This is an outcome neither side desires. A security assistance package for Panama, possibly focused on the common counter-narcotics mission, might prove important to success of the talks. Although the Neutrality Treaty, which continues in perpetuity, guarantees access to all vessels desiring transit of the canal on an equitable basis, the enforcement provisions are vague. The greatest fear is of the Colombianization of Panama. In September 1995, Presidents William Clinton and Ernesto Perez Balladares agreed to explore various options for a continued U.S. presence.
Opinion is split in Panama and the United States, and the issue is being hotly debated.
On the other hand, the United States has decided not to pay compensation for residual basing because of base closures in the continental United States, and because of the negative precedents for U.S. bases elsewhere. The impasse over these two contentious positions delayed the onset of exploratory talks for over 14 months. Recently, a corner may have been turned and there is briefly an historic opportunity to move beyond the clog and seriously address, in formal talks, what U.S. and Panamanian policymakers agree is in the best interests of both nations. That use, however, is guaranteed by the Neutrality Treaty, and the canal's overall military importance has been degraded since the end of the Cold War. It is also vital to commercial enterprise in Peru, Chile and Ecuador.