U.S. Department of State
Background Notes:  Panama
Released by the Bureau of Inter-American Affairs
May 1997

OFFICIAL NAME:  Republic of Panama


PROFILE

People

Nationality: Noun and adjective--Panamanian(s).
Population (1996 est.): 2.68 million.
Annual growth rate: 2%.
Ethnic groups: Mestizo (mixed Indian and European ancestry) 70%, West 
Indian 14%, Caucasian 10%, Indian 6%.
Religions: Roman Catholic 85%, Protestant (Evangelical) 15%.
Languages: Spanish (official); 14% speak English as their native tongue; 
various Indian languages.
Education: Years compulsory--6. Attendance--95% for primary school-age 
children, 96% for secondary. Literacy--About 90% overall: urban 94%, 
rural 62%.
Health: Infant mortality rate--17/1,000. Life expectancy--74 yrs. 
Workforce (910,000): Government and community services--32%. 
Agriculture--27%. Commerce, restaurants, and hotels--16%. Manufacturing 
and mining--9%. Transportation and communication--6%. Construction--3%. 
Finance, insurance, and real estate--4%.

Geography

Area: 77,381 sq. km. (29,762 sq. mi.); slightly smaller than South 
Carolina. Panama occupies the southeastern end of the isthmus forming 
the land bridge between North and South America.
Cities: Capital--Panama City (827,828). Other cities--Colon (140,908), 
David (102,678).
Terrain: Mountainous (highest elevation Cerro Volcan, 3,475 m.--11,468 
ft.); coastline 2,857 km. (1,786 mi.).
Climate: Tropical, with average daily rainfall 28 mm. (1 in.) in winter.

Government

Type: Constitutional democracy.
Independence: November 3, 1903.
Constitution: October 11, 1972; amended 1983 and 1994.
Branches: Executive--president (chief of state), two vice presidents. 
Legislative--Legislative Assembly (unicameral, 72 members). Judicial--
Supreme Court.
Subdivisions: Nine provinces and two (Indian) territories.
Political parties: President Perez Balladares belongs to the Democratic 
Revolutionary Party (PRD), which in a coalition with smaller parties, 
holds a slim majority in the Legislative Assembly. Opposition parties 
include Arnulfista Party (PA), to which former President Endara belongs; 
the Christian Democratic Party (PDC); the Papa Egoro Party; and the 
National Liberal Republic Movement (MOLIRENA). 
Suffrage: Universal and compulsory at 18.

Economy (1995)

Real GDP: $5.7 billion.
Annual growth rate: 1.9%.
Per capita GDP: $2,885.
Natural resources: Timber, seafood, copper.
Services (72% of GDP): Finance, insurance, canal-related services, Colon 
Free Zone.
Agriculture (11% of GDP): Products--bananas and other fruit, corn, 
sugar, rice, coffee, shrimp, timber, vegetables, cattle. Land--
agricultural 24%, exploitable forest 20%, other 56%.
Industry (19% of GDP): Types--food and drink processing, metalworking, 
petroleum products, chemicals, paper and paper products, printing, 
mining, refined sugar, clothing, furniture, construction.
Trade: Exports--$565 million: bananas 33%, shrimp 11%, sugar 4%, coffee 
2%, clothing 5%. Major markets: U.S. 40%. Imports--$2.33 billion: 
capital goods 21%, crude oil 11%, foodstuffs 9 %, other consumer and 
intermediate goods 57%. Major suppliers: U.S. 40%. 
Exchange rate: Fixed at unity with the U.S. dollar.


PEOPLE

The culture, customs, and language of the Panamanians are predominantly 
Caribbean Spanish. Ethnically, the majority of the population is mestizo 
(mixed Spanish and Indian) or mixed Spanish, Indian, Chinese, and West 
Indian. Spanish is the official and dominant language; English is a 
common second language spoken by the West Indians and by many in 
business and the professions. More than half the population lives in the 
Panama City-Colon metropolitan corridor.

Panama is rich in folklore and popular traditions. Brightly colored 
national dress is worn during local festivals and the pre-Lenten 
carnival season, especially for traditional folk dances like the 
tanborito. Lively salsa--a mixture of Latin American popular music, 
rhythm and blues, jazz, and rock--is a Panamanian specialty. Indian 
influences dominate handicrafts such as the famous Kuna textile molas. 
Artist Roberto Lewis' Presidential Palace murals and his restoration 
work and ceiling in the National Theater are well known and admired.

Over 65,000 Panamanian students attend the University of Panama, the 
Technological University, and the University of Santa Maria La Antigua, 
a private Catholic institution. Including smaller colleges, there are 14 
institutions of higher education in Panama.

The first six years of primary education are compulsory, and there are 
357,000 students currently enrolled in grades one through six. The total 
enrollment in the six secondary grades is 207,000. Nearly 90% of 
Panamanians are literate.


HISTORY

Panama's history has been shaped by the evolution of the world economy 
and the ambitions of great powers. Rodrigo de Bastidas, sailing westward 
from Venezuela in 1501 in search of gold, was the first European to 
explore the Isthmus of Panama. A year later, Christopher Columbus 
visited the isthmus and established a short-lived settlement in the 
Darien. Vasco Nunez de Balboa's tortuous trek from the Atlantic to the 
Pacific in 1513 demonstrated that the isthmus was indeed the path 
between the seas, and Panama quickly became the crossroads and 
marketplace of Spain's empire in the New World. Gold and silver were 
brought by ship from South America, hauled across the Isthmus, and 
loaded aboard ships for Spain. The route became known as the Camino 
Real, or Royal Road.

Panama was part of the Spanish empire for 300 years (1538-1821). From 
the outset, Panamanian identity was based on a sense of "geographic 
destiny," and Panamanian fortunes fluctuated with the geopolitical 
importance of the isthmus. The colonial experience also spawned 
Panamanian nationalism as well as a racially complex and highly 
stratified society, the source of internal conflicts that ran counter to 
the unifying force of nationalism. 


BUILDING THE CANAL

Modern Panamanian history has been shaped by its trans-isthmian canal, 
which had been a dream since the beginning of Spanish colonization. From 
1880 to 1900, a French company under Ferdinand de Lesseps attempted 
unsuccessfully to construct a sea-level canal on the site of the present 
Panama Canal. In November 1903, with U.S. encouragement and French 
financial support, Panama proclaimed its independence and concluded the 
Hay/Bunau-Varilla Treaty with the United States. The treaty conceded 
rights to the United States "as if it were sovereign" in a zone roughly 
10 miles wide and 50 miles long. In that zone, the U.S. would build a 
canal, then administer, fortify, and defend it "in perpetuity." In 1914, 
the United States completed the existing 83-kilometer (50-mile) lock 
canal, which today is one of the world's greatest engineering triumphs. 
The early 1960s saw the beginning of sustained pressure in Panama for 
the renegotiation of this treaty. (See discussion of United States-
Panama relations and the 1977 Panama Canal Treaties below.)


MILITARY COUPS AND COALITIONS

From 1903 until 1968, Panama was a constitutional democracy dominated by 
a commercially oriented oligarchy. During the 1950s, the Panamanian 
military began to challenge the oligarchy's political hegemony. In 
October 1968, Dr. Arnulfo Arias Madrid, twice elected president and 
twice ousted by the Panamanian military, was again ousted as president 
by the National Guard after only 10 days in office. A military junta 
government was established, and the commander of the national guard, 
Brigadier General Omar Torrijos, emerged as the principal power in 
Panamanian political life. Torrijos' regime was harsh and corrupt, but 
he was a charismatic leader whose populist domestic programs and 
nationalist foreign policy appealed to the rural and urban 
constituencies largely ignored by the oligarchy.

Torrijos' death in 1981 altered the tone but not the direction of 
Panama's political evolution. Despite 1983 constitutional amendments 
which appeared to proscribe a political role for the military, the 
Panama Defense Force (PDF), as they were then known, continued to 
dominate Panamanian political life behind a facade of civilian 
government. The PDF's hand-picked candidate won the presidential 
election in 1984. Pro-government parties also won a majority of 
Legislative Assembly seats, in races tainted by charges of corruption. 
By this time, General Manuel Noriega was firmly in control of both the 
PDF and the civilian government. 

The rivalry between civilian elites and the Panamanian military, which 
had been a recurring theme in Panamanian political life since the 1950s, 
now developed into a grave crisis. In the summer of 1987, prompted by 
government restrictions on media and civil liberties, more than 100 
business, civic, and religious groups formed a loose coalition that 
organized widespread anti-government demonstrations.

Panama's developing domestic crisis was paralleled by rising tensions 
between the Panamanian Government and the United States. The United 
States froze economic and military assistance to Panama in the summer of 
1987 in response to the political crisis and an attack on the U.S. 
embassy. The Government of Panama countered by ousting the U.S. Agency 
for International Development in December 1987; before the end of the 
year, the U.S. Congress cut off all assistance to Panama. General 
Noriega's February 1988 indictment in U.S. courts on drug trafficking 
charges sharpened tensions; in April 1988, President Reagan invoked the 
International Emergency Economic Powers Act, freezing Panamanian 
Government assets in U.S. banks and prohibiting a variety of payments by 
American agencies, firms, and individuals to the Noriega regime.

When national elections were held in May 1989, Panamanians voted for the 
anti-Noriega candidates by a margin of over three-to-one. Although the 
size of the opposition victory and the presence of international 
observers thwarted regime efforts to control the outcome of the vote, 
the Noreiga regime promptly annulled the election and embarked on a new 
round of repression.

By the fall of 1989, the regime was barely clinging to power. An 
unsuccessful PDF coup attempt in October produced bloody reprisals. 
Deserted by all but a small number of cronies, and distrustful of a 
shaken and demoralized PDF, Noriega began increasingly to rely on 
irregular paramilitary units called Dignity Battalions. In December 
1989, the regime's paranoia made daily existence unsafe for U.S. forces 
and other U.S. citizens.

On December 20, President Bush ordered the U.S. military into Panama to 
protect U.S. lives and property, to fulfill U.S. treaty responsibilities 
to operate and defend the Canal, to assist the Panamanian people in 
restoring democracy, and to bring Noriega to justice. The U.S. troops 
involved in Operation Just Cause achieved their primary objectives 
quickly, and troop withdrawal began on December 27. Noreiga eventually 
surrendered to U.S. authorities voluntarily. He is now serving a 40-year 
sentence in Florida for drug trafficking.

Rebuilding Democracy

Panamanians moved quickly to rebuild their civilian constitutional 
government. On December 27, 1989, Panama's Electoral Tribunal 
invalidated the Noreiga regime's annulment of the May 1989 election and 
confirmed the victory of opposition candidates under the leadership of 
President Guillermo Endara, and Vice Presidents Guillermo Ford and 
Ricardo Arias Calderon.

President Endara took office as the head of a four-party minority 
government, pledging to foster Panama's economic recovery, transform the 
Panamanian military into a political force under civilian control, and 
strengthen democratic institutions. During its five-year term, the 
Endara Government struggled to meet the public's high expectations. Its 
new police force proved to be a major improvement in outlook and 
behavior over its thuggish predecessor, but was not fully able to deter 
crime. Its overall record was not enough to convince a skeptical public 
that it deserved re-election in 1994.


GOVERNMENT AND POLITICAL CONDITIONS

Panama is a representative democracy with three branches of government: 
executive and legislative branches elected by direct, secret vote for 
five-year terms, and an independent appointed judiciary. The executive 
branch includes a president and two vice presidents. The Legislative 
Branch consists of a 72-member unicameral Legislative Assembly. The 
judicial branch is organized under a nine-member Supreme Court and 
includes all tribunals and municipal courts. An autonomous Electoral 
Tribunal supervises voter registration, the election process, and the 
activities of political parties. Everyone over the age of 18 is required 
to vote, although those who fail to do so are not penalized.

Ernesto "Toro" Perez Balladares was sworn in as President on September 
1, 1994, after an internationally monitored election campaign--Panama's 
largest, with seven candidates for the presidency, over 2,500 for the 
legislature, 2,000 for mayoral posts, and more than 10,000 at the local 
level--that was notable for its non-violent, orderly, and efficient 
pace.

Perez Balladares ran as the candidate for a three-party coalition 
dominated by the Democratic Revolutionary Party (PRD), the erstwhile 
political arm of the military dictatorship during the Torrijos and 
Noreiga years. A long-time member of the PRD, Perez Balladares worked 
skillfully during the campaign to rehabilitate the PRD's image, 
emphasizing the party's populist Torrijos roots rather than its 
association with Noriega. He won the election with only 33% of the vote 
when the major non-PRD forces, unable to agree on a joint candidate, 
splintered into competing factions.

Perez Balladares has broad powers under Panama's current constitution, 
but must work with a Legislative Assembly in which his PRD party and its 
political allies have only a bare majority. Although the assembly lacks 
strong budgetary authority, it does play a crucial role in designing 
political, economic, and social initiatives; President Perez Balladares 
has governed with a multi-party cabinet that includes prominent experts 
in their fields as well as several members who publicly opposed Noriega. 
His administration has carried out economic reforms and worked closely 
with the U.S. on implementation on the Canal treaties.

National Security

The Panamanian Government has converted the former Panama Defense Forces 
(PDF) into a civilian "public force," subordinate to civilian officials 
and composed of four independent units: the Panamanian National Police, 
the National Maritime Service (Coast Guard), the National Air Service, 
and the Institutional Protective Service (VIP Security). A 
constitutional amendment, passed in 1994, abolished the military 
permanently.

Law enforcement units that have been separated from the public force, 
such as the Technical Judicial Police, are also directly subordinate to 
civilian authorities. The public force budget--in contrast to the former 
PDF--is on public record and under control of the executive.

The United States, with congressional approval, is delivering assistance 
to help train and establish truly professional law enforcement agencies. 
In fiscal year 1996, the United States provided police skills training 
and technical assistance in civilian law enforcement development through 
a $31 million program managed by the International Criminal 
Investigative and Training Assistance Program (ICITAP). In addition, 
$9.5 million was spent to help the Panamanian government improve its 
administration of justice. Equipment that is appropriate for police work 
is also being provided.


Principal Government Officials

President--Ernesto PEREZ BALLADARES
First Vice President--Tomas G. ALTAMIRANO DUQUE 
Second Vice President--Felipe VIRZI
Ministry of Foreign Affairs--Ricardo Alberto ARIAS
Ambassador to the U.S.--Eduardo MORGAN
Ambassador to the UN--Aquilino BOYD
Ambassador to the OAS--Lawrence CHEWNING FABREGA
Panama maintains an embassy in the United States at 2862 McGill Terrace, 
N.W., Washington, D.C. 20008 (tel: 202-483-1407).


ECONOMY

Two great challenges face the Balladares Administration: efficiently 
utilizing 70,000 acres of U.S. military land and more than 4,000 
buildings which will revert to Panama by the end of 1999, and laying a 
solid groundwork for assuming full control of the Panama Canal in the 
21st century. As the U.S. military departs, Panama will have to replace 
jobs and income earned from U.S. bases. Long-term investor confidence 
brought about by political stability and economic liberalization are the 
keys to Panama's economic future.

Panama's economy is primarily based on a well-developed services sector 
that accounts for 72% of GDP. Services include the Panama Canal, 
banking, insurance, government, and the Colon Free Zone--the world's 
second-largest free trade zone after Hong Kong. Mining, tourism, and 
maritime services are projected sources of future growth.

Although the economic recovery of the early 1990s returned the country 
to its 1987, pre-crisis levels, sustained growth depends on Panama's 
ability to resolve long-standing problems of inequitable distribution of 
wealth, high tariffs, external debt, and dependence on U.S. Government 
and Canal revenues. Under- and unemployment continue to be the most 
serious challenges to the Government of Panama. Panama's working-age 
population is expected to grow 2.5% per year during the 1990s; the 
economy must grow by at least 5% annually, according to one estimate, to 
keep the unemployment rate stable as new entrants swell the labor force. 
If current low growth rates (about 2%) continue, the unemployment rate 
(now 14%) will worsen.

In 1996, U.S. exports to Panama were $1.4 billion; imports from Panama 
were $346 million, for an overall trade surplus of just over $1 billion. 
Trade with the U.S. comprises roughly 40% of Panama's total trade.

In recent years, Panama has embarked on an ambitious privatization 
program. Cellular phone service has been privatized, as have the ports 
of Cristobal and Balboa. Privatization, the state telecommuncations 
company TELECOM, the power utility, casinos, and a racetrack are in 
process. The government also plans to privatize two government-owned 
sugar mills, a convention center, and an international airport. U.S. 
companies are involved in many of the ongoing privatizations, although 
there have been concerns about certain privatization efforts.

U.S. companies play an important role in the Panamanian economy. They 
are particularly active in banking, bananas, ports, and other services. 
There are approximately 100 U.S. companies operating in Panama.

Role of Business

The government and the U.S. business community actively promote Panama's 
long-standing reputation as an international trading, banking, and 
services center, and as a site for foreign direct investment. Panama's 
economy is characterized by low inflation and zero foreign exchange 
risk. Panama must, however, take measures to detect and deter money 
laundering and improve its infrastructure if it is to attract 
investment.

The major task of the Perez Balladares Government is to put into place 
decisive policy reforms to change the economy and sustain long-term 
growth. These include reducing the public sector payroll, liberalizing 
the trade regime, privatizing state-owned enterprises, and fostering job 
creation through labor code reforms. Panama acceded to the World Trade 
Organization (WTO) in October 1996; legislation to ratify and implement 
membership is before the Legislative Assembly. To bring its regime into 
compliance with WTO, Panama has reduced tariffs over a broad range of 
products, converted some tariffs to "value added," and is in the process 
of eliminating non-tariff barriers.


FOREIGN RELATIONS

Panama is a member of the UN General Assembly, most major UN agencies, 
and has served three terms as a member of the UN Security Council. It 
maintains membership in several international financial institutions, 
including the World Bank, the Inter-American Development Bank, and the 
International Monetary Fund. Panama is a member of the Organization of 
American States, and was a founding member of the Rio Group. Although it 
was suspended from the Latin American Economic System (known informally 
both as the Group of Eight and the Rio Group) in 1988 due to its 
internal political system under Noriega, Panama was re-admitted in 
September 1994 as an acknowledgment of its present democratic 
credentials. Panama is also one of the founding members of the Union of 
Banana Exporting Countries and belongs to the Inter-American Tropical 
Tuna Commission.

Panama is an active participant in Central American regional meetings, 
although it is not a formal participant in integration activities. 
Panama is a member of the Central American Parliament (PARLACEN) as well 
as the Central American Integration System (SICA). The government is 
also taking steps to join the Central American Development Bank. Panama 
joined its six Central American neighbors at the 1994 Summit of the 
Americas in signing the Alliance for Sustainable Development known as 
the Conjunta Centroamerica-USA or CONCAUSA to promote sustainable 
economic development in the region.

Panama strongly backed efforts by the United States to implement UN 
Security Council Resolution 940, designed to facilitate the departure of 
Haiti's de facto authorities from power. Panama offered to contribute 
personnel to the Multinational Force, which restored the democratically 
elected government to Haiti in October 1994, and granted asylum to the 
former Haitian military leaders. Also in 1994, Panama agreed to accept 
9,000 Cuban "rafters," who were housed temporarily on U.S. military 
range areas until 1995.


U.S.-PANAMANIAN RELATIONS

The Panama Canal Treaties have provided the foundation for an enduring 
partnership. The U.S. and Panama are implementing the treaties by 
preparing for the transfer to Panama of the Canal and the U.S. base 
properties. Overall U.S. assistance to Panama in FY 1995 was $23 
million. Additionally, civic action projects, direct, and indirect 
military spending pump over $250 million annually into the Panamanian 
economy.

The United States cooperates with the Panamanian Government in promoting 
economic, political, and social development through U.S. and 
international agencies. Cultural ties between the two countries are 
strong, and many Panamanians come to the United States for higher 
education and advanced training. Approximately 6,000 Americans reside in 
Panama, consisting of retirees from the Panama Canal Commission and 
individuals who hold dual nationality. The number of U.S. visitors to 
Panama from July 1995 to June 1996 averaged around 3,600, and 110 
companies are operating in Panama. President Perez Balladares, a Notre 
Dame and Wharton School graduate, has pursued a close relationship with 
the United States. 

Panama continues to fight against illegal narcotics. The country's 
proximity to major cocaine-producing nations and its role as a 
commercial and financial crossroads make it a country of special 
importance in this regard. Although money laundering remains a problem, 
the Perez Balladares Government and the United States are cooperating in 
a new initiative to attack this problem.


Principal U.S. Officials

U.S. Embassy

Ambassador--William J. Hughes
Deputy Chief of Mission--Edward B. O'Donnell, Jr.
Counselor for Political and Economic Affairs--Elizabeth Bollmann 
Counselor for Public Affairs--Patrick Duddy (arrives 8/97)
Counselor for Administrative Affairs--Manuel Acosta (arrives 7/97) 
Consul General--Paul Kline (arrives 8/97)

Panama Canal Commission

Administrator--Alberto ALEMAN Zubieta
Deputy Administrator--Joseph Cornelison

U.S. Southern Command

Commander in Chief--General Wesley Clark (departs 7/97)
Deputy Commander in Chief--RADM Walter Doran

Smithsonian Tropical Research Institute

Director--Dr. Ira Rubinoff

The U.S. embassy in Panama is located at Avenida Balboa y Calle 38, 
Panama City (tel: 507-227-1777). Personal and official mail for the 
embassy and members of the mission may be sent to: U.S. Embassy Panama, 
Unit 0945, APO AA 34002.
E-mail: U.S. Information Service (USIS): usispan@pty.com
Political/Economic Section--embpol@sinfo.net


OTHER CONTACT INFORMATION

American Chamber of Commerce & Industry in Panama
Estafeta Balboa
Apartado 168
Panama, Republica de Panama
Tel: (507) 269-3881
Fax: (507) 223-3508
E-mail: amcham@pan.gbm.net

U.S. DEPARTMENT OF COMMERCE
International Trade Administration
Office of Latin American and the Caribbean
14th and Constitution, N.W.
Washington, D.C. 20230
Tel: (202) 482-0057
800-USA-TRADE
Fax: (202) 482-0464
Home Page: http://www.ita.doc.gov


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

Our 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 three-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.

Treaty negotiations resumed in June 1994 leading 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, D.C. 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.

Basic Provisions of the Treaties

The United States has primary responsibility for the operation and 
defense of the Canal until December 31, 1999. After that date, the 
United States and Panama will maintain a regime of neutrality for the 
Canal, including nondiscriminatory access and tolls for merchant and 
naval vessels of all nations. A U.S. Senate condition attached to the 
instruments of ratification allows the U.S. and Panama to negotiate a 
post-1999 defense-sites treaty, if both countries find such a treaty in 
their mutual interest.

In order to meet its treaty responsibilities, the United States has the 
right to use specified land and water areas and facilities in Panama 
necessary for the operation, maintenance, and defense of the Canal until 
December 31, 1999. U.S. warships will be entitled to expeditious passage 
through the Canal at all times, however, and the United States will 
continue to have the right to ensure that the Canal remains open and 
secure.

The United States operates the Canal through the Panama Canal Commission 
(PCC), which is a U.S. Government agency supervised by a Board of 
Directors consisting of five American and four Panamanian members, 
appointed by the President (the Panamanian members are initially 
nominated by their government). Until 1990, the Canal Administrator was 
an American and the Deputy Administrator was Panamanian; these 
nationalities reversed for the final decade of the treaty on September 
20, 1990, when Gilberto Guardia was installed as the first Panamanian 
Administrator. He was succeeded in 1996 by another Panamanian, Alberto 
Aleman Zubieta. Pursuant to treaty obligations, the PCC is training 
Panamanians in all areas of Canal operations prior to the transfer of 
the Canal in 1999. Panamanian citizens currently comprise over 92% of 
the PCC workforce.

During the life of the treaty, Panama receives the following payments 
from Canal revenues:

-- A fixed annual payment of $10 million;
-- An annual payment of $10 million, adjustable for inflation, for 
public services provided to Canal operating areas by the Government of 
Panama (the Canal Zone and its government ceased to exist when the 
treaties entered into force, and Panama assumed jurisdiction over Canal 
Zone territories and functions);
-- An annual percentage of toll revenues assessed at $0.39 (since 
October 1, 1996) per Panama Canal net ton transiting the Canal, worth 
$84.6 million in 1996; and
-- A payment of up to $10 million in the event that revenues exceed PCC 
expenditures in a given year.
Under U.S. implementing legislation (the Panama Canal Act), the PCC must 
be self-sustaining; its costs may not exceed its revenues, nor may U.S. 
taxpayer funds be used for Canal operations or payments to Panama.


TRAVEL AND BUSINESS INFORMATION 

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4000. 

Passport Services information can be obtained by calling the 24-hour, 7-
day a week automated system ($.35 per minute) or live operators 8 a.m. 
to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-
225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate 
of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648) 

Travelers can check the latest health information with the U.S. Centers 
for Disease Control and Prevention in Atlanta, Georgia. A hotline at 
(404) 332-4559 gives the most recent health advisories, immunization 
recommendations or requirements, and advice on food and drinking water 
safety for regions and countries. A booklet entitled Health Information 
for International Travel (HHS publication number CDC-95-8280) is 
available from the U.S. Government Printing Office, Washington, DC 
20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and 
customs regulations, legal holidays, and other items of interest to 
travelers also may be obtained before your departure from a country's 
embassy and/or consulates in the U.S. (for this country, see "Principal 
Government Officials" listing in this publication). 

U.S. citizens who are long-term visitors or traveling in dangerous 
areas, are encouraged to register at the U.S. embassy upon arrival in a 
country (see "Principal U.S. Embassy Officials" listing in this 
publication). This may help family members contact you in case of an 
emergency. 


Further Electronic Information: 

Department of State Foreign Affairs Network. Available on the Internet, 
DOSFAN provides timely, global access to official U.S. foreign policy 
information. Updated daily, DOSFAN includes Background Notes; Dispatch, 
the official magazine of U.S. foreign policy; daily press briefings; 
directories of key officers of foreign service posts; etc. DOSFAN's 
World Wide Web site is at http://www.state.gov; this site has a link to 
the DOSFAN Gopher Research Collection, which also is accessible at 
gopher://gopher.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on a semi-annual basis 
by the U.S. Department of State, USFAC archives information on the 
Department of State Foreign Affairs Network, and includes an array of 
official foreign policy information from 1990 to the present. Contact 
the Superintendent of Documents, U.S. Government Printing Office, P.O. 
Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or 
fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of 
Commerce, the NTDB contains a wealth of trade-related information, 
including Country Commercial Guides. It is available on the Internet 
(www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-
1986 for more information. 

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