Memorandum by Mr. Murray M. Wise of the Division of Caribbean and Central American Affairs to the Director of the Office of American Republic Affairs (Warren)

There is considerable loose talk by the Panamanian public relative to the negotiation of a commercial treaty with the United States. The general idea is that such a treaty would cover in great detail all phases of economic activity and bring to Panama advantages from its geographical location, not heretofore enjoyed. For Panamanians it would solve long standing issues such as protection of local merchants from sales in Canal Zone commissaries, ships’ service stores and post exchanges (including luxury items and beer); discrimination in ocean and freight rates charged by the Panama Railroad Company; gold and silver payrolls; the establishment of a duty free port; the sale of Panamanian merchandise in the Canal Zone, etc. In other words the treaty should not be one of generalities but one which would help solve commercial problems peculiar to Panama and promote national industrial and agricultural development.

The United States Government has long opposed the negotiation with Panama of the type treaty emphasized above. Our interest has been in reciprocal agreements. Hence, it seems that we should talk with the Panamanians on the standard Treaty of Friendship, Commerce and Navigation, such as is being negotiated with other countries.

If the idea expressed in the above paragraph still obtains, it might be advisable for the Department to get a standard draft proposal to the Panamanians before the Ambassador9 comes in with a long list of problems he hopes to settle through the negotiation of a special commercial treaty. May I have your views?10

  1. J. J. Vallarino.
  2. In a marginal note Mr. Warren approved the suggestion and authorized action.