13th draft

2/26/75

# THE UNITED STATES AND LATIN AMERICA: THE NEW OPPORTUNITY

The central purpose of our foreign policy is to develop
a new structure of international relations based on cooper-
ation rather than force; an international system which
settles disputes by negotiation and frees peoples to focus
on their positive aspirations rather than the accumulation
of arms.

Our relationship to our traditional friends in the Western
Hemisphere is central to this enterprise. The United States
and Latin America were born out of the struggle against
(tyranny; our peoples have shared a common inspiration, the
Heritage of Western civilization, a legacy of musical
support in times of trouble and the promise of a new world of justice, peace, freedom and
prosperity. This bond has linked our destinies for almost
two centuries; and with courage and imagination we now

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have the opportunity to make inter-American cooperation a
pillar of the global community which our era demands.

The discovery of America, more than any other single
event, ended the Middle Ages and revolutionized the thought
of mankind. It drew man beyond what had come to seem
unchangeable, to a new beginning, an escape from the
burdens of the past, and from history itself.

An epic poem of the seventeenth century described the
lure that beckoned the Americas onward:

"... to open new paths never trod, never known...

to push on despite obstacles through every zone..."

With the shield of one ocean at our backs and the dream of
another before us, hope was always just a little father along
the river, over the mountains, across the plains and jungles.

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In the old world a frontier was a limit; in the New World
it was an opportunity.

The frontiers the Western Hemisphere now faces are
not geographical, they are frontiers of human need and
creativity. To conquer them is even more important,
and exciting, than the adventures that shaped our past.

At the heart of our contemporary challenge is a new
interdependence, which is both hemispheric and global.
Until recently,
the past, Western Hemisphere economic relationships were
largely based on the exchange of raw materials from Latin
America for finished goods from the United States. Today's
interdependence reflects a different balance.
The internationalization
of production combines technology, labor and capital across
national boundaries.

As a result, the Latin American countries now need

access to the U.S. market to sell their manufactured goods
as well as their traditional exports. And Latin America's
markets are becoming as important to our own continued
growth as its raw materials -- as indicated by our trade
surplus last year of $1.2 billion.

As interdependence has grown within the hemisphere,
it has linked the Hemisphere to other parts of the world.

Our generation has had to learn that peace is indivisible;
that our well-being is intimately tied up with the well-being
of the rest of the globe. Latin America has developed
important trading relationships with other industrial nations
and has come to share certain political perspectives with
the Third World. The United States prizes its traditional alliances
with the industrialized democracies, and maintains important
political and economic relationships with many less developed

-- And to recognize that the ~~global~~ political dialogue between the developed and less developed nations requires answers that will be difficult to find anywhere if we do not find them ~~there~~ in the Western Hemisphere.

For this hemisphere to which men fled to escape from injustice has a special obligation to demonstrate that progress can go hand in hand with respect for human dignity, that cooperation among nations is not at odds with respect for national sovereignty, that the most powerful political force on earth ~~voluntary~~ is the collaboration of free peoples.

Any relationship as long and complex as ours inevitably is haunted by the bitterness and suspicions of old disputes. We must cast off these legacies, for a dialogue dominated by the endless refrain of old grievances cannot prosper.

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Despite disappointments and temporary interruptions, the United States is ready to resume the dialogue in a spirit of friendship and conciliation. Next month I will make my first visit to South America as Secretary of State. Next week Assistant Secretary Rogers will visit six countries in South America for preliminary discussions.

Let me discuss, more specifically, first, what the United States is prepared to contribute to a Western Hemisphere cooperation, second, what we ask of Latin America, and finally what we can do together.

## What We Must Ask of Ourselves

The United States will bring to this dialogue a commitment to the goal of bringing about a new relationship between the United States and Latin America. We only ask that our Western Hemisphere neighbors meet us in the same spirit.

On the foundations of the principles of non-intervention, 
sovereignty, and mutual respect the United States is prepared
to deal with the major issues that have risen between us; the
status of the Panama Canal; the place of Cuba

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in the hemisphere; and the various strands of
our economic relations.

## The Panama Canal

Since its opening, the peoples of the world
have looked on the Panama Canal as an important
lifeline of commerce and international security.
The United States considers it a vital interest
that the canal remain open to the ships of all nations
on fair terms.

In acquiring the rights to build the Canal,
the United States gained exclusive control -- the
right to act "as if" we were sovereign -- over a
ten-mile wide strip of Panamanian territory from
the Atlantic to the Pacific. In the Canal Zone, we
enforce U.S. laws operate commercial enterprises
and control most deepwater port facilities that serve
Panama.

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treaty negotiated in 1903 does not meet the requirements
of 1975. We are ready to acknowledge that it is
reasonable for Panama to exercise jurisdiction over
its territory and to participate in the operation and
defense of the Canal. We are prepared to modify
arrangements which conflict with Panamanian dignity
and self-respect.

In turn we ask Panama to understand our perspective --
that the efficient, fair and secure operation of the
Canal is a vital economic and security interest of the
United States, ~~and the free world;~~ that a new treaty
must provide for operation and defense of the Canal by
the United States for an extended period of time; and
that a new treaty must protect the legitimate interests
of our citizens and property in Panama.

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A new treaty based on these premises will make
the United States and Panama partners in the operation
of the Canal, protect the essential national interests
of both and provide a secure arrangement for the long
term.

Serious problems still must be resolved. But
we are confident that the remaining obstacles can be
overcome if both parties continue to display good will
and mutual understanding.

The Administration has been consulting regularly
with the Congress on this vital subject. As we approach
a new treaty, we will intensify these consultations
in detail, and discuss the arrangements we envisage, in great detail.

A new treaty which reflects the advice and consent of
the Senate and the full understanding of the American

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people will be a major symbol of cooperation in the Western Hemisphere.

## Cuba

In January 1962 the Hemispheric community, Organization of American States found through the OAS, agreed that Cuba had excluded itself from participation in the inter-American community by its military ties to the Soviet Union and its export of revolution in the Hemisphere. A month later, in February 1962, the United States imposed its own legislative sanctions, against Cuba in response to Cuba's policies. In 1964 the member nations of the OAS agreed collectively to sever diplomatic and trade relations with Cuba.

More than a decade has passed. The countries of Latin America have successfully resisted pressure, submission, and encroachment from Cuba; the nations that felt most threatened in the early '60's by Cuban revolutionary

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Our guiding principle was to prevent the Cuba issue
from dividing us from our Hemispheric neighbors.

A majority voted to lift the collective sanctions.

But the Rio Treaty requires a two thirds vote and the sanctions thus remain in force. However, all the OAS nations have since agreed informally that the Rio Treaty should be amended to permit the lifting of sanctions by a majority vote.

Several Latin American countries have suggested that this agreement in principle should be formalized, and then applied to OAS sanctions against Cuba. The United States will go along with this view. At the forthcoming annual meeting of the OAS the U.S. will agree to adopt procedures which will permit OAS sanctions to be lifted by majority vote.

At the forthcoming annual meeting of the OAS,
the US will support the Latin proposal that the
original 1964 sanctions resolution be amended to
provide that the existing Cuban sanctions can be lifted by a majority
vote of the Permanent Council of the Organization.

We will then engage in consultations with the other
that actual members as to when a later vote to lift the sanctions,
under the majority rule, should be held, and
The action at the annual meeting will not actually remove the sanctions, or make the Río Grande Treaty amendment effective before the formal ratification process. But it will make it possible for the majority to determine the question of continuing the specific Cuban sanctions at a later meeting.

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bilateral

As for our own relations with Cuba, there can, of course, be no change as long as the OAS mandate remains in force. If that should change, our bilateral policy would become a matter of our own decision. We see no virtue in perpetual antagonism between the United States and Cuba.

Our concerns relate less to Cuba's domestic system than to its external policies and military relationships. Should the OAS sanctions be altered, the United States will consider changes in its relations with Cuba in light of our own interests and the external policies of the Cuban government.

We have already taken some symbolic steps to demonstrate the direction in which we are prepared to move. But fundamental change will not come, unless Cuba demonstrates a readiness to assume the mutuality of obligation and regard

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In the next few days the President will take the first step to implement the Preference system of the ~~Trade Act by~~ 1974
announcing the list of products on which the Administration proposes to eliminate all import tariffs for developing countries for ten years. Latin America, as the most advanced developing region and the one nearest the U.S. market, will be in the best position to take advantage of these preferences. Our list will benefit nearly $1 billion of Latin American exports.

Among the economic issues affecting Western Hemisphere relations none looms larger than the ~~multinational corporation.~~ tam

On the one hand, the ~~multinational corporation has a demonstrated record of achievement as an efficient -- and indeed indispensable -- purveyor of technology, management skill, and capital for development.~~ trans

At the same time, the multi-

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national character of these corporations raises complex problems of governmental regulation, and has aroused concern in Latin America over how their activities can be reconciled with domestic political and economic priorities.

In accordance with the Calvo doctrine, most nations of Latin America take the position that the legislation of the host country is conclusive, in other words that a foreign investor cannot appeal to his own government for protection.

But the United States has espoused the cause of U.S.

investors when they are treated in a way which violates international legal standards. And the Congress has reflected this basic policy in such acts as the Hickenlooper and Gonzales Amendments providing for the automatic cut-off of aid in the event of nationalization without adequate and timely compensation.

reality a great deal will depend on our ability to work with

Latin America on new approaches which give some practical
and realistic assurances of fair treatment. The Administra-
tion is prepared, as part of the New Dialogue, to develop
new principles and practices for investment relations which
may commend themselves to Congress as a better solution
than automatic sanctions.

What Latin America Can Do

What do we have a right to expect from Latin America?

In the past decade, progress in science, industry, agri-
culture, and education have done much to transform the
Continent. Economic growth has been steady and sometimes
spectacular. Political institutions have adapted to particular
social conditions and national traditions. A new sense of
Latin American unity has promoted a common awareness of

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Common problems and opportunities.

We welcome the new strength and self-confidence that has accompanied this evolution, implies. We have seen new leadership in Latin America and new Latin American leadership in the international arena. Panamanian and Peruvian soldiers are part of the UN peace-keeping forces in the Middle East.

Last December the Andean countries, following a Peruvian initiative, pledged themselves to limit the acquisition of offensive weapons -- an initiative we are pledged to support and encourage. Venezuela has taken the lead in stimulating regional cooperation by offering oil revenues to the Inter-American Bank and the Central American Bank for Economic Integration. Working with Bolivia, Paraguay and Uruguay, Argentina and Brazil are pooling their technology and resources to harness the vast potential of the River Plate Basin.

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These welcome initiatives are balanced by other trends
which are more worrisome.

The United States is increasingly concerned about the
growing tendency of some Latin American countries to
participate in tactics of confrontation between the developing
and developed worlds. We accept non-alignment as a
necessary, largely positive force. We believe that the
developed nations -- and particularly the United States as
the most powerful industrial country -- have a special
obligation to be sensitive to the imperatives of change.

We welcome the new Latin American initiative, the increasing
sense of common purpose and the growing willingness for
mutual support.

But we consider it ironic that some nations seek to

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enact by confrontation what is being freely offered,~~ countries which once chose nonalignment to protect themselves from blocs are now tending to form a rigid bloc of their own. In doing so they not only foreswear their freedom of action but obstruct the ~~kind of~~ cooperation with the industrialized nations on which their own economic and social progress depends.

This will surely prove self-defeating. ~~Such tactics are~~ particularly inappropriate for the Western Hemisphere ~~(as perillonist & where it means repudiating~~ a tradition of cooperative relations with the United States just at the ~~very moment~~ when the United States is more willing than ever ~~to dedicate itself~~ to common progress.

As the most developed part of the Third World, Latin American nations will increasingly play roles in both the

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What We Can Do Together

The ultimate test is in what the nations of the Western
Hemisphere can do together.

We see four areas in which we can move imaginatively
and boldly:

-- to accelerate development in the Hemisphere;

-- to increase food production and agricultural
development;

-- to strengthen cooperation in science and
technology; and

-- to nourish the human values on which our progress
rests.

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Hemispheric Development

Latin America's development is full of contradictions.

Over the past decade, Latin America's overall growth rate has exceeded the economic targets of the Alliance for Progress. Latin America has also made more progress than any other developing area in economic integration. The Central American Common Market, the Caribbean Common Market, the Andean Pact, and the Latin American Free Trade Association have begun to translate abstract hopes into realities. Despite these facts, Latin America's relative share of global trade has fallen. And economic progress has been unevenly distributed, both within and among countries.

Some Latin American countries have only begun the process of development. As with poor countries everywhere, they require large amounts of concessional assistance in

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the form of grants and long-term loans with subsidized
interest rates.

The United States will continue to contribute its fair share of concessional assistance. The Administration soon will ask Congress to replenish the U.S. contribution to the Inter-American Development Bank, by an amount of $1.8 billion. We expect the more developed Latin American countries now to increase their contribution to the Bank and thereby to the needs of their less well-off neighbors.

To strengthen the Bank in meeting the needs of poor countries, two recent steps have been taken. Final agreement has been reached with twelve new donor members of

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the Bank --the major European countries, Japan and Israel --
who will provide $755 million in new money. To permit the
participation of these new donors the U.S. has ~~willingly~~ agreed
to reduce the weight of its voting power on the Bank's Board
of Governors.

In addition, the Bank and the Venezuelan Government this
week agreed to establish a $500 million trust fund to be
managed by the Bank, with the possibility of $100 million
in additional Venezuelan funding, aimed at benefitting the
poorer countries through highly concessional financing.

The Board of Governors of the Bank meets in Santo
Domingo in May. The needs of the poor countries should
be first on its agenda.

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But poor countries do not have all the problems. There is a new and growing group of Latin American countries that have reached an intermediate stage of development. They have a diversified industrial sector, a significant consumer class, and an increasing capacity to compete in world markets. Their need for foreign exchange is growing.

Most important, they need access to the markets of the developed countries, for exports are the chief source of their external funds. In this effort, the Trade Reform Act and the multilateral trade negotiations in Geneva are of great significance.

But these countries also need access to foreign capital markets. While the U.S. long-term bond capital market is the world's largest, only a few of the intermediate

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developing countries have been able to borrow successfully
in it.

To ease this problem, we will soon be sending to the Congress a proposal for a new program to help more intermediate countries gain independent access to U.S. long-term capital. We will seek authority to extend guarantees to the bonds of these "intermediate" participating countries up to a global total of $500 million.

The guarantees would be provided for a limited number of issues to enable borrowing countries to establish themselves in the U.S. capital market. Thereafter, they would be able to tap these resources on their own.

This is neither an aid program nor a recycling device,

As a supplement to multilateral and bilateral development assistance, it is consistent with the needs and greater

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self-reliance of countries that have achieved a higher level of income and credit standing. Although this capital markets program would not be restricted to any one region, it will be of most benefit to Latin America, because it is a complete self-sustaining, self-reliant nation.

Finally, the development efforts of all Latin American nations, whatever their stage of growth, can be undermined by the traditional boom and bust cycles in world commodity prices. All Latin American countries, regardless of their stage of development, are vulnerable to sharp swings in the prices of their exports of raw materials.

In the past, the attitude and policy of the United States toward on-commodity prices has been ambiguous. Latin America has misread our hesitancy as opposition to their efforts to assure stable and fair prices for their products on the world market.

EVO

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a world trading system which will meet the needs of consumers for increasing supplies of commodities at reasonable prices and the needs of producers for stable and remunerative income. Two fundamental principles guide our approach.

We cannot rely on the market alone as an adequate guide to outcomes. But, equally, we cannot expect unilateral producer or consumer actions to determine a feasible and continuing equilibrium. Within these bounds lie a range of rich possibilities that can make our new interdependence a vehicle for more rapid and more equitable global development.

The time has come for the countries of the Western Hemisphere to consider together how these commodity issues should be resolved. We propose that our Economic and

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Food

Let me turn to a subject which must command our
cooperative efforts -- food, man's most basic need.

Latin America rivals the United States as a potential
food surplus region. Together, we can develop that
potential, and do much to alleviate the world nutritional
crisis.

Over the past 15 years, Latin American agricultural
production has barely kept pace with population. In an
area rich in productive land, malnutrition is rife.

Most Latin American countries are net food importers.

The United States is convinced that most should be net exporters. With a concerted Hemisphere-wide effort, agricultural production can exceed population growth; adequate nutrition for all can be achieved in this century; and Latin America can become a major food exporter.

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has initiated a world-wide effort

Last November the United States set forth a
to solve the food crisis. I announced this
major program at the World Food Conference in Rome last November.

A

its significance for

let me discuss how key elements of this program can-

be applied to Latin America.

**Production.** The U.S. proposes the establishment, under the Inter-American Development Bank, of a Hemisphere Agricultural Consultative Group. Its goal would be \*annual production increases in the range of 3-1/2 to 4 percent, to be achieved through:

-- integration of agricultural research efforts throughout the Hemisphere;

-- adoption of improved national food and nutrition programs, including income redistribution where needed to increase effective demand for food.

-- application of development assistance funds to regional and national agricultural programs.

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need. The numbers of Latin American agriculturalists
has increased impressively during the past three
decades, but more must be done. To this end, the
United States proposes a jointly-funded program
to help finance <u>research</u> in agricultural
and related disciplines in institutions in both
Latin America and the United States.

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The Human Dimension

Our immediate economic, political, and technological imperatives must not lead us to neglect the human foundations of our common progress: the basic human rights, the free exchange of ideas, the priceless cultural heritage we share.

The discovery of America rekindled a belief in
mankind's perfectibility. Our struggles for independence
were among the first modern assertions of
brought recognition that the fundamental rights of man,
shown a more
must not be denied. No part of the globe has a greater
passionate commitment to democratic principles. We have supported, and
obligation to foster human rights. None of our nations
~ can claim success, but the effort must go on. Central
continue to support, the work of
to this is the Inter-American Human Rights Commission's
work to secure full implementation of the Inter-American
and Universal Declarations of Human Rights.

The free flow of ideas is one of the most powerful forces for both liberty and progress. Drawing on this resource, we can fashion new requirements for a common vision of the future. What will life in the Americas be like in the next century? The scientists, scholars and professionals of our countries should now be exchanging ideas on the implications of current trends in education, health and social change. Let us stimulate and encourage the OAS to mobilize the best minds and institutions of the hemisphere in programs of intellectual exchange.

The work of the Inter-American Commission demonstrates

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"Our common reality is the recognition of our diversity.

"Our common task is to forge our historical and geographical links into shared purpose and endeavor."

On this basis, the United States continues to stand ready to conduct a genuine dialogue with its neighbors in any manner: multilaterally and bilaterally, in the OAS and outside the OAS, with subregional groups or individual states.

The dream of hope and opportunity that has lifted the Americas for almost five centuries must be re-vitalized by our generation. We are entering another new world as strange and challenging as that found by the first settlers on America's shores. With imagination, we can build in this Hemisphere the prototype of that larger world community which must be our ultimate goal.

Victor Hugo once wrote, in praise of enlightened South American policies, "The main highway lies open. May America travel it, and the world will follow." We have come a long way, over a road often rough and difficult.

The path ahead is not entirely known. But if we travel it together, it can lead us and the other nations of the world to a new community, where justice, prosperity and peace are shared by all.

11th Draft

2/24/75

In this time of challenge, there is no greater long-term
priority for the United States than to strengthen and build upon
the ties that link us to our traditional friends. And there are
no older international friends than those in this hemisphere.

The long and unique ties which bind the United States
and Latin America provide challenge for the peoples of this hemisphere
to vindicate the promise that for centuries has inspired our two
continents -- the promise of a new world of justice, peace and
prosperity for all. Our success will not only serve the interests
of the American nations and this hemisphere; it can make inter-
American cooperation a firm pillar of the global community which
our new era demands.

Our task will be eased by the historic bonds that already
unite us, by the work already done together.

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What is the chief heritage of this hemisphere?

More than Copernicus or Galileo, the discovery of America
ended the Middle Ages and revolutionized the thought of mankind.
It drew man beyond what had come to seem unchangeable. It
brought an entirely new beginning, an escape from the burdens
of the past, from history itself. For nearly half a millenium the
Americas made their own history, only recently to rejoin the
mainstream of international affairs, the United States as part of a
system of alliances, South America as an increasingly self-
conscious member of what has come to be known as the Third
World. For four hundred years the horizons of the Americas were
ever-widening. A seventeenth century Brazilian epic poem described
the lure that beckoned the Americas onward:

"... to open new paths never trod, never known ..."
to push on despite obstacles through every zone ..."

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With the shield of one ocean at our backs and the dream of another
before us, there was always a new beginning farther along the
river, over the mountains, across the plains and jungles. In
the old world a frontier was a limit; in the New World it was an
opportunity. The frontiers to which we now are called are not
geographical, but frontiers of human need and creativity.

At the heart of our contemporary challenge is interdependence,
which at one and the same time is increasingly global in nature
and has a special history and significance in this hemisphere.

In the past, our economic relationships were largely based
on the exchange of raw materials from Latin America for
finished goods from the United States. Today's interdependence
is more complex. It is based on an internationalization
of production with technology, labor and capital
combined across national boundaries.

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As a result, we are all increasingly both producers and exporters. The industrializing Latin American nations now need access to the U. S. market to sell manufactured goods as well as their more traditional exports. And Latin America's markets are becoming as important to our own continued growth as its raw materials -- as indicated by our trade surplus last year of $1.2 billion with Latin America.

Even as interdependence has grown within the hemisphere, so has it grown between us and other nations of the world. Latin America has important ties and shares perspectives with the Third World; the U. S. maintains its traditional alliances with the industrialized democracies. We see the hemisphere not as a common front against others, but as a common effort with others toward global cooperation.

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It was this awareness of past achievement and vision of
future accomplishment that led the United States to seek a new
dialogue with Latin America. We set three goals for this
effort:

-- To live in a hemisphere lifted by progress -- not torn
by hatreds.

-- To ensure that the millions of people south of us will
lead lives of fulfillment not embittered by frustration and despair.

-- And, above all, to recognize that in the great dialogue
between the developed and the less developed nations, we cannot
find answers anywhere if we do not find them here in the Western
Hemisphere.

We in this hemisphere to which men fled to escape from
injustice have a special challenge, which is at once an obligation

and an opportunity: we must demonstrate that progress can be
combined with respect for human dignity, that nations can
cooperate while respecting each other's sovereignty, that the
hope of mankind resides in the spontaneous cooperation of free
peoples.

Any relationship as long and complex as ours inevitably
is haunted by the bitterness of old disputes and the smoldering
suspicion of new disagreements. Until we cast off these burdens
we will only perpetuate the problems of the past and exacerbate
the legitimate differences which any vital, mature international
relationship inevitably will generate.

The United States has dedicated itself to a New Dialogue.
But it cannot do so alone. The effort to forge new relationships
cannot succeed if from south of the border we hear only the

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refrain of old grievances.

This is demonstrated by the latest controversy in inter-
American affairs, the Latin Americans' postponement of the
Buenos Aires meeting of Foreign Ministers -- which was to
have been the next step in the new dialogue. This decision was
taken in reaction to the 1974 U. S. Trade Bill. Against the
wishes of the Administration, this bill excluded all members of
the Organization of Petroleum Exporting Countries from the new
U. S. trade preferences -- thus excluding also Ecuador,
Venezuela, and other nations outside the hemisphere which did
not participate in the oil embargo. The Administration opposed
this provision and several members of Congress including your
own distinguished Senator Bentsen introduced amendments to
remove the inequity.

To turn this disagreement into an interruption of our
dialogue proves that the nations of America have not yet
learned to confront their problems instead of each other. We
have not yet learned to focus on what binds rather than what
divides us.

The new problems we face together should not be permitted
to delay or disrupt our common challenge. The United States
is ready to continue the dialogue. Next month I will make my
first visit to South America as Secretary of State. At that
time, I will make clear that:

- The United States accepts Latin America's new
strength in the hemisphere and the world. We will
work to resolve longstanding grievances and dedicate
ourselves to common opportunities.

- The Latin American nations in turn should develop a

new sense for the possible as well as the ideal; and

understand that partnership must be built on something

more positive than the removal of grievances.

These principles require each side to reexamine its past
conduct and policies. In light of this, let me now turn to some of
the problems we face. First to what the United States must
contribute, then to what we ask of Latin America, and finally
what we can do together.

First, what must we in the United States ask of ourselves?

Above all, we are prepared to commit this nation -- the
government and the people -- to the goal of bringing about a new
relationship between the United States and Latin America. No
program can be effective without a spirit of partnership.

Without it, policies will lose their momentum; treaties will

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become dead letters; programs will become lifeless. But with
it technical problems can yield to solutions, and fresh acts of
creativity and progress can be realized.

President Ford has asked me to reaffirm the United States
is committed to work in this spirit. We expect the inevitable
frictions and setbacks that mark a new effort. We are prepared
to concentrate on the many strands that unite us rather than the
few that could tear us apart.

If Latin America is willing to join us in a new relationship
of mutual obligation, benefit and understanding, we can resolve
the problems of the past and cooperate on challenges of the
future.

In our political relations, we are determined to anchor our
efforts on the foundations of non-intervention and national
sovereignty. But those principles, though indispensible, are

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not sufficient to meet the challenges of our time. The nations
of the Americas will have to reach out to new levels of mutual
accommodation and consensus. On this basis, the U.S. is pre-
pared to move positively on the major political issues we
face: the status of the Panama Canal; the place of Cuba in
the hemisphere; and the question of U.S. legislative sanctions.

The Panama Canal

The present negotiations between Panama and the United
States over the Panama Canal have implications that extend
beyond our two countries, and demonstrate the need for a
new approach to political accommodation.

The building of the canal is an epic story of our
nation's courageous determination to master nature for the
common benefit of all the world's people. Over the years
the people of the world have come to look upon the canal
as an important lifeline of commerce and international
security. The United States has a vital interest that the

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In acquiring the rights to build the canal, the United
States gained exclusive control -- the right to act as if we
were sovereign -- over a ten-mile strip of Panamanian terri-
tory from the Atlantic to the Pacific. Today in the Canal
Zone we operate a full-fledged Government, enforce U.S.
laws, operate many commercial enterprises and control most
deepwater port facilities that serve Panama.

Understandably, the Panamanian people view the per-
petuation of this arrangement as an infringement upon their
national sovereignty and principal resource -- their country's
strategic location.

Thus, Panama and the United States both have a vital
stake in the treaty arrangements governing the canal.
History, geography and the political imperatives of our
time have induced our two countries to seek to design a new
relationship governing the canal. These negotiations have