go ahead. The Colombian refusal to accept the financial terms the U.S. offered to build a canal led U.S. President Theodore Roosevelt to send warships to the Panamanian coasts, in an implicit show of support for Panamanian independence.

After Panama declared independence, it named Philippe Bunau-Varilla (a French engineer who had been involved in the earlier attempt to dig a canal) as Envoy Extraordinary and Minister Plenipotentiary to the United States. The 1903 Hay-Bunau-Varilla Treaty provided the United States with a 10-mile-wide strip of land for the canal, a one-time $10 million payment to Panama, and an annual annuity of $250,000. The United States also agreed to guarantee the independence of Panama. Completed in 1914, the Panama Canal symbolized U.S. technological prowess and economic power. 

But the Panama Canal became a major irritant in U.S.-Panama relations, and U.S. relations with other countries in the Americas, over the years. In 1964, a riot broke out between U.S. residents and Panamanians over the right to fly the Panamanian flag around the Canal Zone, and Panama suspended diplomatic relations with the U.S. for several months.

The U.S. and Panama reached an agreement to start negotiations over new Canal treaties in 1967. Four Secretaries of State and four U.S. Presidents supported difficult negotiations with multiple governments in Panama before President Jimmy Carter and Omar Torrijos, the Commander of the Panamanian National Guard and military leader of Panama, signed two treaties on September 7, 1977. A fierce debate over ratification in the U.S. Senate finally resulted in the U.S. ratification of both treaties in April 1978.  

The first, called the Neutrality Treaty, stated that the United States could use its military to defend the Panama Canal against any threat to its neutrality, thus allowing perpetual U.S. usage of the Canal. The second, called The Panama Canal Treaty, stated that the Panama Canal Zone would cease to exist on October 1, 1979, and the Canal itself would be turned over to the Panamanians on December 31, 1999.

The first Secretary of State to visit the Panama Canal after it was transferred to the Panamanians was the late Secretary Madeleine Albright in January 2000.  In her official visit with Panamanian President Mireya Moscoso, she shared her reflections on that historic moment:

“So let me say for me it was a personal pleasure to be able to be here today. I worked on the Panama Canal Treaty in 1976 and 1977 both as member of the staff for Senator Muskie and then as a member of the National Security Staff for President Carter. I am very proud to have been able to be at the Canal today. I think I even understand how it works, and I turned the locks; with my own power I helped a ship go through. I consider that it was, as you said Madam President, a very important act of the United States to turn over the Canal to the country to which it belongs.” 

Secretary Blinken’s trip to Panama City and the Panama Canal this week reaffirms our strong bilateral relationship and the importance of Panama and the Canal to the United States. First and foremost, the United States remains the top economic partner of Panama, with over 13 billion dollars in bilateral trade and 72 precent of all transits through the Canal carrying goods to and from the United States. The United States also serves as the largest humanitarian donor to international organizations in Panama that provide assistance and protection to vulnerable migrants and refugees.   

Panama also serves an important leader in the region when it comes to democracy, human rights, and protection of migrants and refugees, which is one of the many reasons Panama recently hosted a Ministerial on Migration and Protection, bringing together 20 nations in the region in support of sustainable integration of refugees, international access to those who need it, expanded legal protections, and humane migration management.

This visit and the ministerial are both milestones that will be added to the pages of history of the Department and the world.

For additional information:

• Secretary of State Madeleine K. Albright- Remarks Prior to dinner with President Moscoso, Presidential Palace- January 15, 2000, Panama City, Panama
• Building the Panama Canal, 1903–1914
• A Guide to the United States’ History of Recognition, Diplomatic, and Consular Relations, by Country, since 1776: Panama
• Senate Foreign Relations Committee, Panama Canal Treaty Hearing, digital file  

This visit and the ministerial are both milestones that will be added to the pages of history of the Department and the world.

About the Author: Shalom Konstantino is a Public Affairs professional and a Special Assistant in the office of the Assistant Secretary for Global Public Affairs and the Spokesperson of the Department of State.