Clock ticking for the Panama Canal U.S. withdrawal: On last day of the century, full ownership reverts to Panama.

December 23, 1996

FAST FORWARD to Dec. 31, 1999, the last day of the millennium for all but mathematics sticklers: As Americans prepare for a New Year's Eve of epochal proportions, President Clinton at the dot of high noon will turn the Panama Canal over to the Panamanians. This is decreed under terms of the 1977 treaty, and it will be one of the final acts of the Clinton presidency.

Already the rumblings are shaking up the Central American scene and the world shipping industry. Panama's neighbors, never happy over the Yanqui presence, are torn. Some see the return of a Latin American heritage to its rightful owners. Others harbor dreams of making their territory, rather than Panama's, the chief international route across the isthmus. Nicaragua, especially, seeks a "dry canal" using a rail link between the oceans to compete in East-West trade with the Panama facility and train routes across the United States.

Many nations outside this hemisphere are into the act. Taiwan is betting heavily on the staying power of the existing canal even though it no longer can handle the biggest tankers and freighters now being built. China, Japan and South Korea are eyeing shipping and development alternatives, with France ever ready to assist in poking Uncle Sam's eye.

These international developments lend a certain urgency to how Panama and the United States handle their mutual affairs.

Already the U.S. has turned over some of its biggest military bases. But a remaining question is whether a force of 4,000 U.S. troops will stay in Panama under a follow-on treaty.

Officials from both nations engaged in maintaining the canal as a competitive facility favor such a pact as a signal to shipping companies of continuing stability. But ultra-nationalist pressures in Panama are building.

Practical bilateral measures are needed now: Multi-billion-dollar plans for widening and deepening the canal; efforts to protect the environment erosion that is growing to dangerous proportions; steps by Panama to clean up an image again marred by drug trafficking and money laundering.

From a military point of view, the Panama Canal no longer has quite the strategic importance of prior eras. But it is still useful in moving warships between the two oceans and in denying such transit to other nations. In the commercial shipping field, the stakes are enormous.

Clearly, the last day of the century will bring big changes for Panama -- and for the United States.

Pub Date: 12/23/96

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