Panama Canal Act of 1979 Statement on Signing H.R. 111 Into Law.

I am pleased to sign into law the Panama Canal Act of 1979, which implements the Panama Canal Treaty of 1977.

The Panama Canal Treaty and the Neutrality Treaty were the result of 13 )'ears of careful negotiations. They have been hailed throughout this hemisphere as a model for equitable negotiations between ourselves and our smaller neighbors. As I said when I signed the treaties, they express the commitment of the United States to the belief that fairness, and not force, should lie at the heart of our dealings with nations of the world.

The treaties also protect our economic and security interests. We will continue to operate the canal until the end of the century through the Panama Canal Commission, an agency of the United States in which Panama will have a minority voice. We will maintain military forces in Panama until that date. After the year 1999, Panama will assume responsibility for operating the canal. A regime of permanent neutrality is established under which both nations have the right to act against any aggression or threat directed against the canal. The Panama Canal Act provides a framework in which the United States can exercise its rights to operate and defend the canal in a manner consistent with our responsibilities and obligations under the treaties.

I particularly want to thank Senators Stennis and Levin and Congressmen Murphy, Bowen, and Derwinski for their outstanding leadership in resolving the many difficult issues embodied in this act.

In signing this act, I want to assure Members of Congress and the Government of Panama that this legislation will be interpreted and applied by the executive branch in strict conformity with the terms and the intent of the treaties. In this respect, I believe that certain technicalities in several sections of the act require comment.

Section 1503 requires congressional approval for transfers of property to Panama. Section 1504 grants such approval subject to a 180-day notice requirement and a prohibition against transfer of the canal itself before termination of the treaty. It remains the position of the administration that the treaty is self-executing with respect to the transfer of property, and thus no additional legislative authorization is required. With regard to the condition contained in Section 1504 (c) concerning transfer of the canal, I note that this does not preclude other discretionary transfers during the lifetime of the treaty, as provided fox' in Article XIII, paragraph 2(b) and 2(c) of the treaty.

Section 1341 (e) lists certain costs which must be paid prior to any contingent payment to Panama under paragraph 4(c) of Article XIII of the treaty. It is my understanding that costs listed in this section are identical to those which will be included in the tolls base under Section 1602 of the act. These costs are related to the operation and maintenance of the canal and are thus properly considered as "expenditures" under paragraph 4(c) of Article XIII, to be paid before any surplus is due to Panama under that provision.