December 1, 1999

U.S. military presence in Panama ends after nearly 90 years

                  From staff and wire reports

                  FORT CLAYTON, Panama (CNN) -- The U.S. military's 88-year
                  presence in the former Canal Zone has ended.

                  Panamanian President Mireya Moscoso received a symbolic key Tuesday to
                  the final U.S. Army base from Col. Edward D. Schumann.

                  As that key was passing hands, U.S. President Bill Clinton was dismissing
                  the notion that a Chinese presence at the Panama Canal could harm U.S.
                  national security. A Hong Kong-based company with ties to Beijing has won
                  the rights to control the ports at both ends of the canal.

                  Tuesday's symbolic key ceremony came a month before the canal itself becomes
                  Panamanian property.

                  Schumann handed a white wooden key to Moscoso during the ceremony at
                  Fort Clayton, which overlooks the Miraflores Locks near the Pacific side of
                  the canal.

                  Children cheered, and the Stars and Stripes was lowered for the last time.

                  "A chapter of the Army in Panama closes, but the relations between the
                  Army and the Panamanian people remain," Schumann said.

                  Moscoso told reporters she would not seek negotiations that would "mean
                  the continuation of U.S. military presence in Panama." Polls show most
                  Panamanians favor a continued U.S. presence because the bases have
                  brought millions of dollars into the economy.

                  Fort Clayton, built in the 1920s, was the headquarters of U.S. Army South
                  until July, when that operation moved to Fort Buchanan in Puerto Rico.

                  Fort Clayton is the last of 14 bases to be handed over to Panama since
                  1979 under the 1977 Panama Canal treaty signed by U.S. President Jimmy
                  Carter and then-Panamanian strongman Omar Torrijos.

                  Transferred along with Clayton were neighboring installations at Corozal.

                  Only about 300 U.S. military personnel remain in Panama. They will
                  gradually leave by the time of the final hand over of the canal at midday on
                  December 31.

                  "This transfer is a recognition of nationalist struggles," Moscoso said. She
                  added that a generation would now grow up "with absolute responsibility for
                  the Panama Canal, free of foreign (military) presence."

                  Clinton expects no problems from Chinese presence

                  At a news briefing in Washington, Clinton downplayed concerns about a
                  Chinese presence at the canal.

                  Hutchison Whampoa, a Hong Kong-based company with ties to Beijing, has
                  been granted lease arrangements to operate the canal's ports.

                  Earlier this week, retired Adm. Thomas Moorer, a former chairman of the
                  Joint Chiefs of Staff, said China was plotting to take over the canal once the
                  United States relinquishes control. He suggested China could use the area to
                  launch a nuclear attack on America.

                  Clinton said, "I think the Chinese will in fact be bending over backward to
                  make sure that they run it in a competent and able and fair manner."

                 The president went on to say, "This is like ... China coming into the World Trade
                 Organization. I think they'll want to demonstrate to a distant part of the world that
                 they can be a responsible partner.

                 "I would be very surprised if any adverse consequences flowed from the Chinese running
                 the canal."

                 Clinton said he was confident the Panamanian government would run the canal in an
                  appropriate fashion, and he reiterated his support for the hand over.

                 "I think it's the right thing to do," Clinton said. "I think that the new government of Panama is
                 committed to maintaining the canal in an appropriate way and keeping it open, and
                 working with us to do so and having good relations."

                  Carter, Albright to attend hand over ceremonies

                  Formal ceremonies marking the hand over of the canal will be conducted
                  December 14. The State Department said Tuesday that Carter and
                  Secretary of State Madeleine Albright will represent the United States at the
                  event. Clinton will not attend.

                  The president told reporters he decided against attending because of the
                  number of foreign trips he had already taken this year. He said the decision
                  should not be seen as a snub of the event.

                  "The people of Panama should know that this president and our government
                  strongly support both the treaty and the event," Clinton said.

                  State Department spokesman James Rubin said Carter's appearance at the
                  hand over will be in recognition of his role in negotiating the transfer.

                  Rubin stressed that Hutchison Whampoa, which controls 10 percent of
                  global maritime container traffic, had contracts to run the ports, not the canal

                  "We have no reason to believe there's any risk of any problem as a result of
                  (Hutchison Whampoa) running the ports," he told a news briefing Tuesday.

                  U.S. troops first arrived in 1911

                  At Fort Clayton, offices and barracks are set among lawns on 2,150 acres.
                  The base includes 1,400 residences, a theater, fire and police stations, two
                  schools, a hospital and recreation areas.

                  Panama plans to use 325 acres for a "Knowledge City" complex of schools
                  and research institutions.

                  The first U.S. soldiers permanently assigned to Panama arrived in 1911 to
                  guard construction efforts of the Panama Canal, which was opened in 1914.

                  Until the mid-1990s, more than 10,000 U.S. troops were based in Panama.
                  At the height of the U.S. presence, during World War II, about 65,000 U.S.
                  troops were based in the country.