February 2, 1999
U.S. says determined to comply with Panama treaty

                  PANAMA CITY (Reuters) -- The United States has reaffirmed its
                  commitment to the 1977 treaty that obliges it to hand over control of the
                  Panama Canal to Panamanian authorities by the end of the year.

                  New U.S. Ambassador Simon Ferro's statement on arrival in Panama that
                  his government meant to honour the Torrijos-Carter Treaty "in both letter
                  and spirit" came after relations cooled between the two countries.

                  "I know that a lot is still left to be done in the next 12 months," Ferro told a
                  closed arrival ceremony on Monday night.

                  The U.S. Embassy in Panama released copies of his remarks on Tuesday.

                  In the 1977 treaty signed by then-President Jimmy Carter and his
                  Panamanian counterpart Omar Torrijos, the United States pledged to
                  remove its troops from Panama and hand over the canal, military bases and
                  other land to the Panamanian government by noon on Dec. 31, 1999.

                  But Panama and the United States have seen their relations cool in recent
                  months after failing to create an anti-drug centre at Howard Air Force Base
                  at the Pacific entrance to the Panama Canal.

                  The anti-drug centre would have allowed U.S. troops to stay in Panama
                  beyond 2000.

                  In December, the Panamanian government criticised what it called a lack of
                  U.S. efforts to clean up unexploded shells from U.S. Army firing ranges in
                  the former Panama Canal Zone, a U.S. enclave until 1979.

                  Ferro has been recognised in the United States for his work in urban zoning,
                  which observers say will be key in helping organise the smooth transition of
                  control of the Canal and the U.S. military bases in Panama.

                  A Cuban-born lawyer who speaks fluent Spanish, Ferro was confirmed by
                  the U.S. Senate as ambassador to Panama in October 1998.

                   Copyright 1999 Reuters.