The Secretary of State to the Chargé in Panama ( Donnelly )
146. Reurtel 271, March 20, 4 p.m. Department is in general favorably disposed toward proposal to initiate negotiations looking toward a treaty of friendship, commerce and navigation with Panama. However, Department is concerned at implications of proposed Constitutional provisions which establish serious discriminations against foreigners, including American citizens, as regards engaging in normal business activities in Panama. Department understands that you have already pointed out to the Government of Panama the concern with which it views these proposals in the light of our own legal guarantees to aliens. Department also feels that the proposals conflict with the economic charter and declaration of principles approved at the recent conference at Mexico City.96 Department would not be disposed to negotiate a commercial treaty involving valid concessions by us as a quid pro quo for the abandonment of such proposed provisions, realizing (for your confidential information only) that the proposals may have been drafted and included for exactly such bargaining purposes.[Page 1267]
Neither, would the Department be willing to begin negotiations for a commercial treaty were present legislation discriminating against foreigners, including American citizens, to be used for bargaining purposes therein.
You may therefore inform the Foreign Minister that your Government is willing to undertake the negotiations which have been discussed, providing existing and proposed discriminatory legislation is not to be used as a bargaining weapon therein. If his reaction is favorable, Department is prepared to forward you for presentation to the Panamanian Government for its consideration a draft treaty similar to the Liberian commercial treaty mentioned in your telegram under reference but containing certain improvements thereon.
With reference to your despatch no. 1444 of March 23, 1945,97 if Panamanian President replies favorably to suggestion which you have made through Minister Chiari,98 regarding issuance of decree giving reciprocal treatment to Americans, Department would have no further doubts as to feasibility of commencing negotiations at once for treaty of friendship, commerce and navigation, ReEmb 271, March 20, on the understanding, indicated in conversation with President and Minister of Foreign Affairs of March 14, 1945, as reported in your despatch 1411, March 16, 1945,97 that administration will also oppose adoption of similar provisions in proposed Constitution.